Memorandum submitted by John White
1. INTRODUCTION
I am an independent racecourse bookmaker, in
partnership with my son, who is the fourth generation of the family
in the business. I have been engaged in racecourse bookmaking
since 1965, taking over from my father in 1979. My son joined
the business in 1994. In 1980 I was appointed to Tattersalls Committee.
This Committee is the only arbiter recognised for the adjudication
of gambling disputes by Law. Its "Rules on Betting"
are accepted by the Gambling Commission and quoted within their
conditions of trade.
2. HISTORY
Prior to 1998 the allocation of pitches on a
racecourse was effectively "deadmans shoes". There was
never a question of this allocation being for a period of time,
it was accepted by the Bookmakers and the Racecourse Association.
I am sure the Committee will be aware of the changes made in 1998
when the Horserace Betting Levy Board set up the National Joint
Pitch Council. The Chairman of the Levy Board encouraged bookmakers
to invest in the purchase of seniority positions on racecourses
by way of auction. The reason was to inject new blood into the
betting rings, which had stagnated under the old regime. It was
never suggested that these purchases would have a time span placed
upon them. From the very first auction back in 1998 many millions
of pounds were invested by this new blood. The possibility of
recouping this investment within a short time was impossible;
they were bought as a long-term investment, with the understanding
that the pitches could be sold at retirement or death.
3. PERSONAL POSITION
The system used to allocate positions to existing
bookmakers in 1998 affected me because I had inherited my positions
from my father. It placed me in inferior positions to the positions
I originally had on the bookmaker's lists. However, the new system
allowed the purchase of any position offered for sale. My son
and I resolved to sell existing positions and purchase better
ones when they became available. We were always, from day one,
buying these "picks" on the understanding they were
ours to deal and sell as appropriate. We used a combination of
profits and assistance from our bankers—we are still in
debt to them, to finance these purchases. The purchases were made
with my son in mind. He is in his mid thirties. They were bought
for his future in the business. At that time we were never made
aware that there would be a "cut off" point in these
purchases. If any bookmaker had been aware of the Racecourse Association's
proposed confiscation of the bookmaker's lists in 2012, the sale
prices would have been a fraction of the prices achieved. The
National Joint Pitch Council has received millions of pounds in
commission on buying and selling of "picks". Indeed,
it was this commission that financed the NJPC—they needed
this buoyant market. This market could only have maintained its
value if the "picks" were an effective freehold. Prior
to the RCA announcement in March this year our "picks"
had a value on the NJPC tariffs of £300,000, with a national
total estimated at c £100 million. This figure was a "fire
sale" amount, however I would estimate a current value post
the announcement of 33% of the tariff figure. This figure will
obviously diminish as 2012 approaches. As matters stand, post-2012
we will have a business with no value and we will then be expected
to bid, on a yearly basis for the "picks" we currently
hold. The proposal to bid on a yearly basis is in itself unfair.
In any one year a bookmaker can win at a track, yet the following
year not generate any profit at the same track. Our profits are
based on the sum total of all the tracks in which we operate,
within any one year. It does not follow that a decent profit is
made at all tracks every year. This yearly bidding system could
cause many bookmakers to leave the industry altogether.
I have discussed all the above with my MP, Crispin
Blunt. He came to the decision that the proposals by the RCA were
an injustice and spoke on our behalf at the Private Members Debate.
4. LIKELY EFFECTS
OF THE
RCA PROPOSAL
As stated above in Para 3, I fear the likely
outcome of the RCA`s proposal will result in a considerable number
of bookmakers leaving the industry. This is already evident by
the racecourse attendances of bookmakers with low "pick"
numbers. It has been very noticeable in the last six months that
bookmaker attendances are in decline, with the exception of the
festival meetings.
I can envisage the major bookmaking organisations
operating from the best positions on racecourses, regardless of
cost. This will result in the majority of bookmakers operating
from positions that will become unworkable, with the "big
battalions" in front of them.
The above scenario will undoubtedly have a detrimental
effect on the Public. There will be far less choice for the Public
and the profit margins will increase in the bookmakers favour
off course, where the major bookmakers generate their profits.
5. SECURITY OF
TENURE
As stated we have been actively engaged in improving
our racecourse positions for 10 years. In 1998, when the Horserace
Betting Levy Board set up the NJPC, no official told bookmakers
that these purchases were not sine die. There have been at least
50 auctions and many thousands of private sales since 1998—not
once was the subject of a term end mentioned. In fact the National
Joint Pitch Council were taking commissions on sales right up
to the day the RCA proposal was announced—despite the fact
that two NJPC directors were RCA appointees. I can safely say
that the whole industry was in a state of shock when these proposals
were announced. We could not believe any fair minded trade association
could treat a body of people so badly. We do not believe it was
the intention of the Government for this to happen.
6. GOVERNMENT
ROLE FOR
THE FUTURE
The Gambling Commission was set up when the
decision was made to wind up the Horserace Betting Levy Board
in 2009. The legislation was drawn up with the expectation that
the HBLB would cease to exist. In addition the "five times"
rule was placed within the Act to protect racecourse bookmakers
from excessive charges prior to 2012. The Levy Board has the power
to approve designated betting areas, which, in effect recognises
the "pick" lists. The Gambling Commission gave this
authority to local councils, effectively removing that recognition.
However, as the Levy Board is now to continue, it would seem appropriate
to give the licensing of betting areas back to the HBLB. Would
this not remove the threat placed upon bookmakers by the RCA?
The "five times" rule will cease in
2012. I believe bookmakers do expect to pay more per day for the
right to bet at a racecourse. However, this amount has to be a
reasonable sum to allow a bookmaker to trade profitably. If the
RCA imposes a swingeing increase in the daily "rent"
a scenario as proposed in Para 4 will undoubtedly happen.
I do not believe it was the Government's intention
to place us in this position. The "picks", bought at
auctions, which were set up through the good offices of a Government
body, The Horserace Betting Levy Board, were considered by be
in perpetuity. There was a promise of a comfortable retirement
or a passing on to the next generation. If this outrageous proposal
of the RCA`s is allowed to take place it will be a travesty of
justice.
October 2007
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