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Exchanges take a

battering on Levy


illiam Hill has come out swing- ing at the betting exchanges as the Levy Board

digests all the submissions into its consultation into how exchanges contribute to the Levy. The national bookmaker has made very public the points it has raised in its submission to the Levy Board, suggesting that the current structure robs racing of at least £30m a year. The firm argues that those who trade by way of business on betting exchanges should be subject to levy payments and that the much vaunted ‘audit trail’ should help identify those users. It said that given the well-devel- oped accounting and risk systems employed by exchanges and the classifi- cation of different types of user by the exchanges themselves, definitional issues relating to business users on exchanges ‘should not prove to be an insur- mountable challenge for the authorities’. William Hill’s chief exec-


utive Ralph Topping said: “William Hill, which is the largest betting shop opera- tor in the UK and therefore the largest payer of levy, is confident that the HBLB’s consultation will concur with our belief that those who have decided to operate a business via betting exchanges are not appropriately levied, taxed or regulated in the same way as traditional book- makers. While this dispar- ity exists, an unfair competitive advantage remains which distorts the market, resulting in a falling tax yield and dwindling financial support for racing.”

In fact, William Hill is using the discussion as a call to the government and regulators to revisit aspects of the Gambling Act, sug- gesting that the need for a wider review and possible legislative change which eliminates ambiguity and brings business users of exchanges within the scope of tax, levy and regulation. The bookmaker said: “William Hill is therefore

calling for a full review of the betting exchange model by the authorities, but this should not hold up early action by the HBLB, which working within existing levy legislation could move to identify and levy busi- ness users of exchanges. This should pave the way for a more fundamental reform. The levy, an anachronistic subsidy introduced in the 1960s to compensate racecourses for loss of attendance at courses expected with the legalisation of off course betting, should be replaced by a commercial relation- ship between racing and the betting industry by 2013.” The Association of British Bookmakers (ABB) has been lobbying for Levy reform for some time now and has even called on the government to announce plans to scrap the system in three years time in order to provide some incentive to come up with an alterna- tive.

But it now seems that racing is getting its act together and launched a

campaign called Racing United, which aims to close the ‘clear loopholes’ that exist in the current Levy system - namely the return from exchange users and off shore bookmakers. The Charter has been launched jointly by the British Horseracing Author- ity (BHA), and the Race- course Association (RCA) and The Horsemen’s Group, which represent jointly the trade associations of race- courses, breeders, jockeys, stable staff, owners and trainers involved in British Racing.

BHA chief executive Nic Coward said: “The launch of this public campaign is the latest step in pressing home racing’s case, a com- prehensive case that is built on rigorous analysis, and which we have been advo- cating on behalf of the sport. Our objective is to secure what is right for the future of the whole sport, and the campaign is intended to leave no-one in any doubt as to the strength of support for it across the whole of racing and its followers.”



Betfair pays the Levy 10 per cent of its profits on horseracing, but there is a growing clamour from some corners of the industry for this rate to be applied to its ‘business’ users. LEVY DISCUSSIONS


Betfair has enough on its plate at the moment with its upcoming flotation, and it seems to have given up the fight for the hearts and minds of the Levy Board. Betfair’s Martin Cruddace

commented: “The terms in which the consultation paper has been framed suggest the board is acting in a biased manner against betting exchanges. It is a consultation that has a number of flaws that are incapable of being remedied.”

The flavour of these comments suggests that the exchange might feel it will have a better chance of success in the courts should the decisions based on the Levy Board’s

consultation go too far against its model.



An illegal supplier of gaming machines has been fined a total of £16,000 and ordered to pay £10,000 in costs following a successful Gambling Commission prosecution. Gambling Commission director of regulation Nick Tofiluk said: “Tackling the illegal supply of gaming machines remains a priority for the Gambling Commission and this sentence sends out a warning to illegal operators who seek to benefit at the expense of both the general public and responsible licensed machine suppliers. Businesses supplying or making gaming machines available for use without a licence risk action from the Commission or its co- regulators.”


The Greyhound Board of Great Britain (GBGB) has organised a new event designed to aid the general wellbeing of the country’s racing dogs. The first GBGB Veterinary Conference will take place over two days at Monmore Green Greyhound Stadium. Day one focuses on scientific matters, followed by dinner and racing at the venue, with day two exploring the duties of the track vet plus a chance to hear from and put questions to GBGB representatives. Among the speakers at the two day event, which will be held over November 18-19, are Cologne University’s Professor Dr Patrick Diel who will be talking about gene doping.


Austria’s restrictions against EU law H


ot on the heels of its judgement against Germany’s gambling laws, the European Court of Justice (ECJ) has also censored Austria for the unfair restrictions it places on operators of land-based and online casinos.

While the ECJ upheld Austria’s obligation for gambling firms to be a public limited company, it described the requirement for companies to have their seat in Austria constitutes an unjustified restriction to the freedoms of the internal market.

Remote Gaming Associa- tion chief executive Clive Hawkswood said: “We


welcome the findings of the ECJ in this ruling and find it hard to believe that some monopolies and incumbent operators keep claiming that EU law has nothing to

16 BettingBusinessInteractive • OCTOBER 2010

do with them. Austria is not alone in having gambling laws and arbitrary practices that seek to protect particu- lar local operators and we hope that this ruling will convince other Member States to introduce changes in their legislation.”

His views were echoed by Sigrid Ligné, secretary general of the European Gaming and Betting Associ- ation, who said: “The ruling against the Austrian gam- bling laws confirms clearly that Member States cannot require EU licensed online operators to be physically present on their territory. In the digital age, there are obviously other and more

efficient means available to monitor the activities of the operators.”

Another key finding of the ECJ, which was com- menting on the Engelmann case, was that the tenders for gambling operations - all of which are owned by Casinos Austria AG - were also incompatible with EU law. Ironically, given the case has been pushed by online operators wanting to service the Austrian market, Casinos Austria’s online operation is licensed in Malta and only available to UK customers.

Although the ECJ accepts the limitation on the number of concessions

and their duration for a period of 15 years, it stressed that the obligation of transparency that arises from EU law requires a degree of publicity suffi- cient to enable the service concession to be open to competition and the impar- tiality of the award proce- dures to be reviewed. The ECJ noted that the conces- sions in Austria were made in ‘total absence of trans- parency’, which constitutes indirect discrimination on grounds of nationality as operators established in other Member States had no real possibility of mani- festing their interest in obtaining a concession.

Social responsibility charity GamCare has published: ‘Beating the odds: preventing teenage problem gambling’ - a framework to tackle youngsters falling foul of compulsive gambling tendencies. GamCare CEO Andy McLellan said currently under 18s aren’t seeking help for problem gambling: “GamCare, with its partners, is developing a programme and materials for use in schools, youth centres and elsewhere to address the issue. We’ll harness new channels of communication aimed specifically at a young audience, both to raise awareness and to deliver help and support for anyone in trouble. We want problem gambling to be talked about frankly and openly, with easily understood messages.”


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