A gaming expert has called for the ‘onerous’ licence fee charged to eGaming businesses to be slashed to attract new start-up firms in the island.
He proposed the £35,000 annual fee charged to eGaming companies be reduced to £5,000 for the first two years.
Castletown based Warwick Bartlett, chief executive of the Global Betting and Gaming Consultancy (GBGC), also believes more should be done to improve shopping facilities in the island which he described as ‘dire.’
Mr Bartlett made his call as one of the speakers at the prestigious KPMG eGaming Summit held at the Palace Hotel, Douglas, a last-minute replacement venue following the Mount Murray fire.
Mr Bartlett said: ‘I’ve been here in the Isle of Man for six years. I really like it here and it is a great place to live and great place in which to run a business.’
He said zero corporation tax was top of the list as a selling point for the island. Low income taxes and no capital gains tax were also important.
‘The licence fee is £35,000 a year and for companies like Paddy Power that is chickenfeed.
‘But to small start-ups it’s quite onerous.’
He recounted how someone had told him the example of a person who might have got together about £600,000 to start a business here.
‘He knows he won’t make any money for the first three years and he’s lost £100,000 in those three years. For what: A piece of paper that enables him to operate a business in the Isle of Man.
‘So they look on it like a commodity, something that they buy.
‘It’s like when you go online and you decide to go with easyJet as opposed to Flybe or whatever because it’s cheaper. And that’s the way entrepreneurs look at this when they are setting up a business.
‘Some of you might not agree but I speak to these people day in and day out and any economy that does not encourage start-ups is destined to flop and that is a fact.
‘Some people say that if they cannot afford £35,000 we don’t want them anyway.
‘We’re not in that market. Ladbrokes, William Hill, Coral, you’re not going to blast them out of Gibraltar. There’s no VAT (in Gibraltar). That is their preferred jurisdiction. And the cost of moving is ridiculous.
‘So they are there and we need those start-ups.
‘I’ve got a proposal. I think for the first two years the licence fee should be £5,000 per year, and thereafter £35,000.
‘The advantage to that is there is no loss to Treasury because I suggest to you that we would not pick up those people anyway. They are incremental.
‘And once they are here they are unlikely to move because all the research we have done here at GBGC suggests that when people do licence in a jurisdiction they stay there.
‘Because there are various anchors that keep them in place. And we have to build on those anchors.’ He said those ‘anchors’ include the cost of moving. ‘It’s a long hard thinking process to move. There aren’t many cases where people chop and change.’
Other anchors were good schools and homes.
Mr Bartlett said some young people would not leave London ‘under any circumstances’ because they enjoyed the ‘euro cafe lifestyle’ there.
‘For an island of 80,000 people we can’t replicate that but we need to go some way towards that.’
Mr Bartlett said the island’s restaurants and coffee shops had improved over the last few years ‘ and we are moving in the right direction. but we need to do a bit more’.
He criticised shopping facilities in the island. He said: ‘Shopping when I first came here was dire, it’s even more dire.’
He said: ‘When people come to set up a business here; the guys like the golf with nine golf courses, lots of sport, plenty of pubs, good beer. You can go fishing, diving, you can go in a boat, ride a motorbike round the TT Course. The guys just fall in love with it.
‘Then they bring their wives over. ‘‘What, you want me to live here?’’ This is an issue. It’s not really immediately solveable because we have a population of 80,000 people and you can’t expect huge department stores like Selfridges to come here.’