No great surprises here as the Betfair share price continued to slide, they needed to do something. Sources told me that a Gibraltar office was being fitted out several weeks ago in preparation for the move, which shocked nobody. Do Betfair deserve to be singled out for criticism in moving their betting operations (but very few of their staff) to Gibraltar? No, they're not the first grandmother-selling company to do it, but hopefully they'll be the last.
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).
And after that, it wouldn't be such a bad idea to extend similar rulings to other industries....
Betfair joins UK offshore exodus
Betfair has become the latest operator to move offshore to escape the UK’s 15% gross profits tax and will save close to £20m a year, its chief executive announced during its third quarter results this morning.
As of tomorrow the newly floated betting exchange will operate under a Gibraltar gaming licence following in the footsteps of rivals Ladbrokes and William Hill, both of which have announced millions of pounds in cost savings since their departure from the UK two years ago.
Betfair CEO David Yu has made no secret of his desire to move more of Betfair’s operation offshore. In October the exchange opened a new Dublin office to house its data centre and telebetting operators. This was considered a warning to the UK government to take action over proposed tax increases including the horseracing levy which it today said it would continue to pay for the time being. The UK government has been reviewing the licensing system but has yet to announce any decision on reforms, however Betfair’s statement today could spark calls for reforms to the law.
The Betfair share price is up over 60p so far today. Ask not what you can do for your country, but how you can bleed it dry....