Showing posts with label Betfair. Show all posts
Showing posts with label Betfair. Show all posts

Betfair may join the exodus of UK

David Yu, Betfair CEO, told the Sunday Telegraph in his first interview with a British national newspaper: "we are very happy to hold a licence and pay the sensible tax, but if we see movement we examine what is good for the company in the long term."

Mr. Yu comments come as he awaits the results of a review of regulation of remote gambling by the Ministry of culture, media and sports games.

Based in the UK online betting companies pay a tax on the gross profits 15pc, which prompted bookmakers Ladbrokes and William Hill to move their betting activities online offshore.

Mr. Yu feels that Betfair is sanctioned to stay at the United Kingdom staffed the 1,000 of its 2,000 employés.Séparément, Betfair and other bookmakers are locked in a wrangle on 10pc they pay to Racing UK today industry levy is the date limit for sampling year next to agree.

"We were very, very proud to be a British company and I think that we are one of the real UK successes, said Mr. Yu."

We have been engaged in a dialogue with the Government and what we hope is that we can find a way for this field set to upgrade.

"The situation we have is where we are one of a very small number of bookmakers that are still here on the Mainland.

"What we need to consider is that many others went to the coast, and we do not think that it is a fair playing field and level from maintenant.Nous have engaged in a dialogue with the Government and what we hope is that we can find a way for this field set to upgrade."

"Last year we paid about 20 million from £ gross tax on our profits, so we're going to make a significant contribution in the UK."

Asked if he was looking for a special agreement with the tax authorities, he replied: "not necessarily all."

"What we are saying is that there must be a way by being a land company and pay taxes have the right to do things in a way that makes it fair for us because right now there is no distinction between someone who is off at someone who is on the Mainland."

"It could be around advertising, for example."

"Maybe one thing could be that you must hold the United Kingdom and payment of the fee if you want to make the advertising in the media or to do other things here at the United Kingdom."

Mr. Yu has also made its first comments from the public on the disclosure in the Betfair was absent from work for a short period in March with a complaint cardiac flotation prospectus.

"Thanks to this topic but I feel much", he said.

"We decided that for the sake of transparency, that we should put something but I'm fine.Je would step crossed this process if I wasn't."


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Betfair head turns its focus on financial exchange line

 

Still, it's worth asking the question. Yu's comment is his first public response to a disclosure on page 200 of the flotation prospectus, stating that he was absent from work for a brief period in March with a cardiological complaint.


Then there are the 13 pages of "risk factors" noting potential concerns including the fact that the company is not currently obliged to hold a licence in territories representing 27pc of its latest
full-year revenues of £341m and the reminder that "in some jurisdictions, online betting and gaming may be illegal".


Gambling can be a risky business, though Yu is at pains to point out how different the world's largest international online sports betting provider is to conventional bookmakers.


"What we do," he says, "is bring a community of users together and match people who have opposing views. They're betting through us but against each other. The bet is legally with us. We hold the bookmaker's licence.


"We're the bookmaker that takes the bet but we only accept the bet if we know we can perfectly hedge it with someone of an opposing view. That's the magic of our technology. We never lose money on the betting."


Founded 10 years ago by Andrew Black and Ed Wray, Betfair now has more than 3m registered users and 800,000 active customers.


Its sophisticated technology takes 4,500 bets every second, amounting to 5m transactions a day – more than all Europe's stock markets combined – with £284m of customer funds on deposit ready for wagering and a further £3,000 deposited with Betfair every minute.


Betfair claims its bet-matching technology and ability to constantly update betting odds during live sporting events give punters prices that are, on average, 24pc better than those of traditional bookmakers in horseracing. The most dramatic examples of this have become legends in the industry.


One came during a race at Cheltenham in 2006 when a customer in Pontypridd asked for a £10 bet on a horse called Noland but Betfair found a matching bet at 999-1 at a moment the horse was 10th. It won the race.


And in 2002 at Southwell, odds of 999-1 were found for a £4 bet on Family Business after its jockey Tony McCoy fell off. The other horses in the race failed to finish but McCoy managed to remount and won.


Yu, 42, is delighted to have got the float away, saying the process was "exciting, exhausting and thrilling all in one".


It was controversial, too, with Goldman Sachs criticised for under-pricing the offering, which did not raise any new money and resulted in just 15pc of the existing stock changing hands.


However, Yu defends the pricing, saying: "It was up to the market to set the price. We believe the flotation is really the start of a new chapter for us. I believe we can grow faster as a public company than as a private company."


What about all the disclosures in the prospectus, not least the one about his health? Can he give any more details?


"I think you've seen it all in there," he says. "Thanks for asking about it but I feel great. We decided that in the interests of transparency we should put something in but I feel fine. I wouldn't have gone through this process if I wasn't."


Yu, an American who has been with Betfair since 2001 – working his way up from chief technology officer to chief operating officer and then taking over as chief executive in 2005 – has lots on his plate.


Broker KBC Peel Hunt believes Betfair can increase its earnings before interest, tax, depreciation and amortisation (Ebitda) by a compound 25pc over three years.


However, net gaming revenues from Betfair's core business slowed to 7pc in the year to April 2010, or about 5pc when stripping out interest on client funds. Could Betfair's low-risk model also make it a low-growth utility?


"I must admit I've never heard that," says Yu. "I think there's tremendous growth. There's so much headroom in the market for growth that I think being called a utility is quite a few years away."


He sees continued growth in the global online gambling and betting market, particularly in sports betting, where Betfair's revenue grew 12pc last year, with 970,000 new registrations and 441,000 new customers.


There's also potential for cross-selling of other gambling products, such as online poker and casino, and there are new channels for customers to place bets, with iPhone, iPad and BlackBerry apps.


"Now you can sit at Starbucks and be using your mobile phone to bet," says Yu. "We can give you an opportunity to bet any time, anywhere and in any place."


To demonstrate, his communications chief logs on to Betfair on her iPhone and bets on a horse called Point North in the 4.50 at Nottingham at odds of 8-5. The process takes less than a minute.


The big problem is further expansion overseas, where half of Betfair's revenues come from.


"Ironically, the biggest four betting countries in the world – the US, China, India and Japan – are restricted in some form," says Yu.


"Obviously we hope those markets will open up over time but today you can't bet online legally so we don't operate there."


Betfair operates in the US only through TVG, a 10-year-old online horse-betting company that operates pool betting similar to Britain's Tote in 18 US states and was acquired for $50m (£31m) last year.


However, Yu believes the US is finally changing, pointing to California's approval of a bill that will allow the state's residents to use a betting exchange for horseracing from May 2012.


He wants to expand TVG into other states and also launch a Betfair exchange into California.


"We hope the US will continue to liberalise," he says. "The challenge with the gaming industry is the rate of regulatory change. Governments work to different timetables. It's impossible to predict when different markets will open.


"In the long-run, regulation of gaming makes sense. It makes more sense than prohibition. It should be licensed, it should be taxed.


"It may take years to get there and it may happen at different times but I'm encouraged because it's going in the right direction."


Yu is also excited about LMAX, Betfair's new contracts for difference (CFDs) online trading exchange, which launched last week after a £25m investment. He believes there will be opportunities to expand further into financial trading.


"We hope LMAX can be as disruptive as Betfair," he says. "We're creating a marketplace where retail customers can come together and trade into the exchange directly without having to go through a market maker. It's taking out one link in the chain. We brought a fundamentally different way of allowing people to bet that was more efficient and we're trying to do the same in financial trading."


Other issues are dominating the headlines, however. Alongside the rest of Britain's bookmakers, Betfair has been wrangling over the levy amounting to 10pc of gross profits on UK horseracing that's paid to the sport in Britain. The company has also lobbied the Department for Culture, Media and Sport's review of the regulation of remote gambling.


Online betting companies based in Britain pay a gross profits tax of 15pc, which has prompted online bookmakers, including Ladbrokes and William Hill, to move their online betting operations to offshore tax havens. Yu feels Betfair is penalised for staying in the UK, where it has 1,000 of its 2,000 staff.


"What we have to consider is that many others have gone offshore and we don't think that is a fair and level playing field right now," he says.


"Last year, we paid about £20m in gross tax on our profits, so we're making a significant contribution back into the UK. We think it should be fair and commercially competitive, and right now I don't believe it is."


Does he want a special deal or a reduced rate? "Not necessarily," he continues. "What we're saying is that there must be a way that by being an onshore business and paying tax we would be entitled to do things in a way that makes it fair for us.


"It might be around advertising. Maybe one thing might be that you need to be licensed in the UK and paying tax if you want to advertise in the media or do other things here in the UK.


"We're very happy to be licensed and to pay sensible tax but if we don't see movement we'd have to continually consider what's right for the business over the long term."


Yu has spent his career in technology, graduating from Stanford University in California with a computer science masters and then working in a host of internet companies, including AltaVista, which brought him to the UK as vice-president for engineering in its e-commerce and international division. His stint in Britain ended after a year but Yu stayed, joining fledgling online betting firm Flutter. Within three months, Flutter announced a merger with Betfair and Yu became chief technology officer of the combined operation.


"There are huge technical demands in what we do," he says. "That's what appealed to me as a technologist. It looks very easy to the consumer but what goes on behind the scenes is hugely complicated."


Does he bet himself? "I do. I try my hand with the horses," he says. "I can't say I'm an expert at it but I love sports. The thing about working at Betfair is if you love sports there's something happening all the time."


There certainly is. After our interview, I check the racing results. Point North came in a winner and Betfair's communications chief won £8.10 with her £5 bet.


That sort of return that will keep the company's new shareholders happy.


Yu will be hoping Betfair can continue to produce it.


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Betfair gets off the coast of a prospectus, even if the race is only half run

Offerors are not known for their generosity. If punters will double pleasure with David Yu, Betfair General Director to leave 19pc on the table on the first day. It makes you wonder, however, why he bothered to hire a stable investment banks for its IPO starting stalls. John McCririck, man from Channel 4 in the cycle would have just so - although its slogan "toerags behave yourself" could upset the institutions.

Alongside lawyers, Goldman Sachs, Morgan Stanley, Barclays Capital and Numis will be pants £ 15. 7 m fee. It is Betfair hawking to £ 11 to 14 £ potential owners share - forward pricing to 13 £.Shares closed at night last 15 h 50 £ .Beau work, if you can get it.

Indeed, the price was investigated if light that even Paul Roy could not new private capital company résister.Son Smith has members itself for up to 50 million pounds worth actions.Juste to clarify, it's the same Roy double as President of the British Horseracing, authority who enjoys running battles with Betfair on his contribution to sport.

Indeed, no more sooner had he announced its float Roy is precipitated a press release stating that it was "disturbed" Finance races with "serious consequences".

True, Betfair is not a typical float.With 151 million to £ cash on its balance sheet, it did not need to raise money and its shareholders are keeping most of their assets - but for 15 2pc sold in the float.

Unlike other offices this year, such as the Ocado Betfair also seems more conventional harass that sale Plater.But its greatest trials are coming - and the hamper took no chances.On some predictions it commercial report earnings price 60 fois.Certes 2011, it fell sharply but William Hill is about 10 times.

Betfair may reflect its success with its financial exchange LMAX, such a side bet probably not racée.Mais is a question of grosse.Offrants always gaining end compte.Mais who knows if that goes also for those non-traditional.

Alistair.Osborne@Telegraph.co.UK


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Betfair shares get strong start in hit market

Shares trade IRAP of exchanged conditionally on the grey market until Wednesday, when the share certificates will be available and treat official begins.

Betfair shares were offered to £ 13 yesterday morning, valorisation Betfair with £ 1. 39bn, but ended the day more than 1550 £ 250 p.

While most large shareholders of Betfair, including founder Edward Wray and Andrew Black, who had developed 10pc of their stock in the lost float outside of these gains, makes the value of their much higher remaining issues.

The company says that the main objective of its stock list is not to raise new funds but to give him a currency to make redemptions of shares and allow it to gain more credibility in foreign markets where the mark is unknown.

However, owners of Betfair triggered 211 m £ in the IPOs of yesterday. Mr. Wray means making £ 18. 9 m and Mr. Black £ 16.6 m of flotation, if an overallotment option is exercised aussi.Ils will then have 10 7pc piles and 10 2pc respectively.

"Betfair may be just what the doctor ordered for market of United Kingdom, which badly need a dose of confidence, said David Wilkinson, head of the Agency to Ernst & Young at the United Kingdom."Companies looking to float pipeline remains strong, but many British companies are retaining until reduce volatility and improve évaluations.La mounted Pope, everyone waits is unlikely to appear in the middle of the year 2011 and 2012.?

Betfair is also a blow of Goldman Sachs, who acted as a sponsor joint with Morgan Stanley.Goldman put on the market in July, in a tank that further than once the offer price strikethrough to 180 p.Ensuite Ocado IPO shares fell 7pc on their first day of trading and are now at 137.2 p.

Floats that were completely this year include the string mode New Look, Merlin Entertainments, the owner of Alton Towers and Travelport.

"Betfair is a rare moment in what should be an otherwise quiet end 2010 for the IPOs in UK, brilliant", said Mr. Wilkinson Ernst & Young.


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