Isle of Man-based gaming solutions provider Playtech have agreed to settle outstanding taxes of approximately £25 million within the coming 30 days after a lengthy civil audit tax process conducted by the Israeli authorities. This news saw the firm’s share price immediately dip around 0.8% when it was announced on Wednesday, 2nd January.
Reports indicate that the settlement is tied to transfer pricing adjustments that the Israeli tax office has made related to Playtech’s activities between 2009 and 2017. The firm has also confirmed that no additional penalties will be levied.
The extra payment will be listed as an “exceptional item” in the firm’s 2018 returns. It is one investors are likely to take exception to, especially given the recent concerns caused by increased taxation on gambling and casino services announced in Italy before Christmas, which is likely to end up costing the firm a similar amount, an estimated €20-25 million.
It certainly hasn’t been a smooth start to 2019 for Playtech, who still hold the title of the world’s largest online gambling software supplier. The firm employs over 5,000 people across seventeen countries, and most analysts appear to have faith in the long-term performance of the firm’s shares, advising investors to hold for the most part and viewing tax losses suffered as a natural consequence of Playtech’s sober decision to operate firmly in regulated and legal markets. It is quite reasonable to expect a firm of this stature to take these financial hits in stride and recover in good order for a strong performance internationally across 2019.
