Gambling Bill

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Bob Russell (Colchester) (LD): Can the hon. Gentleman say which European countries have mega-casinos of the size of those proposed in the United Kingdom or of those in Las Vegas, to which he alluded?

Mr. Moss: I honestly do not know the answer, although the hon. Gentleman probably knew it before he asked the question. I think that there are limited numbers of casinos in the EU. My knowledge of the French industry is that the French were very prescriptive about where they locate casinos; they put them in spa resorts. I am not sure where the hon. Gentleman is leading with his question. I know that certain countries, such as France, have been very particular as to where they place casinos.

Bob Russell: I wonder whether the hon. Gentleman thinks that it would be helpful to the debate in the United Kingdom if the Government provided examples of how our European brothers and sisters have handled the issue of mega-casinos and the type of gaming machines that he mentioned, which we are told are very common in the United States. It would help the debate if we could have examples of how the issues are dealt with in the European Union.

Mr. Moss: The Minister heard the hon. Gentleman's question, and although I do not have the answer to it, the Minister may respond to it in his own good time.

Mr. Page: Would it help my hon. Friend if I said that he is absolutely right in saying that the French have been very prescriptive about where they locate their casinos? However, there is an obligation on casino operators to provide cultural support for particular areas; for example, by providing an arts theatre. I can produce actual examples if my hon. Friend requires me to do so.

10.30 am

Mr. Moss: That, too, is an excellent point, but with all due respect the Government intend to achieve similar outcomes through the regeneration benefits from the permissions for the eight regional casinos. No doubt we will have greater detail on that later, when we get the criteria for selecting the eight. However, the Government's position, which we share, has always been that the permissions for regional casinos or resort casinos—or leisure destination casinos, as my hon. Friend knows the scrutiny Committee wanted to call them—should be predicated on the delivery of massive regeneration benefit, either culturally, socially or economically. Hopefully, the Government will establish tight criteria to achieve that end. The incoming investors—with all due respect to them—will also want to see that regeneration, because that is part of the reason for allowing them in as planned.

The question of whether there are 1,250 or 2,000 category A machines is irrelevant in a way, because the big casinos would say that they know their clients and are capable of setting up sophisticated mechanisms for tackling problem gambling and counselling people who get into difficulties. The evidence from the United States and South Africa is that there is not massive

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problem gambling as a result of access to category A machines in casinos. There is plenty such evidence in Australia, but category A machines are on every street corner there, in pubs, bars and so on, and ambient gambling is a serious problem. Given evidence from the United States, why are the Government imposing a limit of 1,250? Why not 1,000 or 1,500? There is no logical answer, because 1,250 is a number plucked out of the air and, although incoming investors could probably live with it, it is not based on any serious logic.

Mr. Prisk: My hon. Friend is providing us with an incisive insight. Does he think that there is an economy of scale below which there is a danger that the investors whom the Government wish to draw in may hesitate and we may end up with something that is, in legislative terms, neither one thing nor the other? In other words, we will have something that does not achieve the goal that the Government are claiming and that does not settle and clarify existing legislation.

The Chairman: Will the hon. Member for North-East Cambridgeshire be kind enough when he resumes to address the Chair, rather than the Committee? He will find that not only will the Chairman be able to hear him more easily, but so will the vast listening audience to whom the sitting is broadcast.

Mr. Moss: I will, Mr. Gale, although I do not want to turn my back on Committee members, because they have such smiling faces.

There is a threshold. Investors will be making a significant investment and they have a view on whether a deal will be profitable and worth doing, or not worth doing. They seem content with the threshold of 1,250 machines, although I think many of them would like more. They are interested in upgrading the facilities. Many have told me that they are quite happy with the requirements for floor space to be extended above 10,000 sq m. Those people are not hesitating to come forward with substantial investment, but that has to be mirrored and replicated by the return from the gaming machines. We do not have a problem with a pilot scheme for regional casinos with category A machines. However, there still seems to be a misunderstanding on the part of many of those involved.

I am also not sure whether the Secretary of State and the Minister are clear in their own minds exactly what the category A machines will do. At Question Time yesterday, the Minister said that only a proportion of the machines would be category A machines. That is not my understanding. Incoming investors want 1,250 category A machines. There will not be unlimited stakes and prizes on all of those, of course, because we could not afford that. A proportion at the top will pay out huge amounts, but the majority will pay out sums similar to those offered by category B machines, while still being defined as category A machines.

In other words, the point about category A is that the machines can be altered all the time to do what we want them to do. They can either pay out a huge amount or a smaller sum. It is that mix of machines,

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stakes and prizes that gives the operator total flexibility and control over the end product. That is attractive to operators. So, the machines will be category A, in that the stakes and prizes will not be limited, but the vast majority of them will not allow stakes or offer prizes much greater than the category B limits of a few pounds and £500—or, in casinos, a maximum of £2,000.

We need huge numbers of people to come to the casinos and play the machines. On more than one occasion, 20,000 has been mentioned as the number of people who regional casinos need to cross their threshold on a weekend—certainly on Fridays and Saturdays. So, there will be huge numbers of people playing the machines and not everybody will walk into the casinos with several hundred pounds in their pocket. Most of them will play with £10, £20, £30 or £40 and then leave and do something else in that complex. That is the experience that has been related to us by American casino owners.

Why is there a big question mark about category A machines? Why are they so terrible? I do not think that the Government have justified saying, ''We must keep them in this location, because the consequences of doing otherwise could be traumatic.'' I do not think that there is evidence to justify that view. Countering that argument, again on the theme of comparability, where would that leave the existing casinos—small and large—in this country? They are told that they cannot have category A machines. They can have only eight category B machines, with a maximum payout of £2,000. I think that the maximum stake is £1. I am not sure that they can even have FOBTs; I do not think that they can. So, the option of playing a stake of up to £100 on a FOBT at £15 a throw is not available.

The existing casinos, which are membership only, which control their gambling extremely well and which have, to my knowledge, caused no social problems whatever in the past 20 years or more, are being told that they are not able to have category A machines—because? No answer is given.

Mr. Foster: I apologise for interrupting the hon. Gentleman's flow. He said in passing that he thought that small and large casinos would not be able to have FOBTs. That is not my understanding and I wonder which of us is correct. It is important to get that clear on the record.

Mr. Moss: I presented my question in a rhetorical manner; I did not know what the answer was. The hon. Gentleman nodded and then looked at his notes and decided that he should not have nodded in agreement. No doubt the Minister will clarify that point. The point that I am making—

Mr. Foster: Having looked again, I am fairly confident that I am correct in saying that category B2 machines would be allowed, with a maximum of four machines in such casinos. That view is based on page 23 of the helpful explanatory notes.

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Mr. Moss: I am grateful to the hon. Gentleman for clarifying that point. However, the point that I am driving at is about the basis on which the Government have decided that casinos other than the new regional casinos will not have any category A machines.

Mr. Page: My hon. Friend is pushing on a most important point. The new regional casinos will have considerable leisure facilities, and my experience and knowledge tell me that some 50 per cent. of their profit will come from activities other than gaming.

However, if the regeneration moneys are to be put into the various areas, there has to be a carrot: a differential between casinos that have served the country well with very little trouble and the bigger resort and regional casinos. That difference could be category A machines. If such machines were allowed into the other casinos, perhaps fewer regeneration benefits could be creamed off into the various areas. Does my hon. Friend think that a valid point?

Mr. Moss: It could be, if the proliferation of small and large casinos were allowed. If regional casinos were limited to eight, investors who had hoped to go into regional casinos might look elsewhere and start to invest in new large casinos around the country. We have raised that issue on more than one occasion, and it needs to be addressed. The Government have said that they will look at it, and we wait for their proposals on that.

If a person has a holistic view of the issue and attempts to control access to category A machines, their argument is weakened if one week they say that they do not mind if there are 50,000 of the machines in 40 regional casinos, but the next week, when the number of potential regional casinos has dropped to eight and there will be only 10,000 potential category A machines, they say that no one else can have them.

I tabled an amendment—to clause 163 I think—that would have allowed small and large casinos to have a proportion of category A machines. The amendment was thrown out, but I revisit the issue that it raised, which ought to be considered. If that proportion were small—say, 20 per cent.—that would not amount to a great number of machines in small and large casinos; there would be something like 900-plus in all the casinos currently in the country.

The idea that with only six category A machines one would be in a position to pay out huge amounts of money is a nonsense. One cannot pay out huge amounts of money if one has not taken them in. All that the proposals would give the casinos would be the flexibility—also given to the regional casino operators—to set the machines with unlimited stakes and prizes, although limits would obviously be set by economic and financial considerations, because no one would pay out huge amounts if huge amounts of money were not taken.

 
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