William Hill has lodged an appeal against last month’s High Court decision that customers of betting exchanges are not required to pay the Horserace Betting Levy.
The UK’s largest bookmaker failed in its judicial review claim against the Horserace Betting Levy Board’s (HBLB) decision last June not to impose the levy on betting exchange users, after the Court agreed that exchange users were not bookmakers within the terms of the 1963 Betting, Gaming and Lotteries Act, defined as someone who “carries on, whether occasionally or regularly, the business of receiving or negotiating bets.” The judge ruled that while an exchange user may receive bets in the course of business, “he does not carry on the business of receiving bets. He is not a bookmaker. It follows that he is not liable to pay the levy.”
Hill’s said today that Lord Justice Stanley Burnton’s distinction between those types of entities was not clear, with his reasoning not argued at any point in the proceedings, leaving “confusion on the correct interpretation of who ought rightly to be considered a ‘bookmaker’, and as a result, who should be paying the levy”. Hill’s said today that going to the Court of Appeal was the only way of resolving these uncertainties.
CEO Ralph Topping said: “The only simple interpretation of his judgement – i.e. that no users of exchanges pay levy, ever – seems to go against what Parliament has said previously about both levy, taxation and licensing, and could if unchallenged totally undermine any value in the Levy.” He said it was important to the future of the HBLB, bookmakers and British horseracing to clarify this issue.
One of the three horseracing groups making up British Racing, the British Horseracing Authority (BHA), however withdrew from the High Court action against the Levy board ahead of the Judge’s ruling, leaving Hill’s to fight on alone, after “interested party” Betfair agreed to pay £40m to British Racing over five years in a deal that replaced Betfair’s voluntary contribution to the annual Horserace Betting Levy.
Bookmakers agreed last year under the terms of the 51st annual levy scheme to pay £72.4m to UK horse racing in the financial year starting 1st April 2012, with William Hill, Ladbrokes and Coral committed to £45m between them and Betfair, whose exchange-based business model falls outside the current remit of the levy, volunteering to provide £6.5m prior to to this being offset against the payments due under its new commercial agreement with British Racing, consisting of the BHA, the Racecourse Association and the Horsemen’s Group.