Betting tax cut after online sites force Brown's arm

Referring to the upsurge in off-shore internet gambling services, Chancellor Gordon Brown, announced that UK betters can flutter tax free as of 1 January 2002.

However, bookmakers will now pick up the tab, with a new 15 per cent tax on gross profits replacing the old 6.75 per cent levy on revenue.

But this still leaves bookmakers three to four times better off, according to Ed Andrews, commercial director of UK online bookie Blue Square.

While the exchequer may be out of pocket in the short term, Andrews believes the government had no option.

He said: "It may cost the government in the short term, but if they hadn't reduced it every UK bookmaker would have gone off-shore and then they'd be getting 6.75 per cent of nothing."