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BBOA Seminar: 'Tax us, not the punters' William Hill chief Brown reveals his radical idea to scrap betting duty.

A REVOLUTIONARY idea to scrap punters' deductions has been put forward by one of Britain's most senior betting-industry figures, John Brown, as a way of heading off the tidal wave of internet betting.

"Radical problems require radical solutions," said the William Hill chief executive in a speech to a betting-industry seminar in London yesterday.

And nothing could be more radical than Brown's idea to relieve punters of deductions from their winning bets, which currently run at nine per cent. This figure accommodates a betting-duty rate of 6.75 per cent and statutory levy payments.

"Scrap betting duty as a percentage of turnover, and substitute it as a percentage of gross profit," he explained. "In other words, shift the liability to the bookmaker."

Addressing an audience packed with industry colleagues and commercial competitors at the British Betting Office Association seminar, Brown was quick to point out his view is personal, not company policy, and it is "not a firm proposal, not even a solution".

It was, however, a reflection of his concern over the growth of internet and offshore, duty-free telephone betting.

"We have to find a way of dealing with this threat that turns it into an opportunity," he explained. "We have to find a solution that removes the incentive for UK residents to bet offshore, while providing an equal incentive for overseas punters to bet with us."

Brown's own company operates two internet betting sites and is soon to set up an offshore outlet in Antigua, taking calls routed from a centre in Ireland.

"I would prefer to stay here," he said, "but I can't sit back and see my business disappearing."

To protect the whole UK-based business, he put forward a scenario of a duty rate of 20 per cent of a bookmaker's gross profit, allied to the "high-risk assumption" that punters would re-invest the benefit of nil deductions.

He pointed out: "If that happened, duty raised would drop by pounds 164 million. But if illegal betting stopped - and that could be up to pounds 1 billion a year - and we took just pounds 2 billion from overseas, the drop in revenue would be less than pounds 100 million.

"And that's without counting all the benefits that would be reaped from the increased activity, jobs, corporation tax, and so on."

Brown highlighted a series of advantages to his deduction-free scheme.

The UK's home betting business would be in an unbeatable competitive position; the main driver of illegal betting, tax avoidance, would be eliminated; and an opportunity would be created for the UK to compete to become the world betting centre."

Brown shares the view of several colleagues that putting UK betting on an international pedestal is both possible and essential, but he fears traditional Government preference for negative legislation.

He said: "This country, with its well-regulated, highly respected betting industry, has a unique opportunity to simultaneously protect and grow its core home market, the betting shops, and emerge as a world leader for sports betting, an exporter of bets, and an earner of foreign currency.

"Negative legislation would kill that possibility and seriously weaken the home market.

"The UK can either become a major centre for e-commerce business or a Luddite casualty of a new and dynamic era."

Brown, who admitted he was not over-optimistic about a positive response from the Government, concluded plaintively rather than positively: "Wouldn't it be nice if the betting industry, in partnership with the Government, led the way?"

Having taken his theme from Star Wars, he added: "The brat from outer space is only a threat if we treat him as one.

"He also has the potential to be the greatest opportunity of all time to change things for the better, for everyone."
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Title Annotation:Sports
Author:Wright, Howard
Publication:The Racing Post (London, England)
Date:Jan 19, 2000
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