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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
Charlie Horner (00:02.2)
High gaming can finally breathe a sigh of relief as the first draft of the EU budget 2028-2034 omits a common tax on gambling. The first draft written up by Ireland makes no mention of proposals for a 1 % tax, though negotiating and bargaining means that it is far from a done deal. MEPs are still pushing forward for common tax plans to take a greater share of the minimum €2 trillion budget.
Ted Orme-Claye (00:02.35)
Okay, we can find everything.
It's called
Charlie Horner (00:27.806)
iGaming sees some light, but it's not yet out of the woods on its Euro tax judgement. Welcome back to iGaming Daily, supported by Optimove, the creator of positionless marketing and the number one player engagement solution for sports betting and iGaming operators. I'm Charlie Horner and today to dissect this one with me, I'm joined by our editor-at-large, Ted Memur and SBC News editor, Ted Orme-Clay. Ted I've got a little bit of deja vu, have you?
Ted Menmuir (00:56.126)
Yes, yes, I was thinking about that just now and perhaps we should move the offices from Manchester and London to Brussels.
Charlie Horner (01:05.24)
Excellent. Ted Ossie, good to have you back on the show. You ready to discuss the EU once more? Yes, good to be back. Thank you, Charlie. And yeah, good to be back in Europe. I think if the headlines are anything to believe that might be something Andy Burnham is going to be saying in a year or two. you want to make this really nice and topical, nice and political. But yeah, yeah, on that point, yeah, quite a big topic with the EU budget to talk about here that Ted's broke for us today. So yeah, looking forward to getting into it.
Ted Orme-Claye (01:07.574)
Excellent that'll state.
Ted Orme-Claye (01:11.702)
Yeah, yeah.
Ted Menmuir (01:23.903)
you
Charlie Horner (01:35.126)
Yeah, another bit of reporting from Ted So first of all, let's just have our first reactions to the story really. Ted what was your initial reaction to the story that gambling tax was no part of this plan as yet?
Ted Menmuir (01:50.742)
I don't want to comment on the kind of editors, but I was surprised that Dublin admitted a common tax on gambling licenses. And in part, it's because of all the conflicts this industry is going through with tax judgment, tax adjustments at a national level. And I would not have been surprised if Ireland threw a spanner in the works and recommended a review on common tax, on a common tax policy for gambling.
But like you said in the intro, we are nowhere near out the woods and it would be foolish for anyone to be popping champagne corks just yet.
Charlie Horner (02:27.607)
Ted, obviously, I'll ask the same question of you. Yeah, I I found it very hard to disagree with Ted on this one. You all the momentum seems to have been going in favour of this, of a common tax, doesn't it? know, this is going back like a year now if we just talk about the, even longer than that, talk about the Dutch taxes, German taxes, French taxes, obviously the UK taxes, which we talked about very extensively on this podcast.
Ted Orme-Claye (02:27.902)
I asked the same question. Yeah, yeah, it's it's I agree I'd it's agree with ten on this one, you know, but
Ted Menmuir (02:43.999)
Mm-hmm.
Charlie Horner (02:53.815)
Charlie, you and I did a podcast last week with Patrick off my team, we? We talked about the landscape in Ireland and I mentioned towards the end of that about how there's rumours there of a domestic tax as well. you know, the talks of a common tax across the 27 member states of the EU really fell in line with the rest of this narrative, with the rest of these conversations.
And it did really seem like it was just going to be almost inevitable. So I was quite surprised that it wasn't included in the first draft. But as Ted has mentioned, important words here, we should look at our first draft. So there is still every chance that it could get reappraised. But yeah, I was surprised it wasn't included in there to begin with, especially at the same time as we're seeing, like I said, the rumour mill in Ireland suggesting that the duties there might be being increased domestically.
I mean these proposals were put forward by the Social Democrats block of the European Parliament and one of the deputies, Negrescu of Romania. Ted how about we just have a bit of an overview of why islanders decided not to accept the proposals brought forward.
Ted Menmuir (04:06.717)
Okay, so in this initial draft, what is clear is that Ireland is leading with the settlement of top line measures and in particular with the individual contribution of member states, that remains kind of the principal funding mechanism for the budget. In this cycle, we're seeing the EU ask the primary net contributors of countries such as
Germany, France, Austria, Spain, Italy to increase their funding commitment from 1 % to 1.5 % for the whole cycle. This could see net contributions for countries such as Germany and France peak above 45 billion for.
in net contributions. And this comes at a time when kind of Franco and Alamand economies are in reality hitting the walls and underperforming. So as you see, sensitivities are high. And we hear that the EU and high profile MPs such as Ursula von der Leyen and Donald Tusk, they're pushing for the EU to move towards more accountability of common tax plans to help funding. So I'm just going to kind of
Put it simple, member states believe in the EU's project and prospects, but they just don't want to be struck with the bill.
Charlie Horner (05:23.831)
That's often the case, isn't it? Yeah, we want all of the benefits, but we don't want to pay for it. Ted, I'll stick with you just for a moment, because there are common taxes that are in some of these plans. What do you think that shift tells us about the European Union strategy for funding and the finances of various different Eurozone projects?
Ted Orme-Claye (05:23.918)
That's often the case, isn't it?
Ted Menmuir (05:25.21)
Yeah.
Ted Menmuir (05:46.902)
So very much so. Common taxes are on the menu and the draft bill that's been proposed by Ireland carries orders on unified taxes on emissions trading, electronic waste, tobacco consumption and carbon offsetting of EU member states. As stands, the net budget accounts for a net contribution of circa £55 billion raised by common taxes through the cycle period.
So in many cases, you know, there is a case for common taxes and the common tax plan to kind of relieve pressures from national contributions. It's much more, I think the focus here will be much more in how these mechanisms are individually transferred onto each member state and to ensure contribution on how common taxes are applied.
Charlie Horner (06:43.893)
Okay, well, look, we said it earlier. Nothing's finished yet. The plans are still in draft mode and the budget is still under the minimum guarantee of two trillion euros. So, Ted OC, does this leave the door open for a common tax on online gambling? Is this just a false dawn? Yeah, absolutely. I think maybe not a false dawn, but you know...
Ted Orme-Claye (06:44.025)
Okay, well look.
Ted Orme-Claye (07:04.94)
Yeah, absolutely.
Charlie Horner (07:10.295)
It's a positive sign for the industry that it wasn't just immediately seized upon, I think. But as you say, the door is still open now. This is only a first draft. I think if I can relate this back to one of the talking points we just going over with Ted, you know, maybe one of the reasons it was left out was just because they thought, at the end of the day, the Socialists and Democrats, they proposed this, I believe the expected...
tax income from this 1 % pan-EU levy was in the highest estimate was something like 28 billion I think, which obviously is a huge amount of money. But when you look at the overall spending plan of 2 trillion, it's really just sort of a drop in that ocean, isn't it? I is that like between 1 and 2 % of that? So it could be that the Irish policymakers who've been going over this might have just looked at that and thought, well, we can find this money from other means.
we can of different levies on even bigger industries and goings on so that they can fill the gap. But yeah, like you say, it's still under, there's still gaps to fill and kind of a bit similar to the conversation we're having in the UK right now where you can have as much pushback as you want from the industry. But ultimately, when governments are looking at this gap that needs filling, they will.
They will look for all avenues, won't they? The Socialist and Democrats and MEP and Aggressor from Romania can still continue proposing this and making their case to the European Parliament and to the legislators and policymakers putting this together. There's still room to have lot of lobbying around it. They can get more people involved, form more alliances. This is far from the end of it.
but it is a bit of a positive sign, I think, for the industry, like I said earlier, that this wasn't just included straight away, that politicians aren't just blindly jumping in and going, yeah, we'll just tax it and think about any consequences, any potential consequences later. Certainly. But that could yet happen. There is a pathway towards a common tax for online gambling being put into the...
Charlie Horner (09:34.024)
into the budget. Ted how can supporters and proponents of such attacks return the matter for consideration?
Ted Menmuir (09:42.664)
I think Telo Suis had it in the nail. Look, we are at the bargaining stage of the budget. And in this mandate, it's all about what is negotiated and what is bargained by 27 member states. There are many ways in which a curveball could be thrown and maybe one or two member states or political blocs gets creative on the budget and actually just ask for...
gambling taxes to become a consideration in the cycle. So yes, they might not come initially, but they might come in year three or year four and they must be come under deliberation from Strasbourg. And it's important to remember, look.
Brussels, European Parliament, European Councils, they love a deliberation and reality no matter is never dead. I mean this is very much kind of Freddy Krueger, they just keep on coming back and back and you know to our audiences I ask and I tell them why should gambling be any different?
Charlie Horner (10:39.486)
Indeed. Well, look, there's 27 member states in the EU. They can't all agree on everything. And so we'll take a quick break and we'll look at some of the arguments and we'll see on who, countries are in which corner of this particular ring. So join us after the break.
Ted Orme-Claye (10:39.544)
Indeed. Well look, there's twenty seven members.
Charlie Horner (11:01.824)
Welcome back to iGaming Daily. Ted We know that EU budgets are all about the bargaining and the deliberations and the backroom chats between the different member states and their representatives. So let's take a look at who is in each side of this particular debate on a common tax for online gambling. First of all, tell us about the states or the different blocks that consider that the tax is essential for the future of EU funding.
Ted Menmuir (11:28.637)
Okay, so it's important to understand in terms of who supports common taxes, it's actually a mixture of both political blocs and states across the board. So yes, there are elements of France, of French politics and German politics that are wholly supportive, and even Malta itself is supportive of some common tax plans that should be proposed by the EU. And it's important to understand that it's not necessarily drawn by political ideology.
These budgets and their settlements come down to the overall influence on the direction of the EU. And here you have to look at individual member states. Yes, Germany and France are in a kind of a delicate economic state and in dire need of help. Yet they remain much more influential than the EU's younger economies just by sheer size of their markets. Common taxes are viewed as a new funding mechanism that sees the EU secure a layer of self-sufficiency on
future funding of projects, initiatives, but on the whole they're supported even by detractors such as Malta. It's a much more complicated situation than just saying this party supports it or this nation supports it. It's a general mix of how do you finalise and settle on the terms of the budget and move forward.
Charlie Horner (12:50.038)
It's very surprising that you bring up Malta there Ted in the 4 campaign because you presume that Malta would be firmly against such a move. Ted, I'll see how about you tell us about some of the oppositions that this measure might face from the likes of Malta but also other jurisdictions. Well yeah, the simplest that would be you would expect that countries that count iGaming as a very significant industry
Ted Orme-Claye (12:50.064)
It's very surprising that you bring up Malta there, Ted, in in in the call campaign. because you would you presume that Malta would would be the
Charlie Horner (13:18.144)
countries and jurisdictions I should say. The counter-eye gaming is a very significant industry would be rallying against this. You would obviously expect Malta to be one of those given that I think the betting and gaming industry accounts around one tenth of the country's GDP annually. Give or take obviously varies each year. It's also quite significant to the cross-sector economy in Malta with the financial industry and the technology industry being quite big there as well.
Ted Orme-Claye (13:19.44)
should say the I significant industry will be playing against the UNC. I mostly won it would
Charlie Horner (13:46.188)
They obviously service the iGaming space. There's a lot of sort cross significance there. I think another country that could be an interesting one in all this would be Estonia, given the discussions that there's been in the past about them wanting to become Europe's next iGaming hub. Obviously they've been pushing legislation through. They set a lower tax rate than Malta, they? think they set that as a 4%. Malta's is 5%.
It's trying as a way to entice maybe you could say businesses to domicile there and license there. So they might be a bit concerned about the impact a pan-European tax could have on their own ambitions there. And obviously beyond that, you've just got countries like the UK, Italy, France and so on who...
sure that the government might not be as concerned because we've seen governments in these countries happy to put increased regulations on the industry or heavier taxes. But there are very significant stakeholders within those countries who would probably make, we could expect to make some noise around this. Hang on, I've just said the UK, you aren't in the EU, fuck's sake, let me start this again.
Sorry, no, you're gonna have to do some editing on that one. I've gone back 12 years. Yeah, just started reading off France, Italy, and I went UK, bollocks. While I'm pausing here, I thought Malta were opposed to this. Did we just say that Malta were in favour of this?
Ted Menmuir (15:06.421)
Keep it, keep it.
Ted Orme-Claye (15:10.404)
Years. Yeah, just started reading off France, Italy and I went UK, Pollocks.
Ted Menmuir (15:21.205)
No, no, what I'm saying is that Malta is opposed to a common tax plan on gambling. But it's not opposed to a common tax plan on e-emissions or tobacco. there are different common taxes that have been proposed. It accepts four of them, the fifth one on gambling. said, no, you can fuck off. Right, and yeah.
Charlie Horner (15:25.749)
Yeah, yeah. Yeah, okay.
Ted Orme-Claye (15:25.784)
Yeah, yeah. Yeah. Okay.
Charlie Horner (15:31.083)
Yeah, yeah, yeah, yeah, right, yeah, yeah.
Ted Orme-Claye (15:31.14)
Yeah, yeah, yeah. Yeah. Right. Yeah. Yeah.
Charlie Horner (15:41.516)
Yeah, yeah. Okay, right. Well, count myself back in. Yeah, so as you've both just said, Malta is probably going to be one of the most significant national voices against this tax. As Ted said, they're basically in favour of most of the common duties with the exception being the gambling one. We shouldn't find that at all surprising given the significance of betting and gaming to Malta's economy.
Ted Orme-Claye (15:41.54)
Yeah, yeah. Okay, right. Well camps all back in. Yeah, so as as you've as you've both just said, Malta is probably gonna be
We send it through into this.
Charlie Horner (16:09.407)
I think it's routinely cited as being about one tenth of the country's GDP and it also has a lot of significance to some of the very important sectors of the Maltese economy, namely finance and banking, payments, technology, those kind of areas. I think this is quite an interesting one actually regarding Malta and it's kind of setting a bit more of a divide between the country and other EU nations around the topic of gambling, know, given the...
the conversation, given some of the pushback there's been around Bill 55 and some of the international disputes and so on, the cross jurisdictional disputes, I think it's quite interesting how those two can factor in together here. So yeah, obviously Malta would be a big one. I think another, not as big as Malta, but certainly an interesting voice in this could be Estonia, given they're chasing a similar
Ted Menmuir (16:44.437)
Hmm.
Charlie Horner (17:06.935)
status of an iGaming hub as Malta is. They set their gaming tax rate at 4%, which is 1 % point below Malta's, which I think we could almost see as a very deliberate way to try and entice companies, gambling companies, to register in Domicile there and help them build up that iGaming hub ambition. Cyprus would be another one, there's quite a big B2B betting and gaming tech industry there.
We've seen the Cyprus regulator this week put out some public statements about the need to combat illegal gambling. That's something that a lot of stakeholders in the industry who are opposed to this 1 % tax have obviously raised as being one of their arguments against it. This would ultimately benefit the illegal industry more than the governments would get money out of it basically. So there's a couple of different national voices involved.
Yeah, absolutely. So we've got the member states who are in the for section and there's a handful in the against section. There's probably quite a lot just in between as well that could be swayed either way. Ted do think this could end up in a bit of a rift? And if not, then what could impact the proceedings and negotiations between member states here?
Ted Menmuir (18:31.879)
a lot and I mean in terms of both in the foreground and the background negotiations look the budget as is accounted for is at 1.6 trillion euros and it requires settlement on the key issue here of defense and security contributions and how they will be paid by individual member states
I've been reading kind of into this and I think the EU will likely push ahead if the budget gets to 90 % agreement on terms and even if there is some grounds for negotiations left. However, what is not kind of helping dynamics and what is really out in the background is the political state of big nations and top contributors. So last week Spain triggered an election.
France is on the brink of a government collapse and Germany too with the ADF holding kind of strong opinions on the relationship between the Bundestag and Brussels. So again, lots of headaches, lots of anxieties and no one is sure how the budget will reach its final settlement and whether it will carry on to 2027.
Charlie Horner (19:45.688)
Yes, but certainly very fraught times within the EU, particularly on that political angle of some of the big beasts of the bloc. Just as we bring things towards a bit of a close now, we know that the EU is somewhat cash strapped. We know that the economies of some of the major nations aren't growing as fast as perhaps they would like to, yet spending needs on things like defence and energy and agriculture are great.
Ted Orme-Claye (19:45.743)
Yes, it's certainly very
Charlie Horner (20:15.971)
a great level. So do we think that essentially a common tax, whether it happens in this budget or the next budget, is simply an inevitability or a reality of the future of the EU? Do you think that there is any escape for gambling licensees? Ted, I'll see what you think. I think the odds are certainly stacked against the industry and in favour of the tax.
Ted Orme-Claye (20:33.531)
think the odds are certainly stacked against the industry and in favor of the tax.
Charlie Horner (20:40.501)
If you just look at all the different macroeconomic pressures, again, this just relates to a lot of the issues we discuss around taxation at the domestic level, whether it's here in the UK or in other countries. Like you said, Charlie, the EU is facing a huge amount of economic and geopolitical pressures. You've got overseas wars that are putting pressure on the bloc and its member states to increase defense spending.
that's simultaneously affecting energy and power prices and the availability of sources like that, that putting pressure on agriculture. And then you've got the topic that we discussed yesterday of kind of the EU's international economic competitivity against the United States and emerging powers and economies and growing powers and economies in Asia. Ultimately, they need to...
a bit like the UK, need to spend and they need to invest to achieve the goals they've got and that will require funding and eventually when they've got all these pressures stacked against them, even though, like I said earlier, I think this 1 % I gave in tax would really be a drop in the ocean of the 2 trillion spending plan they've got, it is a drop nonetheless and when the political financiers backs are against the wall and they need this money coming from somewhere,
and that source of finances available, they will be more likely to take it, won't they?
Ted Menmuir (22:09.997)
I agree with so much of what Ted says in terms of like you really showcase kind of the...
So let's say the political syndrome of the EU, but I want to kind of bring this back to gaming and its syndrome. And I think as a sector, we have to be real on this and reflective of what has happened in last five years and the of the lived experience of the industry. On the one hand, gambling wants harmonization and a better kind of political understanding. And it's how does it get there? And on the other, what we've seen is the reality that margins are squeezed on taxes sanctioned within an individual market.
And the decision to kind of elevate these taxes wasn't brokered by the EU, it was brokered by the parliaments and governments of individual states. Now, to me, at some point, gambling has to confront its relationship with the EU and ask itself, why does it remain fragmented as other high-risk sectors such as insurance?
financial services and banking have seen kind of some form of unionized frameworks upon its governance. Gambling does not have that. I think that we've got to kind of move away from just thinking that tax is just a binary debate of wrong or right. If a European tax at one or two percent can lead to governments pushing, individual governments pushing down their...
taxation rates or having a more unionized kind of framework for the governance of gambling, I believe that it could become a better outcome for gambling licenses in Europe. But again, it's who's willing to kind of broker these negotiations.
Charlie Horner (23:53.461)
Yeah, that could be something that perhaps shapes the entire next decade of the industry and its relationship with the EU. That's no mean feat. But look, Ted, Ted, it's a really interesting debate. Thanks ever so much for coming on and talking about this one today. Maybe we'll see you again tomorrow where we'll discuss sort of agricultural policy in France, accession talks in Southeast Europe, maybe. But most likely we'll be talking about
Ted Orme-Claye (23:53.51)
Yeah, that that could be something that perhaps shapes the the if
Ted Menmuir (24:12.681)
Book me in.
Charlie Horner (24:21.578)
iGaming and its impact of some form of regulation. Thanks again for joining me today, thanks to Optimo for supporting the show and to our listeners. Thanks for tuning in to today's episode of iGaming Daily and come back tomorrow to keep up to date with all the latest global gambling news.