GRA’s 10% tax on games of chance: A double-edged sword?

At the end of last year, the Ghana Revenue Authority’s announcement of a 10% tax on games of chance ignited ripples of debate in and around the country. Players, operators and policymakers have all since weighed in online to discuss how they believe the tax might affect the market and landscape of gambling in Ghana going forward.

GHANA’S GAMBLING LANDSCAPE: A GROWING MARKET

It doesn’t take an expert in research to uncover the fact that the Ghanaian casino-gaming industry has enjoyed a period of prosperity over the past few years. This growth has mostly happened because smartphones are becoming easier to access and internet connectivity is also improving in leaps and bounds at the same time.

As younger generations become old enough to participate in gambling activities, it should come as no surprise that mobile gambling has taken off in a big way. The success that the online gambling sector has seen, along with sustained interest in both the lotteries and land-based casinos dotted around the country paint a diverse landscape. For better or worse, this diversity naturally presents many challenges for both taxation and regulation.

As more people connect to the internet with a smartphone, games of chance in all their various forms have become more accessible than ever before. This accessibility, along with the many other perks top mobile casinos offer, such as a wide variety of gaming options, loyalty programs and attractive bonuses, is clear as day.

It’s no wonder that individuals in increased numbers have decided to use their newly-acquired phones to explore their gambling options. Naturally, this new way of gambling has resonated with individuals who, until now, have not enjoyed easy access to such compelling and thrilling forms of entertainment.

This period of both success and growth has caught the local government’s attention. It was only a matter of time before the country’s top decision-makers would make a move to meaningfully tap into this new revenue stream with a tax. The new regulations have widely been seen as a way to capitalize on this burgeoning industry and capture a share of the financial gains.

PUBLIC REACTIONS: A COMBINATION OF CONCERNS AND FRUSTRATIONS

Every time a change to taxation laws occurs, there are bound to be mixed reactions from the general public. In the case of this new tax, some individuals have sided with the GRA and acknowledged the government’s need for a boost in revenue. There have also, however, been some voices expressing concerns over the potential impact of the decision.

Players who are dissatisfied or fearful over the idea of receiving reduced payouts may be pushed to start interacting with platforms that are largely unregulated. This unfortunate reaction will undoubtedly put some gamblers at risk, because many of these platforms do not put the safety and wellbeing of players first.

Finally, some online casino operators have raised valid points that the tax will ultimately reduce both the profitability of, and participation at, their platforms. This reduction may eventually cause ripples that may force operators to lay off staff members and downgrade their business-related activities. A reduction to an operator’s bottom-line will also quickly impact their ability to provide adequate funding for gambling programs designed to help problem gamblers.

BALANCING REVENUE AND PLAYER PARTICIPATION: A DOUBLE-EDGED SWORD

Even though the tax was designed to line government coffers, it raises an unavoidable challenge for gamblers. Players who are already trying to tame their financial anxieties in an uncertain economic landscape will see lower returns at the end of a gameplay session. For this reason, participants and consumers may find the ultimate impact of a 10% cut to be the straw that broke the camel’s back, so to speak.

Instead of simply placing a blanket tax on all gambling activities, perhaps alternative models should be explored to keep the government, players and operators happy. These models could involve graduated tax structures that ignore smaller wins. A compromise such as this could work to encourage continued participation while still contributing to public finances in a more balanced way.

Refining the regulations around this tax in a way that allows operators to continue focusing on responsible gambling initiatives would also go a long way. If the government wants to actually see a boost in revenue from this tax, they should work together with operators to create a regulated environment that doesn’t discourage responsible players and operators from participating

Source: thesouthafrican.com

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