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1969 WESTERN AUSTRALIA REPORT OF THE nIl CIL lIN[) M [3[: ..[1 OVer) 33029/2/60 ROYAL COMMISSION ON BETTING Presented to Both Houses of Parliament By Authority: ALEX. B. DAVIES, Government Printer 1960

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1969

WESTERN AUSTRALIA

REPORTOF THE

nIl

CILlIN[) M

[3[: ..[1 OVer)

33029/2/60

ROYAL COMMISSIONON

BETTING

Presented to Both Houses of Parliament

By Authority: ALEX. B. DAVIES, Government Printer

1960

TABLE OF CONTENTS

Chapter Title

1. PRELIMINARY1. Procedure2. Sittings3. Material4. The Main Questions

II. A REVIEW OF THE LAW BEYOND WESTERN AUSTRALIA1. The United Kingdom2. New Zealand3. Queensland ....4. New South Wales5. Victoria6. South Australia7. Tasmania

III. RACING ADMINISTRATION IN WESTERN AUSTRALIA1. Galloping2. Trotting

Page

55556

77778888

88

10

IV. THE TOTALISATOR (ON-COURSE) IN WESTERN AUSTRALIA .... 10

V. BETTING BY BOOKMAKERS BEFORE THE BETTING CONTROLACT, 1954 11

1. On-Course Betting 112. Off-Course Betting 11

VI. BETTING UNDER THE BETTING CONTROL ACT, 1954 12

VII. THE BETTING CONTROL BOARD 131. Constitution and Personnel 132. Staff 143. Administration 144. Relationship to the Government 145. Relationship to the Premises Bookmakers' Association 156. Policy of the Board 15

VIII. THE REVENUE PROVISIONS AFFECTING BOOKMAKERS 151. License Fees 152. Turnover Tax 163. Stamp Duty. 164. Records 16

IX. THE VOLUME OF BETTING, AND REVENUE DERIVED THERE-FROM 16

1. Volume of Betting 162. Revenue and Distribution 173. Tax Potential 17

X. THE DISSEMINATION OF INFORMATION1. Newspapers2. Broadcasting3. Press Agency

17171819

XI. THE EFFECT OF BETTING SHOPS UPON RACING BODIES 201. The Declining Prosperity of the Racing Bodies 20

(1) The Western Australian Turf Club .... 20(2) The Blood Horse Breeders' Association of Australia .... 20(3) The Breeders, Owners and Trainers' Association (Rac-

ing) .... .... .... .... .... .... .... .... 21(4) The W.A. Turf Club Bookmakers' Association 21(5) The Western Australian Trotting Association 22(6) The W.A. Trotting Breeders, Owners, Trainers and

Reinsmen's Association .... 22(7) Automatic Totalisators Ltd. 22

2. Assessment of the Reasons for the Decline 23

'l'ABLE OF CONTENTS-continued

Chapter Title Page

XII. SOME OTHER CONSIDERATIONS OF THE EFFECTS OF THEESTABLISHMENT OF BETTING SHOPS 24

1. Beneficial Results .. 242. The Shops as an Encouragement to Betting and Loitering .... 243. The Off-Course Bookmakers' Monopoly and Profits 254. The Premises Bookmakers' Association '2R5. The Starting Price System of Bookmaking 30

XIII. POSSIBLE CHANGES 331. Modifications to Betting Shops 332. Abolition of all Betting Off-Course.. 333. The Off-Course Totalisator 34

XIV. THE OFF-COURSE TOTALISATOR SCHEME 341. T.A.B. In New Zealand .... 352. The Proposal for Western Australia 36

(1) Administration 36(2) Hours of Closing 37(3) Communications 37(4) Methods of Betting 37(5) Information to be Supplied In Offices and Payment of

Dividends 37(6) Betting on Eastern States Races 37(7) Turnover 38(8) Capital Costs 38(9) Costs of Operation 39

3. Arguments Against the Proposal 394. Summing Up 40

XV. THE SUPPRESSION OF ILLEGAL BETTING 401. Reform of the Law 412. Administration 42

XVI. RUMOURS OF CORRUPTION

XVII. CONCLUSIONS AND RECOMMENDATIONS1. Conclusions2. Recommendations ....

INDEX TO SCHEDULES

No. SUbject Matter

1. Convictions for betting offences

II. Total turnover of all bookmakers and tax paid

III. Gross collections of turnover tax and distribution

IV. Distribution of turnover tax to metropolitan racing clubs.

V. Revenue derived from stamp duty on betting tickets ...

VI. Totalisator returns, 1953-1959 ....

42

484849

Page

50

50

51

51

52

52

VII. Comparison of the distribution of racing revenue in each State 52

VIII. Graph showing revenue and expenditure. western Australian Turfcicu, 1949-1959 53

ROYAL COMMISSION ON BETTING.

To His Excellency Lieutenant-General SirCharles Henry Gairdner, Knight Com­mander at the Most Distinguished Orderat Saint Michael and Saint George,Knight Commander at the RoyalVictorian Order, Companion at the MostHonourable Order at the Bath, Com­mander at the Most Excellent Order atthe British Empire, Governor in and overthe State at Western Australia.

May it please Your Excellency.BY a commission under the hand of HisExcellency the Lieutenant-Governor datedthe eighteenth day of June, 1959, I wasappointed to be a Royal Commission to InquireInto and report upon betting within the Stateon horse-racing In or beyond the State, In­cluding with respect to that subject matter,but without limiting Its generality:

(a) characteristics, features and opera­tion of existing legislation, and ofcontrol and administration there­under;

(b) effects and Influences of or underexisting legislation, Including theBetting Control Act, 1954-1957, andthe Bookmakers Betting Tax Act,1954-1956, upon bodies and personsInterested In, or connected With,horse-racing or betting thereon; and

(c) undesirable features, results and In­fluences of, and practices and trendsunder, existing legislation, control, oradministration;

and to make recommendations for legislativeamendments or administrative ImprovementsIn relation to any of the foregoing matters.

In pursuance of that commission I have thehonour to submit the following report.

CHAPTER I.

PRELIMINARYI.-Procedure.

Prior to the nrst sitting of the Commissionon 21st July, 1959, three notices were pub­lished In each of the dally newspapers andone notice In each of the more prominentcountry newspapers, Invttlng any person Inpossession of Information relating to anyaspect of the terms of reference to communi­cate with the Secretary. Those wishing topresent a case to the Commission wererequested to forward to the Secretary aconcise statement of the evidence theywished to tender.

Apart from these advertisements, the Bet­ting Control Board, the Treasury Departmentand the Police Department together withbodies concerned with the dissemination ofracing information were requested to prepareevidence. In addition a number of organisa­tions who were likely to be affected in someway by the Inquiry, were invited to submitevidence to the Commission.

5

The majority of the witnesses submittedtheir evidence in the form of a written state­ment and this was read by the witness afterbeing sworn and was incorporated in thetranscript In this form. This arrangementachieved a considerable saving in time.

2.-Sittlngs.At the flrst sitting of the Commission,

leave to appear was sought by counsel repre­senting the bodies listed hereunder and Ineach case the application was granted.

The Western Australian Turf Club.The Breeders, Owners and Trainers'

Association (Racing).The Western Australian Trotting Associ­

ation.The Premises Bookmakers' Association of

W.A. (Inc.).The W.A. Turf Club Bookmakers' Associ­

ation.The Blood Horse Breeders' Association of

Australia, W.A. Branch.The United Council for Social Reform.

The Chairman of the Betting ControlBoard sought leave to appear as an advocateto watch the interests of the Board anddespite the fact that he was also to be calledas a witness, I granted his application.

Counsel also appeared to assist me.After dealing with these applications,

counsel assisting the Commission deliveredan opening address, after which the Commis­sion adjourned until Monday, 27th July, 1959.

The Commission commenced hearing evid­ence on 27th July, 1959, and except for twoadjournments, each of one week's duration,sat on four days of each week until 16thOctober, 1959. During this time a total of58 witnesses gave evidence and the Commis­sion was addressed by nine counsel, and theChairman of the Betting Control Board.

Before evidence was called, counsel for thePremises Bookmakers' Asvoctatlon submittedthat the terms of reference did not extend sofar as to permit an Inquiry into the desirabil­Ity of establishing an off-course totalisator.I ruled that such an Inquiry was within theterms of reference.

During the course of the hearing, evidencewas given which Involved certain Individualswho then sought and obtained leave to berepresented by counsel. In addition, abreeder of trotting horses gave evidence andcounsel was granted leave to appear on hisbehalf.

3.-Materlal.The transcript of the evidence and

addresses of counsel covered 2,812 typedpages of foolscap. There were 140 documen­tary exhibits Including the minutes of thePremises Bookmakers' Association for fouryears. I called for and perused a number ofofficial flies from the Betting Control Board,the Treasury and the Police Departmentsand had access to the minutes of the meet-

lngs of the Betting Control Board. I person­ally inspected a number of betting shops andreceived reports from my assisting officerson others. I attended a number of gallopand trotting meetings and for a new experi­ence Indulged in betting In a mild way, onlyto come to the conclusion expressed by all theInformed witnesses including the bookmak­ers, that for the punter betting is a "mug'sgame."

I perused the Reports 01' the relevant partsthereof, of other Commissions which In thepast had considered the question of bettingon horse-racing namely:

(1) In Australia:

(a) In South Australia-The Royal Commission on

Betting, 1932-1933.The Royal Commission on

Betting Laws and Prac­tice, 1937-1938.

(b) In Queensland-The Royal Commission on

Off-the-Course Betting,1951-1952.

(c) In Victorla-The Royal Commission on

Off-the-Course Betting,1958-1959.

(d) In Western Australia-The Royal Commission on

Betting, 1948.The Report of the Betting

Control Board on Bet­ting Shops and Total­isators, 1956.

(2) In New Zealand:The Royal Commission on

Gaming and Racing,1946-1948.

(3) In The United Kingdom:The Royal Commission on

Lotteries and Betting,1932-1933.

The Royal Commission onBetting, Lotteries andGaming, 1949-1951.

(4) In The United States of America:The Mayor's Citizens Com­

ml ttee on Off-TrackBetting (City of NewYork.)

The following general conclusions can bedrawn from the work and reports of theRoyal Commissions to which I have referred.

(a) That in view of the habits of asection of the community who do notregard betting as wrong In itself, Itis undesirable and indeed impossibleto ban betting on horse-racing.

(b) That excessive betting is a social,economic and ethical evil.

(c) That while logically betting shouldbe confined to the racecourse whichprovides the sport, it is impossible tosuppress off-course betting.

6

(d) That It Is expedient to consider theprovision of some avenue of off­course betting so as to minimise theevil of illegal betting.

After considering all the reports, I havecome to the conclusion, that, leaving WesternAustralia aside for the present, the problemof off-course betting has been solved withsome success In New Zealand and in SouthAustralia. New Zealand, following the reportof the Royal Commission and a referendum,has established a nation-wide and exclusivetotalisator system, which has operated foreight years and which I shall consider laterIn this report. It has not eliminated Illegalbetting but has rendered it unobtrusive.South Australia after nine years of licensedbetting shops abolished them and except forone comparatively small town, made all off­course betting illegal. While in that Stateillegal betting has not been eliminated, yetby the operation of severe laws and penaltiesand good police administration, It has beenrendered unobtrusive.

4.-The Main Questions.In relation to Western Australia the main

questions which emerge from the inquiryare:-

(1) Should betting shops be continuedIn their present form?

(2) Are modifications of the presentform of betting shops desirable?

(3) Should the bet tin g shops beabolished?

(4) If they should be abolished, shouldall off-course betting be banned asin South Australia?

(5) Alternatively, should some form ofoff-course totalisator be establishedas an avenue of off-course betting?

The Issue contested most Intensively be­fore me was whether an off-course totalisa­tor should be adopted in preference to thebetting shops. This was the Issue consideredby the Betting Control Board In 1956, pur­suant to Section 8 of the Betting Control Act,1954. The Board, by a majority comprisingthe Government nominees, reported infavour of the betting shops and against theoff-course totalisator. The minority reportedin favour of an off-course totalisator.

In the present Inquiry the Premises Book­makers' Association contended for the con­tinuance of the existing betting shop systemwithout modification. The Western Austra­lian Trotting Association contended for theabolition of the betting shops and sponsoredan off-course totalisator system. The West­ern Australian Turf Club, while preferringthe closing of the shops and the banning ofall off-course betting if that were practicable,supported the Trotting Association. TheTurf Club In its turn was supported by theAssociations of breeders, trainers and owners.The W.A. Turf Ciub Bookmakers' Associationsupported the totalisator scheme 01' alterna­tlvely a very restricted betting shop system.The Churches, or such of them as gaveevidence, and the United Council for SocialReform, while opposing for the most part all

forms of betting on race horses, were pre­pared to concede that by way of compromisebetting should be allowed on the course andthere only.

In considering the Issues there Is a postu­late which I think ought to be made, namelythat horse-racing Is a national sport andthat for the prestige of the State theIndustry ought to be maintained. It wouldbe a pity If Western Australia were to bewithout a racecourse.

In the course of the Report I have used thephrase "racing clubs" to Include both gallop­ing and trotting clubs. Also the words"bettor" and "punter" have been used inter­changeably.

It Is noted that a BIl! has been under con­sideration In Parliament which would alterthe revenue provisions affecting bookmakersand betting off-course. I have not had re­gard to this circumstance In preparing myReport.

CHAPTER II.

A REVIEW OF THE LAW BEYONDWESTERN AUSTRALIA.

Whilst comprehensive reviews of the lawand practice existing In the United Kingdom,New Zealand, the other Australian States,and elsewhere are available In the reports ofthe above-mentioned Royal Commissions, Itseems desirable to preface my Report with abrief sketch of such law and practice In orderto provide the background against which toview the position In Western Australia.

Furthermore, it Is of some Importance tohave regard to the practice In the otherAustralian States because betting on horse­racing throughout Australia Is becoming In­creasingly Interwoven. The evidence Indi­cated that there was no practical difficultyto bookmakers In this State engaging In bet­ting transactions with bookmakers In otherstates and vice versa. For Instance Mr. P. B.Healy (the largest bookmaker In Perth) Isconstantly In telephone communication withthe Eastern States and Indeed, whilst I wasvisiting his premises he received messagesfrom Darwin and Launceston concerningodds fiuctuatlons on a horse shortly to startIn a race In Melbourne.

Further, the great Interest exhibited byWestern Australian punters In horse-racingin the Eastern States, makes the position Inthose States a relevant matter for my con­sideration.

I.-The United Kingdom.Betting on racecourses approved by the

Race Course Betting Control Board witheither bookmakers or on the totalisator Islawful. Off the course It Is unlawful to keepa place for betting If It Is done with personsresorting thereto or for cash. The only law­ful off-course betting Is that done exclusivelyfor credit, whether by telephone, telegram01' post. Betting In the street 01' In publicplaces and also betting with Infants Is ex­pressly prohibited by statute. There Is some

7

credit off-course totalisator betting In Eng­land, this betting being handled by two In­dependent companies. The bets are for­warded to the racecourse and Included Inthe totalisator pool.

At the present time there Is a BIl! beforeParliament to provide for off-course bettingby licensed bookmakers operating In licensedpremises, the significant features of the pro­posed legislation belng:-

(a) The bookmakers wll! be required tohold a permit from the local JusticesIn England and Wales or the Licens­Ing Court In Scotland. The appli­cations wll! be heard in public.

(b) Preference will be given to book­makers already In business In thethree years ending when the BIl! wasIntroduced.

(c) The betting shops may not be usedfor any other purpose and peopleunder the age of eighteen years willnot be admitted. Loitering Insideor outside will be forbidden.

(d) Radio and television Inside the pre­mises will be forbidden.

(e) There are heavy penalties for illegalbookmaking.

The proposal Is In pursuance of the recom­mendat�ons of the report of the Royal Com­mission on Betting, Lotteries and Gaming1949-51, dated 16th March, 1951.

2.-New Zealand.Bookmaking, whether on or off-course Is

unlawful. The totalisator has been the soleon-course betting medium for many yearsand since 1951 It has been lawful to bet off­course by means of a totalisator scheme, towhich I have already referred and which Iwill examine at length. The legislationestablished a Totalisator Agency Board whichmanages the off-course scheme. All betslaid off-course are Incorporated in the total­Isator on-course. All other betting and alsobetting with Infants Is prohibited.

3.-Queensland.It Is lawful to bet on the racecourse either

on the totalisator or with licensed book­makers. Betting with Infants Is prohibited.

Prior to 1954, all forms of off-course bet­ting were expressly prohibited. The Racingand Betting Act, 1954, following the report ofthe Royal Commission In 1952, provided forthe establishing of an off-course Betting Con­trol Board to license off-course bookmakersin certain electoral ZOnes if and when amajority of electors in those zones voted Infavour of such a licensing scheme. Brisbaneand Rockhampton were excluded. The Actprovides for a referendum to be held In anyof the nominated zones on a petition of notless than 10 pel' cent. of the electors In thatzone.

I am advised by the Commissioner ofPolice in Queensland that this legislation hasnot yet been implemented, so that in the re­sult there is still no lawful medium of off­course betting in Queensland.

4.-New South Wales.Betting on the racecourse either by means

of registered bookmakers or on the totalisa­tor is lawful. Betting with infants is pro­hibited. All off-course betting is unlawful.

5.-Victoria.At the present time it is lawfui to bet on

the racecourse with registered bookmakersor on the totalisator. Betting with infantsis prohibited. All forms of off-course bettingare uniawtul,

A Royai Commission sat in Victoria towardsthe end of 1958 and in his report published inFebruary of this year, the Commissioner re­commended the establishment of an off thecourse totalisator. At the present time, aBill is before the Victorian Parliament, whichseeks to implement the recommendation ofthe Royal Commissioner though in a modifiedform. The Bill as introduced embodies aproposal for an off-course totalisator but withfacilities for betting only by telephone, tele­graph or post against an established credit.

6.-South Australia.In the first instance all betting with book­

makers was illegal, the only legal avenuebeing the on-course totalisator. In 1933 pro­vision was made for licensing bookmakers tooperate on-course and off-course respectively.In the following years, besides licensing on­course bookmakers, the Betting Control Boardestablished under the Lottery and GamingActs, registered a iarge number of bettingshops and licensed off-course bookmakers tooperate therein. During the war racing wastemporarily suspended under the Common­wealth National Security Regulations; thelicenses lapsed and the shops were closed. In1945 a new scheme was introduced by anamending Act. The Board is precluded fromregistering any premises within the metro­politan area of Adelaide. Outside the metro­politan area, the Board may register premisesprovided that the relevant local authorityhas approved of both the site and the suita­bility of the premises and after the Boardhas held a public inquiry tn the town wherethe premises are situated. The Act providesthat premises should only be registered if, inthe opinion of the Board, such registration isreasonably necessary in the public interest.

Since this machinery was provided in 1945,90 applications for registered premises incountry towns have been received by theBoard and a total of 78 public inquiries havebeen held. In the result, at the present time,betting shops are operating In only one townin South Australia, the town of Port Pirie,whose inhabitants number about 14,000. Withthis exception, all off-course betting is nowprohibited. On-course betting is conductedthrough on-course bookmakers and thetotalisator. Betting with infants is uniaw­ful.

7.-Tasmania.It is lawful to bet on the racecourse with

registered bookmakers or on the totalisator.Off the course, registered bookmakers may

8

bet in licensed premises sub] ect to the ap­proval of the Tasmanian Racing Commis­sion. The registered bookmakers may operateboth on and off-course, and the off-coursepremises must close whilst a race meeting isin progress. It is customary for registeredbookmakers betting off-course in Tasmaniato take up their stand in a central premisesin a particular locality, which then takes onmore or less the appearance of the bettingring at the course. When the premises closethe bookmakers move to the course.

Street betting, betting in unlicensed pre­mises and betting with infants either on oroff the course is prohibited.

CHAPTER III.

RACING ADMINISTRATION IN WESTERNAUSTRALIA.

I.-Galloping.The racing of gallopers in Western Aus­

tralia dates from the early days of the Colony,the first race meeting being held in 1833.However, the sport did not become system­atised until 1852, with the formation of theWestern Australian Turf Club. The club'spresent headquarters course at Ascot occu­pies ground which was the subject of a CrownGrant in 1877. The club received statutoryrecognition in 1892, with the passage of theWestern Australian Turf Club Act. Provisionwas always available whereby other gallopingclubs could register with the Western Aus­tralian Turf Club, and with the passage ofthe Racing Restriction Act of 1917, all un­registered racing in Western Australia waseliminated; from that time the Western Aus­tralian Turf Club exercised jurisdiction overall galloping racing in Western Australia.

Prior to the second world war, five courseswere operated in the metropolitan area, eachby a different club; with the exception of theWestern Australian Turf Club all the metro­politan clubs were proprietary in nature.About 1945 the Western Australian Turf Clubbought out all four clubs together with theircourses. .It closed down two of the courses,namely those at Canning Park and Good­wood, but continued to develop and use thecourses at Helena Vale and Belmont Park, inaddition to its headquarters course at Ascot.The passing of proprietary clubs from racingin Western Australia was in line with thetrend throughout the Commonwealth.

Consequent on these changes, the WesternAustralian Turf Club now has the entire re­sponsibility for the conduct of race meetingswithin the metropolitan area. The club findsit necessary to maintain the three courses inorder to provide a full round of fixtures andproper facilities for training throughout theyear, particularly because the Ascot race­course is not suitable for winter racing.Ascot is an attractive and well-equippedcourse with extensive lawns and gardensand will bear comparison with the majorcourses in the Eastern States. Belmont Parkand Helena Vale are on a less elaborate scalebut provide the essentials for an enjoyablerace meeting. It was not seriously contended

before me that the maintenance of threecourses was unnecessary or represented amisuse of resources by the club, and I donot find this to be so.

The present membership of the club is 717out of a maximum membership permitted bythe by-laws as approved by the Governor-in­Council of 850. The club's activities aredirected by a committee of twelve, six ofwhom retire each year but are eligible for re­election. The work of the Committee is en­tirely honorary.

The betting facilities provided on the club'scourses are as follows:

Ascot Racecourse, both Enclosure andLeger:

(i) Automatic totalisator with in­dicators, for both win andplace.

(ll) Quinella betting by totalisator.(ill) A bookmakers' ring on a paved

area shaded by trees, fittedwith moveable stands for book­makers and providing facllltiesin separate areas of the ringfor straight out betting on localraces, doubles betting on localraces and each way betting onEastern States races.

Belmont Park and Helena Vale:(i) Automatic totalisator - win

and place.(il) Quinella totalisators.

(ill) A paved bookmakers' ring withcomplete overhead cover andfitted with moveable standsfor bookmakers who collec­tively provide faclllties similarto those at Ascot.

Admission fees (inclusive of entertainmenttax) to the various courses are:-

Ascot:To the Enclosure - Gentlemen

13s. ne., ladies 6s. lld.To the Leger - Gentlemen 4s.,

ladies 2s., Children 1s.

Belmont Park and Helena Vale:To the Enclosure - Gentlemen

13s 3d., ladies 5s. 2d.To the Leger - Gentlemen ss, 9d.

ladies 2s., Children 1s.A number of criticisms were directed

against the administration of the WesternAustralian Turf Club. Some points of criti­cism, for example that admission fees are toohigh, that stakes are too low and that theprice of beer on the course is excessive areconceded by the club. It claims, however,that the present financial predicament pre­cludes any immediate change.

Another criticism was implied in the cross­examination of Mr. Lee Steere, the Vice­Chairman of the Western Australian TurfClub, relating to one or two incidents ofinconsistent running which resulted in dis­qualiftcation of the persons concerned. On

9

the other hand it was asserted by Mr. LeeSteere that the standard of racing in WesternAustralia, despite the difficulties of recentyears, is still high, that racing is well­conducted and is as ciean here as in anyother part of the Commonwealth; indeed, inhis address, counsel appearing for thePremises Bookmakers' Association concededthat there was really no criticism to belevelled at the cleanliness of the sport inWestern Australia.

It was also said that the Western Aus­tralian Turf Club had failed to play its partin the scheme of off-course betting, and haddone its best-vby a sort of passive resistance-to bring about the downfall of the scheme.It was frankly admitted by the club's witnessthat it was always their belief that the off­course bookmaker system would kill racing,and that they strenuously fought the intro­duction of the scheme, but Mr. Styants, theChairman of the Betting Control Board testi­fied that the club's representative on theBoard had proved a valuable member of theBoard, bringing to its deliberations a wideexperience in racing affairs and a co­operative and helpful attitude.

The first country race meeting in WesternAustralia was held at York in 1843 and sincethen country racing has become firmlyestablished throughout the State. At thepresent time there are fifty country clubs,all of them registered with the WesternAustrallan Turf Club. They are organisedunder Associations conforming to the dis­tricts in Which they exist. There are seven ofthese Associations, as follows:

South West Racing Association.Eastern Districts Racing Association.Great Southern Racing Association.Eastern Goidfields Conference.Centrai Districts Racing Association.Murchison Racing Association.Northam Districts Amateur Racing Asso­

ciation.The Eastern Goidfieids Racing Conference

is the largest of the country Associations andconducts 27 meetings in each year. Allcountry meetings are held on dates allotted tothe particular club or conference by theWestern Australian Turf Club. The countryAssociations are linked into a Conference ofCountry Clubs which meets once a year inPerth to discuss the ensuing year's 'pro­gramme and racing problems as they affectthe country.

The evidence showed that on the wholecountry race clubs prospered in the decadefollowing the second world war and that inthis period every club spent money on im­provements; that for some years prior to1955-1956 country clubs had received sub­sidies from the Western Australian Turf Clubto assist their improvements programme, butthat these subsidies had been discontinuedby the Western Australian Turf Club becauseof their own financial difficulties.

Betting is conducted on all country coursesby means of bookmakers who are recom­mended by the Western Australian Turf Club,

licensed by the Betting Control Board, andgranted permits from the several clubs to betat their respective courses. Totalisator bet­ting Is also available on country courses. Inmost country courses there Is a manual total­Isator but at the near city courses of Plnjarra,Northam, York, Toodyay and Beverley amobile automatic totalisator Is used and Isoperated by Automatic Totalisators Ltd. AtBunbury the club has Installed Its own auto­matic totalisator.

metropolitan courses throughout the year.The evidence tendered to me during this in­quiry does not warrant any criticism of theAssociation for the manner in which itadministers the sport in this State.

CHAPTER IV.

THE TOTALISATOR (ON-COURSE) INWESTERN AUSTRALIA.

Quinellas. Doubles 01'Jackpot-

To Clubs 10% 10%

To Government 31% 3!%In addition to this revenue, unclaimed

dividends and fractions, are available fordistribution and are shared on the propor­tions set out hereunder. The fractions com­prise the residue of the pool after the cal­culation of dividends to an even 6d.

cutnene, DOUbles,Metropolitan Jackpot and AllWin or Place Country

To Clubs 92;% 96;%

To Government n% 3!%At the present time automatic totalisator

machinery Is installed on the metropolitanracecourses. Country courses are servicedby either a mobile automatic totalisator, orone that is manually operated. The onlysignificant distinction between a mobiletotalisator and the totalisators installed onmetropolitan courses Is that the Indication

Totalisators on a racecourse were first per­mitted In 1883 by the Totalisator Act. TheAct authorised any bona fide club establishedfor the promotion of horseracing to use thetotalisator on the club racecourse during anyrace meeting held thereon. By an amendingAct in 1899 designed to clarify the meaningof "bona fide club," the Colonial Treasurerwas empowered to authorise any club regis­tered by the Western Australian Turf Clubto use a totalisator on the racecourse duringa meeting on the course.

A subsequent Act, the Totalisator Regula­tion Act, 1911, authorised the Colonial Trea­surer to issue to clubs not registered with theWestern Australian Turf Club a license tooperate a totalisator on their course, andimposed an annual license fee In respectthereof. This Act also provided for the pay­ment of a similar fee by the Western Aus­tralian Turf Club, and every club registeredby It and authorised to operate a totalisator.The present license fee Is fixed at the rateof £1 for every £1,000 turnover.

The Totalisator Duty Act, 1905-1958 im­posed a duty on all totalisator investments.The rate has varied from time to time butat present Is 13t%. The amount realised isshared between the racing club conductingthe meeting and the Government asfollows:-

Metropolitan Country% Turnover % Turnover

10%

3;%6%

7t%

Win or Place­To Clubs

To Government

2.-Trottlng.Trotting has been conducted In Western

Australia since about 1912, the premier clubbeing the Western Australian TrottingAssociation. This Association was created abody corporate by the Western AustralianTrotting Association Act, 1946. Its by-lawsare set out In a schedule to the Act. Themanagement of the Association Is vested In acommittee consisting of ten members Includ­Ing the President. Five of the members ofthe committee retire each year and are ellg­Ible for re-election. The President Is appoin­ted annually. The association conducts nighttrotting meetings at Its headquarters atGloucester Park In Perth. It also owns asecond course at Richmond Park, Fremantle,which It leases to the second metropolitanclub, the Fremantle Trotting Club. This clubalso holds Its meetings at night. The courseat Gloucester Park with Its appointments andamenities Is reputed to be the finest trottingground In the Southern Hemisphere. Thereare nineteen country trotting clubs. Themajority of these also race at night. Someof these country clubs are organised intothree district trotting councils which co­ordinate the Interests of the .clubs in therespective geographic areas. These threecouncils are described respectively as - TheNorth Eastern District Trotting Council, TheGreat Southern District Trotting Council andThe South Western District Trotting Council.The Western Australian Trotting AssociationIs the controlling body throughout the Stateand all fixtures are subj ect to the approvalof the Association.

Betting facilities at Gloucester Park com­prise a win and place totalisator, doubles andqulnellas totalisators and bookmakers' ringsaccommodating about twenty bookmakers Inthe Enclosure and six In the Leger. Rich­mond Park provides similar facilities exceptthat instead of tile Doubles totalisator, jack­pot totalisator betting Is conducted. A total­isator operates on country courses togetherwith bookmakers. Admission fees to Glou­cester Park are as follows-

To the Enclosure-Gentlemen lOs.,Ladiesss,

To the Leger-Gentlemen 5s., Ladies 3s.At 31st July last the membership of the

Western Australian Trotting Associationnumbered 501, of which 135 were honorarymembers. The present nomination fee inrespect of membership of the Association is£50 with an annual subscription fee of£3 3s. Od. Membership entitles a member tofree tickets for himself and two ladies to both

10

of odds on the former require manual ad­justment, whereas the latter are fitted withbarometers which are automatically con­trolled.

The totalisator legislation is administeredby the Commissioner of Stamps.

CHAPTER V.

BETTING BY BOOKMAKERS BEFORETHE BETTING CONTROL ACT, 1954.

1.-0n-Course Betting.Bookmakers operated on the racecourses

throughout the State for many years prior to1955. Some doubts were expressed as towhether on a strict construction of the Orim­inal Code their operations were legal; never­theless, their activity received authoritativerecognition, the racing clubs licensing thebookmakers and receiving fees in considera­tion of their being allowed to bet on thecourse and the Government exacting a StampDuty on all tickets issued by the bookmakerson the course.

2.-0ff-Course Betting.By virtue of the Police Act Amendment Act,

1893, and the Criminal Code, it was unlawfulto keep a place of betting, if the betting wasdone with persons resorting thereto or forcash. There was no statute expressly deal­ing with street betting, nor was betting Withinfants prohIbited. It appears there wasnothing to stop a bookmaker carrying On acredit betting business, provided there wasno resorting' to the premises.

Evidence was given that prior to 1954 therewere probably 150 bookmakers throughoutthe State operating a credit business throughthe medium of the telephone, telegraph orpost. In the metropolitan area these book­makers were linked in an Association styied"The Turf Commissioners' Association," Witha membership of about 65.

Illegal bookmaking was extensive in West­ern Australia over many years. Prior to 1942,it was largely a matter of illegal shop bettingwith police efforts of enforcement being frus­trated by the inadequacy of the then existinglaw.

Following an amendment to the law in1942, the police were able to close the bettingshops whereupon the illegal bookmakermoved into the street. In the absence of anyspecific 'prohibition of street betting, the onlyavenue for law enforcement was to takeprosecutions under a regulation made underthe Traffic Act, the basis of which was theobstruction of traffic and loitering and actingin any way to the annoyance of other pedes­trians.

The police encountered difficulty in pro­ceeding against bookmakers, as can be seenfrom the evidence of Inspector Fiebig, for­merly the Inspector in charge of "the GamingSquad", who said inter alia-

Evidence was difficult to obtain asclients of the bookmakers always warnedthem of the approach of police or strang-

11

ers, and to obtain convictions the policehad to establish that the person chargedwas engaged in betting.

In country towns, particularly, thepolice met with a great deal of oppositionfrom all sections of the public if localbookmakers were prosecuted for "ob­struction" in places where no actualobstruction was being caused. On theother hand, If prosecutions were nottaken the pollee were accused of graft.This also applied to a lesser degree inthe city.

111 many country towns, iocai Justicesof the Peace frequently would not sit onthe bench or convict on obstructioncharges and it was necessary for thePolice Department to arrange for thesecharges to be heard by magistrates.

Mr. Styants, the present Chairman of theBetting Control Board, stressed the inade­quacy of the law and emphasised the incon­sistency of law enforcement. He said-

Except for sporadic attempts little wasdone to stamp out illegal off-course bet­ting on racing. In one town bookmakersbiatantly ignored the law by having theirbetting boards, wireless sets and umbrel­las set up In the open opposite the centralportion of the main street.

To the best of my knowledge therenever was a prosecution institutedagainst any bookmaker in that town forillegal betting.

On the goldfields the bookmakers formost of the time operated openly inshops, many of them being in the mainstreets of Kalgoorlie and Boulder. Oneman operated on the pavement with awireless set under the shade of a peppertree, At infrequent intervals a crusadewould be made against them, but after'a few weeks it would die out and thebetting would go on again in the prem­ises or on the pavement.

There appeared to be a roster or some­thing similar when each bookmakerwould be charged with "obstructingtraffic" and be fined. Rarely If everwere the cases defended.

Rarely was the principal charged. Thecustom was to have a "stooge" or"dummy" available on the day when thebookmaker was to be apprehended.

The bookmaker would put up the ballmoney, then pay the fine imposed on the"stooge" and pay him a sum of money for

. taking "the rap".This was the procedure generally

adopted throughout the State, exceptrare cases where the local police officerwould strictly enforce the law andapprehend the shop bookmakers everyweek.

Everyone knew that in cases wherethe "stooge" was provided that theprincipal was not being charged. Theenforcement of the betting laws incountry districts was entirely accordingto the views of the local police officer.

The operations of off-course bookmakerswere facilitated both by the ample broad­casting and press coverage of racing news,and more particularly by the service pro­vided by two press agencies, Tates Press andTelegram Agency and The Goldfields PressAgency.

The racing service was provided by thesepress agencies during the course of each racemeeting, and embraced details of the resultsof each race In Melbourne and Sydney aswell as local meetings, together with thestarting prices of the winner and favouriteand the totalisator dividends. This Informa­tion was generally distributed to their clientswithin half an hour of the race being run.

In 1948 Tates Press and Telegram Agencyserviced a total of 175 bookmakers, 91 ofthem In the metropolitan area and 84 In thecountry. In 1954 their bookmaker clientstotalled 231, of Whom 131 were In the metro­politan area and 100 In the country.

During the years 1948 to 1954 the Gold­fields Press Agency supplied racing Informa­tion to the Kalgoorlte, Boulder and districtsarea. This agency received Its material fromTates Press and Telegram Agency but other­wise was Independent. In 1954 the GoldfieldsPress Agency supplied Information to 25bookmakers In Kalgoorlle and Boulder andto seven bookmakers In the adjacent countryareas.

I refer to the comment upon these PressAgencies made In the report of the RoyalCommission on Betting held In WesternAustralia In 1948, that "there Is no doubtthat these Press Agencies provide a veryefficient service to their subscribers and thatthe present system of off-the-course bettingIs largely dependent on their services for its

. successful operation."The same Royal Commission reported on

the then state of the law on betting asfollows:

This review will serve to show thatWestern Australia has lagged far behindEngland and the other States so far asbetting legislation Is concerned. Thepresent state of the law here can onlybe regarded as chaotic and hopelesslyInadequate and Ineffective In the light ofpresent-day conditions. The enactmentof a betting and gaming code Is anurgent necessity.

It was this chaotic state of the law whichultimately brought about the enactment ofthe Betting Control Act, 1954 under which allbookmakers were to be licensed. The 1948Royal Commission reported against theestablishment of an off-course totalisatormainly on the ground that It was Impractic­able. Nevertheless there appeared stili to beadvocates of that system and In consequenceSection 8 was Inserted In the Act requiringthe Betting Control Board to hold the Inquiryto which I have referred. As I have said, bya maj 01'1ty, the Board decided against thetotalisator.

CHAPTER VI.

BETTING UNDER THE BETTINGCONTROL ACT, 1954.

The Betting Control Act was passed on 30thDecember, 1954. For administrative purposesit came Into force Immediately, but Its fulloperation was delayed until 1st August, 1955,on which date licensed off-course book­makers commenced business. The Act pro­vided for the constitution of a Betting Con­trol Board with authority to license book­makers, both on-course and off-course andto register premises off-course whereinlicensed off-course bookmakers could operate.

The regulations prescribed a variety ofbookmakers' licenses dependent upon theplace where the licensee is permitted to bet.They also provided for the licensing of book­makers' employees.

The following are the different categoriesof licenses, together with the number inforce as at 31st July in each of the yearsspecified:

1955 1956 1957 1958 1959Bookmakers' Racecourse

Grandstand Enclosure 56 50 53 53 47

Bookmakers' RacecourseLeger 22 22 27 19 17

Bookmakers' RacecourseDoubles 11 11 11 9 5

Bookmakers' CountryRacecourse 20 33 37 44 44

Bookmakers' ExclusivePremises (Off-course) . 181 210 213 214 209

Bookmakers' JointPremises (Off-Course) .

Bookmakers' Employees.. 1,528 2,143 1,940 1,937 1,834

Although the regulations contemplatedthat the Board might license two or morebookmakers to operate In respect of a singleregistered premises for Which the appropriatelicense would be a Bookmakers Joint Pre­mises License, as a matter of practice theBoard has declined to grant such licenses.Without exception, each bookmaker hasoccupied a single registered premises exclu­sively, being authorised to operate as a book­maker only In respect of such premises. Thepremises mayor may not be registered inthe name of the bookmaker; In the majorityof cases they are. In practice, the registra­tion of premises and the licensing of a book­maker to operate therein are always handledcontemporaneously by the Board.

The Act provides that the Board mayregister such number of suitable premisesas It considers is commensurate with thereasonable requirements of the public andthe general Interests of the community.

The Act further provides that bookmakers'licenses granted by the Board shall not betransferable. This, however, did not pre­vent betting businesses being sold. The salewould be subject to the purchaser obtaininga license. The practice was for the sellerto notify the Board of the sale with the nameof the purchaser, who would make an appli­cation for a license In lieu of that of theseller. In the absence of an adverse policereport, the new license would in general begranted.

12

Bookmakers licensed to bet on a racecoursecan only operate if they also hold a permit todo so from the club controlling the course.In practice, the Board satisfies itself thatthe appropriate club has no objection to theissue of a permit in respect of a particularapplicant, before it proceeds to deaf with theapplication.

Bookmakers may lay bets either for cash orby credit transactions. The cash bettor re­ceives a ticket as a record of his bet. Thecredit betting transactions off-course arecarried on for the most part by telephone.No specific record of such a bet is requiredto be given to the punter. The evidence re­vealed an increasing proportion of credit bet­ting to cash betting off-course. In 1956 thepercentage of credit bets to cash bets was3.93%; in 1959 it was 9.13%. The proportionof off-course turnover represented by credittransactions is now between 30% and 40%.

The table hereunder lists the average in­vestment on each bet with bookmakers forthe years mentioned:

1956 1957 1958 1959£ s. d. £ a. d. £ s. d. £ B. d.

On-CourseEnclosureBookmakers 3 1 5 3 15 1 311 4 3 811

On-CourseLeger and countryBookmakers 2 11 1 2 2 0 2 5 3

Off-CourseBookmakers 18 8 1 1 9 18 10 17 11

• Figure not available.

The Act prescribes a number of offenceswith the object of ensuring that all book­making shall be carried on in accordancewith the terms of the appropriate license.For example, a licensed bookmaker is pro­hibited from carrying on betting anywhereother than in the premises in respect ofwhich he is licensed, and the owner or oc­cupier of any place which is used for unlaw­ful betting is liable to a penalty.

It is an offence for the punter to bet other­wise than in accordance with the Act andRegulations.

Other provisions are directed to the pre­vention of loitering in front of registeredpremises, the presence of juveniles (beingpersons under the age of 21 years) on anyregistered premises, betting by or with juve­niles, and the presence of intoxicating liquoror persons apparently under the infiuenceof intoxicating liquor on registered premises.

The Regulations forbid a bookmaker to paycommission to any person for obtaining betson his behalf.

The penalties provided appear to be ap­propriate to the gravity of the offence Ineach case; In the case of a bookmaker con­victed of betting elsewhere than on hisregistered premises, he Is liable to a fine notexceeding £100 or imprisonment for sixmonths and the Board shall, In any suchcase, permanently suspend the license ofthe bookmaker and permanently disqualifyhim from again obtaining a license; In thecase of the owner or occupier of premisesused for unlawful betting, the penalty fora first offence Is £100 or Imprisonment for

three months; for the second offence £200or Imprisonment for six months; for a thirdor subsequent offence Imprisonment for notless than six months and not more thantwelve months without the option of apecuniary penalty.

A summary of convictions recorded since1955 Is appended to this Report and marked"Schedule I.H

CHAPTER VII.

THE BETTING CONTROL BOARD.

l.-Constitution and Personnel.The Board as constituted by the Betting

Control Act, 1954, consists of five membersappointed by the Governor. Three arenominated by the Government, one by theWestern Australian Turf Club and one bythe Western Australian Trotting Association.

The personnel of the Board as originallyconstituted were as follows:-

Mr. T. H. Andersen, then Commissionerof Police (Chairman);

Mr. R. H. Miller, then Director of theGovernment Tourist Bureau (DeputyChairman);

Mr. H. W. Byfield, Under Treasurer;Mr. H. T. Stables, representing the West­

ern Australian Turf Club; andMr. J. P. Stratton, representing the West­

ern Australian Trotting Association.The original appointments were made on

5th January, 1955. All the members were tohold office for a term of three years fromthat date. The Chairman and Deputy Chair­man were full-time members of the Board.The remaining three members acted in apart-time capacity. In March, 1956, Mr.Miller resigned from the Board and returnedto his post as head of the Tourist Bureau.The Hon. H. H. Styants was appointed amember of the Board and Deputy Chairman,with effect from 16th April, 1956. The per­sonnel of the Board then remained constantuntil 5th January, 1958, when Mr Andersenvacated his position at the expiration of histerm and commenced leave prior to his re­tirement from the Police Department. MrStyants succeeded Mr. Andersen as Chairmanof the Board and Mr Miller returned to theBoard as Deputy Chairman but from thistime the position called for part-time serviceonly. The remaining three members of theBoard . were re-appointed and the onlychange that has been made since January,1958, has been the retirement of Mr. Byfieldas Under Treasurer and his replacement byMr. R. J. Bond. Mr. Bond occupied the postof Under Treasurer for only a few monthsand was succeeded by Mr. K. J. Townslngwho Is now a member of the Board. Thesystem provides that members of the Boardmay be represented by deputies; the UnderTreasurer has been constantly representedby the Deputy Commissioner of Stamps,formerly Mr. G. W. Leslie and on his retire­ment in January, 1958, by Mr. J. Klumpp.

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2.-Stafl'.The Board's staff comprises a Secretary

(a qualified accountant and experiencedofficer seconded to this position from thePublic Service). a starting price officer,arecord clerk and two typistes. The duties ofthe starting price officer involve his attend­ance at all race meetings in the metropolitanarea and nearby country centres for thepurpose of fixing the starting price of allrunners and transmitting that informationto the representative of Tates Press Pty.Ltd., the Board's authorised price agent. Inthe case of meetings in the more distantcountry centres, each race club nominates tothe Board a starting price officer, whereuponthe Board appoints such nominee.

3.-Administration.The administration of the Act is divided

between the Commissioner of Stamps andthe Betting Control Board. The Commis­sioner is responsible for the collection of theturnover tax and stamp duties and for thisreason controls the supply of bettingmaterials and undertakes the receipt andinspection of bookmakers' returns. On theother hand, the Betting Control Board isresponsible for the granting of licenses, theregistration of premises, the licensing ofemployees and for the collection of the feesappropriate to these matters. The Boardalso supervises the compliance by off-coursebookmakers with the regulations with par­ticular reference to the condition of thepremises and the conduct of the businessgenerally. The Police Department providesthe physical check on these matters. TheBoard Chairman endeavours to inspect allpremises within the State at least once ayear. The Board also acts as a referee indisputes between the punter and the book­maker, and plays a useful role in this regard.Mr. Styants expressed the opinion that itwould be desirable, and make for economyand efficiency, if the work presently done bythe Commissioner of Stamps were made theresponsiblllty of the Board. He cited the SouthAustralian position as an example of such anarrangement. On the other hand the BettingControl Act being a temporary measure nodoubt made it desirable to commit the collec­tion of tax to the Treasury Department,which already was responsible for the admin­istration of the Totalisator Acts and of theStamp Duties Act. The present arrangementworks satisfactorlly and, while some economyin time may be effected if the two brancheswere amalgamated, it does not seem to be amatter of any great moment. Certainly thetemporary character of the Board mtlltatesagainst any change at the present time.

At the inception the Board was faced witha very difficult task. Within six months, thewhole scheme of off-course betting had to beevolved; regulations had to be prepared andgazetted; premises had to be registered, andbookmakers licensed to operate. There were145 regulations, together with the rules ofbetting and numerous forms relating to themachinery of the scheme. This work for the

14

most part fell upon Mr. Andersen and Mr.Miller who discharged a very onerous andexacting task.

4.-Relationship to the Government.As I have said the Board was constituted of

three Government appointees and one fromthe Turf Club and one from the TrottingAssociation.

In the main, the Govel'l1ment left the ad­ministration of the Act and Regulations tothe Board, but there were some instanceswhere the Government infiuenced the admin­istration.

As early as February, 1956, the undesirableeffects of the off-course bookmakers layingmultiple doubles on local races was broughtto the attention of the Board by the racingrepresentatives. The Board unanimouslyexpressed its opinion that the laying ofmultiple doubles on local events should beprohibited. However, a direction was receivedfrom the Government that it was not infavour of the abolition of multiple double's.The Premises Bookmakers' Association was infavour of their retention. Despite representa­tions from the racing clubs from time to timefor their abolition, nothing could be done un­less the polley of the Government favouredit, because the change required the amend­ment of the regulations. It was not until 17thMay, 1957, that the Government finally gaveits consent to the abolition of multipledoubles and a regulation was gazetted accord­ingly.

Another instance of Government directionoccurred in relation to the provision of seatsin the betting shops. On 4th May, 1955, thatis, before any licenses were granted, the Bet­ting Control Board passed a resolution thatthe premises bookmakers should not provideseating accommodation.

In October, 1955, the Chairman, Mr.Andersen, announced to a meeting of theBoard that he had received a communicationfrom the Minister that Cabinet policy was toallow seating accommodation. In the ensuingdiscussion every member of the Board voicedhis opposition to seating, and the Board'sviews together with those of the Acting Com­missioner of Pollee were submitted bymemorandum to the Cabinet. The Govern­ment replied to the effect that the represen­tations of the Board and Commissioner hadbeen considered by the Caucus, and that ithad been decided to re-affirm the previousdecision conveyed to the Board, and requestedthat seating be given a trial. Mr. Andersenthen moved that the resolution of the 4thMay, 1955, be rescinded. He and Mr. Mlllervoted in favour of It, but the other threemembers of the Board voted against it. Theyincluded Mr. Leslie, the deputy for the UnderTreasurer. The matter came up again on 16thDecember, 1955, when Mr. Andersen statedthat he had revived this matter at the requestof the Hon. Minister, and again moved forthe rescission of the resolution. This time itwas carried by a majority, the racing clubmembers dissenting. Mr. Leslie, who voted onthis occasion in favour of the rescission, said

that he did so only because he had beendirected so to vote by the Under Treasurerwhose representative he was. From that timethere has been seating in the premises, but ithas been restricted for the most part to plainwooden forms, with or without backs.

The provision of seats was an Importantmatter because without them persons resor­ting to the premises would not be so likely toloiter; it was, of course, in the interests ofthe bookmakers that their customers shouldbe given an inducement to remain and con­tinue their betting.

A third instance occurred when the Boardon 27th May, 1957, passed a resolution thatbookmakers making application for the re­newal of their licenses should be required tolodge with their appllcations, a llst of theirassets and liablllties and the values thereof.The bookmakers were notified of the resolu­tion. On 19th June, the Chairman submitteda minute received from the Minister direc­ting that this requirement should not beenforced and the bookmakers were advisedaccordingly that it had been waived.

The Premises Bookmakers' Association, in aletter to the Board, disclaimed having takenany part in the Government's decision, andasserted that, on the contrary, it had advisedits members to comply with the requirement.The minutes of the Association confirm thatthis was so.

On these matters of intervention, Mr.Styants said that he regarded this as aproper exercise of ministerial responsibilityIn a democratic system of government. Hisview was that the Board was in the Sameposition as any other Government Depart­ment. Mr. Styants, prior to becoming amember of the Board in 1956, was the Minis­ter in charge of the Betting Control Act.

5.-Reiationship to the Premises Bookmakers'Association.

The evidence of the minute books and ctr­culars of the Premises Bookmakers' Associa­tion indicate that the Board regarded theAssociation as an integral part of the mach­inery of administration and used It as ameans of liaison between the Board andlicensed premises bookmakers. For instance,on every change of a licensee the Board byletter asked the Association for its opinion ofthe suitabiltty of the proposed transferee.Notice of amendments to the regulations andof resolutions of the Board were sent to theAssociation for transmission to its members.On one occasion a member protested that theBoard was asking the Association to go to theexpense of doing the work of the Board.

6.-Policy of the Board.The policy of the Board was SUbject to

criticism by counsel and witnesses at severalpoints.

The first point concerned the licensing ofpremises in close proximity to an hotel, par­ticularly in the suburbs and country towns.It was said that this practice resulted in thepassage of patrons between the hotel and the

15

betting shop throughout the day, and that itencouraged both betting and drinking. Mr.Styants said the Board granted such licensesout of consideration for what it viewed as itsmajor task, namely the elimination of illegalbetting. Nevertheless it was contended thatsuch an arrangement encourages the patron­age of the betting shop and probably facili­tates excessive betting by reason of the effectof llquor on the self-control and judgment ofthe punter.

Secondly, the Board was criticised for hav­ing failed to develop a positive policy aimedat minimising the volume of off-course bet­ting. Section 13 of the Betting Control Actauthorises the Board to register "such num­ber of suitable premises as the Board consid­ers is commensurate with the reasonablerequirements of the publlc and the generalinterests of the community ... ", and it wasurged that there had been a failure on thepart of the Board to pay any regard to "thegenerai interests of the community." Mr.Styants claimed that the Act had given theBoard no mandate to minimise the incidenceof betting, but merely to control it. Theactions of the Board seemed to reflect thisview, and there was no general discourage­ment to the off-course punter. On the con­trary, he was provided with many facilltiesto induce him to bet.

Thirdly, the Board was criticised moreparticuiarly for failing to discourage bettingon Eastern States races. I think it wouldhave been within the province of the Boardto restrict still further than it has done thenumber of Eastern States meetings on whichthe punter is allowed to bet, and to seek theco-operation of the press in curtalllng thepublication of information relating to suchmeetings.

As will be seen, more than 50 per cent. ofthe turnover of off-course betting in WesternAustralla on gallops is in respect of races runin the Eastern States. This is not surprising,when one considers the opportunities givenfor such betting. For instance in the yearended 31st JUly, 1959, punters could bet on218 metropolltan meetings in the EasternStates as opposed to 58 metropolitan meet­ings in Western Australia.

I am inclined to agree that the volume ofbetting on Eastern States racing is unhealthyand unnecessary and that any steps whichcan be taken to minimise it would be welldeserving of consideration by the Board.

CHAPTER VIII.

THE REVENUE PROVISIONSAFFECTING BOOKI\lAKERS.

i.-License Fees.On-course bookmakers pay an annual

license fee varying from £5 to £15 accordingto where they field. Off-course bookmakerspay an annual license fee which varies from£50 to £500 according to the volume of turn­over during the previous year.

Fees are also payable In respect of appli­cations for licenses, etc. and employees'licenses.

A fee In respect of registration of premisesIs payable each year; this Is a flat fee of£10.

These matters are prescribed pursuant tothe Betting Control Act, 1954-1957.

2.-Turnover Tax.The Bookmakers Betting Tax Act, 1954­

1956 Imposes a tax on on-course bookmakersof It% on the first £50,000 turnover In anyyear and 1t% on all turnover handled duringthat year in excess of £50,000.

Off-course bookmakers are taxed at therate of 2% on their turnover.

The revenue derived from this tax Is ap­portioned between the Government and theracing clubs. Of the turnover tax collectedfrom bookmakers fielding on-course, 60% isretained by the club conducting the meetingand 40% Is paid Into Consolidated Revenue.

In the case of tax collected from off-coursebookmakers, the racing clubs receive 10%of the revenue derived from turnover onWestern Australian events only. This moneyis distributed amongst the clubs In the pro­portion that each club's aggregate stakes forthe year bear to the total stakes paid by allclubs In the same period.

The tax derived from off-course bettingon Eastern States races Is payable whollyto Consolidated Revenue.

3.-Stamp Duty.Stamp Duty Is payable on all betting

tickets and In the case of telephone betting,where no tickets are issued, then on allsuch bets. The rate of duty Is ld. In respectof all telephone bets, all off-course bettingtickets, on-course metropolitan leger and allcountry betting tickets. The duty Is 3d. Inrespect of on-course metropolitan enclosuretickets.

4.-Records.The regulations prescribe the returns

which shall be compiled by bookmakers andthe betting material which is to be used bythem in the conduct of their business. Allbetting transactions are required to be re­corded on forms as prescribed by regulationsand prepared and issued by the Commis­sioner of Stamps.

Off-course bookmakers are required to sub­mit to the Treasury by the Thursday of eachweek, a complete return of their bettingtransactions in the week ended on the pre­ceding Saturday, together with a remittanceequivalent to the Turnover Tax levied onsuch bets.

On-course bookmakers submit their re­turns to the club conducting the meeting,which body In turn submits them to theCommissioner of Stamps together with aremittance representing the Government'sshare of the tax paid by the bookmakers.

In addition to the provisions that relatedirectly to the recording of bets laid by a

16

bookmaker and the compilation of TreasuryReturns relating to the Turnover Tax, Regu­lation 133 provides that--

A bookmaker shall-(a) keep books of account in ac­

cordance with the system com­monly known as the "receiptsand payments system";

(b) enter each week in the booksof account all transactions re­lating to his business as a book­maker in a manner so that theweekly entries shown thereincover the same period as thewritten record of bets lodgedwith the Commissioner covers;

(c) each page of a book of accountkept by the bookmaker pursuantto this regulation shall be ruledand headed in accordance withForm T9 in the second appendix.

Form T9 provides for the entry of the fol­lowing particulars:-

Receipts:W.A. Racing.Eastern States Racing.Total Receipts.

Payments:Winning bets paid.Betting Tax on holdings.Purchase of Tickets.Rent.Clerks' Wages.Sundries.Total.

The bookmakers did not comply literallywith the regulation but contended that theiraccounts were in fact kept on the "receiptsand payments" system of accounting basicto Form T9 and that the summarised par­ticulars required by the form could beextracted or compiled at any time. I thinkthat the regulation shouid have required acompieted Form T9 to be returned to theTreasury at weekiy intervals, because theinformation wouid be most material andhelpful to any consideration by the Treasuryof the tax potential of the industry. Itwould also have provided useful material tothe Betting Control Board.

CHAPTER IX.

THE VOLUME OF BETTING AND REVENUEDERIVED THEREFROM.

1.-Volume of Betting.The total turnover of betting for each of

the years of the current legislation is asfollows. The year in each case ends on 31stJuly.

1956 1957 1958 1959£ £ £ £

Orr-Course 16,704,011 16,881,545 18,372,967 17,249,457on-course 8,679,543 9,062,335 8,717,465 7,097,976Orand Total 25,383,554 25,943,880 27,090,432 24.347,433

The totalisator returns for the same period,but in this case based on the year ended30th June, were as follows:-

1956 1957 1958 1959£ £ £ £

2,263,653 2,176,584 2,487,718 2,018,312

It is impossible to draw any firm conclusionas to whether the gross turnover for the firstyear of licensed off-course betting repre­sented a significant increase in the volume ofbetting over previous years. No evidence wasgiven from which one could assess the volumeof off-course betting, both credit betting andstreet betting, in the years prior to 1955.Evidence was given by one bookmaker to theeffect that the licensing of his businessbrought him new customers, malnly womenwho apparently had preferred not to bet off­course prior to the betting shops beingestablished. Moreover off-course betting ontrotting events would be expected to haveincreased substantially with the opening ofbetting shops, because the former illegalstreet bookmakers seldom operated at night.

The probability is that the total turnoveroff-course in the first year of betting shops,namely, £16,704,011 represents a significantincrease in the volume of betting. Since theshops were established, the volume of bet­ting increased from £16,704,011 in 1956 to£17,249,457 in 1959, with a peak of £18,372,967in 1958.

Other comments which are pertinent to thesurvey of the volume of betting over thisperiod may be summarised as follows:-

(a) The turnover of bookmakers fieldingon-course at the gallops has declinedsubstantially from £6,035,028 in theyea I' ended 31st July, 1956 to£4,450,671 in the year ending 31stJuly, 1959.

(b) Off-course betting on local trottingmeetings has increased substantiallyfrom £2,616,405 in 1956 to £3,733,352in 1959. These figures can be com­pared with the on-course turnoverof £2,644,515 in 1956 and £2,647,305in 1959.

(c) Betting on local gallops in the off­course premises has steadily declinedover the years from £7,144,443 in1956 to £5,764,385 in 1959.

(d) On the other hand, betting off­course on Eastern States gallopingraces has shown a substantial riseover the period from £6,924,067 in1956 to £7,670,608 in 1959, with a peakturnover in 1958 of £8,213,568.

These figures confirm the evidence thatthere is a substantial interest in westernAustralia in Eastern States racing and thatthis interest is increasing while the interestin local racing is declining. For the futurethere seems little doubt that if not restrainedthe punters' interest in Eastern States racingis likely to increase to the detriment ofinterest in local races, unless the presentconditions adverse to the local racing clubsare changed.

2.-Revenue and Distribution.

The gross turnover tax derived from theactivity of both on and off-course book­makers rose from £317,445 in 1956 to £442,262in 1959, with a peak figure of £488,127 in 1958.

(2}-3302917

Of these amounts, the Government retained£274,839 In 1956, £395,549 in 1958 and £364,992in 1959.

The galloping racing clubs received, astheir proportion of the turnover tax, aggre­gate amounts ranging from £32,702 in 1956to £61,026 In 1958 and £48,080 In 1959. Thetrotting clubs' share ranged from £9,904 in1956 to £31,552 In 1958 and £29,190 in 1959.

The total revenue from Stamp Duty onbetting tickets and telephone bets rangedfrom £102,676 for the year ended 30th June,1956 to £102,149 for the year ended 30th June,1959.

Revenue received In respect of bookmakers'license fees and related charges, amountedfor the year ended 30th June, 1958, to £30,685and there is little change In this figure fromyear to year.

Appended to this Report are detailedstatistical analyses of these matters markedas Schedules II, III, IV, V, VI, and VII. Thelast mentioned Schedule is included to enablea comparison to be made with the distribu­tion of racing revenue in other States.

3.-Tax Potential.Mr. Elliott, a Treasury officer, read a state­

ment setting out the different ways in whichmore revenue could be derived from bettingon horse racing. I understand this materialis available to the Government and there­fore I do not discuss its contents.

Of the various avenues the investment taxwould seem to be a fair proposal. This taxwould be payable by off-course punters onlyand take the form of a tax levied on each betand paid by the punter when he makes thebet. It does seem an equitable arrangementfor the off-course punter to make some con­tribution in this way, because the facilitiesfor betting off-course are provided to himfree of charge, whilst the punter on-coursehas considerable expense to bear in travellingto the course and gaining admission thereto.

This tax could equally be applied In con­junction with the operation of an off-coursetotalisator scheme.

CHAPTER X.

DISSEMINATION OF INFORMATION.

I.-Newspapers.

That there is a substantial demand by thepublic for racing information on both localand Eastern States races is reflected in thecoverage provided by the daily press. Theevidence in relation to the daily metropolitanpress was given by Mr. Uren, the Assistant tothe Managing Editor of Western AustralianNewspapers Ltd. I quote portion of hisevidence-

We publish two daily newspapers-TheWest Australian (circulation in excess of152,000 daily) and Daily News (circula­tion just short of 100,000 daily). Bothnewspapers circulate throughout theState.

Each carries a substantiai amount ofsporting news, including adequate gallop­ing and trotting information.

Each of the dailies, although operatingin the same field, must, because of thevarying hours of publlcation, provide thenews in different forms.

The peaks of galloping and trottingnews coverage in The West Australian areon Mondays (results) Wednesday (com­ments about week-end meetings) andFridays (form guides and further com­ments following acceptances).

The Daily News gives its greatestattention to galloping and trotting onFridays (form guides) and Saturdays(race results and descriptions) for bothlocal and Eastern States racing.

Mid-week country galloping meetings(usually on a Wednesday) are covered byboth dailies and Monday holiday events,both galloping and trotting, also getattention.

A statistical analysis was made of thematerial published In each paper during theweek ended 4th July, 1959. The total sportingmaterial published in The West Australianthat week represented 22.19 per cent. of thetotal news space and of the total sportingnews, that devoted to racing and trottingamounted to 38.3 per cent.

In the Daily News 22.35 per cent. of thetotal news space was devoted to sport and ofthis 51 per cent. to racing and trotting. Theweek chosen would appear to represent anaverage week.

Evidence was also adduced to show asimilar analysis of racing news in EasternStates metropolitan dailies.

It appeared that the local dailies publishproportionately more racing news than theircounterparts in the Eastern States. This wasattributed by Mr. Uren to two reasons. First,because so many Western Australians areInterested in Eastern States racing and areeager for Eastern States turf news, Includingform guides, track notes, nominations andacceptances, etc.; second, because the localdailies are state-wide newspapers and there­fore have to provide a coverage of gallopingand trotting news from country centres. Inthe other States country meetings are largelyIgnored by dailies in the capital cities, becausethey are fully covered by local provincialpress.

The Sunday Times, whilst devoting a sub­stantial proportion of its space to racing in­formation is confined, in effect, to thepublication of the results of the previous day'Sracing. The space Is generally distributed Inroughly equal proportions between local andEastern States racing.

2.-Broadcastlng.(1) Aust1'Ctlian Broadcasting Commission

National Stations.

(a) Galloping. - The national stationsbroadcast all the races in running from thelocal metropolitan courses. The only country

18

races broadcast in running are the principalraces at the annual Kalgoorlie carnival. Des­criptions in running from Sydney orMelbourne are confined to the principal races,rarely more than one or two on any Saturday,except in the case of the big carnival meet­ings. Only a few races are broadcast in thecourse of the year from Brisbane or Adelaide.The results of the Eastern States races whichhave not been broadcast in running arebroadcast in the course of the afternoon, assoon as convenient after the running of therace.

No betting summaries are broadcast untilafter the last race of a meeting; In the case ofEastern States meetings, these are usuallybroadcast about 3 p.m, and are repeated at6.30 p.m. Betting details of Perth meetingsare broadcast about 5 p.m, on Saturday,soon after the last race.

Results and dividends of important countrymeetings are usually broadcast at 6.30 p.m,on the day of the meeting.

Apart from this service, short sessions con­fined to racing notes are given regularly asfollows-

Thursdays-1.23-1.30 p.m.: Acceptances.Frldays-6.30 p.m.: Racing Notes.Saturdays-8.45-8.55 a.m.: Racing Pre-

view.Saturdays-lO.OO-lO.lO a.m.: Turf News

(Eastern States).(b) Trotting.-Trottlng broadcasts by the

Australian Broadcasting Commission areconfined to the broadcast of metropolitanmeetings usually on a Saturday night withan occasional Monday night. No countrymeetings and no interstate meetings arebroadcast. The broadcast of metropolitanmeetings include the running of all races onthe programme and betting summaries aregiven after the final event Is run.

Trotting acceptances are broadcast at 6.15p.m, on Wednesdays over regional stationsonly; short trotting notes are given on Fri­days at 6.30 p.m, and again on Saturdays at7.35 a.m,

(2) W.A. Broadcasters Pty. Ltd. (61X Perth,6WB Katanning, 6MD Merredin, 6BYBridgetown) .

These stations do not broadcast any trot­ting information but they provide a completecover to all local metropolitan gallop meet­ings, the annual Kalgoorlie carnival and allgallops in Melbourne and Sydney. Only threeraces per year are broadcast from Brisbane,these being the Stradbroke Handicap, theDoomben Ten Thousand and the DoombenCup. Only the results of Adelaide races arebroadcast. No betting Information is broad­cast during the course of the meeting, butimmediately the last race is concluded thesestations broadcast details of starting pricesand tote dividends.

The broadcast of Eastern States races bythis broadcasting network is subsidised bythe Premises Bookmakers' Association, theircontribution going to meet the cost of theland-lines involved.

(3) Western Broadcasting Co. (6KY Perth,6NA Narrottin),

(a) Galloping.c-T'hese stations completelycover all the mid-week country racing. Bet­ting information is not broadcast until theconclusion of the meeting when completedetails of placings and prices are given.Other sessions are broadcast as follows:-

Fridays-7.30-8.00 p.m.: Preview of localmetropolitan meetings.

Saturdays-8.30-8.45 a.m.: Preview ofMelbourne and Sydney racing land­lined from Melbourne.

Saturdays-lO.15 a.m.: Preview of Mel­bourne and Sydney racing land-linedfrom Melbourne.

(b) Trotting.-A complete trotting cover­age is afforded to metropolitan meetings.Previews are broadcast on Saturday from 8.20to 8.30 a.m, and at 6.05 p.m.

The cost of mid-week country racing is metby the Premises Bookmakers' Association.

(4) Whltfords Broadcasting Network (6PMPerth, 6KG Kautooriie, 6AM Northam,6GE Geraldton).

The only sessions devoted to racing broad­cast over the metropolitan stations are asfollows-

Saturdays-7.50-8.00 a.m.: Trotting High­llghts (sponsored by the WesternAustrallan 'I'rotting Association).

Saturdays-9.15-9.45 a.m.: Preview de­voted to Melbourne and local metro­poll tan races.

Saturdays-ll.30 p.m.: Trotting resultsincluding the winners and prices anddividend.

The Kalgoorlie station broadcasts a de­scription of the Meibourne and Sydney racesin running. These descriptions are broad­cast on relay from 6IX and are sponsored bythe Premises Bookmakers' Association. 6KGalso broadcasts mid-week country races onrelay from station 6KY Perth. These broad­casts also are sponsored by the PremisesBookmakers' Association. No betting infor­mation is broadcast from Kalgoorlle,

Station 6GE Geraldton broadcasts a de­scription of the Melbourne and Sydney racesin running. This broadcast is relayed from6IX Perth and sponsored by the PremisesBookmakers' Association. No betting infor­mation is broadcast by this station.

3.-Press Agency.Tates Press Pty. Ltd. is the successor to the

former Tates Press and Telegram Agency andplays a key part in the present scheme of off­course betting.

The Company is the authorised price agentof the Betting Control Board and operatespursuant to a written contract with theBoard. The company pays £500 per annumfor the rights and privileges accorded it underthe agreement. Its charges to bookmakersare sub] ect to the approval of the BettingControl Board.

19

The company has a representative on allPerth and country courses in Western Aus­tralia which are the subject of betting off­course. The representative receives theofficial starting price of all horses from thestarting price officer accredited by the Board,and telephones such prices together with thetotalisator dividends and any incidentalinformation such as late scratchtngs throughto the city office of the company as soon aspossible after the running of each race. Thecity office receives information on EasternStates races by urgent telegram after eachrace.

The racing service supplied to licensedbookmakers may be summarised by quotingthe following extract from the evidence:-

Our Melbourne service provides ad­vance scratchings if any, distributed assoon as availabie with the weather re­port and the condition of the track, as ageneral rule, about thirty minutes be­fore the advertised starting time of therace meeting. The results give the start­ing price of the winner, a favourite, ifnot the Winner, as returned by the SunNewspaper and the place tote dividendsas soon as possible after such prices areavailable and can be transmitted to ourPerth office. The average time takenwould be in the Vicinity of twenty-fiveminutes.

The Sydney service is the same asMelbourne with advance scratchtngs,weather and the condition of the trackabout thirty minutes before advertisedstarting time. The result, the startingprice of the winner and the favourite,if not the winner, as returned by theSydney Morning Herald and the totedividends are given as soon as availableand can be transmitted to our Perthoffice. The average time taken would bethe Vicinity of thirty minutes.

From Adelaide, advance scratchings'are available and distributed approxi­mately thirty minutes before the adver­tised starting time of a race meeting, andthe winners and favourites, startingprice as returned by the Adelaide News,with the tote dividends are distributedin the same manner as Melbourne andSydney.

As regards Perth and country racemeetings, the jockeys and scratchings ofthe first race of each programme aredistributed approximately thirty min­utes before the running of the first race,and the starting price of the winner andfavourite, as determined by the BettingControl Board prices officer, with thetote dividends, are rung through to Perthoffice as soon as available, from wherethey are immediately released to licensedshops. Similar information is supplied inconnection with the metropolitan trot­ting events.

The company provides a very efficientservice to its subscribers and in most cases,the prices and dividends of any particularrace are received by the licensed bookmakerswell before the next succeeding race is run.

At the present time, the company suppliesracing information to every off-course book­maker in the state, a total of 209 licensedpremises bookmakers. The scale of chargeslevied by Tates Press varies according to thegeographical location of the licensed prem­Ises; the average charge to each bookmakerIs about £5 pel' week.

The network of communications emanat­ing from the city office of Tates Press istruly remarkable. For instance, within themetropolitan area by means of direct linesthe company is in instantaneous touch with50 bookmakers. A teleprinter provides im­mediate service to the Goldfields and severalintermediate towns. Trunk line calls involv­ing very little delay suffice for other countrydistributing centres. Telegrams are used forthe distant North-West ports.

CHAPTER XI.

THE EFFECT OF BETTING SHOPS UPONRACING BODIES

The following bodies presented evidenceupon this subject:

(1) The Western Australian Turf Club.(2) The Blood Horse Breeders' Associa­

tion of Australia, W.A. Branch.(3) The Breeders, Owners and 'I'ralners'

Association (Racing).(4) The W.A. Turf Club Bookmakers'

Association.(5) The Western Australian Trotting

Association.(6) The Western Australian Trotting

Breeders, Owners, Trainers andReinsmen's Association.

(7) Automatic Totalisators Ltd.Without exception they demonstrated a

declining prosperity in recent years and ineach case it was asserted that the blame laywith the betting shops. I propose to sketchbriefly the position as described by eachbody and then discuss the answer pro­pounded by the off-course bookmakers.

I.-The Declining Prosperity of RacingBodies.

(1) The Western Australian Turf Club:The Vice-Chairman of the Turf Club, Mr.

Lee Steere, described an "immediate anddrastic deterioration of the financial positionof the club in all departments" following theinstitution of betting shops. He claimed thatthe deterioration had become worse monthby .month, and produced figures to explainand illustrate his assertion.

Revenue and Expenditure.-In 1945 theclub's revenue was £260,245. It rose to£399,703 in 1955, from when it declined to£311,829 in 1959. In each case the year isending as at 30th April. Expenditureamounted to £191,014 in 1945 and increaseduntil 1959 when it was £329,292. The year1959 was the first year for several decadesthat the expenditure exceeded revenue. Agraph Illustrating these figures is appendedto my Report and marked "Schedule VIII."

Admission Receipts.-Admisslon receiptsamounted to £62,926 in 1950 and rose to apeak of £84,297 in 1955 from when It droppedsteeply to £44,498 in 1959. There was nochange in the price of admission during theseyears, except for a variation in entertainmenttax, which was passed on to the public. Thepercentage decline in admission receiptsfrom 1955 to 1959 was 47.2 pel' cent.

Totalisator Investments and Revenue.-In1950 investments totalled £835,861 and roseeach year to a peak of £1,167,708 in 1955, andthen declined to £618,117 in 1959, a percen­tage decline of 47 pel' cent. The net totalisa­tor revenue being the investments less thedividends paid, amounted to £44,818 in 1950rrslng to £53,283 in 1955 and dropping aslow as £30,477 in 1959, a percentage declinesince 1955 of 42.8 per cent.

Number of Paying Patrons.-The numberof paying patrons more 01' less consistentlydeclined from the year 1950, when the figurewas 239,197 to the year 1959 when the figurewas 120,428. However, here again the signi­ficant change has occurred between theyears 1955 to 1959, the aggregate decreasefor the years 1950 to 1955 amounted to only18,000 and from the year 1955 to the year1959 to 101,000. This decrease of 18,000 wasexplained by an increase in membership ofthe club of 75 members making available afurther 225 tickets for each meeting, or atotal of 13,000 per annum, the majority ofwhich would have been used.

Number of Horses In Training.-The West­ern Australian Turf Club provides facllltiesfor the training of horses at both Ascot andBelmont Park courses. For the year 1955,there was a total of 926 horses In training atthese courses. This number declined by 30pel' cent to 644 horses in 1959.

Number of Bookmakers.-In 1955 therewere 38 bookmakers fielding in the enclosureon metropolitan courses. In the Ieger in thesame year, there were 19 bookmakers bettingstraight out and three doubles bookmakers.

In the year 1959, there were only 24 book­makers betting straight out in the enclosureon metropolitan courses and three doublesbookmakers, and in the leger 10 straight outbookmakers and two doubles bookmakers.(2) The Blood Horse Breeders' Association

of Australia, W.A. Branch:Evidence was given by the President of

the Western Australian branch of the Associ­ation. This branch has 40 members, drawnin the main from stud property andthoroughbred stallion owners. The branchprovides about 80 per cent. of the gallopersracing in Western Australia.

The witness said that since the 1955-56season there has been a marked decrease inthe demand for thoroughbred yearlings dueto a falling-off in stakes; a rise in the costof producing yearlings; a reduction in thenumber of brood mare owners sending theirmares to established studs with a consequentfaIling-off in the number of yearlings pro­duced; a drop in the average price of year­lings and a drastic falling-off in the totaireturn from yearling sales.

20:

(4) The W.A. Turf Club Bookmakers' Associa­tion:

This Association comprises all the book­makers fielding at galloping meetings withinthe State. Members are licensed by theBetting Control Board but also require apermit from the Turf Club before they arepermitted to field. The annual fee payableto the Betting Control Board ranges from£5 to £15, according to the nature of thelicense. In addition to this, each bookmakerpays fees to the club for his permit to fieldon each race day. The fees presently pay­able In respect of metropolitan meetings areas follows:-

In addition there are three doubles book­makers In the enclosure and two in the legerwho pay the following fees-

Easter Carnival(3 meetings incluslve) 149 0 0 61 15 0

Enclosure Leger£ s. d. £ s. d.

Ordinary Meetings 30 0 0 6 0 0

Christmas Carnival 120 0 0 46 0 0

Easter Carnival 90 0 0 24 0 0

At neal' country courses all bookmakers paya fiat fee of £10 pel' meeting to the appro­priate club.

In addition, as already indicated In ChapterVIlI the bookmakers pay turnover tax at therate of 1t per cent. on the first £50,000turnover and 1! pel' cent. on turnover inanyone year In excess of that sum. Theyalso pay stamp duty on each ticket written atthe rate of 3d. per ticket in the enclosure and1d. pel' ticket in the leger and on countrycourses. Statistics were produced to showthat the aggregate of these contributions byon-course bookmakers in Western Australiaare far In excess of contributions made bybookmakers on-course in any other State.

Members of the Association paid In permitfees, a total of £67,796 to the Western Austra­lian Turf Club for the year ending 30th June,1958.

The Turf Club conceded that the permitfees paid by bookmakers fielding on theircourses are excessive In the light of presentday conditions, but It was said that the clubis unable to rectify the position because of Itsown financial predicament.

Drop In Turnover.-The earliest figuresavailable were for the year 1955-56, that Isthe first year of the operation of the BettingControl Act. In that year the aggregateturnover of bookmakers fielding on metro­politan courses was £4,818,644. This figuredeclined In each of the succeeding years to afigure of £3,474,417 for the year recently con­eluded, representing a decline of 27.9 pel'cent.

He said that by contrast in the years from1950 to 1955 there was an upward trend anda buoyancy in every branch of breeding andracing.

Stud Fees.-Figures were adduced relat-·. ing to the largest stud in Western Australia,one which stands 3 to 4 stallions, to showthat aggregate stud fees ranged from £3,014for the year 1950 to a peak figure of £3,707for the year 1955 declining to a figure of £961for the year 1959. The same stud has suffereda decrease in the number of owners boardingmares' permanently from 1955 to 1959 of 85per cent. The number of mares other thanboarders at the same stud in 1959 was onlyone-third of the number at the stud in 1955.

Yearling Sales.-The number of yearlingscatalogued at the annual yearling sales forall studs in Western Australia have variedfrom 129 at the sale in March, 1950, to a peakof 147 at the sale in March, 1955, to 77 at thesale In March, 1959.

The same trend is refiected In the numberof yearlings soid at the annual sales. Theseranged from 79 In 1950 to 66 In 1953, then upagain to 74 In 1955, since when there hasbeen a consistent decline to 45 in 1959. Notonly have less horses been sold, but theaverage price paid for them has shown amarked decline since 1955 from an averageprice of 237 guineas at the 1955 saie to 160guineas at the 1959 sale.

(3) The Breeders, Owners and Trainers'Association (Racing):

This Association has about 200 membersand embraces within its membership at least95 per cent. of the licensed trainers in West­ern Australia. The President of this Associa­tion said that trainers' fees rose from £3 perhorse per week In 1949 to £6 In 1955. Sincethen there has been no change In training'fees although costs have risen SUbstantially.This rate compares with £8 pel' week InAdelaide, £10 pel' week in Melbourne and £10to £12 In Sydney. A number of smallertrainers are charging less than £6 per weekbecause they cannot get horses at that figure.The trainer is responsible for providing feed,stabling and exercise yards and the necessarylabour by stable boys and apprentices. 1tcosts from £3 to £3 lOs. pel' week to feed ahorse.

With training and other expenses It costsan owner about £10 pel' week to keep a horseracing.

The stakes In Western Australia are thelowest in Australia. In the metropolitan areathe average stakes are £350 pel' race whilein Adelaide the average is £600 to £700 andIn Melbourne and Sydney in the vicinity of£1,000 per race. Stakes In the country meet­lugs average £70 per race. The present stakesare quite Insufficient to pay the cost of keep­ing the horse In training and the owner, ifhe regards his racing as a business proposi­tion, must gamble to make It pay.

Like the Blood Horse Breeders' Association,this Association regards the stake money asthe vital key to the prosperity of their re­spective industries.

21

Ordinary Days(apprcx. 52 meetings)

Christmas Carnival(4 meetings inclusive)

Enclosure£ s, d.

29 0 0(each

meeting)

212 15 0

Leger£ s, d.15 0 0(each

meeting)

115 15 0

Decline of Membership.-During the periodfrom 1955 to 1959 there were 21 resignationsfrom the enclosure and 18 resignations fromthe leger, with a net drop In the number ofbookmakers fielding of 11 in the enclosureand 10 in the Ieger.

It was said that only a small proportion ofthe resignations were brought about by iII­health and old age and that the majoritywere due to the fact that bookmaking on­course under present conditions was hardly apaying proposition. Figures from 21 out of atotal of 22 bookmakers who fielded In themetropolitan enclosure throughout the wholeof the financial year 1958-1959 were produced.These showed that 13 of them made a loss,and that taking the 21 bookmakers togetherthere was an aggregate net loss of £9,289. Itwas asserted that 80 per cent of the totalmembership of the Association had failed toclear their expenses.

(5) The Western Australian Trotting Associa­tion:

Mr. J. P. Stratton, the President of theAssociation, said that the position of hisAssociation has deteriorated considerablysince betting shops were licensed. He pro­duced the income and expenditure figures foreach of the years 1949 to 1959. The figuresare complicated because In the years 1953 and1957 the Inter-Dominion Trotting Carnivalwas held in Perth, inflating the results ofthose years. The more significant com­parisons were as follows:-

Stakes Paid.-These ranged from £132,547in 1949 to a peak In 1953 (Inter-Dominionyear) of £175,994, dropping to £156,363 in 1955and to £137,730 in 1959.

Bookmakers' Fees.-These ranged from£32,570 In 1949 to a peak of £40,545 in 1955diminishing to £30,920 In 1959.

Paid Attendances.-The number of peoplewho paid for admission to the course were291 813 in 1949, 308,017 in 1953, diminishing to250'373 In 1955 and 172,829 in 1959. It Is notedth;t in the year 1956 the number of personswho attended amounted to 168,561, but in thisyear only 39 meetings were held against 44In 1959. The average number of personsattending a meeting in 1955 was 5,443 com­pared with an average of 3,929 In 1959.

Totalisator Investments.-The aggregateamount invested on the totalisator in 1953amounted to £1,353,993 or an average invest­ment per meeting of £31,488. In 1955 theaggregate amount Invested was £1,146,994 oran average investment per meeting of £24,935.In subsequent years the figures droppedfurther until in 1959, the aggregate amountInvested was £690,368 or an average invest­ment of £15,690 per meeting.

(6) The Western Australian Trotting Breed­ers. Owners} Trainers and Reinsmen'sAssociation:

Mr. Reid, the Secretary of the Associationgave evidence. He said that his Associationhad been in existence for about 30 years and

22

had a membership of 380 embracing the largemajority of breeders and trainers of trottinghorses and reinsmen.

This witness expressed concern at themarked drop in attendances at trotting meet­ings since the licensing of premises In 1955and the consequent diminution in the stakespaid by the Association.

He said that the costs of preparing horsesfor racing have increased considerably overthe last five years and that if these trendscontinue, it will be impossible to carryon;many breeders and owners are finding it tooexpensive these days and are drifting out ofthe sport; the big breeder had virtually dis­appeared because of the increased costs inbreeding, training and racing horses in con­trast with the smaller stakes; it Is difficult tosecure adequate prices for yearlings.

(7) Automatic Totalisators Ltd.

This organisation specialises in the manu­facture and operation of totalisator equip­ment. The company handles about 80 percent of the aggregate totalisator turnoverthroughout Australia. In Western Australiait operates under contract the equipmentinstalled at the three metropolitan courses ofthe Turf Club and at the trotting grounds ofGloucester Park and Richmond Park, andalso provides a mobile totalisator service tothe country racing clubs at Pinjarra,Northam, York, Beverley and Toodyay.

The company, in consideration of its oper­ating and maintaining the equipment,receives a return based on the volume ofturnover. For this reason, its revenue isdirectly affected by variations in turnover.

Mr. Fairburn, the General Manager ofOperations of the company In Australia, saidthat the company's revenue in Western Aus­tralia showed an alarming decrease immedi­ately the betting shops commenced to oper­ate in August, 1955. He produced figures toshow that, for the year ended 30th June, 1955,the company's turnover in Western Australiawas £2,700,503, a figure which was reasonablyconsistent with turnovers handled in the pre­ceding three years. For the year ended 30thJune, 1956, the aggregate turnover fell by23 per cent to £2,076,156. In the succeedingyears, turnover continued to decline and forthe year ended 30th June, 1959, amounted toonly £1,557,441, a drop of 42 per cent as com­pared with 1955.

The drop in turnover was most dramaticat the country meetings. In the year endedJune, 1956, the average daily turnover drop­ped from £4,500 in the previous year to £2,500,a fall of 45 per cent. The trend continueduntil for the year 1959 the average dally turn­over was £1,680, a decrease of 63 per cent. onthe year 1955. At the present time the com­pany finds itself in a very difficult position.It is bound by contracts with the clubs onwhose courses it operates the equipment, andthe clubs are seemingly in no financialposition to make any adjustments of thecontract rates.

In the years prior to 1955, the company'soperations In Western Australia, according toMr. Fairburn, were reasonably profitable, butduring the four years since 1955, continuingand increasing losses have been incurred.These losses have been borne as an increas­lng burden by the company's operations inthe other Australian States.

From further figures given by Mr. Fairburndistinguishing between galloping and trottingmeetings, the fact emerges that the com­pany's turnover at the former meetings hasbeen more severely affected than in the caseof the latter. The percentage decline inturnover when comparing 1959 with 1955, is51 per cent on gallops and 33 per cent. ontrots.

2.-Assessment of the Reasons for theDecline.

The foregoing represents a survey of thefactual situation in which the various racingclubs and related bodies find themselves. Itnow remains to discuss the question whethertheir decline is to be attributed to the bettingshops.

On the one hand the witnesses whorepresented these various bodies testifiedvehemently and without exception to theirconviction that the off-course betting systemwas the cause of all their troubles. Each wit­ness was the holder of a responsible office inhis particular organisation and was possessedof long experience in that aspect of the racingindustry which he represented. Whilst thisevidence may be attacked as mere opinion,it is nevertheless opinion of an expert charac­ter and should be given due weight.

The argument against the conclusion thatthe betting shops are responsible for the de­clining prosperity of these bodies was pressedby the Premises Bookmakers' Association.This argument, in effect, was that the racingindustry was already entering a period ofdecline for a variety of reasons and that itwas merely fortuitous that the institutionof betting shops coincided in point of timewith the decline. In support of this, it wasobserved that the Trotting Association suf­fered a significant decline as early as 1954,and a similar decline was experienced in studsbefore the shops opened. Reference was alsomade to the fact that clubs in the EasternStates have suffered a reduced prosperity inrecent years. To further the view being re­presented by the Premises Bookmakers' As­sociation, evidence was given by Mr. Tausswho conducted a survey of trends in sport inWestern Australia over the past decade. Thebroad import of his evidence was that interestin a variety of sports has been increasing inrecent years, with bowls and soccer as themore spectacular examples. It was said thatthis increasing interest in sport together withthe general economic conditions were largelyresponsible for the decline in patronage ofthe racecourses.

The reference to bowls is not without in­terest and, I think, significance, in the con­sideration of this question. It appears that

23

bowling clubs are rapidly increasing theirmembership and are generally in a flourish­ing condition. The provision of facilities forbetting off-course may well be partly re­sponsible for this prosperity. I say this be­cause in the course of the Commission, myattention was drawn to a situation thatexisted in one particular bowling club. In thisclub, it was the practice for some membersof the club to combine their interest in bet­ting on horses with their playing of bowls.The barmen received bets from the membersand telephoned them through to a licensedbookmaker, using the telephone installed inthe bar of the club, During each ensuingweek the barman visited the bookmaker'spremises and received accounts relating toeach of the punters, together with any neces­sary money to enable him to settle the bets.The transactions were then finalised at theclub. Whilst the Betting Control Act clearlyprovides that betting must not take placeanywhere except on licensed premises 01' inthe appropriate part of the racecourse, it ap­pears that so long as the barman on the factsI have stated is acting as the agent of thepunters, no offence has been committed.However, in the police investigation which re­sulted in these facts coming to light, the bar­man asserted that he was in receipt of anillegal commission paid to him by the book­maker of Is. in the £1. The bookmaker deniedthe payment of commission, the evidence wasdeemed insufficient and he was not prose­cuted.

Having regard to a situation of this nature,the personal attendance of punters in thebetting shops in the course of a race meetingmay not be the only index to the numberof people Who have been attracted away fromthe course. The legislation enables otherpunters to closely associate their betting withanother Saturday occupation without attend­ing the shops. The system also enables thepunter to make his bets at a shop before mid­day on Saturday, thereby freeing him to fol­low his other sporting interest during theafternoon. Were it not for the facilities pro­vided by the betting shop, such a personmight choose to attend the racecourse on theSaturday afternoon.

The evidence relative to the argument thateconomic conditions were responsible for thedecline in prosperity of the racing clubs, wasaltogether too nebulous to support such aconclusion.

It is pertinent to recall the sequence ofevents in South Australia. Betting shopswere established in that State in 1933. In 1937the prosperity of the racing clubs had shownsuch a decline and the shops were so flourish­ing that a Royal Commission was set up tore-examine the position. It found, inter alia,that the existence of the shops had seriouslyaffected the attendance at race meetings andthe prosperity of the clubs. Subsequent tothese findings, as I have already indicatedin Chapter II, betting shops with one slightexception were abolished. Mr. Alexander, theSecretary to the Betting Control Board inSouth Australia who gave evidence beforeme, said that racing in South Australia, in

contrast to the years when the betting shopswere operating, is now flourishing; he saidthat for instance the Adelaide Racing Clubmeeting held in August, 1959, was very wellattended and established new turnover re­cords; the attendance at the meeting on Sat­urday, 15th August, was 22,000 persons.

On a consideration of all the evidence,while making due allowance for the changingpattern of interest in other outdoor sports,I find that the betting shops have had a sub­stantiai and adverse effect not only on theattendances at racecourses but also on theprosperity of the racing clubs and the bodiesassociated with racing.

The evidence shows that the effect of thebetting shops is progressively cumulative,particularly in the case of the Western Aus­tralian Turf Club. By providlng easy facili­ties for off-course betting, the shops inducepeople to remain away from the course; thesmall attendances cause a psychological de­pression on the enthusiasm of the race-goersand still more are led to stay away; the clubloses revenue from admission fees and fromon-course betting; It Is unable to increase thestakes; owners of outstanding horses takethem to the Eastern States; good jockeys like­wise tend to go East; breeders, owners andtrainers are discouraged; the betting ring isweak and Its turnover small. The effects ontrotting are not so serious, but both the West­ern Australia Trotting Association and theWestern Australian Turf Club assert thatunless the shops are closed the racing indus­try in the course of time will come to a stand­still. They contend that the decline In theirprosperity cannot be cured merely by thegrant of a greater proportion of the bettingtax. They want the people back on thecourse,

CHAPTER XII

SOME OTHER CONSIDERATIONS OF THEEFFECTS OF THE ESTABLISHMENT OF

BETTING SHOPS.

I.-Beneficial Results.The betting shops have achieved four Im­

portant objects which lay behind the legis­lation.

First, they have provided the Governmentwith a fruitful source of revenue.

Second, they have provided those personswho desire to bet off-course on horse-racingwith a wider legal avenue to satisfy thosedesires. Such persons have the opportunityof betting with bookmakers licensed andvouched for by the Betting Control Boardand subject to Its control. They may bet Inpremises which physically are respectable,well-equipped from a business point of view,and well-conducted. The punter payingcash receives a voucher for his bet and canbe paid his Winnings, If any, Immediatelythe race Is concluded. Credit bettors havetelephone facilities for making their betsand receive prompt accounts and settle­ments. Both classes of bettors can bet on

24

local and Eastern States races. For the basicelements of betting, the desires of the pun­ter are satisfied In an orderly manner.

Third, the betting shops have eliminatedto a very great degree the illegal book­maker-not altogether, as the minutes ofthe Bookmakers Association show, therebeing several references therein to theoperations of illegal bookmakers.

Fourth, with the virtual eradication ofillegal bookmaking has gone a major prob­lem In pollee administration which was sodisturbing in the days prior to the operationof the Betting Control Act, 1954, (hereinafterreferred to as the "pre-Act days"). Thepolicing of the shops is almost routine andscarcely any trouble is encountered.

In the submissions of the Premises Book­makers' Association, of Mr. Styants thepresent Chairman of the Betting ControlBoard, of Mr. Andersen the former Chairmanof the Board and of Inspector Fiebig, theActing Chief Inspector of the Pollee Depart­ment, these considerations are sufficient tojustify the existence and the continuance ofthe shops. They contend that any alterna­tive will give rise to illegal bookmakers withthe evils of the pre-Act days. The presentsystem, they say, satisfies the off-course pun­ter and no other system will meet his require­ments; If any other system Is Introduced,inevitably he will go to the illegal book­makers.

The question then arises whether, In theInterests of the community, the price paidfor these advantages Is too high. This bringsme to a consideration of other effects of thesystem, some of which are not apparent evento that section of the public which tndulgesin betting.

2.-The Shops as an Encouragement toBetting and Loitering.

Within the frame-work of the regulationsthe bookmakers, as Is only natural, providetheir customers with every inducement tobet. I shall take a typical Saturday. Theboards In the shops display the starters andriders In each race with a note of the trackand weather conditions; newspapers areavailable on the counters with anticipatedprices and accounts and photographs of pre­vious performances of the horses. The run­nlng description of each race Is providedthrough a commercial broadcasting station.As on an ordinary Saturday there may beno less than 35 races, the broadcasts arepractically continuous. Results, startingprices and dividends are placed on the boardsvery shortly after each race is run, and suc­cessful punters can forthwith collect theirwinnings and continue to bet therewith. Theshops open at 9.30 a.m, or even earlier. Owingto the difference In time between the States,races In the Eastern States commence asearly as 10 a.m. local time, while the lasttrotting race is run about 10.30 p.m, so thatbettors in the aggregate have a continuousperiod of 12 hours In which to engage In theirpastime, with seats and toilets provided fortheir accommodation and about 35 races In

Exceeding £150,000 not Exceeding £200,000 TurnoverLtcenatng Group Turnover Gross Profit Net ProfitTotal of 7 £1,175,162 £110,881 £25,885Lowest Net Profit £2,059Highest Net Profit £4,824Average £167,880 £15,840 £3,698% to Turnover , 9.44% 2.20%

Exceeding £50,000 not Exceeding £100,000 TurnoverLicensing Group Turnover Gross Profit Net ProfitTotal of 41 £3,100,077 £333,555 £84,823Lowest Net Profit £418H1g1HlSt Net Profit £6.394Average £75,612 £8,135 £2,059% to Turnover 10.76% 2.74%

license shall not be transferable, in practicethe system developed whereby bookmakerswere able to sell their business subject to theBoard granting a license to the purchaser. Itwas customary for the outgoing bookmakerto notify the Board the price at which he wasselling his business, so that the Board couldmore properly assess the financial position ofthe incoming licensee. However, the impres­sion got abroad amongst bookmakers that theBoard was interested in the amount beingpaid for goodwill and might take action tocontrol such payments. This impression, sofar from discouraging the transfer ofbusinesses for substantial sums of money,resulted merely In the Board being deceivedIn many cases as to the amount which was tobe paid. Even so a schedule produced by Mr.Styants setting out particulars of all sales oflicenses during the currency of the Actshowed that in 11 out of 59 cases the goodwilldisclosed to the Board amounted to £1,500 ormore. The maximum in anyone case was£4,500 for a city shop. Mr. Styants said Inevidence that he placed no great reliance onthese figures and was satisfied that in manycases they were understated. He adverted toa recent case In which the licensee and hissuccessor were with him in the Betting Con­trol Board offices telling him that the good­will was only £1,500 when, as Mr Styants said,he knew that It was between £4,000 and £5,000.Mr. Styants' evidence relating to the decep­tion of the Board on the matter of goodwillis startling. Two glaring examples will appearlater in this report. Mr. Styants was in aposition to measure the value of the businessbecause he was in possession of the progres­sive data in relation to turnover.

The value of the monopoly is furtherillustrated by the profits made by 130 book­makers for the year ended 30th June, 1958.Informatlon was tendered in respect to only130 bookmakers because for various reasonsthe information was not available from theremainder. The salient features of the surveywere as follows:

Net Profit£46,797

£64£2,720

£9963.74%

TurnoverNet Profit

£97,921£1,133£6,478£3,6273.05%

£3,07611.55%

£26,644

Under £50,000 TurnoverTurnover Gross Profit£1,252,261 £144,585

Exceeding £100,000 not Exceeding £150,000LicensIng Group Turnover Gross ProfitTotal of 27 3,209,953 £329,507Lowest Net ProfitHighest Net ProfitAverage £118,887 £12,204% to Turnover. 10.26%

Ltcenalng GroupTotal of 47Lowest Net ProfitHighest Net ProfitAverage% to Turnover .

3.-The Off-Course Bookmakers' Mnnopolyand Profits.

There is no doubt that the licensing of anoff-course bookmaker represents the grant ofa valuable monopoly. The off-course book­makers who operated In pre-Act days,whether legally on credit or illegally for cash,knew the profits to be derived from the enter­prise. There was a rush for licenses withmore than 500 applicants for the 200 licenseswhich the Board had decided to grant.

The value of the monopoly was immediatelyreflected In the rental or price which thebookmaker was prepared to pay for an ap­proved site. The evidence indicates thatrentals changed by landlords to bookmakerswere much higher than rentals charged forcomparable premises in relation to otherbusinesses. In one case, premises which hadbeen let as a billiard saloon at a weeklyrental of £3 us, Od. were leased to a bookmakerfor £20 Os. Od. a week.

A further Index to the value of a bettingshop is to be found in the evidence given byan officer of the State Housing Commissionconcerning some land sales by his Commis­sion. It appears that when the State HousingCommission was preparing for the sale ofbusiness sites in a new housing estate, itwould confer with the Betting Control Boardwith a view to a particular site being sold assuitable for the erection of a bettlng shop.The Betting Control Board co-operated tothe extent of Indicating their approval of thelocation, although it would not commit itselfIn any way to the issue of a license to thepurchaser of the land. To meet this require­ment, the State Housing Commission Inserteda condition in the contract of sale to providefor its annulment In the event of the pur­chaser being refused a license by the Board..In one of the cases referred to In the evidencea betting shop site was auctioned at NorthInnaloo. The undisclosed upset price was£1,930. The block sold at auctlon for £2,600.This sale took place on 26th April, 1958.Following this sale, however, the purchaserwas not able to obtain a license from theBetting Control Board; consequently the salewas annulled. The site was re-offered for saleby auction on 27th September, 1958, the un­disclosed upset price for this sale being flxedat the former sale price of £2,600. On thissecond occasion the block was sold for £5,500,and the purchaser subsequently received hislicense. Similar blocks In the same estatewere sold by the Commission for normalbusiness purposes at £1,000.

Another aspect which illustrates the valueof a license is the amount paid by way ofgoodwill when premises changed hands.Although the Betting Control Act, in Section11, provides that the premises bookmaker's

all on which they may bet. The customersare provided with all the knowledge, and insome respects more knowledge than personsbetting on-course, with the exception thatthey do not know the fluctuations in theodds. They do not have to pay any admis­sion fees or undertake a journey to the course.

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Net Profit£8,7801.24%

Exceeding £200,000 not Exceeding £250,000 TurnoverLicensing Group Turnover Gross Profit Net ProfitTotal of 2 £414,049 £34,520 £7,403Loweat Net Profit £3,162Highest Net Profit £4,241Average £207,025 £17,260 £3,701% to Turnover. 8.34% 1.76%

Exceeding £250,000 not Exceeding £300,000 TurnoverLicensing Group Turnover Gross Profit Net ProfitTotal of 3 £841,093 £77,700 £14,488Lowest Net Profit £3,656Highest Net Profit £6,325Average £280,365 £25,900 £4,829% to Turnover. 9.24% 1.72%

Exceeding £300,000 not Exceeding £400.000 TurnoverLicensing Group Turnover Gross Profit Net ProfitTotal of 2 £744,895 £56,982 £13,419Lowest Net Profit £6,632Highest Net Profit £6,787Average £372,448 £28,491 £6,710% to Turnover .. 7.65% 1.80%

Exceeding £400,000 TurnoverLicensing Group Turnover Gross ProfitTotal of 1 £706,732 £43,931% to Turnover . 6.22%

There were only three bookmakers includedin the survey who made losses. All threewere in the "Under £50,000 Turnover" bracketand their losses were £147, £173 and £222 re­spectively. These survey figures were pro­duced by the Premises Bookmakers' Associa­tion after being gathered by a firm ofindependent accountants and auditors fromthe taxation returns of the various book­makers. The accuracy of the statement ofnet profits is open to question. The account­ants obtained the turnover figures from theTreasury Department and the gross and netincome from the bookmakers' income tax re­turns but they did not check whether theturnover, as stated in the income tax figurescorresponded with the Treasury return. Forthe purpose of making such a check, the Com­mission obtained a breakdown from theactual income tax returns of eight book­makers, and in some cases sighted the actualreturn. In only four cases were the turnoverfigures set out; in the other four they werenot. In one case, that of Jones of VictoriaPark, the turnover stated for the purpose ofthe income tax return was £6,000 less thanthe Treasury record of his turnover, givingrise to the suggestion that the net incomewas under-stated in the income tax return by£6,000. In relation to this case I quote theevidence of the accountant who compiled thefigures in the survey.

I notice that in relation to Cl6 (Jones),you have shown the turnover for thatperson in exhibit 61 as £134,000?-That iscorrect.

Yet in exhibit 62 you show his turn­over as £128,000?-That is correct.

What happened to the difference of£6,000?-That gets back to the same prOb­lem, the method of recording the grossturnover. The bookmakers record theirbooks in different manners. Some do notrecord credit bets and there is no uni­formity among them.

Then these figures of turnover do notmean anything?-The turnover figuresshown in the schedules are those suppliedby the Stamp Office.

26

Was the discrepancy in the turnoverfigures disclosed by the Stamp Office asagainst those supplied by this bookmakerto the extent of £6,000?-That is correct,

As a chartered accountant do you re­gard that as unsatisfactory and with sus­picion?-What else can you do? Thereare so many factors. Unless you carryout a complete investigation and checkof the books you cannot find out.

Do you regard this as something re­quiring investigation and explanatlon?­I understand that the Taxation Depart­ment has rung up the Stamp Office inthis regard on many occasions, but thedepartment has given it up as a bad job.

In fairness to Jones, it should be statedthat he was not asked to explain the discrep­ancy.

Another consideration which may throwdoubt on the accuracy of the profit figuresis that the opportunities for evasion, both ofincome tax and turnover tax are so obviousthat one can never be certain that it does nottake place.

It is possible for evasion to be effected intwo ways. First, by the failure to record abet. Second, by the entry of a fictitious win­ning bet. By falling to record a bet not onlyis the turnover tax avoided, but the stakedoes not enter into the bookmaker's grossprofit and to that extent is free of incometax. That this system of evasion has beenpractised is shown by the fact that sevenbookmakers have been proceeded against forthe offence of not entering bets. The licensesof six of them were cancelled following theirconviction, and the remaining one was dealtwith by the Commissioner of Stamps who hasthe power summarily to impose penalties.The majority of the offenders engaged in asystematic evasion over a period of time andseveral of them were discovered only becauseof information supplied by a third party tothe police or to the Treasury Officials. How­ever, Mr. Elliott, the Betting Tax Inspectorof the Treasury Department and Mr. Byfield,the former Commissioner of Stamps, eachsaid that he was satisfied that the Treasurywas getting practically 100 per cent. of whatit was entitled to get by way of tax. Theycontended that there was cross-checking ofbookmakers' returns with a view to ensuringthat all bets were recorded. It is difficult tosee how any amount of cross-checking of re­turns will reveal bets which have not beenrecorded. Mr. Byfield gave evidence beforethe Betting Commission in Melbourne on be­half of the Bookmakers Association in supportof the betting shop system, and he then as­serted that in effect there was no evasion ofturnover tax and that all bets were accountedfor. The Commissioner expressed scepticismof that evidence.

While it is true that with telephone bettingit is the practice of most bookmakers to makeout an account for the customer, neverthe­less some customers do not trouble to gettheir accounts and merely settle for cash onthe bookmaker's word. Some of them ask

that accounts should not be sent to them.Then again accounts may be kept in a systemof pseudonyms. Mr. Healy, for instance,uses such ciphers as HZ", "Peter", "George"and "Vin", and said that he might have 100telephone betting accounts recorded in thismanner and that in some instances he didnot know who the customer was and hadnever seen him. I am not suggesting that Mr.Healy used these pseudonyms to avoid tax­ation, but they illustrate how impossible anysystem of cross-checking must be. Theperson who pays the money and receives thewinnings is kept secret and the bookmakerhimself may not even know his Identity.

The second possibility of evasion consistsin the entry of fictitious winning bets. Thismay be directed specifically to the evasion ofincome tax. It Involves the writing in of afictitious winning bet after the race has beenrun; for example, if a bookmaker once amonth writes in a bet for £20 on a horsewhich has already won at 10 to 1, the effectof such an entry, while it increases his turn­over by £20 upon which he pays two per centturnover tax, nominally increases his pay­out by £200, thereby reducing his gross profitand of course his taxable Income. It caneasily be seen that where the customer Isknown only by a pseudonym and does notask for his account, such a system could bepractised. The pseudonym may be the book­maker himself.

The only direct evidence which emerged inthe course of the hearing on this type ofevasion was that of Mr. Humphrys, the Presi­dent of the Premises Bookmakers' Associa­tion, who was himself the victim of such ascheme perpetrated by two of his employees,but In addition to this a number of witnessestestified that entering a fictitious winning betwas a comparatively simple manoeuvre. Mr.Byfield in particular spoke of the ease of thistype of evasion and said that he had actuallyseen It carried out by a bookmaker on-course.He added that the Treasury was not con­cerned with It because it Increased the turn­over and the consequential tax.

There was said to be still a further indica­tion that the profit figures were not accurate.The totalisator In general appears to payhigher odds than the starting price, yet itshows a gross profit of about 14t per cent.,whereas the gross profit of the bookmakersas disclosed by their income tax returns wasin the vicinity of only 9 per cent. This argu­ment, however, may be inconclusive unless anexamination is made of the relative patternsof betting through bookmakers and thetotalisators.

4.-The Premises Bookmakers' Association ofW.A.

One of the inevitable consequences of theBetting Control Act, 1954, was the establish­ment of the Premises Bookmakers' Associa­tion of W.A. Its predecessor was the TurfCommissioners' Association of pre-Act days,constituted of the bookmakers who carriedon a telephone betting business. In Decem­ber, 1954, when the Betting Control Act was

27

passed it had 65 members, all of whomreceived licenses from the Betting ControlBoard. They became the nucleus of the newAssociation which was formed on 11thAugust, 1955 and which eventually becamean incorporated body.

After the licensing was completed therewere altogether 210 licensed off-course book­makers and a substantial proportion of themimmediately joined the new Association. Itwas recognised that such a body could be auseful adjunct to the scheme of the Act andsuch recognition came not only from thebookmakers themselves, but also from theGovernment and the Betting Control Board;In fact the minutes of the Association disclosethat both these authorities from time to timeurged the Association to bring all the off­course bookmakers into its ranks. In timethey succeeded so that at present there areonly three off-course bookmakers who are notmembers. Two of them operate in remotecountry towns, at Cranbrook and at Witte­noom Gorge. The third Is in York. Therewas one other bookmaker who held out andthe Association considered taking measuresto constrain him to join, but before they putthem into effect he capitulated.

The Association was active upon a varietyof subj ects and in a variety of directions. Ishall examine some of them.

(1) The Association's Funds:The Association derives its funds from its

members In three ways:-(a) An annual subscription from each

member.(b) An annual fee from each member

to be used in sponsoring the broad­casting of races.

(c) An annual premium to the Associa­tion for providing a fidelity bondfor each member required by theregulations.

The total amount received from thesethree sources from August, 1955 to July, 1959was £91,778. These moneys were applied asfollows:-

(a) As to £42,506 in payment of fees tobroadcasting stations.

(b) As to £10,000 In establishing a trustfund to answer fidelity bonds.

(c) As to £6,708 in assisting the LaborParty in two political campaigns;£1,708 for the 1956 election and£5,000 for the 1959 election.

(d) As to £2,203 In preparing for andfinancing a delegation to give evi­dence before the Victorian RoyalCommission to explain the workingof the betting shop system InWestern Australia and to advocateits advantages as against those ofthe totalisator system.

(e) As to £12,518 in meeting routine ad­ministrative expenses of the Assocla­tion.

The balance of funds in hand on 31st July,1959, amounted to £17,844 in addition to the£10,000 trust fidelity fund. The fidelity fund

was created with the consent of the BettingControl Board out of general funds so thatthe Association might Issue Its own bonds inlieu of the members having to take out ftdel­ity bonds with Insurance companies.

Subject to calls on the fund in respect ofthese bonds, it belongs to the members:there is provision for members retiring fromthe Association to receive their equity bothin the fidelity fund and the general fund.

(2) The Association as a Political, Force:The Betting Control Act, 1954 was a tem­

porary measure and unless continued wouldexpire on 31st December, 1957. It was spon­sored by the Labor Government of the day.An election was due early in 1956 and it wasessential to the Association that the Govern­ment should be returned to power.

The minutes of the Association disclosethat on 8th March, 1956, a Confidential Com­mittee was appointed "to act without ques­tion on behalf of the Association and forthe benefit of its members," and moneys upto £2,000 were placed at Its disposal as a"fighting fund." The original members ofthe Confidential Committee were Mr. P. B.Healy and Mr. H. Solley, the two largestbookmakers in Western Australia. Contem­poraneously with their appointment, thePresident, Mr. Humphrys, "stressed the factthat the stage was now reached where allbookmakers must be 100 per cent. behindthe Association, as a force of approximately200 bookmakers and their staffs was a bodynot to be considered lightly by any politicalor other organisation." For the election inApril, 1956, the Confidential Committee spenta total of £1,708 on advertisements in theinterests of the Labor Party and in assistingindividual Labor candidates In marginalseats by paying the wages of organisers andcanvassers and by providing meals for pollingday workers. In addition, 27 bookmakersmade 34 cars available to get voters to thepolls. The Government was returned tooffice. In 1957 the Act was extended to 31stDecember, 1960. For the 1959 election, in­stead of taking the direct measures employedin the 1956 election, the Association, throughthe Confidential Committee, contributed£5,000 to the Labor Party funds. The pay­ment was made in cash in £10 notes by Mr.Godwin, a member of the Confidential Com­mittee and no receipt was obtained. £1,750was returned to Mr. Godwin in £10 notes withInstructions as to how to apply It. He keptthis money at his home. He used some of itto reimburse himself for contributions madeby his own cheques to country branches ofthe party. Receipts for these moneys werereturned to him by the respective countrybranches. The bulk of the £1,750 was dis­bursed In cash to party purposes and no re­ceipts were obtained. About half the dis­bursements of the Confidential Committeefor the 1956 election were also in cash with­out vouchers.

Other cash disbursements without receiptswere made by the Confidential Committeeover the period between the elections, in­cluding "honoraria" paid to Mr. Milligan, a

28

retired education official, who in March, 1956,was appointed a "liaison officer to act as As­sociation representative to approach the Bet­ting Control Board and any other body." Theminutes show that "a Minister of the Crownhad asked him to act In liaison on behalf ofthe Association." He regularly attended themeetings of the Committee until October,1958, when he went on an extended holidayto New Zealand. He appeared from theminutes to be in constant touch with Minis­ters and on some occasions other members ofParliament, both State and Federal, in theinterests of the Association.

At one stage the Association was endeavour­ing to induce the Australian BroadcastingCommission to give running descriptions ofall races at meetings held in Melbourne andSydney and Mr. Milligan was very active inpolitical negotiations for that purpose. Ifthey had been successful they would havesaved the Association the very high feeswhich had to be paid to the commercial sta­t�ons. In the two years from 1956 to 1958,Mr. Milligan received from the ConfidentialCommittee £310 In cash by way of honoraria,without receipts. Incidentally, the minutesshow the tremendous importance placed bythe Association upon the broadcast of run­ning descriptions of races.

As receipts were not obtained by the Con­fidential Committee for so many of its pay­ments, the auditors quite properly refusedto vouch Its accounts and each year qualifiedtheir certificate of audit accordingly.

It is not to be thought that there was any­thing corrupt In the political activities ofthe Association, but there is no doubt thatIt sought to use Its political Influence in asecret manner to further its own interests.It is true, no doubt, as Mr. Humphrys said,that other business bodies engage in politicalactivities. The evidence showed that theTurf Commissioners' Association in pre-Actdays made contributions from time to time of£500 to the Liberal Party.

(3) The Association as a Disciplinary andProtective Force tor its Own Members:

On the one hand the Committee of theAssociation was very anxious that all itsmembers should comply strictly with the Actand the Regulations. They wanted the bet­ting shop scheme to succeed and to be freeof any tinge of illegality such as existed be­fore the Betting Control Act was passed. Theywere tully aware, however, that there weremany breaches of the Act and Regulations.The minutes have constant reference to themand to admonitions and warnings given tothe members in general.

On the other hand, the Committee did notlike prosecutions because they reflected onthe whole body of members. Consequentlywhen members reported that breaches hadbeen detected by the police, the Committeetook steps to plead with Inspector Fiebig onthe deliquerits' behalf. Mr. Humphrys said,however, that such interventions occurredonly where breaches were minor or border­line cases. Where the breaches were serious,

he said the law was left to take Its course.It will be sufficient to quote a few extractsfrom the minute books, and one passage froma circular to members to lIIustrate both thedisciplinary and protective aspects of theCommittee's activities.

30/8/56.-The Chairman spoke on thematter of members breaking provisionsof the Act and Regulations and quotedthe case of Mr. W. Shardlow. Twenty-­six members had been saved from punish­ment for various breaches but this couldnot continue. He said that he knew ofsix members who had been pinpointed tobe apprehended for betting on hotel pre­mises but he had been successful in hav­ing this action delayed until a warninghad been issued to all members. Thiswould be done by circular.

7/1/57-Misdemeanours by Members.­The Chairman said that this was a veryawkward matter to handle. Thirty-onemembers had been in trouble and hadbeen forgiven, but the Board was nOWgoing after those who commit breaches.All the authorities concerned consideredthe Association to be an integral part ofthe Act and those who transgress willbe dealt with. He had promised that alist of non-members would be sent to theboard.

9/10/56-Commission.-Mr. Humphrysstated that it appeared that one memberwould lose his license, having been caughtpaying commission, but he (Mr. Hum­phrys) had arranged that the charge bepostponed pending the flnalisation of theTurnover Tax debate in the House.

18/7/57-Commission.-The Chairmansaid that he had received confidential in­formation that one or two members werelikely to be in trouble and that despiteall warnings issued by the Association itappeared that some members were stlIIdoing the wrong thing. The Chairmansaid that he thought sufficient officialwarnings had been sent out by the As­sociation, but now suggested that Com­mittee members spread the warning byword of mouth to other members.

19/9/57-Commission.-The Chairmantold the meeting that there were fourbookmakers stlII paying commission. Thiswas known to the authorities he said andat all costs must be stopped. Mr.Humphrys hoped that no action would betaken at present while the Betting Con­trol Act was before the House andrequested the Committee members toadvise all members with whom theycame in contact as to the seriousness ofthe position.

24/10/56-Wrapped Bottle Beer.-Inreply to a question by Mr. Coffey, theChairman advised that wrapped bottledbeer on licensed premises would not beenquired into by the police.

10/12/57-Extract from a Circular.­Alcohol on Premises: Reports indicatethat the leniency which has been

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extended to bookmakers In connectionwith bottled beer in paper bags in bet­ting premises, is being abused. It appearsthat in some premises, these have beenseen stacked in half-dozen lots oncounters and floors, which can only beviewed by the authorities as wholesaleflouting of the law. It is realised thatthis is a very difficult matter to police,but an all out effort must be made tominimise the public exhibition of alcohol

. in botties. In extreme cases it might bepreferable for the bookmaker to putthem out of sight under counters, or inan inside office if he finds it impossibleto prevent their entry to the premises, orto have them removed entirely.

In relation to these matters Mr. Humphrysexplained he was inclined to exaggerate theseriousness of the position so as to impressthe members and secure their co-operation,and Inspector FIebig denied that he had everwithheld or delayed a prosecution at theinstance of the Association.

(4) The Association and the Victorian RoyalCommission on Betting:

In September, 1958, the Victorian Govern­ment announced its intention to appoint aRoyal Commission to inquire into betting inthat State. The Committee of the Book­makers' Association realised the threat totheIr own existence if the Commission shouldrecommend a totalisator system in Victoria.

Mr. Humphrys took immediate steps tomeet the threat and in asking the Commit­tee to confirm his action, he said that "themain purpose was to fight the totes". Heemployed Mr. Andersen, the former Chair­man of the Betting Control Board and Mr.Byfield, a former member of the Board tocollect material upon which to base evidenceto be placed before the Commission. Anaccount subsequently rendered by Mr. Ander­sen showed that he spent a period of sixweeks in compiling the material for which,including services of a typtste, he chargedthe Association £239 lOs. Od. He subsequentlyspent three weeks in Melbourne attendingthe sittings of the Commission, during whichin addition to giving evidence he advised andassisted Mr. Humphrys and participated inconferences with counsel and solicitors. Hischarges for that work amount to an addit­ional £377 lOs. Od. Mr. Byfield also attendedand gave evidence; his fee was £75. Thesesums were in addition to their air fares andexpenses in Melbourne. Mr. Humphrys him­self worked hard on the proj ect and gavevaluable evIdence from the Association'spoint of view. He made no charge otherthan his expenses. The total amount ex­pended in relation to the Victorian Commis­sion was £2,203.

The first reference to the Victorian Com­mission in the minutes was made on 23rd.October, 1958, as foliows:

Victorian Royal Commission.-TheChairman told the meeting that .... thetime had now arrived for action . . . .Messrs. Andersen and Byfield were pre-

pared to give evidence before the Com­mission and were now assembling infor­mation for that purpose. Mr. Humphryssaid that it was vital that we convincethe Commission that the Western Aus­tralian system was the best, because inthe financiai field our system could notcompete with New Zealand and if toteswere introduced into Victoria the differ­ence in financial returns could give ourown Government food for thought.

According to a later minute of 18th Decem­ber,1958, Mr. Humphrys is recorded as say­ing-

"Although the Commission had beenan expensive matter it was essential andhe thought it could still be a winner".

The Victorian Commissioner however, inspite of the Western Australian efforts recom­mended the totalisator.

Other aspects of the activities of theAssociation were disclosed in the minutes,particularly in relation to certain aspects ofbetting such as doubles and fixed prices, thesecuring of fiuctuations in prices from thecourse, times of opening and closing of shops,complaints by individual members and theoperations of the starting price officer.

To sum up, all this goes to show that theAssociation was a closely-knit and powerfulbody with strong finances and with the meansof exerting its Influence both in the relationsof the members with one another and of thewhole body to the authorities concerned withthe administration of the Act.

5.-The Starting Price System of Bookmaking.'I'he system of off-course betting established

under the Betting Controi Act and the regu­lations thereunder, is essentially a startingprice system. The regulations provide that onlocal races, with the exception of a verylimited number of set events, bookmakersmay not bet other than at starting price fora win and at totalisator odds for a place. OnEastern States races, although technicallyoff-course bookmakers may offer fixed priceson all events, by agreement amongst them­selves and by a ruling of their Associationthey are not allowed to bet otherwise than atstarting prices for a Win, and at totalisatorodds for a place. This, again, is subject tolimited exceptions in the Case of set events.

The starting price is fixed in WesternAustralia by a starting Price Officer appointedby the Betting Control Board, who attendsthe on-course betting ring while the meetingis in progress, and at the close of the bettingfor each race ascertains a fair assessment ofthe best odds shown on the on-course book­makers' boards for each horse. The price soascertained by him becomes the officialstarting price. He informs the representativeof Tates Press of the starting price of thewinner and of the favourite where necessary.Tates Press then communicates these par­ticulars together with those of the totalisatordividends to the off-course bookmakers andto the newspapers and broadcasting stations.The details are displayed immediately in thepremises of the off-course bookmakers and

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winnings are payable forthwith. The broad­casting stations are not permitted to broad­cast the starting prices or the dividends untilthe whole meeting has been concluded.

From the punters' point of view the theorybehind the starting price betting is, no doubt,that at barrier rise, the respective chances ofthe horses engaged in a particular race havebeen measured as between the on-coursebookmakers and the punters by the bettingon-course over the preceding 30 minutes, andthat the starting price is a fair indication ofthe final market. That seems fair enough tothe interests of the ordinary off-coursepunter. He has "backed his fancy" at theultimate market price, that is to say thestarting price, determined as he thinks by thebetting of the punters on the course.

But in between the off-course punter andthe starting price may be interposed thetransaction of "laying-off." An off-coursebookmaker holding what he considers to betoo much money on a particular horse-thatis, having bet the punter that the horse willlose-makes a bet on his own account withanother bookmaker that the horse will win.He "lays off" his money at the same odds ashe has given to the punter, namely, thestarting price. If the horse wins he has setoff against his pay-outs to the punters theamount derived from the lay-off. If the horseloses, the amount he lays off is so much lossto him. The off-course bookmakers are soorganised in "families" that the lay-offmoneys ultimately concentrate in a few ofthe larger bookmakers, so that they are incommand of a substantial proportion of thepunters' money. They, in their turn, use someof that money to back the horse on-course; inother words, they layoff on-course. They notonly get the odds rullng at the time theymake the lay-off, but the effect of their betson-course is to reduce the odds and ultimatelythe starting price; in the result they get oddsfor themselves better than the starting priceand at the same time reduce their own lia­bility and that of all other off-course book­makers by lowering the starting price.

The system can also be used unfairlyagainst the punter in the case of place betsfor Which the punter receives the totalisatordividend. This happens particularly in con­nection with country meetings where thetotalisator pool is small. The procedure iscalled "bearing the tote". An off-course book­maker desires to lower the place dividend soas to reduce his liabllity to punters who havebacked a particular horse for a place. Hesends money to the course and just as thetotalisator is about to close, he puts a sub­stantial place bet on that horse. This hasthe effect of reducing the place dividend, notonly for his own benefit, but also for thebenefit of all off-course bookmakers and tothe detriment of all place punters whetheroff-course or on-course.

The converse transaction is called "bullingthe tote" and is aimed against the off-coursebookmaker. A bettor who desires to enhancethe place dividend on horse "B" which hehopes will Win, at the last minute puts place

money on horse "A", which has the effectof depressing the totalisator odds on horse"A", but at the same time increasing thoseon horse "B". The bettor wlll have backedhorse "B" substantially off-course and soderives an unfair return. At the same timethe genuine punter on horse HAJJ suffers.

There is another direction in which thesystem can be made to work unfairly againstboth the punter and the off-course book­maker. It leads to a state of confiict be­tween such bookmakers and the "connec­tions" of the horse, that is to say the owner,trainer and others associated with them. The"connections" may have reason to believethat their horse has a good chance ofwinning and they desire to make as muchmoney as possible out of the betting. If theycommence to back the horse on-course theprice will soon drop, not only because oftheir money going on the horse, but alsobecause the betting is being done openly andit will probably become known that the"connections" are backing it. Also it may bethat the "connections" want to back thehorse each way, which they cannot do witha bookmaker on-course. Accordingly theyback it secretly off-course by a "commis­sioner", who spreads the money among anumber of off-course bookmakers so that itwill not be known who is backing the horse,or that it is being backed to any extent. Ifthey are secretive enough, the off-coursebookmakers do not "wake up to the ruse",the money does not get back to the courseand so the starting price is llkely to behigher and the "connections" get a goodreturn on their off-course bets.

That these considerations are not meretheorIes of what can be done in this systemof starting price betting but are put intopractice, was made clear by the evidence.

Mr. P. B. Healy frankly admitted that someof the money bet with the off-course book­makers was taken to the course for the verypurpose of reducing the starting price. It isperfectly legitimate to do so, and Mr. Healysaw no reason why the off-course book­makers should not make use of this type oftransaction for their own advantage.

Further, both he and Mr. Humphrys, an­other large bookmaker, when asked wherethe punter "came in in all this", said thatno regard was paid to the punters' interestand Mr Healy added "He (the punter) getscrucified every time. And now I see theywant to put a punters' tax on-it is a cryingshame. There would be no races or book­makers If it weren't for the punters".

Some examples were given in evidence of"bulling" or "bearing" the totalisator so asto affect the place dividends. In 1955 atrotting trainer "bulled" the totalisator soas to raise the place dividend on his horse.It cost the off-course bookmakers a lot ofmoney. In 1956 he tried to do the samething again, but the off-course bookmakers"got wind of it" in advance, and as an Asso­ciation they combined and "beared" thetotaltsator, that is, put a lot of money in

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place bets on the particular horse and there­by reduced the place dividend to less than5s.

Two other incidents of "hulling" or "bear­ing"-It is impossible to say which-occurredin recent months at country meetings atYork. In May, 1959, a regular race-goernamed Zempllas attended the York meeting,and on the last race put a place bet of £25on each of two horses. He must have knownthe approximate amount of the pool andmust also have known that the effect of thebets would have been to reduce the placedividends. In fact, they did. Each of thehorses was placed and for his £50 Zempilasreceived back £62 lOs., showtng a profit ofonly £12 lOs., for which he had risked thesum of £50. Zempllas gave evidence beforethe Commission and contended that the twobets were genuine. Mr. Healy, in the lightof his experience, did not agree; he said thatthe bets were made for a purpose and thatif he were given time he could find out whatthe purpose was. His own theory was thatthe bets were intended to increase the placedividend on a third horse which, however, touse his words "failed to come home." Hethought it was an example of "bulltng thetote" which did not achieve its purpose. Itseffect, however, was to cause a loss to genuinepunters who had backed each horse for aplace.

Again at the York meeting in October,1959, there was another incident of this kind.The circumstances were not given in evi­dence. I happened to attend the meetingafter the hearing had been concluded and Igot the particulars first-hand. Just as themobile totalisator was closing and the barrierabout to rise, a place bet of £25 was put ona horse named "Banbeck." "Sanheck" camein first and "Azure Blue" second. If this £25bet had not been made the place dividend on"Sanbeck" would have been 6s. and the placebet on "Azure Blue" 9s. The effect of theinvestment of the £25 was to reduce thedividend on "Sanbeck" to 4s. 6d. and to in­crease the dividend on "Azure Blue" to 11s.6d. The total place pool was only £119 sothat this final bet of £25 accounted for nearlyone-fourth of the pool. The bettor whenplacing his bet must have known that If"Sanbeck" won he would not get his placemoney back. Whether he wanted to reducethe place dividend on "Sanbeck," that is to"bear the tote" or whether he wanted to in­crease the place dividend on "Azure Blue"or some other horse that is, to "bull the tote"cannot be known, but again this incidentshows that the totalisator on country coursescan be abused to the detriment of the genu­ine punter. That "bulling the tote" is quitea common practice is shown by a minuteof a Committee meeting of the Associationof 28th April, 1958, which reads:

Mr. Humphrys said it was well knownthat bulllng of the tote was going on andthat members would be well advised notto take large amounts for place bettingunless the money could be got back.

The use made of the betting shops by the"connections" to the detriment of punters

and others Is illustrated by what happenedin the case of "Juraco" at the Hannan'sHandicap meeting at Kaigoorlie on 22ndAugust, 1959. Over the preceding years,"Juraco" had started 61 times and had neverwon a race. Then the horse came into thehands of a trainer named Purvis. Watchingits progress, he apparently became convincedthat "Juraco" could win the Great BoulderHandicap for which he was entered. Accord­Ingly he and the owner decided to work whathas variously been called a "commission" oran "S.P. job." They distributed £400 amongthe off-course bookmakers in Perth and Fre­mantle, investing £200 for a win and £200 fora place. By this means they hoped to makea profit of about £1,600, anticipating a start­ing price of about seven or eight to one. Mr.Healy must have had some information as tothe training of the horse because as he said,he was "waiting for Juraco.H When he sawthat money was being placed on the horseoff-course, he came to the conclusion (cor­rect, as it turned out) that this was an "S.P.job." Thereupon he sent a message to Kal­goorlle and within five minutes or less ofthe barrier rise, £606 was invested with theon-course bookmakers in bets of £10 and up­wards. Instead of the starting price beingseven to one or eight to one as the "connec­tions" expected, it was reduced to four toone. The race cost the on-course book­makers £3,930. The profit of the Juraco"connections" was reduced from £1,600 to£800, and the liability of the off-course book­makers was halved. Mr. Healy said that hehad not sent money to the course but hadmerely sent a message that it was an "S.P.job."

Another variant of this type of transactionoccurs when the on-course bookmaker him­self is interested in a particular horse. Insuch a case the "commission" may be secretlylaid off-course and whether the money comesback or not, the on-course bookmaker, inconjunction with some of his fellow book­makers, may lengthen the odds to the detri­ment of the off-course bookmaker.

The above illustrations show the manner inwhich the existence of the betting shops maylead to the influencing of the starting priceon the course.

There are other objections inherent in thestarting price system. In order that "books"may be adjusted and the lay-off system suc­cessfully operated, it is important that thelarger off-course bookmakers should knowthe fluctuations in the betting on the course.The Western Australian Turf Club stronglyobjects to this information getting off thecourse to be used by the off-course book­makers or for that matter by illegal book­makers. If it finds a person taking such in­formation off the course he is banned fromits meetings. At one time, Mr. Healy em­ployed a man whose duty it was to secretlyobtain and supply the necessary informa­tion from the course, but the Turf Club dis­covered his identity. Thereupon a numberof leading bookmakers each agreed to pro­vide a man, so that a different individual

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could attend the meeting each week for thispurpose. This appears to be a very undesir­able feature of the starting price system.

Similarly, the secret off-course betting ofthe "connections" is deprecated by the TurfClub. In the club's view this betting shouldbe done on the course. There is a stewardin the ring whose duty is to see how thebetting is proceeding and who is puttingmoney on a particular horse. This is usefulinformation if an inquiry should becomenecessary into the running. Where the"connections" bet off-course this informa­tion is denied to the stewards. It is true asboth Mr. Healy and Mr. Humphrys said thatthe club can get similar information fromthe off-course bookmakers, but it may bedifficult to get reliable information until afterthe meeting is over or perhaps until severaldays later, and even then if the betting is byway of a "commission", it may be difficult torelate it to the "connections",

The off-course bookmakers themselvesobject to the "connections" betting secretlywith them because subject to the moneygetting back to the course it keeps up thestarting price and increases the liability ofthe off-course bookmakers. The properplace for the "connections" to bet, they say,is on the course.

Hence it can be seen that there is, in effect,continual strife between the Western Aus­tralian Turf Club, some of the owners andtrainers, the on-course bookmakers and theoff-course bookmakers, and in all this strife,as Mr. Healy said, the ordinary punter iscrucified.

The "Juraco" incident shows how the off­course betting plus lay-off operates to thedetriment of the on-course bookmaker andof the racing club. The on-course book­maker is required to show his odds openlyand he is bound to accept money at the oddsdisplayed up to a maximum liability for eachbet of £100. To use racing jargon, the moneywhich comes from the off-course bookmak­ers to the course is, in the main, "hot","informed" or "educated" money, that is tosay, money carrying the greatest chances ofliability. The consequences are that on theone hand the on-course ring is weakened andon the other hand punters are unable todraw the propel' inferences from the fluctua­tions on the course, and are discouraged fromattending the meetings.

The Regulations themselves are designedto promote the system of lay-off and to pro­tect the off-course bookmaker from "educa­ted" money. Thus Regulation 95 providesthat an off-course bookmaker need notaccept a bet of more than £2 straight-out oreach way, within 15 minutes of the startingtime of a race. This gives the bookmaker 15minutes in which to make his lay-offs on thecourse or with his fellow bookmakers and torefuse bets in excess of £2, which he suspectsare coming from the "connections". In otherwords, the bookmaker has 15 minutes inwhich to get rid of "hot" 01' "informed"money and to lay it off directly or indirectlywith the on-course bookmaker, who must