Supplementary memorandum submitted by
the Racecourse Association (RCA)
"PITCHES"
AND "LIST
POSITIONS"
1. Throughout the transcript there are many
references to the buying and selling of "pitches". The
Racecourse Association (the RCA) would like to make it absolutely
clear that no racecourse has ever "sold" a pitch to
a bookmaker. Doing so, for value, would have been a clear breach
of s13 of the Betting Gaming and Lotteries Act 1963 (the five
times rule) and racecourses had no incentive to "sell"
a pitch unless it was for value. This fact is also well known
to bookmakers and was acknowledged by Mr Grossmith during the
oral evidence session.
2. It was very clear to the NAB in discussions
with the RCA prior to the HBLB's review in 1997 that the racecourses
would not accept any arrangement that bought and sold pitches
as this would confer property rights, for which the racecourses
could not be properly compensated given the five times rule. Please
find attached an extract from the Joint Discussion Document (July
1997 version) between the NAB and RCA, which makes this plain.
3. This was, and still is, an important
principle and the RCA ensured this was clear to all bookmakers
by inserting appropriate wording into the preamble to the National
Pitch Rules where it could clearly be brought to the attention
of all bookmakers and not lost in the boilerplate of those Rules.
The actual wording went further than merely excluding property
rights: "Nothing contained in these Rules relating to
the allocation of pitches at horse racecourses shall confer upon
any bookmaker any right of entry to any betting ring or entitlement
to occupy, whether by licence or otherwise, any area or areas
in any betting ring."
4. Due to this fundamental principle, the
bookmakers, in 1997, conceived the concept of Lists and put forward
the proposal that bookmakers should be allowed to trade their
List Positions between themselves. The National Pitch Rules (NPRs),
which dealt with the administration of the betting rings on horse
racecourses, included rules dealing with the allocation of pitches
on a racecourse. To have the opportunity to be offered a "pitch"
on a race day the bookmaker needed to hold a List Position for
the particular racecourse. It is these "Positions" that
are traded between bookmakers. It is not a transaction that involves
the racecourse. This was further emphasised in Rule 7.1 of the
NPRs, which stated: "A List Position confers on an Authorised
Bookmaker the opportunity to be allocated a Pitch as set out in
Rule 6 but does not confer any right to be allocated any particular
Pitch or any licence, right of occupation or any interest in any
Pitch".
5. It is clear therefore that List Positions
do not give the bookmaker who holds them any rights as against
racecourses.
LIST POSITIONS—TENURE/PERPETUAL
RIGHTS
6. It is plain from the above that the bookmakers
did not, and therefore do not, have any rights as against the
racecourse by virtue of the NPRs relating to the allocation of
pitches. The wording is clear: "Nothing contained in these
Rules relating to the allocation of pitches at horse racecourses
shall confer upon any bookmaker any right of entry to any betting
ring or entitlement to occupy, whether by licence or otherwise,
any area or areas in any betting ring". The only significance
of holding a List Position related to the opportunity to be allocated
a pitch, hence List Positions gave no rights to the bookmaker
to even enter a betting ring. It is the RCA's view that the clear
reason for putting this wording in the preamble to the Rules was
to bring to the attention of the bookmakers that List Positions
did not confer any rights (including property rights) as against
racecourses. It cannot have been made any plainer.
7. Such wording entirely undermines the
bookmakers' contention that List Positions somehow have a perpetual
life and bind racecourses. In many respects the question of perpetuity
is redundant because List Positions do not create rights as against
racecourses. Any statements made by NJPC staff cannot change this
fundamental position. It is perhaps for the bookmakers who acquired
List Positions to consider their rights against those bookmakers
who sold them the List Position, or indeed the NJPC.
8. On page 23 of the transcript, Mr Grossmith
suggests that tenure was provided for in section 5 of the Certificates
of Approval. This is not the case. For completeness clause 5 of
the Certificate is set out below together with clause 6:
Clause 5—"That the Betting Ring
be administered by the National Joint Pitch Council Limited (`NJPC')
and the Racecourse shall ensure that any bookmaker, and any bookmaker's
assistant or other personnel representative authorised by the
NJPC, having admission to the Betting Ring, are to be subject
to (as a condition of entry) the National Pitch Rules approved
by the Levy Board, [...]"
Clause 6—"That the Racecourse exclude
or remove from the Betting Ring any person identified by an employee
or official of the NJPC as conducting betting business in an illegal
or unauthorised manner, or who has not been authorised by the
NJPC to carry on business in the Betting Ring, or who has had
any such authorisation withdrawn".
9. Clause 5 does not state that the NPRs
are binding on the racecourse, it merely obliges the racecourse
to ensure that bookmakers and their assistants are bound by them
whilst on the racecourse. It is the RCA's recollection that racecourses
were obliged to incorporate the NPRs into the terms of entry each
race day to ensure that, if necessary, the racecourse could impose
the ultimate sanction of removing a bookmaker from their land
(see Clause 6) if the bookmaker breached the NPRs. In the absence
of that direct contractual relationship the NPRs could not be
enforced in that way by the NJPC. There is no wider relationship
between the bookmaker and the racecourse (see above) by virtue
of clause 5 and cannot be any basis for saying that tenure exists
in relation to List Positions.
10. This is supported by the written evidence
given by the HBLB which had annexed to it Rodney Brack's letter
to DCMS dated 29 October 2004, which states: "It is our
view, therefore, that bookmakers have no security of tenure over
anything. All they have is their seniority positions on the various
Bookmakers' Lists as a basis for choosing their daily standing
positions while the current certificates of approval remain in
place. As and when the [Levy] Board's certificates of approval
are revoked, the related conditions, incorporating the National
Pitch Rules, will cease to exist and will, no doubt, be replaced
on the following day by new arrangements to be determined by the
Gambling Commission". As explained below, neither the
Gambling Commission or DCMS felt it appropriate to extend the
administrative arrangements.
11. Oral and written evidence was put forward
by the FRB that tenure was never an issue and that nobody had
questioned the perpetual nature of List Positions, including the
racecourses. As there is no evidence upon which it can reasonably
be argued that List Positions attracted tenure or were perpetual
in nature there is nothing for the racecourses to have questioned,
especially as List Positions were not binding upon racecourses.
Likewise, it was entirely a matter for the bookmakers as to what
value they placed upon a List Position. The racecourses have never
had any information as regards the turnover or profitability of
those on-course bookmakers trading in the betting ring upon which
they could make a judgment as to value. The bookmakers have in
the past refused to make such information available to the racecourses.
It is not reasonable therefore to expect racecourses to have a
view on value. In which case they could not have a view on whether
in recent years bookmakers paid too much for their List Positions.
THE GAMBLING
ACT DOES
NOT "DEAL"
WITH TENURE/UNINTENDED
CONSEQUENCES
12. The question of tenure has never been
addressed in legislation, and therefore the bookmakers should
not have had any expectations that the matter, or indeed List
Positions, would be specifically dealt with in the Gambling Act
2005. List Positions are merely one aspect of the administrative
system previously overseen by the NJPC, set out in the NPRs. It
is clear from the above that the NPRs do not create rights as
between bookmakers and racecourses as regards List Positions or
the allocation of pitches. The only "right" that attaches
to the List Position is the opportunity to be allocated a pitch
in accordance with the Rules. Therefore the "right"
attaching to the List Position subsists only for so long as the
NPRs exist.
13. Once proposals to repeal the 1963 Act
were put forward, bookmakers should have been on notice that once
Certificates of Approval were replaced by premises licences that
the NPRs would also fall away, taking with them the List Positions.
In the absence of any mechanism keeping the NPRs they would not
survive beyond the Gambling Act 2005 coming into force. There
was no need for the Gambling Act to spell this out—the consequences
for List Positions follow from the repeal of the 1963 Act.
14. The FRB, as part of its written evidence
to the Committee, included an Addendum (marked "HB 4H")
explaining the steps the bookmaker members of the NJPC took, in
response to DCMS's 2003 Policy Paper and meetings with the then
Gaming Board in 2004, to point out that the legislation providing
for the new licensing regime "threatened" (the FRB's
word) the then existing pitch allocation system, adherence to
the Bookmaker's Lists and "the acknowledgement of both
title and tenure without limitation of time". The FRB,
and the bookmaker members of the NJPC therefore were specifically
on notice at that time that unless the new legislation took steps
to extend the current arrangements as regards List Positions and
transfers under the new regime, they would cease to have effect
once the Gambling Act 2005 came into force.
15. As the matter was brought to the attention
of both the Gambling Commission and DCMS by the FRB and NAB in
2003 and yet steps (see below) were not taken to replicate the
administrative system under the new regime (indeed the RCA's view
is there is no basis in law to do so given the licensing objectives)
it cannot be said that the consequences as regards List Positions
were unintended. Indeed the FRB and NAB were well aware of the
potential consequences at least in 2003.
16. That Addendum also makes it clear that
the FRB and the NAB understood the consequences of "full
commercial arrangements" as referred to in DCMS's 2003 Policy
Paper, as otherwise there would be no need for them to have responded
with the observation: "We consider that it is imperative
that following the demise of the Levy Board, future legislation
should recognise the need for security of tenure. This should
be achieved by the continuation of the administration of the seniority
list by the NJPC or its successor".
17. The 2005 Act gives the Secretary of
State the power to attach mandatory and default conditions to
the premises licence. The RCA considers that the Secretary of
State can legitimately attach conditions to the premises licence
only where such conditions are required to promote the licensing
objectives:
(a) to keep crime out of gambling.
(b) to ensure gambling is conducted in a
fair and open way; and
(c) to protect children and the vulnerable
from being harmed by gambling.
18. It is not therefore appropriate to specify
a condition regarding List Positions. Both the Gambling Commission
and DCMS appear to have reached the same conclusion in implementing
the 2005 Act.
19. The Gambling Commission issued a consultation
document entitled Guidance to Licensing Authorities in December
2005. This Guidance included at Part 20 a section dealing with
Tracks and the likely conditions to be attached to premises licences.
There was no reference to an intention to continue the NPRs.
20. In April 2006, the Gambling Commission
issued to the RCA a paper entitled "Betting premises licences
and betting tracks" which updated the Commission's thinking
about the future regulation of on-course betting. It identified,
"Between premises and operating licences there is a gap
where many current administrative arrangements will fall. Our
focus is limited to the licensing objectives and so it is not
for us to determine which of the current administrative system
should be maintained". The paper sought the RCA's views
on what should be kept of the NPRs as it wanted to feed any thoughts
into DCMS who were considering this question also.
21. That paper also stated in relation to
the NPRs that: "These rules emanate from the Levy Board
and NJPC and will cease to apply when the authority of these organisations
ends in September 2007. They should be reviewed to determine
whether there is a case for the retention of some of these once
the new licensing and regulatory regime commences". The
paper specifically referred to bookmakers' picks and the auctioning
of List Positions and the operation of pick lists as an issue
that would not be retained but was a commercial matter.
22. DCMS issued a paper for consultation
in May 2006 dealing with premises licence conditions. In that
consultation paper there was no reference to an intention to replicate
some of the NPRs under the new regime. Therefore it was clear
that both the Gambling Commission and DCMS had considered the
previous administrative arrangements overseen by the NJPC and
did not see fit to replicate them under the premises licence conditions,
but saw it, quite properly, as a matter for the racecourses.
November 2007
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