News from Australia this morning that Betfair are to implement a turnover charge on customers, full details: -
In case you were not aware, a high court ruling this year in Australia has switched the law from a gross profits tax to a turnover based revenue fee for racing. This doesn’t affect the well established and politically well oiledl, but slightly ancient and backward thinking, incumbents in Australia; but does have a significant impact on the new entrants like Betfair. A turnover tax is unviable for a lot of Betfair users and by seeking to pass on the turnover tax, Betfair will almost certainly kill off a lot of advance use of it’s exchange in Australia. This is exactly what the incumbents where looking for, implement a change that makes new competitiors unviable. If you read between the lines the court case had little to do with funding racing or delivering value to customers. That’s disappointing and should be roundly booed by all Australian’s.
This move only affects racing, but that’s probably the mainstay of their business. So it’s very disappointing to see this, but it’s not entirely unexpected. How else can Betfair continue without passing on the costs? I’ve got into Australian racing a lot in recent years and was planning to head over to Australia for the Melbourne cup meeting this year. That’s not going to happen any longer, it’s simply not worth it.
It’s been an interesting couple of weeks for Betfair. A clear win in the judicial review about the levy, but a definite lose on the Australian business.