Written question asked by Richard Caborn (Labour) on Thursday, 3 December 2009, in the House of Commons. It was due for an answer on Monday, 7 December 2009. It was answered by Gerry Sutcliffe (Labour) on Wednesday, 9 December 2009 on behalf of the Department for Culture, Media and Sport.

Betting Shops: Horseracing

Question: To ask the Secretary of State for Culture, Media and Sport what estimate he has made of the effect on the Horserace Betting Levy of the operation of betting exchanges.

Answer: The Government have not made such an estimate. However, the Horserace Betting Levy Board informs me that the levy payable by betting exchanges is equivalent to 10 per cent. of their gross profits, defined as gross commission on British Horserace Betting Business deducted from winnings paid out to bettors and bet-takers. In the year ended 31 March 2009, Betfair also made a voluntary contribution to the Levy Board in respect of British Horserace Betting Business conducted by their off-shore website in Malta.Betting exchanges operate a business model that does not deliver product through shops. When bookmakers accept risk on bets and do so in shops, liability to levy and gross profits tax is calculated without the deduction of overheads. This leads to a proportionately larger contribution to the levy than would be the case for a betting exchange.

Secondary information