UK bookmaker William Hill has announced that it is to transfer its telephone betting operation to Gibraltar because the UK's tax regime makes it "impossible" for the company to compete with offshore telebetting firms on an equal footing.

The group expects to implement the changes during the fourth quarter of 2010 with associated cost savings of approximately GBP4-7m (USD6.2m - USD10.9m) per annum from the start of 2011.

William Hill’s existing telephone betting business made a loss of GBP1.8m in 2009 and a small operating loss is anticipated to be made in the first half of 2010.

Ralph Topping, Chief Executive of William Hill, commented: “This significant change to our Telephone business is a response to the challenge of competing with betting exchanges and offshore telebetting operators, all of whom have benefited from significant cost and tax advantages over UK bookmakers. This has made it impossible for our existing business to compete profitably from the UK.”

William Hill said that it continues to have a "substantial presence" in the UK and Ireland, including more than 2,300 licensed betting offices and around 16,000 employees. It paid GBP265m in UK taxes and levies in 2009.