Bookmaker Victor Chandler walked away in victory from a high court case against Customs and Excise in Great Britain, stirring fears that many will turn to offshore gambling instead of wagering in Britain and keeping the money in the country.
The implications of the verdict, which enables Chandler's Gibralter-based business to advertise its tax-free prices on television via Teletext and Skytext and by fax, left Customs officials stunned.
Chandler, whose family has been in bookmaking since his grandfather built Walthamstow Greyhound Stadium in the 1930s, moved his telephone-betting business to the tax-haven of Gibralter in May. He evaded legislation aiming to ban newspaper advertising from off-shore operators by advertising in the racing press under "Victor Chandler On Course," his British-based racecourse operation.
This could hit the government's annual receipt of 470 million pounds in betting duty as well as the nine percent deductions paid by British off-course punters.
Justice Lightman, in his decision, said that electronically transmitted pages, used by services such as Teletext, are not considered "an advertisement or other document" as referred to in the Betting and Gaming Duties Act 1981.
"This is extremely significant because we can now make people aware of all our services. Teletext is the key to running any credit bookmaking business in the UK," Chandler said.
Leisure company Enic plans to spend 5 million pounds on a 25 percent stake in Chandler's Internet business, which is due to launch in November. Shares in Enic, which has holdings in European football clubs, including Glasgow Rangers, rose 17 1/2 pence to 117 1/2 pence after it confirmed talks.
With the Irish Government having cut betting duty to 5 percent, Britain's bookmakers are pressing for a reduction in betting duty from 6.75 to 3 percent.
Customs and Excise, which is appealing the decision, does not want to cut the duty. "If we cut betting duty to 3 percent that would cost us 270 million pounds. If all telephone betting moved off-shore we would probably lose about 50 million pounds," a spokesman said.
Meanwhile, the Gaming Board of Great Britain, which regulates the country's 2.5-billion-pound gaming industry, noted that there is a growing number of unregulated online casino sites and warned in its annual report that such sites could be used by criminals to launder money and rip off gamblers.
The board has already brought the National Criminal Intelligence Service to oversee applications for gaming licenses in hopes to keep major criminals out of the gambling industry.
"Gambling is an activity which involves the circulation of large sums of money and as a consequence, if not properly controlled, is susceptible to fraud, money laundering, other criminal activity and malpractice," said the board.