It would be interesting to know just how much betfair makes from its horseracing product. Peter has documented the decreasing volumes this year while football [even disregarding WC] and tennis among others have really taken off. Horse racing is also likely to come with the highest overheads as it is most likely to be hammered by fast refreshing APIs.
[For someone too young to remember the old levy - would all of betfair's markets be affected or only the horse racing markets?]
Lunchtime racing and turnover Levy
I can't see the tories banning betfair, they've always been pro business and for letting the markets run themselves. Effectively shutting down a business that won the Queen's enterprise award only a few years ago would sound like madness.
I think the key issue here is how much sway this Paul Dixon actually has in his job, something that I have no idea about
I think the key issue here is how much sway this Paul Dixon actually has in his job, something that I have no idea about
Perhaps Betfair could challenge a levy on the grounds that they are not a bookmaker in the truest sense of the word. They don't make a book - they merely provide others with the facility to do so.andyfuller wrote: Betfair are a bookmaker so yes it would apply to them.
They could also argue that their profit on turnover percentage is much lower than that of a traditional bookmaker, so to tax them on their turnover would be unfair.
There would be a certain irony in Betfair arguing that a charge was unfair...
How would that work in practice? Would the powers that be instruct Internet Service Providers not to let UK customers connect to Betfair? I think that would be the only way to do it. But given how many UK voters would be annoyed by such a move, I doubt it will happen...andyfuller wrote: They could ban Betfair like other countries within the EU have done perhaps, it wasn't so long ago Ireland were threatening this.
I can see how this would work with a traditional bookmaker, as the UK authorities could shut down their UK shops if they didn't pay up.andyfuller wrote: They could introduce legislation so that any bookmaker operating offshore is liable for the tax if they wish to operate in this country, I think I have read something about this recently.
But short of stopping people from connecting to Betfair, it's hard to see how they could enforce such legislation against Betfair if they were based abroad.
True.andyfuller wrote: Horse racing is in a dire funding situation and it is not only a big sport but a huge part of the economy and one that the government can ill afford to let go to the wall.
If horse racing is in decline and attracting less entusiasm in favour of other sports then I don't think it's really in the government's business to decide that it needs to be 'saved'. As far as I'm aware other sports (except maybe the dogs?) don't receive a levy from bookmakers anyway. Horse racing may be more tied to betting than others sports (perhaps one of its problems) but for most owners it has always been a loss making excercise anyway and more of a passion. If it is in decline then it just needs to either attract more people or contract naturally
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andyfuller
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Betfair are a bookmaker and do make a book in every market - it is just they make a perfect book. They have argued this fact to death so they couldn't turn around and argue the opposite.Ferru123 wrote:Perhaps Betfair could challenge a levy on the grounds that they are not a bookmaker in the truest sense of the word. They don't make a book - they merely provide others with the facility to do so.
Counter argument is that the tax is fair it is just their business model doesn't suit.Ferru123 wrote:They could also argue that their profit on turnover percentage is much lower than that of a traditional bookmaker, so to tax them on their turnover would be unfair.
I don't know the technical side of it but numerous other countries achieve it despite numerous voters being against it.Ferru123 wrote:How would that work in practice? Would the powers that be instruct Internet Service Providers not to let UK customers connect to Betfair? I think that would be the only way to do it. But given how many UK voters would be annoyed by such a move, I doubt it will happen...
Dependant on EU law etc but it can be enforced by charging the directors of companies like happened in America.Ferru123 wrote: I can see how this would work with a traditional bookmaker, as the UK authorities could shut down their UK shops if they didn't pay up.
But short of stopping people from connecting to Betfair, it's hard to see how they could enforce such legislation against Betfair if they were based abroad.
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andyfuller
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The important thing from a Government view point is what it contributes to the economy. The horse racing industry is one of the biggest employers in the country for example, in rural areas it is quite likely to be the biggest - take Newmarket, no horse racing = no Newmarket.hgodden wrote:If horse racing is in decline and attracting less entusiasm in favour of other sports then I don't think it's really in the government's business to decide that it needs to be 'saved'.
I think that what it contributes economically is why the government have such a vested interest in seeing it doing well.
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andyfuller
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I see this evening the Racing Post have a story about the Levy Board launching a Public consultation on Betting Exchanges into whether certain users should be liable for the Levy - anyone able to reproduce the story here?
Let's hope they don't have traders in their sights or it could be game over!
Let's hope they don't have traders in their sights or it could be game over!
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andyfuller
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From the Sporting Life:
"LEVY BOARD ANNOUNCES CONSULTATION
The Levy Board has begun a consultation process relating to the issue of whether certain users of betting exchanges should pay levy on their activities.
The consultation document acknowledges betting exchanges did not exist and were not even thought of when the main legislation concerning the Levy was passed and highlights the fact that no amendments have since been made.
Currently no users of the exchanges pay levy, except for licensed bookmakers who use them in the course of their bookmaking business.
HBLB chairman Paul Lee said: "The Board has agreed that there are a number of issues arising from the use of betting exchanges which should be the subject of further investigation.
"It has taken the view that the best way of addressing these is through this consultation process.
"We welcome responses from all those with an informed viewpoint on the areas raised in the consultation document, as well as on any other relevant matters."
British Horseracing Authority chief executive Nic Coward is pleased to see the Levy Board taking some action but would have preferred not to undergo a consultation period.
He said: "We do not believe a consultation is necessary and would have preferred immediate action, but we understand the Levy Board approach and we will of course make a full contribution to the consultation.
"We would urge anyone who cares about the future of racing to do this.
"Betting exchanges have revolutionised the market. Consequently, their impact is a primary concern to the future of the sport, as well as to the future of betting as a whole, and the relationship between the two sectors."
Betfair's legal director, Martin Cruddace, admitted the announcement of the consultation was unexpected.
"We're very surprised by the Levy Board's announcement. This issue of whether betting exchange customers are acting as bookmakers has been the subject of debate since Betfair started," he said.
"After a thorough, independent review of this very issue throughout 2004 and 2005, which took into account full representation from all stakeholders and other Government departments, the Treasury came to the conclusion that the treatment of betting exchanges and their customers was fair.
"Since then, there has not been one scrap of evidence produced by anyone to suggest the situation has changed.
"We are extremely interested to see if the Levy Board is able to run a fair and impartial consultation process bearing in mind that several of their members have publicly stated positions that would seem to prejudge any outcome.
"We are also surprised that any consultation that singles out the customers of one class of operator could be considered fair or lawful where no such distinction is made in any part of the relevant legislation."
The consultation period is due to end on September 20."
Looks like the Levy Board have a bee in their bonnet again re. Exchanges.
"LEVY BOARD ANNOUNCES CONSULTATION
The Levy Board has begun a consultation process relating to the issue of whether certain users of betting exchanges should pay levy on their activities.
The consultation document acknowledges betting exchanges did not exist and were not even thought of when the main legislation concerning the Levy was passed and highlights the fact that no amendments have since been made.
Currently no users of the exchanges pay levy, except for licensed bookmakers who use them in the course of their bookmaking business.
HBLB chairman Paul Lee said: "The Board has agreed that there are a number of issues arising from the use of betting exchanges which should be the subject of further investigation.
"It has taken the view that the best way of addressing these is through this consultation process.
"We welcome responses from all those with an informed viewpoint on the areas raised in the consultation document, as well as on any other relevant matters."
British Horseracing Authority chief executive Nic Coward is pleased to see the Levy Board taking some action but would have preferred not to undergo a consultation period.
He said: "We do not believe a consultation is necessary and would have preferred immediate action, but we understand the Levy Board approach and we will of course make a full contribution to the consultation.
"We would urge anyone who cares about the future of racing to do this.
"Betting exchanges have revolutionised the market. Consequently, their impact is a primary concern to the future of the sport, as well as to the future of betting as a whole, and the relationship between the two sectors."
Betfair's legal director, Martin Cruddace, admitted the announcement of the consultation was unexpected.
"We're very surprised by the Levy Board's announcement. This issue of whether betting exchange customers are acting as bookmakers has been the subject of debate since Betfair started," he said.
"After a thorough, independent review of this very issue throughout 2004 and 2005, which took into account full representation from all stakeholders and other Government departments, the Treasury came to the conclusion that the treatment of betting exchanges and their customers was fair.
"Since then, there has not been one scrap of evidence produced by anyone to suggest the situation has changed.
"We are extremely interested to see if the Levy Board is able to run a fair and impartial consultation process bearing in mind that several of their members have publicly stated positions that would seem to prejudge any outcome.
"We are also surprised that any consultation that singles out the customers of one class of operator could be considered fair or lawful where no such distinction is made in any part of the relevant legislation."
The consultation period is due to end on September 20."
Looks like the Levy Board have a bee in their bonnet again re. Exchanges.
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RinTaaramae
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Anyone interested can take part in the "consultation". All the documentation is here.hgodden wrote:Is there something that we can do as stakeholders ourselves in this? Somewhere we can write to and make them aware of the impact (not just on ourselves) that this would cause?
http://www.hblb.co.uk/document.php?id=360
The question they're asking is "are people who make money on Betfair bookies, so we can have 10% of their gross profits in Levy?". It only really addresses people who win on the horses, but obviously if they can "prove" that then the tax people could reach the same finding for every trader on every sport.
To be clear they're not trying to wallop Betfair (who we probably wouldn't feel much sympathy for). They're trying to wallop us.
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andyfuller
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From the Betfair Chat this evening:
Betfair Live Chat 13 Jul 10 18:56
I know you dont like answering hyperthetical questions, but, in overall terms, if the Levy and/or Exchequer, increase the charges you currently pay to them, would you consider going offshore? If not, how will this be passed on to your customer base?
Specifically, will you increase the Premium charge or the base commission rates or some other method?
We believe that the recently announced Levy Board consultation exercise in relation to whether some exchange customers are betting 'in business' is both discriminatory and unnecessary. Every independent consideration of the subject since 2003 has concluded that there is no justification for singling out exchange customers in this respect and there is no evidence that exchange customers, by virtue of their use of exchanges in isolation, are betting 'in business'. We don't expect this review to achieve what interests adverse to betting exchanges have failed to achieve since 2003, so we agree that your question is probably hypothetical!
In relation to passing on any increase in Betfair's tax/levy liabilities, it is probably worth pointing out that the current consultation exercise relates specifically to exchange customers (unlike previous reviews which generally focussed on both customers and exchange operators), so should there be an attempt to impose new charges, it would seem that these will be aimed directly at an undefined class of exchange customers and not to Betfair itself. Betfair's position remains however that the exercise is unnecessary and discriminatory.
Betfair Live Chat 13 Jul 10 18:56
I know you dont like answering hyperthetical questions, but, in overall terms, if the Levy and/or Exchequer, increase the charges you currently pay to them, would you consider going offshore? If not, how will this be passed on to your customer base?
Specifically, will you increase the Premium charge or the base commission rates or some other method?
We believe that the recently announced Levy Board consultation exercise in relation to whether some exchange customers are betting 'in business' is both discriminatory and unnecessary. Every independent consideration of the subject since 2003 has concluded that there is no justification for singling out exchange customers in this respect and there is no evidence that exchange customers, by virtue of their use of exchanges in isolation, are betting 'in business'. We don't expect this review to achieve what interests adverse to betting exchanges have failed to achieve since 2003, so we agree that your question is probably hypothetical!
In relation to passing on any increase in Betfair's tax/levy liabilities, it is probably worth pointing out that the current consultation exercise relates specifically to exchange customers (unlike previous reviews which generally focussed on both customers and exchange operators), so should there be an attempt to impose new charges, it would seem that these will be aimed directly at an undefined class of exchange customers and not to Betfair itself. Betfair's position remains however that the exercise is unnecessary and discriminatory.
Betfair seem to basically be saying, 'we're against these proposed charges, but as they will hurt our customers and not Betfair itself, we're not about to up sticks to Gibraltar.'
The BHB must be delighted about the latter point, as it will mean they won't have to explain to George Osbourne why lots of tax revenue and jobs have disappeared abroad...
Jeff
The BHB must be delighted about the latter point, as it will mean they won't have to explain to George Osbourne why lots of tax revenue and jobs have disappeared abroad...
Jeff
andyfuller wrote: We believe that the recently announced Levy Board consultation exercise in relation to whether some exchange customers are betting 'in business' is both discriminatory and unnecessary. Every independent consideration of the subject since 2003 has concluded that there is no justification for singling out exchange customers in this respect and there is no evidence that exchange customers, by virtue of their use of exchanges in isolation, are betting 'in business'. We don't expect this review to achieve what interests adverse to betting exchanges have failed to achieve since 2003, so we agree that your question is probably hypothetical!
In relation to passing on any increase in Betfair's tax/levy liabilities, it is probably worth pointing out that the current consultation exercise relates specifically to exchange customers (unlike previous reviews which generally focussed on both customers and exchange operators), so should there be an attempt to impose new charges, it would seem that these will be aimed directly at an undefined class of exchange customers and not to Betfair itself. Betfair's position remains however that the exercise is unnecessary and discriminatory.[/i]
I take it you're referring to this sentence?
'We don't expect this review to achieve what interests adverse to betting exchanges have failed to achieve since 2003, so we agree that your question is probably hypothetical!'
Another interpretation would be that Betfair were basically mocking the BHB, and effectively saying 'Good luck, mate, if you think you'll succeed where others have been failing for years!'.
It's not an entirely wise position to take IMHO...
Jeff
'We don't expect this review to achieve what interests adverse to betting exchanges have failed to achieve since 2003, so we agree that your question is probably hypothetical!'
Another interpretation would be that Betfair were basically mocking the BHB, and effectively saying 'Good luck, mate, if you think you'll succeed where others have been failing for years!'.
It's not an entirely wise position to take IMHO...
Jeff
hgodden wrote:Thanks for posting that Andy
I think the main point is that betfair really don't expect any changes to happen