Ministers have confirmed plans for a new tax on offshore internet bookmakers which MPs claim will preserve thousands of jobs in East Anglia.

By basing themselves outside the UK such bookies avoid millions of pounds in UK tax and levy contributions, a proportion of which would usually go to support the racing industry.

As the offshore websites have taken an ever bigger share of the gambling market, the industry's income has dwindled, putting it and the jobs it provides at race courses like Newmarket and Fakenham under pressure.

The new tax will mean that a bookie will have to pay a fee every time a gambler in the UK places a bet with them, regardless of where their own operations are based.

Speaking in the House of Commons yesterday, minister John Penrose said: 'I'm delighted to see that there is a considerable amount of cross party support in almost every corner for the regulation of remote gambling on a point of consumption basis.'

He added: 'The draft bill is in front of the select committee at the moment, providing it completes its passage there it will go forward as a third session bill [to be debated in the next year].'

The move to introduce the tax for online operators comes after pressure was exerted by West Suffolk MP Matt Hancock, who has trained as a jockey and in whose constituency Newmarket is located. He said: 'Closing this loophole is vital to the future health of the racing industry and to the five thousand jobs at Newmarket.'

Mr Hancock first proposed the idea of the new law as a backbencher last year, but has since become a minister himself, which left him unable to lead the debate on the issue in the Commons. Instead, other MPs such as the member for Mid Norfolk, George Freeman, argued the case, pointing out that £10bn worth of bets was placed on UK racing each year.

The MP, whose father was a grand-national winning jockey, told the Commons: 'The health of racing is of vital importance to our overall economy and the health of racing is under severe threat.' He added: 'The provisions of this bill simply create a level playing field so that offshore bookmakers are subject to exactly the same provisions of regulation, which I don't think anyone is suggesting are unduly onerous.'

David Hunter, chief executive of Fakenham Racecourse, said a new tax would increase funding for the Horserace Betting Levy Board, which would, in turn, increase prize money grants to race courses, as well as research, development and equestrian activities. He said: 'If you can do something like this to close the loophole of offshore internet bookmakers falling outside of paying their due to the Horse Racing Levy Board that would be fantastic. It would be brilliant, and could help stop leakage in the levy. More levy into the levy board means more prize money grants to racing courses.'

joseph.watts@archant.co.uk