Bookies applaud plans to review betting exchanges
Bookmakers have welcomed chancellor Gordon Brown announcement yesterday that the government will conduct a review of the way internet betting exchanges are treated by the tax system.
Betting exchanges now attract around 250,000 UK punters, but High Street bookmakers claim that they are not competing on equal terms because the exchanges only pay taxes on their commission, rather than their winnings.
Betting exchanges act as brokers, matching people with opposite views on a sporting outcome and taking out a relatively low commission for providing the service. Punters can back (to win) or lay (to lose) a bet, unlike traditional betting.
However, concerns have been raised that some people have been using inside information to rig the market and the Jockey Club is particularly concerned that punters on betting exchanges can make a profit on horses losing.
Mr Brown suggested in his 2004 Budget speech that it was the layers’ tax position that would be examined most closely.
Welcoming the review, William Hill spokesman David Hood said: “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.”
A spokeswoman for Ladbrokes welcomed the move, adding: “Ladbrokes is pleased that the Government has acknowledged the need to review the tax treatment of betting exchanges and their clients. We have always maintained that layers – individuals who act as bookmakers – on exchanges enjoy an unfair tax advantage.”
The Association of British Bookmakers welcomed the move and said in a statement: “The ABB is pleased that the Chancellor has recognised that the taxation regime relating to betting exchanges is a problem area. The ABB will fully co-operate with the Treasury on this matter.”
But Paul Cooper, of betting exchange Sportingoptions.co.uk, argued that the sites were already taxed fairly and insisted that professional gamblers, who have not been taxed in the past, should not be now.
The British Horseracing Board has called for tighter regulation of betting exchanges and claims that the number of allegations of irregular betting patterns, focused on losing horses, is increasing rapidly.
A Treasury spokesman said the review would be carried out by Customs and Excise in the coming months, although there was no fixed timetable. He added that changes to the current regime would only be made if they were found to be necessary.
