Betfair, the online betting exchange, has been awarded a licence to operate its exchange in Malta, a move which has fuelled speculation that the pioneering firm could up sticks from the UK and move offshore if the government introduces a punitive new gambling tax regime.
The online gaming licence from the Malta Lotteries and Gaming Authority will enable Betfair to offer its customers poker games on the internet, something it presently cannot do in the UK, whilst also giving the company the option of shifting its betting exchange to Malta.
According to some analysts, Betfair's decision to obtain a Maltese licences is designed to send a message to the UK Treasury not to cave into pressure from conventional bookmakers for a level tax playing field.
Conventional bookmakers such as Ladbrokes and William Hill, argue that person-to-person exchanges such as Betfair allow professionals to “lay” bets in the same way as a bookie while avoiding paying tax.
However, Stephen Hill, Betfair’s chief executive, has revealed that the decision to obtain a licence to operate in Malta, which does not levy tax, was not motivated by tax considerations.
“Malta’s excellent technological infrastructure, its progressive and responsible gambling legislation and its EU membership were the three key reasons for us applying for a licence there,” he said.
“We hope to launch an innovative exchange-based product from Malta in the near future," Mr Hill added.
Meanwhile, Mario Galea, CEO of the Maltese Gaming Authority, has observed that the interest being shown by Betfair in Malta's e-gaming sector was a ringing endorsement of new legislation.
“Betfair’s application for a licence comes just a year after Malta introduced its new Remote Gaming Regulations," he stated.
"The fact that a tier one operator has opted to get a Maltese licence goes to show that our regulations are highly regarded and that Malta is seen by operators as a serious jurisdiction for remote gaming," Galea noted.
A comprehensive report in our Intelligence Report series examining offshore e-commerce and online gaming is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
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