Memorandum from William Hill (DGB 61)
William Hill is grateful for this opportunity
to respond to the pre-legislative Scrutiny Committee with its
comments on the proposed Gambling Bill. The Company operates 1,586
betting shops, is represented at 51 of the 59 horse race courses
in Great Britain and provides the leading telephone and sportsbook
service in the UK. In addition, William Hill operate an internet
casino from Curacao and owns two greyhound stadia. The Company
was established over 70 years ago and as a result has considerable
experience of operating in the betting industry. The Company fully
endorses the statement from Tessa Jowell, in her Foreword to "A
Safe Bet for Success". She said
"We want gambling to be safe, not only for
those who take part in it, but also in the way that it impacts
on wider society. We also, however, want to see a successful British
gambling industry, one that is able to respond rapidly and effectively
to technological and customer led development in both the domestic
and global marketplace."
As the Secretary of State recognised, "the
balance between these two sets of objectives is a fine one".
Whilst DCMS continue to work with interested parties, there is
an inevitability that there will be areas in which stakeholders
do not agree with the DCMS draft.
In responding to the draft we are aware that
only 65-70% of the Bill has been published. Equally the parts
that have been published have only recently appeared and in many
areas significant work is required to understand the intention
of the Draft Bill. As a result we are extremely concerned that
the current timetable is inadequate and consider it would have
been more appropriate for consultation to commence once the full
Bill has been published.
In order to respond to the timetable in this
initial submission William Hill will focus on the key area of
definition. In particular that of betting v gaming and that of
"a bookmaker". In both areas we consider the DCMS draft
fails to correctly address the issue. If appropriate William Hill
will seek to submit further submissions, at a later date on other
subjects.
1. BETTING V
GAMING
Issue—DCMS appear to be redefining the difference
between betting and gaming.
In general terms the test between betting and
gaming has survived the last 40 years.
In "Paterson's Licensing Acts 2002"
(page 995) it states;
"Betting usually involves parties entering
into a contract (wager) by which each party undertakes to pay
to the other money or money's worth upon the outcome of an event
or determination of a previously unascertained issue in accordance
with the other's forecast".
Later, Paterson's states re gaming:
"In order for there to be a game of chance
there must be a game actually played by players".
This we believe reflects the accepted difference,
ie bookmakers have been able to bet on any event or an unascertained
issue whether or not any skill was required in predicting the
outcome. Whilst gaming providers have operated a game of chance
on their premises and enabled persons present to bet on the outcome.
2. Within the definition of betting an extensive
range of products catering to the widest public interest has been
developed.
When the National Lottery was introduced and
the then Government, being conscious that the last Lottery was
undermined by bookmaking, introduced a clause that effectively
stopped side betting.
This action, recognising the long standing right
of bookmakers to bet on events requiring no skill, led to the
development of numbers products.
3. The popularity of numbers betting has
increased and eventually virtual events were introduced with the
results produced by random number generators and Fixed Odds Betting
Terminals were developed to offer a variety of such betting opportunities.
Still later, bookmakers have harnessed that
technical revolution, to improvements in graphics to introduce
virtual horseracing and greyhound racing. The first random number
generated products appeared some six years ago.
4. Despite the popularity of virtual numbers
as a betting product William Hill note with considerable concern
that DCMS plan to ignore the traditional separation between gaming
and retrospectively define these products as gaming. Currently
bookmakers offer virtual events
(a) via TV screens in LBOs;
It would appear possible that all existing virtual
betting could be swept up as gaming. If enacted this will deny
the betting industry the benefit of its own development and instead
reward the gaming industry with a concept that they had no part
in developing. It is difficult to understand what problem DCMS
are attempting to fix. There are two possibilities:
5. DCMS want betting on virtual events to
be gaming. However, within Clause 7-34, page 9, headed "Betting",
DCMS claim that betting relates to "the likelihood of anything
occurring or not occurring". The outcome of a random number
generated event fully meets that definition. It does not meet
the definition of gaming.
In considering the DCMS position William Hill
would like the Committee to compare a virtual betting product
(on a FOBT) to a gaming machine. In an LBO the customer places
their bet and a random number generator, at a remote location,
responds by selecting the result. This is communicated to the
shop where it is shown. There is no interactivity and the customer
when placing his bet knows what he might win.
With a gaming machine the customer places a
set stake (£1), he can interact with the machine (via holds
or nudges). The mechanics in the machine determine the outcome
and the payment is uncertain until the winning combination appears.
6. DCMS believe that reclassifying FOBTs
as gaming machines will prevent unwelcome proliferation of machine
gambling. We would compare the DCMS position to our proposal:
— FOBTs as gaming machines—DCMS
intends to classify them as Category B type gaming machine and
allow them in Adult Gaming Centres, Bingo Halls and casinos as
well as LBOs. In large casinos any number would be allowed.
— DCMS will enable proliferation as
FOBT type machines become available in a number of alternative
gambling outlets. This in itself will lead to further possible
proliferation as working mens/sports clubs, and public houses
all seek further liberalisation.
(b) Betting Industry—Proposal
— The Betting Industry alternative
is to leave them as betting terminals. Recently the ABB signed
up to a Code of Conduct with DCMS/Gaming Board in which it was
agreed that no LBO would have more than four FOBTs.
— As a result Government could create
a new category of "Betting by machine" within the section
on betting, which could be based on the current Code of Conduct
and as they are prescribed as betting terminals proliferation
would only be allowed in premises where betting was allowed.
8. William Hill asks the pre-legislative
scrutiny committee to support our arguments that the long standing
difference between betting and gaming should be maintained. Betting
via terminals is part of the rapid and effective response to technological
and customer led development the Secretary of State is seeking
to encourage.
BOOKMAKER
Issue—DCMS exempt layers on bet exchanges
as providers of facilities for betting.
1. In the 1963 Act a "bookmaker""
is defined. Within the Draft Bill there is no interpretation of
what a bookmaker is.
Within Clause 4 it could be read:
For the purpose of this Act a "Bookmaker"
provides facilities for betting if he:
(a) invites others to bet in accordance with
arrangements made by him,
(b) provides, operates or administers arrangements
for betting by others, or
(c) participates in the operation or administration
of betting by others.
With regard to bet exchanges the position is
clarified in Clause 8 Betting intermediary.
2. With regard to the layer on betting exchanges
there is no such clarity. This person decides to make his offer
via a betting intermediary This entirely fits within Clause 4
(1)(a) which covers a person who provides facilities for gambling
if he "invites others to gamble in accordance with arrangements
made by him". In William Hill's opinion a core requirement
in facilitating a gambling action is that one person has to be
prepared to lay a bet or to stand as a banker in a game. Without
that facility no gambling can take place.
As the "layer" is providing facilities
for betting then he is also caught by 4 (1)(c ). He does this
by entering into a contract with the betting intermediary which
results in him paying a commission on any winnings. This is then
used by the exchange in the operation/administration of his site.
Thus the starting point of any legislation regarding
layers on bet exchanges must be that they are providers for gambling
as under Clause 4.
We support this position. Within the statement
from Tessa Jowell a key objective is for gambling to be safe.
This can only be achieved by regulating all facilitators.
4. However in Clause 22, DCMS exempt certain
facilities for gambling from "General Offences". In
this they cover private and non-commercial gaming/betting but
they also say an offence "shall also not apply to anything
which a person does by way of making or accepting a bet, or offering
to make or accept a bet, if he acts otherwise than in the course
of business".
Thus where say a person with a criminal record,
a non UK citizen or a person with contacts with a sport decides
to lay £5,000 and he does not do it in the course of business
he will not be guilty of an offence. If he decides to lose £2,500
anonymously via a betting exchange and £2,500 via his own
advert in the Racing Post would appear not to make any difference.
We would hope the Committee would seek clarification
from the DCMS and understand the reason behind greater control
on licensed operators compared to the lack of action on layers
on bet exchanges.
Should there be a case for excluding "recreational"
layers on bet exchanges we believe this has to be achieved by
defining what is meant by "private and non-commercial betting"—in
Clause 22 (1) (b).
We cannot support the wide ranging discretion
allowed in Clause 22 (2) and would ask the pre-legislative committee
to reject this proposition as it fails to satisfy the objective
set by the Secretary of State in her Foreword.
December 2003
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