Gaming site and the law

[dom321]

I want to open a site (buisness) where people play money to play my game online, (£1 a go at the game) and then the winner of the game (person with the highest score after say a month) will win a percentage of the money that I recieve from users. The game is a complete game of chance.

I have searched around for information about this but to no avail. So i am going to ask my questions here in the hope someone will be able to aid me:

1. Do I have to have a special permit to be able to host such a system? If so where can i obtain this?
2. What are my VAT responsiblities?

I have found this site online:
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel= pageVAT_ShowContent&id=HMCE_CL_000278&propertyType =document

but havent really been able to make much sence of it, If anyone could I would be most appreciative.

Thankyou
Dom

[gstock]

Hi dom,

I recently looked a little into online raffles for promotions, I found a good place for getting info is in the terms and conditions of other online raffle sites. At least to get the initial idea of the workings.

Graham

[Cougar]

In order to work out what taxes including VAT you will be liable for you will have to work out what sort of game your on-line experience will be classified as. For example, gaming, bingo and lotteries (and other activities) are all different as far as Customs are concerned - even lotteries can be subject to tax i.e. lottery duty. 5p of your £1 lotto or thunderball spend on a Saturday night goes to the Government as Lottery Duty.

On-line betting, gaming, lotteries and so on have been a challenge for the Revenue & Customs to regulate - sometimes because the promoter's web site is not hosted in the UK, so the issue of who is taxable for what - if anyone - gets complicated.

I would start by looking at a few of the notices on Customs website (where your link takes you) to get a broader feel first, because VAT is probably not the first issue to consider. Your first issues are more likely around how your on-line activity is classified and whether it is regulated activity. If it is regulated then you can just then contact the regulatory body for that type of activity. They usually have helplines and can offer advice and information. The VAT and other tax issues will then become clearer.

[wornout]

Dom
Im in the process of trying to launch a gaming/gambling web site.I have found several things that you will need to address. Firstly you will need to get a precise definition of the type of gambling/gaming site your idea will fall under,if you are in the U.K. contact The Gameing Board of Great Britain,you may have to submit your proposal to their legal adjudicator to classify what catagory you come under. Once this has been decided you can then go to HM Customs and more accurately define what legal and tax/vat bracket you fall into.Secondly be carefull that you are not infringing any type of copywrite,my game involved football and I have had legal letters from the Football Association,as I was unaware of the strict controls they have concerning the use of fixture lists.
Whatever,dont give up.Ive been working on my site for three years and am near to having covered all eventualities.
Good Luck
Steve

[Cougar]

Wornout - Thanks for adding your stuff - I couldn't think of the Gaming Board when I wrote my thread. Your contribution on this is good.

[wornout]

Thanks Cougar,thats what we are here for.
Just one more thing for Dom,if you consider going off shore be real carefull there are a lot of sharks out there,I nearly got hook lined and sinkered by a guy in Malta who said he could make the whole thing so easy for me,fortunately I just got a feeling about him,turns out he would have hijacked the whole project.Having said that there are good people who can help.ps just hope Dom reads this stuff
steve

[toycar]

i've always wondered this too, if i live in say UK and make money off a website that is hosted in China... how are my taxes determined...

i guess since i "live" in UK, then i gotta pay local taxes

[wornout]

Would be interested to hear how Dom is progressing.It appears ,if you are playing outside the UK ,your winnings come to you as net of tax,as most countries tax the company on your behalf.For example UK gambling sites are charged tax as an excise duty over and above the normal taxation

[studioeurope]

Yes, I would also be very interested to hear how you got on with this.

I am soon hoping to enter the online gaming business myself.

The way I am seeing things at the moment, my only real option is to incorporate offshore in a "friendly" taxation State and then apply for the relevant licences in whichever other State gives the best deal.

I realise that (as previous posters have written) when going offshore, one has to be very cautious of the sharks. I have come to the conclusion that one should contact the relevant Governments involved when researching where to incorporate and obtain licence instead of using one of the many "agents" out there. If indeed you do eventually end up using an agent (as you will most likely have to), you will be well versed in the procedures and fees involved BEFORE deciding on which agent to use.

Most of the Countries offering these "online gaming licences" are doing so in order to make money and will usually welcome enquiries from potential new licence holders. They are actively seeking new licencees, so they should answer your queries in detail.

As I said, I would be VERY interested in hearing what others experiences have been in this area.

John

[wornout]

Hi studioeurope - what type of online gambling?.maybe we could do something together?Where do you live?.
Some gambling havens like Malta,Camen Isles etc, impose other restrictions on you over and above taxes,licenses etc, they insist you employ so many native people and that a certain amount of profit remains in the country for that countries benefit.The UK at the moment is going through a change, as far as accepting that, if they want to make revenue from gambling online they have to relax the laws a bit.Just something to note,in the uk, the Gaming Board of Great Britain is being replaced this autumn with the Gambling Commision, who knows what,if any,effect that may have.
steve