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State owned betting company to use Guernsey presence to sidestep UK tax

posted 1/14/11 : State owned betting company to use Guernsey presence to sidestep UK tax
The state-owned bookie company The Tote, which is currently on the auction block for sale to private companies, apparently has plans to move at least some of its business to Guernsey in order to reduce tax liabilities incurred in UK operations.
The Guardian newspaper reports that the plan is to filter bets placed with third-party, offshore bookmakers through a Tote facility in Guernsey in a move to sidestep income tax.
Apparently negotiations are 'well advanced' with a number of bookmaking firms on the plan, which, it is speculated, may also help the Tote to save expenditure on a levy supporting the horseracing industry.
According to The Guardian the move has been condemned by the British Horseracing Authority. The newspaper quotes Will Lambe, head of external affairs at the RHA as saying: "This is further evidence of Britain's gambling regulations being in need of urgent attention. There is no level playing field for remote operators in this country, and it is deeply damaging, not least to government.
"While racing may not suffer from this development due to its special relationship with the Tote, other such moves are costing the sport some GBP10 million a year."
Tote Direct's commercial manager, Eddie Bennett, said he was unable to comment for commercial reasons.
However, a statement has apparently been issued by the Tote's managing director of E-gaming and Totepool, David Craven, explaining: "The creation of a Guernsey pool business is a defensive measure designed to prevent non-UK pool operators collecting the Tote's existing international pool business and thereby protect revenue to British racing.
“The Tote can absolutely guarantee that its contribution to racing will not be diminished by a penny as a result of this. Not only is racing's contribution protected, racing will be the beneficiary of any growth."
A spokesman for the government's Department for Culture, Media and Sport declined to comment, as has the Levy Board.
The Tote contributes about GBP11 million a year to horseracing over and above its Levy responsibilities and is by some way racing's biggest race sponsor, The Guardian points out.
The government is keen to see the sale of the Tote by auction before June 2011, and it is known that a short list of the main bidders is to be released soon.
The newspaper notes that "the signing of new commercial agreements with other bookmakers that would encourage them to continue to promote Tote betting through Tote Direct rather than using another supplier or even doing it themselves, would presumably be seen as a positive move, whoever is confirmed later this year as the successful bidder."

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