We have been knocked out by the number of bets that have come flooding in

Graham Sharpe, William Hill

Leading bookies said there had been a 20% increase in the number of bets placed across the UK on Saturday.

Thousands of punters had a flutter on England's vital qualifier for the World Cup finals, according to bookmakers William Hill.

Spokesman Graham Sharpe said: "We have been knocked out by the number of bets that have come flooding in.

"The abolition of the nine percent betting duty has meant people have placed bets they would never have placed before.

"For the first time, we have taken over �1m from people backing England to win - and that's without flutters on correct score or first scorers."

Cool Investment

The first tax-free bet in a betting shop since 1966 was registered at 0700 BST by Nicholas Godfrey, deputy editor of the Racing Post, at a Ladbrokes shop off Trafalgar Square in London.

Four hours later, a greyhound called Cool Investment became the first winner of a tax-free betting event, romping home at odds of 5-1 in a race at Romford in Essex.

Betting duty was introduced just before England's World Cup victory in 1966.

As the system stood, the government collected betting duty of 6.75% from bookmakers, which was passed on to punters through a nine percent tax.

In recent years, many UK bookmakers have moved their businesses offshore, to enable their customers to enjoy tax-free gambling by betting by phone or online.

Chancellor Gordon Brown announced the move to scrap betting duty in his March budget to stop the boom in off-shore tax-free gambling, which costs the exchequer millions of pounds each year.

Industry leader

Financial Secretary to the Treasury, Paul Boateng, said the change would benefit the punter, bookmaker, the government and sport.

"These reforms will allow Britain's betting industry to become a world leader in the international betting market," he said.

A flurry of bets took place ahead of England's big match on Saturday

Bookmaker Ladbrokes estimates that annual turnover could rise by 30%, from its current level of �7.3bn.

The company is already predicting that next April's Grand National will be the biggest yet, breaking the �100m turnover barrier, compared with �70m last year.

Chief executive Chris Bell said: "It could benefit Britain's punters to the tune of �800m over the next year - that's equivalent to �300 for each of Britain's 2.7m regular betting customers."

Ladbrokes is spending �40m to build 40 new city-centre betting shops, employing 1,000 staff.