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Gambling Act (On-course Bookmakers)

I congratulate my hon. Friend the Member for Livingston (Mr. Devine) on securing this important debate and the Minister on his appointment. I thank him for giving his time to an issue that affects the livelihoods of so many. I wish to join my hon. Friend the Member for Livingston in bringing it to the attention of the House, as I believe that it will have serious repercussions for thousands of people involved in the bookmaking industry. A bookmaker’s position on a race course has a significant impact on the value of his business. The closer a pitch is to the finishing line, the greater the revenue is likely to be. The bookmaking community has always worked hard to regulate itself to enable the fairest possible system of pitch allocations on race courses. To allocate highly valuable pitches in the fairest manner possible, trackside positions are based on the pick list system, which, as we have heard, replaced the previous seniority-based system in 1998. Under that system, the longer a bookmaker had been operating, the greater their seniority and the better their trackside position. Seniority could be handed down only from father to son, which adversely affected some of my constituents. That was why that method was felt to be outdated in the modern horse racing industry in the late 1990s. The pick system, which replaced seniority, enabled bookmakers to trade their positions on any given pick list with any other individual or business. In other words, their seniority could be sold. Many of the bookmakers that make up our trackside bookmaking industry are family-run businesses that have built up their credibility and reputation over generations—in some cases, over more than 100 years of hard work. Their positions in the pick list reflect that. Due to the close-knit community of bookmakers, each one in an area is aware of and respects the positions of the others. Unfortunately, as in many other family-run businesses that have been established for generations, the younger generation may not wish to continue in the industry. Many long-standing family bookmakers that had operated under the previous system took the opportunity of the new rules to expand their businesses further by purchasing positions on the new pick lists as other bookmakers left the industry. Since the most recent rule changes were introduced in 1998, bookmakers have ensured that each allocation is distributed fairly on any given racing day. The pick system has been respected, acknowledged and adhered to by every bookmaker in the United Kingdom. Whenever there is a change in the law, as was the case with the abolition of seniority, it is right for the House to do all that it can to protect the assets of those affected. Such forethought was applied in 1998, when the initial positions on the pick list were allocated based on a bookmaker’s seniority. As most hon. Members present know, and as the Minister may be aware, there were some disputes about that allocation, but that is not the subject of the debate. While the change in the law has resulted in much-needed new blood entering the bookmaking industry, it was seen as a natural evolution of the previous system. In fact, most bookmakers welcomed it. Their support was guaranteed because we as a Government had ensured that the value of their accrued assets was protected. In 1998 the Government acknowledged that it would be unfair for accrued seniority simply to vanish and evaporate when a bookmaker wished to cease trading. The Government-appointed Horserace Betting Levy Board allowed the trading of list positions, which meant that a bookmaker’s greatest asset—the position of his pitch on a race course—could be sold. The worth of a pitch position can often run into tens of thousands of pounds or in some cases, as we have heard, more than £1 million. A business that had been established for many years was therefore able to benefit from its accrued seniority by selling its list position. That system has worked successfully for almost 10 years and all the bookmakers work to the rule and respect it. As we have heard, and as I have been told by several bookmakers in my constituency, the Racecourse Association will cease to recognise list positions from 2012 as a consequence of the coming into force of the 2005 Act later this year. That interpretation of the Act will cause many in the industry to lose assets that often constitute a lifetime’s work. Indeed, they have already done so simply because of the announcement. Many bookmakers are family-run businesses and a list position can be handed down from generation to generation. The livelihood of children, grandchildren and great-grandchildren of bookmakers has suddenly evaporated, which I am sure was not the intention behind the 2005 Act. Many in the industry see the Racecourse Association’s interpretation of the new rule and refusal to acknowledge pitch positions from 2012 as nothing less than industrial theft. I would hesitate to use such terms, but that is none the less a useful indication of the depth of feeling, as is the number of hon. and right hon. Members here today. Perhaps a good analogy would be that the situation is the equivalent of owning the freehold on a home, only to be informed that not only has the freehold been rescinded, there are now only five years left on the lease. Any such property would be greatly reduced in value, if not made worthless. The situation has come about because the Horserace Betting Levy Board will no longer take any responsibility for the issuing of certificates of approval for bookmakers. Under the Betting, Gaming and Lotteries Act 1963, the price of admission to a race course for a bookmaker has been limited to five times the price of public admission to prevent race courses from charging unrealistic figures for the better-placed pitches. Under the new Act there is no provision for a set amount to be paid by bookmakers to secure a pitch. That has allowed race courses to state their intentions to determine in commercial negotiations with betting operators the terms by which they will stand in relevant areas and where they will stand relative to one another. The result is that following the five-year ““grace period”” allowed for in the Act, from 1 September 2012 race courses will not recognise lists or transfers of picks between betting operators, and the current system of a pick list based on bookmakers’ seniority will be set aside in favour of one awarding placements to the highest bidder. Many family-run businesses will find themselves unable to compete with the larger bookmakers, which are very large organisations. Despite the positions of the family-run businesses on the pick lists, they will find themselves further and further down the track, with the correlating substantial loss of earnings and of the true flavour of the track. For those who have bought their list positions from established bookmakers for considerable sums, the situation is even more distressing. Those who bought them at auctions held by the National Joint Pitch Council were given a clear indication that the placements would be secure for their lifetimes.