Member Info for JohnLewis79

Sense prevails for the moment. See rns.

Morning bags1. An interesting read especially the para you highlighted. Agree that the COA are extremely unlikely to agree to a Supreme Court appeal by HMRC, on what grounds would they concur with HMRC? That they got it wrong? I don't think so and it seems the Supreme Court will not entertain an appeal that has already been refused by the COA....if I read it correctly? The only reason I can see HMRC taking the case to Strasbourg if indeed they can, is one of pure devilment, ie delaying the payment to Spo. But as you say can they rule on our tax laws? Looks to me this is the end of the road unless HMRC are on a 100/1 shot that wins in a photo? I agree that selling the Pools is the right move so as we can expand in the US where let's face it the opportunities are far greater especially if the FS games business (huge pools like business of the 1960's) gets sorted. I see the Venues business as a great cash cow if they can get the % right (poor atm) and massive scope for lt expansion down the road. There's a lot to like about Spo atm but whether the present management have the skills to jump start an US expansion i doubt. I think once the vat & pools are resolved Penrose should go and lie down on a desert island.....permanently! I know I would! Fully expect the COA to rule this coming week. It's already taken too long of management time and shareholders nerves! The sooner we end these frivolous appeals the better. They should rule: We will allow an appeal. If the court rules against you we will allow one final appeal on the understanding that should you lose double/triple the damages will he awarded to the other party inc costs and other nuisances. That would concentrate minds methinks?

In line with Management expectations...these are the nos to beat. Ebita GP % Racing £17.2 £4.1m 24 Venues £17.0 £1.4m 8 Pools £17.2 £7.4m 43 Group £51.4 £12.9m 25 These nos were slightly down on 14 so expect the interims to be back on the upside ex any vat monies. Check the GP on the Pools.......nice!!

HMRC advised Spo that they would seek permission to appeal the vat verdict on the 4th May. Decision expected within 14 days of that date so could get an rns today, if not next week for certain. I think they will be turned down by the COA however as has been discussed they might appeal directly to the Supreme Court who in my opinion won't take kindly to HMRC 'bending' the rules. Any submission must be in writing and have new evidence or at the least evidence overlooked by the last court... so best of luck with that! I'm sure HMRC will attempt to muddy the waters hoping to confuse the issue through differences and shades of meaning of words. I'd bet that every angle has been minutely explored by HMRC's legal team and are now clutching at straws in a last ditch effort to get a reversal. I think they are going to need a stronger defence of their case than semasiology for the Supreme Court to take notice of, that's my take on the play to date.

Seems there was little said to stir investors enthusiasm at yesterday's agm if share vols (32k) was anything to go by. If we're still negotiating with 'interested' parties I doubt Penrose could say much? However I'd lay you money HG & RG know the score...2-1 2-1 2-1 2-1!!!!!!! Heh heh heh. PS. That was the most bullish update on trading and 'positivities' ive heard from Spo in a long time. I have accused them in the past of talking a good story and not delivering, maybe this time it's different?

All agm resolutions duly passed...can't remember when one was ever rejected by shareholders. Total waste of time of course but heh...gotta shuffle the paper work..know what I mean? Should have heard something by now re Hogg's intentions, Buffet slings a $1BN bet into Apple in the blink of an eye and we're still ******* about re £100m sale. I don't know.... no wonder the city thinks our prospects are ( I'll be polite).. limited!

Should HMRC win the right of appeal or appeal anyway the Supreme Court could take 3-6 months to decide whether to allow HMRC to go to trial. Should they do so the time frame is likely to be a minimum of a year before a verdict. That takes us to mid - ish 2018!! Will HMRC bring to their appeal something they didn't rely on in court last time!?

Generally positive on all fronts ahead of today's AGM. Nothing on Pools sale or progress thereof....someone pull the bod up on this today!!!!

Sads/Gala merger decision by the Competition & Markets Authority is due this week. Likely to get the nod through pending the sale of 400+ betting shops ( from 4000+) to allay the fears of lessening competition on the high street. Jim Mullen is hoping that this time around Sads will be successful after the failed attempt back in 1998. With the Internet now playing such a huge part in the betting business, I'd say competition worries are few............excepting the on line divisions where lots of blood is yet to be spilt!

Why appeal to the Court of Appeal when HMRC have no intention of abiding by the courts ruling.... assuming they turn HMRC down? Seems a waste of time but no doubt have been advised to do so by their legal team. Incidentally have they sent us the money?If not I hope interest will be added if it's not in our account earning us money! We should get an rns to this effect on Monday. Also an update on the Pools situation is long overdue, keeping investors (pis) in the dark this long (the iis know what's going on) is outrageous. For God's sake Penrose sort this out before we're back at 50p.

I read that should the Court of Appeal refuse permission then HMRC can appeal directly to the Supreme Court for a ruling. Jeez what a farce this is but it's not costing HMRC diddly as it's public funds being squandered by the bone heads at the revenue. Still with a free pass, so to speak I guess I would as well if for no other reason than to cause the maximum aggravation to the other party. Cannot be certain that they can bypass the COA so don't take my word for it but should it be so we will be here in 2017/18 twiddling our thumbs. Then as no doubt the score will be 2-2, i guess we can appeal to some orher European outfit taking us into the 2019/20's and by then no one will know what the hell we have been arguing about these last 10 years, which is kinda the whole point of the exercise. Can you bloody believe that a stupid bloody game that requires one to throw a dart at a picture with your eyes closed has taken the best legal brains to come up with "sod the result we'll appeal anyway!" Maybe your a skillful thrower of arrows or useless when it comes to pin pricking but either way the shysters are laughing all the way up Threadneedle St. Perhaps Penrose and others can make a decision re the Pools? Why has he allowed the auction to go past mid Jan? Why has he not set a final day for put up or shut up? Wtf are they doing up in Liverpool?

As expected HMRC will ask the Court of Appeal for permission to try their luck yet again! Decision in c circa two weeks.

Last rns stated....have been given to until 13/5 to apply to the Court of Appeal.... Does not mention what might happen if they miss the deadline. I'd imagine the appeal would fall by the wayside? Cannot see that happening but you never know! Likely a late statement will be issued by Spo.

Seems HMRC are intent on taking this to the wire not that it surprises me as won't their decision to seek leave to appeal the 2-1 loss. You would think they have had their fill of this "'where's the ball" game by now and £97m while a huge sum for us is small potatoes for HMRC! Will the court grant them leave to appeal? As I understand it HMRC will have to provide new evidence to sway the judge? I doubt they can as surely they would have presented it at the 3rd trial? So new grounds for an appeal?......who knows? Unless they can the judge will throw out their submission which should be classed as frivolous. Pity there are no penalties!

This appeal system seems bonkers to me. Surely the courts should say a maximum of 3 appeals will be permitted and only in the case of parties winning a verdict each. Where does this end? Should the High Court grant HMRC another appeal, i take its to the Supreme Court the case will go to the back of the queue and we could still be here in 2017/8 a whole 10 years after submitting our claim! Of course I don't know what ramifications the verdict will have on other cases in the pipeline for instance vat on gaming machines which I think Rank lost but may be appealing? There could be others. So HMRC may be loathe to turn it in if given another chance. Hopefully the court will see sense and refuse HMRC. The time for time wasting is over. Did we not win in extra time? You don't normally have a replay after winning the VAT Cup after extra time has been played......do you?

Ok let's assume we sell the Pools for an okay sum, what does that leave us with? When we bought SG Racing business in 2010 it was always seen as the real earnings driver for Spo and as the Pools business declined we needed a growth business to own and develop. SGR gave us exposure to the US, South American, European and now Far Eastern markets where we process 50% of all bets struck in the US. Added to this a slew of partners & customers to develop our operations from our strong technology base in bricks & mortar, casinos, on line and race tracks. We have a huge competitive edge in Connecticut holding an exclusive license to operate betting on horses, dog racing and on line wagering. We run three venues (more planned) of 50.000 Sq ft with cinema style screens, a bar, restaurant, pool room and big betting emporium. Aimed at a younger audience entertainment is the name of the game and is proving very popular. Similar venues are now in operation in California. The £97m vat windfall will accelerate capital expenditure, acquisitions (DraftDay?) a dividend or a mix of all three. I'd say the Co is very well placed to dominate in the US over time and is not the flagging business the scribblers call us!

Turned out the sp rise was 10 on vat news so spot on for a change. Others I know we're going for 20-30 but probably had not factored in costs, debt and not selling the Pools which is where we are at the moment. Current group debt is c £57m which is reduced by around £6m a year so in effect we have £40m or 19p net if we chose to pay off our debts. Deduct legal costs est at c 2 pps and under that scenario a 10 rise was about right imo. Further sp gains will depend on whether the Pools are sold and at what price. Don't forget we will be losing c 6 months pools profits this year if sold anytime soon, so realising c £4-5 m + £80-100m on the sale. No doubt a hefty tax bill will have to be paid. reducing proceeds even further. If Hogg bids will he want a % of the vat monies or have the Co ring fenced those monies? That could prove a sticking point unless he pays us £200m+ for the whole caboodle ( vat + pools)? I doubt HMRC will want to prolong their decision and I'd expect them to announce that they will appeal on the grounds of sheer bloody mindedness as I cannot see any other logical reason so to do! If the various High Courts are not fed up with deciding the future of an an essentially silly game of pin pricking a picture, then this will run and run. As the FT said...."this smacks of a quantum physics problem devised by Peter Beardsley".......making the dual uncertainty (pick the spot / guess the spot where a bunch of ex players think the ball might have been).......a game of chance rather than skill...... that's the way I see it as do most sensible people including 2/3 judges.

Be interesting to read the judgement re the spb vat case. Did it hinge on the definition of "game" -"luck" -"skill" or a combination of skill & luck which the first trial judge ruled vat free. From memory HMRC opined spb was a game of skill and subject to vat as players trying to work out where the missing ball should be and marking that spot is a game of skill. I'm no expert but to my way of thinking it's a pure guess for after all from a photograph the ball is removed then presented to a panel of judges who decide where to place the ball. Now I have to decide two things: a) where I might place the ball & b) where the judges have placed the ball? So in effect i'm having to guess where they have placed the ball. How could I possibly do otherwise? Thats a pure guess and out ranks any skill element. You may remember that at the second appeal the judge ruled spb was not even a game! Nobody thinks the lottery is a game of skill, yet how many jackpot winners have there been? A lot over the years. Spot the ball has been played for over 50 years, many more than the lottery yet the jackpot has not been won for over 10 years. Surely if spb is a game of skill we would have had quite a few winners these last 10 years? So why have there been no winners? Perhaps HMRC would like to hazard a guess!!

The shareholder spring ( hacked off pis) continued yesterday at Sads agm where 42% voiced their disapproval (against) at the proposed remuneration for Directors. Others who have been given a dressing down by irate shareholders inc BP-Reckitt-WPP- Anglo American- Glaxo & Carillion to name a few. Good to see boards put on notice by shareholders... the days of under performance & over payment may at last be over!

Very disappointing follow up to the paradigm shift in Spo's fortunes after receiving c £97m or 47p which is more than 60% of the mrkt cap going into the Co coffers! Suppose it's understandable awaiting clarification of HMRC'S position but less than 100k broadly neutral trades surprised me. I expected many more bargains after the excellent newspaper coverage. As soon as the HMRC business is concluded satisfactorily and the shares are free of that uncertainty, we should advance to 80-90 which in the short term might be top of the range. If the Pools are sold and i'm beginning to doubt they will be, we might hit 120 which is pretty much what I thought 6-9 months ago. There has been talk of a special one - off dividend, taxable of course and one I would not support as I'd rather the cash remain in the business for future use rather than given to me to spend down the boozer! Close of business next Friday is 'D' day. I expect HMRC to appeal but be turned down the Judge (s) to uphold the Court's verdict.