Racing: Track betting faces new tax threat

Betting tax could return to racecourses by the back door if the Racecourse Association gets its way. Greg Wood reports.

It is 10 years since Nigel Lawson abolished the on-course betting tax of four per cent in the 1987 Budget, but deductions from bets with bookmakers at the track could soon be a reality once again.

In its submission to a Levy Board committee considering the administration of betting rings, the Racecourse Association (RCA) is demanding the right to impose a charge of three per cent of turnover on the bookmakers operating in its enclosures - a charge which would, almost inevitably, be passed on to their customers.

The RCA has long believed that on-course bookmakers should pay more for the right to bet at their tracks than the present charge of five times the public admission price, which is laid down by law.

Its submission to the three Government-appointed members of the Levy Board, who must decide how betting areas will be administered after October 1998, claims that at present, ring bookmakers pay about pounds 3 million to the tracks.

The RCA proposes instead a ``target figure'' of between pounds 9 million and pounds 10m, and while several methods for collecting such a sum are discussed, argues that ``the fairest system of all'' would be a ``pitch turnover tax''. This would be raised through ``the full computerisation of all betting transactions in the ring'', with payment of the tax ``ideally ... made at the end of each day's trading.'' In order to reach their target figure, the proposed rate of tax would be three per cent of turnover.

What the RCA does not acknowledge at any stage is that off-course bookmakers pass their Levy payments on to the punters in their shops, and on-course bookies would feel compelled to do the same.

Barry Dennis turns over more money than any other boards bookmaker in the southern England, but yesterday he insisted that his net profit over the last eight years (see table) is less than 1.5 per cent.

``There would be no other way to do it than to hand it on to the punters,'' Dennis said yesterday. ``Most people think that racecourse bookmakers are making bundles and bundles of money, but I'm earning 3.1 per cent gross on my turnover, which comes down to 1.49 per cent after expenses. I've always tried to give punters the best value I can, I always pay each- way the first five on the Cesarewitch and some other handicaps, and I was the only person in the country who paid each-way the first four on the 2,000 Guineas.

``This is all to try and encourage the public to come racing, and before the Guineas they were fighting to get on. I did 860 tickets in an hour, that's one every four seconds. But if they try to charge me three per cent, it will have to be a straight deduction from the punter.''

Inevitably, such a charge would also be a temptation for a Chancellor searching for every penny he can find. ``Why should it stop there?'', Dennis asks. ``The Government will be looking at it and thinking, that's handy, we used to get millions off racecourses. Now they're deducting, so we'll put another couple of per cent on and round it up to five.''

It would be foolish to claim that the current regime in the betting ring is ideal. A bookmaker's length of service, rather than its standard, is what matters most, and there are long waiting lists to bet at many courses.

Dennis, for instance, has been in the game almost 30 years, but is still not allowed to bet at Ascot during the winter, and is forced to occupy a poor, back-row pitch at many tracks. The number of bookmakers present at any one meeting, meanwhile, often bears little relation to the size or relative wealth of the crowd.

It should surely be possible, though, to make necessary adjustments without expecting racegoers to pay the price. Even punters who never set foot on a racecourse should also be concerned by the RCA submission, since any return to on-course deductions would weaken the betting market and give the big off-course betting chains more opportunity to manipulate starting prices to their advantage.

Morag Gray, of the RCA, said yesterday that she ``would rather not comment on details which could be taken out of context''. The final decision on how racecourse bookmaking will be run from next October now rests with the Levy Board. On past form, however, it would be foolish to think that the interests of punters will be a significant concern.

It is the Levy Board, you may recall, which spends pounds 2m annually on its own administration, but refused to give a penny to the now defunct National Association for the Protection of Punters. If the RCA's submission wins the day, tax-free on-course betting could soon be a thing of the past.