Mr. Hawkins: I am grateful to the Minister. That provides the helpful, on-the-record clarification that I was seeking, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 13 ordered to stand part of the Bill.
Mr. Moss: I beg to move amendment No. 53, in
clause 14, page 6, line 24, leave out 'simple.'.
The Chairman: With this it will be convenient to discuss the following:
Amendment No. 54, in
clause 14, page 6, line 29, leave out subsection (3).
Mr. Moss: Amendment No. 54 is consequential to amendment No. 53, and would remove the whole subsection relating to complex lotteries. These are probing amendments to ask the Minister why the Bill makes a distinction between a simple lottery and a complex lottery. Subsection (3)(c) makes an addition to the definition in the case of a complex lottery, stating that
''the prizes are allocated by a series of processes''.
I am not sure what that means, and it is the only reason given for the difference between the two lotteries. Why do we have to make a distinction between simple lotteries and complex lotteries? Surely a lottery is a lottery.
Mr. Caborn: The amendments are intended to simplify the definition of ''lottery'' in the context of the arrangements that need to be included. They would remove the distinction between a simple and a complex lottery. The distinction is made in the clause for a particular reason. Lotteries may involve a group of persons paying to enter and a prize being allocated among all those persons. Those lotteries are covered by the simple lottery definition in subsection (2). Lotteries may, however, also involve a number of processes. For example, a group of people may pay to enter and after the first draw there may be a further competition, or some further competitions, to determine the ultimate winner. Those further competitions may not rely wholly on chance. They could, for example, be tie-breakers. Such lotteries are caught by the complex lottery definition in subsection (3).
Deleting subsection (3) would therefore exclude from the definition of ''lottery'' those arrangements in which there is a draw based on chance and a subsequent competition. We want to ensure that such arrangements are regulated as lotteries under the Bill; I am sure that the hon. Gentleman agrees with that. If we do not do that, we risk commercial enterprises exploiting that loophole. With that explanation, I ask him to withdraw the amendment.
Mr. Moss: There is a feeling that clause 14(3) was included because of a legal case in 1967—the Director of Public Prosecutions v. Bradfute and Associates. If so, chance formed the first stage of an arrangement
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and skill the final stage. That is pretty much what the Minister said. Will he confirm to the Committee that it was that case that brought about the Government's thinking? Is a case from 1967 relevant today?
Mr. Caborn: The answers are no and no.
Mr. Moss: I am glad to have got that on the record. One of the difficulties in interpreting the clause is that few competitions these days follow the pattern established in clause 14(3). As there are virtually no competitions of that ilk, there is some doubt about why it was relevant. The Government and the Minister seem to think that it is, in which case it is probably better that it is in than not in. On that basis, unless information contrary to that comes to my notice, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr. Moss: I beg to move amendment No. 50, in
clause 14, page 6, line 27, leave out 'members of a class' and insert 'persons who participate'.
The Chairman: With this it will be convenient to discuss the following amendments:
No. 51, in
clause 14, page 6, line 32, leave out 'members of a class' and insert 'persons who participate.'.
No. 52, in
clause 14, page 7, line 2, leave out 'members of the class' and insert 'persons who participate.'.
Mr. Moss: The issue is what the Government mean by ''members of a class''. I think that the wording ''persons who participate'' is much clearer. The amendment is a probing one to establish the definition of the words in the Bill. What do they really mean?
Mr. Caborn: The amendments seek to simplify the definition of ''lottery'', but they would exclude arrangements that need to be included. The amendments change the reference to the group among whom prizes can be allocated from ''members of a class'' to ''persons who participate''.
A lottery may involve the distribution of a prize among persons who enter the lottery, but it may also involve the distribution of prizes among a smaller group of persons. That would be the case where, for example, there are a number of ''rounds'' in a lottery, each round working on the basis of elimination. We do not want to exclude that type of lottery from the regulation. The current wording is wide enough to achieve that aim and the proposed change risks not doing so. So, to future-proof the issue, I hope that the hon. Gentleman will withdraw the amendment.
Mr. Moss: I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: No. 14, in
clause 14, page 6, line 35, leave out subsection (4).—[Mr. Caborn.]
Mr. Moss: I beg to move amendment No. 55, in
clause 14, page 7, line 4, leave out subsection (6).
The amendment would remove subsection (6) in its entirety. It is a probing amendment. There are, obviously, reasons for the subsection to be in the
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Bill. We understand where the Government are coming from. The Lotteries Council is concerned about the issue and has no doubt raised it with Members on both sides of the Committee. The interpretation of the subsection is important.
The Government are trying to make a clear distinction between certain games or competitions that require the exercise of skill or judgment and so on, and those in which, to put it nicely, there is an element of scam involved: people are drawn on and of course it costs them more and more money. If we are to pass the legislation, there must be a clear-cut interpretation in law so that the two parties—those who run the competitions and the charities' lotteries—would be happy with the interpretation that is given. We are simply saying that the wording in the clause is not as clear as it needs to be.
The subsection states that, in certain circumstances, skill and judgment would be disregarded and the scheme treated as if it relied wholly on chance. Such a situation would arise if the competition prevented a significant proportion of participants from receiving a prize or prevented a significant proportion of people who might want to participate from doing so. At the heart of the question is the term ''a significant proportion''. Quite what that means is unclear. Presumably, a significant proportion is somewhere between, say, 1 per cent. and 99 per cent., but where exactly does the boundary lie?
Equally, will not the concept of the application of skill vary from individual to individual, and how will it be possible to judge whether a significant proportion of persons had been prevented from participating in the competition? Indeed, those running the competition would presumably need to know before it commenced how many potential participants would be prevented from winning. How could they possibly know that? Proving a negative is a difficult affair at the best of times, but that requirement, if it is the intention behind the wording of the Bill, would be nigh on impossible to meet. Clause 14(6) would therefore place a significant and unnecessary administrative and legal burden on many businesses.
Another potential problem thrown up by subsection (6) relates to competitions that may inadvertently succeed in attracting the same number of entrants, or indeed fewer entrants, than there are prizes available, which we are reliably informed can occasionally happen. I would be grateful if the Minister would clarify whether such a competition would have to be regarded as a game of chance and, therefore, a lottery on the basis that the skill element did not prevent a significant proportion of participants from receiving a prize.
Mr. Caborn: This is an interesting area, and it has been around the course many times. Amendment No. 55 would remove the test in subsection (6) for determining whether a process relied wholly on chance. Although necessarily complicated—we all acknowledge that—subsection (6) is vital to prevent lotteries from being dressed up as prize competitions and thus avoiding regulation under the Bill. That is important in terms of protection of lotteries, and we
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have seen quite a lot of it recently. That is why we must get this right, and we believe that we have.
Examples of such so-called competitions are those in which participants are required to answer questions, the answers to which are so easy that they are almost universally known. We want such competitions to be regulated as lotteries. If we were to accept the proposed amendment, which would delete the whole of subsection (6), such competitions would continue to be run without regulation.
Several people have criticised the words in the Bill but no one, including the eminent QCs to whom the hon. Gentleman referred earlier, has been able to propose anything better. The matter has been much debated. Indeed, it was raised by the scrutiny Committee. It asked us to include the test and we did. The measure is the result of the response to the scrutiny Committee and we believe that it gets the balance about right.
Mr. Moss: We share the Government's intention to prevent certain competitions from masquerading as lotteries, and I made that clear. However, a large cohort of people interpret the matter differently and are worried that because the proposal goes almost too far, it will catch legitimate competitions in the net. The Minister has not offered to go back to the drawing board.