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Letter: Bookmakers left with little choice.

Byline: David Harding

David Harding of William Hill argues that deductions on punters will be inevitable, given the Government's demands

YOUR report of Alex Gibbs's speech at the BOLA conference on February 13 omitted one of the most important facts to emerge in the whole event.

Alex did indeed state that the Treasury was well aware that the introduction of a gross profits tax would result in a loss of tax revenues in the early years, and that the Treasury expected it would break even over five years.

He also restated that the Government's objectives

behind the reforms include a better deal for punters and the creation of the right environment for the future funding of racing, as well as providing an incentive for British bookmakers to become bookmakers to the world.

However, he also said that the Treasury's forecast reduction in tax revenues from all types of betting in 2002 was pounds 145 million. In other words, the Treasury thinks that the windfall benefit available to be shared between punters, the betting industry and racing in 2002 is pounds 145m.

Racing's demands would account for all of that after VAT. And if bookmakers don't deduct, then punters would not contribute.

This leaves bookmaking bearing all the costs of repatriation, including extra staffing costs, taking all the risk if recycling doesn't happen as expected or if margins fall, and being expected to meet additional marketing and IT costs to grow the international business.

Those sums just don't add up. Bookmakers take all the risk, punters enjoy the benefit of tax-free betting, while the BHB gets the windfall, most of which, it seems, will be wasted on prize-money.

We don't want to undermine our commitment to the Government by reintroducing a deduction, and we certainly don't want a legal fight with the Department for Culture, Media and Sport.

However, faced with the complete intransigence of the BHB and a levy scheme that bankrolls its unreasonable commercial agreement, I don't see what choice we're going to have.

Chief executive

William Hill
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Copyright 2002 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Sports
Publication:The Racing Post (London, England)
Date:Feb 20, 2002
Previous Article:Letter: Deductions are unacceptable.
Next Article:Letter: Letter sought to clarify key issues.

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