Betfair has won its Italian ‘tax reform’ appeal, made against Italy’s ADM customs and monopolies agency with regards to how a temporary 0.5% wagering tax should be applied to its Exchange platform.
This week, Rome’s TAR commercial disputes court ruled in favour of Betfair’s appeal that a 0.5% tax charge should not be enforced on Betfair’s Exchange activities as a licensed market incumbent.
Last summer, following Parliament’s approval of Italy’s COVID Revival Decree’, the ADM was ordered to apply a temporary 18-month 0.5 tax charge across all sports wagering verticals – retail, digital and virtual sports.
Betfair immediately appealed against the ADM’s order, underlining that its Exchange would face total tax charges (corporate and wagering) of 111% making Italy a non-viable marketplace for its business.
Supporting Betfair’s appeal, Rome TAR judges stated that the ADM had “failed to carry out an accurate analysis of how to determine the taxable amount/contribution to be paid in the context of betting exchanges and as to why the contribution should be payable by winning players”.
The judges have ordered the ADM to rectify passages of the Revival Decree, stating that an exemption should be outlined for betting exchanges – in which Betfair currently maintains 96% of the Italian marketplace.
The ruling cites that the ADM must recalculate its temporary tax charge, considering unique factors to betting exchange calculations, in order to ensure Italian betting maintains a fair treatment of its licensed businesses and services.
Prior to its Rome verdict, Betfair had seen its preliminary legal challenges against the ADM overturned, forcing the company to restrict its Exchange services for high wagering customers.
In previous appeals, Betfair had recommended that the ADM modify the temporary tax charge to an additional 3% GGR tax rate on its earnings, or as an Exchange commission, rather than being applied as a wagering charge.
As it stands, the temporary tax charge for the betting exchange operators has been suspended, while it remains fully in force for the licenced Italian bookmakers.