German Jurisdiction Sees Betfair Online Sports Book Vacate

Published Wednesday, November 07, 2012 -

Germany has been a tough nut to crack for many online gambling operators and some have simply given in and vacated the competitive and highly taxed jurisdiction. The uncertainty experienced by operators who signed on for a license to operate there is costly in many more ways than one. Betfair the online betting exchange has decided that the best way to curb the confusion is to leave the arena while standing.

The Betfair Group will cease to offer its registered and licensed online sports betting book saying the German taxes makes doing business in Germany unprofitable. Betfair calims it should be exempt from the 5% levy on stakes because the firm maintains it does really take bets it provides a service that lets player play against one another. The company issued a statement which read, 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. The explanation continued, Betfair said that the remaining part of its business in Germany which would now be minimal following the withdrawal of the sports betting product.

Those other concerns include, poker, casino games and fixed odds betting which have all been asked by the German authorities to close if the firm only has a sports betting license. Should Betfair loose the tax fight in Germany it has been suggested that the company may owe almost or more than £25 million. The betting exchange concept is hard for some jurisdictions to understand, thus Betfair is defending itself in court often. France also has a wager tax that is based on turnover instead of profit. Germany has the same model which Betfair’s betting exchange finds unfair and unprofitable.

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