Betfair response to HBLB Consultation Exercise Re betting exchangesIn this Response the following abbreviations are used: BC" The Bookmakers’ Committee. “BHA” The British Horseracing Authority. “The Board” The Horserace Betting Levy Boat “The Commission” The UK Gambling Commission. “Consultation” The consultation exercise ated by the Board in July 2010. “The Code” The Code of Practice on Written Consultation. “CP” The Betting Exchanges Consultation Paper issued by the Board in July 2010. “HM Customs” Her Majesty's Revenue and Customs. “DCMS” Department for Culture, Media and Sport, “exchanges” Betting Exchanges. “GPT” Gross Profits Tax. “Levy” the British Horserace Betting Levy. “the Minister” The Secretary of State at DCMS responsible for betting and racing. “Racing” A combination of the BHA, the Horsemen's Group and and the Racecourse Association. “Sporting Options” R (on the application of Sporting Options) v Horseracing (sic) Betting Levy Board [2003] EWHC 1943 (Admin Hooper J).. “HM Treasury” Her Majesty's Treasury. "1963 Act” Betting, Gaming and Lotteries Act 1963. “1981 Act” Betting and Gaming Duties Act 1981. "2005 Act” Gambling Act 2005.Ex Betfair is of the view that no customer of a betting exchange should be regarded as being a leviable bookmaker, solely based on his or her exchange betting. In support of that stance and in respect of the Consultation it makes the following four primary submissions in this Response to the CP: 1. The First Submission: customers of betting exchanges are not bookmakers by reason of the fact that they bet on an exchange. Indeed they are in no different position from those who bet on other betting platforms. They are incapable of falling within the definition of a “bookmaker” as found in s.55 of the 1963 Act for they are not in business; nor do they receive or negotiate bets. Moreover they are not “leviable” bookmakers under s.27 of the 1963 Act as they are not involved in “effecting” betting transactions. The details of this Submission are set ‘out at para 5 below. 2, The Second Submission: the CP covers ground which has been exhaustively examined by a number of public authorities over the last 8 years. Each has (correctly) concluded that exchange customers do not fall into any special category so as to render them bookmakers either for duty/tax, regulatory or Levy purposes. No reason exists now to change that view. ‘The Consultation is therefore unnecessary and it is inconceivable that it can be of any cogent use as a result of a mere 12 week “process”. This Submission is expanded upon in para 6 below. 3, The Third Submission: Betfair submits that the terms in which the CP has been drafted indicate that the Board is acting in a biased manner and not in accordance with Its statutory remit. In particular much of the CP content suggests that the Board has allowed itself to become improperiy aligned with, unduly sympathetic to and inappropriately supportive of the claimed interests of Racing. In publishing the CP in its current form the Board has failed to act as a responsible public authority. See para 7 below for specific arguments in support of this Submission. 4 he Fourth Submissio1 Betfair submits that the decision to issue the CP, the Gircumstances surrounding it coming into existence, its discriminatory focus, the hostility towards exchanges demonstrated by the Board and the failure of the CP to adhere to the Code are separately and together indicative of the fact that the Consultation is and has been since inception, fatally flawed. The CP exists in order for the Board to present itself as open- minded (when in fact it is not); to provide procedural cover for a wished-for conclusion, irrespective of whether evidentiary support for it can be found, See para 8 below for specific arguments in support of this Submission. ‘The Final Submission and the Final Conclusions are contained within paras 9 and 10 below. 2