Guernsey to be precise. Last week Guardian ran a piece called “Government’s bookmaker Tote plans to avoid tax by moving bets offshore”.
Tote winning prize fund consists of punters contributions. Other bookmakers’ customers can enter into the Tote betting pool. So the plans are well underway for those third-party bookmakers begin directing their wagers through offshore hub situated in Guernsey. This move has the potential of avoiding income tax and payment to the Levy. It is seen by the top management as an important negotiating tool with bookmakers already placed offshore. As a consequence they are already free from gross profit tax, corporation tax and the Levy. So management at Tote is afraid that those bookmakers might want to search for other pool betting operators. According to the statement issued by the Tote’s managing director of E-gaming and Totepool, David Craven the creation of a Guernsey pool business is a defensive measure aimed at preventing non-UK pool operators collecting the Tote’s existing international pool business.
Nevertheless, the decision of betting operator to move part of its operations offshore has caused quite a stir in the public eye. After all the institution is state-owned and have been so since its establishment in 1928 by Winston Churchill. It was set up also to fund horseracing activities, and so it does, contributing to it over £ 11 million a year. It is the biggest racing sponsor. The fears are that moving offshore will deteriorate current state of things. The chief executive of the National Trainers’ Federation Rupert Arnold and head of external affairs for the British Horseracing Authority Will Lambe have both voiced their concerns if not condemned the actions of Tote.
What is worth mentioning in this story that Tote is expected to become private by June this year, currently there are 10 bidders for British bookmaker. It’s been on Labor Party agenda since 2001 that Tote must become a private company. Thoughts are being expressed that moving part of operations offshore can bring more appeal to the deal for the potential buyers.