British betting duty is 6.75 per cent, but betting shops levy an actual rate of nine per cent, to cover overheads and payments to the racing industry. In May, however, Victor Chandler, a leading racecourse bookmaker, moved his telephone credit-betting operation to Gibraltar. British punters can reach him on a freephone number, and he charges a tax of just three per cent on stakes.
Coral, which has 25,000 clients with telephone accounts, said yesterday its rate would be "no higher" than three per cent. It is expected to relocate its call centre to either Gibraltar, the Isle of Man or Alderney.
Bookmakers are lobbying the Government for a cut in betting duty, so they can compete with offshore operators, bookies in Ireland, where the tax is five per cent, and internet bookmakers, who offer tax-free bets on British racing and sports from locations such as Australasia and the West Indies.
"We are losing customers at an alarming rate," said a Coral spokesman. "The action should be taken by the Government but it continues to bury its head in the sand."
Ladbrokes is Britain's biggest bookie in terms of betting shops and turnover, but William Hill, with about 150,000 account holders, is the leader in telephone betting. Both firms are expected to follow Coral before the end of the year. "It's not something we want to do but it looks like we will have to," Graham Sharpe, of Hills, said. "The betting levy would need to be cut to about three per cent to enable us to compete."
Coral's move is good news for punters, but signals difficult times ahead for many other bookies and their staff. Already, some regular betting shop customers have started placing low-tax bets with foreign bookmakers by mobile phone while watching the racing in their local shop. If betting turnover continues to drift abroad, call-centre staff and smaller off- course bookies will be hit hard.
Warwick Bartlett, chairman of the British Betting Office Association, represents the small bookmakers, many with only one or two shops. He warned that 1,800 shops, each of which employ at least two people, could be forced to close.
"Coral have no choice and I'm sure this is just the tip of the iceberg," he said. "Off-shore betting is already having an impact and this isn't taking into account betting on the internet."
Martin Belsham, managing director of City Index, a leading spread-betting firm, said up to 8,000 jobs could be lost.
But there is little sign of an imminent cut in betting duty. The Government collected pounds 480 million from betting duty in 1998-99, but only 10 per cent was generated by telephone betting. "It's difficult to predict how things will turn out, but the position is that telephone betting provides only a small amount of the Government's revenue," Alex Strutt, a spokeswoman for Customs & Excise, said.
Punters in cyberspace
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