In a move that’s anticipated to save the company about £18.5 million a year — no small change, especially given how competitive the UK’s online gambling market is — leading betting exchange (and CAP Listed Program) Betfair has announced it will start using a Gibraltar online betting license, as opposed to the United Kingdom license it’s now using.
The move shouldn’t impact the UK economy unfavorably, as Betfair’s 1,200 UK-based staff won’t be relocating, per the story in the UK Guardian. The company also said “it would still pay the British horse racing levy despite moving its licensing abroad,” the article adds.
Betfair is the largest Internet betting exchange in the world and the largest Internet betting company in the UK. (A betting exchange lets punters bet on odds that are fixed by other punters, and not a bookmaker.) It’s currently based in a section of London.
Inspiring the move is the UK’s 15 percent tax on gross betting profits. But Betfair has said the move would also enable it to “consolidate its technology platforms”.
“Betfair continually strives to create the best technology platform for the business,” Betfair representatives stated in an interim management statement earlier this week. “This revised structure will provide the company with the freedom to locate key technical equipment in more efficient locations in order to improve service to customers and compete on a level basis in the UK market.”
“Betfair will continue to support British horse racing by committing the same amount of money to the sport that the company has been paying via the statutory levy for the remainder of the 49th Levy Scheme and on the terms set out for the 50th Levy Scheme,” the statement added.
There’s nothing revolutionary about the move; in fact, it’s becoming increasingly common for UK-based online gambling brands to move away from the high UK tax regime. To that effect, Betfair will be joining other UK bookmakers like William Hill and Ladbrokes in making the licensing change to Gibraltar. Even Tote (Totesport), which is run by the British government, runs its online casino, poker and bingo operations from offshore — from Malta and Alderney, to be specific.