The potential increase in gaming device tax paid by casinos in Russia has not yet been finalized contrary to media reports, says brokerage Union Gaming.
In a note on Monday, analysts from Union Gaming made reference to media reports over the weekend detailing a two-fold increase in gaming tax rates – applicable to all taxable gambling activities. The increase reportedly came from the latest amendments to the draft law, which passed the first reading back in May, 2016.
However, Union Gaming says it does not believe the changes have been finalized yet. The brokerage also noted that in many cases, local policy is different to national policy – with the example of Vladivostok (Primorye IEZ gaming area) being one.
In regards to casino operator Summit Ascent Holdings, the brokerage notes that should tax rates be doubled in Primorye to the potential new statutory maximum, the tax paid by Summit Ascent would go from around HK$10 million (US$1.3 million) at current tax rates to HK$20 million on an annual basis, which would be a 2 percent EBITDA impact.
“We note that the rates paid in Primorye are already in the middle of the band that might be established at the federal level. In a worst case scenario, the local government in Primorye could double the current tax and be inline with the top-end of the range established at the federal level. We do not believe the local government in Primorye has indicated they will move the taxes in either direction,” said the brokerage.