The body responsible for assessing and collecting contributions from bookmakers in the UK is considering whether betting exchanges should pay.
Thursday 15th July 2010
The Horserace Betting Levy Board is responsible for assessing and collecting contributions from bookmakers in the UK via a voluntary duty and then distributing these funds for the improvement of the sport and veterinary sciences.
This consultation is necessary, according to a statement from the Horserace Betting Levy Board, because betting exchanges were not in existence when the main legislation concerning the levy, in particular The Betting, Gaming And Lotteries Act of 1963, was passed.
“The document reflects that there have been no amendments made to this legislation to take account of betting exchanges,” read a statement from the Horserace Betting Levy Board.
“However, by contrast, the legislation dealing with taxation and licensing of bookmaking activities has been amended to take account of betting exchanges and their activities. Currently, no users of betting exchanges pay the levy except for licensed bookmakers in respect of their use of betting exchanges in the course of their bookmaking business.”
The Horserace Betting Levy Board revealed that it has been working on the basis that betting exchanges fall within the definition of a ‘bookmaker’ under Section 55 of the 1963 legislation and, as such, are liable to pay duty.
“The Horserace Betting Levy Board has agreed that there are a number of issues arising from the use of betting exchanges that should be the subject of further investigation,” said Paul Lee, Chairman for the Horserace Betting Levy Board
“It has taken the view that the best way of addressing these is through this consultation process.
“We welcome responses from all those with an informed viewpoint on the areas raised in the consultation document as well as on any other relevant matters.”
Right on cue, online betting giant Betfair released a statement calling into question the Horserace Betting Levy Board’s consultation while confirming that it was investing over one million pounds previously paid in levy.
“We’re very surprised by the Horserace Betting Levy Board’s announcement,” said Martin Cruddace, Legal Director for Betfair.
“This issue of whether betting exchange customers are acting as bookmakers has been the subject of debate since Betfair started. After a thorough, independent review of this very issue throughout 2004 and 2005, which took into account full representation from all stakeholders and other Government departments, the Treasury came to the conclusion that the treatment of betting exchanges and their customers was fair. Since then, there has not been one scrap of evidence produced by anyone to suggest the situation has changed.
“We are extremely interested to see if the Horserace Betting Levy Board is able to run a fair and impartial consultation process bearing in mind that several of their directors have publicly stated positions that would seem to prejudge any outcome. We are also surprised that any consultation that singles out the customers of one class of operator could be considered fair or lawful where no such distinction is made in any part of the relevant legislation.
“Betfair has already committed to redirect over one million pounds that it paid as a voluntary levy in 2009 into British racing. This was money we were not obliged to pay last year but chose to pay because we want to support British racing and it was part of the £7.5 million levy the company paid in total in 2009, up seven percent from the previous year.
“In the coming months we will redirect over one million pounds into funding a range of initiatives within British racing in addition to our existing commitments. We have already had a number of great conversations and are excited about how this money can be invested creatively.”
