clarification of levy board argument

I've been following the whole bf vs horseracing and levy board agruement for a while but have been unclear since the start on a few points was just wandering if anyone could clarify a few points for me please

1) I believe it has gone to the government to make a decision - what is the worse case scenario for betfair and betfair customers - what could actually happen?

2) If there was some sort of tax on winnings would it apply to all sports or just horse racing?

3) what do you think the long term effects of this could be?

Thanking you in advance