Citing "competitive pressures", company will move online gambling operations to Gibraltar

Bookmaking giant Ladbrokes has confirmed it will join rival William Hill in moving its online gambling operations to Gibraltar in a decision that will cost the Treasury millions of pounds.

The company confirmed this morning that it will defy a "gentleman’s agreement" to keep running its Internet operations in the UK.

Chief Executive Christopher Bell blamed “intense competitive pressures” for the decision.

“Operating from the UK has become unsustainable and we will relocate by the year end,” he said in a statement.

Ladbrokes’ pre-tax profits for the first half of the year fell by 3.9 percent to £131.3 million, and the company said it is cutting its interim dividend by almost one-third to 3.5 pence, but said it still expects to meet City expectations.

Ladbrokes did not reveal how much it expects to save through the move, but said it would “materially improve the competitiveness and operating margin" of its eGaming business.”

Analysts have estimated that William Hill will save upwards of £7 million a year through its offshore shift.

In 2001, UK bookmakers agreed to move their Web gambling operations back to Britain in return for the government abolishing a levy on bets.