Gambling Bill

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New Clause 6

Non-commercial betting

    'For the purposes of this Act a betting transaction is non-commercial betting if no party to the transaction—

    (a) enters it in the course of a business, or

    (b) holds himself out as being in business in relation to the acceptance of bets.'.—[Mr. Caborn]

Brought up, read the First and Second time, and added to the Bill.

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New Clause 8

Gambling software operating licence: standards

    '(1) The Commission may establish, or provide for the establishment of, standards in respect of the manufacture, supply, installation or adaptation of gambling software.

    (2) In particular, the Commission may—

    (a) provide for the enforcement of standards by the attachment of conditions under section 71 or 73;

    (b) make arrangements with any person for the establishment of standards;

    (c) make arrangements with any person for the administration of tests of compliance with standards;

    (d) for the purpose of considering whether a condition under section 71 or 73 has been complied with, require the holder of a gambling software operating licence—

    (i) to submit to a test in accordance with arrangements made under paragraph (c) above, and

    (ii) to produce specified evidence of the result of the test;

    (e) for the purpose of considering whether to grant an application under this Part, require the holder of or an applicant for a gambling software operating licence—

    (i) to submit to a test in accordance with arrangements made under paragraph (c) above, and

    (ii) to produce specified evidence of the result of the test.

    (3) Standards established under subsection (2) may, in particular, be expressed—

    (a) by reference to the opinion of a specified person or class of persons;

    (b) by reference to a specified process or description of software.

    (4) This section is without prejudice to the generality of sections 71, 73 and 74.'.—[Mr. Caborn.]

Brought up, and read the First time.

Mr. Caborn: I beg to move, That the clause be read a Second time.

The new clause makes an important improvement to the Bill by allowing the commission to set standards in the licences of gambling software companies under part 5. As hon. Members know, many of the gambling products now available depend on computer software that generates images on the screen, such as for internet poker rooms. Software that underpins such games must be tested carefully, and the new clause allows that. I believe that the companies are keen on that. The new clause will allow the commission to mandate individuals to test software, or a random sample of software, and requires licensees to make software available for testing.

Mr. Prisk: I have a technical question, but nevertheless an important one. A rogue supplier of software may offer something that can be downloaded remotely. How will the commission be able to regulate a piece of software that people use for gambling, which may have been downloaded from a company far from its control? Clearly rogue software that is beyond the United Kingdom's shores, and therefore beyond the ability to be regulated, offers the greatest danger. Some of the established players, who will be subject to the new clause and the standards proposed by the Government, may feel that they are under a regulatory burden but have to compete with others who do not have to meet the same high standards. Will the
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Minister establish for us and put on the record the thinking behind the commission's ability to get to grips with this issue?

Mr. Hawkins: My hon. Friend is raising an important point. Does he agree that an issue that we have debated in the Committee, which will come up again later on one of my new clauses, is whether it would be sensible for the protection of consumers to kitemark certain remote gambling sites as British sites and therefore under the commission's control? Does my hon. Friend agree that, if the Government found a way to do that, it might address some of the consumer protection issues that he has rightly raised?

Mr. Prisk: As usual, my hon. Friend has made an excellent point. I hope that the Minister will be able to respond to what I suspect is the answer to my question. I am grateful to my hon. Friend.

I am interested not simply in the consumer protection point but in the different standards to which players in this market will have to work and the way in which the Government intend to enforce the regulations.

Mr. Caborn: Downloading is covered by the definition. The commission will be able to pursue operators using illegally downloaded software. How it does that technically is up to the commission. I assume that it would bring in experts, because it is a highly technical operation which one would not expect to be set out in a Bill. We believe that the new clause gives the commission the power to bring in the technical know-how. We have made it clear that downloading remotely comes within the definition and therefore would be acted upon by the gambling commission.

We have explored kitemarking, but under European Community laws a kitemarked scheme is against competition policy. However, an operator can advertise that it is licensed by the commission. That is one of the standards that we want to set. The operator would then know that the product conformed to the standard set by the commission and that it is transparent and fair in operation.

To reply specifically to the hon. Gentleman's point, the rogue operator is acting illegally. We believe that the commission has the necessary powers and resources to tackle the problem.

Mr. Prisk: I accept that the Minister will have to ask the commission to put forward its own practical approach to the issue in due course. While we do not expect kitemarking to be included in the Bill, it is important in our discussions that the view of the Minister and the Department are clear. Despite the legal statement that he made, does the Minister see that there is an important merit in the concept underlying a kitemark? Does he agree that it would be beneficial? Without seeking to tie the hands of the commission, does he accept that that concept is one that should be noted in the commission's future actions?
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Mr. Caborn: What is the difference between a kitemark and a sign on the screen saying that the operator is licensed by the commission? We are saying clearly that licensing by the commission will bring an operator under the commission's standards. The commission will not give licences out without due consideration and will make sure that licences are complied with and policed. It is important that people using products that are licensed by the commission know that they will get a fair deal. From the point of view of the European Commission, kitemarking would be anti-competitive and therefore we will not use it.

Bob Russell (Colchester) (LD): Would it be possible for the commission to use as part of its address or logo a bunch of red cherries or something similar ? That could appear on the authorised licences. It would get round the problem, because I suspect that the problem is relates to national identity and not to a logo of the type that I describe.

Mr. Caborn: I do not disagree. If a cherry is symbolic of a licence from the gambling commission but is not seen to be anti-competitive by the European Commission, fine, let us have cherries. What is a kitemark? Is it a cherry, a licence or something else? What I want to make sure is that people know exactly what product they are getting. The point raised was about the cowboys who are trying to infiltrate the marketplace. I believe that the Bill includes enough powers and resources for the gambling commission to be able to act against the cowboys.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 9

Operating licences: conditions: information

    '(1) A condition attached to an operating licence by virtue of section 71 or 74 may require the provision of information of a specified kind to—

    (a) the Commission, or

    (b) another specified person or class of person.

    (2) A condition attached by virtue of this section may, in particular—

    (a) relate to information about the use made of facilities provided in accordance with the operating licence;

    (b) require a person to provide any information that he suspects may—

    (i) relate to the commission of an offence under this Act,

    (ii) relate to a breach of a rule applied by a sporting or other body, or

    (iii) lead to the making of an order under section 315.'.—[Mr. Caborn]

Brought up, and read the First time.

Mr. Caborn: I beg to move, That the clause be read a Second time.

Although the new clause applies to all operating licence holders, it may be helpful to consider it with betting exchanges in mind. It is essential to ensure that the gambling commission has the teeth to do its job properly. At present, clause 115 requires licence holders to provide information only to the
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commission. However, it is essential that betting operators share information with others, including sporting authorities. That information may include details of suspicious betting patterns on an event or the identity of an account holder suspected of having access to inside information about a sport.

Sharing information is vital if we are to provide adequate safeguards for consumers and protect the integrity of sport. The new clause brings in stringent requirements on betting exchanges, giving the commission the power to force them to surrender information to the relevant authority.

Mr. Richard Page (South-West Hertfordshire) (Con): I am grateful for the Minister's explanation. For gaming in this country to advance, we must ensure that we have the cleanest and most open operations in the world. Without that we will not attract the revenues that are out there in the world. I am sure that that revenue will come to this country once people know that we continue to operate a rigorous, open and honest gambling regime.

I ask the Minister to be a little more detailed in his explanation of the requirements for operators to register and to provide details. Will those requirements apply exclusively to betting exchanges or will other gambling operators, such as bookmakers, also be required to release all the names of their credit customers? To what extent will the gambling commission have the power to go into all of those bodies?

Betting exchanges have created an audit trail that did not previously exist. I welcome that audit trail, and I think that it is to the benefit of racing, although it obviously extends into other areas of gambling. To what extent will the clause influence the regime of following and checking those taking part in gambling?

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