General Betting
There is currently 1 person viewing this thread.
08 Mar 11
07:36
Joined:
Date Joined:
07 Aug 06
It begs the question on how the exchequer will recoup the lost income and the comments about the Dublin office won't settle UK based workers. This from the FT:
Betfair set to move offshore
By Roger Blitz, Leisure Industries Correspondent
Published: March 7 2011 23:34 | Last updated: March 7 2011 23:34
Betfair is expected to announce on Tuesday that it will in future operate under a Gibraltar rather than a UK gaming licence, following the lead of other betting operators that have moved offshore to escape the UK’s 15 per cent tax on gross betting profits.
The betting exchange, which floated in October, has repeatedly warned that it was at a competitive disadvantage because of its UK licence.
It is expected to save about £18.5m in annual tax payments as a result of the move. The group’s likely announcement would coincide with its first trading update since its maiden results as a listed company in December when investors reacted badly to poor performances in horseracing and poker.
Betfair insiders indicated that the licensing move did not involve relocating staff.
In its flotation prospectus, Betfair said the Dublin office it opened in July, which included a new data centre and its relocated telephone betting and trading teams would “provide strategic benefits . . . by combining some existing technology and operational resources into a single location, which should deliver long-term improved performance and reduced costs”.
It added: “Betfair’s Dublin base will provide the Betfair group with additional flexibility as the regulatory environment evolves, should the need arise”.
The licence switch echoes decisions taken in recent years by William Hill and Ladbrokes to relocate their online businesses to low-tax licensing jurisdictions, also in reaction to the competitive threat from overseas-based operators taking bets from the UK. Betfair declined to comment.
Some analysts predicted that the company’s third-quarter results would be adversely affected by the loss of half of the scheduled racing fixtures in December due to poor weather.
The shares reached £15.50 in late October, but have fallen since and were on Monday night at £8.87, although they are 5 per cent higher than the post-flotation low of £8.45, reached on February 24.
The government, faced by an ever-growing band of operators finding its betting tax rate prohibitive, has been reviewing the licensing system but has yet to decide on any reforms.
Betfair set to move offshore
By Roger Blitz, Leisure Industries Correspondent
Published: March 7 2011 23:34 | Last updated: March 7 2011 23:34
Betfair is expected to announce on Tuesday that it will in future operate under a Gibraltar rather than a UK gaming licence, following the lead of other betting operators that have moved offshore to escape the UK’s 15 per cent tax on gross betting profits.
The betting exchange, which floated in October, has repeatedly warned that it was at a competitive disadvantage because of its UK licence.
It is expected to save about £18.5m in annual tax payments as a result of the move. The group’s likely announcement would coincide with its first trading update since its maiden results as a listed company in December when investors reacted badly to poor performances in horseracing and poker.
Betfair insiders indicated that the licensing move did not involve relocating staff.
In its flotation prospectus, Betfair said the Dublin office it opened in July, which included a new data centre and its relocated telephone betting and trading teams would “provide strategic benefits . . . by combining some existing technology and operational resources into a single location, which should deliver long-term improved performance and reduced costs”.
It added: “Betfair’s Dublin base will provide the Betfair group with additional flexibility as the regulatory environment evolves, should the need arise”.
The licence switch echoes decisions taken in recent years by William Hill and Ladbrokes to relocate their online businesses to low-tax licensing jurisdictions, also in reaction to the competitive threat from overseas-based operators taking bets from the UK. Betfair declined to comment.
Some analysts predicted that the company’s third-quarter results would be adversely affected by the loss of half of the scheduled racing fixtures in December due to poor weather.
The shares reached £15.50 in late October, but have fallen since and were on Monday night at £8.87, although they are 5 per cent higher than the post-flotation low of £8.45, reached on February 24.
The government, faced by an ever-growing band of operators finding its betting tax rate prohibitive, has been reviewing the licensing system but has yet to decide on any reforms.
sort by:
Show
per page
Replies: 54
|
By:
An unfortunate inevitability after Betfair floated. Shareholders will want to save costs by any means, and moving offshore is an easy answer.
How long before they stop paying the horseracing levy as well? |
|
By:
The move is on 9th March which is just before Cheltenham/Aintree, I bet they are having a little smile at the horse racing authority.
On the other hand with most of the larger operators now offshore surely its time for the government to follow the lead of other European countries and ban overseas betting operators from taking bets from the UK. |
|
By:
this is hardly news, betfair have been advertising for the gibraltar jobs since last year.
|
|
By:
And your point is? What?
|
|
By:
point is this is not breaking news, its old news
|
|
By:
Lack of long term view. Europe will legislate country specific monopoly at some point. Well done to paying less taxes when your business is deemed illegal.
|
|
By:
betting_quant
08 Mar 11 12:16 Joined: 08 Jun 10 | Topic/replies: 167 | Blogger: betting_quant's blog point is this is not breaking news, its old news I see. Thank you for that valuable contribution. |
|
By:
if i move to gilbratar will i become exempt from the premium charge?
|
|
By:
Betting_Quant
To the minority it was news but not the vast majority... |
|
By:
Have they published anywhere how much of their income comes from UK customers? They could have done this years ago and saved themselves tens of millions in tax.
|
|
By:
zeeny
you may be right, but this has been muted for years and not happened yet I'm sure their legal teams have weighed up all eventualities |
|
By:
Why worry about something which may never happen?
|
|
By:
To answer my own question over half revenues are from the UK (£39.5m for q3 compared to £36.5m for outside the UK).
|
|
By:
The last time I phoned customer services, (about a 10 days ago) the bloke I spoke to was based in Malta! It was an early morning call I may add, but it begs the question, why Malta?
|
|
By:
stewarty, wages are cheaper, they offered me £14k to go out there to be a trader a few years back. when I finished laughing at them, the response was "the cost of living is cheaper out there"
|
|
By:
Betfair hae a few of their gambling licenses in Malta, including the one for poker and I also think all customers based outside UK betting on the exchange go through Betfair International which I think have both the server and bookmaking licens in Malta.
|
|
By:
I geninley had no idea about the Malta situation. I've always spoken to their English based customer services. Luckily, for queries during the day I have the direct number of the head of the customer team. A nice bloke to speak to......when he's at his desk!!
|
|
By:
*customer services
|
|
By:
betting_quant , I take it you cashed in buying BF shares today given your comment that Betfair's announcement was 'not breaking news, its old news'. 7% gain today.
|
|
By:
The former head of education at Betfair, Scott Ferguson, says the following in his blog.
Word is that the DCMS are close to announcing new regulations for gambling operators targetting the UK - pay the full amount of tax (and hopefully levy) that a fully UK-based firm pays or you will not be allowed to advertise within the UK. In theory, this should raise questions re European law, but other countries such as France and Italy have managed it, so now is the time for the UK government to show their muscle (though hopefully not William Hague - he couldn't scare a kitten). |
|
By:
frog i didnt thought it was such common knowledge that it was already factored in the share price.
although it nots long now, that betfair will make the annoucement that will rock this forum. this is the final piece in the jigsaw. |
|
By:
The Irish are trying to collect their extra 1% duty from whatever operator takes bets on their racing. The British will follow, w/ exchange operators finding it harder to absorb than other players.
Over the long term the levy is a busted flush, but how will bf be able to grow revenues when all their measures to protect the bottom line at the moment concern cutting costs? |
|
By:
although it nots long now, that betfair will make the annoucement that will rock this forum. this is the final piece in the jigsaw.
???????? any clues ? |
|
By:
frog2
betting_quant , I take it you cashed in buying BF shares today given your comment that Betfair's announcement was 'not breaking news, its old news'. 7% gain today. Good plan, these City boys don't have a clue do they? I will now be scouring the situation vacant pages to see where companies are planning £15m + tax savings and will go back to share trading. I ought to have been able to predict this back in August apparently.  |
|
By:
what exactly would a trader for betfair actually do.. serious question.
|
|
By:
although it nots long now, that betfair will make the annoucement that will rock this forum. this is the final piece in the jigsaw.
???????? any clues ? I expect that it will be their bookmaking operation, yes betfair to actually act as a bookmaker. Right or not betting_quant? The question is; is this already factored into the share price? |
|
By:
middles, Betfair have a team of traders based in Malta. I think officially they are resposible for the multiples on here and are doing their best to reduce liability for Betfair's multiples by hedging in the underlying markets. I also suspect they may be doing some trading which isn't based on multiple hedging.
|
|
By:
i thought as much about the multiple markets although they should be able to get themselves some tool i would have thought to do that..
|
|
By:
Presumably "tool" means the same in Australia as it does in the UK mfd?
|
|
By:
Well, they did offer betting_quant a position..
 |
|
By:
betting_quant
although it nots long now, that betfair will make the annoucement that will rock this forum. this is the final piece in the jigsaw. Should have added a wink at the end of the post betting_quant, that way it'll give the impression you know something ;) |
|
By:
alex "right", question does the market see extra revenue for betfair and the price go up, or go down as it will be seen as an admission that the exchange model is either flawed or has little growth left in it.
|
|
By:
so your saying they are going to scrap the exchange ?
|
|
By:
Why on earth would they need anyone to "hedge" their multiples given they offer such awful prices the likelihood of losing money on them is basically zero?
|
|
By:
Why on earth would they need anyone to "hedge" their multiples given they offer such awful prices the likelihood of losing money on them is basically zero?
They dont, if they can implement a real time cross matcher, then the idea they need a person in the loop for multiples is abit fanciful |
|
By:
turtleshead
Date Joined: 01 Jan 05 Add contact | Send message When: 09 Mar 11 16:42 Joined: Date Joined: 01 Jan 05 | Topic/replies: 8,226 | Blogger: turtleshead's blog Why on earth would they need anyone to "hedge" their multiples given they offer such awful prices the likelihood of losing money on them is basically zero? Because they prefer a guaranteed profit to a series of positive expectancy bets. Their hedging activity is losing money for betfair, as would be expected. |
|
By:
Well they are extremely stupid then. The "positive expectancy" on the multiples is so high that trying to lay off is like setting fire to money. With decisions like that it's no wonder that the share price has plummetted since launch!
|
|
By:
Well it's been like that from the start. Betfair don't like to 'gamble' like traditional bookies do. Most of their risk is 'perfectly hedged', which is another way of saying there is no risk.
Does it makes sense they scrapped the 'high roller' segment? Same argument applies really. |
|
By:
The nature of an exchange is no risk so it would be surprising to see them gambling on long term value.
|