* Betfair pulls main product from German over tax
* Gaming companies unhappy over 5 pct level on sporting
* Some focusing expansion efforts on other parts of Europe
By Keith Weir
LONDON, Nov 7 Betfair Group Plc has
withdrawn its online sports betting exchange in Germany, blaming
a 5 percent turnover tax for making its main product unviable in
Europe's largest economy.
Other British-listed gambling companies have also cried foul
over a tax levied in Germany on stakes on sports events from
Companies in the growing online gambling market complain of
a patchwork of different regulatory regimes and tax systems
across continental Europe. They are focusing their expansion
efforts on those countries where there are clear rules and less
onerous tax regimes.
Betfair, which launched 12 years ago and operates an
exchange system that allows gamblers to bet against each other
rather than the bookmaker, argued it should not have to pay the
Germany is a relatively small part of its business,
accounting for around 4 percent of core revenue in its last
"The company is disappointed 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," Betfair said on Wednesday.
"Consequently, Betfair has decided to withdraw its exchange
product from the German market," it added.
Betfair said contributions from Germany would be minimal
following the withdrawal of the product. Besides the sports
betting exchange, it also offers poker, casino and more
traditional fixed-odds betting there.
Betfair shares initially opened lower but recouped the
losses to trade 1.8 percent higher at 765p by 1020 GMT.
Analyst Nick Batram of brokerage Peel Hunt said he had
already factored a German withdrawal into his forecasts after
previous statements from the company.
"We believe that there is the potential to create a much
leaner and meaner business, with the unique exchange platform at
the core," said Batram, who has a "buy" rating on the stock.
William Hill, Britain's largest bookmaker, said it
no longer offered any kind of service to German residents
because of the tax situation.
"We remain licensed in Spain and Italy, and have recently
developed a Swedish language website and started advertising in
print and broadcast media there," spokeswoman Kate Miller said.
Bwin.party, the world's largest online gaming
group, said last week that the German tax had contributed to a
decline in revenue in the third quarter.
Bwin has amended its business model in Germany, its largest
market, by no longer accepting very short-odds bets on sports