Revenue refund from the EU totals EUR 40 million for Germany.
In a long-lasting tax court battle that began in 2012, the Hesse Fiscal Court has decided that the Irish-British bookmaking giant Paddy Power Betfair (PPB) needs to repay a total of €40 million in taxes to the German tax authorities. PPB intends to file an appeal. Additionally, Greece demands repayment of €15 million from the company.
The Dispute Over the Bookmaker's Tax
The long-standing tax conflict between the German state and the British betting giant PPB stems from the introduction of a tax on sports betting winnings in 2012. The disputed tax entails a 5% levy on the gross stakes or winnings. The law applies to all German sports betting customers, regardless of whether the respective bookmaker is based in the country or not. Bookmakers are free choose either to pass on the tax burden to their customers through fees or to cover it themselves.
After the implementation of the tax, PPB ended its sales in Germany, though it's still liable for the taxes incurred in the last active financial year. Additionally, there's the accrued interest to be considered. PPB previously tried to appeal, but the recent ruling of the Hessian Tax Court (Kassel) refused their claim. The verdict affirms the requirement for PPB to follow German laws.
A legal statement issued by the company declared their intention to contest the verdict. According to lawyers, the Hesse Fiscal Court needs to provide a more detailed explanation of the €40 million sum. Furthermore, a company spokesperson stressed to the industry magazine iGamingBusiness while contradicting the Greek demand for a €15 million back payment:
"The company strongly disagrees with the basis of the tax assessment, so we will confidently appeal upon the discussions with our legal advisors and financial experts."
The Demand for a €15 Million Repayment to Greece
Simultaneously, the Greek government in Athens is requesting an additional tax payment of €15 million from PPB, which covers taxes, penalty interest, and reminder fees for the period between 2012 and 2014. PPB insists they already paid out the money in early 2019, calling the requested back payment unfounded. Unfortunately, Athens has not confirmed this yet. The matter awaits further development.
To summarize, Paddy Power Betfair is one of the largest global bookmaker groups. It was formed through a €8 billion merger between the operators Paddy Power and Betfair in early 2016. In 2017, the business generated over €2 billion, making it one of the most successful sports betting providers worldwide. It's listed on the London Stock Exchange.
The Group also owns the well-known betting brand Sportsbet and the dog and horse racing operator TVG. They've recently expanded their business into the US after the sports betting legalization occurred in May, and it includes the acquisition of the daily fantasy sports company FanDuel from New York City.
Paddy Power Betfair Presents Encouraging Sales Figures for 2018
In brighter news for PPB, the organization released an impressive financial report for 2017/2018, with its success attributed to robust international expansion. The positive results were mentioned by CEO Peter Jackson.
PPB continues its global growth trajectory, with total revenue jumping from £1.77 billion in 2017 to £1.87 billion (around €2.1 billion). Online sports betting generated an increase in revenue from £898 million in 2017 to over £948 million in 2018. This led to a higher EBITDA, increasing from £306 million to £316 million. In his statement, Jackson mentioned:
"I am very pleased with the group's performance in 2018, which was a difficult year for the industry involving numerous legal and fiscal changes. Our brand portfolio is well-positioned in every market. Paddy Power has increased its involvement and made product improvements in our traditional business areas."
Concerning the company's global progress, Jackson noted aiming for a "podium position" with the multi-billion euro US market in mind. Legal changes have led to eight states already implementing official amendments to the law, including Nevada, New Jersey, New York, Mississippi, and Pennsylvania. Jackson referred to the FanDuel acquisition following the repeal of PASPA, saying:
"The opening of the US online sports betting market could be the most significant development in the sector since the inception of online betting. We're better prepared than our competitors due to the FanDuel acquisition right after PASPA's repeal."
FanDuel, which has over 8 million customers, was recently acquired by PPB and functions as a strong foundation for the company's entry into this rapidly growing market. In New Jersey, the market share for FanDuel currently stands at 35%. The situation is still evolving.
Read also:
- BVB trails 1-0 against Paris, with Füllkrug leading them towards the final.
- Munich Drama: Late Real Penalty Leaves Bayern Shocked
- Lars is capable of leading BVB, according to many.
- Subsequent torrential rainfall leads to 48 fatalities due to partial highway collapse in China.
Source: www.onlinecasinosdeutschland.com
