Racing: Bookies upbeat on tax-free benefits

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The Independent Online

Four and a half weeks after the abolition of betting tax for punters, the inside of the average betting shop does not, in truth, look any more like Shangri-La than on 5 October, the last time we all had to sacrifice that irritating nine per cent. Many shops still seem to have more staff than punters, and on a normal weekday the obligatory pair of fruit machines spend hour after hour flashing at thin air. You wonder how some shops turn over enough money to keep the cashier in fags.

Four and a half weeks after the abolition of betting tax for punters, the inside of the average betting shop does not, in truth, look any more like Shangri-La than on 5 October, the last time we all had to sacrifice that irritating nine per cent. Many shops still seem to have more staff than punters, and on a normal weekday the obligatory pair of fruit machines spend hour after hour flashing at thin air. You wonder how some shops turn over enough money to keep the cashier in fags.

But appearances, it seems, can deceive. Britain's major bookmakers, though they are shy about putting a figure on it, seem confident that their turnover has increased significantly since tax was abolished, just as they all predicted it would. The only bookie to produce a number so far is Coral, whose spokesman, Simon Clare, estimated this week that turnover had improved by 30 per cent. Elsewhere in the betting industry they are keeping what figures they have to themselves, but there are signs that Coral's claim is a conservative one.

"I can genuinely say that we're very satisfied with the way things have gone so far," Chris Bell, the chief executive of Ladbrokes, says. "It's quite difficult to be absolutely precise, because this was a period last year when a lot of meetings were abandoned, so year-on-year comparisons are difficult. We've also had weekends with the England against Greece game, and Manchester United against Leeds, which punters tend to like to watch at home.

"But having said that, if you take an intuitive look at the figures and try to read them, you'd have to say that we're very pleased with how things have gone, and there's no evidence of substitution from other channels such as the internet and telephone betting. They're growing just as well as the retail side."

William Hill also seems satisfied with the first few weeks of the tax-free age, although again, precise figures for any increase in turnover will not be available for several months. "It's been widely reported that John Brown, our chairman, predicted a 40 per cent rise in turnover," Graham Sharpe, Hill's spokesman, says, "and I think it's fair to say that the increase has met expectations."

One reason why the bookmakers are not keen to discuss definitive numbers, apart from the difficulties of year-on-year comparisons, is that talk of bookies' turnover, and by extension profits, has the same effect on Peter Savill, chairman of the British Horseracing Board, that a drop of blood in the Amazon has on nearby piranhas. Any suggestion that business is booming will only encourage Savill as he seeks a huge increase in the amount which the betting industry (and, ultimately, its customers) pays to racing.

But there has certainly been an increase in the number of punters wanting lumpy bets on short-priced favourites – though whether all of these are accommodated is another matter. For many of them, there have also been several painful reminders that there is no such thing as a certainty, starting with England's failure to beat Greece at odds of 1-5 on the first day of tax-free betting.

With plenty of money which once fuelled the illegal gambling industry also likely to find its way to the shops over the coming weeks and months, turnover is certainly going to rise significantly. It is interesting, though, that person-to-person betting on the internet, one of the few sectors of the industry which still levies a deduction, has seen no slow-down in the growth of turnover. The main person-to-person sites are Betfair, which charges five per cent on winnings, and Flutter.com, which deducts a far more reasonable two-and-a-half.

"What we offer is something much more potent than tax-free betting, which is better prices," Ian Davies, of flutter.com, says. "Tax-free betting has not affected us at all, and in the long run, I think punters will take their betting much more seriously and become more value-driven, which is the first step on a road which eventually leads to us. Even at the margins, where you're talking about the difference between 7-4 and 15-8, you get more back at 15-8 with a 2.5 per cent deduction that you do at 7-4 tax-free."

The loss of so much of last winter's jumps programme as a result of the weather and foot-and-mouth outbreaks will make year-to-year comparisons difficult for some time. It will probably be a year before a reliable estimate emerges of the effect of the new regime on turnover. The impression remains, though, that Britain's bookmakers are growing in confidence that when they took their punt on a new way of doing things, it was yet another winner.

* Punters have plunged on Shooting Light for Cheltenham's Thomas Pink Gold Cup on Saturday week after the weights were published yesterday. Martin Pipe's charge had been 5-1 in the morning with Coral and was cut to 7-2 before support saw his odds fall to 3-1. The eight-year-old, who joined Pipe from Pat Murphy, is also Coral's 8-1 favourite for the Hennessy Gold Cup. He is on 9st 10lb in the Thomas Pink, after going up 14lb in the ratings for an impressive course win.

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