Betting firms including William Hill Plc and Hilton Group Plc moved businesses back to Britain after gambling taxes were reformed in 2001, a study by U.K. government auditors found.

"The big operators have repatriated their offshore businesses and secured additional employment within the U.K.," the report said, citing William Hill and Hilton Group's Ladbrokes subsidiary.

Under pre-2001 rules, customers had to pay 9 percent tax on each stake, making offshore gaming firms, such as Internet sites, cheaper. The reforms replaced that levy with a 15 percent gross profits tax on bookmakers.

Gambling duties collected fell to 1.35 billion pounds ($2.54 billion) in the year to April 2004 from 1.53 billion pounds in the year to April 1999. Still, "it is likely that the reduction under the old regime would have been higher in the longer term had no change been made," a report by the National Audit Office concluded.

U.K. Prime Minister Tony Blair's government is currently trying to pass legislation to reform U.K. gambling rules, allowing Las Vegas-style casinos for the first time.

The government predicts the amount gambled in Britain will rise to 12.5 billion pounds a year within five years from 8.7 billion pounds in the year through April 2004, discounting inflation, if the proposed legislation is passed. The gaming industry currently accounts for the equivalent of 100,000 full- time jobs in the U.K., according to the study of the Gambling Bill.