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Judicial Review

I went to Olswang’s annual media drinks party last night, at the kind invitation of David Zeffman. It is always a fun and well-attended event, and as I said to him when I arrived, it’s always a pleasure to be drinking at the BHA’s expense. The Authority had only hours earlier reconfirmed that they would be paying the bill, with their announcement of a joint action with William Hill, launching a judicial review of the Levy Board’s decision not to pursue Betfair’s customers for levy. I am hoping that there will be a further event on Bonfire night, since that would seem to me to be the next most effective way to burn vast piles of cash while providing enjoyment for a few of us for whom this has become a spectator sport.

I’ve been pondering, overnight, what it was that would have tipped the balance into deciding to go for JR, sneaked in a few hours before the deadline of three months from the time of the Levy Board’s 8th June announcement which is now being challenged. Perhaps, I suggested to David, the collective disappointment that I was never seen running naked down High Holborn was so great that the lawyers and administrators on that street thought they’d have another go. I remain of the view expressed when I made that promise, as I do confident that my dignity will remain intact.

To be fair, you can see why the decision to launch a Judicial Review makes sense from Olswang’s point of view. I doubt that the BHA will be paying them the £200,000 a week they are rumoured to be getting at the moment from News International, but clearly their fees will not be cheap. You can see, less clearly, why it might make sense for William Hill, although their business – particularly online – would seem to be going perfectly well enough right now for them to conclude that they would be wiser to stick to their onions. But for the BHA? It’s more difficult to establish why it makes sense for them.

The argument expressed in their press release is that the challenge will allow them to establish a point of law, and to that extent, you could argue that it ought to be welcomed by all sides. Credit therefore, at least, to them and their acting CEO, Chris Brand, for finally having got their rhetoric sounding reasonable – even if we remain only one click away from the more emotional bombast of their Chairman, which some might see as a closer representation of the real agenda. But messaging aside, the nagging question that remains is what they really think will be achieved, eighteen months down the line, other than (at best) taking us back into the same loop that we’ve been stuck in for a decade. Can that really be good for the sport?

Of course, I’m no expert on the law. My understanding gets me as far as knowing that the likely ground that is being used for this challenge to the decision of a public authority (i.e. HBLB), is that an “error in law” has occurred, which suggests that the BHA and William Hill claim will be that Lord Pannick QC has misinterpreted the sections of the 1963 Act on which he based the judgment that apparently blew their case out of the water.

On what basis they think that would be the case, I am sure we will discover in due course. But given that Pannick laid out his understanding of some specific terms (such as ‘effecting bets’), it seems reasonable to assume that they will say  that it, and therefore the basis of his judgment, was wrong. But even if they were proved right, where would it get them? If ‘effecting bets’ doesn’t (as Pannick believes) mean “making the arrangements necessary for betting…..which only the operator can do…”, and instead simply means “betting”, then what? Surely, then we’re just back to the same question that has always been asked, which is whether any punter can be receiving or negotiating those bets in business. Perhaps there is a silver bullet that will allow Racing and Olswang and William Hill to demonstrate for the first time in over a decade that they can, on Betfair alone. But I doubt it very much, because it can’t be done.

I would imagine there is a lot of gnashing of teeth and tearing of hair going on at Betfair this morning, but equally I wouldn’t expect there to be the least amount of concern. There is a reason why this debate has only gone one way for eleven years, and it is quite simply this: there is a complete divergence between how people understand the exchange’s business, and the actual mechanics of its operation. It’s a small thing, but when the William Hill CEO cannot calculate the net price after commission of a Betfair bet (they charge commission on winnings, Ralph, not on the total return), it suggests that he has a limited grasp of how the business works.

Amazing, and you might say arrogant, though it may seem to be to suggest that the people bringing this Judicial Review don’t actually get Betfair’s business, there are thousands of punters out there who know that to be true. The BHA/William Hill case has been based, for years, on anecdote, half-understandings, and misconception; and Betfair’s rather boringly consistent defence on the reality of the mechanics. From the conversations I had last night with various people telling me why Betfair were wrong, I can’t see what has changed. As a result, we are now promised eighteen months more of the same debate, an identical outcome – and a good few years of decent parties on Olswang’s roof terrace.

Posted in Betfair, Betting industry, Regulation, Sport.

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6 Responses

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  1. bigdipper says

    BHA / Hills are unlikely to get anywhere with the ‘error in law’ line, but the scope remains for fresh legislation to revise the 1963 Act to redefine the ‘business’ of negotiating bets in such a way as to make liable for tax anyone who gambles as their main occupation.

    Presumably gambling winnings were exempt from taxation before because 1) the costs of verifying all of a gambler’s bets, winnings and claimed losses, over a taxation period would cost the Revenue more than the tax collected; and 2) the presumption was that gambling was a recreational activity. In general, gamblers lost.

    On the first point, data capture has improved a lot since the 50s, even for (some) over-the-counter shop bets. On the second, I cannot feel that it is not encouraging to gamblers’ desire to avoid taxation that Betfair has implicitly given succour to the argument that many win through professionally applied, rational strategies through its various PC schemes. What are these but (in their most severe form) a kind of 62.5% taxation?

    If a company can exact a clawback over and above the result of customers’ bets struck merely on their standard terms and at prices they have offered, surely the government have a much stronger justification for taxing, on ground of equity and wanting to promote genuine (as opposed to zero-sum game) productivity?

  2. bigdipper says

    *I can’t but feel

  3. geoffbanks says

    Lord a mighty, I wish Lord Pannick had been about with his novel expression ‘effecting bets’ to shiled me from the yards of duty I used to pay under the 1963 act. I recall the absolute clarity of Betting in those pre exchange days.
    Clever play on words, when you get right down to it, that’s all it remains.

  4. geoffbanks says

    that last comment would be – shield me from yards of duty! 🙂

Continuing the Discussion

  1. Clutching at straws? | Mark Davies linked to this post on April 12, 2012

    […] who have always argued that “Betfair’s customers should be licensed” want people who are very serious punters to the extent that they look (at a glance) like […]

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

    […] 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, so resoundingly was the William […]

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