Schedule 1 - Betting: Prize Competitions: Definition of Payment to Enter

Part of Gambling Bill – in a Public Bill Committee at 2:45 pm on 11th November 2004.

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Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs 2:45 pm, 11th November 2004

Amendments Nos. 64 and 65 refer to schedule 1 and amendment No. 57 refers to schedule 2. The reason that we have tabled them is consistency. Without them, the Government's intention to adopt the so-called New Zealand model could be frustrated or indeed negated. In that model, draws tied to a product promotion do not have to be free to enter as long as the cost of entering them is no more than the cost of the product. Amendment No. 58, relating to schedule 2, would remove the words

''does not reflect the opportunity to enter a lottery''

and replace them with

''is not enhanced or increased in a manner directly attributable to the opportunity to participate in an arrangement.''

The difficulties surrounding the use of the term ''normal rate'' were well aired in the scrutiny Committee, when Susanna Fitzgerald QC and Philip Circus, legal advisers to the Institute of Sales Promotion, gave oral evidence. The issue was covered in detail and their responses are set out in questions 1629, 1630 and 1631 to that Committee. I quote Mr. Circus at the scrutiny Committee:

''It is virtually impossible in the majority of cases to establish what the 'normal' price [for goods] is.''

We concur with that view.

We do not wish to take up the Committee's time by running through the difficulties in defining ''normal price'', but I provide one example to establish the existence of such difficulties. How does one define the normal rate in price of a product that has only just reached the market and, therefore, has no trading history to show that its price was not inflated to cover the cost of running a competition?

The Government's intention in the schedules is clearly to protect consumers from those promoters who openly flout the spirit of those rules that we referred to as the ''New Zealand rules''. It is right and proper that that is done. We think that our proposed revision would help to capture what the Government intend—namely, to ensure that the prices of products are not inflated by unscrupulous operators to cover the cost of running the competition. Therefore, the objective of the amendments is to remove the uncertainty about what constitutes the ''normal rate''

while ensuring that consumers are protected, by making certain that operators of prize competitions cannot artificially inflate the prices of the product to cover the cost of running the competition.