Online casino operators in Belgium were celebrating last week after the Belgian Constitutional Court issued a ruling stating that the country’s online casino operators would no longer be subject to the country’s 21% value added tax (VAT).
In it’s decision the court overruled every substantive element of a 2016 law making Belgian online casino operators subject to the tax on gross gaming revenues. Belgian online casino operators are already subject to an 11% gambling tax in addition to the now defunct requirement to pay the 21% VAT.
In overturning the 2016 law the court’s logic centered on four key issues. First the court noted that in 2010 the Court of Justice of the European Union ruled that gambling products and services “do not lend themselves well to the application of VAT, compared to other services.”
The second was that the additional VAT as applied to online gamers made those services less attractive and less competitive, potentially decreasing total tax revenue from the service.
Third, the court argued that imposition of the VAT tax on the federal level unfairly undermined the rights of the countries regions, who are allowed under the Special Finance Act to determine their own tax regimes.
Finally, the court noted that in passing the 2016 law the countries legislators ignored an EU Directive from 2006, which stated that “betting, lotteries and other forms of gambling” should be exempt from VAT and that the issue should largely be settled by individual member states based on their local laws.
VAT is a European Union consumption tax on selected goods and services that ranges from 5% to 21%. As an internal EU consumption tax, goods that are exported outside the EU or services provided inside the EU to customers resident abroad are not subject to VAT.
At the same time legislation looking to ban casino bonus advertising is still pending in the Belgian parliament and is largely expected to pass into law later this year.
Iowa casinos see drop in revenues
Casinos in Dubuque, Iowa, a quaint town of 53,000+ set on the west bank of the Mississippi river, have reported that the city’s casinos saw a 6.4% drop in gaming revenues in February when compared to last year.
The city’s Q Casino reported a meager $3.6 million in revenue last month, a 5.2% year-on-year drop. Diamond Jo Casino pulled down $5 million in revenue to chalk up a 7.3% year-on-year drop.
The trend held firm across the largely rural middle American state, with only three of a total 19 casinos statewide reporting positive year-on-year revenue figures for last month.
Casino operators pointed the finger at the rise in the number of video gaming terminals across the state as a possible contributor of the declining revenue numbers. Over the last three years, reports the Dubuque Telegraph Herald, the number of video gambling terminals in the state has risen some 49.7% to 25,565.
As competition increases across the state, numbers may well continue to fall. Iowa is one of 18 states currently considering legislation to legalize sports betting in the event of a favorable US Supreme Court decision on the matter expected in the coming days.
In the event the US Supreme Court decides to overturn the federal law banning sports betting, the Iowa legislature, who are still debating appropriate taxation levels for sports betting, may place even further pressure on the states existing licensed casino operators as funds are channeled to legal sports betting and away from casino games.
While the casinos themselves are likely to offer legalized sports betting in the event the Supreme Court rules in favor, it remains an exceptionally low margin business and any kind of open competition landscape may well continue to draw revenue form the states 19 existing casinos.
Regional tensions impact South Korea gambling revenues
Gambling revenues in South Korea are down in the first quarter of this year thanks in large part to increased tensions between South Korea and Beijing. Tourists from mainland China remain the primary source of income for most South Korean casinos, as in all but one of the nation’s 18 casino resort facilities are intended for foreigners only. With premium tour groups, as opposed to Chinese whales, who were banned for the last three years from travelling abroad to gamble, the bread and butter of South Korea’s fledgling casino industry, being steered elsewhere by Chinese authorities, casino revenues are expected to continue to dwindle.
The winter Olympics last year did give casino operators a revenue boost of approximately 23% for Q4, but with the games gone and tensions increasing between Seoul and Beijing, numbers are quickly falling off again.
With China making aggressive moves in the South China Sea, a disputed area of largely international waters also claimed by Brunei, Taiwan, Malaysia, Indonesia, the Philippines, and Vietnam and China’s thinly veiled support of nuclear armed North Korean dictator Kim Jong-un within missile range of Seoul, South Korea recently took an aggressively self-defensive posture by installing a Terminal High Altitude Area Defense battery in the south east of the country, much to Beijing’s chagrin. In light of South Korea’s installation of the advanced missile defense shield, the number of Chinese visitors to the country’s casinos have fallen off sharply.
At home, China has already taken a hard line when it comes it its citizens gambling abroad. Late last year the Chinese government banned independent tour operators from offering package holidays to gambling destinations abroad – specifically South Korea, instead forcing all tours to South Korea to go through the China National Tourism Administration, a state-controlled travel and tourism agency. The move, in effect, banned all charter tours, and online package tours, leaving Beijing in complete control of the number of Chinese tourists visiting South Korea.
The result was an estimated $6.5 billion loss in total tourism revenue from Chinese gamblers, with the slump expected to continue as long as tensions in the region remain high.
Madison Square Garden looks to expand to Las Vegas
The iconic Madison Square Garden is looking to expand its brand overseas to London as well as going west domestically with a new generation of entertainment facilities known as Madison Square Garden spheres.
Intended to use the latest in ultra-high-tech, state-of-the-art visual displays and sound will dominate these spherical entertainment facilities. The venue will each have a distinct spherical shape, the exterior of which will be covered in the world’s most high-end digital imaging screens, allowing the outside of the sphere to be used as a high-resolution display to promote artists and events as well as illuminate the surrounding cityscape. The spheres will also be installed with a cutting-edge digital camera systems and digital sound.
The plans for the MSG Sphere Las Vegas include more than 18,000 scalable seats directly in front of the stage and space for some 5,000 standing attendees.