Speech by Minister for Sport Gerry Sutcliffe at the Association of British Bookmakers Annual General Meeting – 4 March 2008

4 March 2008

Thanks to everyone for inviting me to speak to you today. My predecessor as Minister, Richard Caborn, had the opportunity to address your AGM several times, and I know he worked hard to build a positive relationship between the betting industry and Government.

I am very keen to continue that collaborative approach, especially as we move forward into what will be an important period, during which I hope that many of the issues that have come to the surface during the recent Levy determination will be resolved.

You don’t need me to tell you that bookmaking has changed significantly over recent years. Betting shops now open for more varied hours and offer a range of different betting products, demonstrated by the growth in popularity of Category B2 machines, formerly Fixed Odds Betting Terminals. Crucially, bookmakers have also expanded their product way beyond simply horserace betting to increasingly offer betting on a wide variety of other sports.

The Gambling Act has presented a number of challenges and opportunities to bookmakers during the last year, and it is testament to your professionalism and vision that the industry is reacting so positively to meet the needs of punters, in an increasingly competitive leisure sector.

However, although bookmakers are no longer entirely reliant on horse and greyhound racing, that symbiotic relationship still remains at the heart of your business. If horseracing thrives in this country, it stands to reason that this will also attract more people through the doors of betting shops and into on-course betting rings.

The Financial Times leader of 17 January summed it up, saying:

“The betting levy that bookmakers pay to the horseracing industry should have been put out to grass long ago. Common sense suggests that both [bookmakers and horseracing] should be backing the same horse: a flourishing racing industry with enough money to invest in improving facilities and building on record attendances.”

Given the interdependence of the two industries, I must say I was deeply sad that they could not agree the 2008/09 Levy scheme between themselves and that Government was required to step in.

You have heard from Tom Kelly and Patrick Nixon about the Levy determination and I understand that you are disappointed by the decision. However, I strongly believe that a roll-over of the 46th determination to the coming year was the fairest and most practical solution available, given the gulf between racing and betting.

We carefully considered the submissions from the Bookmakers’ Committee and the British Horseracing Authority, as well as advice from consultants OCP and from the independent members of the Levy Board.

A roll-over was recommended by the independent members of the Levy Board, a non departmental public body of DCMS, and I believe that this now allows time for the two sides to come together and negotiate a mutually satisfactory way through the new circumstances in which both industries find themselves, including that issue of Turf TV.

It is important that these discussions begin immediately, so I am arranging the first of a succession of meetings through the All-Party Racing and Bloodstock Industries Group to take this forward. I know, with the Cheltenham Festival and Aintree coming up, this is a busy time for everyone, but I hope these meetings can be given high priority. I don't think it suits either racing or bookmaking to delay the discussions any longer.

I will be hosting the first meeting and we are currently finalising details, including the Terms of Reference of the meetings. I know you feel strongly that those Terms of Reference should include an end date for the Levy.

However, please be quite clear that that the Levy will continue until we are certain that an alternative is in place which is acceptable to both sides, however long that takes. The focus should be on getting that acceptable alternative in place, and I am clear that a broad range of factors including Turf TV, betting exchanges, the growth in popularity of high stake high prize gaming machines, and the expanding fixture list will all need to be on the table.

As to whether legislation will be needed to underpin the new arrangements, I will consider this possibility when details of an alternative begin to emerge.

I am hopeful that the meetings will be approached with a spirit of partnership, allowing for an honest, wide-ranging debate and in that respect I have to say that I am encouraged by what I have heard. You obviously recognise that the things cannot continue as they are, and are rightly going in with an open mind.

Moving on to another area of interest to bookmakers, some attention has been drawn to my asking the Gambling Commission to prioritise their research into the impact of high stake high prize gaming machines on problem gambling.

As I have already said, there has been considerable growth in the popularity of these machines. For instance, according to preliminary results, revenue from machines at William Hill is up 15 per cent.

I am sure you will understand it is important that we analyse their impact in Britain properly, and make sure the regulatory framework is correct. I recognise you may be concerned about what the outcome of this work might be, and that is precisely why I would like the review to be given particular priority, to provide certainty to the industry.

I know that fee levels also continue to be of great concern, especially to smaller bookmakers. We must ensure the Gambling Commission has enough funding through the fees to be able to do its job properly. But we are working with the Commission to review the fees and make sure they are at the right level, so that businesses are not penalised unfairly.

The ABB has already discussed the fee levels with the Gambling Commission and I would urge you all to take an active part in the joint consultation in due course.

Whilst the majority of people are able to bet responsibly, there are undoubtedly a small number for whom gambling is a problem. As you know, this is an area of particular concern to Government and Parliament, and I sincerely appreciate the commitment that bookmakers put into meeting your social responsibility obligations.

However, I would be missing a good opportunity, with many operators represented here, if I didn’t reiterate the Secretary of State’s disappointment that only around 360 of 3800 licensed operators have contributed to the Responsibility in Gambling Trust this year.

I realise that there are many calls on your pockets – not least voluntary contributions towards greyhound welfare and to promote betting integrity.

Nevertheless, when making his Casinos statement to Parliament last week, Andy Burnham warned that unless all gambling operators, including bookmakers, deliver a timely and significant increase in contributions by the end of the year, he will seek to introduce a statutory levy.

This is not an empty threat, but I am confident that the betting industry will heed the warning.

On another issue of concern to some of you, there has been some good progress made in the Working Party I set up, under an independent Chairman, to try and resolve the dispute between racecourses and on-course bookmakers about the system for allocating pitches for on-course bookmakers after the Five Time Rule expires in 2012.

This is a positive sign given the tensions that have existed between the two sides, and I look forward to their conclusions in due course. Like the proposed Levy discussions, this is another example of where the racing and betting industries have a clear incentive to work together for mutual benefit. I hope they will increasingly be able to do so without Government mediation.

It would be wrong of me to finish without paying to tribute to the efforts of Tom Kelly on behalf of bookmakers both through the ABB and before that at its predecessor, the Betting Office Licensees Association. I think Tom has been highly effective in the discussions and relationship with Government, and I know that his work on behalf of the betting industry over the years has been unceasing.

He has always fought the ABB’s corner with great authority but good humour, and I am pleased that although he is retiring soon, his knowledge will not be lost entirely as he will continue to assist where needed. The experience of people like Tom will be essential during the critical discussions on the future relationship between betting and horseracing over the coming weeks.

These discussions mark a real opportunity to bring forward a new relationship between the two industries and I am confident that we can make progress. I am pleased that you are committed to work with us to this aim. It is clearly in your interests to do so.

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