Go Easy In Budget 2009, Bookmakers Tell Ministers

Leading UK bookmakers have warned the Government not to attempt increasing taxes or regulation at the Budget as this will result in closure of betting shops and job losses, as well as further undermining their chances at competing with offshore rivals.

Bookmakers emphasised that their industry gave direct employment to 40,000 people and provided support to a further 60,000 jobs in racing and other betting-related industries.

Some bookmakers have also hinted that any regressive move from the government could force them to relocate sections of their businesses offshore. These hints were given at meetings with Gerry Sutcliffe, Minister for Sport, and Angela Eagle, Exchequer Secretary to the Treasury.

Last week, the bookmakers told Mr Sutcliffe what was at risk in the event that the their fears that the government were to raise gross profits tax from 15pc to 17 pc, and introduce tougher regulations on fixed-odds betting terminals came to pass.

At a presentation seen by The Daily Telegraph, the bookies stressed that the industry directly employed 40,000 people and provided support to a further 60,000 jobs in racing and other industries that depend on betting.

They also sought to emphasise the 920m in direct taxes that bookmakers pay annually, inclusive of gross profit tax, corporation tax and VAT – a figure that surpasses 1bn inclusive of local taxes.

Mr Sutcliffe was told that the bookmakers also contributed more than 130m a year in levies to the horse and greyhound racing industries, while providing 100m to sporting events via sponsorship and other commercial arrangements.

“Analysis by London Economics indicates that an increase in GPT from 15pc to 17pc would result in the closure of 845 betting shops and see the loss of 3,190 full time jobs,” warned the bookies in the presentation.

The bookies highlighted how 2,500 of the UK’s 8,600 shops were already hurting from the recession and were now making less than 30,000 in annual profits.

In attendance at the March 18 meeting was Chris Bell and Ralph Topping, respectively chief executives at Ladbrokes and William Hill, as well as Neil Goulden, the chairman of Gala Coral. Representatives of the Association of British Bookmakers were also in attendance, while a similar delegation met Ms. Eagle on March 2.

The bookmakers also drew attention to the “severe competitive pressures from offshore operators paying little or no tax or levies″, such as the online casino and telephone businesses of Irish bookie Paddy Power and Gibraltar-based Bwin.

For instance, online casino site Paddy Power routes such bets through servers on the Isle of Man, paying a mere 1.5pc tax on gross profits – thereby making savings which may then be recycled into advertising and providing better casino odds to punters in Britain.

“The problem is that the tax rate on e-gaming is too high in the UK,” said Warwick Bartlett, the ABB chairman.

Due to increased competition from offshore rivals, he added, bookmakers were reconsidering whether it was financially savvy to remain located in the UK.

“They are reaching a tipping point,” Mr Bartlett said. “They have got the staff here, the expertise here and the infrastructure here. But they may not have a choice. Their shareholders are going to start asking what are you doing here?

To find the best online casino, visit the make money now site for winning systems and bookmakers .