Betfair has said there was no truth in UK press reports that the government would increase the tax rate on betting exchanges, and hit out at “vested interests” it believed were behind the story.
A report in UK Sunday newspaper The Observer claimed the government would “clamp down” on betting exchanges following its ongoing review of the tax treatment of the sector.
According to The Observer, a Whitehall insider said the Treasury will move within months to change the way exchanges are taxed.
But Antonia Sharpe, spokesperson for Betfair, said she firmly believed there was no truth to the story.
“It looks like the story was motivated by vested interests, because we have heard nothing along those lines from the Treasury,” Sharpe said.
“We are not concerned, and we await the findings of the Treasury with interest.”
The Observer said the move was prompted by a recent report by the UK’s National Audit Office that pointed to a shortfall in expected revenue from betting duty.
The report pointed to the US$13.7m (£7.3m) paid on US$5bn wagered on exchanges, compared with US$704m paid by bookmakers on a turnover of US$56bn.
And it highlighted internet betting exchanges as a potential cause of the loss of revenue.
But Sharpe pointed to the fact that the report was also heavily critical of the role fixed-odds betting terminals played in falling tax revenue.
And although she insisted Betfair wanted to remain onshore, she hinted any heavy-handed tactics by the UK government could force it offshore.
“If you wind the clock back six years, the UK eGaming industry went offshore and only came back when the government changed the rules on gross profit tax,” Sharpe said.
“If the UK wants people to stay in the UK, then they have to make the tax rate work.”
The P2P sector has long argued that comparisons based on turnover are largely irrelevant and insisted it pays tax on the bottom line in the same way as the fixed-odds industry.
The full report by the NAO on betting duty in the UK can be downloaded from http://www.nao.org.uk/pn/04-05/0405188.htm
source : egaming review magazine
