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| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES | 6. INCOME TAXES The following table presents the provision for income taxes and the effective tax rates for the three and six months ended June 30, 2026 and 2025:
The provision for income taxes for the three and six months ended June 30, 2026 and 2025 is based on our projected annual effective tax rate for the applicable fiscal year, adjusted for specific items that are required to be recognized in the interim period in which they are incurred. The Group’s effective tax rate fluctuates based on, among other factors, where income is earned and the level of income relative to tax attributes. The change between the Group’s effective income tax rate of 1.0% and 82.0% for the three months ended June 30, 2026 and 2025, respectively, was primarily due to the net impact of jurisdictional mix of earnings and discrete items. The discrete items for these periods primarily comprised of the change in the fair value gain on the Fox Option liability and the loss making jurisdictions for which no tax benefit is recognized. For the three months ended June 30, 2025, discrete items included income tax expense resulting from the reorganization of our Betfair Brazil business and increase in our liabilities for various unrecognized tax benefits. Additionally, the Group’s effective income tax rate was affected by share-based compensation tax shortfall for the three months ended June 30, 2026, compared with an excess tax benefit for the three months ended June 30, 2025. The change between the Group’s effective income tax rate of (33.8%) and 33.5% for the six months ended June 30, 2026 and 2025, respectively, was primarily due to the net impact of jurisdictional mix of earnings and discrete items. The discrete items for these periods primarily comprised of the change in the fair value gain on the Fox Option liability and the loss making jurisdictions for which no tax benefit is recognized. For the six months ended June 30, 2026 discrete items also included, the effect of a contribution to a super political action committee to strengthen our advocacy initiatives which is nondeductible for income tax purposes, whereas for the six months ended June 30, 2025, discrete items also included income tax expense resulting from the reorganization of our Betfair Brazil business and increase in our liabilities for various unrecognized tax benefits. Additionally, the Group’s effective income tax rate was affected by a share-based compensation tax shortfall for the six months ended June 30, 2026, compared with an excess tax benefit for the six months ended June 30, 2025. As previously reported, we have received a discovery assessment from His Majesty’s Revenue and Customs authority (“HMRC”) relating to an intragroup transfer of intellectual property from the United Kingdom to the United States for the year ended December 31, 2020. As of June 30, 2026, we are in the process of appealing this assessment and previously recognized an unrecognized tax benefit for the estimated settlement which is included in Other non-current liabilities in the Condensed Consolidated Balance Sheets. We do not expect to resolve this matter in the near term and will continue to assess the recognition and measurement criteria of the tax position. While the Group believes that we have strong arguments, there can be no assurance this matter will be resolved favorably. In May 2026, we received notices of amended assessments from the Australian Tax Office relating to the valuation of intragroup royalties for fiscal years 2014 to 2021. See Note 16 “Commitments and Contingencies” for further details in relation to this ongoing Australia income tax dispute. Each year the Group files hundreds of tax returns in various national, state, and local income taxing jurisdictions in which it operates. These tax returns are subject to examination and possible challenge by the tax authorities. The Group has ongoing income tax audits in various jurisdictions and evaluates tax positions that may be challenged by tax authorities in accordance with accounting for income taxes and accounting for uncertainty in income taxes. As of June 30, 2026, the Group does not expect there to be any material changes to its existing unrecognized tax benefits that would affect the effective tax rate, due to the current position with taxing authorities. Effective from fiscal 2024, the Organization for Economic Co-operation and Development (OECD) Global Anti-Abuse Erosion (GLoBE) rules under Pillar Two have been enacted by various countries in which the Group operates. The Group currently does not expect a material impact to the effective tax rate in connection with Pillar Two for the current year ending December 31, 2026.
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