OFT welcomes NJPC changes

PN 43/02 17 July 2002

Following intervention from the OFT, the National Joint Pitch Council (NJPC) has amended its charging structure and rules for the sale of bookmakers' pitches at racecourses.

The OFT launched a Competition Act investigation in May 2001 following complaints that:

Rule 17 of the NJPC's National Pitch Rules effectively restricted the freedom of bookmakers to sell their pitches by requiring them to use auctions organised by the NJPC
the NJPC's fees for administering auctions and transferring pitches were excessive.

The OFT also received a number of other complaints about the increase in pitch administration fees and the introduction of an 'opt-in' fee, which came into effect on 8 April 2002. The complainants argued that the fees were excessive and discriminatory.

During the course of the OFT investigation the NJPC amended Rule 17 to allow private sales of pitches between bookmakers. It also cancelled the 'opt-in' fee.

In addition, the NJPC has carried out a funding review which has brought reduced charges. The changes, which came into effect on 16 July 2002, include:

a reduction in the commission from twelve per cent and fifteen per cent respectively to six per cent for both auction and private sales; and
the return of daily pitch administration fees to the level prior to 8 April 2002.

In the light of the above changes, the OFT has decided not to pursue its investigation further.

John Vickers, Director General of Fair Trading, said: 'We welcome the NJPC reforms. The potential distortion of competition between ways of selling pitches has been removed, and overall charges to on-course bookmakers have been lowered – by over £1 million a year – to the ultimate benefit of the punters.'

NOTES

1. The NJPC was established in 1998 as the body responsible for running on-course betting rings at all race meetings (except point-to-point). It is a non profit-making organisation, funded through charges to on-course bookmakers. It provides a mechanism for the auctioning of pitches; and it registers all sales and transfers of pitches. The NJPC has also set up a Local Joint Pitch Council for each racecourse in Great Britain.

2. Powers under the Competition Act 1998
The Act gives the OFT powers to investigate suspected infringements of the Act’s prohibitions:

(i) the Chapter I prohibition prohibits agreements between undertakings, decisions by associations of undertakings or concerted practices which have the object or effect of preventing, restricting or distorting competition in the UK (or any part of it) and which may affect trade within the UK (or any part of it); and

(ii) the Chapter II prohibition prohibits conduct by one or more undertakings which amounts to the abuse of a dominant position in a market which may affect trade within the UK (or any part of it).

3. In this press release the functions of the Director General of Fair Trading (DGFT) under the Act are for simplicity described as the functions of 'the OFT'. The Enterprise Bill proposes to replace the office of the DGFT with the OFT, to which would be transferred the DGFT's functions.

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