The Italian ADM customs and monopolies agency has provided Betfair with grim options as to how it can measure Italy’s temporary turnover tax on its ‘Exchange’ betting product.
‘Covid Revival Decree’
Last summer, through all sports wagering verticals (retail, digital and virtual sports), the Italian government levied a 0.5 percent turnover levy, a year-long measure approved as part of the ‘Covid Revival Decree’ of Italy.
Betfair immediately appealed the ruling, underlining that its betting exchange was unable to work under the turnover tax applicable to its wagers.
Betfair told the ADM that its online betting exchange will operate at an overall tax rate of 111 percent in conjunction with existing betting and corporate taxes, making the Italian market non-viable for its business.
The operator advised the ADM that either an extra 3 percent GGR tax rate or measured on its exchange commission rather than a wagering fee should be modified to the temporary tax.
Reply to Betfair’s Appeal
The ADM replied to the appeal of Betfair by claiming that the turnover tax should be measured as ‘summation of all amounts matched between lays and bets, minus the betting tax, calculated for each individual market’.
The judgment put Betfair in a precarious position, since higher commissions would be paid to winning players on its exchange, with some likely to end up paying more tax than their net winnings.
Maintaining 96 percent of the exchange market for Italian betting, Betfair said that the decision of ADM had seriously harmed the competitiveness and appeal of its flagship product.
Dismissal of other appeals
Elsewhere, the Administrative Court of Rome dismissed the appeals of the Italian giants Lottomatica, Goldbet and Sisal for turnover tax clemency, as the firms continue to work under imposed lockdown with their retail units.
The recent ADM figures revealed that EUR 20 million was paid by sports betting, horse racing and betting exchange dealers for the duration May-to-August, raising Italian betting taxes above 30 percent GGR (standard 20-to-24 percent).