On-course bookies battle against odds

The Treasury benefits in the long term because bookmakers who moved offshore repatriate.

They may even be followed by their overseas counterparts, potentially making Britain the hub of the betting world. Illegal betting is priced out of town.

Sounds good, doesn't it? But many significant industry figures wonder whether turnover will increase to the extent claimed. Tote chairman Peter Jones couldn't guarantee, when asked at yesterday's AGM, that bookmakers could absorb all the new costs without leaning on the punter.

"I'm not an accountant, but I don't think the figures add up," argues on-course bookmaker and Channel 4 Racing pundit, Barry Dennis. "I don't see how betting shops can stop taking deductions, pay 15 per cent to Government in gross profits tax and make a greater contribution to the levy. It looks tight, tight, tight to me."

If the pot of gold isn't there, punters and then racing will pay the price - not bookmakers or the Treasury. When the government have scrapped betting tax, it would be a PR disaster for bookmakers to reintroduce it, but money can be recouped subtly using wider margins and less favourable starting prices (SP).

To do that, the big off-course bookies would need greater control over their on-course counterparts who determine the SP. Zero deductions could do this of its own accord - why should punters go racing if they can now bet tax-free in their local shop? Lower attendances weaken the ring's ability to withstand off-course bookmakers laying off vast amounts of money to balance their books.

But on-course bookies may soon be squeezed from another angle. The Home Office's gambling review report, delivered by chairman Sir Alan Budd yesterday, recommends scrapping the existing rule confining race-courses to charging on-course bookmakers five times the public admission cost to whichever enclosure they bet in. Pointing to the vast sums bookmakers' picks (on-course betting positions) have changed hands for in recent months, racing argues this archaic system effectively subsidises a profitable business. They want it replaced by a cut of turnover (such as paid by the Tote's racecourse division), though on-course bookmakers aren't yet obliged to divulge this information.

Many on-course bookmakers already claim competition is such and margins so tight that their's is no longer a viable business. Without them, one of the key experiences of going racing would be lost.

Racecourses wouldn't mind - they'd prefer a Tote monopoly anyway, as profitably employed in other countries.

But punters and racegoers should mind. This sport doesn't want to go the way of greyhound racing, where the stands are deserted midweek and big bookmakers have an unhealthy grip.