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Betfair Threatens To Quit UK Over Tax

by Robert Lee, Tax-News.com, London

04 November 2010


Betfair, the world's largest betting exchange, is complaining on a number of fronts about the difficulty of remaining competitive with offshore rivals under the UK tax and regulatory regime.

David Yu, the Betfair chief executive, told The Sunday Telegraph that his company was very happy to be licensed and pay "sensible tax" in the UK but he needed some "movement" in his consultations with the UK department of culture, media and sport over the regulation of remote gambling.

Betfair wanted to "level the playing field" between onshore and offshore companies, by securing regulatory advantages and/or tax concessions for onshore companies which could enable them to compete more effectively.

The company has just completed an initial public offering and let it be known that it had a contingency plan that envisages a move offshore, possibly to the Isle of Man, if it had no other way of maintaining a competitive position with its offshore rivals.

These include William Hill and Ladbrokes, who already moved offshore to Gibraltar to avoid the 15% gross profit tax on bookies. Betfair is also in dispute with the British Horseracing Authority over a 10% levy.

In its submission on a consultation paper issued by the Horserace Betting Levy Board (HBLB) regarding betting exchange customers, Betfair criticized the paper as "significantly flawed in a number of areas".

Betfair took the view that "no customer of a betting exchange should be regarded as being a leviable bookmaker", and went on to make four submissions on the "biased and ill-informed" nature of the paper.

Betfair is an important innovator in the sports betting business with over 4 million clients and a GBP50m+ weekly turnover. It employs about half of its 2,000 staff in the UK.

A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-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
TAGS: tax | business | commerce | law | offshore e-commerce | United Kingdom | offshore | e-commerce | gambling | offshore e-gaming | regulation

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