New tax proposals may impact Betfair

Betfair balks at tax proposals in current negotiations

Befair's licensing renewals in the Australian state of Tasmania continue to generate heated debate as the international betting company's Australasian division negotiates its next kicensing period.

Betfair's first licence was a groundbreaking Aussie state move back in 2006, an arrangement that is due to expire in April 2011, hence the negotiations now being negotiated. The betting company is reportedly concerned it no longer has a "level playing field" following the government's recent decision to replace taxes for corporate bookmakers with a flat fee of $256 000 a year.

Last week Betfair's regional chief exec, Andrew Twaits, was reported as saying that the Tasmanian operations have still to grow, and the imposition of new tax burdens will have a significant impact on the company's business plans in the state which may cause it to look at alternative arrangements.

Twaits said the proposed flat fee contrasted with the 15 percent of gross revenue, plus GST, that his company paid as tax in the state under its present licensing agreement.

"In terms of total (Betfair) contribution to Tassie, it's at least $20 million in the past three-and-a-half years, including the product fee to industry and probably A$7 million to A$8 million in tax," he said.

Twaits told the Australian newspaper The Age that Betfair wanted legislative change to ensure it was treated equally with the online bookmakers Tasmania is hoping to lure from the Northern Territory.

"We are an online operation, just as the bookmakers are; we have a non-exclusive licence, just like the government is offering to the bookmakers - there is really no difference," he said. "They are direct competitors of ours. So I'm not sure why the tax should be any different."

Betfair's Hobart base in Tasmania employs 120 staff, the newspaper reported.

The government remained optimistic that the negotiations would be fruitful, however.

Treasurer Michael Aird told The Age that he was confident an agreement on a new post-2011 licence would be concluded by year's end.

"There's a bit of an exaggeration going on about Betfair leaving the state - all indications from Betfair are that they want to stay here," the politician said.

"We want to protect the jobs at Betfair, and we think they have provided a very good skill base in terms of data storage and transfer, and that they have been very good corporate citizens. I'm confident we will be able to get an agreement with them."

Despite initial widespread opposition to Betfair being licensed in Tasmania, its presence now has bipartisan support, The Age reports.

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