I can't see any other posts about this, so I'll reproduce the article from the Racing Post website and see if anyone has any comments: Change in policy over online betting tax By Howard Wright 2:14PM 21 MAR 2012 CHANCELLOR George Osborne on Wednesday confirmed a change in policy over online betting, which isto be taxed at the point of consumption and not the point of supply, as at present, with the intention of capturing duty from offshore operators taking bets from UK-based punters. Delivering the Budget in the House of Commons, Osborne said: "The current duty regime for remote gambling introduced by the last government was levied on a 'place of supply' basis. This allowed overseas operators to largely avoid it, and much of the industry has, as result, moved offshore. "Ninety per cent of online gambling consumed by our citizens is now supplied from outside the UK, and the remaining UK operations are under pressure to leave. "This is clearly not fair, and not a sensible way to support jobs in Britain. So we intend to introduce a tax regime based on the place of consumption, where the customer is based, not the company." The Treasury is expected to begin a consultation period shortly, which will lead to the rate of duty being announced in either the autumn financial statement or next year's Budget. Osborne has also set the new duty that will apply to machines played in betting shops at 20 per cent of net takings, higher than betting industry studies had suggested would match the government's pledge for a revenue neutral position. The rate for machines games duty, which replaces both amusement machine licence duty and the VAT previously paid by betting-shop operators, was set out in the Budget on Wednesday and came into effect when a series of motions was passed inthe House of Commons. Osborne told the House: "The VAT treatment of gaming machines is being repeatedly challenged by operators in the courts. So I will introduce a new machine games duty, with a standard rate of 20 per cent and a lower rate for low stakes and prize machines of five per cent of net takings." Osborne also announced that from next month the government would introduce double taxation relief for remote gambling. He said: "These changes will create a more level playing field, and protect jobs here."
It's about time that this loophole was closed! The next step is to ensure the betting shops in the UK pay their fair share. I've seen some very good proposals on what can replace the Levy, including one which suggested a "£1 per race, per shop" payment which would see the big chains pay more and the little family run shops more fairly treated. On top of this a % taxation of gross profits for the offshore companies and a levy on betting exchanges - 5p per transaction was mentioned.
5p seems quite high. I mean, I know that the minimum spend it £2, but given that betfair take 5% commision on profits only, I'm quite surprised it would be this high...
Ron, off the top of my head I think the figure was something in the region of £150million. A darn sight better than the £55 million or so racing got from the Levy last year. Danish, as I said this is just one proposal I am aware of. It is nowhere near being set in stone and they may end up using an entirely different method.
Thanks Princess. Some time ago (might even have been on 606) you posted the amounts fed into racing with UK looking dismal compared to other countries. Do you know how we would compare if that figure materialised?
That does sound good. I'm not really aware of how the Levy works - does this all go into prize money, or is it split into various pots? Also, the 'at point of consumption' - will this affect the punter directly, or just increase the amount of tax the bookies pay (and hence possibly affect the punter indirectly as the bookies aim to maintain their margins)?
I suppose the tax take will be passed onto the punter at the point of consumption. Betting houses will not wear the loss.
It will increase the amount of tax the bookies pay, though I am sure they will find a way of trying to pass on some of the cost to their customers. It is important to note that this change in taxation will not affect the Levy at this time, as that would constitute state aid, which is illegal under European Law. Instead the way in which the Levy is collected is what is also under review. The Levy funds several different parts of racing, and the horse industry for that matter. The Levy for the financial year 2010/2011 was paid out as follows: TOTAL £83,809,000 Prize Money £48,963,000 Integrity Services £21,835,000 Racecourses £3,910,000 Administration £3,403,000 Improvement of breeds £1,245,000 Veterinary £1,009,000 Industry Training £892,000 Other £2,017,000 Bookmakers' Committee £535,000 You can see more about the Levy Board here: http://www.hblb.org.uk/ Ron, whilst it would go a long way to improving the state of racing's finances in Britain, we'd still be a long way behind the French. I don't have their most recent figures, but the PMU contribution to prize money in France in 2010 was some €175million which is massive when you consider that their racing programme and number of horses in training is much smaller than in Britain. PMU turnover has been increasing rapidly in recent years, so I would not be surprised if the figure for 2012 was in excess of €200million. Edit - I've just tracked down this piece, which may help to elaborate further on the gulf between British and French prize money: Record set of trading figures for PMU in 2011 08 Jan 2012 | Racingpost.com The rude financial health of French racing has been underlined with the announcement of a record set of trading figures for the Pari Mutuel Urbain (PMU) for 2011. The former state betting monopoly broke the €10 billion mark in turnover for the first time and reported increases in revenue across all sectors of the business. It is the 14th consecutive year of growth for the company, which is good news for French racing and trotting, whose coffers depend on the money the PMU and other online operators contribute. France Galop announced in November a proposed five per cent increase in prize-money across the board for 2012, a figure mirrored in the PMU'S operating profit for 2011 of € 2.49bn. Prize-money in Britain in 2011 was£93.9 million, less than half that up for grabs in France last year. The headline figure of €10.23bn in turnover represents a 7.3 per cent rise, while the PMU'S core horseracing activity rose by 4.5 per cent to €9.76bn. The overall figure was boosted by the PMU'S new sports and poker divisions. PMU director general Philippe Germond said: "The strategy we put in place has worked and we've achieved the goals we set for 2011 - to grow the volume of racing betting and to increase our share in the sports and poker markets." The partial liberalisation of the French market in 2010 has driven the PMU to invest heavily in its online and mobile products, a fact reflected in a 45 per cent increase in activity. However, nearly 87 per cent of its racing business still comes through direct points of sale on-course and in bars and service stations.
Thanks Princess. Very interesting. I see that "90% of online gambling consumed by our citizens is now supplied from outside the UK. " More questions if I may: 1. how much of that 90% is horse racing? 2. What % of horse racing betting in UK is on-line? 3. As this % has increased, what increase, if any, has there been in overall betting (ie has betting increased or is it just a switch in the method of betting)? 4. What % of betting in shops is horse racing?
The honest answer Ron, is that I don't know! I am sure the figures are out there somewhere, and you often hear of Bookies stating that the % of their business from racing is falling - though if you suggest a Tote monopoly (after all if the % of business from racing doesn't matter, why do they need it?!) they quickly backtrack!
Thanks very much Princess. It's all quite interesting really. Assuming they keep roughly the same proportions (which I'm sure they won't), then that would double the prize money issues. Paul Nicholls (amongst others) has been saying that this is the biggest issue affecting races (although it's maybe truer to say the issue closest to his heart...) for quite some time. It will be interesting to see the re-distribution of this extra prize money.
I don't know how they do it in France but when I went to Longchamp for the Arc de Triomphe with Amanda it cost 8 euros admission for both (admittedly half price for me 'cos I'm old and half price for Amanda as a member of FFE - still bloody cheap though) and that gave us access to everywhere (except the posh reserved area) including the stand, paddock, right up to the winning post. Just seemed like no restriction at all. And, there were free shuttles laid on from Auteuil tube station right to the course (and back). Compared to Royal Ascot, Ascot is a joke.
The problem that French racing has, is that the general public aren't interested! The majority of racegoers at the Arc meeting are usually British/Irish. At most race meetings the crowd is usually minmal. They are very envious of our large crowds! Grass is always greener, etc, etc!
According to the Darley Stallions Twitter feed, Dubawi has covered 5 Oaks winners this year - Ouija Board, Kazzia, Casual Look, Look Here and Eswarah. That's some role call!
Sad news to report: Montjeu has died at the age of 16. World-class stallion Montjeu dies aged 16 By Racing Post staff 11:49AM 29 MAR 2012 THE bloodstock world has been dealt a devasting blow with the news that Montjeu, Coolmore Stud's second most important stallion after Galileo, has died at the age of 16. The son of Sadler's Wells leaves an outstanding legacy having sired three Derby winnings in Motivator, Authorized, and, last year, Pour Moi. Another of his sons, Camelot, would be a strong contender for this season's Epsom Classic based on his authoritative victory in last season's Racing Post Trophy. Having overcome question marks about his ability to produce high-class fillies, Montjeu's daughter Wading is favourite for this year's Oaks.
I'e just started a thread on this PN (should have known you would be quick off the mark!) Very sad news. 16 is not that old.
I've commented on Janabelle's thread as I think it is worthy of a dedicated thread. Thanks for mentioning it though. Very sad indeed. Edit Actually just discovered that earlier comments were posted on the Daily Thread so I've combined all under a new dedicated thread.
PN i dont suppose if you know if white moonstone is still in training as a four year old? Thanks in advance.
