The
Committee consisted of the following
Members:
Atkins,
Charlotte
(Staffordshire, Moorlands)
(Lab)
Cooper,
Rosie
(West Lancashire)
(Lab)
Dean,
Mrs. Janet
(Burton)
(Lab)
Ellwood,
Mr. Tobias
(Bournemouth, East)
(Con)
Fabricant,
Michael
(Lichfield)
(Con)
Flynn,
Paul
(Newport, West)
(Lab)
Foster,
Mr. Don
(Bath)
(LD)
Greenway,
Mr. John
(Ryedale)
(Con)
Harris,
Mr. Tom
(Glasgow, South)
(Lab)
Mates,
Mr. Michael
(East Hampshire)
(Con)
Meale,
Mr. Alan
(Mansfield)
(Lab)
Sanders,
Mr. Adrian
(Torbay)
(LD)
Sutcliffe,
Mr. Gerry
(Parliamentary Under-Secretary of State for
Culture, Media and
Sport)
Walter,
Mr. Robert
(North Dorset)
(Con)
Winnick,
Mr. David
(Walsall, North)
(Lab)
Wright,
David
(Telford) (Lab)
Joanna
Dodd, Committee Clerk
attended the Committee
First
Delegated Legislation
Committee
Monday 1
February
2010
[Mr.
Greg Pope in the
Chair]
Draft
Gambling Act 2005 (Operating Licence Conditions) (Amendment)
Regulations
2010
4.30
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 Gambling Act 2005
(Operating Licence Conditions) (Amendment) Regulations
2010.
Good
afternoon, Mr. Pope. It is a pleasure to serve under your
chairmanship. The purpose of the regulations is to increase the maximum
participation fee for prize gaming in bingo premises, and the maximum
amounts that may be paid in money prizes in respect of such gaming. The
regulations refer to a type of gaming where players are notified of the
prizes in advance, rather than where the winnings are made up from the
stakes of all the participants. Prize gaming forms an integral part of
the business model for the bingo industry. Many operators have
traditionally offered what is referred to as prize or
interval bingo under prize gaming rulessmaller,
faster games run in between sessions of main-stage
bingo.
The
industry generally regards prize or interval bingo as an essential
revenue stream, which can account for up to 20 per cent. of bingo sales
in some clubs. Members of the Committee will be aware that, last year
in June, the Government introduced the Gambling Act 2005 (Limits on
Prize Gaming) Regulations 2009. The regulations increased the limits on
participation fees and prize levels for prize gaming in a number of
different premises. It was the Governments original intention
that all venues entitled to offer prize gaming should benefit from an
uplift in stake and prize levels. However, prize gaming in relation to
bingo premises is regulated under a separate framework within the
Gambling Act 2005, with a separate parliamentary procedure and, as a
result, the 2009 regulations can be applied only to adult gaming
centres, family entertainment centres and fairs. Since June 2009, the
Government have held discussions with several stakeholders about
whether the new prize gaming limits ought to be applied to prize gaming
in bingo halls. Following those discussions, we have now concluded that
there are no reasons why the new limits should not be applicable to
bingo.
Throughout
our discussions, the Government have considered three key points:
first, whether the economic and social case for increasing prize gaming
limits in adult gaming centres, family entertainment centres and fairs
could be applied equally to the bingo industry; secondly, whether any
new limits could translate straight across into the bingo
industrys business model or needed to be refined in order to
meet the industrys needs; and
thirdly, whether an increase in prize gaming limits risks undermining
the character of bingo premises as softer gambling
environments.
Michael
Fabricant (Lichfield) (Con): I am merely being a
devils advocate, but what is the Ministers response to
those siren voices that say that the order would encourage excessive
gambling on the
machines?
Mr.
Sutcliffe: The hon. Gentleman will know that the whole
purpose of the Gambling Act was to put the consumer at the heart of the
situation, and the protection of vulnerable people is a key element of
that. As hon. Members will know, I am mindful that such issues are at
the forefront of peoples minds when we discuss gambling in the
House, and it is right and proper that we make sure that we do not do
anything that harms the situation. Most people accept that bingo is one
of the softer gambling
environments.
When
the Government reviewed stake and prize levels for category C and D
gaming machines in 2008, they included proposals for prize gaming. That
was in response to a number of compelling points made by stakeholders.
We could not ignore the fact that the issues raised in respect of prize
gaming and the needs of small businesses such as seaside arcades were
comparable to those raised in connection with category C and D
machines. In June 2009, following two public consultation exercises,
the Government duly increased the participation fee and prize levels
for prize gaming in certain venues
accordingly.
4.34
pm
Sitting
suspended for a Division in the
House.
4.46
pm
On
resuming
Mr.
Sutcliffe: I was making the point that many bingo premises
continue to feel the effects of a severe long-term economic downturn
across the industry. My Department has stepped in before, to help where
it can, most notably in February last year when we increased the number
of B3 gaming machines that bingo premises could offer, but many
operators still appear to be facing difficult trading conditions. Prize
bingo generates significant levels of income for many bingo clubs and
the Government want to see those businesses benefit in the same way as
adult gaming centres and family entertainment centres did in June 2009.
The regulations will enable bingo operators not only to maintain
important, long-established revenue streams but to develop and maximise
them to their fullest
potential.
The
current regulations governing prize gaming limits in bingo premises
operate on a slightly different basis from those in respect of other
types of premises. They specifically distinguish between premises where
games are played in the presence of children and those where they are
not, allowing operators to offer different maximum prizes accordingly
and reflecting the different levels of risk that each type of premises
poses in relation to the licensing objectives of the Act. At present,
bingo clubs can offer a maximum stake of 50p and a maximum prize of
£35 if children are permitted on the premises, and a maximum
prize of £50 if they are not.
Following
discussions with a number of stakeholders, the Government have reached
the conclusion that this difference in maximum prize levels between
games played in the presence of children and those that are not should
be preserved. To do otherwise would run the risk of undermining an
important revenue stream, especially for the many smaller and
medium-sized clubs. Therefore, the regulations we are debating today
will introduce a new maximum stake of £1 and a maximum prize of
£70 if those less than 18 years of age are permitted
on the premises when a game is being played; where under-18s are not
present, we propose a maximum prize of
£100.
The
Government must keep to the forefront of their mind the licensing
objectives and the risk that the new limits might pose to them. The
prize gaming limits implemented through the Gambling Act 2005 are
intended to reflect Parliaments view that prize gaming should
remain a low-risk gambling activity suited to those venues more
oriented towards the family or the wider community. The limits were
considered necessary to mitigate the effects of any significant
commercial exploitation of the prize gaming rules that might otherwise
undermine the nature and character of prize gaming as a low-level
gambling activity. Such concerns were paramount when the
Governments original proposals regarding prize gaming were
included in the two public consultation exercises on category C and
category D gaming machine limits carried out in 2008. None of the
responses to those consultations raised any issues that would suggest
problems with the similar proposals in the
regulations.
In
September 2009, I wrote to stakeholders informing them of the
Governments plans with regard to the introduction of new prize
gaming limits to bingo premises. Following further discussions, I am
confident that the new limits for bingo balance the needs of the
industry with the Governments commitment to consumer
protection. The regulations ensure that the bingo industry can, in
difficult economic times, secure established revenue streams and
develop further a product that is hugely popular with players while
still retaining the character of prize gaming originally intended
through the Gambling
Act.
I
am confident that the regulations do not prejudice the licensing
objectives and, in particular, the protection of children and the
vulnerable. The regulatory framework implemented by the Gambling Act
recognises that gambling is not a homogeneous activity but, rather,
covers a range of experiences reflected in the different types of
gambling environments available to customers. As a result, the
cornerstone of the Governments gambling policy is to regulate
gambling premises based on the levels of risk they pose to the
licensing objectives in the
Act.
Bingo
is a low-risk gambling activity and hon. Members here today will know
and appreciate the important social functions that bingo clubs perform
in their constituencies and in many local communities. The bingo
industry faces and continues to face significant economic pressures.
Given the valuable role bingo clubs play in many peoples lives,
the Government believe that it is right for the clubs to benefit from
an increase in prize gaming limits in a similar way that other types of
premises did in June last year. I am pleased to commend the regulations
to the Committee.
4.50
pm
Mr.
Tobias Ellwood (Bournemouth, East) (Con): I am delighted
to serve under your chairmanship, Mr. Pope. I am
grateful for the opportunity to discuss this statutory instrument. I am
surprised it has taken so long, considering the length of time the
Minister has had the information on his desk. Indeed, as he alluded,
the information could have been contained in a former
SI.
It
is fair to say that the balls have not fallen kindly for the bingo
industry under this Government. The industry has pleaded for a long
time for the removal of VAT. Having to pay VAT and gross profits tax
meant it was hit by a double whammy. When VAT was finally removed, the
Government increased gross profits tax to counter that change. We also
had the dilemma of the slot machine changes, which are still out of
sync with other forms of gambling available on the high
street.
The
bingo industry is important for Britain. We are a nation of gamblers,
and we cannot deny that. From the Conservative perspective, it is
important to have the correct regulations, no matter what form of
gambling. Gambling should be seen as a form of entertainment where
someone is likely to lose rather than a form of investment where
someone is likely to win. When people move from one category to
another, there must be a safety net to look after them, once they have
been identified.
Michael
Fabricant: My hon. Friend represents a seaside town. Does
he agree that places such as Blackpool also depend on the gambling
industry in the shape of successful bingo
halls?
Mr.
Ellwood: My hon. Friend makes a valid point. In places
such as Bournemouth and Blackpool, and other places across the nation,
we are seeing adult gaming centres and bingo halls being boarded up and
closed down simply because they have not received help during the
economic downturn. If we do not look after the soft gambling, we will
see people migrate to harder forms of gambling, and that cannot be good
for
Britain.
I
pay tribute to the bingo industry. More than 3 million
people play bingo in Britain. It is an important part of British life.
It brings together many people in the communitymany are
elderlywho might not venture out if a bingo operation closed
down. It keeps the mind sharp and provides a glue for bringing elderly
people together. Lack of Government support means that, out of 560
clubs, more than a hundred have closed in the past three years and
another hundred are currently under threat. Once we lose a bingo hall,
it disappears for good and turns into something else. We cannot then
bring it back overnight. Any help that the Government are able to
provide is welcome.
The Minister
has said this is an important statutory instrument designed to help the
industry, but he has alsoreading between the
linesacknowledged that this particular SI corrects last
years mistake. Normally, the stakes and prizes of machines are
unofficially linked with the stakes and prizes of prize gaming. When
the Government announced in September 2009 that they were increasing
the stakes and prizes for amusement arcades, they thought they were
automatically increasing the stakes and prizes for prize gaming in
bingo clubs. However, that was not the case, so here we are today
playing catch-up and having to make the smallest of changes to bingo
regulations.
As the
Minister said, the Government proposal is clear. It will increase the
maximum participation fee for prize-gaming in bingo premises from 50p
to £1 and increase limits on prizes from games within bingo
premises from £50 to £100 on adult premises and from
£35 to £70 on all other clubs. However, keeping the small
error in mind and packing it together with other issues that have
cropped up, recognised by the bingo industry, one has to ask,
What is the relationship between the DCMS and the
Treasury? The measures should have been tied in with
consultations on category C and D machines. We had the fiasco over the
VAT and gross profits tax issue, to which I alluded before, and we are
now entering another confusing chapter, which is whether to replace
amusement machine licence duty with another gross profits tax. Again,
we are not clear what the DCMS is trying to achieve. It seems that
things are led not by that Department, but by the
Treasury.
I
suggest that the Minister takes the Exchequer Secretary to the Treasury
on a date, perhaps even to a bingo hall, either in Portsmouth or
Bradford, South. If that cannot be arranged, I am happy to invite them
down to Bournemouth, where they can understand the impact of the delays
in the creation of a sensible policy and the extra taxation that bingo
is being hit with during these difficult times.
The Gambling
Act 2005, to which the Minister referred, provided a huge change in the
landscape of British gambling, but it raised more questions than it
answered. I understandI stand to be corrected if this is not
exactly accuratethat more amendments have been made to the 2005
Act than any other parliamentary Act, two thirds of which were made
even before the Act was signed by Her Majesty the Queen. There is
urgent need for reform in UK gambling laws, and the DCMS and the
Treasury have treated gambling with an arms length approach.
There is an urgent requirement to reform the horse racing levy, and
immediate action is needed to stem the tide of internet gambling
companies moving abroad. We also have the fiasco of the roll-out of the
16 casinosnot one brick has yet been built. As my hon. Friend
mentioned, we have a shadow hanging over the seaside arcades, and we
also have the problems facing the bingo industry. However, all we are
getting from this Government is consultation after consultation.
Finally, we have the decision that we are making today, which of course
is welcome. However, it is the tiniest of changes to the world of
gambling, a mere tweak to bingo regulation and the smallest adjustment
to gambling, when the customer, the industry and the gambling
watchdogs, which my hon. Friend the Member for Ryedale will no
doubthe has gone. I was expecting my hon. Friend, who speaks so
well on these issues and has done much work on rigging, to make some
comments on the
issue.