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Viscount Falkland: My Lords, I had not intended to enter into this debate, but since my name was mentioned in reference to the debate in Committee, I thought that I would reinforce the point that I made then with the additional point that in this country we have gone down a road that is uncommon, if not unique. We have bookmakers who offer odds to the betting public in competition with the Tote, which offers pool as opposed to fixed-odds betting. An inevitable result of this freedom of movement in the market in which bookmakers operate is that the success of the Tote pool has been patchy to say the least in areas where there is not a lot of interest from the public. Where public interest is present and large betting pools arise, the Tote does very well in competition with bookmakers.
In other countries they have opted to go down the other road. Indeed, gambling is illegal in France, as we discovered in the pre-legislative scrutiny committee on gambling. I had not known that, and I thought I knew a lot about France. Gambling there is illegal, but their way of dealing with these matters is to introduce exceptions to the ban when it is appropriatevery French, one might say. There are two fundamental exceptions. One is the Pari Mutuel, which was created in 1928. They decided not to allow bookmaking at all in the world of racing and to make it exclusively a betting pool. The other exception of course is casinos in resorts and spas in France. An additional exception has also been introduced recently whereby towns with populations of more than 500,000 may apply for one casino.
That is by the by. We have a curious situation here which may mean that, psychologically, there is a underrating of the role of the Tote in its relationship with bookmakers. As the noble Lord, Lord Moynihan, said in comparing the Tote to the National Lottery, the size of the pool is fundamental to the success of the Tote in raising money. People can choose which horses to support in racing, but the bigger the pool the better.
Recent talk about dividing the pool up into small parts does not offer a practical or realistic solution. It is just unfortunate that the phrase "Tote monopoly" has been current for so many years. For most of us, "monopoly" has a pejorative note to it. In reality, however, in the day-to-day world, the bigger a pool, sweepstake or totaliser is, the better it will be for all those who benefit from it. To divide that up into small pools and to allow other operators to compete is a prescription for the end of pool betting.
Lord Lipsey: My Lords, for all the reasons so eloquently set out by the noble Viscount, Lord Falkland, the Racing Trust and the Tote sought a longer period of exclusivity than seven yearsthat is no secret. We also took the view that seven years was enough. It was the lowest number of years at which a deal could be done, and a deal was agreed.
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I am about to go into negotiations with the Government on this deal and this price. I would like to do so with a reasonably intact reputation for keeping my word. Having signed up to this dealalthough I understand the strong arguments of the noble Lord, Lord Moynihan, and the noble Viscount, Lord FalklandI do not seek an extension or even a power for the Government to extend the exclusive licence.
If that sounds rather high-minded, I am afraid there is also a low-minded reason. We are negotiating the price that will have to be paid. Obviously, a Tote with a seven-year exclusive licence is worth more than a Tote with a nought-year exclusive licence, and less than a Tote with an infinitely long exclusive licence. If we accept the seven-year exclusive licence, that brings the price down.
That is not an abstract point. At this very momentI trustthe Tote will be negotiating arrangements with the racecourses designed to cement its position after the seven years have expired. Those arrangements will be costing it current cash out of the accounts, but they are designed to cement its position in the long term in light of the seven-year exclusive licence. They are all reducing the value of the Tote. So there will be money off in return for the Government rejecting the amendment. At this stage in the negotiations, I recommend that Tote supporters in the House go for that.
Lord McIntosh of Haringey: My Lords, I agree with both the high-minded and low-minded arguments of the noble Lord, Lord Lipsey. I would like to retain a reputation for consistency as well. It has always been the view of the Government that an exclusive licence is a transitional measure to foster a strong pool-betting market, so far as we can obtain it, and allow the Racing Trust-owned successor an opportunity to establish itself in a fully commercial environment. The business should not be in public ownership.
Any provision that would permit the continuation beyond the seven years would run counter to our objective of opening up the pool-betting market to greater competition. As the noble Lord, Lord Lipsey, rightly said, seven years without the option to continue was the deal. In the interests of consistency and in view of how we have been making progress, I ask the noble Lord, Lord Moynihan, not to press the amendment.
Lord Moynihan: My Lords, I am grateful to the Minister for his comments. I agree with the noble Lord, Lord Lipsey, on 99 per cent of issues when it comes to the interests of racing, but I differ with him and the Minister on this matter. I simply do not accept the economic argument that the noble Lord, Lord Lipsey, put to the House. Competition in racing is effectively between different opportunities to individual punters when it comes to choice. Removing one of those choices reduces competition; it does not enhance it.
I understand that Ministers within the Department for Culture, Media and Sport have found it a struggle to convince their colleagues in government to permit even a
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seven-year exclusive licence, and I praise the Minister for the achievement. In those circumstances, it is wholly understandable that he is unwilling to accept any amendments that might upset that arrangement. However, future Ministers for Sport and, if I may say so, future chairmen of the Racing Trust might have a different point of view from those that we heard this afternoon. The Minister said in Committee that this deal was the only deal on the table; that is his prerogative. However, it is the duty of this House to decide whether the deal before us is acceptable.
In the context of the comment of the noble Lord, Lord Lipsey, about competition, I remind the House that the Government's own regulatory impact assessment stated that without an exclusive licence there would be:
That is the crux of the matterthe safeguarding of the Tote's contribution to racing and helping to make sure that all race meetings, particularly the smaller meetings and courses, benefit from pool betting well into the future. For those reasons, I have no doubt that the amendments strengthen the Bill and British horseracing. I therefore wish to test the opinion of the House on the issue.
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