Betfair Says Level Playing Field May Extend Tasmania Stay9th October 2009 8:36 am GMT
With its current five-year licence in Tasmania set to expire in 2011, Betfair has said that it will keep its options open regarding a possible renewal of the licence, in light of the new tax arrangements passed earlier this year by the state government which imposed a flat annual licence fee for corporate bookmakers while Betfair as a betting exchange must continue to contribute taxes based on turnover.
Under new tax arrangements, passed by Tasmania's state parliament earlier this year as part of amendments to the Gaming Control Act, corporate bookmakers will no longer pay taxes based on turnover, instead paying a flat annual licence fee, creating stiff competition for Betfair who must continue to contribute taxes based on turnover.
Andrew Twaits, Betfair Australia's CEO, said that the company would continue to look at its options in order to maintain a competitive edge.
"One of the things that the board has asked the management team to do is to explore other options," he said. "As you would expect, the environment in Australia is very different now than it was four years or so ago when we were trying to get a licence here in Australia so we'll just see how it goes."
Betfair said it would look for a level playing field when it negotiates an extension of its contract with the Tasmanian Government, but stressed that the company had no set plans to leave the state.
"We have a deal with the government that goes for another 15 months and a deal's a deal," Twaits told ABC Local Radio. "We're not resiling from that at all. We're looking really into the future and we would hope that if we're to stay in Tasmania that it will be on terms that allow us to compete with TOTE and bookmakers not just in Tasmania but around the country."
Betfair has been licensed in Tasmania since February 2006, and now has 115 employees at its base in Hobart. The five-year licence expires in 2011.
Tasmania Treasurer, Michael Aird, said he was working with Betfair to ensure the betting agency remains in Tasmania, and confirmed that discussions with the online betting exchange had been ongoing for several months regarding a renewal of its licence.
"I am confident that the excellent association between Tasmania and Betfair will continue long into the future," said Mr Aird. "Betfair has been a good corporate citizen and we'll be doing what we can to ensure that it stays in Tasmania.
"The Government's aim is to secure a long term agreement with Betfair and to provide job security for its employees.
Mr Aird said that he understood that Betfair regarded corporate bookmakers as strong competitors and that the new tax arrangements passed earlier this year would open the business to further competition.
However, he added that the government's view has always been that the taxation change would create more employment opportunities for Tasmanians, and as a result the demand for people and skills in Tasmania would grow.
"Under the new tax arrangement, corporate bookmakers that become licensed in Tasmania will need to establish their risk management teams in Tasmania so that the State gets the employment benefits," said Aird.
"The Government has created an opportunity for wagering businesses to take advantage of not only Tasmania's favourable taxation environment, but also the opportunities Tasmania is now presenting in terms of IT infrastructure which is vital to today's modern and IT driven wagering operators."