If the two industries — horse racing and betting — cannot agree the levy, the Government acts as ultimate arbiter. However, Jeremy Hunt, the Secretary of State for Culture, Olympics, Media and Sport, became so fed up with the latest round of bickering that he's decided to take the matter out of government hands in future years. What this "straightforward commercial negotiation" will be in future is not clear, though there is a consultation pending. On deciding to increase the tax from 10 to So, even the smallest levy hike harms the industry, particularly the small and medium-sized operators.
And there is now debate as to whether the levy is actually relevant 50 years after its introduction. For example, horse racing now has television revenue, and betting shops effectively subsidise racecourses when they sponsor events and individual races. This is one row that looks certain to get nastier as more and more shops fail and redundancies escalate. Set up under the Gambling Act , the ideas behind the commission seem eminently sensible: a regular audit to ensure crime is kept out of shops, that there is fairness for the punter and that youths under 18 don't go fluttering away their pocket money.
However, the industry is frustrated at the intrusion of the commission's regular visits to shops. Pubs, for example, have to play by broadly the same rules and they don't have to worry about regular visits. Will Roseff, who is chairman of the Bookmakers' Committee and who has been a bookie for three decades, says: "An enlightened government would get rid of the Gambling Commission.
The fact is, if you've got a law you obey it. If you mess about with the punters and don't treat them properly they will go elsewhere. The commission treats problems that do not, and never did, exist. The real problem here is the costs that are associated with the commission and its efforts. To get an operating licence there is a fee related to the number of shops that a bookie owns. William Hill owned 2, shops as at 28 December last year.
The smaller guys, with the far weaker balance sheets, in effect, have to pay far more than their larger peers. Aside from the commission, there is a plethora of bureaucracy that is weighing down betting shops. Not only do chains need a licence from the commission, but they have to apply for a premise licence from local authorities. They also require personal management permits.
For a smaller operator with few resources, this results in losses of time and money. At present, betting shops, as well as pubs and casinos, effectively pay tax on their fruities twice, in the form of VAT and amusement machine licence duty. However, the Government is seeking to simplify the system and introduce an amalgamated machine games duty. This will certainly help with the accounts, but the industry is wary over exactly what the structure of this new tax will be.
A consultation is due later this month and the Treasury will look to finalise its plans as part of next year's Finance Bill. Implementation should follow in As things stand, the existing duty is moving up in line with retail price inflation, while VAT rose from These are extra price pressures on an industry that, 50 years after its reintroduction to civilised society, can ill afford.
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