The British Horseracing Authority is up in arms over the offshore loopholes in horse racing. More and more horseracing sportsbooks are going offshore, fleeing the high tax rates they experience in the UK.
Gibraltar Looking Good
The betting exchange, for instance, has just declared that they are going to be operating under a Gibraltar license starting today. Analysts see the choice as a great decision. As James Hollins at Evolution Securities said, “Betfair has made a strategically and financially sensible move to reduce its tax bill.”
Sportsbooks Hitting the Roads
Other sportsbooks have made similar decisions, such as Ladbrokes and William Hill’s decisions to relocate in 2009. Such moves are making many in the UK racing circles nervous.
Stephen Morana, the Betfair’s chief financial officer has tried to reassure those in the sports betting world by saying, “We are committed to British horseracing and guarantee we will support it.”
However, a spokesman for the British Horseracing Authority countered Morana’s reassurances when he said, “The concept of so called voluntary payments is deeply flawed. They cannot be trusted, cannot be enforced, cannot be planned against.” He asked the British government to close the offshore loopholes and to restore the credibility to the gambling framework in Britain.
Tax Rates Too High
Many gambling powerhouses explain that the tax rate in the UK is simply too high. As Warwick Barlett, the head of gambling consultancy GBGG explained, “Companies would much prefer to be in the UK and would come back if the rate was lowered.”