Betfair's overseas business rising fast.

Byline: Howard Wright 

BETFAIR chief executive David Yu yesterday forecast that the world's dominant betting exchange, which began operating in 2000, will bring in more revenue from overseas players than those in the UK for the first time within the next 12 months.

Yu also said the majority share of revenue attributed to horserace betting was coming under threat from other sports.

Speaking on publication of an outline of Betfair's financial results for the year ended April 30, Yu revealed that more than half of new users came from outside the UK and, while revenue from the UK ranked almost 50-50 alongside overseas betting, growth in business was 20 per cent in the UK but 40 per cent overseas.

Yu said: "The trend is for international business to overtake the UK over the next year, and we will continue to push into these markets."

The lifting of an advertising ban in Australia, once staunchly anti-Betfair, was followed by a 40 per cent growth in revenue.

Despite the pressure on horseracing, which has dropped to 50 per cent of business, and brings in 20 per cent of revenue through in-running bets, the sport remains "very significant" for the exchange, chief financial officer Stephen Morana said.

"Revenue from horseracing is still growing, and we have taken a number of initiatives, especially to push the sport internationally by integrating a number of overseas tote operators," Morana said.

Morana pointed out that as well as paying the normal betting levy for UK business, Betfair made a voluntary contribution for offshore horseracing business.

Betfair paid around pounds 7.5 million in levy last year, seven per cent up on the previous year, which was made up of pounds 6.16m in statutory levy and about pounds 1.3m in a voluntary contribution.

Yu said that Betfair began streaming live racing pictures from South Africa on Tuesday, and yesterday added US racing to the service.

He said: "Racing stays at the heart of our business, but the challenge comes from the younger generation, who are more interested in other sports."

An announcement that group revenues for 2008-09 had grown by 27 per cent, to pounds 303m, and active users had increased by 25 per cent, to 652,000, fuelled further speculation about a possible float.

Betfair also issued a thinly veiled threat to move their UK business to Malta, should the competitive disadvantage of paying tax in Britain worsen.

Betfair already channel almost all of their non-UK business through low-tax operations in Malta, but are committed to the UK and have no plans "at the moment" to move, said Yu.

However, he added of the Treasury's 15 per cent betting tax on profits: "It is not ideal. It does put us at a competitive disadvantage."

He declined to rule out abandoning the UK at some stage.