- Germany and Greece demand taxes from Paddy Power Betfair
- Betfair and Paddy Power merged on February 2 2016
- Germany makes tax assessment against Betfair Exchange of $46.2m
- Greece totalled $16.6m of Paddy Power unpaid taxes from 2012-2014
- Paddy Power Betfair prepares to appeal German tax bill due to its legal hold
Well-known bookmaker Paddy Power Betfair has been served with a total tax bill of $62.89m by EU countries Germany and Greece. In the bill dated 2012-2014 Paddy Power owes Greece a sum of $16.6m, and from 2012 Betfair Exchange is seen to owe Germany a tax debt of $46.2m.
To complicate matters, in November 2012 Betfair Exchange was officially wound up. Although Paddy Power Betfair has paid the bill from Greece, it is now appealing both bills and their legal hold over them, as they have since merged to create Paddy Power Betfair.
Paddy Power is an Ireland-based bookmaker, established in 1988. From its initial 10 shops to its merger with Betfair Exchange in 2016, it is one of the biggest gambling platforms on the planet. Its strengths include offering outside odds on some fairly oddball topics, such as celebrity baby names and who will be the next Pope.
When Paddy Power merged with another large gambling platform, Betfair Exchange in 2016, it faced complaints of an industry monopoly, predominantly due to its large European market. But the unpaid tax bills soon landed the company in hot water.
In total, the Greek bill has racked up to a sum of $16.6m after penalties and interest. Paddy Power Betfair reached into its deep pockets and paid the total bill in January 2019.
German tax bill
Germany’s Hessen Fiscal Court has served Betfair Exchange with a tax bill of $46.2m dated back to 2012, but as the company was officially wound up in November of that year it remains less clear cut. Paddy Power Betfair has now been handed the bill and is disputing the legal hold it has over them. The gambling platform is not as inclined to pay this bill, however.
The company has stated: “The group strongly disputes the basis of these assessments, and in line with the legal and tax advice we have received, is confident in our grounds to appeal. We, therefore, intend to do so. We paid the total Greek liability in January 2019, while we await clarity with respect to the timing of any cash payment in Germany.”
Expansion on the cards
While a tax bill in the millions is hardly loose change, it won’t cripple the business either as the company’s 2018 earnings were in the range of $596.8-$616.11m. This amount fails to take into account its expansion into the US sports betting industry.
Since the US Supreme Court legalized gambling on sports, the market has opened up for great potential, with Paddy Power Betfair already moving in and acquiring the fantasy sports business, FanDuel.
And in recent times, America isn’t the only market it has focused on. Paddy Power Betfair has also branched into the Georgian market, where it acquired a 51% shareholding in the gaming group, Adjarabet.