§ 7.0 p.m.
§ LORD WINDLESHAM
I beg to move that this Bill be now read a second time. Although this Bill looks somewhat complicated it has a simple purpose which I should explain at the outset. This is to safeguard the position of certain charities and sporting activities which derive a substantial part of their income from 730 what are often described as charity pools. These take the form of competitions, usually based on the outcome of football matches and in many ways similar to fooball pools, which have as part of their appeal to the public the fact that considerable sums are paid over to charities out of the proceeds. The Spastics Society, for example, has benefited to the tune of between £1½ and £2 million a year from competitions of this sort. This is probably the largest single charitable organisation affected, but there seems no doubt that several million pounds a year are going to deserving charities and sporting interests.
As your Lordships are aware, for some years a number of competitions have been operating from which charities and sport derive considerable benefit. Until recently these competitions purported to operate as lawful pool betting, but the decision of your Lordships' House in the case of Singette & Others v. Martin established that they were in fact unlawful lotteries. The purpose of this Bill is to restore to a limited extent and for a limited period the position which was thought to obtain before that decision. It does no more than make the necessary changes to enable those competitions to be treated again for a limited period as pool betting.
The schemes which the House of Lords found were unlawful lotteries had many 731 similarities with legitimate pool betting, but there were also some significant differences. The principal difference was that the overwhelming majority of those taking part made no forecast. These schemes had other features which distinguished them from ordinary pool betting. The most important, of course, is that they operated to provide substantial financial contributions to charity and sport. Another distinguishing feature is the much greater reliance placed by them on the collection of weekly entry moneys by local collectors organised under a system of regional supervisors. One other feature to which I should like to draw attention is the combination of these schemes with other forms of benefit—notably Premium Bonds or gifts—which do not purport to be pool betting at all and which accordingly do not come within any part of the existing system of control. Some of these distributions of benefits proved to be lotteries, and unlawful on that account. In other cases distributions are made in such a way as to avoid this illegality. In addition, some competitions are associated with modest insurance schemes which act as an inducement to the entrant to maintain his regular weekly payments.
These collateral schemes are of considerable importance in considering the provision that has to be made in this Bill. It has been the practice for some promoters to run the whole scheme by a series of separate companies, one company running the pool competition and other companies being responsible for the related benefits. In some cases the contribution to charity or sport has in fact been made out of the turnover of the company concerned with the related benefits. It is not, therefore, sufficient to deal with the pool competition itself in isolation, but it is necessary to take into account the whole operation.
It would seem that the financial pattern of these schemes is subject to a good deal of variation. In one scheme, for example, 25 per cent. of the entry money goes into the pool competition and 75 per cent. goes into the related schemes. Other competitions have been differently organised, with a much greater proportion of the entry money going into the competition proper. The amount of benefit going to charity and sport has 732 also varied from scheme to scheme. In some cases it has averaged about 10 per cent. of the total turnover, and in other cases it has reached a higher figure. The total turnover involved has been very substantial. The annual turnover of what may be the largest of these schemes has on occasion reached a figure as high as £15 million.
It is the size of the benefit to charity and sport which has led the Government to decide that it would not be right to allow this source of income to be suddenly brought to an end. It would clearly be impracticable for the charities affected to find comparable sources of income to replace what would be lost without strenuous efforts over a long period. At the same time it would not have been practical to introduce comprehensive permanent legislation to regularise the situation in time to save the income on which certain charities and sport had come very largely to depend. The Government, therefore, decided that the right course would be to introduce temporary provisions in the nature of indemnifying legislation, to enable those charitable and sporting interests concerned who had come to depend on this form of income to continue to enjoy it while the whole of the law in this field is reviewed.
This review has now been put in hand. The laws concerning lotteries, pool betting and prize competitions are far from straightforward, and it seems sensible to consider the implications to the public as widely as possible and not in a piecemeal way. There are, of course, many other interests involved as well as charities who have benefited until now from this sort of income, and it should not be assumed that the law will be permanently altered to enable arrangements of this kind to continue in the future. What the Bill does, therefore, is to provide a breathing space, a period of five years, in which charities which have depended on this form of competition for such a large part of their income can seek alternative sources. I should add that the Bill only applies to those schemes which were already in operation at the time of the decision in Singette and others v. Martin last November. There will not be any opportunity for new entrants to come into the field.
The Bill is concerned only with competitions for prizes depending on the 733 sporting events. What is meant by the words "competition for prizes" is defined in Clause 7(2). This establishes that the allocation of prizes must depend on the outcome of a sporting event; that there is a right to forecast the outcome, even though it is not exercised; and that prizes can be won whether or not a forecast is made. The Bill legalises the competitions in question by providing a procedure for identifying those which are intended to be covered by it and licensing them to continue to operate in the way they have done, subject to new controls.
The cornerstone of the new procedure is the Gaming Board, which has very willingly taken on this new task. It has been necessary to introduce a central authority of this kind because of the wide variations which exist from scheme to scheme, and the difficulty of knowing, without full information about the various schemes, what general or particular provision ought to be made. Accordingly the Gaming Board is given power to issue certificates identifying the schemes which will benefit under the Bill, and to license those schemes to continue subject to controls. The procedure for issuing certificates is contained in Clause 1. The essential criteria are that the promoter must have held during the year preceding the House of Lords decision at least nine competitions, which must have benefited some charities or sporting organisation or other organisation not established for private gain, and that the competitions must have been of a certain kind, closely analogous to pool betting. Once an applicant has satisfied the Board a certificate must be issued.
The licensing provisions are contained in Clauses 2 and 3 of the Bill. The effect of the grant of a licence will be to treat these competitions as lawful pool betting. This will remove them from the lottery law and ensure that they are subject to the ordinary provisions of the pool betting law. In addition to issuing the licence the Board is given power to impose conditions. The primary object that the Board must satisfy in exercising its powers is set out in Clause 2(2), namely, to ensure that financial benefit continues to accrue to the relevant society. In addition the Board is required to impose conditions which will ensure 734 that full information about the whole operation of the scheme is made available to those who take part.
Licences under the Bill will run for a year at a time and the Board is given wide power to extend or revoke a licence. This power to extend or revoke will enable the Board to keep these licences continually under review. The financing of the new procedure will be covered by fees payable to the Board by applicants for certificates and licences. The amount of these fees will be prescribed by the Secretary of State by Order under the power conferred on him by Clause 5.
The Gaming Board have already invited applications for certificates from pool promoters whose competitions fulfil the criteria in Clause 1 of the Bill, and a number of applications have already been received. As soon as the Bill has received Royal Assent the Board will act as quickly as possible in issuing licences, to ensure that existing schemes are brought within the law so that the contributions made to the benefiting organisations can continue. My right honourable friend the Home Secretary is very grateful to the Chairman and members of the Board for taking on this new task.
This is a small Bill, but an important one to the interests concerned. It is an agreed measure between the Parties, and for the reasons that I have given I hope it will commend itself to your Lordships. I beg to move.
§ Moved, That the Bill be now read 2a.—(Lord Windlesham.)
§ 7.12 p.m.
§ Loon GARDINER
My Lords, the House will be grateful to the noble Lord, Lord Windlesham, for the clear way in which he has explained this Bill to us. At first sight, is is a rather complicated Bill, and it seems an odd piece of legislation to put before Parliament, because it enables people to go on doing something which your Lordships' House has found to be illegal. But when one looks into it, one finds that it is a good example of that common sense which we hope in the end the Government will show in relation to Equity and the Industrial Relations Bill.
It is the fact that a limited number of charities have been raising large sums by these pool competitions which they 735 believed to be legal. Not only do the Spastics Society stand to lose something between £1½ million and £2 million a year, but the National Fund for Research into Crippling Diseases and the Imperial Cancer Research Fund together are in danger of losing more than £200,000 a year. One must realise therefore that if this fund raising had suddenly stopped, as it would if there were no legislation, the good work clone by the Spastic Society for spastics, for example, would at once have been drastically curtailed. Therefore, it is only common sense in the circumstances that the Government of the day should say: "We have always known that the law about pools competitions and lotteries has been a troublesome one, and we will appoint a Working Party to go into it; meanwhile, we will have this short Bill to enable these socieites to go on doing what they have done so far."
As the noble Lord has said, this Bill received unanimous support from all Parties in the other place, and the reason, I apprehend, why there are not the usual cheering crowds behind me is not solely due to another attraction which is now taking place in your Lordships' House, but to the fact that nobody would wish to say anything against this admirable Bill.
§ 7.14 p.m.
§ LORD EBBISHAM
My Lords, I should like to give a brief but warm welcome to this Bill on behalf of first-class cricket. 'Those of your Lordships who are interested in first-class cricket will know that the financial position of most county clubs is at a very low ebb indeed. Some clubs, one of which is Surrey, of which I happen to be honorary treasurer, are wondering whether they can survive at all. For some years now most county clubs have been relying on pools competitions, in common with some charities and football, for additional income. The most noticeably successful in cricket has been the Warwickshire County Cricket Supporters' Association, which has from its funds so collected helped many aspects of cricket as well as the Warwickshire County Club. So when the decisison in Singette and Ors v. Martin came to be known it was a great blow to first-class cricket in general.
I am well aware that the main purpose of this Bill is to help those charities, both 736 great and small, which have been counting on this harmless form of gambling to produce a useful source of income, and to compare the worth and value of the work which these organisations do with cricket and football would be absurd. Yet I venture to think that cricket is part of our national heritage—a heritage which we have imparted to many parts of the Commonwealth, and which forms a bond between us wholly for good. Indeed, cricket has spread beyond the bounds of the Commonwealth, and can be found in such unlikely places as California, Corfu and the Netherlands. As such, it is surely worth preserving.
We are therefore extremely grateful to the Government for acting so promptly. This Bill, as has been said, is admittedly only a holding operation, but we must hope that the review later on will lead to the permanent restitution of the right to hold these pools competitions, or to some similar right. I thank the Government warmly for introducing the Bill, and I hope that your Lordships will give it a second reading.
§ 7.17 p.m.
§ LORD WINDLESHAM
My Lords, I think all that remains for me to do is to thank both noble Lords who have spoken in this brief debate. The Bill represents, as the noble and learned Lord, Lord Gardiner said, a common sense approach. There was no other course of action that could be taken. We were aware of the significance of these competitions to first-class cricket and I believe it to be the fact that the Warwickshire County Cricket Supporters' Association has been paying a sum of approximately £750,000 to first-class county cricket and also to certain football activities. The cricket grounds of Gloucestershire and Leicestershire were both purchased recently out of grants made from that source. However, the whole question is now under review and we should not assume that the shape the law finally takes will necessarily correspond to this temporary measure. I thank noble Lords once again for what they have said.
§ On Question, Bill read 2a, and committed to a Committee of the whole House.
§ [The Sitting was suspended at 7.18 p.m. and resumed at 7.45 p.m.]