Ainsley Walters, Staff Reporter
Xavier Chin
LOCAL BOOKMAKERS will cease offering overseas racing with immediate effect as of December 23, following the imposition of a 1.5 per cent tax on gross sales, accompanying the recent amendment to the tax regime.
Bookies, who were previously taxed 11 per cent of gross sales, said they thought they had finally got a break when Government recently agreed to gross profit taxation.
A recently gazetted amendment saw the bookies being taxed 16.5 per cent gross profit on local racing. An additional two per cent of gross local sales, one per cent apiece, was made payable to the Jamaica Racing Commission (JRC) and the Betting, Gaming and Lotteries Commission (BGLC).
NO QUARREL
The bookies apparently have no quarrel with the local racing taxation but are peeved at Government's imposition of a 1.5 per cent gross sales tax on of overseas racing, which also attracts a 16.5 per cent gross profit tax.
The bookmakers claim the additional 1.5 per cent, one per cent payable to the JRC and .5 to the Sports Development Foundation, was never a part of an agreement reached at a meeting with the BGLC.
Strong opposition has been voiced to paying a tax on overseas racing especially to the JRC, whose regulatory functions does not include overseas racing.
On Thursday, representatives from Track Price Plus Limited, Markham, Summit and Para-mount Betting met to discuss the additional tax plus a new rights fee, which their overseas racing provider, Phumelela, will implement as of January 1.
"As of January 1, Phumelela will start charging us four per cent of gross sales, moving from a flat fee, and we can't afford all that," said Xavier Chin, chief executive officer of Track Price Plus Limited and president of the United Bookmakers Association.
"Over the years, overseas racing has become less profitable with increased costs to staff, foreign currency and operating expenses on a whole," explained Damian Chin-You of Champion Betting.
NEW TAX
"The first to go was American racing last year and we've taken the decision to cease sales altogether with this new tax.
"We asked for gross profit tax for the past 2 1/2 years but including taxes, based on gross sales, defeats the purpose.
"That, added to our rights fee of January 1, our bottom line will be negative and we can no longer be viable," he added.
Overseas betting represents 60 per cent of sales for bookies selling both overseas and local, amounting to more than $700 million last year.
