William Hill Organization Ltd, R (on the application of) v The Horserace Betting Levy Board & Ors, England and Wales High Court (Administrative Court), Judgment, Law, casemine.com

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Attorney(S)

Dinah Rose QC and Ben Jaffey (instructed by Olswang LLP) for the Claimants
Lord Pannick QC, Michael Fordham QC and Fraser Campbell (instructed by Herbert Smith LLP) for the Defendant

Judges

LORD JUSTICE STANLEY BURNTON

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William Hill Organization Ltd, R (on the application of) v. The Horserace Betting Levy Board & Ors

Smart Summary

Factual and Procedural Background

The Claimant seeks judicial review of the decision by the Horserace Betting Levy Board ("the Board") that customers of betting exchanges are not required to pay the horserace betting levy pursuant to section 27 of the Betting, Gaming and Lotteries Act 1963 ("the 1963 Act"). The Claimant contends that the Board's decision was based on an incorrect interpretation and application of the 1963 Act and should be quashed for legal error. The case concerns the statutory interpretation of whether persons entering betting transactions through betting exchanges are "bookmakers" liable to pay the levy. The Board, a statutory body responsible for administering the levy, decided that such persons are not bookmakers within the meaning of the Act, relying on legal advice. The Claimant, the largest operator of betting shops in the UK, challenges this decision. Several interested parties were involved, including trade associations and the leading betting exchange operator, some supporting the Board's decision and others supporting the Claimant. The proceedings culminated in a hearing where the Claimant remained the sole claimant after a commercial agreement led another claimant to withdraw.

Legal Issues Presented

Whether customers who enter into betting transactions through betting exchanges in the course of their business are "bookmakers" within the meaning of section 27 of the Betting, Gaming and Lotteries Act 1963.
Whether the Board's decision, based on legal advice that such persons are not bookmakers liable to pay the horserace betting levy, was legally correct.

Arguments of the Parties

Appellant's Arguments

Business users of betting exchanges "receive bets" within the meaning of the 1963 Act and thus are bookmakers liable to pay the levy.
Equated "receiving bets" with entering into betting transactions, arguing that there is no logical basis for exempting betting exchange users from levy liability while traditional bookmakers remain liable.
Highlighted the absurdity of the current situation where betting shops pay levy but betting exchange users do not.

Defendant Board's Arguments

The statutory definition of bookmaker was intended to encompass those who offer facilities for betting, not those who merely place bets on betting exchanges.
The 1963 Act imposes criminal sanctions on bookmakers who are not licensed, requiring a strict construction of the term "bookmaker".
A person is "receiving or negotiating bets" if they facilitate or arrange bets for the public, not if they merely enter into bets arranged by others.
Accepted legal advice from senior counsel that betting exchange customers are not bookmakers under the Act.

Second Interested Party (Betting Exchange Operator) Arguments

Adopted the Board's submissions, supporting the decision that customers of betting exchanges are not bookmakers.
Highlighted that betting exchanges themselves are bookmakers and pay the levy, but their customers do not carry on the business of receiving bets.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Royal College of Nursing of the UK v Department for Health and Social Security [1981] AC 800	Principles of statutory interpretation where new facts arise that were not envisaged by Parliament.	Used to guide interpretation of the 1963 Act in light of betting exchanges, a new phenomenon not foreseen at enactment.
R (Quintavalle) v Secretary of State for Health [2003] UKHL 13	Confirmed the approach to interpreting statutes in changing factual contexts and emphasized giving effect to Parliament's purpose.	Reinforced the method of statutory interpretation applied to the 1963 Act regarding betting exchanges.
R v Gambrell (unreported, 1981)	Clarified the meaning of "negotiating bets" and distinguished between bets made with and bets made by a bookmaker.	Supported the view that merely making bets does not constitute being a bookmaker under the Act.
Bland v Cowan [1963] 2 QB 735	Interpreted "receiving bets" as dealing with punter's winnings, indicating a post-bet function.	Confirmed that receiving bets involves accepting bets placed, supporting the distinction from merely making bets.
Graham v Green [1925] 2 KB 37	Distinguished a professional gambler from a bookmaker for tax liability purposes.	Confirmed that a person making bets for personal gain is not a bookmaker carrying on a business of receiving bets.
Attorney General v Luncheon and Sports Club Ltd [1929] AC 400	Held that a party who cannot win or lose on the outcome of a bet is not a bookmaker.	Distinguished the role of a betting exchange operator from customers; the former may be bookmaker, the latter not.
Seay v Eastwood [1976] 1 WLR 1117	Confirmed that providing gaming machines without making bets with customers is not bookmaking.	Supported strict interpretation of bookmaker as one who receives or negotiates bets, not merely facilitates betting.
Cozens v Brutus [1973] AC 854	Referenced regarding the linguistic register and statutory interpretation of betting-related terms.	Supported the ordinary meaning approach to the statutory terms in the 1963 Act.

Court's Reasoning and Analysis

The court undertook a detailed statutory interpretation of the term "bookmaker" as defined in the 1963 Act, focusing on the meaning of "receiving or negotiating bets." It emphasized that the Act was designed to impose levy liability only on those carrying on the business of receiving bets, not merely those who make bets. Historical legislative context, including earlier statutes and Royal Commission reports, was examined to understand Parliament's intent. The court rejected the Claimant's argument equating making bets with receiving bets, noting the clear distinction in statutory language and case law.

The court also considered the nature of betting exchanges as internet-based platforms facilitating bets between users, where the exchange operator acts as bookmaker but customers do not receive bets from others in the statutory sense. It accepted that betting exchanges were not envisaged when the 1963 Act was enacted and applied established principles for interpreting statutes in light of unforeseen modern developments, emphasizing the importance of a strict construction due to the criminal sanctions involved.

The court found that business users of betting exchanges do not carry on the business of receiving bets and therefore do not fall within the statutory definition of bookmaker liable to pay the levy. It distinguished between those who operate betting facilities (bookmakers) and those who merely place bets through such facilities. The court also noted practical difficulties in identifying liable persons do not justify expanding the statutory definition.

Consequently, the Board's decision, based on legal advice that betting exchange customers are not bookmakers under the 1963 Act, was upheld.

Holding and Implications

The court DISMISSED the Claimant's application for judicial review.

The direct effect is that customers who enter into betting transactions through betting exchanges are not liable to pay the horserace betting levy under the 1963 Act, as they are not "bookmakers" within the statutory meaning. No new precedent was established beyond affirming the strict interpretation of the statutory definition of bookmaker in the context of modern betting exchanges.