Be careful what you wish for: Turnover-based Levy could be brutal for betting exchanges....

We had  this Thread - a few weeks ago  ....

With extensive replies ...

Did you start that Thread, too?
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- and it wouldn't be - "brutal" ...

It would be 'effing FATAL.

I did and, while there were replies, with respect to all here I feel that many - unlike yourself - failed to grasp the gravity of the situation.

The UK tax and Levy status was unclear when betting exchanges first emerged, it took operators a while to convince the relevant authorities that it was the operator - and not the users - who should be taxed and levied.

The Gross Profits Tax and similar profit-based Levy model were very helpful in that respect with operators pointing to gross commission revenue as the gross profit equivalent to a bookmaker's gross profit.

Some online conspiracy theorists - obsessed with the notion racing is now structured to maximise bookie profits - seem to have forgotten (or maybe never knew) all this.

A turnover-based tax or Levy would pose a mortal danger to the entire betting exchange business model.

Any exchange punter wanting this is a turkey voting for Christmas.

And any pro punter wanting this is the biggest turkey of the lot.

I am reading on social media today that it is highly likely a return to a turnover-based model will be considered.

This would be more catastrophic than any other item, affordability checks included, exercising the minds of punters this past year or two.

Who is advocating a turnover based tax? Australian commission is 8% because of it. Why would anyone think it was a good idea?

Indeed - Same Question?

It would suit the bookies, and they are very good at lobbying MP's to get what they want.As you know we have the best MP's money can buy.

"I am reading on social media today that it is highly likely a return to a turnover-based model will be considered."

I understand that the primary news source of young people these days is TikTok and Instagram, but I would rather see a more authorative source of the possibility of such before panicking.

spot on longbridge

There's no end to the greed of racing and the trainers and owners in it. We have other things to bet on now and these things are on tv/internet. Exchange betting would go underground. If this goes ahead many racecourses will close or just become flapping tracks.

In the white paper, the government said it had begun a review of the levy, British racing's central funding system, and would consider reforms including extending it to all international racing, basing it on a percentage of turnover rather than profits, or simply increasing the current rate.4 May 2023

https://www.racingpost.com/news/gambling-review/we-need-a-grown-up-discussion-flutter-raises-concerns-over-levy-reform-proposals-aSZQl2N7Y1j6/

To be clear, this is the UK government stating in a white paper that it had begun a review of the levy in which it would consider basing it on a percentage of turnover rather than profits.

Thanks screaming, that's useful.

'Consider' is a long way from it becoming a real thing or issue.

Turnover will go through the floor with the way the economy is going allied to the fact that people are ever more struggling to get to the end of the month without being potless. KYC impact will see many off.

Is this turnover horseracing and greyhounds [what's left of it] and sports betting alone?

Relying on punters doing their bowlocks in the near future is risky when their bowlocks will have been shredded by KYC, mortgage rises, energy, fuel and food increases.

What they should realise is many of the people betting on horses are 50+ or a bit older and retired. They may have more money than some groups but if the CHANCE of long term  profit is taken away they can easily do something else and many will not care too much if the sport goes down the plughole. What do they care they have had  racing fun all their lives and will be dead soon.

Without doubt, I would stop betting if the betting tax system returns. Running up a steep hill is not my favourite pastime.

Without doubt, I would stop betting if the betting tax system returns. Running up a steep hill is not my favourite pastime.

As Screaming beneath the waves illustrates, this is not something I picked up on, err, TikTok.

But thanks for inferring I'm young - at 60, I'll take that all day long.

I have heard of prominent racing and betting podcasts calling for a return to a turnover-based Levy based on the misguided premise it would benefit punters  - WRONG.

This must be fought at all costs - anything based on exchange turnover would drive commission rates through the roof.

"Considered" doesn't mean "it's happening," but "it's happening" would mean it's too late to change it - "considering" means it's time to make voices heard....while they still can be.

Fair points Getreal.

UK government and Gambling Commission launch three separate consultations on proposals contained in white paper

https://www.racingpost.com/news/gambling-review/uk-government-and-gambling-commission-launch-three-separate-consultations-on-proposals-contained-in-white-paper-ahwoG2u7zSsq/


There's a link there for you to have your say via a feedback form and the commission will pretend to read it it and take on board your imput

Key issue is that people who have a lump sum that they set aside for gambling, which they can lose without causing financial distress, should not be excluded because of an apparent low income.

Cheers Stu - and thanks for posting that link, leif.

The RP wants to hear from the great unwashed

The white paper proposed two thresholds for checks.

The first is a 'moderate loss threshold' at either £125 net loss in a rolling month period or £500 net loss within a rolling year period. At this point indicators of 'financial vulnerability' such as county court judgements, average postcode affluence and bankruptcies will be checked.

The second check will be triggered by what the white paper described as 'binge gambling', a net £1,000 loss in a 24-hour period (or a £2,000 net loss threshold within a 90-day period), and will entail an 'enhanced spending check'.

The Racing Post wants to hear from you. What has been your experience of affordability checks since the white paper was published at the end of April, and what do you think of the government's proposals? Have affordability checks affected your betting behaviour?

It's a chance for your voice to be heard. Email the Racing Post at editor@racingpost.com with the subject 'Affordability checks' to share your experiences, your thoughts about the government's proposals, and your contact details.

Come on. The bookies with their cohort the ineffective Gambling Commission were trying to repent after years of "friendship" because of the impending White Paper on Gambling by being excessively and disproportionately over-zealous in executing Affordability Checks (AC).

If the same AC was utilised in Banking eg Mortgage Application it will cause a crash in the stocks of house builders and ownership. But, the bookies had fobt to rely upon to sustain profit; the only casualty is recreational punters.

The Racing Post is very vocal and supportive of bookies on AC asking for punters experiences with AC. I'd like to see the same commitment and voracity on bookies restriction and closure of recreational betting accounts.

Until then The Racing Post gets nothing from me on this.

How does a tax on turnover work if you lose?

The whole system is going into fantasy land.


Surely if you deposit, and withdraw by card
a bank can decide what can be afforded, even
if bookies have to keep an eye on losses if
you've built up a pot and start gambling
"recklessly" .

How does a tax on turnover work if you lose?

You can't be very old or a bit thick. If you back 100% losers no change to your betting. As soon as you back a winner you pay tax.

"a bank can decide what can be afforded "   PMSL

All those who punted each and every afternoon in the LBO's in the 9% tax times and who were adamant that they broke level ( the assertion of the majority) must have been genuises. Happy memories though.

The biggest problem is  over £1000 loss  in 24 hours. That's nothing for a serious backer that could be well in profit over  weeks/months. Such a person could have a modest income eg pension  but a load of cash savings. But do you want to give details of savings ?

Well, yes. If you punted each and every afternoon ...

If you punted best prices where you spotted a rick, then it was a damned sight easier to turn a profit with 9% or 10% tax and 130% books than it is now. Simply because there WERE ricks. The shops didn't have this rotten place telling them what odds to offer.

How the hell did dave90210 manage to divert this into people arguing about affordability checks. This is nothing at all to do with affordability checks. Nothing.

It's about the levy changing from 15%(?) of bookmaker profits to, I suppose, 1.5% of punter turnover.

So a turnover tax only kicks in
If you make a profit?

What happens if I lay Biden at 1.50
and Trump at 3 few a few grand and
make a small profit laying pence at 50
and Harris at 10 on same book.

Do I get taxed on Biden and trump bets too?

Seems as if it wouldn't be worthwhile.

Bookies made lots of ricks on sports
and even took bets on golf courses tax
free and often took golf bets on racecourse
tax free.

I could even bet tax free at Durham cricket.

Seems as if it wouldn't be worthwhile.

At last. You got there in the end!

I think I was already there to be honest.

It's fantasy that it works.

Of course it works. It worked for decades. Just doesn't work with a betting exchange, that's all.

In the days of turnover tax, bookmakers passed it on and punters either paid 9% (or even 10%) tax on returns or avoided that by paying the tax on the initial stake.

Betting exchanges have thankfully never had to operate under a turnover-based system in the UK but, if they did, and Betfair was taxed on the turnover on its site, and not it's gross commission levels, I could see the commission rates here going through the roof.

Same principle if there was a turnover-based Levy.

This, to me, is a bigger threat to punters than affordability checks or anything else that's looming in this sphere.

As this is still only being considered hopefully the wider business issue of a failing exchange system might be considered?

I still don't quite believe any government would want to ruin the betting industry completely would it?

Yes worked in past under different circumstances.

Big bookies would doubtless manage too
if it was brought in, by passing on
costs to punters in poorer prices, which
they could easily do if exchanges went, or became
bookies money only.

They still earn/tax from a functioning industry don't they?

I think bookies would ultimately fail if the exchanges completely collapsed personally - you can't rewind the history of the betting industry IMO. Not enough generation of business left without the exchanges IMO.

Though casinos might still exist (i.e. ex-bookies).

All correct from screaming. The last sentence is the interesting one. Because with today's tech and tech savvy backers we are in a different world. A smartphone world or in to the bookies to give them your £100 + £10 tax ?

Industry would function better for
big bookies, that wine and dine mps of
all parties, if them pesky exchanges
with their 101% books disappeared

Gambling on sport and racing is in decline - bookies wouldn't have enough business IMO from that alone. Let's not forget they use exchanges too in various ways.

Punters are not going to put up with paying 10% tax again or anything like it. And shortening their prices instead won't work either.

The 100s of bookies will be fighting each other for the 50 or so punters bothering anymore...it wouldn't last.

Oh, and of course the racing industry then also closes...yep good job.

All taxes collected from all the above for the government suddenly becomes a big fat...0

screaming from beneaththewaves • July 26, 2023 5:57 PM BST
How the hell did dave90210 manage to divert this into people arguing about affordability checks

prick

Given that, I think it's fair to say, everyone on this thread has a common vested interest in the current method of taxation/Levy remaining unchanged, being offensive to one another, or even acting patronisingly as we're more knowledgeable or intelligent than others, isn't particularly helpful.

If we all go our own individual ways we may all go the same way in the end.

I'm as cynical about consultation processes as anyone, but participating is a free bet so I hope as many here as possible have their say.

There are people in charge getting paid big money. Let them make the right decision or the wrong decision. Nearly all of us don't NEED racing ( for a living ) But as I have said they better realise we now live in a high tech high communication world.

As long as racing income is directly depending on bookmaker profits it's always going to be sport that's high on quantity and low on quality. So I don't see GPT as the answer unless racing can do a lot more to stand on its own two feet.

"There are people in charge getting paid big money. Let them make the right decision or the wrong decision."

There is a consultation - it takes less time to participate than it did to type that Pontius Pilate sentence.

I think what is being mooted represents a potential threat to the entire UK betting exchange business model.

I hope plenty here don't leave it to others, but have their say.

We are the consumers. It is up to business to get their product correct. They have to do the fighting or they are out of business. It might be a case of "worse is better " what with the nanny state spending checks on top.