Ladbrokes yesterday said its online gambling operation was moving offshore. It follows a similar move announced by rival William Hill.
Its chief executive Chris Bell said the bookie had taken the decision on competition grounds – many rivals are already offshore, which enables them to evade the Government's 15 per cent gross profits tax and a 10 per cent levy on horse-racing profits.
"We have to be able to defend our position and compete or we will lose our business," he said yesterday.
Mr Bell was speaking as the company announced a 3.9 per cent fall in pre-tax profits to £131.3m. The interim dividend will fall by nearly a third to 3.5p.
He said trading was "tough". "The football season will be very important to us. We need the customers to come back into our shops," Mr Bell said. However, the shares closed up 3.6p at 171.1p.
Mr Bell also called on the horse-racing industry to work with bookies to improve the product. "We're not going to agree on everything, but we need each other. Racing is continuing to decline as a share of our business at a rate of 5-6 per cent a year. We need to get something done to make it relevant."