Gambling

Written evidence submitted by the Northern Ireland Horse Racing Group

(GA 13)

NORTHERN IRELAND HORSE RACING GROUP

1. Summary

· Northern Ireland Horse Racing Group welcomes the updated legislative framework with regards to online gambling.

· Consumer spending on internet and phone gambling has increased rapidly since the act was introduced in 2005.

· Many remote gambling operators take bets from UK consumers remain licensed by the Betting Commission.

· Without proper amended legislation, remote gambling operators enjoy unfair market advantages, withdraw funds from the UK exchequer and damage industries that rely on funding from licensed gambling organisations.

· Northern Ireland Horse Racing is facing a funding crisis as a result of the regulation loopholes being exploited by remote gambling operators.

· We encourage the inquiry to review options for tougher online and telephone gambling regulation.

· We recommend that all licensed remote gambling operators who take sportsbook bets from UK consumers are required to contribute fairly to UK sports including racing in Northern Ireland.

2. About the Northern Ireland Horse Racing Group

2.1 The Northern Ireland Horse Racing Group provides a voice for racecourses affected by remote betting and is supported by senior organisations in racing, gambling and affiliated industries.

2.2 It is working directly with industry bodies and elected representatives in the Northern Ireland Assembly and Parliament to:

· safeguard the long term future of the sport

· increase its contribution to the economic fabric and

· build progressive and mutually beneficial relationships with stakeholders and regulators

2.3 The Group’s strategic aim is to establish a platform for long-term financial stability for horse racing in Northern Ireland and safeguard thousands of jobs in the racing and associated industries by ensuring continued fair and reasonable funding from the gambling industry.

2.4 The group is chaired by James Nicholson. James is currently the Chairman of Down Royal Racecourse and board member of Horse Racing Ireland (HRI).

3. Purpose of response

3.1 The Northern Ireland Horse Racing Group recognises the valuable contribution that the Gambling Act 2005 has made and the important role that Gambling Commission holds in protecting consumers and regulating this challenging sector.

3.2 This response concerns the update of the legislative framework regarding online gambling, as implemented by the Gambling Act 2005, with specific relevance to remote gambling operators who offer ‘sportsbook’ accounts in the United Kingdom.

3.3 We recognise the current regulation and licensing of remote gambling operators affords a number of loopholes which have created damaging problems for the gambling sector and related industries.

3.4 We recognise that there needs to be a UK-wide approach (England, Wales, Scotland and Northern Ireland) to these issues.

4. Concerns relating to online gambling regulation

4.1 In January 2011 the Daily Mail reported that UK consumers spent £2.5 billion on internet or telephone gambling last year. Less than a quarter of this figure was spent on operators that are licensed by the Gambling Commission.

4.2 Loopholes in current gambling regulation are being exploited by unlicensed operators. They have a severe impact upon the betting sector and damage important industries that rely on commercial arrangements with licensed organisations.

5. Example of how other industries are affected by the impact of remote gambling operators under current regulation

5.1 The funding of racing in the United Kingdom is directly supported by the betting industry.

5.2 Challenging trading conditions, due in part to the proliferation of tax-free remote gambling organisations, has forced the closure of hundreds of bookmakers across the UK.

5.3 The closure of a large number of bookmakers has directly led to a loss of significant revenue for racecourses. For example the contribution towards the British Horseracing Levy has dropped from £100 million to £65 million in two years.

5.4 The future of UK horseracing, an industry that supports the employment of 100,000 people and contributes £2.5 billion to the economy each year, is at stake.

6. The immediate risk to Northern Ireland’s racecourses

6.1 Northern Ireland’s racecourses face a funding crisis as a result of current licensing loopholes.

6.2 The Horse Racing (NI) Order 1990 requires all persons who intend to apply for a bookmaker’s licence or a bookmaking office licence to make an annual contribution to the Northern Ireland Horseracing Fund as determined by the Department of Agriculture and Rural Development.

6.3 Off-course bookmakers, struggling to compete with unfair advantages enjoyed by remote gambling operators, can no longer make a fair contribution to racing - which an independent report (compiled in 2009) identified as £4,000 per location.

6.4 Following emergency discussions between the racing and gambling industries in 2010 this figure was temporarily adjusted to £2,000. This represents a loss of £646,000 to Northern Ireland racing.

6.5 Further closures of bookmakers are expected to continue and this will limit the ability of Northern Ireland’s racecourses to:

· Compete with overseas events by hosting exceptional standards of racing

· Offer prize-funds that draw top quality racing talent and visitors

· Improve facilities and services

· Maintain resources that guarantee spectator and event safety

· Maintain security staffing and procedures as required in Northern Ireland

7. Recommendations

7.1 Consider a set of measures that will encourage all remote operators that engage UK consumers to obtain appropriate licences.

7.2 Consider penalties, such as limitations on advertising, for operators that do not comply.

7.3 Remote gambling operators that offer sportsbook accounts to UK consumers must agree to put forward a fair contribution towards UK sports, as other licensed operators are required, before licences will be granted.

7.4 The licences will be granted for all of the United Kingdom therefore every region of the United Kingdom, including Northern Ireland, should benefit from this arrangement.

7.5 As licences are being issued to sportsbook from Northern Ireland it is appropriate that Northern Ireland receives a fair share of the income generated.

June 2011

Prepared 29th July 2011