Gordon must give bookies reason to stay - Thursday 17th of September 2009
I dont suppose there will be much argument with the statement that racing has had better weeks.
On Tuesday, William Hill announced they would be taking their online business offshore to Gibraltar, and then, 48 hours later, Ladbrokes announced they would be doing the same.
The news, which will hit racing where it hurts most - in the pocket - with Hills move calculated to cost the Levy £1.5million, and Ladbrokes that amount plus another third.
It couldnt have come at a worse time, hot on the heels of confirmation that prize money for 2010 is set to be reduced by 5 per cent.
The reaction from racing diehards has been predictable - that bookmakers are turning their backs on a sport that for so long has been the foundation of their business.
Many will think that the bookies are honourbound to contribute to the Levy and Ive heard the phrase biting the hand that feeds on more than one occasion this week.
The truth, of course, is that all businesses want to run along the most profitable lines possi-bl- isnt that what the capitalist model is all about? If your employer, or mine for that matter, finds that their product can be put together more cheaply somewhere else, only the naïve would expect them not to explore that avenue.
Bookmakers are obliged to pay 15 per cent gross profits tax when based in Britain, a figure that is reduced by 90 per cent if they operate on the Rock. So it doesnt take Carol Vorderman to work out that such a switch makes perfect sense insofar as the bottom line is concerned.
Moral arguments count for nothing - its the dividend to shareholders that counts - and, in any case, the layers have been at pains to point out for years that our sports once-prominent place in their business model is ever sinking into the sand.
For the moment, there are some leaden skies over racing, with prominent figures using terms like third world to describe the direction they think our sport is heading in.
But its now up to the Government to get involved - and it genuinely has an incentive to do so.
For not only is racing being hit in the purse-strings - the Treasury is, too, to the tune of £45million.
In the past, governments have been reluctant to get in-volvein the squabbles between different factions of the racing community.
But, if taxation rates here cant compete with those abroad, the picture will get a good deal worse - with others following in Hills and Ladbrokes footsteps - before things get better.
It is surely better for bookmakers to operate in the UK on revised tax rates - with the many other benefits their presence brings with it - than for them to disappear overseas altogether.
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