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Draft Categories of Casino Regulations 2008

The Committee consisted of the following Members:

Chairman: John Bercow
Benyon, Mr. Richard (Newbury) (Con)
Challen, Colin (Morley and Rothwell) (Lab)
Clarke, Mr. Charles (Norwich, South) (Lab)
Crausby, Mr. David (Bolton, North-East) (Lab)
Ellwood, Mr. Tobias (Bournemouth, East) (Con)
Foster, Mr. Don (Bath) (LD)
Ingram, Mr. Adam (East Kilbride, Strathaven and Lesmahagow) (Lab)
Johnson, Ms Diana R. (Kingston upon Hull, North) (Lab)
McCarthy-Fry, Sarah (Portsmouth, North) (Lab/Co-op)
Moss, Mr. Malcolm (North-East Cambridgeshire) (Con)
Smith, Mr. Andrew (Oxford, East) (Lab)
Stoate, Dr. Howard (Dartford) (Lab)
Sutcliffe, Mr. Gerry (Parliamentary Under-Secretary of State for Culture, Media and Sport)
Truswell, Mr. Paul (Pudsey) (Lab)
Viggers, Peter (Gosport) (Con)
Walker, Mr. Charles (Broxbourne) (Con)
Younger-Ross, Richard (Teignbridge) (LD)
Mike Clark, Committee Clerk
† attended the Committee

Fifth Delegated Legislation Committee

Tuesday 25 March 2008

[John Bercow in the Chair]

Draft Categories of Casino Regulations 2008

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 Casino Regulations 2008.
The Chairman: With this it will be convenient to consider the draft Gambling (Geographical Distribution of Large and Small Casino Premises Licences) Order 2008.
Mr. Sutcliffe: I welcome you to the Chair, Mr. Bercow, and wish all distinguished hon. Members a good afternoon.
We are debating two orders this afternoon. The draft Categories of Casino Regulations 2008 defines the large and small categories of casinos permitted by the Gambling Act 2005, and the draft Gambling (Geographical Distribution of Large and Small Casinos Premises Licences) Order 2008 specifies the 16 local authorities that will be authorised to license the eight large and eight small casinos that the Act allows.
The draft regulations define the large and small categories of casinos by reference to the minimum and maximum gambling area that each type of casino must offer. A casino will be a large casino if the combined floor area of those parts of the casino used for providing gambling is not less than 1,500 sq m, but does not exceed 3,500 sq m. A casino will be a small casino if the combined floor area of those parts of the casino used for providing gambling is not less than 500 sq m, but does not exceed 1,500 sq m. The principal purpose of establishing new minimum and maximum size criteria for the new casinos is ultimately to prevent a proliferation of small casinos.
Separately, the new casinos are required by mandatory premises licence conditions, which were approved by the House last year, to set aside minimum non-gambling areas where customers may take a break from gambling. The regulations will not apply to casinos previously licensed under the Gaming Act 1968. Many existing casinos will be well below the minimum size for a large or small casino under the Gambling Act 2005. Existing casinos licensed under the 1968 Act, regardless of size, are subject to special transitional arrangements under which they have been granted a converted casino premises licence, which will enable them to continue to trade with their current gaming entitlements.
Mr. Malcolm Moss (North-East Cambridgeshire) (Con): The Minister has broached the subject of casinos licensed under the 1968 Act. Does he agree that, given that 10 of the new 16 casinos will be in locations that already contain casinos licensed under the 1968 Act, that will surely have a detrimental effect on the trading plans of the existing casinos? What will the Government do about that?
Mr. Sutcliffe: The hon. Gentleman was the Opposition Front Bench spokesman when the Gambling Bill was going through the House and will be well aware of the issues that were raised. I believe that he moved a probing amendment to increase the number of casinos that should be considered. On the point that he makes, we are in correspondence with the British Casino Association and have received a proposal from it, which I am considering. I am prepared to investigate it further, but it will have no immediate impact on the instruments that we are discussing.
Mr. Don Foster (Bath) (LD): The Minister knows that I am fairly supportive of the order, but to suggest that it would not have an impact on the existing, well run casinos that we have in this country is to mislead the Committee. Surely he accepts that in the current climate, with the increase in duty on gambling, if an area already has, for example, five casinos, an additional casino could well have an impact on those existing casinos? It is wrong to say that it would have no impact whatever.
The Chairman: Order. Before the Minister replies, I simply say in a good-natured way to the hon. Member for Bath that he is far too experienced and senior a parliamentarian to accuse anyone of misleading the Committee.
Mr. Sutcliffe: Thank you for your protection, Mr. Bercow. It is not my intention in any way to mislead the Committee, but the hon. Gentleman knows that there have been issues with the permitted areas proposals and that we are concerned about casino proliferation. He also knows that there was a large number of applications before the cut-off date in April 2006. The issue is still relevant and a cause of concern inside and outside Parliament. One of the reasons for bringing the order back today is to try to gauge the will of Parliament in respect of the 16 casinos that we believe Parliament intended should be approved. That is why we are here this afternoon.
Mr. Moss: The Minister raised the hare of proliferation again. It is something that the Government referred to over and over again during the debates on the Gambling Bill. Seven of the 144 casinos licensed under the 1968 Act have already closed; how can that be proliferation? Ladbrokes, one of the top four companies in the country, said that it will not go into the casino industry. How does that fit with the Government’s view that there will be proliferation of casinos?
The draft order specifies the 16 authority areas where the eight large and eight small casinos permitted by the Government may be located. The 16 licensing authority areas are those that were originally recommended by the independent Casino Advisory Panel, which was chaired by the late Professor Stephen Crow, and which were included in the first geographical distribution order, which was rejected in the other place in March last year.
Mr. Foster: When the Minister says that the order was defeated in another place, that is, of course, factually correct, but will he confirm that, when their lordships did that—one year ago—they proposed that the eight large and eight small casinos be brought back under a separate order to enable them to go ahead?
Mr. Sutcliffe: I understand the hon. Gentleman’s point, but this is our first opportunity to introduce an order after considering all the aspects of the matter, as he would expect us to do. Given the new regime in the Department, and the new Ministers looking at the detail of the orders, we wanted to investigate the issues and discuss them at length with the stakeholders.
There was broad consensus across all parties in both Houses in last year’s debates that the eight large and eight small casino licences should be awarded to the 16 licensing authorities identified by the panel. We continue to believe that the panel did a good job, and that it exactly met its remit in recommending the 16 areas. The areas provide a good spread and represent locations ranging from large urban areas to town centres and seaside resorts.
Mr. Moss: The Minister says that the panel made a good fist of choosing the locations for the eight large and eight small casinos. Why did it make such a hash over Manchester?
Mr. Sutcliffe: Perhaps we can deal with Manchester a little later. I want first to set out why we are where we are.
We set out in our December 2004 policy statement what we wanted to achieve. When the time comes to carry out an assessment of the social and economic impact of the 16 new casinos, the areas will provide a good test in a broad range of different locations. I am sorry that the House of Lords Select Committee on the Merits of Statutory Instruments concluded that the order may imperfectly achieve its policy objective. The Secretary of State wrote to Lord Filkin, the Chairman of the Committee, to explain why he does not agree with its conclusions. A principal argument advanced by the Select Committee is that the Casino Advisory Panel gave insufficient emphasis in its work to the minimisation of harm from gambling, but that is to confuse the overarching objectives of the 2005 Act with the narrower objectives of the order.
The main objectives of the Act are to prevent crime and to protect children and vulnerable people from harm. The Government are proud that they have placed those protections at the heart of the system of regulation of gambling in this country for the first time. We have not abdicated our responsibility to prioritise the minimisation of harm. Those protections are being put in place, although that is not the purpose of the draft order. The narrow purpose of the order is to identify those areas that will best facilitate a proper assessment of the social impact of the new casinos, so that the Government and, indeed, Parliament can make future decisions about casino policy on an informed and evidence-based foundation.
The hon. Member for Bath rightly raised the question of public consultation in the casino licensing process. He is right to stress the primacy of local decision making and local consultation, and I pay tribute to the tenacity with which he has pursued that issue. Let me reassure him that those principles are central to our policy. In the 2005 Act we have, for the first time, given local authorities the power to resolve not to license a new casino in their area, and that includes the authorities mentioned in the order. Where an authority wishes to license a casino, local people will be consulted at every stage of the process. Authorities must issue a three-year licensing policy which, among other things, will set out the principles that they intend to apply when determining to whom to issue a casino licence. In settling that policy, licensing authorities are required to consult with local people.
Mr. Moss: On the position of local authorities, the Secretary of State made a statement on the Floor of the House announcing that the Government were going to change the 24-hour opening rule. I understand that, at the moment, local authorities have the powers to decide, premise by premise, case by case, whether that should apply. Will the Minister confirm whether the Government intend to impose opening hours from the centre, or whether they will continue to allow local authorities the licence to decide?
Mr. Sutcliffe: It will still be a matter for local authorities. The Secretary of State was answering a question and saying that certain matters will always be kept under consideration in relation to people having non-gambling time.
We want local people to be involved and consulted at every stage of the licensing process, and it is important that licensing authorities are required to consult local people in the widest possible sense.
Mr. Foster: I am extraordinarily grateful that the Minister wrote to me in advance on this matter—I understand that he sent copies to other people involved in the debate. I remind him that, when I raised this matter in the House on 26 February, in response to my question, the Secretary of State referred specifically to the requirement on local authorities
“as good practice, to consult local people and communities at every stage of the process”.—[Official Report, 26 February 2008; Vol. 472, c. 909.]
As the Minister is aware, I have been concerned for a long time about the impact on local people. That could mean only people in the immediate vicinity of the proposed casino, but the wider community will have an interest as well. Can he assure me that the wider community will also be consulted in the way that he describes?
Mr. Sutcliffe: There are two ways in which we can help the hon. Gentleman. First, the licensing authority can maximise its opportunity to include interested parties; those could be people who live within the vicinity of the premises, or those who are affected by what happens within it. That is one area of opportunity additional to the opportunities offered by the planning process. I hope that I have reassured the hon. Gentleman that it is our intention, as it must be that of local authorities and licensing authorities, to ensure maximum consultation.
On receipt of applications for a casino licence, licensing authorities must consider representations from interested parties, including local people and businesses, about the applications. Unless local people agree otherwise, the authority must hold a hearing. Where they receive more than one application for a licence, a statutory code of practice will require licensing authorities to take account of local views in deciding what benefits they want a casino to provide to their area.
This is no top-down, one-size-fits-all model. Licensing authorities have the flexibility to decide, after consulting local people, what is best for their area. That may include specific measures funded by the casino to support local efforts to combat problem gambling or crime. In the Act, we provided for authorities to hold operators to the commitments they make during the licensing process. Even after a casino has been licensed, local people may complain to their licensing authority and ask it to review the licence. All those measures are in addition to local people’s input to the planning process, as I said earlier. I hope that members of the Committee agree that the consultation measures for which we have provided are substantial and appropriate.
The order does not provide for a regional casino. The Secretary of State explained in his statement to the House on 26 February his reasoning for not proceeding with the regional casino. I do not intend to repeat what he said on that occasion, but central to his decision were the anxieties expressed in both Houses of Parliament about the potential negative impact of a regional casino.
Peter Viggers (Gosport) (Con): I listened carefully to the Minister’s introductory remarks. I hope that he accepts that he misquoted the definitions of a large casino and a small casino. He said that a casino is a large casino if the combined floor area of those parts of the casino used “for providing gambling” is equal to or exceeds 1,500 sq m. He repeated the same mistake when he said that a casino is a small casino if the parts of the casino used “for providing gambling” are equal to or exceed 500 sq m. He left out “facilities for”. Obviously, the definition of facilities for gambling is broader than the definition of gambling, as such. If gambling is provided, that is gambling, but if facilities for gambling are provided, they could include ancillary facilities. I think that the Minister just made a mistake in leaving out two words, but I should be grateful for his confirmation of that at some point. He did—
The Chairman: Order. Interventions, although very learned, are becoming increasing prolix. We must have time for both the continuation and conclusion of Front-Bench speeches and for Back Benchers to contribute to the debate if they so wish. The hon. Gentleman is very experienced, and he knows that interventions must be brief.
Mr. Sutcliffe: I am grateful to the hon. Member for Gosport. I shall try to satisfy his concerns during the debate and, if I cannot do so today, I shall make matters clear him in writing as soon as possible.
The large and small casinos that are subject to the order will pose a lower risk, but they are still new to the British market. They will be able to offer a larger number of £4,000 jackpot gaming machines than exist at present in casinos, and they will be permitted to offer new combinations of gambling. That is why we continue to believe that it is right to take cautious approach to their introduction and have limited the number of new casinos. We will not consider any further casinos under the Gambling Act 2005 until the assessment of the impact of the new casinos on problem gambling to which I have referred has been completed. We do not expect that to be until 2014 at the earliest. Even then, it will ultimately be for Parliament to approve an increase in the number of casinos permitted under the Act.
Protection of the public interest and the vulnerable from harm from gambling is central to the Act. That approach is reflected in the manner in which we are proceeding with new casinos, and I commend the draft statutory instruments to the Committee.
4.48 pm
Mr. Tobias Ellwood (Bournemouth, East) (Con): It is a pleasure to work under your tutelage today, Mr. Bercow. It is also a pleasure to be in such distinguished company. It is not only you to whom I am referring, but the veritable feast of tribal excellence on the Labour Benches. I see former Ministers and former Secretaries of State. It really is a privilege to have such an honour and to have almost an alternative Cabinet in our midst. It shows how serious the Government are taking gambling and these particular regulations.
The concept of the small and large casinos comes about from the development of the Gambling Act 2005. The Minister should be congratulated on bringing the regulations finally to the Committee. It has almost been like the 12 tasks of Hercules, who actually gained immortality if I remember correctly. Given the number of Ministers and Secretaries of State who have preceded the Minister in trying to get the measure to where it is today, I do not know whether he feels that way. It is a bold attempt to update the gambling laws and to allow legislation to catch up with our changing technology in respect of gambling.
The Opposition agree with the Government’s stated aims for the 2005 Act, which are to keep gambling crime free, to make sure that it is fair and open and that children and vulnerable adults are protected. We fully endorse them, although the detailed policy that has emerged from the Act about the internet, properties, bingo, adult gaming centres and land-based casinos leaves a lot to be desired. I suspect that this will not be the last statutory instrument that the Minister and I will spar over in relation to the original Act.
As we have heard, the statutory instrument follows the Government’s statement on gambling policy on 26 February, in which the draft order identifying 16 local authorities will be authorised to license the eight large and eight small casinos permitted by the 2005 Act. In English, that simply means that there is finally the go-ahead for 16 specific councils to determine for themselves how new large or small casinos might fit into the entertainment mix. Of course, we have lost one casino along the way.
As we have heard from my hon. Friend the Member for North-East Cambridgeshire, it is clear that the background to this issue stems from the announcement by the right hon. Member for Dulwich and West Norwood (Tessa Jowell), who established the Casino Advisory Panel to advise on the location of the 17 new casinos permitted by the Act. The panel considered applications from 68 local authorities and made its recommendations after detailed consideration. We have already had one statutory instrument on 28 March 2007, and it was to do with a super-casino. It was laid before the House and not only did the Prime Minister and the Secretary of State for Culture, Media and Sport vote in favour of it, but the Minister himself did, I believe.
My party felt that the statutory instrument should be divided, so we split the 16 casinos from the super-casino. Thanks, I am afraid, to the wise owls down the corridor, the order incorporating the Casino Advisory Panel’s recommendations was defeated in another place. I ask the Minister what has changed between then and now. We already knew the arguments about regeneration, which were very clear, and not so much because we made them, but because this is not the first Government or the first country to go down the route of looking at super-casinos. There have been many studies linking or testing the use of regeneration in developing and introducing a super-casino to a community.
I ask the Minister what plans there are in connection with the 24-hour licensing of casinos. The matter has been touched on in the media in the last few days. I understand that the British Casino Association did not, in fact, request a change in the licensing laws, but it was brought about. Now that the Act has come into place, the Government are already toying with the idea of limiting the opening hours of casinos. Will the Minister confirm what the Government have in mind?
When asked on 4 March in a written question, it was clear that the Government had no idea how many casinos had 24-hour licensing operations. If they do not know how many have such licensing, that gives rise to the question as to how they can fully understand its impact and why they want to change it. We believe that any changes must be evidence based. However, for them to be evidence based, we need to know how many casinos are open or are using the capacity for longer opening hours. I urge the Minister to provide clarity on that matter.
The Minister referred to a statement by the Secretary of State on 26 February, in which tough new rules were going to be announced for casinos. Can the Minister elaborate on what those rules will be? The Secretary of State said that they would provide non-gambling areas where customers can take a break from gambling. As far as I understand it, the 2005 Act already has mandatory and default conditions that state that the casinos must have a non-gambling area. He talked about the fact that cash machines should be located away from gaming areas, which the Gambling Act also covers. He talked about the fact that casinos must have policies to identify problem gamblers and provide information about support for addiction. That is something with which we wholeheartedly agree, but the measures are already in place.
There was talk of making the contribution towards GamCare and the Responsibility in Gambling Trust a compulsory one. Is that simply a threat or will it move towards being something more concrete? It would be helpful if the Minister could elaborate on those matters. The industry is asking for clarity. If we are in the position to say, “Yes, we support gambling; yes, we are willing to allow it to operate in the United Kingdom”, we must ensure that we look after people who transit from regarding gambling as a form of entertainment in which one is likely to lose to viewing it as a form of investment where one thinks one might win. Any changes must be evidence based, and I question whether that is fully the case.
There has been a call for a fresh order dealing only with the 16 casinos; we have talked about that today. Why did we have to wait an entire year to debate this issue now, when it could have been done a year ago and the casinos could have moved forward from there? The Minister said that he would return to the discussion about Manchester, but he did not. Perhaps he will do so when he speaks again. Will he also discuss the ad hoc ministerial group that is apparently being set up to talk about the challenges that Manchester faces? What will the group discover now about regeneration that it did not know before? On Blackpool, will he expand on the investment package that the Secretary of State for Communities and Local Government announced, suggesting that £300 million was to be spent there?
The irony of our debating the introduction of 16 casinos, is that the two places in Britain that have long been mooted as obvious places for casinos will not get one at all. Both those areas bid for super-casinos, and both are missing out on small and medium-sized casinos. Let us not forget where all this came from. The Government wanted super-casinos and were considering having 40 at first. The number moved down to eight, then to just one, and now the idea has disappeared completely from the statutory instrument. We need some consistency and a long-term policy that the industry can rally around. Instead, we have had a series of confusing statements and changes. As my hon. Friend the Member for South-West Surrey (Mr. Hunt) said in the House, there has not been a U-turn so much as an S-bend, weaving around policies and reacting rather than providing stability.
Mr. Moss: My hon. Friend mentioned regeneration and used the example of moneys that were promised for Blackpool by another Department. Given the changes to taxation that were introduced last year, does he believe that any of the 16 new casinos will have a bean left for regeneration of any kind?
Mr. Ellwood: My hon. Friend makes a valid point, and I pay tribute to his work in this area. Looking at the statistics, it is interesting to note how much money goes into casinos and how much ends up in the Government’s pocket. We say that the house always wins, but that could refer to the House of Commons rather than the casino. Apparently, the customer spend per visit is £37.31—a rather exact figure—and the total amount that is taken away in gaming duties, taxation on machines, VAT, employee costs and so on adds up to £9.09, which leaves about £28. One must then take away £2.42 for running, marketing, finance, compliance, property development and IT costs. Finally, when one takes away the cost of employing gaming and hospitality staff, as well as machine and hospitality costs, which add up to £22.82, that leaves £5 per customer from a starting figure of £37. One could say that there is still a lot of money to be made, but, as we have heard, some casinos are shutting. The point is that if those operations are over-taxed, they can be run into the ground. Taxes went up last year.
The way to avoid problems of over-taxation is to ensure that there is an even playing field regarding the location of the casinos. If one looks at the map that shows where the new casinos are to be placed, one sees that there will be challenges, as the new casinos will have serious advantages over the old ones that are based on the 1968 Act. There is a worry that some of those old casinos will go under simply because they do not have those advantages. The new casinos are likely to displace existing casinos because they have a better commercial set-up and because they can offer bingo and sports betting. The likely consequence is a reduction in the total number of casinos. Perhaps that is the Minister’s objective, but it would be nice to have some clarification if that is his policy.
What will happen when the 16 casinos come into being? How will Chelmsford, for example, which is not in a permitted area and does not have a casino, apply to have a casino should it wish to have one? Now that we have the measure behind us, will the Minister tell us what the new approach will be for an area that wishes to apply for a casino?
The statutory instrument poses some serious questions. There are questions hanging over the Act based on hearsay, such as whether the age of admission will be changed from 18 to 21. If that is the case, about 30 per cent. of the staff who work in casinos will not be allowed to continue their jobs. Will the Minister provide clarity on that? We need stability. The Conservatives are willing to support the measure, but serious questions remain about the Government’s strategy on gambling. It should be evidence-based, not simply headline-grabbing. The goalposts seem to be moving, and business needs stability. I have asked a number of questions. If the Minister cannot provide the answers today, I should be grateful if he could put them in writing. He has done so in the past, and I am grateful for that.
5.1 pm
Mr. Foster: May I say yet again how delighted I am to serve on a Committee under your chairmanship, Mr. Bercow? Like the hon. Member for Bournemouth, East, I am delighted that such a galaxy of talent has joined us today to discuss an issue that has taken rather too long to come to fruition. As I said in an intervention, it was about a year ago that the Liberal Democrats proposed in both Houses of Parliament that we should put the Manchester super-casino to one side, deal with it separately, and make a separate order enabling the eight large and eight small casinos identified by the Casino Advisory Panel under the late Professor Crow to go ahead. Notwithstanding what the Minister said about a new team and the need for extensive consultation, I think that many people find it disappointing that there has been a year’s delay in coming to a decision. The climate in the casino world has changed dramatically during those 12 months, as we have heard, and a number of casinos are closing.
Mr. Sutcliffe: Surely the hon. Gentleman will acknowledge and accept that the introduction of small and large casinos is significantly different from anything that exists in the UK at the moment. It is right for the Government to be cautious about our approach.
Mr. Foster: The Minister says that it is right to be cautious. He is a Minister from the very Government who proposed, in the legislation’s initial form, that there should be a complete free-for-all and that we should be able to have as many super-casinos as the market would bear. The same was true of the so-called large and small casinos. He suggests that the reason for the huge delay is that the Government have suddenly seen the light about the need for a cautious approach. That is welcome, but the impacts were discussed ad nauseam in Standing Committee, when a number of us had the great pleasure to debate the issues. It is a little rich for him to lecture me about the need for a cautious approach when both Liberal Democrats and Conservatives urged that from the very beginning.
The Liberal Democrats have no intention of dividing this Committee; we advocated such a measure a year ago and we stick to that position. I am grateful for the Minister’s generous comments earlier, and for the fact that in that 12 months, we have had the opportunity to be much clearer than we were a year ago about consultation. I have made it clear on a number of occasions to him, the Secretary of State and anyone else who would listen that it seems crucial that before an additional large or small casino opens for business in any of the 16 areas, there should be maximum opportunity for wide consultation at all stages of the process. I was particularly grateful to the Secretary of State for making it clear on 26 February that he shared that view, and I am grateful to the Minister for explaining in Committee now, and in the letter that he sent me prior to the Committee, each stage at which that can happen.
I also welcome the Government’s approach in all the documentation—this has been repeated in the letter and in what the Minister has said today—whereby they expect local authorities to adopt very best practice when consulting people. That is crucial.
The Minister knows that I have said on several occasions that it is slightly odd that we spend so much time debating 16 potential new casinos—the eight large and eight small—while a vast number of other potential new casinos have not been subject to such debate and scrutiny, even though I acknowledge that they are of a different order, as he rightly explained. He has frequently questioned my figures when referring to the number of casinos that could open in this country under the old 1968 legislation. The casino industry and I suggested that that loophole should have been closed much more quickly than the Government chose to.
Given that the Minister has questioned my figures on several occasions, I thought it right to speak to the Gambling Commission today so that I had the most up-to-date figures. In relaying them, may I remind the Committee and the Minister of what the right hon. Member for Sheffield, Central (Mr. Caborn), the former Minister with responsibility for gambling, said on 11 January 2005? When referring to the total number of casinos that were expected following the agreement of the legislation for eight large casinos, eight small and—at that time—one super-casino, he clearly said on record:
“we can say with certainty that there will be no more than 150 casinos.[Official Report, Standing Committee B, 11 January 2005; c. 718.]
According to the Gambling Commission, 142 licensed casinos are operating, 19 have been rejected by local magistrates but await appeal, 47 are already licensed but not yet open, 17 have been given consent but await a hearing with local magistrates, and nine await issue by the Gambling Commission. That gives a total of 234, but 11 of those are replacements or extensions to existing casino premises, so that makes 223 casinos under the 1968 Act, plus the new 16 that we are debating today. That gives a theoretical maximum—I accept that it will not come to this—of 239 casinos in this country, which is way in excess of the 150 that the former Minister said with certainty were likely to, or would, exist in this country.
Let us consider the situation in relation to the smaller casinos. Torbay already has one casino. Swansea has two, with two additional ones licensed but not yet open. Luton has three, with one appeal for a licence pending. Wolverhampton has two operating, with an additional one licensed but not yet open. Scarborough has one, plus one that recently closed.
In all those cases, we are proposing to add another casino that could well have an impact on the viability of the existing casinos in those areas. That viability is called into question, particularly in the light of changes that have taken place in relation to taxation, as has been mentioned, and some of the other unanticipated outcomes of the 2005 Act. That is why it is vital that the Minister sticks by the assurance that I think he has already given the Committee that he will consider carefully the proposals that have been made by the BCA to determine whether there is a solution to that problem, not to increase overall the number of casinos in the country, but to see whether we can find ways of protecting the viability of the existing casino estate. I am grateful that he appears to have given that assurance already. Perhaps he will confirm in his winding-up speech that that is the case.
I am also grateful that the Minister has addressed the Government’s approach on changing the age limit for casinos and the time limitation on the so-called ban on 24-hour gambling. I am sure that he will be prepared to give me a further assurance. He said that the Government keep all these issues under consideration—of course they do. Will he give the Committee an absolute assurance that he will not come back with proposals on changes to the age limit or the time limitation unless they are based clearly on evidence so that we have an evidence-based proposal for change, if such a change is suggested?
One issue that has not been touched on is the procedures to be used by local authorities, which, if the measures go through today, will be granted the opportunity, after consultation and all the various stages, to go ahead with either a new small or a new large casino. I am referring to the procedures that they must adopt in the event that more than one potential casino operator comes forward to become involved. The Minister will be well aware that when we discussed the issue in Standing Committee—the hon. Member for North-West Cambridgeshire will remember this well—we were deeply concerned about some local authorities getting into bed with a particular casino operator at the very early stages of a bid being put in to the Casino Advisory Panel. We were given assurances at that time that none of that would have any impact whatever.
Reference has been made to some of the wider unanticipated effects of the 2005 Act on the gambling estate. The Minister will be well aware of one particular concern to many involved in gambling, including bingo halls—I know that they have lobbied him extensively—adult gaming centres and the existing casino estate. They are desperately keen for him to conduct an immediate review of stakes and prizes for machines, because they impact on the viability of the casinos being debated today. Will he update us on the current situation?
We have already touched on the contributions of the new casinos—and the whole of the gambling fraternity, if we can call it that—to the Responsibility in Gambling Trust. On 26 February, the Secretary of State, having expressed concern that a large number of organisations were making no contribution, said:
“Unless the industry delivers a substantial increase in contributions by the end of this year and makes contributions in a timely fashion, I will seek the approval of the House for a statutory levy, at a rate to be determined.”—[Official Report, 26 February 2008; Vol. 472, c. 904.]
Again, this is relevant to the viability of the existing casino estate and the new casinos coming on line. Will the Minister amplify what the Secretary of State meant by “substantial increase”? As I said the other day, I give the Secretary of State credit for consistency. He is the third Secretary of State in a row to threaten a statutory levy on the gambling industry, but how can we judge him on whether he will introduce it, unless we know what he means by “substantial”? Will the Minister help us by giving us his interpretation of the Secretary of State’s words?
Mr. Moss: On the issue of a levy and the work of the RIGT, GamCare and others, should we not first ask what the problem is and how much money is needed to sort it out, instead of raising amounts worked out on the back of an envelope to fund whatever people think ought to be funded? Should we not start from basics by assessing the problem, finding out exactly what we need to address, and raising the money?
Mr. Moss: Does the hon. Gentleman agree that it is deeply unfair to charge people in the casino and bingo industries, where there is no evidence-based problem with problem gambling at all, when, as he says, the people who are causing increasing problems—the internet gamblers—pay nothing?
Mr. Foster: The hon. Gentleman speaks eloquently, wisely and correctly. It is important that we have a better handle on precisely what the Secretary of State means by “substantial”. This is not only to do with the industry, but about which parts of the industry are involved and whether there will be a differential charge on those parts that are more likely to lead to problem gambling. These are big questions. As I said, one of the problems is that our research evidence base is pretty inadequate when it comes to helping us answer some of the questions that the hon. Gentleman rightly raises.
We support the measures. I am delighted that we have got the consultation sorted out, because that was a lingering concern that needed to be—and has been—resolved. I have asked a number of questions, so I look forward to hearing the Minister’s answers, but he can be assured that I will certainly not be looking to call a Division.
5.21 pm
Mr. Sutcliffe: I thank the hon. Members for Bath and for Bournemouth, East for their contributions and I am grateful for their qualified support for the order. I acknowledge the expertise of current and previous Committee members involved in taking the Gambling Act through its parliamentary stages and I thank them for their work.
The hon. Member for Bournemouth, East is right to say that the Casino Advisory Panel undertook to consider the casino policy in relation to the 68 local authorities that made requests. The local authorities wanted us to be clear about what we wanted to achieve with the casino policy.
On 28 March 2007, we could not get an agreement through Parliament about how to proceed. It was right that we set out then to review what the will of Parliament was and to consider why we needed to investigate further the impact of regional casinos—small and large—on society. There was a time when it was clear that there needed to be a growth of casinos. The hon. Member for North-East Cambridgeshire tabled a probing amendment during the Committee stage of the Gambling Bill on trying to increase the number of casinos.
Mr. Moss: The Minister has mentioned that twice. I am racking my brain to remember any such amendment. I do not believe that I tabled an amendment to increase the number of casinos. Perhaps he will mention exactly what I was proposing.
Mr. Sutcliffe: I will dig out the amendment and write to the hon. Gentleman and the Committee with the detail.
Because there is a broad consensus of agreement on the order, notwithstanding the questions that have been asked, I will try to assist the Committee by going through the issues fairly quickly. However, if I miss something I will answer hon. Members’ questions in writing after the sitting.
It was made clear, in the statement made on 26 February by the Secretary of State for Communities and Local Government, my right hon. Friend the Member for Salford (Hazel Blears), why we did not consider regional casinos to be appropriate. Manchester was disappointed and is still disappointed by our not proceeding. However, the Secretary of State, in conjunction with the Prime Minister, is leading a task force looking at regeneration issues in Manchester and Blackpool. We hope that those areas can be supported through alternative regeneration projects.
Mr. Moss: Of all the towns and cities that applied for a regional casino, why are Manchester and Blackpool the only ones that seem to be getting some regeneration money from the Government? What is wrong with the other people who bid for the super-casinos?
Mr. Sutcliffe: The hon. Gentleman will be aware that this Government have given regeneration money to all sorts of authorities, in seaside towns and elsewhere. I am sure that he will congratulate the Government on the £55 million that has gone into seaside regeneration and on the wealth of other regeneration moneys.
The specific reason with regard to Manchester was that it thought that it was going to get a regional casino and did not. Manchester has raised issues with us and there are alternative regeneration proposals for it. Clearly, Blackpool was raised as an issue in the other place and in this House with regard to the Casino Advisory Panel. It is quite clear why those two authorities want to look at regeneration issues.
Mr. Ellwood: You will now understand why I am sad that Bournemouth did not put in a bid for a regional casino, Mr. Bercow. Had we done so, we would now be expecting a huge amount of regeneration money from the Government, if that is the Minister’s argument.
If Manchester or Blackpool, which both spent an awful lot of effort and money trying to secure a super-casino, were to approach the Government for a large casino, what would the answer be?
Mr. Sutcliffe: Manchester and Blackpool were asked if they wanted large casinos and they did not bid for them. That is the answer.
Mr. Ellwood: Because they were after a super-casino.
The Chairman: Order. We will not have sedentary interventions.
Mr. Sutcliffe: What came through from the contributions of the hon. Members for Bournemouth, East and for Bath was that whatever we did had to be evidence based, and I wholeheartedly agree with that. The Secretary of State and the Department had no intention of suggesting that issues worthy of consideration—whether they be about age or the 24-hour issue—will not be consulted on or that we will not consider the evidence that comes before us.
I pay tribute to the work of the British Casino Association on the issues that face the industry. I realise that there are some problems within the sector. That is why we want to consider what has been put to us and we will do so. We will work with the industry, as we have in the past, to look at what can be done for existing casinos. However, the regulations are about the new 16.
The hon. Member for Bournemouth, East asked about the statutory levy and the issues regarding the Responsibility in Gambling Trust. It is very clear from what the Secretary of State has said that we must see an increase in the number of people who contribute to the voluntary levy. We have asked the Gambling Commission to look at the system for collecting the levy. By the autumn it should report on that process and whether it has been successful. The chair of the Responsibility in Gambling Trust was quite pleased with the Secretary of State’s announcement because there was an almost immediate increase in payments to the organisation. If the voluntary contributions work, that is fine. If they do not, the Gambling Commission will make recommendations to us. If we have to put forward a statutory levy, we will do so.
Mr. Foster: The Minister is going backwards rather than giving us greater clarification. He referred to the Gambling Commission advising on the process and the number of people who are contributing. He said that we must see an increase in the number of people. At least before, it was a substantial increase, rather than just an increase in the number of people.
I am none the wiser about what we are looking for. What is in the Secretary of State’s mind that will help us all to know that we are not getting there and that there will be a statutory levy? Unless the industry knows that there is a real threat, we will be in exactly the same position as we were under two previous Secretaries of State.
Mr. Sutcliffe: I do not agree. The industry knows that 10 per cent. is not enough in terms of the numbers that are contributing. We need to see a substantial increase. We were asked for an evidence base and it is right and appropriate that the Gambling Commission tells us where we should pitch the levy. We will then look to do that.
Mr. Moss: I am grateful to the Minister for giving way again and for his patience.
I return to the point that I raised earlier. Why are we saying that we need to raise more money? Who says that we need more money for gambling problems? Is that driven by GamCare or the Responsibility in Gambling Trust? Do the Minister and his Department get to see the cost-effectiveness of the money that is spent and the number of problem gamblers that are helped? Is there an analysis of that?
Mr. Sutcliffe: Just to help the Committee, the Responsibility in Gambling Trust is the body responsible for drawing in the moneys for the treatment of people with gambling problems. It does that through a number of organisations, of which GamCare is an obvious example. I believe that process to be cost-effective. The chair of the Responsibility in Gambling Trust is looking at the amount of money needed. That evidence is based upon the prevalence study and trends within the sector. It is clear that the industry wants to be responsible, and some of the key players contribute a great deal and very quickly. All that we are saying is that we want an increased contribution, and we will report back in the autumn on how to take that forward.
The hon. Member for Bath asked me to reassure him on the issues concerning the licensing authorities and planning, and I am happy to do so. He will know that the licensing authorities have the opportunity to hear from people who live close by and would be affected. The definition is clear, and I agree that the issues that affect communities should be taken into consideration. However, most of the casinos that exist at the moment have operated in a proper manner, and as a sector and an industry it is able to deal with those issue well. One of the objections to the Gambling Act is the need to protect us from crime, but the casino industry has a proud record of ensuring that there are sufficient safeguards in place to stop crime operating within its premises.
The hon. Gentleman asked me what I intend to do in relation to the review on stakes and prizes and how I will respond to bingo and the British Amusement Catering Trade Association. I will shortly—it was shortly when I last spoke to him and it is now very shortly—make some announcements on how the Government intend to go forward, and we will do that is due course.
Mr. Moss: With regard to the review of stakes and prizes, I am encouraged to hear that there will soon be an announcement on bingo and BACTA, but does it refer to the section 21 machines that the casinos used to have under the 1968 Act, but which are now banned? At the same time as putting new casinos, large and small, into the same areas in direct competition with the existing estate, the Government are diminishing the number of machines in the existing casinos and increasing the competition through the number of machines in the others.
Mr. Sutcliffe: I understand the hon. Gentleman’s point. It is a complex area of business—I have learnt at first hand that it is very complex. We will cater for those issues in the announcements. I am sure that they will make some people happy and disappoint others, but I ask the hon. Gentleman to wait for the announcements with a little more patience.
Mr. Ellwood: I am sorry to press the Minister on this point, but can he say, yes or no, whether the number of B1 machines, which is currently limited to 20 in casinos, will be reviewed?
Mr. Sutcliffe: The hon. Gentleman will have to wait for the announcement in due course.
The hon. Member for Gosport, who is not in his place, asked me to clarify the scope of the categories order, which provides the minimum and maximum floor areas for the parts of casinos used for providing gambling facilities. Section 5 of the 2005 Act sets out an extensive definition for facilities for gambling, which will apply to the order. I can confirm that facilities for gambling and gambling areas are the same, so I hope that that will reassure him.
The hon. Member for Bath referred to my right hon. Friend the Member for Sheffield, Central (Mr. Caborn) and raised the issue of the figures. He will be pleased to know that I accept his figure of 239. He was quite right to say that those are theoretical maximums that might be achieved. I think that my right hon. Friend was quoted out of context, as he was seeking to make the point that the cap on the number of new casinos permitted by the Act was an absolute and that no new casinos would be permitted until agreed by Parliament. I have dealt with the point raised about vicinity, and we have talked about the issue relating to the Gambling Trust.
The hon. Gentleman asked me about casino premises licences for the future, and I am happy to say that local authorities will be obliged to run fair and open competitions for such licences and have regard to the provisions of the Gambling Act. It will be their responsibility to ensure that any arrangements that they enter into do not compromise their ability to exercise their statutory functions fairly and appropriately, and the Gambling Commission included advice in its guidance to licensing authorities to that effect. We also made that point when we consulted on the draft code of practice on competitions in February 2007, and the code of practice published today makes it clear that a licensing authority must ensure that any pre-existing contract arrangement and the relationship with any other person do not affect the manner in which they invite them to turn in applications.
Mr. Ellwood: The Minister has been helpful and gracious. On permitted areas and the licences that are available, will he consider the possibility of the ability to move licences from one permitted area to another?
Mr. Sutcliffe: Again, that is the proposal that has been put to us in correspondence from the BCA, to which I shall respond in due course. I shall make the hon. Gentleman aware of my views on whether such an ability is appropriate.
We should ensure that we act cautiously. Small and large casinos—this is not the hon. Gentleman’s point—are new to the UK and we want to ensure that we introduce them in a proper manner. I acknowledge the length of time that it has taken, but it is right to proceed on an evidence base, look with caution to where we are heading, and take into account the views of the industry, local government and local stakeholders. I shall write to members of the Committee on any points that I have not made, but with those assurances, I hope that the Committee will support the regulations and order.
Question put and agreed to.
That the Committee has considered the draft Categories of Casino Regulations 2008.

Draft gambling (geographical distribution of large and small casino premises licences) order 2008

That the Committee has considered the draft Gambling (Geographical Distribution of Large and Small Casino Premises Licences) Order 2008.—[Mr. Sutcliffe.]
Committee rose at twenty-four minutes to Six o’clock.

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