Betting exchange Betfair’s recently announced plan to operate under a Gibraltar license is expected to save the company £18m in UK taxes next year. In the meantime, the move is raising eyebrows among Britain’s horse racing industry. While Betfair maintains that it will continue to ante up its £6m Levy contribution for the “foreseeable future,” the British Horseracing Authority isn’t buying it. After all, once in Gibraltar, Betfair’s contribution to the Levy will shift from statutory to voluntary. The BHA thinks that the minute some cynical City analyst starts suggesting Betfair’s balance sheet isn’t what it ought to be, those ‘voluntary’ expenditures will be the first things to get the snip.
Concern over Betfair’s Gibraltar move is also being raised by those determined to maintain the integrity of sporting events. As The Guardian’s Matt Scott noted, while operating under a UK license, Betfair was bound by statutory obligations to pass on instances of suspicious betting patterns to the appropriate sport’s governing body. As with its Levy contribution, once in Gibraltar, that obligation goes from statutory to voluntary. Your standard bookmaker stands to personally lose from betting shenanigans, and thus can be expected to maintain a vigilant watch on betting patterns purely based on self-preservation. But Betfair derives income from every bet placed, regardless of how fishy an odor the transaction might give off, which would (theoretically) make it a far less pressing area of concern. Not so, says Betfair. “We’ve always gone above and beyond our statutory requirements and will continue to do that.” For the foreseeable future, at the very least.
The future of Betfair’s eight-month old relationship with poker network Ongame is decidedly less clear. Betfair CEO David Yu says he’s “unsure what would happen” after March 31, when Ongame’s parent company Bwin completes its merger with PartyGaming. With Pwin insiders making oblique references to the merger creating “surplus assets” that are likely to be sold off after the honeymoon, Yu has ample reason to be concerned. “We think about what might happen, we have the necessary experience and understand how networks work, but we’ll have to see how it goes and react accordingly.” Betfair shares reacted to the company’s latest quarterly report by closing at 949p Tuesday, a boost of almost 7% on the day. But what will the morrow bring?
