 |
Explanatory Notes to Horserace Betting And Olympic Lottery Act
2004 Chapter 25 |
|
© Crown Copyright 2004 Explanatory Notes to Acts of the UK Parliament are subject to Crown Copyright protection. They may be reproduced free of charge provided that they are reproduced accurately and that the source and copyright status of the material is made evident to users. It should be noted that the right to reproduce the text of these Explanatory Notes does not extend to the Queen's Printer imprints which should be removed from any copies of the Explanatory Notes which are issued or made available to the public. This includes reproduction of the Notes on the internet and on intranet sites. The Royal Arms may be reproduced only where they are an integral part of the original document. The text of this internet version of the Explanatory Notes which is published by the Queen's Printer of Acts of Parliament has been prepared to reflect the text in printed form and as published by The Stationery Office Limited as the Horserace Betting And Olympic Lottery Act , ISBN 0105625043. The print version may be purchased by clicking here. Braille copies of the Explanatory Notes can also be purchased at the same price as the print edition by contacting TSO Customer Services on 0870 600 5522 or e-mail: customer.services@tso.co.uk.
Further information about the publication of legislation on this website can be found by referring to the Frequently Asked Questions.
To ensure fast access over slow connections, large documents have been segmented into "chunks". Where you see a "continue" button at the bottom of the page of text, this indicates that there is another chunk of text available.
| |
|
These notes refer to the Horserace Betting and Olympic Lottery Act (c.25) which received Royal Assent on 28 October 2004 HORSERACE BETTING AND OLYMPIC LOTTERY ACTEXPLANATORY NOTES1. These explanatory notes relate to the Horserace Betting and Olympic Lottery Act which received Royal Assent on 28 October 2004. They have been prepared by the Department for Culture, Media and Sport in order to assist the reader in understanding the Act. They do not form part of the Act and have not been endorsed by Parliament. 2. These notes need to be read in conjunction with the Act. They are not, and are not meant to be, a comprehensive description of the Act. So where a section or part of a section does not seem to require any explanation, none is given. SUMMARY OF THE ACT 3. The Act concerns the abolition of the Horserace Totalisator Board ('The Tote') and the sale of its assets and the abolition of the Horserace Betting Levy Board ('The Levy Board'). Part 1 covers the sale and dissolution of the Tote, Part 2 the abolition and transfer of the assets of the Levy Board and Part 3 the licensing of Olympic Lottery games. 4. The Act enables Olympic Lottery games to be established as part of the National Lottery in the event that London is chosen to host the 2012 Olympic and Paralympic Games. It creates the necessary structures for holding the proceeds from these Lottery games and a distribution mechanism that will enable those proceeds to be used to meet expenditure in connection with the staging of the Games. 5. The main provisions of the Act concerning the abolition of the Tote and the sale of its assets and the abolition of the Levy Board provide for:
6. The main provisions of the Act concerning Olympic Lottery games provide for:
BACKGROUND Horserace betting 7. On 2 March 2000, the then Home Secretary made a statement to the House of Commons to announce that the Government had decided to sell the Tote and abolish the horserace betting levy and the Levy Board. Amongst other objectives, the Act seeks to implement this policy. 8. Both the Tote and the Levy Board are Non-Departmental Public Bodies (NDPBs) sponsored by the Department for Culture, Media and Sport. Their current powers and responsibilities are set out in the Betting, Gaming & Lotteries Act 1963 ("the 1963 Act") as subsequently extended by the Horserace Totalisator and Betting Levy Boards Act 1972 and the Horserace Betting Levy Act 1981. 9. Since 1928, when it was established, the Tote has had an exclusive right to operate, or authorise others to operate, pool betting on horse races in Great Britain. Pool betting is a particular form of betting where all the stakes are pooled, and the total pool is divided amongst the winners, less a deduction for the operator. More recently, following successive deregulation, the Tote has developed a significant fixed odds betting operation and is now the fifth largest bookmaker in the country. The business includes telephone and internet betting as well as over four hundred licensed betting offices. 10. The Levy Board has statutory responsibility for assessing and collecting monetary contributions from bookmakers and the Tote, and for allocating them for one or more of the following purposes: the improvement of horseracing; the advancement or encouragement of veterinary science or education; and the improvement of breeds of horses. This is the horserace betting levy system. 11. Both bodies also have some regulatory responsibilities. The Tote is in effect the regulator of horserace pool betting and the Levy Board is responsible for issuing certificates of approval for racecourses and also for the National Joint Pitch rules that govern the operation of bookmakers on racecourses in Great Britain. Olympic Lotteries 12. On 15 May 2003, the Government announced its intention to support a bid to stage the 2012 Olympic and Paralympic Games in London. 13. If the bid is successful and the 2012 Games are awarded to London, the Government will provide for financial support to the staging of the Games through the National Lottery and, in particular, through the licensing of dedicated Olympic Lottery games forming part of the National Lottery. The decision on which city will host the 2012 Games will be made by the International Olympic Committee in July 2005. TERRITORIAL APPLICATION 14. Parts 1 and 2 covering the sale of the Tote and the abolition of the Levy Board apply only to England, Wales and Scotland. Part 3 providing for the licensing of Olympic Lottery games applies to the whole of the United Kingdom. COMMENTARY ON SECTIONS PART ONE: SALE OF THE TOTE Section 1: Dissolution of the Tote 15. Section 1 provides for the Secretary of State to abolish the Tote on an appointed day. It is intended that this will take place as close to the point of sale as possible. Section 2: Successor Company: Transfer 16. Section 2 makes provision for the transfer of the Tote's property, rights and liabilities to a company wholly owned by the Crown. The transfer will occur automatically on the appointed day. Section 3: Section 1 and 2: Supplemental 17. This section explains in more detail how the measures contained in sections 1 and 2 will take effect. 18. Subsections (1) and (2) ensure that anything done or in the process of being done by or in relation to the Tote is to be regarded as having been done or continued by the successor company. 19. Subsection (3) operates so that after the appointed day any reference in any document or agreement to the Tote is treated as a reference to the successor company. Equivalent provision is made in relation to members and officers. 20. Subsection (5) provides that any property, rights and liabilities of the Tote vest in the successor company without any requirement for further legal formality. 21. Subsection (6) ensures that the Transfer of Undertakings (Protection of Employment) Regulations 1981 will apply to the transfer to the successor company safeguarding existing rights of employees, including the right to be consulted. 22. Subsections (8) and (9) provide that the Secretary of State shall consult the Tote before nominating the successor company and before appointing the appointed day. Section 4: Tax 23. Subsection (1) provides that for all income tax, corporation tax and capital gains tax purposes the successor company is to be treated as if it had always been the Tote, and the transfer itself will not have any tax consequences. 24. Subsection (2) ensures that liability to stamp duty or stamp duty land tax does not arise on the vesting of the Tote's property in the successor company, or on certain preliminary transactions and subsection (3) ensures that group relief in respect of stamp duty and stamp duty land tax is unaffected by the vesting provisions of Part 1. Section 5: Pre-sale of shares, &c. to government 25. Section 5 provides for the issue of securities in the successor company to the Secretary of State and ancillary matters. 26. Subsections (1) and (2) enable the Secretary of State to request the successor company to issue securities to herself or her nominee. The request may specify the nature and value of the securities to be issued, the timing, and terms of the issue. Securities are defined in subsection (4) of section 12 to include shares, debentures, bonds and other securities. 27. Subsection (3) provides that a request made under subsection (1) which requires the issue of shares must specify the nominal value of the shares to be issued and the shares are to be issued as fully paid. The subsection makes provision for the treatment of shares under the Companies Act 1985 and Corporation Tax Acts as fully paid and subsection (4) makes equivalent provision for the treatment of debentures. 28. Subsection (5) prevents the Secretary of State making a request after the successor company has ceased to be wholly owned by the Crown. 29. Subsections (6) and (7) require the Treasury's consent to be obtained before a request is made under subsection (1) and before the disposal of a security issued pursuant to a request under that subsection. Section 6: Accounts 30. This section deals with the preparation of accounts by the successor company. The effect of this section is to take, for accounting purposes, the value of the assets etc. in the Tote's accounts at the end of the last accounting period before dissolution and apply those values to the successor company's accounts. It is also provided, by virtue of subsection (4), that any movement in those values, for example through sale or disposal, between the end of the Tote's last accounting period and dissolution will be reflected in successor company's accounts by treating whatever was done by the Tote in that period as having been done by the successor company. Section 7: Shadow directors 31. Section 7 disapplies the provisions in the Companies Act 1985 relating to shadow directors in respect of the Secretary of State and the Treasury whilst the successor company is wholly owned by the Crown. Section 8: Excusive licence 32. Subsection (1) allows the Secretary of State to request the Gaming Board ("the Board") to issue to the successor company an exclusive licence to carry on pool betting business (in any form) in connection with horse racing in Great Britain and to conduct betting on terms determined by reference to pool dividends. Subsection (2) specifies that the licence shall be for a period of seven years. 33. Subsection (3) enables the Secretary of State to specify the terms and conditions of this licence. 34. Subsection (4) makes provision as to when a request made by the Secretary of State may be exercised. In particular, once a licence has been issued under subsection (1) she may not make a further request for the issue of another exclusive licence. The intention behind this provision is to ensure that where, for example, an exclusive licence has been issued and subsequently revoked, the Secretary of State is not to have the power to request the Board to issue another exclusive licence. 35. Subsection (5) provides that the successor company may authorise other persons to conduct pool betting along similar lines to the Tote's current practice. For example, those who wish to organise a totalisator at point to points will have to be authorised by the successor company. Paragraph (b) makes it clear that no person other than the successor company or a person so authorised may do anything that the successor company is authorised to do under the exclusive licence. 36. In relation to authorising others in respect of pool betting under subsection (5), subsection (6) allows the successor company to give an authorisation on terms and conditions, including as to payment. 37. Subsection (7) enables the Board to revoke the licence if they think a term or condition of the licence has been breached. They may also be required by the Secretary of State to revoke it, but only as explained in paragraph 45 below. Subsections (8) and (9) require reasons to be given for any revocation. 38. Under subsection (10) the Secretary of State may only require revocation under subsection (7) while the successor company is wholly owned by the Crown. 39. Subsection (11) provides that the exclusive licence may not be renewed. It may also not be issued or revoked otherwise than in accordance with the provisions described above. Section 9: Section 8: Supplemental 40. Subsection (1) sets out the matters the Secretary of State must consider in making a request for the issue or revocation of an exclusive licence. These embody the government's key aims for the legislation relating to the exclusive licence and certificates of approval, namely protecting the interests of those who bet on horse races, and of the sport of horseracing, as well as the objectives of preventing crime and disorder, ensuring that betting is fair and open and protecting children and the vulnerable. 41. Under subsection (2) while the exclusive licence has effect, the restrictions on pool betting on and off track in the 1963 Act (currently in section 4 and 4A and subsequently as substituted by section 10) will not apply in relation to anything done by the successor company in pursuance of the exclusive licence and anything done by any person authorised by the company under that licence. 42. Subsection (3) provides that while the exclusive licence has effect the successor company and anyone authorised by it will be able to apply for a betting office licence, under section 9(2) of the 1963 Act, in respect of the activities covered by the exclusive licence. The subsection goes on to make clear that a betting office licence held by another operator will not override the protection given by the exclusive licence in section 8 to the successor company and authorised persons. The effect of paragraph (c) of section 9(3) is that in the case of the successor company and authorised persons the disapplication of section 1(1) of the 1963 Act (restriction on use of premises for betting) which results from holding a betting office licence will only extend to the activities covered by the exclusive licence. 43. Subsection (4) ensures that during the period of the exclusive licence the successor company and persons authorised by it are not, by virtue of the exclusive licence alone, to be treated as bookmakers. This reflects the present operation of the 1963 Act in relation to the Tote. 44. Subsection (5) provides that any person who, without the authority of the successor company, purports to do anything which that company would be able to do under the exclusive licence is to be treated as having committed an offence under new sections 4 to 4A. 45. Subsection (6) provides the successor company with a statutory right, subject to the procedural rules specified in subsection (7), to enforce in the civil courts an infringement of its licence. This right is similar to that provided in section 14(2) of the 1963 Act. Section 10: Control when no exclusive licence 46. This replaces section 4 of the 1963 Act with three new sections: new section 4, section 4A and section 4B and a new Schedule 1A. Under new section 4 a person commits an offence if he carries on a pool betting business on track unless:
47. Under section 4A a person will commit an offence if he carries on pool betting business otherwise than on a track, unless:
48. Section 4B introduces a new Schedule (Schedule 1A) which provides for the regulation of pool betting business in connection with horse racing. 49. The effect of subsections (2) and (3) of new section 4B is that where a condition imposed by Part 2 of Schedule 1A requires action by a person after the conclusion of a race or set of races and that action is not taken he will be treated as not having carried on a pool betting business in accordance with Part 2 of that Schedule. The consequence of this is that in relation to pool betting on track an offence is committed under new section 4(1) (read with new section 4(2)(d)) and in relation to pool betting off track under new section 4A(1) (read with new section 4A(2)(b)). 50. The effect of subsections (4) and (5) of new section 4B is that where a person who conducts pool betting in connection with horse racing fails to comply with a requirement of Part 3 (supervision) of Schedule 1A he will be treated as having failed to carry on a pool betting business in accordance with Part 2 of that Schedule. The consequence of this is similar to that explained in the previous paragraph, namely that an offence will be committed by virtue of new sections 4(2)(d) or 4A(2)(b). 51. Subsection (3) of section 10 ensures that the provisions of sections 281 and 282 of the Criminal Justice Act 2003 (under which penalties on summary conviction may be altered) will apply to the 1963 Act as amended by the section. Section 11: Preparatory work by the Tote 52. This section enables the Tote or the Secretary of State to do anything necessary to facilitate the sale of the Tote. 53. Subsection (2) gives the Secretary of State the power to request information or assistance and to direct the Tote in connection with the sale of the successor company. Section 12: Interpretation 54. This section makes provision for the interpretation and definition of a number of expressions. In particular, expressions used in the Companies Act 1985 and the 1963 Act have the same meaning for the purposes of Part 1 of the Act. PART 2: ABOLITION OF THE HORSERACE BETTING LEVY SYSTEM Section 15: Abolition of levy 55. Section 15 enables the Secretary of State, by order made by statutory instrument, to abolish the Levy Board and the levy system. Subsection (2) makes it clear that orders may be made in stages. Orders under section 15(1) will be subject to annulment in pursuance of a resolution of either House of Parliament. Section 16: Property of the Levy Board 56. Subsection (1) allows for the making of transfer schemes so that any property, rights and liabilities of the Levy Board can be transferred to specified persons at specified times. Subsection (7) introduces Schedule 3 which contains supplementary provisions. 57. Subsection (2) gives the Secretary of State the power to direct the Levy Board to make and submit a transfer scheme and once approved the scheme will have effect. 58. Subsection (3) sets out the matters which the Secretary of State can include in the direction, including when it is to be made, what it is to cover and to whom things are to be transferred. 59. Subsection (4) gives the Secretary of State the power to make a transfer scheme herself if the Board fails to comply with a direction to make a scheme or she decides not to approve a scheme submitted by the Levy Board. 60. Subsection (6) provides that the Secretary of State must not make or approve a transfer scheme unless she is satisfied that any property or rights to be transferred will be used for certain specified purposes. These relate to horse breeding, veterinary science and education and horseracing and mirror the Levy Board's existing purposes under section 24(1) of the 1963 Act. Section 17 and Schedule 4: Consequential amendments 61. Section 17 introduces Schedule 4 which makes a number of consequential amendments to the 1963 Act. Under subsection (1)(b) of section 17 the Levy Board cannot be abolished until these amendments have been brought into force. The most significant amendment substitutes the Gaming Board for the Levy Board in respect of certification of race courses under section 13 of the 1963 Act. Subsection (3) of section 17 contains transitional provisions for existing certificates of approval, which if not revoked by the Gaming Board will expire three years after the new arrangements come into effect. 62. The key features of new section 13, as amended by paragraph 2 of Schedule 4 are as follows:
Section 18: Tax 63. Section 18 enables the Treasury to make regulations providing for the disapplication or modification of various tax legislation in connection with a transfer scheme and related matters. This is so that a transfer is tax neutral and the recipient inherits the relevant tax history of what they receive. The taxes affected are income tax, corporation tax, capital gains tax, stamp duty, stamp duty land tax and stamp duty reserve tax. PART 3: NATIONAL LOTTERY: OLYMPIC LOTTERIES Section 21: Licensing of Olympic Lotteries 64. A key component of the National Lottery etc. Act 1993 is the issue of licences for the operation of the Lottery. These are issued and enforced by the regulator of the National Lottery, the National Lottery Commission. There are two kinds of licence: a licence under section 5 of the 1993 Act, which is granted to a company to run the National Lottery; and one or more licences under section 6 of that Act, granted to companies to promote lotteries as part of the National Lottery. The section 5 licence holder is currently Camelot, under a licence that ends in January 2009. It is the responsibility of this licence holder to provide the technical, retailing and marketing infrastructure within which the section 6 licence holders can operate, and for ensuring that payments to prize-winners, the National Lottery Distribution Fund (NLDF), and the Exchequer are made. At present, Camelot holds all the section 6 licences. 65. This section deals with the licensing of Olympic Lottery games. Subsection (1) provides that a licence to promote lotteries granted by the National Lottery Commission under section 6 of the 1993 Act may designate a lottery as an Olympic Lottery. Subsection (2) also provides that the section 5 operating licence must include a provision for determining the proportion of proceeds of Lottery games that are attributable to Olympic lotteries. Under subsection (3), a lottery may only be designated as an Olympic Lottery if the section 5 licence required by subsection (2) has effect. Subsection (4) in turn provides that the National Lottery Commission shall make a variation of an existing section 5 licence to accommodate the requirements of subsection (2) of this section after consulting the section 5 licence holder. The timing of such a variation shall be determined by the Commission (irrespective of whether the licence holder agrees to the variation of the licence). | |
| |
 | |
| Other Explanatory Notes | Home | Her Majesty's Stationery Office | |
| We welcome your comments on this site | © Crown Copyright 2005 | Prepared: 11 July 2005 |