The UK has some of the most liberal laws concerning online gambling in the world. They have enacted some of the most comprehensive and fair systems regarding regulation and operations but all this has come at a price in the means of taxation and the horse racing levy. This taxation is now causing some companies to consider leaving the legal umbrella in the U.K.
For some companies that are walking the line between profit and loss, the tax in the U.K. can be a big hurdle to overcome. Betfair has become the latest company to warn that it may be moving its business elsewhere. The biggest concern is the British Horseracing Authority (BHA) and the horse racing levy.
William Hill and Ladbrokes have already moved their online gambling interests to offshore where they do not have to worry about the horseracing levy and can enjoy a lower gross profits tax which is currently 15% in the U.K.
Betfair’s Chief Executive Officer, David Yu just recently hinted about a possible move last Sunday in a interview with the British newspaper the Sunday Telegraph. In the interview Yu said,
“We’re happy to be licensed and to pay sensible tax, but if we don’t see movement we’d have to consider what’s right for the business over the long term. We’ve been very, very proud to be a British business and I think we’re one of the real U.K. success stories.”
Betfair has been discussing other possibilities with the government to keep them from moving. Experts believe that this would take a major concession by the government to keep them including a major tax break. Another area of discussion could be the advertising laws and changing in what type of advertising Betfair could do within the country.
Now only time will tell if Betfair joins the likes of William Hill and Ladbrokes or can negotiate the changes it need to run profitably in its own country.