UK Bookies Welcome Review Of Betting Exchange Tax Treatment

by Robert Lee, Tax-News.com, London

23 March 2004

UK bookmakers have welcomed the decision by Chancellor Gordon Brown to review the way online betting exchanges are treated by the tax system.

Although a relatively new addition to Britain’s gambling industry, the popularity of internet betting exchanges has increased dramatically, with more than 250,000 people using them, according to some estimates. The exchanges work by allowing punters to place bets with each other, rather than with a bookmaker, with the exchange firm effectively acting as a broker.

However, unlike bets placed with conventional bookmakers, users of exchanges pay tax on commissions, rather than on winnings, allowing them for the most part to pay less tax. Conventional bookmakers have complained that this gives the exchanges an unfair competitive advantage.

"All that we are asking for is that anyone who lays bets on an exchange should be subjected to the same regulation and taxation issue as any other licensed bookmaker,” David Hood, a spokesman for William Hill, was quoted by BBC Online as announcing.

However, Paul Cooper of betting exchange Sportingoptions.co.uk told the BBC that the sector was already fairly taxed.

"Professional gamblers have not been taxed in the past and there's no way they should be taxed now because they're taking the position of saying something will or won't happen,” he observed.

Recommended