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House of Commons

Friday 5 July 2002

The House met at half-past Nine o'clock


[Mr. Speaker in the Chair]


[Relevant documents: Volume of memoranda published by the Culture, Media and Sport Committee, Gambling, (HC 827) and the Minutes of Evidence taken before the Committee on 11th and 25th June and 2nd July.]

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pearson.]

9.33 am

The Minister for Sport (Mr. Richard Caborn): When the Secretary of State announced the publication of "A safe bet for success" in March, she made it clear that we would continue to involve a wide cross-section of stakeholders in working up the detailed legislative proposals for the reform and modernisation of our gambling laws. Today's debate, which I am pleased to introduce, is an important part of that process, as is the inquiry being undertaken by the Select Committee on Culture, Media and Sport under the chairmanship of my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), to which I gave oral evidence earlier this week.

We want the debate on these important reforms to be open and inclusive. The changes that we propose will have significant implications not only for the gambling industry and those who work in it—I remind the House that the industry employs more than 100,000 people—but for the three quarters of the adult population who enjoy gambling as one of their leisure pursuits, whether that be on the racecourse or in the bingo hall, the betting shop or the casino. That is reflected by the fact that we received almost 5,000 responses to our original consultation, and many more in response to "A safe bet for success".

Constructive debate and dialogue continue, and I am well aware of the interest that many colleagues in the Chamber have in our proposals, so I was pleased that the House business managers could offer a slot today, in advance of the major Bill that will be needed if we are to implement most of the changes. The debate, like the discussions that we are having with the industry and other stakeholders, will help to inform our detailed policy development as we begin to draft the necessary legislation.

Our overriding objective is to create an environment within which a well regulated British gambling industry can flourish and prosper, under sensible modern laws that deliver adequate protection for its customers and for society as a whole—an industry equipped to respond rapidly and effectively to the technological and customer-led developments in both the domestic and the global marketplace.

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As right hon. and hon. Members will know, three major Acts of Parliament, with a vast array of subsidiary orders and regulations, cover gambling. The Betting, Gaming and Lotteries Act 1963 covers betting in its various forms, the Gaming Act 1968 covers bingo, casinos and gaming machines, and the Lotteries and Amusements Act 1976 covers charitable lotteries and amusements. There is also a separate Act covering the national lottery.

As hon. Members will know, the legislation was drafted at a time when gambling was seen as a rather shady activity that needed to be carefully controlled and managed. If we cast our minds back 30 or 40 years, we will remember that the social climate demanded that gambling should be frowned upon as a leisure pursuit— I come from a strong Methodist background, so I know all about that. The prevailing tone of the resultant statutes reflected that attitude, and the legislation of that day could be described by the phrase "grudging toleration".

During our consultations it has been clearly shown that things have changed dramatically. Our gambling industry has earned itself a reputation for integrity and quality, and is respected world wide. Gambling is now seen as a legitimate mainstream leisure activity that gives pleasure and excitement to millions of our citizens. Many people relax by going to the races, the bingo club or the casino. Business opportunities are growing with the increased globalisation of gambling products, across regulatory jurisdictions, by electronic means such as the internet and interactive television.

Our laws, however, have not kept pace with that activity. They are woefully out of date, hard to understand, inflexible and difficult to amend. Hon. Members know how many times we have had to introduce orders and other statutory instruments, which eat up valuable parliamentary time. The present law certainly does not cater for the electronic communications age. It is now an obvious one-liner to say that the e-revolution is here and affects all our lives—and that revolution has not bypassed the gambling industry. One of the reasons for the review was the fact that information can now be passed electronically.

Businesses are saying that they are being held back, and opportunities for this country are slipping away. Consumers are beginning to look elsewhere for variety and choice, particularly in online gambling. Reform and modernisation of our system of regulation are long overdue.

Mr. Gareth Thomas (Harrow, West): I entirely endorse my right hon. Friend's point about the need to regulate online gambling. May I highlight the issue raised by the BBC programme "Kenyon Confronts", which examined the problem of betting exchanges? People can place bets there, which allows people who have not passed the "fit and proper person" test to act as bookmakers. That threatens the integrity of our bookmaking industry. Will the regulation of online gambling be able to deal with that?

Mr. Caborn: Very much so. As my hon. Friend knows, the new gambling commission—which I shall discuss in due course, and to which we will give considerable powers—will deal with the eventualities to which he refers.

As we embrace the need for change and modernisation, we must not lose sight of the fact that gambling can harm some of our citizens. That is why, when the then Home

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Secretary announced the gambling review in 1999, he stated that, while seeking to relax some of the outdated controls, the Government's aims were that the industry should remain crime free, that players should know what to expect and not be exploited, and that children and vulnerable people should be protected. We attach the utmost importance to those aims, and I shall return to them shortly.

The gambling review report—published in July 2001—was researched and written by the independent gambling review body, which was ably chaired by Sir Alan Budd. The review's remit was to consider the gambling industry today and how it may develop over the next 10 years, in order to update outmoded legislation. It was asked to evaluate gambling's social impact, weighing up the costs and benefits. The need to protect the young and vulnerable from exploitation, and to protect all gamblers from unfair practices, were key factors to be taken into account. Those issues were addressed in the case to which my hon. Friend the Member for Harrow, West (Mr. Thomas) refers.

The scope for criminal infiltration is a very serious consideration, particularly given that, as I have said, current legislation was in part a reaction to infiltration of the industry by organised crime in the 1960s, under cover of what were then legitimate gambling businesses. The terms of reference also required the review body to consider the availability and effectiveness of treatment programmes for problem gambling, and to make recommendations for their future provision. It was also asked to look at the need for new, more streamlined approaches to the practical regulation of the industry.

The review body was not asked to consider changes to the national lottery itself, but it was expected to consider and assess the impact on the lottery of any recommendations that it might make. In short, the review aimed to bring gambling legislation into the 21st century, while ensuring that gambling remains a transparent and fair activity, and that the vulnerable in society are properly protected from its downside effects.

I have already explained that the existing laws no longer meet the needs and expectations of today's gambling industry and its customers. Advances in technology are not provided for within current legislation, and Britain is missing out on the opportunity to keep pace internationally. In some instances it is hard, in today's context, to fathom the reasons behind the rules, which are holding back legitimate business. Some regulations appear to defy common sense, although there were doubtless good reasons for their introduction at the time. However, do we really need regulations that prevent casinos from offering any form of live entertainment—not even a pianist or a string quartet, let alone Tom Jones or Shirley Bassey, who are probably of greater interest to people like the hon. Member for Ryedale (Mr. Greenway) and me—or which stop betting offices serving anything other than pre-packaged food? Why, for example, is it okay to visit a casino in Reading or Brighton, but not in Swindon or Worthing? What is the sense in obliging those of our citizens who wish to game on the internet to choose between gambling sites based and regulated in central America or the south Pacific, for example, while preventing the operation of such sites in the UK?

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These are by no means the only examples of regulations whose sell-by dates have passed. The relaxation of gambling laws worries many people, and we must respect and respond to those concerns. Like many hon. Members, we have received many letters from individuals who are worried about exposing some of our population, particularly children and vulnerable adults, to a more deregulated gambling regime. For example, my Department recently received a letter from a lady who was married to a compulsive gambler for many years. The husband managed to conquer his addiction, but unfortunately the marriage broke down during the process. Thankfully, they have got back together, but she is extremely concerned that loosening the restrictions may increase the risk of her husband's exposure to gambling, thereby causing him to slide back into his former habits. I am sure that many hon. Members have heard similar stories. These fears are real, and the House cannot and should not ignore them.

The prevalence of problem gambling in this country is reckoned to be low by international standards—the figures were given to the Select Committee only this week—but that is no reason for complacency. I make it clear on the Government's behalf that we must ensure that deregulation and the relaxation of controls go hand in hand with effective measures to minimise harm. We must ensure that children do not develop gambling problems and take them into later life. Many of the proposals in "A safe bet for success" are geared to ensuring that children are properly protected—a point that applies particularly to gaming machines, from which the review body considers that children are most at risk. We did not agree with all of Sir Alan's recommendations about such machines. In our view, the evidence did not support a complete ban for children, but a clear distinction should be drawn between machines that children may continue to play, and those which they should not.

Getting the balance right between freeing up regulation and ensuring that proper and proportionate safeguards are in place is a challenge, but I believe that this can be achieved, and that the proposals in "A safe bet for success" will enable us to do so. The key component in the new regulatory system will be the gambling commission. The creation of this new regulatory body will, for the first time, centralise responsibility for the licensing of all gambling operators. The commission will have a vital role in monitoring the conduct of gambling in this country, and in responding to developments, whether on its own account or through advice from Government.

At the heart of the relationship between the commission and the industry that it will regulate must be an acknowledgement by operators that corporate social responsibility will be an integral feature of the way in which they run their businesses. My dialogue with industry representatives in the past six to nine months has left me in no doubt that they understand and accept that responsibility, which will attach to the additional opportunities offered to them. I have been particularly impressed by the way in which all sectors of the industry have embraced the review body's recommendation that an independent trust be established to fund research not only into the day-to-day issues of problem gambling, but into the equally important issue of why people get involved in such gambling—a problem that the Budd report highlights. However, nobody should be in any doubt that

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the Government and the gambling commission will monitor developments very closely, and that we will be ready to respond if standards are allowed to slip, or commitments are not honoured.

I want to put one myth to bed. Several critics have said that our review was led by fiscal considerations and the prospect of significantly increased revenue from additional gambling activity. It was not. Although we asked the gambling review to take into account the implications for the current system of taxation, and the scope for its further development, that was not the main driver for reform. Although the changes may generate more revenue from gambling, our assessment is that such increased spending will mostly constitute money previously spent on other taxable leisure activities. Consequently, we do not expect any extra revenue from gambling or significant increases for the Government coffers.

What will change? What are the likely impacts? The reforms outlined in "A safe bet for success" will have a profound impact on the gambling industry. Casinos are significant winners, with major deregulation affording substantial business opportunities and customer benefits. Bingo clubs will also enjoy greater freedom, with many restrictions removed following changes in the deregulation order that I laid before Parliament in March.

The world of online gambling will, at last, be properly opened to British businesses, and the Government are committed to ensuring that our e-gaming services are as well regulated and enjoy the same reputation for fairness and transparency as the bricks-and-mortar gambling premises. Society lotteries will also do well out of the changes with higher stakes, sales and prize limits that allow them to raise more money for their good causes.

I am pleased that we have already been able to implement some modest reforms, as we promised in "A safe bet for success". For example, we have already lifted restrictions that prevent customers in casinos from enjoying a drink while they are gaming. We have doubled the stake, sales and prize limits on society lotteries, as they requested. Orders will be laid before Parliament before the recess to increase bingo limits and allow live entertainment in casinos. An order has already been debated to allow betting shops to offer a more attractive range of refreshments, but not alcoholic drinks.

All this should have a positive spin-off for our tourist industry, which we all want to return to its former glory. It was badly affected by last year's foot and mouth crisis and the events of 11 September in the United States. Anything that we can do to help it become a vibrant, major industry again is welcome. It would be good to think that we could attract to tourist destinations in this country punters who prefer to play in the large resort casinos, but currently do so abroad.

We will allow UK casino operators to offer a broader and more attractive leisure experience in a well planned and pleasant environment. I am sure that that is welcome. Places such as Blackpool are making great strides to ascertain whether they can be first out of the starting blocks. I wish them well.

As I said earlier, we did not accept all the review body's proposals, but we did not reject many. Out of the 176 recommendations, the Government rejected only nine. We decided that another 10 needed further substantive consideration. I am not surprised. The report

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has been acknowledged to be solid, well thought out and sensible. That is a testament to Sir Alan Budd's professionalism and that of other members of the review body. I want to put on record our appreciation of their work. It was a professional job, which enabled the Government to do their job much more easily. I hope that it will lead to good quality legislation.

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