Examination of Witnesses (Questions 261-279)
MR PETER DEAN, MR TOM KAVANAGH AND MR GRAHAM WHITE
TUESDAY 2 JULY 2002
Chairman: Gentlemen, thank you very much indeed for attending. We have a very busy final session today.
Derek Wyatt
261. We have met some of you in Aberdeen. Can we just reflect, because we did talk about this in Aberdeen, about the stamp or the approval you need for a website and how you think that might operate for off-shore betting on-line.
(Mr Dean) How the stamp of approval might . . . ?
262. What your thinking is about that area.
(Mr Dean) The notion is—and other countries have tried this with some success —
263. Can you tell us which countries.
(Mr Dean) Yes, Australia in particular. The notion is that there will be a process whereby the Gambling Commission will investigate applicants for this sort of licence in very much the same way as they do currently for terrestrial operators for fitness and propriety, that their systems will be investigated also and the Commission will have to be satisfied that those are in order, that the games are fair and so on and so forth. That having been done, the games having been approved, these operators will be authorised in the same way as terrestrial operators are now, and they will have a stamp of approval either by going through the Commission's portal or by some other means. That is the way in which it will be done in practice. Of course, we have not worked out the fine detail of this but it seems entirely practicable.
(Mr Kavanagh) May I just add a comment there because you mentioned off-shore sites. The intention is that all of these sites will be based in Britain. The Gambling Commission would not be licensing off-shore sites. The requirement would be that all the systems—the gaming systems and financial systems—should be run out of Great Britain so that it can be properly regulated.
264. As you know, the net is not that sort of animal so, if I were half intelligent, I would go to Jersey or the Isle of Man and play from there.
(Mr Dean) The system does two things. First, it enables British residents to have access to gambling sites and internet gambling sites which they know have been authenticated by a British board. Of course it does not prevent them from going to any one of the hundreds of sites which are and will continue to be available from overseas, but it gives them that option. Secondly, it enables reputable British organisations to establish reputable internet gambling sites here. It does not do away with the mass of possibly unregulated sites from overseas.
265. Do you think that, given that there is a concern, this is something the EU should also be looking at or is it looking at?
(Mr Dean) I think it possibly is but gambling is an area which has hitherto not been tackled by the EU and it is, as Sir Alan was saying earlier, extraordinarily difficult to get any sort of co-operation on these matters. Views differ as to what is and what is not appropriate in the gambling arena. I think it is extraordinarily difficult to get EU co-operation and, even if one did, there is plenty of the world outside the EU and one is only shifting the problem.
266. In Aberdeen, you told us that you were relatively happy with legislation as it currently stood. I think that would be a fair comment and, if it is not, I am sure you will tell me. So, looking at the response from the Department recently, last week I think, generally from their more liberal views on the way gambling should go, what are your concerns now if legislation should follow?
(Mr Dean) If legislation should follow the Government's proposals?
267. Yes.
(Mr Dean) Broadly we supported the Government's proposals and broadly we supported the Budd report. It is not quite true to say that we had no concerns with the status quo. There were a number of concerns which we have voiced over a number of years. Broadly, we support the current proposals. We have one or two reservations, in particular relating to gaming machines in single site outlets such as fish and chip shops, taxi cab businesses and so on.
268. That seems to be the bone of contention everywhere, that fish and chip shops were actually visited by young kids who were spending more on the cash machines than they were buying fish and chips. Is it that the actual current regulation is not strong enough from the local authority or is that you would not wish there to be one armed bandits or whatever you call them in single sites and with single operators?
(Mr Dean) I should preface my answer by saying that we do not currently regulate these sites. So, to some extent, our knowledge is secondhand. What seems quite clear is that illegal machines do appear in such sites. They appear in unauthorised venues and, when the venues are authorised, there will be unlicensed machines there. These matters are brought to our attention from time to time by properly authorised licensees. We will seek to involve the police or the local authorities and Customs & Excise and, from time to time, raids are carried out and the illegal machines are removed. So, that is one area of difficulty. The problem really is with such an enormously diverse possibility of sites, it is extremely difficult to control.
269. Are you saying to us that you would rather—it may be you are not so I am rather teasing this out—be the licensor of all gaming or that you would rather be the accounting agency so that if local authorities do give licences . . . ? Or is it regional governments doing that? I do not know what will happen in England; it is obviously different in Scotland. Would you rather, as it were, that you were the accounting agency for everything or do you think . . . ?
(Mr Dean) We make no comment about that. Our comment with regard to AWPs in fish and chip shops and the like is simply that, at the moment, there is no adequate control over them at all; they proliferate and they are a source of illegality that is currently uncontrolled that needs to be controlled and the simplest way of controlling them, so far as those single sites are concerned, is to ban them.
270. Are you saying that we would not know how many one armed bandits there were in my constituency? We just would not know. There is not the figure to tell us how many there are.
(Mr Dean) I do not think I am saying that, no.
271. I am just asking you. How is the illegal bit then? If they have to apply for a licence, presumably you know where they are.
(Mr Dean) The illegality arises because there is no sufficient follow-up and illegal machines do appear. Illegal machines appear in places which have licences and legal machines appear in places which are not licensed. That is a matter of fact.
Michael Fabricant
272. Just to pursue that line, what about the counter argument that says that the local fish and chip shop or, I do not know, the local labour club would not be able to carry on going unless it did have one of these AWPs? It is actually a ridiculous name: an amusement with prize machine. I will call it a one armed bandit from now on, even though they do not have arms to pull any more. What about that argument? A great deal of criticism was made by organisations who have these AWPs/one armed bandits saying they would go bust if they did not have them.
(Mr Dean) Clubs and pubs have made that argument and I have sympathy with it. I am not sure that I have heard that argument from fish and chip shops and taxi cab offices.
273. Or labour clubs?
(Mr Dean) If it is a registered club, then it might indeed be entitled to machines under the current rules.
274. You were saying in answer to Derek Wyatt that there is a problem also in discerning, under the Government's proposals, whether a particular AWP/one armed bandit would be legal or not and the Government's proposals say that a category D machine would be permitted and that means there would be a maximum stake of 10p in the slot and a maximum prize of £5.
(Mr Dean) Yes.
275. But if you had an inspectorate, surely it would be easy enough to see whether a machine met that criterion or not?
(Mr Dean) Yes, indeed but, being realistic, unless one has some limitation over the venues where these machines can occur, it is actually an impossible task to regulate them.
276. Can I move on now to slot machines in casinos. These machines of course, as you know, are electronically operated and are getting cleverer and cleverer and some of the machines in the US now try and identify player's particular habits and try and adapt to their habits in order to make them play more. For example, I understand—and you will know more about this than I am because, like Alan Keen and most people on this Committee, I do not actually go in for gambling including the National Lottery—that some players, if they think they have almost won, are more likely to put more money in thinking there is a greater likelihood that they are going to win if they gamble more. Does your Board have a view on that sort of intelligent gaming machine, the gaming machine that actually, as Debra Shipley might say, might prey on the sort of gambling instincts of those people who are least able to protect themselves from gambling?
(Mr Dean) I will start off by answering that and then leave it to my colleagues. First of all, we do not have currently the casino slots with unlimited prizes on payout which are proposed to be allowed and so our jurisdiction at the moment extends to limited prizes —
277. But this could come to the UK.
(Mr Dean) It could.
278. And presumably you have looked at the US system and the Australian system?
(Mr Dean) Indeed we have and we do have views on the so-called near miss situation.
(Mr Kavanagh) I think there is a point worth making here. When we put in our evidence originally to the Budd Review, we said that these machines should operate randomly, as indeed they do in the States, Australia and places like that. We have also raised the question which is still for consideration as the legislation goes forward as to whether the displays on those machines should also be random and, if they become random as well, you cannot programme into them and that is one of the things we want to pursue in the legislation itself or in the codes of conduct that go with it for these gaming machines and that would address the point you are raising.
279. What reaction have you had from Government to this proposal that there be complete randomness and none of this intelligence use within the machine?
(Mr Kavanagh) The Government have accepted the randomness point. We are not at the level yet where the discussions about the near misses and things have featured in terms of the details. That is something for the future.
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