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The UK is set to become an Internet gambling haven after the Chancellor abolished betting duty in his Budget last week.

The current nine per cent tax on all bets was abolished and replaced with a 15 per cent tax on bookmakers' profits - a tax which they have promised not to pass onto consumers. We have to admit we were slightly confused by this announcement at the time, but it would appear that gambling industry has grown increasingly annoyed with the betting tax as the Internet makes cross-border, tax-free gambling so easy.

Big gambling companies have therefore been moving their operation to tax havens under British jurisdiction like Antigua, Gibraltar and Malta - causing the UK government to lose valuable income.

Brown is a practical politician and so appears to have met them half-way. They can set up in the UK, saving them time and trouble, operate without betting tax and thus steal the booming online betting industry.

In the medium term, Gordon Brown gets more money, the gambling companies get more money and the UK gets a strong betting industry. The only constraint is casino-type games (the UK has a different gambling culture to the US).

Anyway, this is grand news for the UK both in terms of money and Internet presence. Few big countries have a liberal betting law and so the UK is ahead of the field. Britain's four biggest bookies - Coral, Ladbroke's, Stanley leisure, and William Hill - have already said they will shutdown offshore Net systems and bring them to the UK. Why? Because by being based in the UK, they are allowed to advertise in the UK.

This could be the beginning of a huge Internet gambling industry and with that kind of money moving about, it will be bound to have a positive effect on the rest of the UK Internet infrastructure. In one decision Mr Brown may have done more for the UK's Net industry than three years, five ministers and six laws. ®

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