Sizeable Chunk of Betfred’s Annual Profits Came from VAT Claim
Despite the COVID-19 pandemic, US-based bookmaker Betfred had a profitable year. Its annual report covering the period to September 27, 2020 shows a $165 million profit after tax, up from $156.7 million during the previous year.
However, much of that money or just over $97 million came from a successful claim that Betfred filed against the HM Revenue & Customs department in April 2020. The case concerns the bookmaker’s VAT payments on Fixed Odds Betting Terminals. Betfred claimed it was mistakenly paying VAT on FOBTs winnings between 2005 and 2013. The contention was that identical or similar games on FOBTs in casinos or online casino sites were exempt from taxes.
Reports also show that players wagered $6.48 billion throughout 2020, which marks a 35.8% drop from the $10.10 billion wagered during the previous year. Out of this amount, Betfred made $524.9 million, down 15.5%, while the bookmaker settled $55.1 million in betting duty, up 3.3%.
Other costs include $38.1 million in machine gaming duty, $8.4 million in the statutory betting levy, and $13.2 million in commissions. This left Betfred with a $410.2 million gross profit, a $475.0 million decrease from the previous year. But staff costs were also lower this year, with Betfred paying out $158.7 million, compared to $187.9 million last year.
Thanks to a $28.1 million government grant to preserve jobs during the pandemic, the Betfred staff got the same compensation in 2020 as in 2019. However, the average number of employed staff was reduced to 6,993 from 7,154
The US bookmaker also reported an income of $94.3 million from investments from a fair payoff on shares investment on the London Stock Exchange.