Betfair exiting Germany

[Euler]

RNS notice this morning

UPDATE ON GERMANY

As previously indicated, in July 2012 Germany introduced a law that applies a 5% tax on stakes on sports betting in the country. A tax at this rate, if applicable, would make Betfair's current exchange model unviable. Following detailed opinions provided by its legal and tax advisors, Betfair believes that, in regard to bets placed on its exchange, it is not an organiser of sports betting under the tax law and is not, therefore, liable for the tax.

Betfair has been working with the relevant tax authorities to seek clarification on interpretation of the law and its applicability to exchanges. The company is disappointed, however, that to date the tax authorities have not been able to agree to an interpretation of the law that would allow Betfair to continue to offer the exchange product. Consequently, Betfair has decided to withdraw its exchange product from the German market.

Following this decision, on-going contribution from Germany is expected to be de minimis and Betfair is reviewing its operations in this market. In FY12, approximately 4% of Core Betfair revenue came from Germany and this revenue delivered a contribution of approximately £6 million before the allocation of central costs.

The company believes that it has fulfilled all of its obligations under German law, including the filing of necessary tax returns. Discussions are continuing with tax authorities regarding the potential tax liability, if any, arising from bets placed on its exchange since the law came into effect.

[CaerMyrddin]

Does this come as a surprised or was it expected? Thought there were some positives in the german situation?

[Euler]

It's been up in the air in Germany for a while, they were granted a license, then Germany changed their mind, then they were given a conditional license but imposed uneconomic terms on it. But it's another country added to Betfair's list of casualties. Despite touting oversea's expansion as the future, one by one pretty much all the countries have fallen out the mix now.

[ChrisCGN]

What does this mean? Does this apply to all German residents or is it depending from where they place their bets?
I'm quite often in Switzerland, so will my bf account work there? Or am I flaged as a German, not depending on where I am?

Best regards from Cologne

Chris

[Euler]

It looks like they will block access from German accounts. So if you happen to have one registered in Switzerland then you will be ok. But if it is registered from a German address then you will probably be blocked.

[george]

thats some sad news , that will have big effect in liquidity specially in football markets , and i think Greece will follow next

[fuzzer54]

This is rather worrying. Does anyone think there's a chance these kinds of prohibitive taxes might be brought in here? They would obviously kill us stone dead.

[LeTiss]

What concerns me, is that BF will try to recoup their lost revenues

No German customers means £6M less in BF's coffers. The easiest way to counteract this is by raising a further £6M from various charges on their remaining client base

[giulio2010]

Betfair supposed to be licenzed last may 2012 in Italy but nothing happened yet..We are still waiting to be legalized..They lost the German market so that may speed up the process e recover their loss within the italian and spanish market...However these delays may be sign that Betfair is finding hard to make a tax agreement here too.....
My advice ,for those who earns between 2000-3000 a month, is to open a swiss account ( it's quite easy) and rent a mail box at the same location you have opened the account..

[Euler]

Back door sports book roll out

[Will Sharpe]

Betfair has made around 50 redundancies across help desk and customer service staff as it reduces some of its language options in “less attractive” markets

...from EGR today

[steven1976]

If betfair are outside of Germany do they still need to pay 5%? From a quick read of the initial post I get the impression the tax are on bets within Germany. If bets are made offshore I don't see it would effect BF.

[Mr Undercover]

It seems churlish to pick up their german ball and walk away. I don't think the german authorities will relent and their in a worse position to argue the case for exchange betting outside the market then in-side.

It's less than ideal but they could pass on the 5% to all winners registered in german territory... and of course a proportion of german registered accounts will start moving to switzland or whereever (incidentally don't you need a registered address in swizz to do this? i'm sure people will figure it out).

The point is strategically this looks like a mistake from the outside, there'll lose vital revenues from soft punters (no one would trader under these conditions of course) put pressure on their existing cost base to recover market share and crucially lose their position to lobby their position proactively. other fixed odds bookmakers will have to make adjustments to absorb penalty tax.

in play punting on football from german customers is so important I hope you are right and actually they are going to attack this market with a different product.

[CaerMyrddin]

Good news for BF now?

http://www.bloodhorse.com/horse-racing/ ... e-wagering

[andyfuller]

[quote="CaerMyrddin"]Good news for BF now?

This bit tell you everything you need to know most likely:

"Betting exchange providers are required to reach agreements with the tracks and horsemen involved before offering races on their exchange platforms."