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Gambling Act (On-course Bookmakers)

Thank you for allowing us to have this debate, Mr. Conway. First, I congratulate my hon. Friend the Minister on his new ministerial role and thank him for taking time out to come to the Chamber this morning. People might ask why we are having this debate, because bookies do not have a very good reputation with a lot of people. In fact, they are described as pickpockets who pay people the courtesy of allowing them to use their own hands. That is very unfair, because bookmakers bring a lot to racing, particularly through race track pitches. The last time I spoke in a debate like this, it was the week of Cheltenham and I gave out a tip for a horse, which came nowhere. What I did not realise was that half the staff who work in the Palace had bet on that horse, and some have not spoken to me since then. I want to draw the Minister’s attention to a situation that is of grave concern to all bookmakers operating in the trackside betting industry. Under the Gambling Act 2005, hundreds of bookmakers throughout the United Kingdom stand to lose thousands of pounds in accrued business assets, because the Racecourse Association has decided that, as of 2012, it will no longer acknowledge a bookmaker’s list position. A bookmaker’s list position determines their choice of pitch, or pitches, on a race course. The higher up the list position a bookmaker is, the greater the choice of pitches on any given day. As one would imagine, the position of a pitch on the race course has a substantial effect on the revenue that a bookmaker can hope to make from the day’s racing. Before 1998, such allocations were made on the system of inherited seniority, which enabled the priority of pitch allocations to remain within a given family of bookmakers. That outmoded practice was abolished in 1998, as it was rightly felt that it restricted access to new blood within the industry. Obviously, the concept of any system of inherited privilege should always be challenged in a just and fair society—I am sure that Members of the other place will wholeheartedly agree with that. From 1998, the rules were changed so that a bookmaker’s list position, which at the beginning of that year was still based on the outmoded system of seniority, could be traded. Their greatest asset—the order in which they chose their trackside pitch position—could therefore be sold. That allowed bookmakers to realise the financial worth of years, and often generations, of hard work in the industry. To put that into a financial context, an official of the soon-to-be-defunct National Joint Pitch Council—the body that oversees the allocation of pitches— recently estimated the total value of bookmakers’ positions to be in excess of £100 million, a not inconsiderable sum of money. The change in the rules has allowed established bookmakers to expand their businesses and others to enter the industry. As was predicted in 1998, fresh blood is entering the system and it has worked effectively. The RCA is no doubt aware of the worth of the pitches. Although it is right to say that it owns the physical pitch, it has previously had no say in which bookmaker occupies which pitch. If the RCA were to control the allocation of pitches, the accrued worth of years’ of hard work from bookmakers would transfer to it in the blink of an eye. Many bookmakers have invested thousands, and in some cases millions, of pounds in their list positions. I do not believe that, when the 2005 Act was first proposed, the Government intended to deprive so many individuals of their commercial equity. An article from The Guardian, published on 21 June, mentioned a man named Barry Johnson who had spent £1.25 million to buy 34 pitches in the south and midlands. If we continue to take the present position, that investment, made months ago, would disappear come 2012. If the RCA proceeds as it intends, from 2012, all pitch positions will be rented out on any given day to the highest bidder. That will leave independent bookmakers, regardless of their previous list position, to compete with the larger corporate betting companies that will, no doubt, take advantage of the new system. In practice, we could face a monopoly whereby the big three or four bookmakers would determine the prices not only on the high street but on the track as well. Such a monopoly is not acceptable. To put it simply, many independent bookmakers will have no option but to leave the industry, as worsening pitch positions lead to a loss of revenue. Not only that, but their previous asset, their pitch position, will have zero value. That will render their investment, personal or financial, completely worthless. There is a great danger that our independent bookmakers will be priced out of the market by the larger, corporate betting companies, many of whom would, no doubt, pay whatever cost for the most prestigious positions on a race course. That would have a devastating effect on not only the independent bookmaking industry, but the image of horse racing in general. For those who purchased their list positions after 1998 from established bookmakers, the position is arguably even more unjust. They have purchased their list position at considerable expense and they are being told, despite assurances in good faith when the purchase took place that their list position was for life, that those assets will be rendered worthless as of 2012. Modernisation should not result in the loss of millions of pounds worth of accrued assets for independent bookmakers. When a business has been established and built by a family, either to pass on from generation to generation or as an asset to sell at a later date, surely it is only fair that that family can trade that asset itself. The RCA has made no provision for, or even mentioned, any form of compensation for the bookmakers whose assets will be worthless. Horse racing remains one of the United Kingdom’s best-loved sports and events, such as the grand national, are enjoyed the world over. Our independent bookmakers are an essential part of the industry. They bring a lot of fun and competition to the race track. We in both Houses should do everything in our power to ensure that they can continue in their chosen profession. I believe the RCA’s decision to ignore long-established and regulated list positions from 2012 is not in the spirit of the 2005 Act as intended. When the Act was first proposed, much emphasis was placed on the regulation of casinos. Certain consequences for other sectors of the gambling industry, particularly trackside bookmakers, were perhaps not fully considered. I therefore urge my hon. Friend the Minister to revisit this important issue with the view to retaining the current system of list positions for trackside bookmakers. I fear we are in danger of doing a grave injustice to many individuals who have worked so hard in building up their livelihoods, and I encourage the Government—in particular, my hon. Friend—to address the issue with the utmost urgency.