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Betting exchanges should pay the levy too.
William Hill plc, a major land and online betting group in the UK, has come out in support of a proposal that betting exchanges should contribute to the Horserace Betting Levy Board's finances.
The Board is currently conducting a consultation on betting exchanges, to which William Hill has responded.
In a statement posted on its website, the gambling group observes:
* William Hill agrees with the argument set out in the HBLB consultation document that those who trade by way of business on betting exchanges should be subject to levy
* William Hill contends that the failure to collect levy from business users of betting exchanges has led to a shortfall in funding for horseracing (estimated loss at least GBP30 million per annum)
* Given the well-developed accounting and risk systems employed by exchanges and the classification of different types of user by the exchanges themselves, definitional issues relating to business users on exchanges should not prove to be an insurmountable challenge for the authorities.
* William Hill appreciates the limitations placed on this consultation by the HBLB’s own statutory objectives, but whilst it may be possible to consider this issue purely in terms of extant legislation, there is undoubtedly 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. There is as the HBLB have pointed out, a lack of correlation between tax, levy and regulatory statutes. A coordinated gambling policy requires this correlation.
* 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 business 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 relationship between racing and the betting industry by 2013.
Ralph Topping, William Hill’s chief executive, said that his company was confident that the HBLB would agree with its 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 bookmakers.
"While this disparity exists an unfair competitive advantage remains which distorts the market, resulting in a falling tax yield and dwindling financial support for racing.’’

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