§ Motion made and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones]
11.46 pm§ Mr. Tim Smith (Beaconsfield)I am grateful for the opportunity to raise this evening the subject of greyhound racing. I am especially grateful to my hon. Friend the Minister of State, Home Office for coming to the House to reply to the debate. I am glad, too, to see a number of hon. Members present who I know have an interest in the matter, including my hon. Friend the Member for Langbaurgh (Mr. Holt).
I have raised the subject because I am a great enthusiast of greyhound racing. I have attended several meetings recently and they have been most enjoyable occasions. It may be that my hon. Friend has not been to a greyhound meeting in the recent past and I urge and thoroughly recommend him to take the opportunity to attend one.
Next week's derby, worth £30,000 to the winner, will he watched by more than 10,000 racegoers and will be followed avidly by millions of people via the media. No, it did not take place at Epsom a week ago—this is the classic of the classics, the Greyhound Derby. It is the culmination of six rounds of competition among 200 runners, and it will be run at Plough lane, Wimbledon.
This is the start of the greyhound festival week and it is an appropriate time to look at the sport of greyhound racing and how it has fared over the past 10 years.
Greyhound racing is popular, but under-financed. Attendances are going up on the more popular courses, but smaller ones are still under threat from property developers. Ten years ago there were 48 courses, but today there are only 35, which race under the National Greyhound Racing Club rules.
Crowd violence and drunkenness have never been a problem and most tracks in recent years have become much more upmarket and can offer a sophisticated dinner and evening out. Nonetheless, the underlying tendency is that the sport is getting poorer while the off-course bookmakers, through their betting office chains, are getting richer. Standards countrywide for racegoers and the greyhounds are not improving as fast as they should.
The heart of the problem is that greyhound racing, as with horseracing, is unable to extract a fair price from the off-course betting shops for the use of its product. The situation is exacerbated for dog racing, which gets no levy and only totally insignificant sums from the off-course betting industry, despite the fact that the sport now provides nearly one third of off-course betting revenue for the bookmakers. As horseracing receives an off-course betting levy administered by the Horserace Betting Levy Board, so should greyhound racing receive an off-course betting levy.
The bookmakers argue that most greyhound race meetings take place in the evenings, when betting offices are closed. However, that does not prevent punters from placing their bets on evening dogs during the daytime when the shops are open—and thousands do.
The bookmakers say that almost all their greyhound business is conducted on the afternoon meetings. That may be true, but those afternoon meetings—although the bookmakers own some of the tracks—are all part of NGRC greyhound racing and subject to NGRC rules, stewardship, licensing and discipline. All the greyhounds, 678 their owners and trainers are NGRC-registered. The meetings could not be run in the absence of a supervisory authority for greyhound racing whose integrity is assured by independent stewards to the satisfaction of the licensing authority and the Home Office, which has overall responsibility for the conduct of betting sports.
All off-course greyhound betting takes place on the results of racing at NGRC-licensed tracks. It amounts to more than a £1 billion turnover for the off-course bookmakers. In betting offices the same 10 per cent. deduction is made for a bet on a greyhound as for a bet on a horse. That permits the bookmaker to recover betting duty and levy. Since greyhound racing has no levy, however, that part of the money taken from greyhound punters, supposedly to cover the levy, is not passed on to greyhound racing. The bookmakers keep it and the punters do not know that. In effect, the bookmakers make a levy charge on greyhound punters and keep the proceeds to boost their own profits. Because the bookmakers are able to exploit greyhound punters in that way, it makes sense for them to maximise their greyhound racing betting, which is what they have been doing. Between the years 1977 and 1988 the amount of off-course betting turnover on greyhounds increased from 18 to 27 per cent. of the total. Betting on horses went down from 82 to 72 per cent.
As long as bookmakers are able to charge greyhound punters for a levy that does not exist, the composition of off-course betting will continue to change to the detriment of horseracing and therefore to the detriment of the horseracing levy.
The statutory 8 per cent. betting duty applies just as much to off-course greyhound betting as to off-course horse betting, so the Government have an equal interest in both. But the greyhound betting public is not being protected in the same way as the horserace betting public because greyhound racing has no levy income to help fund veterinary work, or to improve security and dope testing, particularly in the increasing use of steroids. It has no equivalent to the equine research centre or the Racecourse Security Services companies, both of which are funded by virtue of the horserace betting levy. Why should the punter who bets on a dog and pays 8 per cent. to the Government not be protected in the same way as the punter who bets on a horse and pays 8 per cent?
A levy for greyhound racing would provide the necessary financing to improve protection for the public. Annual betting turnover on greyhounds now exceeds £1£3 billion and a levy for the sport similar to the horseracing levy would yield between £10 million and £11 million. It would also remove the bookmakers' incentive to exploit betting on greyhounds at the expense of the horseracing levy.
Many people are now beginning to question the fairness of the present situation, which leaves greyhound racing out in the cold. In the absence of a levy, much thought has been given to some alternative funding mechanism to provide a proper balance between the supplier and the retailer of the betting product. The ideal alternative would have been the control by the greyhound racing and horseracing authorities of the satellite communications company which distributes betting information and live television picture commentaries from the greyhound stadium to the off-course betting shops. But here again there is a marked imbalance. Control of Satellite Information Services Ltd., known as SIS, rests with the 679 bookmakers, who appear to have no intention of relinquishing that control, or of allowing greyhound interests to have any stake in the company.
In the first placement of SIS shares the big four bookmakers took 45 per cent. of the 60 per cent. which were allocated, the Horserace Tote took 5 per cent. and the Racecourse Association 10 per cent. This put the bookmaker in the driving seat during the vital period when the company was being established. The result has been, as we see in the latest announcement relating to the imminent placing of the remaining 40 per cent. of SIS shares, that the big bookmakers are calling the shots once again. They are saying that none of the unplaced shares will be allowed to go to horseracing or greyhound racing, at least until 1992, when there is the vague promise that the company will go public. That means that if bookmakers have their way, racing will have to join the queue for shares with everybody else.
Since Sears Securities has sold its William Hill betting shops chain to Mecca Bookmakers, a new allocation of shares has been announced. Ladbrokes, the combination of William Hill and Mecca, and Corals, the big three, are to share between them 45 per cent. of SIS, and the Tote's holding will be increased by 1 per cent. to 6 per cent., giving bookmaking interests 51 per cent. Sears Securities is to keep just under 13 per cent., leaving only 26 per cent. for the outside world. The Racecourse Association, representing horseracing, remains with its handout of 10 per cent.
Clearly the bookmakers have no intention of letting other partners into SIS and horseracing may find its negotiating hand rather short of trumps in years to come. Greyhound racing, meanwhile, holds no cards at all despite the fact that two greyhound race meetings are beamed live every afternoon into off-course betting offices.
The merger of Mecca Bookmakers, owned by Grand Metropolitian plc, and the William Hill Organisation is presently the subject of a Monopolies and Mergers Commission inquiry. The merger serves only to aggravate the situation and give the big three bookmakers and their associates a bigger stake in the control of the only means of distributing betting information to betting shops.
The merger will also further restrict competition in the betting market and strengthen the influence of the major bookmaking companies over the Bookmakers Afternoon Greyhound Services company which was established to obtain from NGRC licensed greyhound racecourses a racing service for off-course outlets during betting office opening hours. That might have developed into the ideal mechanism for paying to greyhound racing a proper price for its product. Unfortunately it has not, because the big bookmakers have also managed to usurp the sport's position there.
Two of the big three bookmakers, Coral and Ladbrokes, now own and operate four of the eight greyhound tracks which, in 1988–89, supplied the greyhound service to betting offices. A fifth track supplying the bookmaker service is Newcastle, which is owned by Ladbrokes and leased to a private company to operate. A sixth is Hackney, whose owners, Brent Walker Ltd., purchased 119 betting shops from William Hill at the time of the merger with Mecca. Bookmaking interests control six out of the eight tracks which supply greyhound racing to bookmakers.
680 When the law governing the control of betting at greyhound tracks was enacted it became an offence for the proprietor of any greyhound stadium to run a book or have any interest in bookmaking at that stadium. The public interest objective was to prevent organisers of races from offering betting odds against runners. The offence is now to be found in section 19 of the Betting, Gaming and Lotteries Act 1963, which remains in force today. The law applies only to on-course betting. Thus, bookmakers who are also track proprietors can run a book in their betting shops on the racing taking place at their tracks. In other words, the law does not extend to the bookmaking companies which now organise off-course betting on greyhound racing, taking enormous numbers of bets on races that they and their employees arrange at the tracks which they own.
Perhaps my hon. Friend the Minister will agree that the law appears anomalous and should be brought up to date. I am suggesting that the spirit of section 19, if not the letter of the law, is being contravened because no safeguard exists for the off-course betting public such as that which exists for racegoers. The spirit of section 19 is being abused by all the major bookmakers. Would it not make sense, in the greyhound punters' interests, to take a leaf out of horseracing's book and prohibit bookmakers from using their own greyhound tracks to supply any form of greyhound racing and betting service to their own betting shops? If the law was changed in this way, and the sport of greyhound racing was given some form of enforceable copyright in its race results, market forces might prevail.
The Government-appointed members of the Horserace Betting Levy Board have made it clear that they believe that there should be a direct market mechanism between racing and the betting industry. In the absence of this mechanism, horseracing and greyhound racing should be treated equally.
I conclude that the existing horserace betting levy should be extended to include greyhound racing and, indeed, other sports on which off-course betting takes place, although I understand that, pro rata to the two racing sports, the other sports account for only about 1 per cent. of the total. I also conclude that there should be an inquiry into off-course betting's unhealthy influence over afternoon greyhound racing.
§ The Minister of State, Home Office (Mr. John Patten)I welcome the opportunity which my hon. Friend the Member for Beaconsfield (Mr. Smith) has given us to respond to some of the anxieties of the greyhound racing industry and of those who enjoy the sport.
I sometimes think that issues of dispute between the racing and bookmaking industries may appear to the outside world a little arcane, but the way in which my hon. Friend addressed the House this evening was a model of clarity—much more so perhaps than some of the technical and often heated exchanges that we see in the racing press, which are hard for the average person to understand. Now the greyhound industry has taken its campaign to the pages of The Times, in which it is advertising. That newspaper may or may not be read more widely by hon. Members than, say, The Sporting Life.
Racing and betting are major industries in this country. They are the major passions of some people and they are among the diversions, if not passions, of a good many 681 more. Incidentally, I welcome the presence in the Chamber of my hon. Friend the Member for Langbaurgh (Mr. Holt) who takes an interest in these matters.
My hon. Friend the Member for Beaconsfield ended by speaking of the need for an inquiry into the problems of greyhound racing and of betting on it. I shall begin by responding to that point, and then try to deal with as many of his detailed points as I can in the time available. Those that I do not answer now I shall try to deal with immediately in writing.
I can confirm that my right hon. Friend the Secretary of State and I are carefully considering whether to hold an inquiry, and, if we hold one, whether it should include horse and greyhound racing. The need for an inquiry has been urged on us not least by the British Greyhound Racing Board, to which my hon. Friend referred. The House will know that last year, alas, the Horserace Betting Levy Board and the Bookmakers Committee failed to agree the terms of the horserace betting levy scheme for the current financial year—the 28th scheme. My right hon.Friend the Home Secretary was therefore called upon to determine the scheme.
In their submissions about the levy dispute, the three Government-appointed members of the levy board recommended the establishment of an inquiry into the long-term funding of racing. My hon. Friend referred to these three people, who served the board with such distinction. When my right hon. Friend announced his determination of the scheme on 22 March this year, he said that he understood the arguments for this recommendation—meaning the need for an inquiry. He also explained that the possible privatisation of the Horserace Totalisator Board is a factor relevant to reaching a conclusion on the need for and the scope of an independent and objective assessment of the issues within the recommendation.
My right hon. Friend added that he would announce his conclusion on an inquiry when we had received and considered the advice of Lloyds merchant bank on the feasibility of privatising the Tote. I am not in a position to announce our conclusions on that issue, but we are making progress in considering the complex issues involved and at the end of April we received Lloyd's advice on the Tote. In addition, we have assured the chairman of the Betting and Greyhound Racing Board that whether or not the funding of greyhound racing should be included in such an inquiry is most certainly among the considerations that we are taking into account. I am happy to repeat that. In our view, that is certainly the right approach. It does not seem sensible to pursue an inquiry into greyhound racing alone.
§ Mr. Richard Holt (Langbaurgh)rose—
§ Mr. PattenI see that my hon. Friend the Member for Langbaurgh (Mr. Holt) is rising menacingly.
§ Mr. HoltHas the Minister and our right hon. Friend the Home Secretary taken into account the latest deliberations of the Horseracing Advisory Board, which has said that it is firmly against any form of inquiry?
§ Mr. PattenWe take careful account of the views of the horseracing world. I am aware of the matter to which my hon. Friend refers. In recent months there have been some substantial shifts of opinion in the horseracing world about the desirability of an inquiry. Sometimes it is rather hard for the innocent Minister to keep up with the shifts in fashion about whether to have an inquiry.
§ Mr. PattenI welcome my hon. Friend's promise to keep me posted. No doubt the two Opposition Members who are present will do the same.
We have not reached a decision about an inquiry, but if one is held it will certainly encompass the relationship between greyhound racing and off-course bookmaking. That is a pledge if we go ahead with the inquiry. It would be extremely odd to consider bookmaking separate from its relationship to horse racing which accounts for the majority of off-course betting turnover.
Greyhound racing and horseracing are also alike in being subject to constraints and in enjoying privileges under legislation for which my right hon. Friend the Home Secretary is responsible. That is not to say that an inquiry is inevitable, because many of the issues that might be covered were explored in depth and with considerable authority by the Rothschild Royal Commission on gambling which reported 11 years ago, in 1978. It is not right to say that racing's interests have been neglected in the intervening years. For example, greyhound racing and horseracing were certainly helped by the abolition of the on-course betting duty in 1987. That help by my right hon. Friend the Chancellor of the Exchequer was widely welcomed.
§ Mr. Alan Meale (Mansfield)I accept much of what the Minister has said about how the industry has progressed. However, as the hon. Member for Beaconsfield (Mr. Smith) said, in the last 12 months a substantial amount of money—approximately £11 million—has gone astray. It has been taken from punters in off-course betting shops and continues to be deducted from punters who presume it is being paid in tax. To me, and probably to the majority of hon. Members, that is deception by off-course bookmakers of the punters. Will the Minister see if he can find a way to direct some of that money into the greyhound industry?
§ Mr. PattenI shall do my best to respond later to the general tenor of the intervention by the hon. Member for Mansfield (Mr. Meale). I hope that hon. Members will forgive me if I do not give way again because I wish to give as full a reply as possible before the debate finishes at 12.16.
I welcome the view of the hon. Member for Mansfield that he has seen some improvements. Like my hon. Friends the Members for Beaconsfield and for Langbaurgh, he will have noticed that the Government supported private Members' legislation in 1985, the Betting, Gaming and Lotteries (Amendment) Act, which abolished the limit on the number of days on which betting, and hence racing, was allowed on each greyhound track. That was a substantial advance.
In addition, means exist for exploring concerns about bookmaking, ill founded or not. It is interesting to re-read the Royal Commission's report of 1978. One passage caught my eye and I shall read it to the House and thereby run the risk of bringing to his feet again my hon. Friend the Member for Langbaurgh. It says:
As Jane Austen might have said, it is a truth universally acknowledged that bookmakers make too much money…in fact, one might say that this opinion is held by everyone except bookmakers.I do not hold those views myself.Claims such as the manipulation of odds or betting information and alleged domination of others within or by 683 the bookmaking industry will, I suspect, continue just as long as bookmakers and punters do business. It shows something of the vitality of the racing industry, both horse and greyhound, that these feelings run so strongly. Such claims were considered exhaustively by the Director General of Fair Trading in 1986 and 1987. As a result, early last year, he decided not to refer the off-course bookmaking industry to the Monopolies and Mergers Commission as a potential complex monopoly.
Continuing and suitable action under current arrangements—for example, by the Home Office, the Office of Fair Trading or Customs and Excise—might, therefore, remain the best means to address the concerns and claims of the racing industry. The arguments for a comprehensive review are also strong. My right hon. Friend the Home Secretary hopes to announce his conclusion on an inquiry before the House rises for the summer recess, or, if not, in the spill-over session.
My hon. Friend the Member for Beaconsfield made a cluster of arguments for a levy on off-course bets for greyhound races, and asks two specific questions. He referred to Satellite Information Services. The greyhound industry has variously alleged that SIS is dominated by the big bookmakers, and argued either that it should be entitled to a holding in SIS, or that the placing of unissued shares in SIS should be deferred until there has been an inquiry into racing and betting. I understand the strength of feeling on this, but the Government are not answerable for SIS's conduct as a commercial company. I understand that, at present, the big bookmakers do not control the SIS board. Under the terms of the proposed sharing placing—I have gone into this with some care—the bookmakers' shareholding will reduce to less than 50 per cent. I also understand that the Racecourse Association, which also is independent of Government, is not sympathetic to the call for it to block the share placing unless or until there has been an inquiry. The current investigation by the Office of Fair Trading into the relationship between SIS and the 684 Racecourse Association is a matter for the Director General of Fair Trading, not my right hon. Friend the Home Secretary, but I understand that the outcome of the investigation will be made public.
My hon. Friend then referred to section 19 of the Betting, Gaming and Lotteries Act 1963, and suggested that the spirit of this section might be being abused by the ownership of some greyhound tracks by off-course bookmaking companies. That section prohibits the proprietor of any greyhound track from having an interest in bookmaking on that track. That is because the proprietor can also operate his own totalisator. If he could also conduct the on-course bookmaking, he would have a monopoly of on-course betting. This does not apply to the ownership of tracks by off-course bookmakers. This was looked at in some depth by the Rothschild commission. In the absence of any evidence of abuse, it did not support the case for prohibiting off-course bookmakers from owning tracks, and nor has the Office of Fair Trading made any recommendations about it. If anyone has any evidence of malpractice, such as the fixing of races, by virtue of ownership, it is extremely important that it is brought to the attention of the Office of Fair Trading or the Home Office, and we shall deal with it urgently.
There are six principal reasons why the Government believe that the law relating to the levy on off course betting on greyhound races should not be changed. First, it is argued that greyhound racing is entitled to a levy because horseracing has one. The arrangements for the horseracing levy are in question at present, following the dispute about the 28th levy scheme and the resulting call from members of the levy board for an inquiry. Looking back at the origins of the levy, the extent to which it was the product of several special factors that applied back in 1960 is striking. The viability of English racing—
The motion having been made after Ten o'clock on Monday evening, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at sixteen minutes past Twelve o'clock.