§ I come now to a subject which has aroused a good deal of discussion: betting and gaming. The Committee will have seen the information published earlier this year as a result of the Customs' inquiry into gaming. I think that 246 the whole picture is now a good deal clearer. What does emerge is that gambling as a source of taxation is nothing like as fruitful as it is commonly supposed to be. The total turnover on betting and gaming is, of course, many hundreds of millions of pounds; no one knows exactly how many.
§ But this is not the potential field of taxation. The field is to be measured not by the gross turnover, but by what is quite a different thing, the net amount actually spent by the gambling public, which is in the region of £100 million to £150 million a year. We are already drawing in taxation from certain forms of betting, that is, the football pools and dog race courses, about £33 million, which is already a fairly high percentage of the total spent on gambling.
§ I have considered at length the possibility of a tax on betting generally. The most satisfactory way of covering those kinds of betting at present untaxed would appear to be a tax on stakes which at, say, 21½ per cent., or 6d. in the £ of all money staked, should, in a full year, yield about £10 or £12 million.
§ But the difficulties are formidable. There is no doubt that the opportunities for evasion would be very considerable, and I share the concern of those who fear that the effect might be to drive betting once again into illegal channels. I have, moreover, seen reports of the difficulties which the Horserace Betting Levy Board say that it is encountering in raising its levy. For these reasons I conclude that the time is not yet ripe to introduce a general betting tax.
§ There are, on the other hand, some changes that to my mind can and should be made. I pointed out to the Committee last year the unfairness of some features of the present system. The greater part of the current revenue from betting comes from the football pools. They claim, and, I think, with justice, that they are being subjected to competition of an unfair character from certain forms of coupon betting which are free from any taxation, while they, the pools, are paying a duty as high as 33 per cent. The fact is, moreover, that, as a result no doubt to a large extent of this competition, the revenue from football pools has declined sharply, and large sums for the Exchequer are now at risk.247
§ I have, therefore, decided to extend the scope of the Pool Betting Duty to cover other forms of coupon betting. The most common form of this, of course, is betting at fixed odds—usually high fixed odds—on football results, done through coupons which are almost indistinguishable from coupons used for the purposes of the football pools themselves.
§ I also propose to close a loophole in the existing law through which some forms of pool betting are escaping the full incidence of the duty. The changes mean that I can reduce the duty, which will in future apply to both pool betting and other coupon betting, from 33 per cent. to 25 per cent.
§ At the same time, I propose to deal with another anomaly, namely, the taxation of betting on greyhounds, which is at present unfairly heavy. I intend to do this by cutting the duty on the greyhound totalisators from 10 per cent. to 5 per cent. and correspondingly halving the bookmakers licence duties. In this case, also, there is clear evidence that the weight of duty has become penal.
§ After making these changes, which will apply from 3rd August next, I should gain an additional £2½ million this year from the taxation of betting. The effect of the changes, therefore, will be to protect the important revenue at present drawn from football pools, to eliminate or reduce some serious anomalies, and to produce a modest additional benefit to the Exchequer. I consider that this represents the sum of what should be done this year in this particular field of taxation.
§ The net effect of all the minor changes that I have mentioned, together with the betting tax changes, is to increase revenue receipts in 1964–65 by just under £6 million.