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With an ever-evolving growth chart, the gaming industry is witnessing many upheavals in recent times and the latest developments are a testimony to the challenges that gaming operators continue to struggle with.
While in India, four Indian lottery firms have recently been slapped with tax evasion charges for reported lesser payment of their Goods and Services Tax (GST), the U.S. based anti-online poker group ‘Coalition to Stop Online Gambling’ will be presenting their view before the House Subcommittee on Crime, Terrorism, Homeland Security and Investigations. On the other hand, in Pennsylvania the District Court for the Middle District of Pennsylvania has overturned the ban on gaming individuals to make financial contribution for political purposes.
The Latin-American country of Peru has taken positive steps towards attempting to legalize sport betting within the country by presenting a bill before Congress.
Meanwhile, the Australia gaming manufacturing company Ainsworth Game Technology Ltd. will be bidding goodbye to its CEO Danny Gladstone who will step down from his post on June 30, 2019.
Nevertheless, sports betting seems to be progressing at a brisk pace in the U.S. as Westgate Las Vegas SuperBook became the newest company that will be launching a gaming platform in partnership with Paragon Gaming.
Punjab-based branches of four Indian lottery distributors – Essel Group, Sugal & Damani Group, Martin Group and M/s PAN India Network Ltd are facing the heat of government action on Goods and Services Tax (GST) evasion charges.
On Tuesday, following investigations by its anti-evasion wing, the Ludhiana branch of Central GST (CGST) Commissionerate registered four separate cases against the local branches or group firms of these companies. In all these four firms were found to have evaded GST to the tune of ₹13 Crores.
The CGST Commissionerate discovered that these companies were depositing GST at lesser rate i.e. 12% as against the notified rate of 28%. One of the firms was found collecting GST from customers but not depositing it. The firm had also not filed its tax returns from May 2018 to August 2018. The CGST Commissionerate has not disclosed the name of the mentioned firm.
Meanwhile, the Commissionerate booked Future Gaming & Hotel Services Pvt Ltd- a company of the Martin Group for paying 12% GST as against the liable rate of 28% authorized. The company’s differential liability stands at an estimated ₹1.20 Crores. The company’s representatives gave an undertaking of paying the entire amount, shortly along with interest and applicable penalty. The company has also agreed to pay GST on all paper and online lotteries at the rate of 28%, under protest.
The differential liability of M/s Ecool Gaming Solutions Pvt. Ltd., an Essel Group company is ₹4.30 Crores, of M/s PAN India Network Ltds ₹4.58 Crores and that of M/s Skill Lotto of the Sugal and Damani Group stands at ₹2.50 Crores.
While representatives of M/s PAN India have admitted to the differential liability and paid ₹50 Lakhs, along with an undertaking to pay the remaining amount soon, the exact amount for which M/s Skill Lotto is liable is still being finalized by the CGST Commissionerate.
It is noteworthy here that according to the GST Act, and a notification of the Central Tax Rates dated June 28, 2017, there are two tax rates applicable on the lottery business. While lottery firms have to cough up a GST of 12% on sale of state-run lotteries, an 18% GST is applicable on private lotteries. Private lottery firms have sought relief from such high rates of taxation, but the GST Council and the Centre are yet to yield to their demands.
The much talked-about congressional sub-committee hearing in the U.S. on sports betting, scheduled to be held on September 27 will feature testimony from a group opposed to online casino gambling.
Sheldon Adelson’s anti-online poker group, ‘Coalition to Stop Online Gambling’ will be presenting their view before the House Subcommittee on Crime, Terrorism, Homeland Security and Investigations on Capitol Hill. The hearing will be live streamed.
The group has been seeking to prevent regulation of a number of online casino games including poker. Representing the group’s case before the subcommittee will be former Nebraska attorney-general, General Jon Bruning a Republican.
Notably, Adelson has been a driving force behind efforts for banning online casino regulation. The founder of the world’s largest casino developer, Las Vegas Sands Corp, has famously stated that he would spend whatever it takes to stop casino games from going online. Adelson has claimed that online gaming would hurt society while critics accuse him of trying to protect his casino empire from rivals who have moved online.
In addition to Adelson’s Coalition, the NFL, the AGA and the Nevada Gaming Control Board have signed on to testify. While NFL has long been hostile to gambling, with the influx of more stakeholders in the gaming industry, NFL has changed its stance and sought greater power over the sports betting industry.
The ban on individuals associated with gaming entities in Pennsylvania to make fiscal contributions to political campaigns in the state has been lifted. Hearing a case put forth in the court by two individuals who own shares in gaming companies – Sands Pennsylvania Inc and Nemacolin Woodlands Inc., the District Court for the Middle District of Pennsylvania overturned the ban recently.
The two plaintiffs had named the Pennsylvania Gaming Control Board (PGCB) members, among others in the civil lawsuit, claiming that it was unconstitutional to ban them from making political contributions.
In the hearing, Judge Rambo summarized her ruling with the statement that the state ban on financial contributions to political campaigns was too broad a definition and that the lawmakers needed to “explore ways to restrict political contributions of gaming industry principals by more strictly defining who is subject to the ban.”
She added, “There is no evidence that, in Pennsylvania, legalised gaming is uniquely susceptible to corrupt influence beyond other state-licensed industries. The court holds only that the ban in its current form goes much further than necessary to achieve its stated purpose of eliminating corruption and the appearance of corruption.”
The lawmakers of the South-American country of Peru may be on the verge of legalizing sport betting. Introduced by Percy Eloy Alcala Mateo of the Fuerza Popular party, a bill to provide a way for Peruvians to participate in the increasingly popular gambling market was tabled before the Congress for consideration.
The bill discusses a plethora of points associated to sports gambling. The legislative piece attempts to play sports gambling taxable by making casinos and lotteries, sportsbooks pay a monthly tax of 12%, which would be calculated against the difference between what was taken in by the sportsbooks and what was paid out.
At present, though sportsbooks operate in the Peruvian market, they are not legislated. As pointed out by Luis Felipe Cornejo, the general manager of Sportimba.com, “sports gambling operators only pay an income tax and, for his part, the additional 12% is acceptable, as it would bring the tax rate in line with what is seen in other countries.”
Cornejo added, “I do not think the measure will impact on the players’ prizes. If it were to impact the companies, we would receive the same income and the expense would be higher. But it is a manageable tax.”
The legislation provides a system to establish where sportsbook could legally operate, guarantees mandated to cover payouts and penalties for infractions. It also seeks to establish that all sportsbooks pay a guarantee to the equivalent of US$166,210 to cover payouts, which some consider too high.
Chief Executive Officer (CEO) of Australia gaming manufacturing giant Ainsworth Game Technology Ltd. Danny Gladstone, announced on September 24 that he will be stepping down from his post on June 30, 2019.
His departure from the company will not be immediate and the executive will remain with the company until a suitable replacement is found. Once a replacement is found, Gladstone will switch to an unidentified role within the organization.
Having worked for the gaming company for several years, Gladstone has accumulated immense experience and expertise over the years in the gaming industry. Acknowledging his contributing to the growth of the company, Ainsworth’s chairman of the board, Graeme Campbell said, “Ainsworth is much stronger for Danny’s contribution. We are delighted he will continue to assist us in the future.”
The Australian firm has witnessed impressive profits during its previous fiscal year, even though it was less than the previous year. In its financial report issued in August, the company reported a net profit of US$23.3 Million for the year, about 15.8% less than the prior period. Revenue for the company was approximately US$192.6 Million.
The newest establishment to launch a gaming platform is the largest sportsbook in Nevada, Westgate Las Vegas SuperBook. Having gained national prominence over recent years in part due to its increasingly popular NFL season-long SuperContest, the SuperBook announced on September 19 its intention to expand its gaming platform across the U.S. via a partnership between Westgate Resorts and Paragon Gaming.
This partnership will allow the franchise to become a “white label” sportsbook provider in new markets, including states that have recently introduced sports betting after the dismissal of the PASPA Act.
The casino management company Paragon Gaming, which is based in Las Vegas, has operated the Westgate Las Vegas Resort and Casino since 2015. Executive VP of Race & Sports Book Operations at the SuperBook, Jay Kornega stated, “This is the natural next step in the evolution of our industry. We have maintained the highest levels of technology and service in a highly-regulated industry. We have written the playbook, and now we will put it in action across the national field.”
Paragon Gaming COO Rob Oseland also noted, “In a way, we’re decoupling the SuperBook brand from the Westgate so it can stand on its own in other markets and compete for market share.”
The announcement further stated “Future SuperBook sites, turnkey sportsbook products, and gaming partners will be announced at later dates.”
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