Racing: Move abroad for Chandler

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The Independent Online
BRITISH PUNTERS will be able to cut the amount of betting tax they pay by 66 per cent from Monday, following the announcement yesterday that Victor Chandler is to move his entire telephone betting operation to Gibraltar. Chandler's clients will be able to call free of charge, and will pay only a "service charge" of three per cent on top of their bets, rather than the nine per cent betting tax paid by the customers of rival, British-based firms.

The move comes as Britain's bookmakers prepare to face fresh competition from Ireland, where the betting tax will be reduced to five per cent from July. "It's the only sensible commercial move we can make given the imminent attack the UK industry is set to face in July," Michael Carlton, the managing director of Victor Chandler International, said yesterday.

"Unlike Ladbrokes and Hills, we have no betting shop-based business upon which to depend if phone turnover falls, as the entire industry knows it will. Without the UK Government creating a level playing field by reducing betting duty, we are forced to sell the London business to our Gibraltar company."

The move to Gibraltar means that Chandler will avoid the need to collect UK betting duty entirely, as well as the Levy which is returned to racing. The "service charge" will include a voluntary levy, however, which is forecast to generate between pounds 400,000 and pounds 500,000 annually. This will be distributed via sponsorship, prize-money and, according to Carlton, "initiatives to help racing achieve sustained growth in the longer term".

Chandler and Ladbrokes have a long-established presence on Gibraltar, while Hills have a major operation in another tax-haven, the Isle of Man. A gentlemen's agreement with Customs & Excise, though, has ensured that these tax-free betting facilities have until now been available only to foreign clients.

The joint impact of Chandler's new venture and the Irish tax cut in July will put immense pressure on the Government to reduce betting tax for all British punters, perhaps to the five per cent soon to be available across the Irish Sea.

Failure to do so will inevitably see a steady fall in the revenue from betting duty as turnover drifts abroad, and the growth of reliable, low- tax or tax-free internet betting - which may again be led by Chandler - can only accelerate the decline.

The downside of yesterday's announcement is that the British betting ring will lose one of its most colourful figures. Victor Chandler's rails betting operation will continue, but the man himself will retire from the track to concentrate on his new commitments.