H.M. TREASURY Notes on Clauses

CLAUSE 6: RATE OF POOL BETTING DUTY

INTRODUCTION

1. This clause reduces the rate of pool betting duty from 26.5 per cent to 17.5 per cent. The change comes into effect for all pools stakes paid on or after 28 March 1999.

DETAILS OF THE CLAUSE

2. Subsection (1) amends section 7(1) of the Betting and Gaming Duties Act 1981, reducing the rate of pool betting duty from 26.5 per cent to 17.5 per cent.

3. Subsection (2) provides that the reduced rate will take effect for pool betting stakes paid on or after 28 March 1999.

BACKGROUND

4. The pools companies have seen their turnover decline from around £945m per annum before the National Lottery to about £280m last year. Two previous reductions, each of 5%, were given in May and December 1995 to assist the industry, and this further cut is intended to help the pools companies invest in their future.

5. For a number of years the pools companies have provided funding for the Foundation for Sport and the Arts and the Football Trust. This duty cut will enable the pools companies to continue to give their valued support to these good causes.

6. The Football Trust (FT) has been supported by the pools companies since 1990 after the Taylor Report on the Hillsborough disaster. The FT does valuable work in helping football clubs meet the safety recommendations of the Taylor Report. The pools companies' support is funded through the proceeds of a 3% reduction in pool betting duty.

7. The Foundation for Sport and the Arts was established in 1991, mainly at the behest of the pools companies. It does useful work funding small arts and sports projects. The FSA's sole source of funds is contributions from the pools companies, equivalent to 3 per cent of turnover, but funded through a reduction in pool betting duty, totalling almost £10 million per annum.

8. The revenue cost of this measure is £30 million. The start date coincides with the beginning of the next duty accounting period for the pools companies.