At present, a UK bookie can open up an offshore Internet site and encourage all of his most profitable punters to use it - tax-free. The bookie still has to pay UK corporation tax on the profits, but this is small beer compared with the tax he might have to pay if Customs and Excise is successful in imposing the gross profits tax on the totality of his business.

‘The whole thing is self-defeating. The more the Government cracks down on betting taxes in the UK the more business it pushes offshore,’ said Mark Blandford, who runs Alderney-based Internet bookmaker Sportingbet.com. Mr Blandford said that most of the company's business came from North America and Asia, with only 7% of turnover originating in the UK. ‘Even if a Government crackdown was effective it would not have a dramatic effect on us,’ he said.

Internet betting companies like SportingBet.com are already banned from advertising in the UK and there seems to be very little more that regulators can do. According to Mr Blandford: ‘In my opinion there is not anything that they could do that would be effective. We don’t advertise in the UK but people still find us using Internet search engines.’

Reported in This Is Guernsey, David Earl, a member of Alderney’s e-commerce task force, agreed that the two companies with Alderney betting licences should benefit from tightened restrictions on UK Internet betting. ‘It certainly will not harm Alderney’s Internet betting industry and it could possibly help it,’ he said.