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On-course Betting

The right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) has usefully drawn attention to a subject of considerable interest to his constituent, which he has tenaciously prosecuted for a long time. I acknowledge other hon. Members, too, with an interest in horse racing or bookmaking. As the right hon. Gentleman will appreciate, it would be inappropriate to comment on any particular allegation, but it is right that I should address the serious allegations that several right hon. and hon. Members have raised. I agree with the right hon. Gentleman that on-course bookmaking must be properly regulated, and I hope that my contribution will show some ways of ensuring that that will happen. It is also essential that gambling remains crime-free and that it is carried out in a fair and open way. Those things are the basis for, and the key objectives of, the Gambling Act 2005, which now covers this area. It will bring bookmakers within the jurisdiction of a new national regulator, the Gambling Commission, for the first time. I will come back to that point, but perhaps it would be useful if I were to start by outlining the history behind the establishment of the National Joint Pitch Council, the involvement of the Horserace Betting Levy Board and the Government’s association with those bodies. As the right hon. Gentleman will know, the levy board is a non-departmental public body, NDPB, that operates in accordance with the Betting, Gaming and Lotteries Act 1963, as amended. Its main functions are to collect payments from bookmakers and use them for the three statutory purposes set out in the 1963 Act: the improvement of breeds of horses; the advancement or encouragement of veterinary science or veterinary education; and the improvement of horse racing. Since 1972, the board has also had responsibility for issuing certificates of approval to race courses, providing for the location of betting rings for on-course bookmakers. At that time, the National Association of Bookmakers had responsibility for the administration of betting rings, under an agreement with the Racecourse Association, the RCA. However, in 1997, after seven years of disputes, that agreement was terminated by the RCA. To ensure that betting rings were properly administered after the termination of the agreement, the levy board instigated a review. Following extensive consultation, the review recommended that a new administrative body should be established. It was to be known as the National Joint Pitch Council. It is a condition of the levy board’s certificates of approval that race courses observe the national pitch rules that the board has endorsed. The NJPC is not a public body, but a company limited by guarantee. Its functions are essentially administrative and relate to the conduct of bookmakers on race courses. In particular, the NJPC has introduced much-needed modernisation into the betting ring. The right hon. Gentleman has suggested that the introduction of the auction of on-course betting pitches has allowed crime to infiltrate that market. He has further implied that the NJPC has turned a blind eye to that infiltration. I should remind him that the auction of pitches was implemented by the NJPC, at the request of the levy board, to ensure greater freedom and transparency in the on-course market. I should further remind the right hon. Gentleman that the fact that pitches are auctioned demonstrates that the process is transparent, since auctions take place with scores, if not hundreds, of people present. Pitches may be bought and sold only by bookmakers who have permits issued by the magistrates court and who are then subject to further NJPC authorisation hurdles. The right hon. Gentleman suggested that he could supply evidence. If that is the case, will he please provide it? We would refer it to the right people, be that the police or the new Gambling Commission. The system was a marked improvement on the dead man’s shoes arrangement that existed pre-1998, and the vast majority of people said that that was so. Furthermore, the Office of Fair Trading looked into the operation of the on-course market and found no problems with the auction arrangements. The right hon. Gentlemen has also implied that organised crime groups might be forming cartels to influence the starting price used by off-course bookmakers across the country. Again, it might be helpful if I were to explain a little about how starting prices are set and used. In 2004, the method used for setting the starting price was revised by the starting price regulatory commission—an entirely independent body chaired by Lord Donoughue. At that time, he stated that his priorities for the new system were total transparency and integrity. Indeed, he insisted on opening up the new system to press scrutiny during its testing period and, to this day, the starting price for each race is overseen by an independent starting price validator employed by the Press Association. The importance of the starting price is that it is used in licensed betting offices up and down the country. I should remind hon. Members that the off-course industry is under no obligation to use the starting prices from on-course bookmakers. It is widely considered that the starting price arrangements benefit the customer because the on-course market is highly competitive and highly efficient, and therefore drives down off-course margins. It is perhaps for that reason that some bookmakers are beginning to consider setting their own starting prices without reference to on-course prices. If the right hon. Gentleman has any evidence of criminal conduct concerning the setting of starting prices, I urge him to draw it to the attention of the police.