Full house!

NICK CASSIDY OF BETFAIR EXPLAINS TO RICHARD CURTIS HOW HE TURNED HIS TAX CAREER INTO A WINNING STREAK

I had a great idea for an article about working ‘in house’ in tax. What about working in the tax department of a firm in the gaming business?

It might have been a subliminal thought, but the word ‘house’ made me think of ‘housey, housey’, an old name for bingo, that well known game that’s played for money up and down the country and around the world most nights of the week.

I therefore phoned Nick Cassidy, tax director of Betfair Ltd, one of the UK’s largest online gaming businesses.

Things were going extremely well until Nick dropped the bombshell as I explained how great the article was going to look with a picture of someone winning a bingo game and shouting ‘House!’ as he leapt up.

‘We don’t do bingo’, he said.

I was just going to ask him if he knew of anyone who did, when the thought crossed my mind that this might seem churlish. Of course, once he mentioned that they did operate online poker games, I suddenly realised that I had a ‘full house’ as far as the article was concerned and with just the smallest of adjustments to the image idea…

Down the line

Nick started his career in tax with big four firms in Aberdeen and London, before moving to the tax department of a recruitment consultancy and from there to a new and exciting opportunity with Betfair based in Hammersmith.

Nick explained that in the online gaming industry, Betfair is ‘slightly unusual’ in retaining a large business in the UK. ‘Generally speaking, a lot of traditional tax havens have targeted online gaming companies as a useful revenue source. As well as the UK, Betfair has large businesses in Malta and the US and a growing number of locations around the world.

The business has gone from nothing nine years ago to employing about 1,500 people today and we feel that we are one of Europe’s biggest internet success stories.’ This is evidenced by the firm winning the prestigious Queen’s Award for Industry twice in its relatively short existence.

A pioneering business

Like most people who work in house, Nick was full of enthusiasm for his firm, its business, its tax concerns and how the various elements all mesh together.

‘We are in a very interesting and innovative business. We pioneered the betting exchange concept – “person to person betting” – by providing the platform that facilitates this, but we now also operate online poker, online casinos, arcade games, etc.’

‘But not bingo?’ I asked.

‘No’; although I did wonder if my bringing the subject up again may have started him thinking that there could be an untapped business opportunity waiting to be exploited there. Perhaps not!

But then again, Nick did mention that these are interesting times taxwise in the gaming industry.

For example, Rank has just won a multi-million pound case concerning the VAT treatment of bingo and gaming machines and how this had contravened the EU’s principle of fiscal neutrality. That’s got to help the profitability of what worryingly seems to be becoming my favourite game.

The fast moving, fast changing nature of the business ‘is what keeps me here’, said Nick.

‘There are five of us in the tax department; a mix of tax advisers (Customs trained as far as VAT is concerned) and accountants, but above all we must be very entrepreneurial in our approach as we are in a very fast growing phase, with 25% growth last year.

‘The business is still massively positive, we are moving forward and this is what makes it an enjoyable place to work. We are, of course, a very highly taxed business and cover all aspects of tax. One of the challenges our corporate tax people have to engage with is the VAT aspect of the business which is a real cost to us. And that’s before we factor in betting duties which are 15% off the top line.

‘International expansion is where we are now, with a recent US acquisition, but what we have to remember is that in the US, and in many other countries, betting is very highly regulated, even to the extent of being a national monopoly.

'The UK and Ireland have, by comparison, quite a liberal approach. It’s therefore very important to understand how tax is so inextricably linked to the regulatory environment and supporting the business. For example, we always need to look closely at joint venture and third party contracts to make sure that they work from the tax angle.’

Cards on the table

Who would do well in the gaming business? Nick suggested that ‘you need to be interested in one of three things – as well as tax, of course – betting, technology or sport. If you haven’t got a passion for at least one of these, gaming may not be the place for you’.

We assume that you are already passionate about tax – you wouldn’t be reading this if you weren’t, would you?

Nick pointed out that ‘a recent employee turned down offers of a position in two large multi-nationals because she wanted to work in a business related to sport. There are no free betting opportunities, but Nick explained that as the company had grown, more of the big company benefits were available and opportunities exist for training as required.

So there’s lot’s going on in tax at Betfair: pretty much everything other than bingo, then. But from the sound of things, I would bet that this hasn’t detracted from working in Betfair’s tax department.