Gambling Bill

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Mr. Don Foster (Bath) (LD): In detail.

9.45 am

Mr. Prisk: I am grateful to the hon. Gentleman for his support for this narrow, but very significant point.

Alluding back to my concern about wide and woolly definitions, I say to the Committee that subsection (5)(d) states that the regulations made under subsection (4)(e), in particular, make provision by reference to

    ''the software installed on a computer''.

I am assuming, although one should never do so with legislation, that that is gaming software, because clearly if one took the meaning at face value, the danger would be that, according to the Bill, the Secretary of State could regulate any form of software installed on a computer. I doubt that that is the Government's meaning, intent or purpose, but the Bill says what it says, and I would be grateful if the Minister could confirm whether it is meant to refer only to gaming software. I must inevitably ask him to define what he means by gaming software.

With those thoughts in mind, I look forward to what the Minister has to say. I hope that we will be able to improve the Bill through these deliberations. I am grateful to you, Mr. Gale, for allowing me to contribute to the debate.

Mr. Caborn: The hon. Gentleman shows why we need new legislation: because of the problems of new technology. If the Second Reading debate had concentrated on these matters, which should be of real concern to the public because of the way people can access gambling in this new electronic era, the need for new legislation would have been even clearer. We are talking about the difficulties that we face in ensuring that we future-proof the Bill.

Before I go into the detail, I want to make it clear that we are talking about having a powerful new gambling commission. We will include quite a lot of material in further regulation to clarify a number of points, but I will try to go through each point that the hon. Gentleman has raised. As I say, the definition of a gaming machine is completely new and has been broadly drawn to capture all machines used for gambling. It therefore needs to be future-proofed. This is a major and much-needed reform.

The definition covers virtual betting and gaming by machine, as well as virtual lotteries. That means that machines currently known as fixed-odds betting machines are covered by the new definition. The hon. Gentleman may know that that has been a bone of contention for some time, but at least now we will be able to clarify that in the Bill. Machines currently being offered in reliance on section 21 of the Gaming Act 1968 and section 16 of the Lotteries and Amusements Act 1976 are also covered.

There is no longer a requirement that there be a slot for inserting money into the machine, nor that an element of chance must be generated in the machine. Both those elements of the present definition have lead

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to avoidance of gaming machine regulation, and we now wish to ensure that all machines offered for gambling are caught properly as gaming machines.

There are a number of specific exemptions from the definition to remove devices that should not be regulated as gaming machines, even though gambling can take place on them. That does not mean that such equipment will always be outside the scope of the Bill, but simply that it should not be regulated as a gaming machine under part 10; for example, telephones or domestic personal computers are everyday devices that can be used for many activities in life other than accessing internet gambling, so that equipment is carved out from the definition. We will make regulations defining both domestic and dual-use computers. We will ensure, through regulation, that operators do not abuse those exemptions.

Mr. Moss: The Minister raised the issue of domestic and dual-use computers. Subsection (4)(e) states that the Secretary of State may define them in regulations. Subsection (5) states:

    ''Regulations under subsection (4)(e) may, in particular, make provision by reference to''.

There follows a whole host of things, which were mentioned by my hon. Friend the Member for Hertford and Stortford (Mr. Prisk). Given the wide range of those provisions, including paragraph (e), which refers to ''any other matter'', does that not convey the fact that the Government have not got a clue how they are going to define domestic and dual-use computers? It might be helpful if, while the Minister is on the subject, he could give us some indication of the Government's thinking.

Mr. Caborn: That is the problem that any Government would face, trying to look ahead five years and project how the electronic age will affect any sector or any industry, including the one under discussion. Do we return to the prescriptive role of the 1968 Act, where proposals for everything from increasing the number of slot machines to increasing the amount of prize money must come back to the Floor of the House? Or do we create a new framework, as we are trying to do through a new regulatory authority, which takes the successful provisions of the 1968 Act and puts them into a body that can respond to the ever-moving world in which we live, make sensible decisions and still be accountable to Parliament?

We are trying to create a framework whereby the gambling commission and the Secretary of State can respond to an ever-changing world. If we do not, either the industry will stop growing and developing or a lot of parliamentary time will be absorbed unnecessarily. One tries to project sensibly the powers, and the parameters of those powers, which the gambling commission or the Secretary of State will need, and that is what the wording of the provision is about.

Ann McKechin (Glasgow, Maryhill) (Lab): Will the Minister clarify something for the sake of the Committee? I understand that the virtual roulette machines, which are commonly found in betting shops, are one of the most profitable parts of a

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bookmaker's business. Someone quoted to me that about one third of William Hill's profits relates directly to those machines. I welcome the Government's intention to regulate them, because they are from where local bookmakers obtain their real profits. It would be helpful if the Minister could provide us with an idea of how large that sector is.

Mr. Caborn: I do not know how large the sector is; all I know is that because of the question, to which I have just referred, about the definition of a fixed-odds betting terminal and what type of machine it is, we had to come to a sensible arrangement. There was a dispute about the definition, and sensibly the Government and the industry came together rather than cause a massive explosion of wall-to-wall FOBTs in betting shops. We did not allow that to happen. We sat down with representatives from the industry and sensibly agreed a formula.

There are more than 20,000 machines; that is what it says on the note before me. We needed new legislation: we could not control FOBTs, and there was an argument about what the machines are and whether one could install a number of them in betting shops. That would have lead to long arguments in court, but we took a sensible approach and came to an agreement with the industry. We said then that we would tackle the matter in the Bill, and that is what this and many other clauses are about.

Mr. Page: Will the Minister address closely the points made by my hon. Friends the Members for North-East Cambridgeshire (Mr. Moss) and for Hertford and Stortford? Subsection (4)(e) enables the Secretary of State through regulation to make provision by reference to a machine's location—whether it is in a house—and its purpose. That provision will give the Secretary of State immense power over our individual lives. Although the Minister says that the power will be made by regulation so the proposal will come back to the House, we know that statutory instruments just go through the House and that there is no ability to debate and amend them. I would be a lot happier if, when the Minister makes further comment and says that ''the Secretary of State may'', he were to include the phrase, ''subject to advice or agreement with the gambling commission.''

Mr. Caborn: If I may, I will go through each subsection. That might be more sensible. If the provisions need to be strengthened, we will consider that in the spirit in which I have just explained the clause and in light of what we hope to achieve.

Other exemptions set out in subsection (2) are intended to allow operators to automate some of their gambling products without opening up loopholes allowing them to offer machine gambling on devices to evade the gaming machine entitlements. For example, lottery ticket vending machines and automated terminals for betting on real events will not become gaming machines under part 10 of the Bill, nor will equipment used by croupiers in casinos for gaming. That includes terminals linked to live table games, which simply offer electronic methods of taking part in a real game of chance. However, wholly automated

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gaming equipment, which does not need a person to operate it on behalf of a casino, will be caught in the definition of a gaming machine.

I believe that the clause strikes the right balance between preventing evasion of the gambling regime and allowing certain equipment to fall outside the regime.

Let me go through each of the areas that have been mentioned.

Mr. Prisk: The Minister is steadily working through the arguments, and rightly so. One of my concerns, to which I would like his response, is that, inevitably, technology will adjust and the Government will have to play catch-up. One sees that in other areas of Government; for example, in the taxation system. My concern is that that adds to the sense of uncertainty.

I am aware that the Government need to be able to provide themselves with a degree of flexibility, but the point raised by my hon. Friend the Member for South-West Hertfordshire (Mr. Page) is right: we are giving the Government considerable powers. Does the Minister understand our concern about that? Will he commit to stating for the record the Government's willingness to provide some means of genuine accountability in the future?

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