Select Committee on Culture, Media and Sport Minutes of Evidence


Annexe 1

Extract from the Sparrow Report—24 March 1998

SECTION 4

Seniority System

  4.1  The NAB argued strongly in its submission to us that the current seniority system has worked well over the years, that it lies at the heart of the ring administration arrangements, and should be retained. Both the RBA and the RCA put forward suggestions as to how it should be modernised and improved, but did not disagree with the main proposition. We see no reason, therefore, why the principle should not be retained, but believe that it needs to be streamlined and improved in order to make it effective into the twenty-first century.

  4.2  In particular, we agree with the proposals from each of the Parties, that there should be a system for transferring seniority positions for value. Recommendations are set out in Section 5 for an auction system which should be designed to maximise the prices achieved by bookmakers who wish to retire or to acquire a better position, thus introducing some dynamism into a system which has become too rigid over the years.

  4.3  We believe that the NJPC should create new seniority lists for both boards and rails, to be known as the Bookmakers' Lists. These should be based on the NAB's current lists of Tattersalls bookmakers, Silver Ring bookmakers, Supplementary List bookmakers and Extended Supplementary List bookmakers. It has been suggested that these lists should be merged into one, since all the bookmakers on them are entitled to stand under certain conditions. We believe that the NJPC should implement this merger in the context of our recommendation, set out in Section 11, for the introduction of a system that would require bookmakers to register in advance their intention to attend, or not attend, a particular race meeting, in order to ensure that vacant positions may be filled.

  4.4  It seems to us appropriate that the Waiting List should be maintained separately from the other lists, and that, in the interest of creating a more vibrant on-course betting market, the five-year qualification requirement should be dropped. We recommend that, instead, applicants for the Waiting List should be vetted carefully by RJPCs and that, before a bookmaker is added to a Waiting List, he/she should be able to demonstrate that a financial bond, which would be held for five years and realised as appropriate in the event of a default in settlement of debts owed by the bookmaker to punters would be available before he/she first commences to trade on a racecourse. We suggest that the bonds should be £5,000 for Tattersalls and £2,500 for the Silver Ring, on the basis that only bookmakers of several years standing should be allowed to occupy any pitches in Members.

  4.5  The current provisions in the NAB's Pitch Rules covering inheritance are complex, but we believe that the principle of a bookmaker's seniority position being capable, upon death, of being inherited by the spouse or a child, who would then trade from the appropriate pitch or auction the seniority position, is sound. We suggest that the NJPC in drafting the appropriate pitch rules should seek to simplify the current arrangements.

  4.6  The RBA has sought to persuade us that seniority positions should be capable of being held in corporate names. Under the NAB's Pitch Rules, this is not currently allowed, and in the event of the retirement of the employee in whose name a seniority is held, that company suffers a demotion in pitch position, even though the company itself may have been trading for a long period. We were presented with no convincing arguments to retain this system, and, since it seems fair and practical, we recommend that the NJPC should make provision in the National Pitch Rules, for seniority positions to be held in corporate names. The seniority positions of the relevant bookmakers on the seniority list on 24 March 1998 should be transferred from the named employee to the company. However, these arrangements should be conditional on the bookmaker's trade on a particular pitch being accounted for through the relevant company holding the seniority position, which should have a current bookmaker's permit.

SECTION 5

Transfer of Seniority Positions

  5.1  All three of the Parties to the Review, together with BOLA which also expressed a view on the subject, supported the principle of permitting the transfer of a bookmaker's seniority position otherwise than by the present system which only permits succession by a registered successor, who may only be the son, daughter, and, more recently, the wife of a pitch holder. The RBA and the RCA proposed that seniority should be transferred on an open market basis, whilst the NAB proposed offering to transfer seniority by offering the position firstly to the bookmaker next on the seniority list at a fixed price, and only when that bookmaker has declined the opportunity to "trade up" should the position be offered to the bookmaker next on the seniority list, and so on until the position is acquired, when the acquiring bookmaker should then offer his own position for sale by the same method.

  5.2  It is clear from the Joint Discussion Documents between the RCA and the NAB, and from the information supplied to us by the NAB and the RCA that bookmakers' seniority, which confers the right to occupy a particular pitch in the betting ring, does not confer any proprietary rights. We have been advised by Counsel that an attempt by the racecourse to sell pitches to bookmakers may be interpreted as a charge for admission to the betting ring and, as such, would be in breach of the provisions of Section 13 (2) of the Betting, Gaming and Lotteries Act 1963. We have therefore concluded that the only interest to which a bookmaker has a right and which may be transferred, for a consideration or otherwise, is the bookmaker's seniority position ie his position in the order of seniority between other bookmakers.

  5.3  We have concluded that it is in the interests of both the bookmakers and the racecourse that the full value of any seniority position is realised on a disposal by way of sale, rather than transfers at previously agreed sums, and we recommend that this should be achieved through the auction of bookmaker's seniority positions to the highest bidder, to be conducted through the NJPC and administered by the LJPC and the Betting Ring Manager.

  5.4  We recommend all transfers of bookmaker's seniority positions on sale should only be made through the auction system outlined above and the NJPC (through the LJPC) shall be entitled to receive a transfer administration fee, set by the LJPC in accordance with the NJPC guidelines, to be paid by the vendor. No transfer of seniority shall be effective until registered by the NJPC, who shall be entitled to charge a registration fee, and the transfer administration fee paid.

  5.5  We accept the concerns of the NAB and the RBA that only those bookmakers previously approved should be permitted to occupy a pitch in the betting ring. We therefore recommend that any bookmaker bidding for a seniority position must satisfy the NJPC requirements as to financial probity and bookmaking experience and be registered as a current pitch holder, or be on the Supplementary List or the Extended Supplementary List as merged by the NJPC. Bookmakers on the Waiting List may bid for a seniority position upon production of confirmation from a bank or their financial institution that a bond for the required sum, as laid down by the NJPC, will be available in the event of a successful bid. The registration of a transfer of a seniority position to a bookmaker on the Waiting List will not be effected until the required bond is produced.

  5.6  We have recommended that any transfer of seniority for a consideration may only be effected via an open auction. However, we acknowledge that there will be occasions when it is appropriate to change a company's nominated individual, and notification of any change of the nominated individual should be effected through the NJPC, upon payment of the registration fee. Individual bookmakers will therefore be able upon retirement, or by their Will to transfer their seniority position to a named individual, who must hold a current bookmaker's permit. Where such a transfer is approved it shall not be effective until registered by the NJPC, to whom the relevant registration fee must be paid.



 
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