HM Customs and Excise 2 - 9 November 1999

GOVERNMENT TO TAKE ACTION ON OFFSHORE BOOKIES

The Government is to take action against the threat to the UK betting and racing industries from offshore bookmakers, the Chancellor announced today.

Steps to protect these important UK industries will start with a strengthening of the ban on advertising by offshore bookmakers on teletext services and other media in the UK.

The Government has ruled out no options in its effort to discourage offshore betting and protect the revenue, and may bring forward further measures in the Budget.

NOTES FOR EDITORS

1. General Betting Duty receipts are up by 3.5 per cent in 1999 compared to 1998, but the government is concerned this trend will be reversed if the big bookmakers carry out their threat to take their telephone credit business offshore.

2. Duty rates at 6.75 per cent are about the average by international standards. 1.25 per cent goes to the horseracing levy, and raises some £52 million per year for the UK horseracing industry. The UK racing industry employs 50,000 people and the UK betting industry employs another 35,000.

3. UK bookmakers have been operating offshore betting centres for several years. Until recently their impact upon the UK betting market was constrained by a voluntary code between them that they would not accept bets from the UK. The code was breached by Gibraltar-based Victor Chandler International in May 1999, which actively sought to attract UK customers. Chandler charges a 3 per cent levy on these UK bets.

4. This competition has caused the big UK bookmakers to consider expanding or setting up their own offshore centres to take UK bets.

5. This has forced the government to intervene in order to ensure that UK bookmakers can operate in a fair competitive environment, pay their fair share of taxes, and provide the financial support to the racing industry upon which the betting industry depends.

6. Currently, offshore bookmakers are able to exploit a loophole in the ban on advertising in the UK by promoting 'tax-free' offshore betting on teletext services and other electronic media. The Government will be strengthening this ban, and making it more flexible so that any further avoidance schemes can be quickly tackled.