Betfair switches to Gibraltar

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andyfuller
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If they were going to continue to pay the Levy I think they would have said, we will continue to pay the Levy, not we will continue to support the sport.

Those are very different statements imo.
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jimrobo
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jimrobo wrote:according to reuters

http://www.reuters.com/article/2011/03/ ... geNumber=2

they are planning to consolodate their offices in 2012 which means we a complete move to gibraltor.
when they do move thats gonna mean 250 Ms response times for all of us
andyfuller
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Not if we all move there - we could have our own version Silicon Valley :)

Weather will be better that's for sure!
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oddstrader
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have they not already moved it to Dublin
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mugsgame
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The way I read this is they will support racing to the tune of the amount they would be paying into the levy if they had to.

I have to say that the way the BHA, Paul Roy, and the other bookies, particularly the William Hill chairman has been trying to bury BF and blame all racings problems on them has probably forced their hand.

Don't get me wrong, I think the way BF conducts it's business leaves a lot to be desired, but I saw this coming.
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jimrobo
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I guess we could share a house or something out there! A quick google search and it doesn;t look cheap at all!

Wonder if its worth emailing that customer services person and asking them if consolidating the offices includes moving the datacentre to gibraltar because that is going to really screw us over in the uk

Oddstrader, according to that reuters article they will get 10M savings instantly because of operational costs on a 2nd major office and 20M savings after they have consolidated their offices in 2012. Whether that means ditch the uk office or move the dublin datacentre to gibraltar I don;t know
andyfuller
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Interesting post by Scott Ferguson on it:

http://www.sportismadeforbetting.com/20 ... er-of.html

Sounds like it could be a pointless move tbh as surely they need to advertise!
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jimrobo
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that was actually the next point I was going to make!!

What are they going to do when the government says not contributing CT then no advertising??!!
andyfuller
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Maybe the short term savings still make it worth while from an accountants view point seeing as they are running the business these days. As surely it will take some time for the legislation to pass?
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oddstrader
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they will probably go down the route of sponsorship instead.
andyfuller
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Would be nice to see them put it into a whole load more of frost covers, machinery to put them on and get them off quicker and cheaper so we lose less racing the future in the winter and in turn help the Levy. Also some gritters, salt supplies etc wouldn't go a miss!
andyfuller
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This from the FAQ by Betfair on the changes confirms to me that they will be paying basically no Levy from now on:

Question: Will the funding of British horseracing suffer as a result of this move?

Answer: No. Betfair has committed to putting exactly the same amount of money back into British horseracing than we have been paying via the statutory Levy and is happy to make that commitment for the rest of the 49th Levy Scheme and on the terms set out for the forthcoming 50th Levy scheme.


Yes they will be paying the Levy on the terms set out but like every other offshore business there will be bugger all to pay as it is all offshore now.

This article as well confirms it, for some reason they seem at the start of the article to expect them to make a voluntary Levy payment but as we know Betfair were told effectively they could make no such payments anymore and they said okay we will spend the same money how we see fit.

By the end of the article though it is summed up by:

However, it is quite possible that their contribution to racing will bypass the Levy altogether and go straight to some of racing's constituent parts which is already part of their modus operandi. Apart from paying the Jockey Club, it has also paid a similar amount to the Horsemen’s Group, £200,000 to Scottish racing and £150,000 to Yorkshire racing.

http://www.telegraph.co.uk/sport/horser ... cence.html

Also I don't see anywhere that they have said they will support the sport to the tune of what they would pay in Levy ON TOP of what they currently do. So who knows, the £7 million they would have paid in Levy could mean no increase at all potentially in support for the industry if they are already spend £7 million through sponsorship at Ascot and the like.

Also interesting that the Government are likely to be taking action by the end of the year on offshore operators according to the article.

But all in all I think this whole move is very worrying whatever way you look at it, I see a lot of negatives and very few if any positives.

So the Levy for the next scheme can now be estimated at more like £67m to £73m.

Something is going to have to give at some point, the sport in its current form is really going to struggle imo :!:
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Euler
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Looks like you were write, it was a carefully crafted peice of spin by Betfair. I think racing is right in the assesment that Betfair will most likley use it as leverage rather than making a 'true' contribution to the sport. If Betfair were not popular before then their name is mud now in the industry.

I think racing does need to change though as its current model is outdated for sure. But maybe it needs a crisis to achieve that change?
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Euler
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Just thinking, this isn't going to help them in new territories is it?
andyfuller
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I think it is a very short sighted move by Betfair and one that is going to have big consequences long term but we now know who runs the company and I don't buy the line it had nothing to do with their share price.

If you were a closed market before Betfair could say, hey we could move offshore in the UK but we choose to remain onshore, pay our taxes and pay our fair share to British Racing unlike all the others who disappear offshore. We are your friends racing.

Now in America those against will be able to say look what they have done in the UK, they have moved offshore to avoid paying any taxes and they now pay no Levy to British Racing at all. If they do that there why are they going to do anything different here, they clearly don't care about the sport at all and only care about boosting their profits for their shareholder.

I always thought Betfair's one saving grace was that they stayed onshore, but it looks like they are just like any other corporate company now looking to boost their profits at all costs. Any sway they had with the Government has surely gone and any they had left with the racing industry is now gone.

I don't think people in Racing realise just yet they impact of this decision as imo it is HUGE. The Government can relatively easily survive without getting taxes from Betfair for a few years but racing which is already on its knees will have seen a 10% fall in its funding over night - that surely isn't going to be taken lightly or at all well.

Also people tend to have long memories, so I think they have just undone the last of the 10 years of goodwill that they have built up in the sport. It will be interesting to see Mark Davies blog post on the move if he does one as I can't see how he can put a good spin on it, though Ralph Topping must be loving it as no longer can Betfair beat him with the we pay the Levy stick!

As you said earlier - this is a game changer in several ways!
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