Harmless Flutterers Part 2 : Brown takes the Bookies for a ride

Currently the UK Gubment raises revenue from gambling by 6 different duties (taxes by another name)

1. General Betting Duty applies to bets made with bookmakers, betting exchanges and the Tote.
2. Pool Betting Duty applies to the football pools and fantasy football competitions.
3. Gaming Duty applies to casino games played on licenced premises.
4. Amusement Machine License Duty taxes dutiable amusement and gaming machines.
5. Bingo Duty applies to commercial bingo.
6. Lottery Duty is paid by the National Lottery.

Anyone resident in the UK can access, and play, so called Remote Gaming. This involves dealing with overseas based operators and basically refers to the activities of Internet / Web based organisations - which US residents cannot legally do due to the Unlawful Internet Gambling Enforcement Act. Lightly regulated (if at all) they are based in such exotic locationsd as Kahnawake, Antigua and Barbuda, Costa Rica, Netherland Antilles, but also in EU countries such as Gibralter, Malta and Cyprus. (Chart shows language / sex / age of internet gamblers)

The Gambling Act 2005 (which does not cover NI) will make it legal for a remote gaming operator to locate in Great Britain, and be regulated under UK jurisdiction, for the first time. This reflects the obsession by Mrs Tessa Jowell's Department for Culture, Media and Sport to extend the scope and accessibility of gambling to UK residents. There are incidentally 5 such gambling organisation registered in the Isle of Man where they pay a licence of £35,000 and then tax that is paid on gross gaming yield in 3 bands 1.5% on £20 million, 0.5% on £20-£40 Mn and 0.1% over £40 Mn.

For some extraordinary and no doubt historical reason gambling is regulated under the Betting, Gaming, Lotteries and Amusements Order 1985 in Northern Ireland.

Faced with the prospect of remote gambling being located in the UK the nose picking Chancellor (Brown the Bogyman) was faced with the potential to rake in more money and saw there were three avenues to participating in this new group of potential taxpayers.

A: Do nothing. Ho.Ho.Ho.
B: Extend the scope of the existing gaming duty regime to capture remote gaming activity on the net receipts (payments received minus winnings paid out).
C: Create a new duty of excise known as ‘remote gaming duty’ on the net receipts (payments received minus winnings paid out).

He decided on the third option and the primary legislation for Remote Gaming Duty was planned (after "consultation" with the "industry" to be contained within the Finance Bill 2007.

Well it was ,and the gamblers of the world were united in their grief when Gordon did 2 things.

1. He set the Remote Gaming Duty in line with land-based bookmakers and bingo firms at 15 %. The major bettors had been gambling on rates of 2/3% as promised by Mrs Tess Jowell and her legions of demented supporters.

2. Having upset the Remote Gamblers he also hit the smaller casino operators and scrapped the lowest Gaming Duty rate for the smallest casinos and created a new, higher, 50 % tax band for the most profitable ones

Internet gambling firms looking to locate back to Britain from tax havens such as Gibraltar and Cyprus were dismayed at the 15% tax rate... but Remote gambling will not be liable for VAT - which seems a curious concession, sitting alongside fod and children's clothes.

Some had predicted Remote Gaming Duty would be as low as 2 or 3 percent after having listened too closely to Mrs Tessa Jowell and her demented advisers. Oddly, the Daily Torygraph (the Punters Friend) had been peddling "unsourced" stories on Friday February 23rd, that the duty would be in the range of 2/3 %.

"The Remote Gaming Duty has been set breathtakingly high, it will do nothing to attract the existing offshore industry onshore and it may indeed have the contrary effect,"

BDO Stoy Hayward tax principal Martin Dane is quoted in the Scotsman. Well thank the Lord for that.“This sounds the death knell for the Government’s aspiration to be the world leader in regulated remote gaming.” he added. Good.

There is a body called the Remote Gambling Association and it has a chairman called John Coates, not happy man ....."With the additional VAT and corporation tax for most companies, it would be almost impossible for a UK-based operation to compete with offshore businesses, especially those located in other EU jurisdictions," (seeming it appears to have missed the VAT concession - but who says gamblers have to be honest ?)

"This decision means that the UK has effectively turned its back on the industry," he added. Clive Hawkswood, its chief executive, said the Government "has missed a real opportunity to lead the way in terms of international regulatory standards".Good.

Having upset the Remote Gamblers he also hit the smaller casino operators and scrapped the lowest tax rate for the smallest casinos and created a new, higher, 50 % tax band for the most profitable ones - which will send the Las Vegas style gamblers back to their pocket calculators , to do their sums again. Last year the Treasury take on gambling duties from casinos was £175 Mn. Next year Treasury hopes to raise an extra £35 million a year from the increase in gaming duty from current casinos and increase of 20%.

An immediate consequence was, Rank warned , that the changes would wipe 20 percent off the annual profits of its casinos... for example its Grosvenor Casinos, - Gross Profit £39.5 million pounds in 2006, would fall by 8 million pounds a year as a result of the higher taxes. Rank's shares slumped more than 8 percent ... 240p to 212 at the weekend. See chart (Yahoo). They have 33 UK casinos and 130 UK Bingo clubs - profits 2006, £44Mn. on TO of £560Mn. with 24,323 employees - down 1,000 on the year.

The level of Remote Gaming Duty will also scupper talks that Ladbroke have been having to acquire 888.com "The Worlds No 1 Onlone Casino and Poker Room", to hit the ground running for a UK based businesse.

No doubt another consequence will be a distinct froideur between Mrs Tessa Jowell and her chums in the gambling "industry" - and, one might reasonably guess that Presbyterian, son of the Manse, Gordon won't be welcome to those fabulous "swinging parties" the Jowell's were / are, renowned for, at their modest country mansion.

Gordon also managed to upset the fragrant party loving Lady Cobham and mistress of David Mellor, chairman of the British Casino Association, who said the Budget changes would cost operators GBP100 million over three years - which is exactly in line with Treasury expectations. Evidently she didn't appreciate what such a sterling job her members were doing according to Gordon .."“to ensure that this vibrant and expanding sector continues to make a fair contribution to tax receipts”.. no doubt she can relax and enjoy the benefits of being a Director with her Mellors of Partridge Fine Arts, of New Bond Street, once purveyors of fine Antiques to Queen Mary ... and there is an ane auld tale , .... Partridges going for a song.

Should you want to see Brown the Bogyman pickin' his nose and chewin' it try this on You Tube ugghhh!!

Or visit 888,com and ...