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Mr. Foster: Just before the hon. Gentleman completes his remarks, he may wish to turn his attention to amendment No. 274, with which I have a great deal of sympathy. It relates to the re-introduction of a triennial review as part of the regulatory procedures under the Secretary of State's powers.
Mr. Moss: I am grateful to the hon. Gentleman for reminding me of a whole host of amendments—Nos. 270 to 274 and 341. As he rightly pointed out, I overlooked any reference to amendment No. 274, which re-introduces the triennial review. The amendment would be helpful and sensible, and we await the Minister's response to it.
Mr. Foster: I am grateful to the hon. Gentleman for picking up that important point in his discussion of the string of amendments. During his helpful analysis of the figures, he failed to give us the punchline. While he was speaking, I was listening intently, but also doing a bit of arithmetic. I apologise if I have made a mistake, but by my calculation—using the hon. Gentleman's figures and assuming that there are the 134 existing casinos of the Minister's most recent parliamentary answer—were they to take up the full option of category A machines, the grand total throughout the country would be only 824, rather than the 1,250 that could be possible in each of the new regional casinos. That is a small number by comparison.
I share the hon. Gentleman's belief that the Government need to consider even more carefully how to create a level playing field for the existing UK gaming industry and the new industries that will seek to operate the new regional casinos. I have raised that point before, and I know that the hon. Gentleman has done so, too. There are various ways of doing that. One would be, as suggested in the amendment tabled by the hon. Member for Bromsgrove, to have a 10 per cent. cap on regional casinos; another would be a 20 per cent. cap, fairly distributed between the regional casinos and the existing ones. The Minister will recall that I moved an amendment to say that there should be no category A machines. That, too, would create a level playing field. That option still appears as an amendment, although it is rather defunct in the light of our discussions.
The untried and untested element of category A—unlimited prize money— machines is of considerable concern, not only to members of the Committee but to the public. In a 2002 study, National Economic Research Associates found that there was a direct
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correlation between the number of unlimited prize money machines in an Australian territory and the number of problem gamblers. There is clear evidence on those machines, and they are the ones about which most of us have the greatest concern. We shall be interested to hear what the Minister says. Although he has already indicated that he is not prepared to introduce a cap on the number of category A machines in a regional casino, perhaps he will reflect on that again at a later stage, possibly when new amendments relating to regional casinos are introduced.
I was particularly pleased that the hon. Member for North-East Cambridgeshire proposed the reintroduction of the triennial review. The Committee will be aware that a review was to have taken place in the last quarter of this year. Now it appears that it will be put off, and there is no reference in the legislation to a triennial review occurring under the new regime of the gambling commission. Amendment No. 7 takes the proposal a stage further in that the triennial review, rather than covering just those things listed in amendment No. 274, would give the Secretary of State the opportunity to review every one of the issues covered by her regulation-making powers. It is a slightly wider amendment, but the principle is the same. It is crucially important for the industry that the Minister should acknowledge the need for, and assure us that there will be, a regular review of all such matters in respect of the new bodies that might be introduced and the existing UK industry.
Dr. Pugh: I want to make a few comments, particularly on what the hon. Member for North-East Cambridgeshire said about a level playing field. I should like to share with the Committee the scrutiny Committee's thoughts on the issue. When we objected to the sole ownership of category A machines by regional casinos, the thinking was that that would give an undue competitive edge to regional casinos over other casinos, and that any large casino would have everything to gain and very little to lose by grossing up and becoming a regional casino. In other words, that would be where the money was to be made, and they would clearly move in that direction.
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The worry about proliferation was, I think, behind some of the arguments presented to the scrutiny Committee, but those arguments have been knocked on the head somewhat by the Government putting a limit of eight on the number of casinos. However, there is still an ad hoc character to the Government's justification for giving some casinos a distinct competitive edge over others. Their argument is that we are talking about relatively new, possibly dangerous things and that we need to assess their impact in a confined environment—that is to say, in regional casinos. It is not obvious to me that it follows that we must have a huge number of category A machines in regional casinos. Also, it does not follow that we will extrapolate the right lessons, because the use of category A machines in regional casinos might have a completely different effect to their use in large or small urban casinos.
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There is sense in the Government's saying that there should be a limit—no one disagrees with that—and in suggesting that we should study the effects of category A machines. However, it is not obvious how the Government arrived at that limit. Cynics might suggest that the limit has not much to do with drawing the correct lessons about what such machines may do to gambling behaviour, and a lot to do with what key players in the industry, who come to this country to invest, might want.
Mr. Caborn: I shall answer two questions that were asked before I give my explanation on the amendments.
First, I come to the point raised by the hon. Member for Bromsgrove. I recently came back from Australia, and the hon. Member for North-East Cambridgeshire is right to say that the trip had a profound effect on my thinking on the whole issue of gambling and how various problems can be controlled. We must look to where we have come from under the Gaming Act 1968, and consider how we can translate it into the Bill.
It struck me forcefully that if we are to control gambling, we must remember that it is about machines—pokies, as they call them in Australia. We have to tie them to provisions on something, such as premises or tables. There has to be a control. What really got out of control in Australia, for all sorts of reasons, was the massive proliferation of machines. The problem is not about casinos; it is just the machines, as the hon. Member for Bromsgrove rightly said. She mentioned sheds, and she is absolutely right. That proliferation changed the whole character of sports clubs and so on; it had a profound effect.
Everything that has been done has come about by tying the machines to some formula—whether a betting shop, a pub or a club with a certain number of machines. As far as casinos are concerned, the hon. Lady is absolutely right: in the regional casinos, we are talking about 25 machines per table. The figure is five for a large casino and two for a small casino. That is one area where we can control things. As I say, in Australia the machines are not in controlled locations. They can be in all sorts of places, because there is no licence in that sense.
On the so-called unlevel playing field that has been created by fixed-odds betting terminals, and the relationship to bingo halls, there are some 700 bingo premises in which alcohol is served that allow children in them. Betting shops are adult-only and do not have a licence to sell alcohol.
On the triennial review, the latest review did take place, and the Gaming Board recommended to the Government that there be increases in stakes and prizes. Ministers rejected those recommendations.
On the amendments, the hon. Lady is absolutely right, and expresses concerns in her amendment. Many people do not like the proposals for casinos with 1,250 gaming machines, but that is not the real problem. In Las Vegas, there are no limits on the number of category A machines, but fewer than 10 per cent. of them have prizes above £2,000. That is a result
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of straightforward economics. In order to offer high prizes, one needs a high stake, or to make a stake on something many times, before—as the hon. Lady described it—one hears the chink of the prize money. Casino operators normally have relatively few very high-prize machines. Otherwise, their products would be unattractive to the vast majority of people.
That is borne out in this country. In the 134 casinos operating today, there are 976 gaming machines, all of which are capable, as a matter of law, of offering a maximum prize of £2,000. However, of those machines—we are asking for category As to be included—the casinos have decided to offer only 289 with a maximum prize of £2,000. Market forces apply and customers are demanding smaller and more frequent payouts. That seems to be what people want, and the industry has responded. I sympathise with the concerns expressed by the hon. Lady, but her amendment addresses a problem that experience around the world and in this country suggests is not real.
Our policy on category A machines is clear: they will be allowed only in regional casinos. I have listened to the concerns expressed that the domestic casino industry will be prejudiced by our policy on category A machines, but I do not believe that there is any evidence of that. We have a strong home-grown casino industry that will be able to benefit from many of the measures in this Bill, which will release it from much of what it considers to be undue regulation.
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