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New client needed. Issue put to bed.

A part of me is sorry it’s over: I could have seen if my ticket sales could better the Olympics’; could have requested my own traffic lane, claiming a major event was taking place; and – who knows? – might even have got lucky. But it’s not happening any more. Ladies of London, you can stand down: I will not be running naked down High Holborn after all. Now there’s a relief.

Regular readers of this blog will know that my promise to do so was dependent on a successful outcome for the Claimants of a Judicial Review (brought initially by William Hill and the BHA, but from which the BHA withdrew at the last minute) to determine whether the Levy Board had erred in law. The Levy Board had decided, after a 12 month consultation exercise, that exchange customers do not constitute leviable bookmakers under the 1963 Betting, Gaming and Lotteries Act. The case was expected to boil down to whether the definition in law of a bookmaker (described in section 55 of the 1963 Act as “someone in the business of receiving or negotiating bets”) captured customers of a betting operator; and, ideally for the Claimants, the customers of an exchange in isolation.

Judgment was handed down this morning, and, though it may have been slightly tortured in its thought process and may have focused on areas which neither side expected, it was categoric: the challenge was rejected; William Hill were refused permission to appeal; and William Hill have to pay 25% of Betfair’s costs. By my understanding, that means William Hill must be about to write Betfair a cheque in six figures, which I would suspect is something that their lawyers, Olswang, told them could never happen.

Many has been the time that I have thought this debate might finally be over, only to discover that it has a Rasputin-like ability to stagger back to life. Might it be that this time, finally, we can move on? Rejected; no appeal allowed; costs awarded against Claimant. End of story, no?

Apparently not. The Olswang press release on the subject, which runs – while we’re on the Russians – to a Tolstoyan 1233 words, concludes as follows:

This leaves the law in a very uncertain position.  Not only is this distinction confusing, it also leaves unclear the position of the activities of traditional bookmakers on exchanges.  On one view, these activities would now appear (again) to be subject to levy since traditional bookmakers are certainly carrying on a business of receiving bets.  But this is contrary to the position adopted by the Levy Board and the challenge to that position has failed.

The only means of clarifying these uncertainties is if the case is appealed to the Court of Appeal.

Uncertain? Appeal? Hold on, let me get this right: the judge who handed down this decision, Stanley Burnton LJ, is a Court of Appeal judge. He has denied the Claimants the right of appeal, which means that they need to appeal the denial of a right of appeal to the Court of Appeal, one of whose number is the very person who said that they shouldn’t have it in the first place. Having then persuaded the Court of Appeal that they should have a right of appeal, they then have to appeal, and get a different judgment.  That it sounds more like something from a Yes Prime Minister sketch than a statement of the true position should give a clue to the likelihood of its success.

Those who believe that there are people conducting substantially the same business on Betfair as would need a licence and be leviable if conducted not on Betfair will doubtless go to their graves believing that to be the case. As I said to one independent bookmaker who tweeted as such at me recently, my own view is that if people really believed that it was as simple as that, they would all just get on and do it. The fact that they don’t means that even they realise that there must be a difference.

But bugger my view: it really doesn’t matter any more who is right and who is wrong in this case. Every time a judgment has been passed by anyone that matters, it has been in Betfair’s favour. This is true not only without exception, but also irrespective of whatever torturous route those sitting in judgment have taken in examining the issue.  This probably explains why everyone I speak to, in racing or bookmaking, now wants to move on from this tired debate and start to talk about the future. It’s time to agree to disagree; to park the issues we won’t see in the same light, and to work out what next. The BHA have finally been sensible enough under the leadership of Paul Bittar to accept that they are where they are, and make the best of that. I would be amazed – totally gobsmacked – were William Hill not to do the same.

If you didn’t follow this particular (hopefully final) court case, you will have missed how when Counsel for the Claimants gave her final summing up, she miraculously pulled out a new point in relation to the 2005 Gambling Act which (after all the debates that have been had) “had come to light overnight”. It would, she said, make it “game over”. You will also have missed her interrupting –  as her killer argument was torn to shreds by Lord Pannick QC (for the Levy Board) reading from notes prepared some months earlier on her very point – and trying to claim that Pannick was straying into areas which he should not be allowed to deal with because he was only allowed to respond to the specific point she had raised. You will not have heard him cut her dead with “I am sorry that my friend wishes to prevent me from answering points she made…”. And you will not have seen her quickly sit down to allow him to finish his submission.

It might have been amusing at the time, but it, along with Olswang’s press release today, underlines that quite literally, the only people making any money out of continuing this debate are the lawyers. There are no rabbits left in hats, and no points left to make that have not been made. So go find yourself a new client, David. The Crusades are over, and the rest of us are keen to get on with our lives.



Posted in Betfair, Betting industry.

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3 Responses

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  1. PPBox says

    I wouldn’t be so sure that the issue is dead, Mark. You are right to point out that William Hill would have to be badly-advised and totally irrational to appeal the decision, but they’ve already proved they are badly-advised and totally irrational by bringing the Judicial Review in the first place!

    It must take a lot of front for David Zeffman to write that “legal update” for Olswang, having lost a case that everyone except David Zeffman predicted they would. To be able to pretend that the issue remains in doubt unless someone writes him a large cheque to launch an appeal is inspired – you get the feeling the man will never relent until every last penny has been squeezed out of the clients.

    Quite why anyone would hire Olswang for an appeal is another question entirely. The “rabbit from the hat” trick of pretending on the second day of the trial that something critical and never-before considered had been unearthed overnight (from the explanatory notes to the 2005 Act) was desperate. You could have taken a photo of the judge’s face to illustrate the word “unimpressed”, and the fact that he went out of his way in his judgement to rebuke them for that shoddy manoeuvre would give any client doubts that they’d hired lawyers with good judgement. Getting bitchslapped by the Gambling Commission for deliberately misrepresenting the Fees Consultation wasn’t exactly the smartest move just before the trial either.

    I wonder if David Zeffman still thinks he’s got “more than half a case”, as he did on October 8th 2010?

    The sad thing is it wouldn’t surprise me to find out that he actually still thinks he does.

  2. bigdipper says

    David Zeffman’s statement indulges in the worst sort of obfuscation.

    The BHA lost the appeal on the narrow point of whether the clients of a bookmaker–including an intermediary such as betfair–are bookmakers in the sense intended by the 1963 Betting Act. The judgment ruled that they were not bookmakers, nor conducting a bookmaking business, in the relevant sense.

    The reason was not that these people didn’t make or stand bets (i.e. lay bets) for a living, either 1) because such a thing was not practically possible or 2) because it did not amount to ‘effecting betting transactions’ in the terms of the Betting Act.

    No–the reason was even more favourable to betfair and other exchange operators as regards the judge’s definition of the ‘business’ of receiving bets. The activities that characterise a betting business are those which are readily recognisable as such to the business’s clients–buying and operating a pitch, paying cashiers, paying shop rental, installing televisions in shops. These comprise the ‘business’ of receiving bets, over and above merely negotiating bets in the course of an organised, ordinarily successful betting strategy (a ‘business’).

    According to the judgment, then, someone could be shown to make a full-time income from getting filled in as a layer on Betfair and not meet the leviable definition of being in the business of receiving and negotiating bets.

    One thing that strikes me is how throughout Olswang have been badly, or selectively, informed by Hills on how full-time traders make a living and how exchanges undercut them. It isn’t by putting up full markets throughout the morning that achieve a balanced book at a lower margin than their licensed bookie competitors (or, if so, we are talking a tiny handful of people). Further, if it’s through arbing, then why should such players be considered the clients of the exchange, rather than of those putting up the other end of the arb, licensed bookmakers? And wouldn’t this activity, no matter its scale and sophistication, exclude its participants from the Betting Act’s definition of ‘receiving and negotiating bets’?

    My own sense is that the BHA do not quite know what they’e done in accepting a contractual levy payment from Betfair, saying in effect they don’t care whether they get 10 million from BF or from the conventional books. This is tantamount to accepting–in the absence of taxation changes– that they will take their spoils of the winnings of BF’s incumbent market-makers. But if the sport is really saying it doesn’t need licensed bookies per se, this is an excellent thing. It opens the door to racing setting up its own exchange and holding onto more than the leviable portion of its profits.

Continuing the Discussion

  1. And so she sings at last | Mark Davies linked to this post on May 3, 2013

    […] its customers should not be liable for levy) – challenged again and again by William Hill, against all logic but at the behest of their lawyers at Olswang – was never going to come to pass. In the end, […]

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