Bookie sends millions offshore

Tom Waterhouse is chief executive of William Hill's Australian operations. Photo: Mark Metcalfe/Fairfax Media via Getty Images

William Hill, the global British betting firm whose Australian operations are headed by prominent Sydney racing identity Tom Waterhouse, has struck a secretive financing deal to funnel millions in punters' losses to Gibraltar.

The group acquired the nation's largest online bookmaker, Sportingbet, and Waterhouse's eponymous online wagering business, last year. Waterhouse was later appointed chief executive.

The financial statements for his company, William Hill Holdings Pty Ltd, show a loan of 334 million ($580 million) from a company in Gibraltar called Steeplechase. The hefty 5.79 per cent interest rate on this loan means $40 million of profits will go offshore, tax free, each year.

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There is increasing concern in government and racing-industry circles over the small contribution made by corporate bookmakers in taxes and levies in Australia. News of this William Hill tax scheme is likely to bolster support for proper regulation of corporate gambling.

Already, gambling reform is back on the table in Canberra. A motion by National Party senator for Victoria, Bridget McKenzie, was carried at last weekend's party conference for online gambling to be regulated by the Commonwealth.

Such a move would thwart the big corporate bookmakers Ladbrokes, Paddy Power and William Hill from "jurisdiction shopping" to find the best odds on tax and licensing.

Most corporate bookies are licensed in the Northern Territory where, on the most recent figures available, the entire sector paid just $2.3 million tax on turnover of $5.7 billion and profit of $469 million.

National regulation, if judiciously implemented, would prove a boon for taxpayers, the racing industry and the punters. The only losers would be foreign shareholders of the British betting houses that have expanded their interests dramatically here over the past three years.

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Bookie sends millions offshore