“We pride ourselves on listening to our customers and what we’ve heard loud and clear is that LOCOG have got their priorities upside-down. It’s a pity they didn’t put the same energy into the ticketing and security arrangements for the Games that they put into protecting their sponsorship revenue streams.”


Paddy Power gets a dig in during its battle with LOCOG


DCMS Select Committee on the Mark


Warwick Bartlett, chief executive of Global Betting & Gaming Consultants (GBGC), sees the recent report by MPs as a good sign that British politicians are understanding the industry.


T


he Culture Media and Sport Committee (CMSC) of MPs has produced its report on the 2005 Gambling Act and the find-


ings are not as bad as the industry had thought they might have been.


for racecourse closures


decent margin from horseracing. However, the introduction of the betting exchanges


drastically


slashed the margins along- side increased competition from the internet making horseracing more expen- sive than ever. Is it any wonder that bookmakers have diversified away from the sport?


All racing has done in that time is work out a way of squeezing more money out of bookmakers for media rights.


The Champion Series may find some


success in attracting a wider crowd and the dou- bling racecourses as music venues has increased attendance, if not actual interest in the sport. In fairness to Northern &


Arena Racing Group, it has been trying to make plans to revitalise both courses, but it has been the failure of support from the local councils that has ultimately scuppered their futures and it is disingenuous at best to suggest that the bookmak- ing industry is at fault. Scoring some cheap


political points about the Levy is hardly a fitting way to mark the closure of race- courses with over 100 years of tradition each. Instead it should trigger another bout of introspection for a sport that is due to receive a windfall from the sale of the Tote Organisation. The fact that it is not getting it in a lump sum just demon- strates the lack of confi- dence that the government has in the sport not to blow the cash like it did in the mid-00s when the Levy yield was uncommonly high.


In the conclusion the report said: “Gam- bling is now widely accepted in the UK as a legitimate entertainment activity. While we recognise the need to be aware of the harm caused by problem gambling, it seems to us that the rather reluctantly permissive tone of gambling legislation over the last 50 years is now an anomaly.” The MPs have come to the same conclu- sion as their constituents that gambling is now fun, it is enjoyed by millions day in day out and if you enjoyed the opening cere- mony of the Olympics, I thought it was won- derful, then we should note that a significant sum to support the funding came from gam- bling through the National Lottery. Budd came to the same conclusion in 2001 and while at the time most people agreed with what he had to say there was a significant minority who thought other- wise. They played havoc in the press the report was derailed, the prohibitions remained the relaxations were put on hold. On that front nothing has changed. The breakthrough for me is the recogni- tion by CMSC that both Treasury and the Department of Culture Media and Sport must work together to arrive at a rate of tax that will encourage operators to accept UK regulation and taxation and to discourage the grey market. The Committee also advised Treasury to


set a rate of tax that does not stifle growth. So far so good, one hopes the report does not gather dust and those responsible for gambling in government at least give the recommendations a fair hearing. My fear is that with the worsening eco- nomic situation the Treasury will follow other European countries such as Greece, Italy and Spain and use the gambling indus- try as an ATM. When cash is needed govern- ments have been quick to modify existing taxes or introduce a new tax. It is a question


of pay up or have your licence revoked. We saw this in Spain where those seeking


an internet licence had to pay millions in back tax before a new licence would be issued. While the gambling companies do pay up their customers are not so keen in accepting the very poor value created by higher taxation. Gamblers begin to bet ille- gally either on the street, amongst them- selves


or offshore in unregulated


jurisdictions. The problem when a tax is introduced that is too high and is not sus- tainable is that it takes government five years to reverse a policy that was wrong in the first place. The Treasury is driven toward fixing a rate that is payable by the operator without causing the consumer to bet illegally. However, while testing the economics Treasury will allow slippage. A case in example is tobacco where a 10 per cent smuggling rate is deemed efficient having regard to the extra tax take.


I hope they will not make the same mistake with online gambling because of its very nature, offshore markets are a click away. Five years to correct a mistake in this case would be too long. There would be nothing left to correct!


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