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Point-of-consumption tax

A point-of-consumption (POC) tax is a gambling tax levied by the jurisdiction where the player is located, on bets or gross gaming revenue from that…

Definition

A point-of-consumption (POC) tax is a gambling tax levied by the jurisdiction where the player is located, on bets or gross gaming revenue from that jurisdiction's residents, regardless of where the operator is based or licensed. It replaced the older point-of-supply model, under which an operator could base itself in a low-tax jurisdiction and pay little on business done with customers elsewhere.

Under POC, serving a country's players means paying that country's gambling tax and, usually, holding its licence.

POC taxes vary widely in rate and base - a percentage of stakes, of gross gaming revenue, or of net revenue after bonuses - and they are a major determinant of how profitable a regulated market is. A high POC rate, stacked with licence fees, compliance costs and advertising levies, can make a market marginal even at large scale.

In context

For affiliates, POC tax is the main reason commission rates and deal terms differ so much between regulated markets. In a high-POC market the operator's margin per player is compressed, so revenue-share percentages are lower, CPA offers are smaller, and operators are more selective about traffic quality because there is less headroom to absorb weak cohorts.

An affiliate comparing the same operator's programme across countries will often see materially different terms driven by local tax.

POC also shapes market entry and exit, which affects an affiliate's operator list. When a country introduces or raises POC tax, some operators withdraw rather than operate at thin or negative margin, and an affiliate can be left promoting brands that are no longer available in that market.

Conversely, a market opening with a moderate POC rate can bring a wave of new operator launches and better deals. A serious affiliate tracks the tax regime of each target market as part of understanding why deals are priced the way they are, and factors likely tax changes into which markets to invest content in.

The takeaway for content is that lower commissions in a well-run, licensed, high-tax market are not a worse deal by default - they reflect a stable market with real consumer protections, which usually delivers better player quality and durability than a lightly taxed grey market.

Worked example

An affiliate notices an operator's revenue-share offer is 35% in one regulated market and 22% in another. The difference tracks the two countries' point-of-consumption tax rates.

When a third market raises its POC rate sharply, two of the affiliate's featured operators exit, and it updates that market's pages to the brands that remain.

Related terms

Frequently asked questions

What does Point-of-consumption tax mean in iGaming?+
Point-of-consumption tax is a point-of-consumption (poc) tax is a gambling tax levied by the jurisdiction where the player is located, on bets or gross gaming revenue from that jurisdiction's residents, regardless of where the o……
How is Point-of-consumption tax calculated?+
The calculation depends on the specific context, but typically involves standard iGaming metrics. See the worked example above for a practical illustration.
Why is Point-of-consumption tax important for affiliates?+
Understanding Point-of-consumption tax is essential for negotiating fair deals, tracking performance accurately, and maximising long-term revenue from iGaming partnerships.
What is a good point-of-consumption tax rate?+
Benchmark rates vary by jurisdiction, product type, and deal structure. Industry averages and competitive ranges are discussed in the definition above.
How does Point-of-consumption tax compare to alternatives?+
See the related terms below for direct comparisons between Point-of-consumption tax and alternative approaches used across the iGaming industry.
Where can I learn more about point-of-consumption tax?+
Browse our full iGaming glossary for 80+ terms, or explore jurisdiction matrix and commission calculator for practical tools.

Browse more iGaming terms in our glossary.

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