Memorandum submitted by Michael Martin
Campbell
1. I am divorced and live with my partner.
I have a daughter aged 14 years who lives with me.
2. I was born and brought up in Ballymena,
Northern Ireland. On leaving school I attended University of East
London, graduating with a degree in psychology. I then went to
work in the City of London.
3. I worked in the City trading financial
options. I started trading in options first with a Dutch company
in December 1988. I stayed with them until 1993 when I set up
business on my own account, trading options in German government
bonds, Italian bonds, UK gilts and UK short Sterling futures.
4. In 2000 I accepted an approach from BP
to become their UK gas and electricity options trader. I continued
in that position until October 2004.
5. I have had a lifelong interest in horseracing.
I learnt of the opportunity to acquire racecourse pitches in 1999.
I considered combining my lifelong love and hobby, racing, with
a job. I read the press articles at the time and made extensive
enquiries as to how the system of pitch sales took place and how
pitch rights were acquired and what rights a purchaser would acquire.
Inter alia, I telephoned the NJPC and had a lengthy conversation
with one of their officials He told me that it was now possible
to buy and sell pitches. When I asked why this power had not been
there before, he said it had only recently been decided on and
approved by the Horse Race Betting Levy Board, together with the
Racecourse Owners Association and the Bookmakers' representatives
and it was now possible to buy and sell pitches. When I asked
why this power had not been there before, he said it had only
recently been approved and that it had come about as a result
of a Levy Board Directive. Obviously, that statement gave me complete
assurance, in light of the high reputation of the Levy Board and
the fact that it was the statutory body established by Parliament
with overall responsibility for racing and licensing race-tracks.
6. I was led to understand that the NJPC
was a company guaranteed by the Levy Board and the arrangements
over pitches had been set up so that they were self-financing
since the auctions provided considerable income. I was also led
to understand that the arrangements imposed and/or agreed between
the Levy Board and the Racecourse Owners Association meant that
the pitch rights which one could buy and sell through the NJPC
for any particular racecourse were rights which would continue
in perpetuity (unless a race course was closed down). There was
no indication from anyone on the part of the NJPC that the rights
could be done away with or rendered valueless at any time in the
future by any of the parties which had set up the new pitch arrangements
or by the Government which had legislated that horserace betting
would be regulated by the Levy Board.
7. I also understood that the system was
regulated by the requirement in the Certificate of Approval issued
by the Levy Board to each racecourse owner that they had to operate
the NJPC's Pitch Rules. The Pitch Rules were central to the system
by which on-course book-makers could operate at any race-meeting.
8. I wanted to see how the process worked.
I went to pitch auctions. The first I attended was at the Marriot
Hotel, Waltham Abbey and, later, the Marriot Hotel, Bristol. The
system seemed to be straightforward, there was open bidding for
the pitches. I looked at the prices for which they were being
sold to give me some guide as to the amount I should offer should
I decide to buy. The prices were substantial, but that reflected
the fact that the rights being sold were perpetual ones and could
be traded on to third parties at any time through the NJPC's detailed
Pitch Rules.
9. I then checked the figures produced by
a bookmaker, Steven Little, He had been a licensed bookmaker and
had a list of all the pitches bought and sold at every auction.
10. I decided to buy pitches and acquired
pitches for the Cheltenham Festival and Aintree. The purchase
price for the two pitches was some £53,000 in 1999. I took
monies out of my SIPP to deal with the acquisition of the pitches
to begin this new venture. For that purpose I formed Paddy Campbell
Racing Ltd. I continue to trade through Paddy Campbell Racing
Ltd.
11. Obviously, after making proper inquiries
and satisfying myself regarding the pitch rights which I would
be buying, and before buying any pitch rights, I determined to
become a bookmaker. The process took up some six months during
1999. I had to submit my application and experience and then appear
before the NJPC for them to determine whether I was a fit and
proper person.
12. To start with I worked part-time as
a bookmaker by combining my work as the options trader for BP.
My initial years were very successful and in 2004 I decided to
become a full time bookmaker, which obviously meant a complete
change of lifestyle. By that time, I was tired of the City and
its stress and the travel which I had to do. My bookmaking business
had done reasonably well and by 2004 I felt able to work full
time, although the financial rewards were going to be significantly
less than if I had continued in the City.
13. I would not have taken up bookmaking
full time unless I had been led to believe that, by virtue of
the pitch arrangements put in place by the Levy Board, the RCA
and NJPC, I would achieve a reasonable standard of living for
my family and would be able to enjoy the benefits of the pitches
which I had acquired at considerable cost.
14. Between 1999 and 2004 I built up the
number of pitches to ensure I would be able to go into racing
full time. The pitches I currently own are on the attached list,
marked "A".[3]
I have sold some of the original pitches. I had, such as the one
at Cheltenham, to improve my position overall. I had largely established
the pitches that Paddy Campbell Racing Ltd owned by 2004, but
there has been some fine tuning since then.
15. At no stage before I became a fulltime
racecourse bookmaker was there any Press or other coverage which
could have led me to the view that it was possible that my security
of tenure of the pitch rights would be attacked. If that had been
a possibility, I would not have risked my money on an uncertain
future.
16. When the RCA made their announcement
in the Spring 2007 that they regarded security of tenure as lasting
until only 2012, there was considerable alarm among the racecourse
bookmakers whom I know. Pitches that I had wanted to acquire for
some time, but were too expensive, suddenly become available.
I believed the position would be resolved very quickly because
I believed that we had perpetual rights, safeguarded by the Levy
Board and the NJPC. I bought two pitches at well below the normal
market price, because of the collapse in the prices achieved at
auction, One of those pitches is at Newmarket Rowley Mil, which
I bought for £30,000 (it should have been worth at least
£50,000). I had been trying to buy it for two years prior
to the RCA announcement. I also acquired a pitch at Newmarket
July Course at a fraction of its previous value.
17. I consider now that it would be foolhardy
for anyone to invest further money in acquiring pitches, in the
current uncertainty and the threat that the pitches may almost
be valueless. Together with my initial investment from my SIPP,
I have invested about £525,000 in purchasing pitch rights.
18. The attached list marked "A"
sets out the acquisition price for the pitches. There is also
attached a list marked "B" with letters from the auction
manager of the NJPC confirming the identify of the Vendor/Buyer
and the list position acquired.[4]
19. The NJPC have currently marked down
the price of pitches by some 50%. Therefore the value of my pitches,
acquired for about £525,,000, is now, on the NJPC's calculation,
no more than some £265,000. That figure, however, is now
a completely theoretical one and is not realistic, since there
is now no real market left for selling pitches. If I had an urgent
need to sell those pitches to meet financial demands of my family,
I would get only a small percentage of my investment back.
20. I acquired the pitches from my earnings
and pension in the complete and fair expectation that I would
be able to buy and sell those pitches freely, on the open market
at auction in accordance with the Pitch Rules. I had made careful
and proper inquiries before I became a book-maker and before buying
any pitch rights. I feel very aggrieved that the Government's
decision through the Gambling Act 2005 to change the body which
grants racecourse licences, so that they are now granted by local
authorities, has not also expressly included a scheme which ensures
that my valuable rights (along with other book-makers) are preserved.
The basis of such a scheme has to be the Pitch Rules and all the
other elements which make it possible for the Rules to continue
to be operated fairly as between the on-course book-makers and
the racecourse owners. That can be achieved by direct legislation
or by requiring the Gambling Commission to issue a directive to
the local authorities that they must include such a proviso in
each licence (coupled with a maximum sum which the owners can
charge me for using my pitch rights). I would ask the Select Committee
to bear in mind that I am currently obliged under the Pitch Rules
to make use of my pitch rights for each meeting or face a penalty:
the purpose of this is to ensure that the independent bookmakers
(like me) who have pitch rights at a particular meeting, do provide
their service in the Bookmakers' Ring as they have agreed to do
when they acquired those rights.
21. This change brought about by the Gambling
Act omits all the elements which make the existing system work
fairly as between bookmakers, racecourse owners and the public.
It has now unfairly resulted in the RCA seizing the opportunity
to try to bring to an end their part of the arrangements even
though the pitch rights which I purchased were supposed to be
perpetual rights. The members of the RCA, knowing that I and other
bookmakers were acquiring these perpetual rights at auction and
for which we were paying considerable sums and knowing that we
were bound by the Pitch Rules, earn a considerable income from
all the public who pay to attend their race-meetings and expect
to find small independent bookmakers like me in the Bookmakers'
Ring at every meeting.
22. That leads me to a further point; not
only did I (in common with other bookmakers) have a legitimate
expectation that our rights would continue on the same basis for
all time (unless all pitch holders agreed to changes or the racetrack
closed down), but also our expectation was deliberately brought
about by the relevant statutory body, the Levy Board, acting both
directly as well as indirectly through the NJPC and acting in
combination with the RCA.
23, Unless Parliament legislates, or the
Government undertakes, to continue the Pitch Rules system (with
a maximum fee which can be charged to bookmakers by the racecourse
owners) I am going to be deprived of the enjoyment of my property
rights without any form of compensation being offered to me. I
do not believe that that is fair or just, or indeed lawful.
24. I should add that I appreciate that
the Select Committee is concerned with the steps which Parliament
and/ or the Government should take to protect the interests of
both book-makers and the public. I trust that these matters will
be properly and fairly considered. I do, however, want to make
clear that I necessarily am reserving my right to seek compensation
either from the Government and/ or from the members of the RCA,
if I need to do so.
25. I am aware that submissions will be
made by others about the public interest in retaining the Pitch
Rules, the existing system of transferring pitch rights and the
regulator's control over the entry fees which racecourse bookmakers
have to pay to attend at each race-meeting. I strongly believe
that the small independent bookmarkers like me have a very important
role to play both by our presence at each race-meeting and in
order to protect the public from being disadvantaged by the removal
of our competition at race-meetings. Without the Pitch Rules and
a maximum fee which can be charged to us for attending the meetings
(as we are obliged to do under the Pitch Rules), we would never
be able to compete at meetings against the book-makers who operate
nationally or a Tote operated by the racecourse and we would not
be able to provide the public with a service which they clearly
appreciate from independent on-course bookmakers like me. I understand
from my solicitors that the provision of this service was central
to the Sparrow recommendations. Bookmakers like me provide it;
the racing public plainly want and deserve it.
26. I mean to attend before the Select Committee
and am willing to give evidence.
October 2007
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