General Betting
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By Simon Goodley (Independent on Sunday)
Sunday, 10 October 2010
Betfair, the soon to be floated betting exchange, has drawn up plans to move its business offshore.
The group, which announced last week that its listing would value it at as much as £1.48bn, has denied it is to leave the UK. However, it is irked by offshore rivals marketing themselves to UK punters, while avoiding UK taxes.
A spokesman said: "If there is no movement on [the regulation of offshore bookmakers] the team has to make sure it has the right contingencies to run the business effectively. No decision has been taken on offshore."
Meanwhile, the company's listing prospectus admits that its new Dublin office – which will house around 100 staff – will "provide the Betfair Group with additional flexibility as the regulatory environment evolves". That has been interpreted as a message for the Department for Culture, Media and Sport, which is looking at responses to a remote gambling consultation which began in March.
Sunday, 10 October 2010
Betfair, the soon to be floated betting exchange, has drawn up plans to move its business offshore.
The group, which announced last week that its listing would value it at as much as £1.48bn, has denied it is to leave the UK. However, it is irked by offshore rivals marketing themselves to UK punters, while avoiding UK taxes.
A spokesman said: "If there is no movement on [the regulation of offshore bookmakers] the team has to make sure it has the right contingencies to run the business effectively. No decision has been taken on offshore."
Meanwhile, the company's listing prospectus admits that its new Dublin office – which will house around 100 staff – will "provide the Betfair Group with additional flexibility as the regulatory environment evolves". That has been interpreted as a message for the Department for Culture, Media and Sport, which is looking at responses to a remote gambling consultation which began in March.
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Don't worry about matters I can't do anything about.
They will wait for the outcome of the DCMS remote review. That will decide what happens not just to Betfair but also to pretty much all online bookmakers.
The preferred option for the government is clearly to require overseas operators to hold a licence to advertise in UK and transact with UK customers. Whilst this will come at a price I also think that the long term aim is taxation based on player residency. I just can`t see the government letting all the tax leave the UK and this would be an easy way for them to not only stop the flow away from UK but also to attract many firms back.
If they already hold a licence for advertising and UK customer purposes then the taxation step is easier.
As far as BF is concerned once floated they will have to take action that is most profitable to their shareholders. Moving offshore might well be one step however I would be staggered if they didn`t introduce higher charges too sooner rather than later.
It may be in the form of an extended premium charge. Time will tell however I would be surprised if they didn`t try and squeeze more out of the winners up until such time as the competition closes the gap.
The preferred option for the government is clearly to require overseas operators to hold a licence to advertise in UK and transact with UK customers. Whilst this will come at a price I also think that the long term aim is taxation based on player residency. I just can`t see the government letting all the tax leave the UK and this would be an easy way for them to not only stop the flow away from UK but also to attract many firms back.
If they already hold a licence for advertising and UK customer purposes then the taxation step is easier.
As far as BF is concerned once floated they will have to take action that is most profitable to their shareholders. Moving offshore might well be one step however I would be staggered if they didn`t introduce higher charges too sooner rather than later.
It may be in the form of an extended premium charge. Time will tell however I would be surprised if they didn`t try and squeeze more out of the winners up until such time as the competition closes the gap.
they better float this turd before USA legalizes exchanges and some big Vegas casinos break up their monopoly. About 15 years ago, AOL had a similar monopoly. Their shares were selling at around $100....they treated their customers the same way Betfair does....to make a long story short, AOL is now trading 80% lower.
Premium charges are irrelevant to the big picture.
Most of BF's customer base is not in the slihtest bit affected by it.
Normal punters are either not making a profit, or their overall charges to net profit well exceed 20% just from what they do.
The big time Vegas casinos are monoliths themselves, just like AOL, and represent no more a threat than anybody else. They don't for example have a true loyal customer base to build on for starters.
They just have names that are associated with gambling, and not necessarily good names in some cases.
Most of BF's customer base is not in the slihtest bit affected by it.
Normal punters are either not making a profit, or their overall charges to net profit well exceed 20% just from what they do.
The big time Vegas casinos are monoliths themselves, just like AOL, and represent no more a threat than anybody else. They don't for example have a true loyal customer base to build on for starters.
They just have names that are associated with gambling, and not necessarily good names in some cases.
I can only see the govt. shooting themselves in the foot if they try to get more than a token contribution from offshore operators. They cd get away perhaps w/ charging for a license but not for voluntary levy or profits contributions on the same basis as UK resident firms.
My sense is that v. little will change.
My sense is that v. little will change.
http://www.cityam.com/news-and-analysis/betfair-threat-quit-the-uk
TAX
MATTHEW WEST
BETFAIR may quit the UK over a proposed tax increase and government inaction over offshore gambling websites, it emerged over the weekend.
City A.M. understands the online bookmaker, which only last week confirmed it would go ahead with a planned £1.5bn flotation on the stock market, has drawn up a contingency plan that could see it copy rival William Hill in moving its operations to Gibraltar.
The bookmaker could save millions in tax by moving offshore as it would not be subject to the horseracing levy – a 10 per cent tax that all but the smallest bookmakers in the country have to pay on profits from betting on horse racing.
Betfair feels it is being unfairly targeted by the British Horseracing Authority (BHA) in a longstanding row over the levy.
The BHA argues professional bookies, who should be subject to the levy, use online exchanges like Betfair to conduct their business and avoid paying the tax, a charge the bookmaker has always refuted. However, funds raised by the levy have fallen from £115m to £75m in three years.
Last year Betfair paid £6.1m in levy payments, plus another £1.25m voluntary payment in respect of its overseas customers betting on UK horse racing.
While the company said it had no immediate plans to quit the country, a source said that it had made a contingency plan should it consider itself disadvantaged by the government’s failure to regulate offshore gambling websites and the BHA’s plan to raise the levy.
A spokesman for the company said: “No decision has been made but like every company Betfair puts in place contigency plans for the risks facing it business.”
Rival bookmaker William Hill moved its online and telephone betting business to Gibraltar in June where gross profit tax (GPT) is only three per cent compared to 15 per cent in the UK and where it is not subject to the horseracing levy.
In March, the Department for Culture Media and Sport (DCMS) launched a consultation into the regulation of offshore gambling websites and betting exchanges. These have exploded since a 2005 act created the Gambling Commission to regulate betting in the UK.
A source close to the situation said Betfair had heard nothing from DCMS in recent months on offshore betting regulation, despite the consultation ending in June, adding it was “the idea of the previous government.”
Meanwhile the company’s listing prospectus says Betfair’s new Dublin office – which will house around 100 staff – will “provide the Betfair Group with additional flexibility as the regulatory environment evolves”, a phrase considered to be a warning to the government to take action.
TAX
MATTHEW WEST
BETFAIR may quit the UK over a proposed tax increase and government inaction over offshore gambling websites, it emerged over the weekend.
City A.M. understands the online bookmaker, which only last week confirmed it would go ahead with a planned £1.5bn flotation on the stock market, has drawn up a contingency plan that could see it copy rival William Hill in moving its operations to Gibraltar.
The bookmaker could save millions in tax by moving offshore as it would not be subject to the horseracing levy – a 10 per cent tax that all but the smallest bookmakers in the country have to pay on profits from betting on horse racing.
Betfair feels it is being unfairly targeted by the British Horseracing Authority (BHA) in a longstanding row over the levy.
The BHA argues professional bookies, who should be subject to the levy, use online exchanges like Betfair to conduct their business and avoid paying the tax, a charge the bookmaker has always refuted. However, funds raised by the levy have fallen from £115m to £75m in three years.
Last year Betfair paid £6.1m in levy payments, plus another £1.25m voluntary payment in respect of its overseas customers betting on UK horse racing.
While the company said it had no immediate plans to quit the country, a source said that it had made a contingency plan should it consider itself disadvantaged by the government’s failure to regulate offshore gambling websites and the BHA’s plan to raise the levy.
A spokesman for the company said: “No decision has been made but like every company Betfair puts in place contigency plans for the risks facing it business.”
Rival bookmaker William Hill moved its online and telephone betting business to Gibraltar in June where gross profit tax (GPT) is only three per cent compared to 15 per cent in the UK and where it is not subject to the horseracing levy.
In March, the Department for Culture Media and Sport (DCMS) launched a consultation into the regulation of offshore gambling websites and betting exchanges. These have exploded since a 2005 act created the Gambling Commission to regulate betting in the UK.
A source close to the situation said Betfair had heard nothing from DCMS in recent months on offshore betting regulation, despite the consultation ending in June, adding it was “the idea of the previous government.”
Meanwhile the company’s listing prospectus says Betfair’s new Dublin office – which will house around 100 staff – will “provide the Betfair Group with additional flexibility as the regulatory environment evolves”, a phrase considered to be a warning to the government to take action.
Banks,
As far as BF is concerned once floated they will have to take action that is most profitable to their shareholders.
That's a bit of a weird comment. Are you suggesting that the directors of a private company don't have to take the action that's most profitable for shareholders?
I don't think you've thought through your taxation based on player residency idea. How would that work? I'm in the UK, and I open an online account with an offshore company. How will you know that's what I've done and how much I bet?
As far as BF is concerned once floated they will have to take action that is most profitable to their shareholders.
That's a bit of a weird comment. Are you suggesting that the directors of a private company don't have to take the action that's most profitable for shareholders?
I don't think you've thought through your taxation based on player residency idea. How would that work? I'm in the UK, and I open an online account with an offshore company. How will you know that's what I've done and how much I bet?
I think he may mean that private companies are not under the same type of consistent pressure to be always seen to be trying to maximize shoer term profits.
One if the biggest complaints public companies is their emphasis on setting and meeting short term profit targets to get up their share prices.
Of course directors always have a general responsibility that a company always acts correctly in the intersts of all concerned with it, be they shareholders or creditors.
One if the biggest complaints public companies is their emphasis on setting and meeting short term profit targets to get up their share prices.
Of course directors always have a general responsibility that a company always acts correctly in the intersts of all concerned with it, be they shareholders or creditors.
FAFH,
You don't think "Las Vegas" represents any more of a threat to Betfair than other companies? These companies have the capital, the name recognition and easy access to target customers. Furthermore, gambling is their business. They will have an exchange up and running soon after legislation is passed. They'll dominate the American market and will have their eyes set on SE Asia (they've already invested billions in Macau). Competition also inevitably leads to price wars.
In my opinion, there is zero longterm growth potential for Betfair.....opinions are like a$$holes, though...we all have one & most of em stink.
You don't think "Las Vegas" represents any more of a threat to Betfair than other companies? These companies have the capital, the name recognition and easy access to target customers. Furthermore, gambling is their business. They will have an exchange up and running soon after legislation is passed. They'll dominate the American market and will have their eyes set on SE Asia (they've already invested billions in Macau). Competition also inevitably leads to price wars.
In my opinion, there is zero longterm growth potential for Betfair.....opinions are like a$$holes, though...we all have one & most of em stink.
Having an exchange means sharing w/ winners, and this is something that casinos are utterly averse to doing. Anyone caught card counting at blackjack is going to get thrown out.
Imv casinos will continue running their lines, maybe exanding to Asian hcaps, for a long time yet without showing any desire to switch to an exchange model.
Imv casinos will continue running their lines, maybe exanding to Asian hcaps, for a long time yet without showing any desire to switch to an exchange model.
Banks,
As far as BF is concerned once floated they will have to take action that is most profitable to their shareholders.
That's a bit of a weird comment. Are you suggesting that the directors of a private company don't have to take the action that's most profitable for shareholders?
In simple terms a privately owned business can make decisions that suit them but may not necessarily be the best financial decision. In this case it may well have suited the private owners to stay in UK. The financial cost of this may have seemed reasonable to them. Once they are publically floated the decision makers ie the shareholders would demand a different course of action.
I don't think you've thought through your taxation based on player residency idea. How would that work? I'm in the UK, and I open an online account with an offshore company. How will you know that's what I've done and how much I bet?
It`s not my idea. It has long been floated in government circles.
I suspect what would happen is that there would be agreements between all regulated operators in different countries to disclose the information. If it followed on from the proposed licence for operators who wanted to advertise in the UK it would be easy to get the info.
Even if it was limited to these operators I would imagine the government would be quite happy as all that would be missed would be low level operators who never advertised in UK.
As far as BF is concerned once floated they will have to take action that is most profitable to their shareholders.
That's a bit of a weird comment. Are you suggesting that the directors of a private company don't have to take the action that's most profitable for shareholders?
In simple terms a privately owned business can make decisions that suit them but may not necessarily be the best financial decision. In this case it may well have suited the private owners to stay in UK. The financial cost of this may have seemed reasonable to them. Once they are publically floated the decision makers ie the shareholders would demand a different course of action.
I don't think you've thought through your taxation based on player residency idea. How would that work? I'm in the UK, and I open an online account with an offshore company. How will you know that's what I've done and how much I bet?
It`s not my idea. It has long been floated in government circles.
I suspect what would happen is that there would be agreements between all regulated operators in different countries to disclose the information. If it followed on from the proposed licence for operators who wanted to advertise in the UK it would be easy to get the info.
Even if it was limited to these operators I would imagine the government would be quite happy as all that would be missed would be low level operators who never advertised in UK.
Proxies blow all laws based on country of origin out the water
Proxies blow all laws based on country of origin out the water
You could determine country via bank account etc. No need to worry about proxies.
You could determine country via bank account etc. No need to worry about proxies.
askari1 12 Oct 10 12:52
Having an exchange means sharing w/ winners
sharing winnings? Hardly....Betfair act as brokers, not bookmakers! Furthermore, it is OUR money in the first place. When the government "gives" you a "tax refund", they aren't actually giving you money....they are returning the money to the rightful owner.
Having an exchange means sharing w/ winners
sharing winnings? Hardly....Betfair act as brokers, not bookmakers! Furthermore, it is OUR money in the first place. When the government "gives" you a "tax refund", they aren't actually giving you money....they are returning the money to the rightful owner.
Is there something stopping you having a bank account outside your country of residence?
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