News

Tuesday, 16 November 2010 09:21

Yet another big name in gambling is added to the list of companies deserting the UK over their taxation system as Betfair announces its relocation to Ireland.

Despite having a well regulated and liberal system for online gambling, the UK is suddenly having a hard time hanging on to its once strong array of top companies within the online gambling industry. It seems that the higher costs, in terms of taxation, are killing the goose that laid the treasury's golden egg as gaming companies flee to offshore locations to take advantage of lower tax rates. Two of the biggest rats to desert the sinking ship so far are Ladbrokes and William Hill who have both relocated to Gibraltar to take advantage of their very reasonable three percent gross tax profit, which is only a fifth of the UK's rather higher 15 percent.

But in the case of Betfair, it was their long running battle with the treasury over its unpopular 10 percent levy on horse racing that has it upping sticks to relocate in Ireland. The move involving its active customer operations teams will create 100 new jobs in Dublin, where Betfair will establish their new data centre.

Betfair was the UK’s biggest online betting company and its announcement to relocate offshore has surely struck a savage blow to the economy in the UK. This result could have been averted had the British government and Betfair reached an agreement over alternate measures to keep the betting company in the UK. The major ideas on the table were the possibility of a lower rate of tax or better advertising concessions. Betfair warned that if no agreement could be reached it would consider moving offshore, with its original destination slated to be the Isle of Man.

Chief Executive of Betfair, David Yu, had said that the company was happy to remain licensed and pay a sensible rate of tax. But movement was not forthcoming they had to consider what was right for the long term success of their core business.

Over the years, Betfair has helped to revolutionise the online side of the horse and sports gambling industry. It is also the world's biggest bet exchange, handling more than 4 million clients, it employs over 2,000 people worldwide and has a weekly turnover of over £50 million.