UK bookmaker William Hill last week announced a new tax-free betting service to its telephone clients over the internet. The service will be operated from a call centre in Ireland, with internet services being provided from Antigua. The web site (www.willhill.com) will accept internet bets and process telephone bets as well as providing odds on all sports in real-time.
The clever use of the Irish call centre and Antiguan internet service allows William Hill to avoid UK betting duty on both its internet and telephone bets. Only a service charge of 3% will apply to telephone bets. William Hill currently has 40% of the telephone betting market, and the new arrangement could cost the UK Treasury millions of pounds, particularly if competitors Ladbrokes and Coral follow suit and move their telephone betting offshore too.
Managing Director of William Hill, John Brown said the new arrangements were a direct response to the UK Government's failure to respond to the betting industry's calls for a reduction in betting duty. "We cannot afford to sit here and see our business ebb away. It is an unsustainable tax. The Government should cut it to three per cent and then we would not need to go abroad." Mr Brown said.
Mr Brown also said that even if the UK Government introduces legislation to impose betting duty on bets taken offshore by UK bookies, there are plenty of tax free bookmakers in Australia and the Far East ready to offer to offer tax-free betting.
Mr Brown then issued a challenge to the UK Treasury - tax the bookies not the punters. Mr Brown, speaking at an industry seminar in London said the best way for the Government to stem the exodus of betting revenue offshore to low tax jurisdictions would be to scrap the betting duty altogether and tax bookmakers' profits instead. He rationalised his proposal by saying that British punters should not have to call the world to make tax-free bets, and also pointed out that removing the betting duty would spell the death of the illegal betting industry in the UK.
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