22 June 2005

The Web

Betfair threatens full move to Malta if UK raises tax

Matthew Vella

Betfair, the betting exchange, has issued “a veiled threat” to the UK government to make a full move to Malta after being granted a licence to operate on the island, if the UK Treasury applies a heavier tax rate than traditional bookmakers, the Independent of London reported yesterday.
Betfair’s chairman Sir Robert Horton said in the company’s annual report, published on Monday this week, that he had “pointed out” to the Treasury, which is reviewing how betting exchanges are taxed, the “considerable drawbacks of introducing an inequitable tax structure among UK-based operators”.
The betting company wants the UK government to maintain the same rate of tax for traditional bookmakers and betting exchanges, which match bets between individuals.
But Betfair’s main rivals claim that many of Betfair’s customers are acting as professional bookmakers and should pay the gross profits tax which they pay.
Betfair was recently granted a licence to operate in Malta, and is now hinting that it would be ready to make a full move to the island if the UK Treasury accedes to the demands of high street betting shops.
Betfair says all its customers should be treated the same, whether they back a horse to win or “lay” it to lose, as Betfair, which is a licensed bookmaker, pays its fair share gross profits tax on its customers’ winnings. “Our gross profits tax payment rose to GBP14.3 million from GBP9.3 million last year,” Stephen Hill, the chief executive of Betfair, said on Monday when announcing its full-year results.
Pre-tax profits for the year rose 74 per cent despite taking a GBP4 million hit to bail out customers of its rival, Sporting Options, which went bust last year.


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