If you were running a book for the Golden Hypocrites Bookies Stakes you would have to price William Hill at onerously short odds.
Punter Richard Irvine got a letter from Australia’s largest online bookmaker asking him to complete a statutory declaration with 18 questions. Among other penetrating requests, these included a demand for “certified copies of your last three tax returns and mark those certified copies with the letter ‘C’.” And, “include certified copies of documents evidencing your income (eg your last three employee pay slips) and mark those certified copies with the letter ‘E’.” Irvine is one of those punters the bookies don’t care for … one who tends to win too much.
“William Hill feels that no punter should actually be able to win off them,” says Irvine. “When Racing NSW forced them to give punters a chance to win, they placed this impost on all punters they had marked as winners – knowing that no punter would be able to source all this info let alone be willing to provide it.” These stringent “legal” requirements came replete with a threat of “imprisonment” should Irvine make any false statement. The bookie is not quite so pernickety however when it comes to its own statutory declarations.
Take its financial statements for the year to December 2014 for instance. Once again the William Hill accounts feature a loan from Gibraltar of £249 million ($A483 million) at the usurious interest rate of 5.79 per cent and repayable by March 2022.
This rate is not in the same weight class as News Corp and Telstra’s 12 per cent loan to Foxtel, or Glencore’s 9 per cent loan from Switzerland for that matter, but it is still far higher than parent company William Hill Plc can borrow in London.
If there is any commercial reason for this loan, apart from funnelling millions in pre-tax punters’ dollars out of Australia every year to a rock in the Mediterranean, it is not evident.
William Hill has also fixed itself up with a very nice handicap; its accounts are in pounds sterling rather than Australian dollars. What is the point of an Australian company reporting in pounds, you ask?
A cynic would say this company had set itself up to lose; and lost it verily has as the $A has fallen against the pound. What is the point of losing, you ask?
As is the case with most multinationals operating in Australia, the whole game-plan is to lose. If you make a loss, you don’t have to pay tax.
Even without loans to mysterious companies in exotic destinations – the cost of which is magnified as the $A falls against the British pound – William Hill would be in the red anyway.
It bolted into the Australian online gaming market, fluttering $710 million to buy Sportingbet, Centrebet and Tom Waterhouse at the very top of the market. It has overpaid and is naturally keen to win back its losses.
It was by no means alone though. Europe’s big wagering houses all took the plunge: Ladbrokes snapping up bookmaker.com.au and Betstar for $40 million and Ireland’s Paddy Power buying Sportsbet and IasBet for $235 million; all on the basis that we Aussies are the biggest punters in the world, each one of us losing, on average, $1600 a year.
(These are always amusing facts to consider when we hear from politicians, business and media how tough things are).
In any case, the online bookies mostly set up shop in the Northern Territory which has offered them a cosy tax regime. The 13 bookies raked in $8.5 billion in bets last financial year on which they paid a princely $2.5 million in tax.
Nick Xenophon got it right as usual when he described the NT’s tax laws “an absolute gift” to bookmakers. “They must be laughing all the way to their offshore bank accounts”.
As for corporate income tax, it’s probably a fair bet that most of the British bookies don’t fork out a lot. William Hill’s latest accounts showed revenues of £126 million, up from £89 million prior, a loss of £49 million and a tax benefit of £14 million.
Sports book turnover was £1.39 billion and client payouts were £1.27 billion.
That will grow, especially with the irritating blanket advertising to suck in new victims such as this little beauty on the AFL: “A $5 bet could win you up to $100 million. Just pick the final 2015 AFL ladder in the correct order and bet now!”
“Just pick” … and you “could win up to”. You’ve got to love that.