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Saturday September 3rd 2011

News in Flashback

After WilliamHill Betfair Moving Out of UK?

The British company Betfair may be moving out of UK.

Online casino laws in the United Kingdom are very liberal and as a result the online gaming industry is booming in the UK and is a small contributor of UK economy. At one time there were over 15,000 betting shops in the UK. Now, through consolidation, they have been reduced to about 8,500. Recently however, the country has taken a hit, and some of the industry’s giants have taken their operations and moved to Gibraltar where the tax rate is 10% lower than in the UK.

It started last year with (In 2009) William Hill moved its online and fixed-odds games division to Gibraltar, for tax avoidance purposes.  They moved their operations to Gibraltar and were able to save 10% annually. Ladbrokes were not far behind when they packed up right after.

Rumour now has it that the world’s largest  online betting exchange, Betfair Group is considering doing the same thing. David Yu, the Chief Executive at Betfair said that the company would consider moving out of the UK if the government didn’t relax a bit with the gambling taxes. The government has been in negotiations with the company in hopes of convincing them to stay in the UK but it would have to compromise seemingly quite a bit in order to convince the gambling giants to stay in the country.

Over the last few months, the government has been trying to negotiate with Betfair online casino. Perhaps one area that may be negotiable is the type of advertising Betfair can run within the UK. The advertising gambling laws in the UK are very strict and may be harder to move than lowering the gambling tax.

Either way, all three of these giants are interested in moving on to the US market as soon as US legislation allows. Even though current US law does not allow online casino gambling in the country, the US remains one of the biggest online gaming markets in the world today.

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