THE - STATISTICS OF BETTING
BY CANON PETER GREEN.
[Canon Green does not, as our readers will remember, agree with our policy for the taxation 'or betting. But those NON) want to tax betting and those who do not are agreed. that it is essential to know approximately what the turnover of gambling is. Canon Green here gives us his estimate. He will, we 'hope, forgive
for say5ng that his figures make us wish more than ever to tax betting.1 -
(A NE of the first requisites for the profitable discussion. 'kJ of any topic is accurate figures. Unfortunately,, these are very difficult to obtain in connexion with gambling. An - attempt will be made, in the following article, to get a few reliable data for further discussion. • At the outset it will be well to recognize that whereas the evidence of the Commission of 1923 is a mine of valuable facts, the conclusions of the draft Report are quite unreliable. A very brief examination of one or two details will prove this to be so.
(a) The only two pieces of evidence bearing on the point suggested 16,000 as the number of bookmakers in the United Kingdom. Quite arbitrarily the Report reduces this figure to '10,000.
(b) After describing all estimates of the total volume of- betting laid before the Commission as " guesses," and declaring that there are not " any data on which to form any estimate approaching accuracy," the- Report quite- arbitrarily adopts E200,000,000 as the gross turnover. '
(c) The Report declares that credit bookmakers work- at a profit of no more than per cent. of the turnover,. though the witness to whom we are referred -in support- of this statement says " not more -than 2 per cent." - Clearly, 1 per 'cent. on two hundred millions would' yield one million as the income of 10,000 bookmakers, or an average of £100 a year. But 1,732 bookmakers- paid Income Tax in one year (1922-23) on /1,040,000.1. So the remaining 8,268 must have made a net loss of. £40,000. Even if we accept the suggested figure of 1 per. cent. for the whole profession we get an average income of - only £200 a year for all bookmakers. An obviously ridiculous figure. The conclusions of the draft Report are clearly worthless. The whole question- needs re-- discussion. • Let us see what can be done to get reliable figures for - (A) The number of bookmakers, principals and assist tants, in Great Britain. • (B) The gross turnover ; i.e., the total amount put on.
(C) The bookmakers' gross profits ; i.e., the turnover lesS the amount paid out in winnings.
(D) The bookmakers' net profits ; i.e., the gross profits less the expenses. .
(A) Before the Commission (1923) Mr. Joseph Marshall, for twenty-three years Secretary of the National Sporting League, put the total number of bookmakers in the United Kingdom at 16,000. Mr. Trevor Bigham put the numbers for the Metropolitan Police District at 800 credit bookmakers, 950 street bookmakers, and 4,000 clerks and runners. As the whole Metropolitan Police District includes many respectable residential areas, and many business areas, the number of bookmakers' per 1,000 of the population is probably lower than in the more purely industrial areas of the Midlands and- North.: Against these may be set the purely agricultural districts. Yet I have evidence of the activity of bookmakers in the most sparsely populated districts of Wiltshire, Norfolk,' and northern Lancashire. The two estimates, that of the secretary of a bookmakers' trade society, and that of an Assistant Commissioner of Police, suggest 16,000 as the number of bookmakers and 36,000 as the number of clerks and runners. (B) In my book-, Betting and Gambling (1924) I put the gross turnover as £270,000,000 as a minimum, but I did so because I was anxious to under- rather than over- estimate. Mr. Marshall, before the Commission, confi- dently- put it at £500,000,000, but could produce no evidence. A careful estimate, submitted by the Board of Inland Revenue, put it at 417 millions, with a possible margin of error of 15 per cent. This would mean thatthe gross turnover is not less than 355, nor more than '479 million. These figures are so startling that they must be checked in other ways. The sums passing through the totalisator in New Zealand, with a population of 1.4 millions, are said to amount to eleven million. Even if we ignore the large amount of illicit betting done with bookmakers this would give, for a country with the population of Great Britain, a turnover of 330 millions, We had better see what light is thrown on the gross turnover by examination of the gross and net profits.
(C) Sir R. V. Hopkins, Chairman of the Board of Inland Revenue, stated before the Commission that 1,732 credit bookmakers paid Income Tax on net profits of £1,040,000, and that this was 3.4 per cent. of their gross profits. Lengthy cross-examination made it clear that he meant what he said, namely, gross profits, and not gross turnover. The gross profits of these 1,732 bookmakers would therefore be £30,647,058. What about the remaining 14 thousand odd ? Sir R. V. Hopkins himself explained that " local Income Tax officials suppose, rightly or wrongly, that they (i.e., street or ready-money bookmakers, carrying on an illegal trade) are exempt." (Reply. 9,190 in Evidence.) If we put the average income of a bookmaker at only £500 a year, which as an average is very low, since many make vastly greater amounts, the net profits for the remaining 14,268 are £7,134,000, and the gross profits 210 millions. Add the £30,647,058 mentioned above, and we get the total gross profits of bookmakers as roughly 240 millions ; their net profits about 8 millions.
(D) What proportion do net and gross profits bear to turnover.? By actual trial of the amount I should have lost by betting regularly—trials made at intervals extending over twenty years, as described in my book, Betting and Gambling—I arrived at the conclusion that the book- maker's gross profits were to his gross turnover as 5 : 7. Years after I published this conclusion I found that similar calculations, made independently by the late Canon Horsley, and laid before the 1901 Commission, gave an identical figure. Bookmakers have always strenuously denied the accuracy of these figures. But actual examination of the books of 1,782 credit men gave the net profit as 3.4 per cent. of the gross profit. The evidence quoted above gives the net profit as 2 per cent. or 21 per cent, of the gross turnover. If we accept these figures the proportion of gross profits to turnover works out at exactly the figure I have always claimed, namely 5 : 7. This is the more striking as the methods by which they are arrived at are quite distinct Let us then accept the lowest estimate of the Board of Inland- Revenue for gross turnover, namely, 855 millions: Five-sevenths of this gives 250 millions as gross profit. And 21 per cent, gives £8,875,000 as net profit. Hence two methods, wholly independent of one another, give- the following rough totals :— Turnover • • • • • . .. £355,000,000.
Gross profits • • • • • • £250,000,000.
Net profit • • • • £9,000,000.
I believe further enquiry will prove these figures to be fairly accurate, though a gross turnover of 400 millions, and a net profit of 10 millions is not improbable.
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