This story is sponsored by BetfairThe Gambling Commission has called the spat between Betfair and lawyers Olswang over a new licensing category for exchange betting “a manufactured storm in a tea cup”.
Betfair today hit out at lawyers Olswang and their client William Hill after Olswang partner David Zeffman linked an apparent new licensing category for “non-licensed traders” to the judicial review into betting exchanges in which Olswang is acting for Hill’s and the British Horse Racing Authority, with Zeffman calling this new licensing requirement “an important victory” for “many traditional bookmakers”.
The Gambling Commission (GC) however today denied it had introduced a new licence category for professional punters trading on betting exchanges - “as we and DCMS have made clear” - calling the dispute “a manufactured storm in a teacup”. The UK regulator stated that the new fee category was simply a way to avoid charging UK bookmakers - who they had decided technically required a remote gambling licence to continue hedging on remote platforms – the cost of full licence starting from around £13,500.
The GC also explained what it meant by the phrase “offering facilities for gambling on other remote platforms in the course of a business” in its information note on the new licensing category, that arguably caused the confusion, particularly when read alongside the accompanying exemption from the fee for on and off-course bookies.
“Bookmakers with only non remote licences have already been asked if they need a zero price remote licence. Since the [2005 Gambling] Act came into force the Commission has made it clear that ‘in the course of business’ is a tax concept and that the Revenue have not identified nor expect to identify users of exchanges in this category. So while for completeness a minimal fee is specified for those without existing non remote licences no income is forecast from this fee category.”
Zeffman however disagreed with the GC’s statement that the debate had been “a manufactured storm in a teacup”, telling Casino Choice: “In our view, the Commission’s position, as it applies to exchange users was (and is) new and worthy of comment.
“Whilst I understand that the Gambling Commission has introduced this category to fill a gap in their licensing framework, they do not dispute that it could equally apply to an exchange user who does not otherwise have a remote operating licence. What they go on to say is that they will take the HMRC’s lead on the question of whether or not any such individuals exist. It is correct that the Treasury and HMRC looked into this issue in 2004/5 and concluded that - on policy but not legal grounds - that there were no exchange customers who they then wished to pursue for betting duty.
“The Gambling Commission is correct that the judicial review concerns different legislation but it does also relate to the question of whether there are exchange users acting in the course of a business. If, subsequent to those proceedings, the Levy Board does identify any such users, then I find it difficult to see why the Gambling Commission (or HMRC for that matter) would choose to turn a blind eye to their existence.”
The judicial review of the Horserace Betting Levy Board’s Consultation decision not to impose the levy on business users of betting exchanges, following the action brought by British Horse Racing Authority (BHA) and William Hill, will be heard in court from 4-6 July.
