For centuries, betting has been legal in the United Kingdom. But it was not until 1961 that cash betting shops were permitted. U.K. legislators took the pragmatic view that it was better to legalize and control something that was going to happen anyway. Runners on street corners had been commonplace and the police tended to ignore this activity, or make token pre-arranged arrests to satisfy the anti-gambling lobby. Once legal, betting could be taxed for all U.K. citizens. The U.K. Government did not wait long before introducing a turnover tax. The stake of every bet was taxed, win or lose.
The horse racing industry also benefited with its own tax on horse racing turnover called the “levy.” By last year, around £500 million was being paid in betting tax and over £60 million in the levy and it was the punter who paid for these taxes! An £11 bet at 10/11 would cost the punter £11.99 including the tax charge. This effective 14% juice drove a lot of betting underground, with illegal betting a growing threat both to tax revenues and the legal betting industry. Then the advent of offshore telephone betting and online Internet betting, allowed U.K. punters the chance to bet legally without incurring the tax. The U.K. Government decided to confront the threat to losing these revenues, while at the same time firmly grasping the opportunity to place the U.K. at the forefront of global legal sports betting.
The U.K. Government proposed the removal of the punters turnover tax, replacing it with a tax on the bookmakers gross profits. This brought the betting tax in line with casinos and gaming machines, which are also taxed on the hold. At what rate of G.P.T. (gross profit tax) would the U.K. bookmakers remove the tax on punters? 15% answered the bookmakers, as long as horse racing is not too greedy over the levy or its replacement.
And so, as of October 6, 2001, betting with legal U.K. UFABET bookmakers will now be tax-free for all U.K. citizens. Illegal betting will disappear, offshore betting will be irrelevant, and legal U.K. bookmakers will be marketing their long experience and credibility to the worldwide market. Depending on the source, estimates of the anticipated increase in turnover for various bookmakers vary. Some say 30%, others 60% or even 100%. One thing is sure; customers of a legal U.K. bookmaker will have a better chance of winning after October 6th.
Changing gears, it has certainly been interesting to follow the NFL’s uneasy relationship with the sportsbook industry; in particular its relationship with CBS Sportsline, which owns Vegas Insider, Las Vegas Sporting News, and also a stake in sports.bet.uk. This type of relationship is just the opposite in the U.K., where most professional sports teams promote sports betting and have maintained for many years betting units within their stadiums. This fostering of the relationship between sports and betting has continued with the development of the Internet and the opportunities it presents. The soccer world, always eager to exploit commercial revenue streams, has been developing its Internet rights.
Recently the Nationwide Football League (the oldest club competition in the world formed in 1888) and Premium TV (a subsidiary of cable giant, NTL) formed a company to exploit these rights. Over 70 of the 92 professional clubs in England have now signed up for the deal. The people at bet365 are very proud of the fact that they were awarded the contract to produce Internet betting sites for all of the clubs involved. These betting sites were launched in March 2001. Sports and gambling have always been, and will continue to be, inextricably linked. And now, with a proactive sports betting regulatory environment in place in the U.K., all parties can benefit.