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Session 2006 - 07
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Public Bill Committee Debates

Gaming Duty (Additional Games) Order 2007

The Committee consisted of the following Members:

Chairman: John Cummings
Butler, Ms Dawn (Brent, South) (Lab)
Devine, Mr. Jim (Livingston) (Lab)
Eagle, Angela (Exchequer Secretary to the Treasury)
Flynn, Paul (Newport, West) (Lab)
Foster, Mr. Don (Bath) (LD)
Greening, Justine (Putney) (Con)
Hall, Patrick (Bedford) (Lab)
Heppell, Mr. John (Nottingham, East) (Lab)
Laxton, Mr. Bob (Derby, North) (Lab)
Newmark, Mr. Brooks (Braintree) (Con)
Rifkind, Sir Malcolm (Kensington and Chelsea) (Con)
Rogerson, Dan (North Cornwall) (LD)
Ruane, Chris (Vale of Clwyd) (Lab)
Shepherd, Mr. Richard (Aldridge-Brownhills) (Con)
Spink, Bob (Castle Point) (Con)
Ward, Claire (Lord Commissioner of Her Majesty's Treasury)
Wright, David (Telford) (Lab)
Geoffrey Farrar, Committee Clerk
† attended the Committee

Sixth Delegated Legislation Committee

Tuesday 23 October 2007

[John Cummings in the Chair]

Gaming Duty (Additional Games) Order 2007

10.30 am
The Exchequer Secretary to the Treasury (Angela Eagle): I beg to move,
That the Committee has considered the Gaming Duty (Additional Games) Order 2007 (S.I. 2007, No. 2910).
It is a pleasure to be serving under your chairmanship, Mr. Cummings—the first of many times, I suspect.
The order, which came into force on 9 October, makes changes in relation to games that constitute dutiable gaming for the purposes of gaming duty. The Finance Act 1997 imposes a liability to gaming duty on casinos in relation to their gross gaming yield from specified games. Only games specified in section 10 of the Finance Act 1997, such as poker, dice, French roulette and blackjack, or essentially similar games, will attract a duty liability for casinos. The Gambling Act 2005 allows the Gaming Commission to attach conditions to any casino operating licence, including specifying the types of games that can be made available in a casino. On 17 July Her Majesty’s Revenue and Customs became aware that the Gambling Commission would permit casinos to offer six new games from 1 September, but none of the games was specified as a dutiable game in the Finance Act 1997 and none was essentially similar to any of the specified games. If the six new games were not added to the specified list, no gaming duty would be payable on the revenue that casinos made from the playing of them.
There was a small window before the recess in which an order to add the six new games could have been laid, but with insufficient time for debate before it would come into force on 1 September. Rather than give effect to the order while the House was in recess, I decided to defer laying the order and bringing it into effect until after the recess. That said, it was expedient to bring the order into force as soon as possible after the recess, to minimise the time during which the new games enjoyed a different tax status and treatment to other casino games. The Committee now has an opportunity for that debate. I commend the order to the Committee.
10.32 am
Justine Greening (Putney) (Con): It is a pleasure for me to serve under your chairmanship, Mr. Cummings. I am grateful to the Minister for her remarks. My understanding, similarly, is that the order is relatively routine, merely extending the Finance Act 1997 to include the new games that have now been approved by the Gambling Commission, earlier inclusion being prevented by the summer recess.
I have a few minor questions about the issue that she mentioned as she was finishing—the period between when the Gambling Commission approves games for use and when we are able to include them within the Finance Act 1997. Obviously, as a result of the new Gambling Act 2005, the rise of remote gambling and possibly the increased branding of games for marketing purposes, increasing numbers of branded games such as these may well be put before the Gambling Commission for approval—in fact, such games will be approved. We do not want to see any games given favourable tax treatment in terms of duty payable, compared with those already approved. Will the Minister outline whether she is looking at that area?
What can we in Parliament do to minimise the time between when the Gambling Commission approves games and when we can lay before Parliament the orders bringing those games within the remit of section 10(2) of the Finance Act? Has the Minister had or is she planning any discussions—perhaps with her ministerial colleagues in the Department for Culture, Media and Sport or with the Gambling Commission directly—about minimising any time delay between approval and when such orders are brought before the House? Has she had any representations from the industry, for example, which may or may not be concerned about this potential tax loophole?
I have no doubt that the Minister will be able to answer my questions, and I fully understand the impact of the recess on bringing the order before the House, but I felt that the questions were appropriate, given the opportunity.
10.35 am
Mr. Don Foster (Bath) (LD): I, too, am delighted to serve under your chairmanship, Mr. Cummings, and will be brief. We have no problem with the order and are happy to support it. I am grateful to the Minister for making it clear that the order was not introduced until 9 October—when Parliament reassembled—because it would have been a bit tight to do so at the end of the summer. I confess that I am slightly disappointed that she did not take the same approach to a gambling order that we discussed yesterday. There is a slight dichotomy, but her approach today is certainly welcome.
The hon. Member for Putney asked about the industry’s views. I would like to place it on record that the view of people I have spoken to in the industry is that the handling of the matter by both the Government and the Gambling Commission has been exemplary, and they are extremely grateful for that, although they have gone on to suggest that in some other areas—money laundering in particular—a similar approach could be adopted.
I have some concern about the suggestion by the hon. Member for Putney that fast-track approval should be adopted—a system whereby any new game approved by the Gambling Commission should in some way be automatically eligible for tax—because in those circumstances there would not be the opportunity for the Committee to discuss the merits or otherwise of the introduction of further games in casinos.
Justine Greening: I was merely suggesting that, over the course of a parliamentary year—we know when Parliament is due to rise—there may be an opportunity to talk to the Gambling Commission about what games it is considering and co-ordinate better, so that games are not approved just as Parliament is going into recess.
Mr. Foster: I am grateful to the hon. Lady for that clarification, and I now fully support what she says. I am delighted that we are not going to debate the merits or otherwise of these particular games, which I confess I know absolutely nothing about.
Bob Spink (Castle Point) (Con): Shame!
Mr. Foster: Clearly, there are hon. Members who are familiar with each and every one of them. For me, it is, rather like a discussion about different voting systems—whether we should have Sainte-Lague or d’Hondt—fairly complex for a brain the size of mine.
I have one key question for the Minister. If these games are now being permitted by the Gambling Commission and will therefore be taxable, what assumption must we make about the recommendation for them to be developed into a mechanical form and used on fixed-odds betting terminals in the betting shops on many of our high streets? Many people are increasingly concerned that the development of up to four of these machines in our bookies shops up and down the land is leading to a huge increase in the potential for, if not the reality of, problem gambling. The big cause for concern is not the highly regulated, controlled area of casinos, but what is happening in our betting shops. Can any assumption be made as to what effect the order will have on the games on fixed-odds betting terminals in betting shops?
10.39 am
Bob Spink: In response to the hon. Gentleman, I have never played any of these games, but I am told by people who frequent my local casinos—to which I have never been—that this order is perfectly acceptable and should be supported. He made the point about problem betting that I was going to make, which the Minister noted, but could I ask her—if she has been briefed in this area, which she may not have been—to explain whether these games are more skill-based than traditional ones, such as roulette, that take place in casinos, and whether that has any bearing on the order.
10.40 am
Angela Eagle: The first thing to say is that, before the amendment in the order was introduced, only four games had been added to the list of dutiable games in the last 35 years. Now we have the sudden addition of six. That may mean that the industry is becoming more innovative in how it develops proprietary poker games. I am a chess player rather than a poker player, so naturally my view of the skill of games is derived from that. I am told, however, that poker can be a very skilful game.
When one comes from a chess background and the number of potential moves after seven, so I am told, equals the number of atoms in the universe, poker seems a rather different proposition. All those games, however, are new proprietary games under the law and, in order to tax them, we have to pass the order, and I hope that the Committee will not object to our doing so.
In answer to the points raised by the hon. Member for Putney about new games and innovations, the Gambling Commission needs to be more aware of the need to keep HMRC in touch if new games are brought forward for licensing so that we can ensure that the dutiable element can be dealt with in good time by the House. A memorandum of understanding is being developed so that HMRC has plenty of notice of any new games that may be coming along the track that the Gambling Commission is likely to license. I hope that we can get the timing right.
I thank the hon. Member for Bath for his comment that the handling of this matter had been exemplary. That is the information that I had from my officials. There are no concerns in the industry about any of this.
I apparently implied in the Committee that considered a statutory instrument yesterday that some tax might have been avoided in card-to-card playing in casinos. I would like to take this opportunity to say that I did not wish to give that impression. No tax has been avoided, although we are looking at the lack of participatory VAT in those circumstances. HMRC is applying the law as it is. I apologise if I gave an impression that there had been any avoidance. That was not the intention, and there has not been any avoidance in reality—in what is an anomalous position at the moment.
Fixed-odds betting terminals are not a tax issue. I believe that the hon. Member for Bath should take that issue up with the Department for Culture, Media and Sport, which deals with the social policy around gambling. The Treasury really only looks at what is taxable, rather than what ought to be in betting shops. That is a social policy issue, which, of course, the Department for Culture, Media and Sport is responsible for. If he has concerns about what might be happening in betting shops, I suggest that he raises them with that Department.
Although I am sorry that I have not been able to go into great detail about the difference between two way Texas hold ’em casino poker, casino hold ’em poker and let it ride, I hope that Members in the Committee will be happy to allow the statutory instrument to go through today.
Question put and agreed to.
That the Committee has considered the Gaming Duty (Additional Games) Order 2007 (S.I. 2007, No. 2910).
Committee rose at fifteen minutes to Eleven o’clock.

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