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An organised activity to make profits out of the gambling public will normally amount to trading. An example of this is the bookmaker.

In Partridge v Mallandaine [1886] 2 TC 179 a professional bookmaker systematically attended racecourses for the purpose of carrying on that activity; he could not legally recover amounts due to him. He was held to be carrying on a vocation and hence assessable to Income Tax on the profits.

Rowlatt J explained the position in Graham v Green [1925] 9 TC 309 at page 313:

‘It has been settled that a bookmaker carries on a taxable vocation. What is the bookmaker's system? He knows that there are a great many people who are willing to back horses and that they will back horses with anybody who holds himself out to give reasonable odds as a bookmaker. By calculating the odds in the case of various horses over a long period of time and quoting them so that on the whole the aggregate odds� are in his favour, he makes a profit. That seems to me to be organising an effort in the same way that a person organises an effort if he sets out to buy himself things with a view to securing a profit by the difference in what I may call their capital value in individual cases.�

Bookmakers may themselves place bets. Where this is done as part of the trade (‘laying off�), the proceeds or losses have to be taken into account in arriving at their profit.

»Ê¹ÚÌåÓýapp key feature is that the taxpayer is likely to be involved in the organisation of the activity. »Ê¹ÚÌåÓýappy are not mere punters. »Ê¹ÚÌåÓýappy are carrying on an activity where the odds are in their favour.