Pool Competitions Act 1971 (Continuance) Order 1983 (Hansard, 14 July 1983)

§ The Parliamentary Under-Secretary of State, Home Office (Lord Elton)

My Lords, I beg to move that the draft Pool Competitions Act 1971 (Continuance) Order 1983 laid before the House on 10th May be approved. The draft order has been considered by the Joint Committee on Statutory Instruments, which passed no comments thereon. The purpose of this draft order and the background to it will be familiar to those of your Lordships who have attended these debates in previous years. The Pool Competitions Act came into force on 27th July 1971 and set up a system of licensing and control, administered by the Gaming Board of the so-called charitable and sporting pools. These are competitions for prizes, depending on sporting events (essentially football matches) and run for the financial benefit of organisations supporting charities and athletics or games.

The Act was introduced following a judgment by this House in 1970 that a particular competition of this kind did not constitute lawful pool betting, as the promoters had supposed, but was, in fact, an unlawful lottery, because prizes were not in the main for making forecasts—an essential feature of lawful pool betting—but for holding or selecting numbers which happened to be lucky in a particular week.

The effect of this judgment on the charitable and sporting organisations supported by these competitions, such as the Spastics Society and the Imperial Cancer Research Fund, could have been severe. They derive substantial income from this source. The Pool Competitions Act 1971 was therefore introduced as a temporary measure to safeguard the interests of the charities and sporting clubs concerned. It did not permit new schemes to be launched. There were at the time 18 schemes, but the number has since diminished to six.

The Act was to have effect for five years, but under Section 8 of the Act there is provision for its extension by order for up to a year at a time. The Act has, in fact, been extended annually since 1976. Last year, the then Home Secretary announced his intention to lay further annual orders as necessary during the lifetime of that Parliament. A discussion document on the future of pool competitions had been sent to relevant organisations and a copy was also placed in the Library of your Lordships' House. Since then, the comments on the discussion document have been considered and officials have had further meetings with representatives of the promoters and beneficiaries under the Act.

902 Your Lordships will not be surprised to hear that our consideration of this whole issue posed a substantial dilemma—the same dilemma that has faced all Governments since the inception of the Act. There has been criticism during these debates in previous years; sometimes directed at the lack of a permanent solution, sometimes at aspects of the schemes themselves. The difficulties posed by this seemingly small issue are, on closer examination, not insignificant.

Some might think that the Act should be allowed to lapse; that it was intended as a temporary measure; that it created a privileged position for those who benefit by and operate under it and that this anomaly should now be removed. They would say that there is no evidence of any demand to make such competitions more widely available and point to the clear and unambiguous recommendation of the Royal Commission on Gambling that the Act should be allowed to lapse. This course would result in some saving in Gaming Board expenditure. It would also mean an end to these annual debates in this House and in another place.

There certainly is some logic in this suggestion, but against that we must consider the sums which various charities would stand to lose. To take the same two examples, in 1982–83 the Spastics Society derived £553,000 from these competitions; and the Imperial Cancer Research Fund some £600,000. It would be a rash act to deprive such deserving causes of these substantial sums.

As an alternative to letting it lapse, others might argue for some form of permanent legislation, whether confined to the existing schemes or open to all. This would also avoid the need for annual renewals and annual debates and remove uncertainty about the longer term. They would point to the deserving causes which benefit. Such legislation could either make the existing Act permanent or improve on it.

If it were simply a case of making the 1971 Act permanent, confined as it is to the existing schemes, it would involve no additional work once the amending legislation was passed and would not result in any wider expansion of the competitions. On the other hand, to preserve and make permanent what is patently an anomaly would also have disadvantages. If it was confined to the existing schemes, it would be discriminatory and might be thought unacceptable to your Lordships. If the new legislation were, on the contrary, to open the schemes up to all, this would not be discriminatory, whether it was done on the basis of existing controls or better. This also would avoid the need for annual renewals and annual debates. It would, however, create a new gambling outlet for which there is no demand.

I should stress that the Gaming Board, who would have to monitor and control the competitions, are opposed to their becoming more widely available even with tighter controls. Such a course would have financial and manpower implications for the board and perhaps for the Home Office as well. Stricter limits on such aspects as prizes or expenses could affect the viability of some existing schemes and, paradoxically, reduce the sums paid to the beneficiary. For all these reasons we have decided that permanent legislation is not a sensible option.

903 We have also considered whether these competitions could fit within the framework of the lotteries legislation. Some of the organisations operating under the Act run lotteries as well, but these are not as profitable as pool competitions. The prize limits for lotteries are considerably lower than the level of prizes available in pool competitions, and I do not think we should distort lotteries legislation simply to accommodate pool competitions. In any case, although the competitions are in essence lotteries, they nevertheless have characteristics of their own. I am advised that, in consequence, they would probably have to be dealt with as a distinct gambling activity in any permanent legislation.

Faced with this dilemma, the Government have decided that, subject to the draft order before the House being approved, further annual orders will be laid as necessary during the lifetime of this Parliament. This option has the support of the promoters and beneficiaries under the Act. They have come to accept that the prospect of permanent legislation with minimal changes to the 1971 Act is remote. In addition, by proceeding in this way we ensure that no new gambling outlet is created. Parliament will have the opportunity to review the position annually and to end these competitions when it wants to.

It might be said that this decision is based on mere expediency. I would rather call it pragmatism and remind the House that it was on pragmatic grounds that the Act was originally introduced. I doubt whether your Lordships would wish, any more than we do, either to deprive deserving causes of significant sums of money at a stroke or to perpetuate an anomaly for which there is no wider demand.

In presenting our intentions to the House, I should also emphasise that we do not see a long-term future for these competitions. The number of schemes has declined to six since the Act was passed and may well decline still further over the next few years. Despite the large sums that beneficiaries derive from these competitions, the amounts are declining as a proportion of their total income, and this trend seems likely to continue. There will come a point when we no longer feel justified in laying further renewal orders before the House. I would therefore beg those who benefit from the Act to use the opportunity provided by this statement of our intention to reduce still further their dependence on income from these competitions and to find and develop other ways of raising revenue. My Lords, I beg to move.