The
Committee consisted of the following
Members:
Chairman:
Mr.
Martyn
Jones
Banks,
Gordon
(Ochil and South Perthshire)
(Lab)
Butler,
Ms Dawn
(Brent, South)
(Lab)
Coffey,
Ann
(Stockport)
(Lab)
Devine,
Mr. Jim
(Livingston)
(Lab)
Engel,
Natascha
(North-East Derbyshire)
(Lab)
Foster,
Mr. Don
(Bath)
(LD)
Greenway,
Mr. John
(Ryedale)
(Con)
Lancaster,
Mr. Mark
(North-East Milton Keynes)
(Con)
Marsden,
Mr. Gordon
(Blackpool, South)
(Lab)
Milton,
Anne
(Guildford)
(Con)
Pelling,
Mr. Andrew
(Croydon, Central)
(Con)
Penrose,
John
(Weston-super-Mare)
(Con)
Prosser,
Gwyn
(Dover)
(Lab)
Stringer,
Graham
(Manchester, Blackley)
(Lab)
Sutcliffe,
Mr. Gerry
(Parliamentary Under-Secretary of State for
Culture, Media and
Sport)
Ward,
Claire
(Lord Commissioner of Her Majesty's
Treasury)
Younger-Ross,
Richard
(Teignbridge)
(LD)
Hannah
Weston, Committee
Clerk
attended the Committee
Fourth
Delegated Legislation
Committee
Thursday 5
July
2007
[Mr.
Martyn Jones
in the
Chair]
Draft Categories of Gaming Machine Regulations 2007, Draft Gambling Act 2005 (Operating Licence Conditions) Regulations 2007 and Draft Gambling (Lottery Machine Interval) Order 2007
2.49
pm
The
Parliamentary Under-Secretary of State for Culture, Media and Sport
(Mr. Gerry Sutcliffe):
I beg to
move,
That the
Committee has considered the draft Categories of Gaming Machine
Regulations
2007.
The
Chairman:
With this it will be convenient to consider the
draft Gambling Act 2005 (Operating Licence Conditions) Regulations 2007
and the draft Gambling (Lottery Machine Interval) Order
2007.
Mr.
Sutcliffe:
Good afternoon to you and to the Committee,
Mr. Jones. I am delighted to have the opportunity to speak
to the regulations. I am also delighted to see the wide range of
experience represented in the Committee; my fast learning curve in the
gambling and gaming industry is almost complete, but I know that there
are many people here with expertise, so I shall look forward to their
support during the
debate.
These three
important statutory instruments are among a number that my Department
is publishing in preparation for the implementation of the Gambling Act
2005 from 1 September 2007. We are making good progress, as the draft
measures take us a step closer to establishing a comprehensive new
regulatory regime for the gambling industry that, for the first time,
places the protection of children and other vulnerable people at its
heart, while ensuring that responsible operators have the flexibility
to remain profitable. The instruments have been drafted with the
licensing objectives of the Gambling Act in mind. They are worth
repeating; they are to keep gambling crime-free; to ensure that
gambling is conducted in a fair and open way; and to protect children
and the vulnerable. The three statutory instruments deal with gaming
machines, lottery machines and operating licence conditions. All three
have over the past year been the subject of consultation with the
statutory regulator, the Gambling Commission, and key stakeholders from
industry and organisations with an interest in problem
gambling.
First, I
will deal with the categories of gaming machine. The Categories of
Gaming Machine Regulations 2007 define four classes of gaming machine,
to be known as categories A, B, C and D. As required by the Act, the
regulations also subdivide category B machines into five sub-categories
and make
it clear, where there is a reference to a category B machine in the Act,
to which of those categories it shall be treated as referring. New
categories are defined in the draft regulations primarily by the
maximum stake and prize that they may offer. That approach has worked
well in the past and is well understood in the industry, and we believe
that it continues to form a sound basis for future
policy.
The proposed
stake and prize levels take their cue from the hierarchy of gaming
machines suggested by the Act. It determines which type of premises may
make the different categories of gaming machine available for use,
depending on the nature and degree of regulation on the premises,
whether the premises are established primarily for gambling, and the
age of potential visitors. Broadly speaking, the proposed stake and
prize limits replicate those proposed by the Government alongside the
draft Gambling Bill in November 2004, which have already been
implemented over the last two years under existing legislation. The
Government have made a commitment to review the stake and prize levels
proposed for 2009. Category A machines with unlimited stakes and prizes
will be allowed only in one regional casino permitted by the Act. Those
machines are new to the country and we think that it is right to take a
cautious approach to their
introduction.
Mr.
Don Foster (Bath) (LD): The Minister is right to say that
the Government want to adopt a cautious approach, but they are adopting
a very cautious one to the opening of the regional casino. Will he give
an indication of when we will hear something more about that
matter?
Mr.
Sutcliffe:
I am grateful for the hon. Members
interventionI think. He will be aware of the situation
regarding the outcome of votes in the other place. I do not think that
there is enough time from now until the recess to make any further
decisions at this stage. The Department, the Secretary of State and I
want to reflect on what has happened, and consult more widely with
people about the
implications.
The
Chairman:
Order. That is not part of the regulations that
we are
debating.
Mr.
Sutcliffe:
Thank you for keeping me in order,
Mr. Jones.
I was discussing the situation
in relation to category A machines. The previous Secretary of State, my
right hon. Friend the Member for Dulwich and West Norwood (Tessa
Jowell), made a clear commitment that we would not consider allowing
other casinos to offer those machines until a proper assessment of
their impact on problem gambling, based on the experience in the
regional casino, had been undertaken. That remains our firm
intention.
Category B
machines may be sited in a variety of premises, including casinos,
betting offices, bingo halls and adult-only arcades, as well as
members clubs and miners welfare institutes. Stake and
prize limits will range from £2 to £4,000 in casinos,
which are subject to regulation, to £1 to £250 in snooker
and other commercial clubs which are established for purposes
other than gambling. Category B includes what have become known as
fixed-odds betting terminals in bookmakers offices. They are
also permitted in casinos and will have a maximum stake of £100
and a maximum prize of £500. The machines are relatively new to
the British market and will be regulated as gaming machines for the
first time from 1 September. We will continue to keep those machines
under close scrutiny and, if it becomes clear that they are a source of
problem gambling, there are powers in the Act to control them that we
will not hesitate to
use.
Category C
machines, which will be permitted in pubs and the adults-only areas of
seaside arcades, will have a maximum stake and prize of 50p and
£35 respectively. Category D machines will be the only machines
that children are permitted to play. They include crane
grabs and penny falls, which, it is generally
accepted, cause no harm to children, as well as the lowest stake and
prize fruit machines commonly found at seaside arcades and travelling
fairs. Because children are permitted to play those machines, we
propose to reduce the maximum stake on all cash category D machines
from the current 30p to 10p from 1 September.
I understand the concerns of
hon. Members of all parties about the impact of allowing children to
play gaming machines of any sort. This was subject to considerable
debate during the passage of the Gambling Act, and the Government made
it clear that they did not believe there was sufficient evidence to
justify a ban at this stage. We will, however, continue to monitor the
issue very
carefully.
Mr.
Gordon Marsden (Blackpool, South) (Lab): My hon. Friend
sets out the existing position very clearly. I think that the move to
reduce the figure from 30p to 10p will be widely accepted, if not
welcomed. It certainly reinforces the point made by many of us from
seaside and coastal towns and elsewhere, that it is important to retain
the principle that families can play these machines chiefly for the
purposes of amusement and the elusive teddy
bear.
Mr.
Sutcliffe:
I have taken my grandchildren to such arcades,
and yes, those teddy bears are very elusive. My hon. Friend is right,
and I am happy that he accepts what we are trying to achieve.
The Government have a reserve
power to make it an offence for a child or a young person below a
specified age to use a category D machine, and we will not hesitate to
use it if the evidence justifies it. The regulations are just one
component of a range of measures that we are putting in place to ensure
that players of gaming machines are properly protected. For the first
time, it will be a specific criminal offence to permit a child to use
gaming machines, other than those in category D. We have already
prevented any further application for gaming machines in takeaway food
shops, taxi offices and other non-gambling premises. That will see the
removal of those opportunities for ambient gambling in some 6,000
premises by 2009.
Following an
extensive consultation with the industry and problem gambling groups,
we shall shortly introduce regulations under section 240 that will
control key
aspects of how gaming machines are used. They will include new
requirements for machines to display information about where customers
can obtain help and support for gambling problems, and limits on how
much money may be deposited in a machine.
Those regulations will be
complemented by the Gambling Commissions technical standards
for manufacture, which will limit speed of play and ensure that
machines offered in this country meet the strictest international
standards. The commission will also ensure that all gambling operators
have procedures and policies in place to ensure proper supervision of
machines and to identify and support problem gamblers. Taken together,
this will mean that we have one of the most robust regimes and systems
of regulation for gaming machines anywhere in the world.
The Gambling
Acts definition of a gaming machine is deliberately wide. One
exemption from the definition is made for machines that dispense
lottery tickets or otherwise allow a person to enter a lottery. The
order specifies the minimum amount of time that must lapse between the
purchase of a lottery ticket and the announcement of the result by the
machine, if that machine is to be exempted. If we did not impose that
minimum time lag, there is a risk that operators would develop machines
that enabled customers to enter a virtual lottery and which, to the
player, would be all but indistinguishable from a gaming
machine.
That is
exactly what has happened under the existing legislation: manufacturers
have developed lottery machines for members clubs that bear all
the characteristics of gaming machines but have none of the protections
while offering prizes of up to £2,000. Only gaming machines in
casinos are permitted to offer prizes at such a level. That is an
abuse, and the one-hour interval will ensure that it cannot happen
again in future, while at the same time allowing charities and other
good causes for the first time to raise more funds by selling tickets
by machine.
Finally,
while we make no apologies for forcing the removal of lottery machines
from clubs, the Government recognise that those machines have offered
an important source of revenue for working mens clubs and
miners welfare institutes. It was to assist clubs in that
position that we proposed the introduction, with their support, the new
category B3A gaming machines included in the Categories of Gaming
Machine Regulations 2007.
The Gambling Act 2005
(Operating Licence Conditions) Regulations 2007 impose mandatory
operating licensing conditions on casinos and bingo halls. In the case
of casinos, the regulations deal with another form of equipment that is
exempted from the gaming machine definition: wholly automated gaming
tables. The regulations require that a minimum of four player positions
be offered at each wholly automated gaming
table.
Wholly
automated roulette is typical of that sort of game: a real roulette
wheel spins automatically at regular intervals and is connected to
electronic terminals on which customers place their stakes. Wholly
automated gaming tables were granted an exemption from the general
gaming machine definition included in the Gambling Act because the
Government accepted that the equipment, which may be provided only in
casinos, merely provided an automated means of playing a real
casino game. Those games will be regulated along broadly similar lines
to the real version of the game: they will not be subject to any
statutory stake and prize limits; the equipment must comply with strict
technical specifications that the Gambling Commission will set; and
operators must have in place strict monitoring policies and procedures
to ensure that customers are protected.
The proposal
to require a minimum number of player positions is needed to prevent
the development of wholly automated casino games for very few people,
which would be indistinguishable from unlimited stake and prize gaming
machines. That would risk undermining the justification for exempting
the equipment from gaming machine definitions in the first place. For
bingo halls, the regulations would impose monetary limits on any prize
gaming they wished to offer, unless it was prize bingo. Prize bingo is
not subject to the controls because bingo halls can offer all types of
bingo under the new Act, without monetary limits. Therefore, the
regulations concern only prize games of other sorts played on bingo
premises.
Prize gaming
is one of the lesser-known and lesser-used permissions under the Act.
It was originally permitted in bingo halls as a low-stake form of
amusement within what is known in the industry as main
game bingo. The Government are determined that that form of
gaming should remain at a low level. The strict monetary limits in the
current legislation have worked well to control any harmful effects,
and the proposed new limits will ensure that those safeguards are
maintained.
The
Government listened carefully during consultation to Bingo Association
representations that some differential treatment may be possible for
adult-only premises offering prize gaming, without prejudicing the
intention that prize gaming should remain at a low level. We therefore
decided to allow bingo halls, but strictly only those that do not allow
under-18s to enter the premises, to offer a maximum cash prize of
£50, which will double the level currently permitted. Separate
regulations will impose limits on prize gaming in arcades and other
venues permitted to offer that form of gaming. I therefore commend the
measures to the
House.
3.3
pm
Mr.
John Greenway (Ryedale) (Con): First, may I formally
welcome the Minister to his position? I did not make that comment in
yesterdays debate in Westminster Hall because time was short,
although I have done so privately. It is fortunate that he has come
into the position at the end of a long process, and much of the
argument, some of which has been extremely heated, has largely passed.
The purpose of the statutory instruments is to put in place the final
detail of some of the regulatory arrangements in the
Act.
As
the Committee will know, I chaired the Joint Scrutiny Committee, which
looked at all of this before the normal parliamentary process. Before
that, I was for several years the shadow spokesman both on Home Affairs
and Culture, Media and Sport, and I considered the Budd review and the
whole process. I sense that we
are coming to the endthank goodness!and that when we get
to 1 September the Act will be in place and we will therefore need to
see how things turn out. For that reason, I think it was right for the
Act to be structured to enable such regulations and statutory
instruments.
We want
the legislation to be time proof so that it can deal with technological
change. This is the first review for 40 years. However, in revisiting
and, on occasions, increasing the limits of stakes and prizes, we must
keep in mind the impact on the consumerparticularly vulnerable
people and childrenshould they take part in gambling activity,
albeit illegally.
I
remind the Committee that I am the chairman of the Responsibility in
Gambling Trust, and we think it right to take a cautious approach when
there is doubt. In September, the Gambling Commission will publish the
outcome of its prevalence study and none of us knows what it will
report. My instinct is that it will report an increase in the
prevalence of gambling and in the number of people with a gambling
addiction. Because of that, we need constantly to review the various
limits, which is what the statutory instrument mechanism
allows.
When
considering the specifics of the provisions, we should keep in mind the
concerns of the industry. Fixed-odds betting terminals, of which there
are 25,000 in betting shops, are hugely profitable for bookmakers and
hugely popular with punters. The jury is out on whether they contribute
to gambling addiction in a harmful way, but they allow a stake and
prize limit not available in comparable gambling premises. There will
come a point when the matter of whether there will be a reduction is
laid to bed once and for all. The betting shop industry needs
certainty, and that question cannot be held over its head for ever. The
limits must be kept under review as time passes
anyway.
There is still
a great deal of resentment from casinos that machine numbers in the
existing estates have not been allowed to expand. That resentment is
even greater, because the 17 other casinos under development are
currently stalled. This is the only opportunity I have to point out to
the Minister that if he decides to reconvene the Joint Committee,
pretty well all of its members are willing and able to serve, if both
Houses wish it. We would need to appoint two more people, because sadly
one member, Tony Banks, has died and another, Richard Page, is no
longer here. However, the Minister might want to do
that.
On the number of
positions on wholly automated gaming machines, it was sensible not to
insist on a maximum limit in the order. The minimum is not popular with
all the casino industry, but on the whole it makes sense. I agree with
the Minister about the importance of ensuring that automated gaming
machines are not pseudo-gaming machines, but automated machines,
whereby people can take part in casino-style gaming because there is no
limits on stakes and prizes. Given the pressure of what I have
described, one can understand that
dynamic.
I hope that
the Ministers door will be open to people from the bingo
industry. They are facing very tough and challenging times. The smoking
ban will be a real problem for them, and it is understandable that they
are disappointed about the decision on prize gaming limits. Bingo halls
are effectively members clubs, and
so it is equally understandable that they are looking for innovative and
imaginative ways of bringing what they offer their members up to date.
We should keep it in mind that they have some real
concerns.
Mr.
Foster:
Does the hon. Gentleman agree that if we accept
these provisions, which go wholly against what the bingo industry
wants, particularly bearing in mind the difficult times that it faces,
it would be appropriate for the Government at least to enter into
discussions with the industry about having to pay VAT on participation
fees?
Mr.
Greenway:
The hon. Gentleman, who is a good friend, tempts
me to stray into a territory that is not within the scope of these
measures. The bingo industrys concern about the details in
these provisions is as nothing compared with its dissatisfaction with
the fact that VAT will be charged on participation fees. I think that
the Minister has already grasped that
point.
I will touch on
lotteries. I remind the Committee that, for my sins, in the shoes of
the late Stan Orme, I am the honorary president of the Lotteries
Council, the members of which are mostly charities. I think that to
allow automated, electronically printed tickets is a huge step forward
that has been needed for a long time. That is a big plus.
The Minister knows that the
one-hour interval is not welcome. I see his point entirely and
understand the view that his officials have come to in the advice that
they have given him about the need to distinguish lottery machines from
normal gaming machines, particularly where a game could be a back-door
way of getting around limits, but on the other hand, automated lottery
machines can equally be said to be in competition with scratchcards,
for which there are no limitsa good deal more research is
probably needed on the harm that may be caused.
My concluding
commentthis is probably the last time that we will speak in
public after a very long legislative processis that if one
talks to people in the media or the general public about what they
think the Gambling Act 2005 is about, they say that it is about
deregulation and allowing an industry rampant opportunities for new
gambling products, but my judgment is that, in the end, that is not
what it is about. This legislative process is about protecting
consumers. The Act and this secondary legislation are characterised by
the protection of the consumer and vulnerable adults. Those are the key
objectives of the Act.
My very last comment to the
Minister is to encourage him, in his new job, to press forward and
argue more forcefully for the consumer interest in the legislation.
Consumers will be better off from 1 September than they are now, and
the Government should put that m0essage across very
strongly.
3.13
pm
Mr.
Foster:
It is a great honour to follow the hon. Gentleman,
who I suspect knows more about these issues than any other member of
the Committeehe certainly knows more than me. However, in one
respect he is sadly and woefully wrong: he said that this is probably
the last time that we will debate the Gambling Act and that we are
coming to the end of a long road.
He is well aware that there are many outstanding statutory instruments
that relate to the legislation. Indeed, the major issue of the casino
advisory panels recommendation has been discussed in both
Houses of Parliament and, as the Minster has said, has not come back to
us yetfrom what the Minister said, we will not see it for some
time to come. There is, therefore, a long road still to follow, and the
Minister is well aware, because I told him so yesterday, of my
continuing concern about the huge delays in bringing forward a number
of orders that relate to the legislation, including the orders before
us. Many in the industry had hoped that they would be here much
earlier.
Let me
address a few issues in no particular order. I agree with the hon.
Member for Ryedale that lottery machines are a welcome addition to what
is on offer to those who seek to raise money for charities and other
good causes. Nevertheless, given the limits on prize money and stakes,
there is serious concern about the possibility that such machines could
contribute to the growth of problem gambling. The Government are right
to impose the one-hour limit. I welcome that, not least because all the
research shows that such machines cause a particular problem through
repeat play, when people start to chase losses. I shall
return to that point
shortly.
I am somewhat
confused and a bit concerned about the exemption for identical machines
located in what I shall call working mens clubs. The new
category, B3A, enables such machines, admittedly with lower pay-out
levels, to operate without that one-hour interval. The Minister must
explain to the Committee why a one-hour limit between play and the
player being told whether they have won can be imposed in commercial
clubs and so on, but not in working mens clubs. If the key
concern is repetition of play and the impact that that can have on the
development of problem gambling, I fail to understand the
Governments rationale. I know that the Minister will tell me
that the difference is in the amount of prize money, but the research
evidence clearly shows that repetition of play and the chasing of
losses are key, not the size of the prize. Therefore, I should be
grateful for an explanation of that difference in
treatment.
We know
from the explanatory notes that a number of the orders have to be
referred to the European Commission for agreement. Although we are only
now, in July, debating whether to approve these orders, I note with
interest that the Department notified the European Commission on 24
May. It was obviously very confident as to the outcome of our
deliberations, but it seems to me it jumped the gun. We could be
charitable to the Minister and say that that was sensible advance
planning to speed up the process, given that his Department has been so
woefully slow. However, the response from the European Commission is
anticipated on 27 August. So far as I am aware, that is only a few days
away from 1 September, when the legislation is due to come into force.
Therefore, will the Minister tell me how the Government will respond if
the European Commission says no or has reservations, bearing in mind
that it will then have a further three months in which to determine
what will happen? The Government will surely have prepared a response
for the European Commission in the event that it is not happy. What
will be the effect on the implementation of the legislation?
I also note that the Minister
said that the lottery machines will enable a wide range of charities
and other good causes to raise money. He is right, of course, and I
have already said that I welcome that. Will the Minister therefore
explain why the national lottery, one of the key providers of funds to
charities and other good causes, will be not be allowed to have such
machines? I note with interest that a trial of the machines for the
national lottery was planned, yet the Department decided to prevent it
from going ahead. Will the Minister explain the rationale for not
including machines for the national lottery in the categorisations that
we are
discussing?
At
the beginning, I expressed my concern about the delay in bringing
forward statutory instruments in relation to various aspects of the
implementation of the Gambling Act. Today, we are debating the
categories of machines, so only today will we discover whether
Parliament will approve the Governments proposals. When
Parliament approves them, as I imagine that it will, it will be up to
the Gambling Commission to do the workno doubt it is already
doing iton the technical specifications that will be needed to
meet the requirements of the category definitions. That means that at
some point there will have to be an order about technical standards
flowing from this statutory instrument. When I wrote to the Department,
I received a letter saying that that order will not be presented to
Parliament until August, when, as the Minister is well aware,
Parliament will not be sitting.
Mr.
Foster:
Indeed. I hope that we will not be brought back
for that particular reason. It might prove necessary, however, because
it could prove to be a significant issue. If the technical standards
are not to be approved until August, when we will not be here, I
presume that they will be put in place anyway and that we will have a
retrospective opportunity to debate them, which will create huge
uncertainty in the
industry.
More
importantly, representatives of the industry have told me that a long
period of time is necessary to reconfigure machines to meet the various
requirements that the Minister has mentioned, such as changes to the
limits on the speed of play and on sums that can be deposited and
changes to the labelling of the machines. Those things all take time. I
understand that to devise and develop a new machine from scratch to
meet the requirements of the new categories would take a minimum of six
months. To make changes to existing machines so that they meet the
technical requirements flowing from the new categories might take less
than six months, but it would take more time than will be available
between August and 1
September.
There is a
danger that, of the 300,000 machine throughout the country, a number
will not be able to operate, because they do not meet the
specifications. Such machines will therefore be unavailable for use for
up to six months. What are the Governments plans in respect of
that problem? Due to the delay in this statutory instrument and those
that flow from it, the industry is in a huge quandary about what will
happen.
It has been suggested that the implementation of the requirement to meet
the category definitions in the statutory instruments could be delayed
until the end of November, for example. That is one possible solution;
another is for the industry to have some freedom to continue using the
machines in the interim period. I would be grateful to hear from the
Minister. He must be well aware of the problem, because I wrote to the
Department about it in April. I am sure that he has a solution, and I
would be delighted to hear it.
The Minister has made exactly
the right decision about automated casino machines, as the hon. Member
for Ryedale has said. Although I accept the hon. Gentlemans
point that the industry is not particularly happy about the minimum of
four chairs around the machine, most operators already have that number
anyway. The minimum meets what they already have, so it should not be
too much of a burden for them. It is the right approach to distinguish
such machines from other
types.
The
hon. Member for Ryedale is right about the bingo order. The big issue
at the moment for the bingo industry, which is going through difficult
circumstancesa number of bingo halls have already
closedis double taxation. The industry is being charged for VAT
on participation, unlike any other form of gambling. Because that is a
significant worry for the industry, it is therefore not too surprising
that it has grave concerns about the prize limits that the order
imposes. The Minister knows that it would like higher prize and
stake limits.
As the
hon. Member for Ryedale has said, people could operate at much higher
levels with only a scratchcard, which anybody can get easily. Although
I accept that VAT is the bigger issue, I have grave concerns whether
the level is being set correctly in respect of
bingo.
With those
relatively few remarks, I look forward to the contribution from the
hon. Member for Guildford and to the Ministers
response.
3.26
pm
Anne
Milton (Guildford) (Con): I welcome the comments of my
hon. Friend the Member for Ryedale and the hon. Member for Bath. The
Minister and I are in the not dissimilar position of not having seen
this legislation through all its stages. My hon. Friend and the hon.
Member for Bath know a considerable amount about it and their
contributions to this debate are useful. I hope that the Minister will
take on board some of their comments, many of which have already been
expressed to me by those involved in the
industry.
I shall
start with the categories of machines. I repeat my hon. Friends
comments about the existing casino estate, which is an unresolved issue
for the industry. The fact that the existing casinos were unable to
convert to new style casinos continues to cause considerable
resentment, because the existing casino estate feels that it has always
operated responsibly. It allowed an opportunity for people who wanted
to gamble to do so and did not throw it in our faces or unduly
stimulate gambling. It feels let down by the fact that it cannot expand
into the same
markets.
I should like
to comment on section 3(1) of the 2005 Act. It is vital that the
Government are open to continual review of the regulations. We are in
terribly
uncharted territorynot least the Minister. There are anomalies
in all three statutory instruments and a lot more will emerge. The fact
that the Government have undertaken to look again at stakes and prizes
is vital, in the light of all the evidence that has been
gathered.
I offer a
word of caution to the Minister. My short experience in this role has
demonstrated to me that the gaming industry is a powerful lobby. There
are a large number of other groups out there to which I hope the
Minister will give an equal ear. The whole of the Act needs to be kept
under review. The Salvation Army, for instance, produced a report three
years ago that examined whether people felt that they had sufficient
opportunities to gamble. Some 93 per cent. of people said that they
did. There is no doubt that, if the industry wants to make money out of
gambling, it will have to stimulate some demand. It is possible that
the British Casino Association would also advance that evidence. If the
Minister could reassure us that he will give an equal ear to both the
industry and the other groups that have voiced considerable concerns
about the impact of the Act, that would be an important message for
other groups to
hear.
Moving on to the
lottery machine intervals, there is some fascinating information
available that one looks at and then one glazes over, particularly in
respect of the categories of machines. I am sure that many officials in
the Department also feel like
that.
Anne
Milton:
My hon. Friend obviously feels that he has got the
information there in his head, but as I say, it is quite interesting,
when one gets into itit really is.
I welcome the fact that the
Government have listened to the working mens clubs and the
miners welfare institutions and created a new category of
machine. There is a big difference from the gambler pumping in the
pound coins in a large casino and not moving for 12 hours to
somebody having a small flutter on the
machine.
Mr.
Marsden:
The hon. Lady is making a very important point,
which the Minister also touched on. She is saying that the gambling
that takes place in a social context, in which many of the people know
each other, is a very different kettle of fish from the traditional
gambling that we are talking about. I also say gently, in respect of
quoting the opinion polls that she mentioned, that this is one of the
things that is sometimes misunderstood. The nature of the new gambling
opportunities offered in the Act involve more social environments, such
as restaurants and other facilities, and is very different from
existing gambling. I wish that some of the groups with strong moral and
other concerns recognised that
distinction.
Anne
Milton:
Absolutely. The hon. Gentleman does not have to
say things quietly and gently. He can say them noisily if he wants. He
is right. I quoted the Salvation Armys report, which said that
93 per cent. of people feel that they have enough opportunity to
gamble. It is interesting to note that 73 per cent. of the population
regularly gamble. When I look at that figure, I think to myself,
I do not gamble., but in fact,
I do, because I have occasionally bought a lottery ticket. I note the
sharp intake of breath when I said that I gambled. Most people do not
think of buying a lottery ticket as gambling.
It is important to separate the
two groups. Some of the clubs that I referred to play an important role
in our communities. Generally, I welcome the fact that the Government
have listened to those groups because they are struggling to survive. I
do not think that we will be fully aware of their important social
function until they disappear. The same could be said of the bingo
halls.
Moving on to
the last order, I was on the Select Committee on Health when we
examined the possible ban on smoking in public places. I remember well
the evidence that the Bingo Association gave. It said that there was no
way that it could say anything other than that the ban on smoking in
public places was a good idea. It supported the ban and was very
grown-up in its attitude. It must have been aware what impact such a
ban would have. For those on the Committee who are not aware what
happened in bingo halls, let me explain. People played bingo. There was
then an interval in which people had a cup of tea or coffee, they
played the machines and they had a fag. The trouble is people cannot
now have a fag. They go outside to have a fag and do not play the
machines. That means a considerable loss of income for the bingo
halls.
There is a
tiny percentage of people who play too much bingo and get themselves
into debt, but the problem is small. As with the working mens
clubs, the bingo halls play a valuable role in the community. There are
not many left and people are very loyal to them. They are a social
outlet and somewhere that people can go when they live alone. They help
reduce social exclusion and isolation. In paragraph 7.8 of the
explanatory notes, there is a huge range of views, as there is on all
these orders, and all those to come. I have no doubt that we will
continue to be lobbied, and that many different views will be expressed
about what is being
suggested.
The
Governments intention to keep an open mind about the
regulations and the Act is important to ensuring that the Act does the
two things that it was intended to do: protect children and vulnerable
people, and ensure that problem gambling does not increase. The
differentiation between adult-only premises and those that allow
children is extremely important. Perhaps we should canvass the opinion
of all MPs and see whether anyone can claim to have won one of those
bears[Laughter.] It appears that an unnamed member of
this Committee, speaking from a sedentary position, has indeed won a
bear. It is nice that that will be on the record.
I was brought up near the
seaside. I remember going on to Brighton pier as a child with my
family, and I have taken my own children there. Differentiating between
mild and fairly harmless gambling and other gambling is extremely
important.
We look
forward to the Governments response on the location of the
eight small and medium casinos, although they are not the subject of
these proposals. The Minister is new to his role and we give him a warm
welcome; I hope he will remain open-minded.
There is some
interesting research on the matter. The hon. Member for Bath mentioned
people chasing their
losses; I recently met an anthropologist who was looking at cultural
differences in gambling and at problem gambling, especially in the
Chinese community. Interestingly, Caucasians tend to chase their
losses, the Chinese community uses gambling to test its luck.
Typically, they will get up in the morning and gamble to test their
luck; if that is shown, and they feel lucky, they will continue to
gamble, which is why, for some of them, gambling becomes a
problem.
That point
demonstrates why we must be so open-minded about gambling and problem
gambling. Testing the social and economic impact of the Act is
important for those groups such as the Churches that have made a strong
moral case for their views. It is vital that the Governments
research, which I look forward to, has the confidence of those
organisations.
The
Minister nodded when the hon. Member for Bath was talking about bingo
halls and VAT, and I sincerely hope that he will look at that issue,
too.
The
Chairman:
Minister, do not feel constrained to answer any
questions about the placing of casinos and the timing
thereof.
3.39
pm
Mr.
Sutcliffe:
Thank you for your protection, Sir John. I
think I have set out the position in response to the hon. Member for
Bath.
This has been a
worthwhile debate. It was educational for me to hear hon.
Members views on the proposals and on wider issues relating to
the Act and I am grateful to them for the constructive way in which
they put their points of view. I particularly want to express my thanks
and those of my predecessor to the hon. Member for Ryedale for his work
in the industry and as chair of the Responsibility in Gambling Trust. I
look forward to going through those issues with him in greater
detail.
Mr.
Greenway:
I advise my colleagues that they will shortly be
receiving a letter from me outlining the progress we have made with
RIGT. The information will be available to coincide with the rolling
out of the Act in
September.
Mr.
Sutcliffe:
I thank the hon. Gentleman for that
announcement. I am sure that other hon. Members will be keen to hear
what he has to say about it. I was also struck by what he said about
looking at the measures with a view to protecting the interest of the
consumer. As a former Minister with responsibility for consumer affairs
in the DTI, I was at the forefront of looking at a range of issues from
the consumers perspective, and I shall follow that in future
discussions, even if we are coming to the end of our discussions about
these measures.
The
hon. Gentleman was right to point out the time scale of gambling
legislationit is more than 40 years since we lasted looked at
such matters. It is important to move forward with the protections
because of the change of environment and technology.
I was
particularly struck by the intervention made by my hon. Friend the
Member for Blackpool, North and Fleetwood. She spoke about the balance
that needs to be struck on the issues when we address them. I
understand the reasons the there are anti-gambling groups, but there
must be an acceptance or acknowledgement of the framework in which we
operate in our modern
society.
I also pay tribute to my right
hon. Friend the Member for Sheffield, Central (Mr. Caborn),
who steered and developed the measures. The Committee will have much
respect for his
work.
I shall try to
go through the points in the same constructive manner in which they
were made. If I fail to answer any particular point now, I shall write
to hon. Members. The hon. Member for Ryedale spoke about fixed odds
betting terminals, and I agree with him that they are on probation. The
Government will continue to monitor them closely, as we will do with
all categories of machine. He asked about reconvening the Joint
Committee to consider an issue that he does not want to talk about, but
it is a possibility. We will consider that suggestion in the light of
the Joint Committees excellent work. We might look to go down
that route again, but I shall not make a firm commitment
today.
The hon.
Gentleman spoke about how the measure is enabling in nature, which is
true. As I have said, we need to respond to technical developments and
to new problems as they occur. As the hon. Member for Guildford has
said, we can review the monetary limits on a regular basis, and we will
review the stake and prize limits for gaming machines in
2009.
I have already
spoken about the hon. Member for Ryedale and his work for the
Responsibility in Gambling Trust, for which I am grateful. He spoke
about how the limit for existing casinos should be kept at 20 machines,
while new casinos have higher entitlements. I understand the
industrys concern, but the Government have doubled existing
casinos entitlement from 10 to 20, and we believe that the
higher entitlements should be limited to new casinos so that a proper
assessment can be made in relation to problem gambling among other
things.
The hon.
Members for Ryedale, for Bath and for Guildford spoke about the
problems of the bingo industry. I am well aware of the issue of the
smoking ban, as are my hon. Friends.
Mr.
Foster:
On that point, the hon. Member for Guildford quite
rightly raised the bingo industrys concerns about the effect of
the smoking ban andcruciallypointed out that the
industry supported the ban. In view of the Ministers remarks, I
hope that he will look sympathetically at the measures that are being
developed by the bingo industry to find means by which people can play
and smoke cigarettes immediately outside premises. Currently, there is
a technical problem in that the involvement of machinery to enable that
would be deemed a remote gambling machine, which would be subject to a
different tax regime. I hope that the Minister will look at the issue
sympathetically, and that he will discuss it with the
industry.
Mr.
Sutcliffe:
I am grateful to the hon.
Gentleman.
Mr.
Jim Devine (Livingston) (Lab): I am grateful, having won a
teddy bear.
[
Laughter.
]
There
is a large bingo hall in my constituency, which reported an initial
drop in income and clientele after the smoking ban, but it is now
reporting a substantial increase. I think the fact that bingo halls
were very smoky areas put a lot of people off. The initial difficulties
that were quite rightly identified are, in fact,
unproven.
Mr.
Sutcliffe:
I am grateful for that intervention. Both
interventions were about the future of bingo and what is happening to
the industry. The Government recognise the importance of the role of
bingo players in our communities. We all have bingo halls in our
constituencies, and we know that about 3 million people play. Clearly,
we are talking about a large sector of the
population.
The
safest way to approach the matter without giving commitments today is
to say that I need to speak to the industryas a new Minister, I
am happy to do soin order to understand its problems. I am well
aware of the VAT issue. That is a matter for the Treasury, but again, I
am happy to speak to the industry to find out what its difficulties
will be in the near future. Hopefully, we can resolve some of the
issues and understand the transitional problems. I am sure that my hon.
Friend the Member for Livingston is right that there are ways to
develop the
issues.
The hon.
Member for Bath chided the Government and the Department about the
laying of orders in August. I understand that that is not outside our
parliamentary processes, because orders can be laid in August. He will
know that about 45 orders have been or will be laid to implement the
Act, and there is tremendous pressure to get them correct, deal with
the consultation and so
on.
Mr.
Foster:
Will the Minister tell the Committee straight away
how many orders remain to be presented between now and 1
September?
Mr.
Sutcliffe:
It is about 14, of which a small number,
hopefully, will be laid in August. I give him that
commitment.
The hon.
Gentleman went on to talk about the European Union and notification. It
is our view that the order is unlikely to prove controversial. It will
primarily affect lottery ticket vending machines in clubs, which are
not produced in great numbers compared with the total number of gaming
machines available in the UK, and is unlikely to be of interest to
other member states. We notified the European Commission at the end of
May under the European technical standards
directive.
Mr.
Foster:
The Minister suggests that because there are only
a few machines, the European Commission will not worry about them. I am
sure that he has seen the advertisements by people who are producing
machines to meet the specification. I suspect that there will be large
numbers of
machines.
Mr.
Sutcliffe:
I was alluding to one reason why the Government
do not think that the European Union will see it as a controversial
issue, and why we should be okay in terms of the approval. The hon.
Gentleman
also asked about category B3A machines. It was a
question of judgment about the machinery. We are concerned that clubs
are effectively offering the kind of high-prize gaming permitted only
in casinos. The new B3A category was developed through discussion and
consultation with a variety of
bodies.
Mr.
Greenway:
This is an important point for the Committee to
grasp. It may be obvious, but I am not sure from our conversation that
it is. As I understand it, the clubs will be allowed a B3A machine
instead of a lottery-type machine with a one-hour interval, but that
B3A machine will come within the total limit of three machines per
club. It is likely that there will not be that many of them, because
clubs will also want to keep their ordinary B4
machines.
Mr.
Sutcliffe:
I am entirely grateful to the hon. Gentleman
for setting the record straight and helping me get my mind around
exactly what the difference
is.
We
have discussed European notification. We see no reason for the European
Commission to say no. It will obviously be a problem if it does, but
from the soundings and advice that we have taken, we feel that that is
unlikely. I hope that that reassures the
Committee.
The hon.
Member for Bath asked about the national lottery and the use of ticket
terminals. The national lottery will not be regulated by the
instruments generally, so we are considering the question separately
with the National Lottery Commission to see what can be done. The
important point that is concerning him is perhaps key to the whole
matter. At the end of the day, we want to make sure that the industry
is in a position to deal with matters in a spirit of fruitful
consultation. The Governments view on that is not quite the
same as the hon. Gentlemans, however. The overwhelming majority
of machines will require little or no adjustment in order to comply
from 1 September, and when adjustments are necessary, we will give
industry the lead times to comply with section 240 regulations. If the
industry has genuine concerns, it might be useful for officials to meet
with industry representatives to ensure that we can sort out any real
issues.
Mr.
Foster:
I am grateful to the Minister for his categorical
statement that the Government will give a lead time to the industry.
The implication is significant, and I am sure that he thought long and
hard before using those words. Labelling might seem a relatively small
task, but machines have to be labelled according to the categories that
we are discussing. The industry estimates that the cost of that
exercise alone will be something in the region of £3 million.
The operation is not a small one, and the industry is being asked to
undertake it in a very short space of time.
Mr.
Sutcliffe:
I want to make it clear what I am saying, so
that there is no uncertainty. I believe that the overwhelming majority
of machines will require little or no adjustment in order to comply by
1 September. If there is a problem, I am happy for the industry to
explain it, and if we accept the severity of the problem, a lead time
will be given for compliance with the section 240 regulations. I
acknowledge that there has been a great deal of work between officials
and the industry to try to achieve the best position that meets
everyones requirements.
I am grateful for the comments
of the hon. Member for Guildford in welcoming the regulations in
general terms. It is important to keep the Act under review and to
review what happens, particularly in relation to problem gambling. The
first results of studies will be published in the autumn, and will
provide us with benchmarks that we shall be able to
consider.
I commend
the orders to the
Committee.
Question
put and agreed
to.
Resolved,
That
the Committee has considered the draft Categories of Gaming Machine
Regulations 2007.
DRAFT GAMBLING ACT 2005 (OPERATING
LICENCE CONDITIONS) REGULATIONS
2007
Resolved,
That
the Committee has considered the draft Gambling Act 2005
(Operating Licence Conditions) Regulations
2007.[Mr.
Sutcliffe.]
DRAFT
GAMBLING (LOTTERY MACHINE INTERVAL) ORDER
2007
Resolved,
That
the Committee has considered the draft Gambling (Lottery Machine
Interval) Order 2007.[Mr.
Sutcliffe.]
Committee
rose at seven minutes to Four
oclock.