Why the Scoop6 fatally undermines the BHA's position
News that someone won the Scoop6 this weekend will probably not strike many people as an obvious spanner in the works of the BHA's quest to get money out of Betfair customers in levy. But in my view, it deals their arguments a huge blow.
If you've missed it, a punter won £663,164 for a £10,000 bet, with a chance to add another million to it (as part of a bonus) next week. Doubtless, this will be characterised as a lucky punter, and the BHA will, if asked, make lots of warm noises about how wonderful it all is. But the reality, I suspect, is rather different.
First of all, this was not, I think it is fair to say, a small bet. I don't know about you, but I wouldn't wager £10,000 myself. I have nothing against people who do - good luck to them - but they are, well, about £9,995 out of my league.
I suspect (without evidence; but hey - the BHA can do it all the time, so cut me a bit of slack) that the punter in question is quite savvy. That suspicion is not entirely unfounded: it is based on the fact that I know people who have won the Scoop6 before; and I know people who bet large sums of money; and I know professional punters who bet into Tote pools all over the world and narrow their chances down something chronic in a way which my poor mathematically-addled brain finds hard to understand. So, I know what makes a successful strategy for some people, and the people in question tend not to be much like me, at least insofar as it comes to placing bets.
Second, the bet was placed on Betfair. So, the plot is thickening: a savvy punter has placed a bet on Betfair, and has come away not far off a million to the good. I can sense the BHA's antennae starting to prick up.
Third, I suspect it is fair to say that some kind of narrowing down of the odds has been done by the punter in question. Why else would you put £10,000 on the line, unless you felt that you were beating the odds? This punter seems to me to fall into the definition of 'shrewd', which the BHA's submission to the Levy Board says is one of four 'techniques' which singles out what it calls 'high volume profitable users' - the people whose money it wants a slice of. (The others, if you're intersted, are "trading", "arbitrage - namely, locking in a profit", and "utiilising bots".)
So, assume that our winning punter falls into all of the first three categories mentioned above: he has placed a large bet, on Betfair, and he's shrewd. Let's say that all his other activity also puts him into the other categories, too: he uses a bot, he trades, and he arbs. The BHA want a piece of him.
But wait! His bet was on the Scoop6: a bet which he could have placed with...er... the Tote. Or anyone else, in fact.
So, let us assume that the BHA has its way. Somehow, it persuades someone who makes a difference that Betfair customers who fall into these catgeories should be subject to levy. What now? Well, the punter who wins £660,000 on the Scoop6 with Betfair has to pay 10% in Levy. But if he places the same bet with someone else - oh, lucky him: he doesn't.
Now, we've already established that the man is a shrewdie. Certainly, we've established that he is at least more shrewd than me. But what would you do in his position? I know sure as hell that next time I bet on the Scoop6, I would place my bet somewhere - anywhere - other than Betfair. The BHA's policy is therefore quite plainly and demonstrably anti-competitive.
I am sure that the BHA will say that they will exclude this type of bet. "No!" they will cry. "It isn't about the Scoop6 at all! People can win the Scoop6 all they like!" But this will show how little they understand about it. It will reveal that they think that the Scoop6 is just for small punters and is like a lottery, when in reality I know someone who has won the Scoop6 three times (or possibly, who knows after reading the weekend's papers, four). The reality of the BHA's position is that they cast around looking for people they can fit into definitions that suit them, and then seek exclusions from those definitions wherever it makes their lives difficult.
Their submission to the Levy Consultation demonstrates as much. Early on (paragraph 3.4), it includes a line which says, "This paper does not seek to identify the level of exchange activity at which a liability to pay levy arises, i.e. the threshold of activity, above which, [sic] one might argue that a user is in business", which is a straight admission that they think that someone changes category from punter to leviable bookmaker by volume (or profit - it is not clear which: the BHA apparently believes that in this category, one equates to the other).
Let's leave aside the implication that the BHA think that I am a passenger on a bus if I take two trips a day, but that if I travel as far as the driver, or get on and off a lot, I need a driving licence (even though I am never at the wheel). Let us concede, instead, that there is an argument for charging profitable people over a threshold, as happens with Capital Gains Tax in share dealings. But where, after that, is the BHA's consistency? The taxman cannot charge a customer of Hargreaves Lansdown and not a customer of Charles Schwab; but on the levy, which (perversely) the BHA wants to separate from tax, apparently they want to argue that you can.
It's a tragedy for racing that the BHA remains at sixes and sevens over an issue which should not be hard to solve. Their quest to fund the sport effectively is admirable; but their strategy is woeful, and its implementation, worse still. If they're trying to say that "anyone who profits by a sum over a given amount on British Horseracing should pay a percentage of that to British Horseracing", it's a fair enough argument. But then they should first say it, and then be consistent in their approach to having it put in place. As it stands, they are doing neither, which is why they have no hope of getting anywhere at all with their arguments. As the Scoop6 has underlined this weekend, any legislator which follows the BHA's suggested path will simply encourage (not to say force) betting customers away from one licensed operator and on to another, in a manner which is directly damaging to the business of the first.
No British government is ever going to sanction that.