Chancellor Gordon Brown is tipped to scrap the 9% betting duty in his fifth Budget statement this afternoon in favour of a tax on bookie's gross profits.

But Chandler told the Guardian the plan would not deter punters using offshore internet sites to place bets.

He said the plans would equate to a 3% betting tax, which would be passed onto the betting public.

'The punter will always suffer. People will still find us [the offshore websites], even if the government restricts our advertising,' said Chandler.

Chandler also criticised five leading bookmakers, which he claimed had agreed to abandon offshore activities if Brown scrapped betting duty.

Victor Chandler moved operations to Gibraltar in May 1999 and began levying 3% on telephone and internet gambling. Previously Chandler was best known as a track-side bookmaker. But his success at moving offshore has transformed his business.

Customs & Excise announced a consultation on the reform of betting duty a year ago after repeated calls from bookmakers to review the tax, which they claimed was forcing them to move offshore.

In November's pre-budget report, the government said it believed there was 'scope to modernise the way betting is taxed in the UK that would provide the right competitive environment for the UK betting industry to thrive, both domestically and internationally.'

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Budget 2001