Court of Appeal holds that customers of betting exchanges are not bookmakers

03/05/13

The Court of Appeal today gave judgment (Moses LJ giving the leading judgment, with whom Maurice Kay and Davis LJJ agreed) in a challenge by William Hill to the decision of the Horserace Levy Board that the customers of betting exchanges, such as Betfair, were not "bookmakers" under the Betting, Gaming and Lotteries Act 1963 and therefore not liable to pay horseracing levy: William Hill v Horserace Betting Levy Board & Betfair [2013] EWCA Civ 487.

Betting exchanges generally "match" the bets of their customers, and take a commission on winning bets. They do not, unlike traditional bookmakers such as William Hill, take any risk on a particular bet. William Hill contended that those customers that were betting in business on the exchange were bookmakers. Stanley Burnton LJ, sitting at first instance, rejected that suggestion.

The Court of Appeal dismissed William Hill's appeal against that decision, but for reasons different from those given by Stanley Burnton LJ. Moses LJ focused on what he regarded as the "traditional distinction between bookmaker and punter" which had been adopted throughout the legislative history of the 1963 Act and its predecessors. In his view, to limit the scope of the statutory definition to those who operate the exchange - as opposed to their customers - preserved the distinction between the "maker" of the bet, and the "receiver" of the bet. That was consistent with the parallel system of statutory regulation, which looked to those who provide facilities for betting, not those who use those facilities.

William Hill also appealed against Stanley Burnton LJ's decision that Betfair should be awarded 25% of its costs at first instance. That appeal was also dismissed, Moses LJ holding that "Betfair had every reason actively to participate to protect its own commercial interests".

Betfair was awarded 50% of its costs of the appeal.

The judgment is here.