Mr. Jones: Does the hon. Gentleman agree that the difference between exchange betting and race-course betting is that at a race course one bets on a horse to win, whereas in exchange betting one can bet on a range of things, including place betting and the possibility that a horse will not win?
Mr. Page: The hon. Gentleman has grasped at a stroke the whole principle of betting exchanges. In effect, an individual can be a bookmaker and lay a bet against other people who bet on the horse to win.
Mr. Jones: Does that not open the possibility that if one wanted to predict or bet that a horse would lose, people involved in racing could ensure that that was the outcome?
Mr. Page: Sadly, any form of activity in which money is involved includes such an element.
Sitting suspended for two minutes' silence.
Mr. Page: As I was saying, any activity involving money can be subject to corruption and people fiddling the results. I must say to the hon. Member for North Durham (Mr. Jones) that that is not new. It has not suddenly occurred with the advent of betting
Column Number: 095exchanges. The temptation to fix results in any game or activity has always been there. That is why it is important to have a strong, well funded gambling commission to deal with such problems.
Mr. Hawkins: My hon. Friend is, rightly, looking forward to the day, which we hope will occur if we get this Bill right, on which there will be more and more opportunities for properly regulated gambling to take place through British companies. Does he share my concern and amazement at the Minister's response to me on Tuesday? When I asked whether British companies might be able to have their product on the internet kitemarked to show that they are British, he said that that is not allowed under EU competition law. If he is right, we might lose that opportunity. Does my hon. Friend agree that it has come to a pretty pass if British companies cannot even say that they are British to attract inward investment?
Mr. Page: Although we have our problems and scandals, the gambling and bookmaking industry in this country is of an integrity, style and shape at which the rest of the world looks with envy. Sometimes, we do a little too much breast-beating and saying how terrible things are. If we look at other countries, we can see that we are a shining example of how things should be done. That is not to say that we cannot make them better, but bookmakers and exchanges could be advertised in a way that shows that they are British, as that gives tremendous confidence throughout the world.
However, I will say to my hon. Friend that international gamblers do not suddenly sign up to a bookmaker or an exchange just because they feel the whim to flip through the Hong Kong yellow pages and dial a number. They choose carefully where they are going to place their money.
The Chairman: Order. The hon. Gentleman is letting the hon. Member for Surrey Heath drag him a little astray from the amendment.
Mr. Page: You are absolutely right, Mr. Chairman, and he does it to me religiously every time—this is the third time. When he leads me to speak out of order, I would appreciate it if you slapped him down quicker. That would cut out a lot of work on my part and we would get on much better.
The problem is the relationship, on which the amendment touches, between the ways in which betting exchanges and existing bookmakers operate. There is a big argument about betting exchanges—are they bookmakers or not? As we know, bookmakers have to be licensed. They have to go through integrity tests and be seen to be able to take money, because they will hold stakes and, depending on results, pay out winnings. A betting exchange does not do that. It simply transfers money from one client account to another, taking a small levy on the way, on which it will pay both tax and supporting funds to British racing. It will not surprise me if the largest exchange in the country shortly announces a profit of some £11 million, on which it will pay £4 a million levy to British racing. That is very small beer compared with
Column Number: 096the big three, one of which is about to announce a £220 million profit, not all from bookmaking activities. Of that, some £20 to £25 million will go to the levy. It is important to get the balance right.
The hon. Member for North Durham, who has now left, mentioned integrity. One of the purposes of my hon. Friend's amendment was to probe that issue. The betting exchanges can do one thing that has never been done before—they can have an intensive audit trail. In order to register for a betting exchange, one has to give details such as a credit card number and verification of one's name and address, whereas if one went to a bookmaker in Brighton and said ''I want £5 on Saucy Sue,'' the bookmaker would not look one up and down and say, ''Can I have your name and address? I'd like to see your passport and a current bill for identification.'' The integrity of the trail is greater.
For that reason, the Bill rightly sets up a strong, properly funded, gambling commission. The Jockey Club does not have the powers or the resources to follow through some of the concerns that have been expressed, whereas the gambling commission will do. The sooner we can get the Bill on to the statute book—with the appropriate amendments about destination casinos—the better. It is a matter of regret that those amendments are not before us.
My last point is that I believe that there will be legal difficulties in working out what is a bet. The betting exchanges have been likened to a dating agency. The sooner the legislation is enacted the better—then we can let the gambling commission examine such matters, with the flexibility to propose appropriate rules and regulations. It will also have to tackle some increasingly difficult situations. A number of the bookmakers who have been quite critical of betting exchanges are launching their own betting exchanges. It will be interesting to see where the mix will come, with bookmakers running a conventional book and the betting exchanges.
I am glad that my hon. Friend is not pressing the amendment to a vote, because I would not be able to support it, but he has given the Committee a valuable opportunity to consider betting exchanges. I look forward to listening to what the Minister has to say.
Mr. Caborn: This is an important part of the Bill, as the hon. Members for Surrey Heath and for South-West Hertfordshire (Mr. Page) said. I know that the threat that betting exchanges may pose to the integrity of the sport has been a cause of concern. I have some sympathy with those concerns, but I am convinced that the Government's policy on the future regulation of exchanges will protect the integrity of the sport while maintaining the increased consumer choice that those exchanges offer.
Under the Bill, there will be specific licensing for betting exchanges, with unique licence conditions. It is our policy that those conditions should include mandatory registration of all customers, information sharing agreements—the sporting regulator thinks that the question of integrity is at the centre of things, as I think has been amply demonstrated this morning—and ring-fencing of customer accounts. Anyone laying a horse or a dog on a betting exchange in the course of
Column Number: 097business will require a betting operation license. That will ensure that people cannot use betting exchanges for commercial purposes, as a back-door way of avoiding the need for a licence.
In addition, protection measures appear throughout the Bill and will have the same effect for exchanges as they will for any other betting operator. The Bill already contains provisions to deal with bets that are made unfairly. If the gambling commission is satisfied that a bet is unfair, it can render that bet void and unenforceable. Requirements for a personal licence and the new offence of cheating will act as a further protection for individuals who participate in all forms of gambling activity.
Mr. Page: I am sorry to interrupt the Minister, but have I understood him as saying that anybody laying a horse or a greyhound on a betting exchange would have to be registered? If so, will the small gambler—someone who may bet 20, 30 or 40 times a year and thinks that the horse will lose—have to be registered, or are we talking about people running parallel activities with a bookmaker's licence or heavy users? I am continuing to talk, so that the Minister has a chance to respond.
Mr. Caborn: The advice that I have been given is that all users are registered, by the fact that they lay, and that anyone active in business is licensed.
Mr. Page: That is immensely helpful, although I detect the hand of the Treasury in part of that answer. No doubt the Minister will tell us what ''in business'' means.
Mr. Caborn: I will get the definition of ''in business'', although I think that the distinction is clear—one is registered and one is licensed. If somebody lays that bet, they are registered, and if someone runs a business, they are licensed. I will find what the definition of a business is in the Bill for the hon. Gentleman.
Mr. Moss: This is a critical moment. Legitimate bookmakers, who have a tremendous record in this country, feel that it is possible for someone to run a business through the betting exchange; that is, to use it frequently to lay bets off with other people. We accept that people will have to be registered to participate in the exchange. However, they could run a successful ''bookmaker's business'' without necessarily being required to have a licence. The critical threshold should be turnover, or some other definition of business, so that such people are under the same regulation as the bookmakers. If the Minister cannot answer that critical point today, he should certainly clarify the position. Out there, no one understands the present position.
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