Italian tax decision goes against Betfair

The betting exchange operator has been left with few options on the Italian market.

Italy.- The decision from Italy’s customs and monopolies agency ADM on the application of the country’s temporary sports betting turnover tax has left betting exchange operator Betfair in an almost untenable position.

Betfair had been quick to contend Italy’s imposition of a temporary 0.5 per cent turnover tax on all sports betting verticals last summer, arguing that its betting exchange would be unable to operate if the tax was applied to wagers.

Combined with existing betting and corporate taxes, the new tax would leave the exchange facing a total tax rate of 111 per cent, it said. 

It called for the temporary tax to be modified to either an additional 3 per cent tax rate on GGR, or calculated on its exchange commission rather than on wagers.

The ADM has now responded that for betting exchanges, the turnover tax should be calculated as a “sum of all amounts matched between lays and bets, minus the betting tax, calculated for each individual market”.

The decision means winning players on Betfair’s Exchange will face higher commissions, with some even facing more tax than their net winnings. 

Betfair, which has 96 per cent of Italian betting exchange marketplace, said the decision would severely damage the competitiveness and appeal of its product.

Italian operators Lottomatica, Goldbet and Sisal also lodged appeals against the sports betting turnover tax at the administrative court in Rome but have seen their appeals rejected. 

They had argued that they should receive clemency due to the continued disruption of retail operations owing to the Covid-19 pandemic.