Betfair Mulls UK Departure Over Tax DisputeNovember 3, 2010 9:35 am
Online sports betting company Betfair has said it may follow the example of its biggest rivals, William Hill and Ladbrokes, and move its UK operation offshore.
Despite the UK having one of the most regulated and liberal online gambling systems in the world, the price to pay has been higher costs for the gaming companies based in the country.
This lead William Hill and Ladbrokes to relocate their businesses to Gibraltar in order to pay up to ten percent less in taxes.
At the heart of Betfair’s complaint is the competitive edge it is giving away to its rivals by paying the higher rate of taxes,as well as a dispute over the horse racing levy.
In the offshore haven of Gibraltar the horseracing levy does not apply and as the Betfair CEO David Yu explained:
“We’re happy to be licensed and to pay sensible tax, but if we don’t see movement we’d have to consider what’s right for the business over the long term. We’ve been very, very proud to be a British business and I think we’re one of the real U.K. success stories.”
Betfair helped revolutionise the UK’s online horse and sports betting industry and is also the biggest bet exchange in the world with over 4 million clients and a £50m plus turnover every week.
The move of the country’s largest online betting company offshore would surely strike another blow to the UK’s economy and so Betfair and the UK government are currently locked in discussions as they consider alternate ways to keep the company based in the UK.
Ideas being touted include offering a lower tax rate or greater advertising concessions with Betfair warning that in the eventuality of no agreement being reached it was considering a move to the Isle of Man.