Clause 163
Gaming machines
Miss Kirkbride: I beg to move amendment No. 343, in page 73, line 8, at end insert
(c) not more than 10 per cent. of the number of actual machines sited, or not more than 1,250 machines, shall be Category A machines.'.
The Chairman: With this it will be convenient to discuss the following amendments: No. 271, in page 73, line 13, after 'Category', insert 'A,'.
No. 272, in page 73, line 21, after 'Category', insert 'A,'.
No. 273, in page 74, line 7, at end insert—
'(10) The provisions of this section are subject to section 220(2)(c).'.
No. 6, in clause 220, page 101, line 41, leave out from 'defining' to end of line 43 and insert
'three classes of gaming machine for the purposes of this Act all of which shall be subject to maximum stakes and prizes.'.
No. 270, in clause 220, page 102, line 3, at end insert
(c) only allow a maximum of one-fifth of the number of gaming machines which are permitted to be installed to be Category A machines and subject always to subsection (4).'.
No. 7, in clause 220, page 102, leave out lines 6 and 7 and insert—
'(4) Every three years the Secretary of State shall review any regulations made in respect of Category B to D gaming machines, and which make provision in respect of—'.
No. 274, in clause 220, page 102, line 6, leave out subsection (4) and insert—
'(4) Subject to section 228 of this Act, every third year after the coming into force of Part 10 of this Act the Secretary of State shall, after receiving from, and paying due regard to, the advice of the Commission given under section 25, review any regulations made in respect of Category A to D gaming machines, and which make provision in respect of—
(a) amounts paid in respect of the use of a machine;
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(c) the nature of prizes;
(d) the premises where a machine is used;
(e) the aggregate value of prizes of linked machines.'.
No. 277, in clause 220, page 102, line 18, at end add—
'(7) Subsection 220(2)(c) may only be altered by regulations made under subsection (1) and not by an order made under section 163 (12).'.
No. 341, in clause 220, page 102, line 18, at end add—
'(7) Regulations under subsection (1) shall provide that the same categories and sub-categories of Category B and C machines are authorised to be made available for use on—
(a) premises with a bingo premises licence, and
(b) premises with a betting premises licence.'.
No. 344, in clause 220, page 101, line 45, after 'categories', insert—
'(aa) limit the number of Category A machines that may be made available to not more than 10 per cent. of total gaming machines on any premises subject to a Regional Casino Licence, and'.
Miss Kirkbride: As the Minister will be aware, another great concern about this reform of our gambling laws is that we might turn many sites into what are commonly known as gambling sheds: machines would simply be put in some great barn, whirring, blaring their sirens and making all sorts of other noises—primarily the sound of money chinking down, to encourage more people to put more money into them. That creates an unsavoury, unattractive atmosphere that encourages people to become problem gamblers.
Amendment No. 344 is intended to gauge the Minister's thinking on category A machines, which are the most dangerous, and to find out how far the Government intend to restrict their use. As I am sure the Committee is aware, the introduction of category A machines is the key issue in the Bill. Category B, C and D machines have always been available in the UK, and there is no great concern about them. However, category A machines give pay-outs of £1 million-plus, although exactly what they will be allowed to pay out will be an issue. We are certainly talking about £1 million as a prize, however, and that is what makes these machines so attractive and, therefore, so addictive.
It would therefore be desirable to restrict the number of category A machines in a regional casino network. That would protect people who wanted to play them, by encouraging them to play the lower pay-out machines, where they could spend less money and probably have as much fun, although winning £1 million is probably pretty exciting. The entire casino should not be full only of category A machines, and people should be encouraged to gravitate to other machines and take up the less dangerous forms of gambling or to restrict their spending on category A machines. That is the most important benefit of seeking to restrict the numbers of such machines.
There are, however, wider considerations. One impact of the introduction of category A gaming in the UK is that other forms of gambling will suffer—principally, we all assume, the national lottery. Having chosen their numbers, people can win £1 million or more on the lottery twice a week, but category A
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machines will allow them to win £1 million or more 24 hours a day, seven days a week, 52 weeks a year. For some people, that will be very attractive and highly addictive. It will also have the malign effect of cutting the amount spent on the lottery and, therefore, the amount going to good causes, all of which are feeling the pinch as a result of many of the Government's changes to the way in which lottery funds are distributed.
I would be grateful to hear the Minister's thinking on how far the Government intend to restrict the number of category A machines in regional casinos. Incidentally, the amendment refers only to regional casinos because the smaller casinos will, I assume, not have such machines.
Mr. Moss: This is an opportunity to debate gaming machines which, alongside the location and numbers of casinos, are a key area of concern. That is evident not just in the arguments deployed by my hon. Friend the Member for Bromsgrove (Miss Kirkbride), but throughout the industry. In light of the fact that Government proposals may emerge in the near future, this may not be the right time to have the debate. It is a pity that we do not have the overview that we need to put our arguments into a holistic context.
The Government have already decided to limit the number of regional casinos to eight. They obviously feel that they can justify that on the grounds of protection and social responsibility. We are not unsupportive of that. We have deployed arguments previously in Committee about category A machines not just being restricted to regional casinos. That argument was given greater weight when there was a possibility of between 20 and 40 regional casinos around the country competing with a great advantage against existing casinos. We think that there are currently 131 casinos, but we have had this debate before, so we will say that the figure is between 131 and 135.
Although that threat of unfair competition has diminished, there is still an argument from existing casino operators in this country which should be aired. They believe that an unfair advantage is being given to the regional casinos. We are going from a position of having no category A machines in the country to having eight regional casinos with up to 1,250 in each, but no one else will be allowed to have them. There is concern about the impact of category A machines, and rightly so. We would certainly support the Government in a pilot scheme as we tabled an amendment in that regard.
If there is to be a trial, however, it seems logical to look at the whole casino industry over, say, three years or whatever period is decided. We must look at the impact not only of the new regional casinos, but of any other casinos that might develop. The large and the small have been defined and will find a niche. They are new casinos and we do not know how many there will be. The argument that we deployed earlier was that capping the number of regional casinos would create a vacuum at the next level down in the size hierarchy, into which the new investment that had been going into regional casinos might pile. The Minister has
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indicated that he accepts the argument about proliferation at that level and may make suggestions on how to control it.
In terms of a level playing field for businesses, just to say categorically that no category A machines should be allowed in anything other than the new, and as yet untried and untested, regional casinos seems unfair. It is unfair to the existing industry because there has been no problem with that. As far as we are aware there have been no difficulties in the operation of the existing legislation and of many existing casinos. Restrictions are applied under the 1968 Act, including the membership rules, the 24-hour rules, the need to demonstrate demand and the permitted areas. Casinos rightly feel that they have run a clean ship, have a clean bill of health—to mix my metaphors—and are being disadvantaged by the Government's proposals. That is why, in amendments Nos. 271 to 273, we have sought to include category A machines in subsections (4) and (5) in addition to the machines that the Government are proposing in large and small casinos.
4.30 pm
There is uncertainty about the influence and impact of category A machines. There is also misunderstanding about what they really are. The idea that there will be 1,250 maximum stake and payout machines in regional casinos is nonsense. The Secretary of State said on Second Reading, and the Minister confirmed it earlier, that only a small proportion of category A machines will pay out at the high levels. Casino operators whom I have spoken to, and who wish to invest in this country say that they want category A machines because of their flexibility. It is not so much the maximum stake and payout that is critical as the ability to move stakes and payouts along the continuum to attract punters. That means that someone playing a 50p machine could, because of a link, suddenly hit the massive jackpot. They were not playing for it, but it could fall to them. Casino operators want that flexibility. I am making no judgment at this time. No doubt through trials carried out over time and through research, which we support, we will find out whether category A machines are that much of a problem.
We know from Australia—the Minister has been there, and he probably got a shock—that category A machines in all sorts of locations, including pubs, clubs, bars and even corner shops—almost—can be addictive. Ambient gambling takes place with people betting money as they go to and from work and in their leisure time. Because of the availability and proliferation of machines, there is a serious problem. However, no one is suggesting that category A machines should proliferate.
Amendment No. 270 would allow only 20 per cent. of gaming machines to be category A. I asked the industry to give me a feel for how many that would mean in small and large casinos. The figures are based on there being 131 casinos, so if there are 134 we will have to add three somewhere along the line. On average, casinos have about 16 gaming tables. About
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90 per cent. of casinos are small casinos, as defined by the Bill, and about 10 per cent. are large. In small casinos, there would be a total of 2,096 tables. With two machines per table, that gives a total of 3,773 machines. If 20 per cent. of those machines were category A, there would be six category A machines per small casino. Since large casinos are allowed more machines per table, there would be 1,048 machines in total, and 20 per cent. of that would mean a maximum of 15 category A machines in large casinos. Compared with the 1,250 category A machines that would be allowed in regional casinos, allowing large casinos to have 15 and small casinos to have six is in no shape or form proliferation, nor would it lead to massive problem gambling. It would, however, enable businesses to compete on a level playing field.
I hope that the Government will take on board our recommendations and amendments in relation to what I earlier termed membership but which I am now convinced is more to do with the idea of identity. I hope that the regulations will be strong, and that the gambling commission will enforce them, so that people who go to casinos to gamble will have to give proof of identity. That is vital in terms of knowing the customer and being able to pick up and deal with problem gambling. If that happens, there is no evidence, certainly from the United States or South Africa, to suggest that there are massive problems with problem gambling on category A machines. We tabled the amendments in an attempt to get a more level playing field for the industry. If there is a proliferation of small and large casinos, my figures will not stand up, but if there is an overall restriction on new casino development—the approach that the Government are wisely and sensibly taking; limiting numbers under a trial scheme and, after a few years, reviewing and testing the scheme's impact before going further—it does not seem unreasonable to perform such trials with category A machines in existing casinos. If we can control the number of casinos, I do not see that we will have a serious problem. We may have to return to the debate about the types of machines when we know more about the Government's overall proposals.
Many of the amendments relate not to this clause but to clause 220. However, as they relate to gaming machines, it is appropriate to discuss them at this juncture. Amendment No. 341, which has—pretty obviously, given its wording—come from the Bingo Association, raises the issue of fixed-odds betting terminals. The Bingo Association rightly points out that there is a huge discrepancy in industry opinion over who should have those terminals, what their payouts should be and whether there can be a level playing field.
There is no level playing field at the moment, and certain agreements have been made with the Association of British Bookmakers. It is up to that association to conduct some research and report to the Government. We would be interested to know if any has been done and, if so, its conclusions. There does not seem to be any consistency in stakes and payouts, and before the Bill goes much further we must gain a clearer idea about what is proposed for the future of
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FOBTs in the industry. We must be clear whether the number of machines currently available in betting shops should remain so under the agreement between the betting industry and the Department, whether the agreement is open to amendment and why FOBTs are not allowed on bingo premises but are on other premises.
We will no doubt return to those matters, because, along with the availability of premises for gambling, the type of gaming machine available is critical to the Government's overall objectives. If we do not conclude our discussions today, we should revisit those matters.
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