DEFINITION OF BOOKMAKER (Hansard, 7 August 1972)

§ Mr. Brian Walden
I beg to move, That the Clause be read a Second time.
I shall not take very long, but I wish to take up a comment made by the Minister which gives the House some indication why I thought that something like this new Clause would be desirable.
The Minister rightly said that nothing we are doing on Report, on the presumption that we pass the Bill, prevents the Totalisator Board from going into the off-course market if it wishes. Lest it be felt by those who report our affairs that that means that the Minister and I understand these matters differently, perhaps I could say that I am sure that we are wholly in accord.
The Minister says that there is nothing in the Bill by means of which the Government can interfere in the commercial judgment of the tote. I quite agree. I 1399 am saying that I am certain that the commercial judgment of the tote now will be not to go into the SP market. I have too much confidence in Lord Mancroft to believe that he would be so stupid. If the tote goes into the SP market and has to raise all the capital necessary to do that it will throw away a very substantial sum that it is now hoped to get without any effort or endeavour on its part.
I agree with the Minister, and I do not want anyone to think that in what I said I was implying that we were passing a Bill which prevented the Tote Board from going into the SP market if it wanted to. I am sure that it will not. However, before I realised that I could afford to be as sure as I am now, it occurred to me that if the Totalisator Board were to operate as an SP book-maker it had as a matter of equity to be subjected to the same terms and conditions as those to which commercial bookmakers are subjected.
I regard new Clause 71 as probably redundant now. However, its then reasonable purpose was to alter the definition of "bookmaker" in the 1963 Act so that the Tote Board should not receive an exclusion.
I do not imagine that the Minister will accept the Clause. However one of the good things about what we are doing this evening is that we are moving away from the nonsense of having a Tote Board which is not a Tote Board, of having a Tote Board which is also an SP bookmaker, and having a Tote Board which is very difficult to categorise in betting. New Clause 71 was an attempt to say that anyone who operated in the SP market was a bookmaker and therefore was not entitled to any concessions given to a quasi-public body operating in pool betting.
I am delighted to think that the practicalities of the present situation are such that it is almost certain that these difficulties will not arise. However I put it to the Minister that the theoretical difficulty does arise in the way in which we are passing the Bill. If the Tote Board is to operate as a bookmaker off-course, I claim that it has no right to any consideration which would apply if it were solely a pool betting agency—

§ Mr. Rees-Davies
There is one important point. The hon. Gentleman is stressing "off-course": that is to say it should be equally between the bookmakers and the totalisator if the totalisator ventures off-course. But on-course it may wish to have SP arrangements in this new scheme being evolved. I take it that he is excluding that possibility from the operation of what he is saying.

§ Mr. Walden
That is an important point. It was my intention to deal with it on Third Reading, but perhaps I had beter take it up at once.
It has always been the view of the National Association of Bookmakers that it ran SP shops on-course simply for the convenience of punters and to prevent individual firms from running shops on-course. The NAB always has been naturally sensitive to the needs of on-course bookmakers, and the hon. Member for Isle of Thanet (Mr. Rees-Davies) knows how on-course shops, if made very attractive at SP odds, could seriously damage the on-course market. Rather than have competition arise between individual firms, the National Association of Bookmakers, as the National Association, has run those shops on-course. It has never been unwilling to discuss with the Tote Board the possibility that it would run those shops and give the profit from them to the Totalisator Board.
10.30 p.m.
I have only this objection to the board running its own shops. It is a personal objection. It does not necessarily reflect the views of anyone other than myself. I do not think that giving the board the power to run SP shops on race courses will have desirable results. What are these places to be? Are they to be what I would call stand palaces—magnificently lush places where one can sit, drink and bet at SP? If they are, a most serious effect will then be felt by the on-the-rails bookmaker. I would not want the board to do anything like that, though I personally would not have the slightest objection to the board either receiving the profit from the NAB shops or running similar facilities itself.
What I fear is an attempt to produce a pari-mutuel situation, a situation in which the board is taking more and more of the money which is being bet on-course.I object to that, not only 1401 because it enormously affects the profits of bookmakers off-course, but because it ruins the whole starting price business. Once a meaningful starting price cannot be declared, the whole of racing will suffer.
It can be argued that no such situation would ever arise. I would accept that. It is most unlikely that any body chaired by Lord Mancroft would ever be so foolish as to spend a lot of money establishing places to pick up a certain amount of money from the on-course market which it knew would ruin the on-course market for the bookmaker and mean that Sporting Life and Sporting Chronicle could not declare a reasonable starting price. I cannot believe that it will happen. Nevertheless, as we are discussing what might happen, and as the hon. Member for Isle of Thanet asked me a fair question, I have answered him in some detail.
I revert to my main point. If we are discussing a Bill which gives at least the theoretical chance of the board operating as an SP bookmaker, I hope that the Minister will agree with me that even if the new Clause is not the way he would find to do it, there must be at some stage clear guidance from the House that the board cannot expect to be both a quasipublic body operating as a pool betting agency and receiving preferential treatment in that sense and at the same time operating in effect as an SP bookmaker off-course, and that this would make no sense, that it would be inequitable, and that the House would have to do something about it.

§ Mr. Carlisle
I can only repeat to the hon. Member for Birmingham, All Saints (Mr. Brian Walden) that, if the Totalisator Board chooses to go into the off-course starting price market, it must be a matter for its own commercial judgment, if it considers that that is in its interests to enable it to remain viable for the purpose of running an alternative method of betting available to the public.
The hon. Gentleman says that, if the board does this, it should be under all the same constraints as a bookmaker and that for that purpose the words other than the Totalisator Board should be removed from the definition of "bookmaker" in the 1963 Act. This 1402 is unacceptable. Certain minor consequences would follow, one being that the board would be required to apply for a bookmaker's permit, which would be unnecessary and undesirable. I suspect that what the hon. Gentleman has in mind, and this is a more serious objection, is that if the board goes into the off-course market as a bookmaker, in that it is taking and negotiating bets, it should be subject to similar contributions to the levy as a private bookmaker. It therefore gives me the opportunity to say that I failed to say in reply to the previous debate, which is that the Totalisator Board is specifically excluded from the definition of a bookmaker. So long as it is carrying on pool betting it is not liable to similar contributions to the levy as the bookmaker. Because the bets are being taken by the Totalisator Board, if it offers to accept bets at tote prices it is not subject to the levy, although a bookmaker who accepts bets at Tote prices is.
On the other hand, its only reason for being excluded from the normal levy scheme for the bookmakers, if it chooses to accept ordinary fixed odd or starting price bets, is on the basis that the contribution to the levy is payable by a bookmaker acting on his own account. In other words, should the totalisator Board enter into the off-course market on its own account and accept fixed odds bets, it would not for that reason become subject to levy payments, but if it should go into the starting price market by means either of setting up a subsidiary company for that purpose, or, in negotiation with one or more bookmakers, creating a company for that purpose, then it would not be taking bets on its own account and that subsidiary company would therefore be a bookmaker within the definition of bookmaker in the 1963 Act and therefore would be liable for a similar contribution to the levy as that paid by the present private bookmaker.
I make that point because one of the hon. Gentleman's concerns is that the board might find it in its commercial interest to enter into negotiation with a particular individual private bookmaker, set up a subsidiary company for that purpose, and be able to use statutory advantages in the interests of that subsidiary company and through that subsidiary company, the firm of bookmakers 1403 with which it had carried out the negotiation.
I want to point out to the hon. Gentleman that, as I understand the legal position, should the board enter into such an arrangement with an individual book-maker and set up a subsidiary company for that purpose, and the subsidiary company accepts bets at fixed odds or at tote prices, that company would be deemed in law to be a bookmaker and would not enjoy any advantage as against any other bookmaker nor, if other Amendments yet to be debated are accepted, would there be any statutory advantage as a result of the Bill.
The hon. Gentleman can be assured that much of his real concern is met, and he may think it is to his advantage to remember that it means that if the board as such, although going into the off-course market, wishes to have the advantage of being separately assessed for levy, it will have to retain its off-course interests itself; because if it once enters into a connection with an individual bookmaker and creates a subsidiary company for that purpose it will have no advantage of separate assessment as the Totalisator Board. It will be assessed in the same way as any other bookmaker.

§ Mr. Brian Walden
With the permission of the House, Mr. Deputy Speaker, I should like to say that the Minister of State has given a very valuable assurance. It is not that I have not had guidance from him on previous occasions, but he has now made clear what he believes to be the legal position in this respect.
In view of his assurance I wish to make one comment before seeking to withdraw the Clause. I still do not accept that if the Totalisator Board were to establish a private firm of bookmakers as its agents in the off-course market, no advantage would accrue to that firm of bookmakers. If the necessary parts of the Bill were activated the bookmakers would receive preferential treatment in the allocation of sites. But that is quite a way from what we are discussing on the Clause and I am satisfied with the Minister's assurances. I am grateful for the way in which he has given them. I beg to ask leave to withdraw the Motion.