Examination of Witnesses (Questions 180-199)
PETER DEAN
CBE, TOM KAVANAGH
CBE, GERALDINE MENEAUD-LISSENBURG
AND ELLIOT
GRANT
18 DECEMBER 2003
Q180 Chairman: It is a red hot potato.
Mr Dean: It is some time since
I visited one of these companies but when I did it struck me that
the activities are identical in practice. At the company which
I visited they devoted one floor to the financial transactions
and another to sports betting, but the nature of the activity
is very similar. The line taken is that somehow or other one must
distinguish between sports betting on the one hand and a financial
transaction on the other. I do not know that one can carry it
much further forward at this stage than to say that that is the
intention and that the legislation should reflect that.
Chairman: The next area we want to move
on to is your relationship with other bodies.
Q181 Mr Meale: The government has stated
that it is only right that sports regulators take the leading
role in controlling the betting behaviour of participants in their
sport. It is also suggested, quite rightly in my opinion, that
the Bill complements the measures that they introduce. What we
are interested in is what additional assistance do you envisage
the Commission being able to give to sport regulators to enable
them to investigate and respond to cases of improper interference
on the outcome of sporting events and, in particular, we are very
interested in those either caused or detected by betting exchanges.
Mr Dean: We have yet to see the
draft clauses on the voiding of bets and on gateways to facilitate
the exchanges so we cannot comment but, in principle, what we
would be keen to see is that the Commission is able to exchange
information with whatever bodies are necessary to ensure that
gambling is conducted in a fair, transparent manner. If we uncover
something in the course of investigating a bookmaker which repercusses
upon a sport, we would be keen to ensure that information was
capable of being exchanged to enable that to be put right. I do
not think we can go much further.
Q182 Mr Meale: When we had a session
with the Minister on Tuesday, he was very muddled over what could
be done particularly on what you could challenge and what you
could stop on settled bets. As we live in an age of new technology
which is changing rapidly, we are very keen to be sure that we
give the best possible help to stop crime or people unfairly taking
advantage of these new technologies. One of the things which the
Minister said was, "It is at the close of day." You
know it is a 24 hour day which never closes and technology accesses
that 24 hour clock. I do not think you can act like a Stock Exchange.
We are very keen that we enable the measures to counteract this.
On betting exchanges, it is not just about it happening because
of these; in many cases, they are detecting the crime and are
being helpful. We need help from you and possibly some suggestions
about what we need to put in the Bill in this sector.
Mr Dean: Can we think about and
drop you a line?
Q183 Chairman: Yes. I did have a brief
exchange with the Minister about this issue on Tuesday which I
can draw to your attention. He seems to be suggesting that he
is expecting that you will create a regulatory structure for betting
exchanges. He also promised to write to me about whether or not
that structure might take a different view of licensed bookmakers
using exchanges as opposed to ordinary punters. I would draw that
to your attention.
Mr Dean: That would be very helpful.
Q184 Lord Faulkner of Worcester: When
we visited a licensed betting office last week, we were told that
it is now possible to bet on single sporting events such as a
single football match, the score, the first score, the final score,
the half-time score and so on. We were told that the position
had changed from a few years ago when it was impossible to bet
on as few as one match, mainly because of the bribery scandals
in the sixties and seventies. Can I ask if you were consulted
about the change which now allows betting to take place on single
matches compared with a minimum of, I think, three or four?
Mr Dean: No, we were not but I
would not have expected us to be because the Gaming Board has
no responsibility for the regulation of betting.
Q185 Lord Faulkner of Worcester: Is that
something which the Gambling Commission could or should take an
interest in?
Mr Dean: I am sure it would take
an interest, yes.
Q186 Lord Brooke of Sutton Mandeville: In
this era of political correctness, I should perhaps err in the
direction of discretion and declare that my father was Home Secretary
at the time of the 1963 Act. Are you happy with the settlement
that has been reached over FOBTs?
Mr Dean: I certainly think it
is the best settlement that could have been achieved in the circumstances
and is highly desirable and in the public interest.
Q187 Lord Brooke of Sutton Mandeville: What
was the major factor which encouraged you to reach a settlement
rather than take the case to court?
Mr Dean: The major factor was
the opportunity which the settlement gave of bringing an end to
the proliferation of fixed odds betting machines on the high street
without any control whatsoever on size of stake, size of prize,
numbers of machines, types of games played, speed of play. The
settlement has put controls on all those matters. In the absence
of the settlement, the alternative would be to soldier on with
the case which the Gaming Board was bringing to determine the
legal status of these machines for a considerable time—it
could easily have taken 18 months to achieve finality—without
any certainty of outcome. The case by nature was uncertain. That
would not have been in the public interest. We are confident that
it was by far the best outcome that could have been expected.
It remains undeniably unsatisfactory that the legal status of
these machines under current law is unresolved, but that is a
necessary price to pay for the settlement and new legislation
will sort it out.
Q188 Chairman: How is this code going
to be enforced? In the fullness of time, is it your intention
or your expectation that the key elements of the code in relation
to the numbers of machines would become part of betting office
licence conditions?
Mr Dean: On the second point,
this is something which the new legislation, probably statutory
instruments, will cater for. On the wider point of policing, we
see it as being so strongly in the interests of the bookmakers
to ensure that this code is observed that they will have every
incentive to self-police. Furthermore, there will be no shortage
of whistle blowers to draw attention to any breaches. You will
have an opportunity to put these matters to the bookmakers later
on but I have no doubts about that.
Q189 Lord Brooke of Sutton Mandeville: The
Secretary of State has indicated that FOBTs are going to be "on
probation". What does that mean?
Mr Dean: I would have to say that
that is a question for the Secretary of State to answer.
Q190 Lord Brooke of Sutton Mandeville: I
will ask the question in a slightly different way. It goes back
to some degree to the interest I declared at the beginning. I
do not intend this to be an indelicate question but what is the
nature of the relationship which you have with the Minister on
issues like this?
Mr Dean: Perfectly good and straightforward.
We are not at odds in any way. If I could perhaps rashly speculate
what that might mean, it might very well mean that if, contrary
to my expectation, the bookmakers were found to be in flagrant
breach of the code, that might affect the nature of their entitlement
under the new legislation. That is a question that is improper
for me to answer, but it makes sense of the answer which was given.
Q191 Lord Brooke of Sutton Mandeville: I
think my indelicate question was not so much on quality of relationship
as what form it took in terms of the whole range of issues.
Mr Dean: The relationship is in
two parts. So far as continuing activities are concerned, leaving
aside the whole matter of the new Bill, the relationship is that
the Gaming Board regulates and the department is the policy maker.
It is as simple as that. In terms of the practicality, we have
a very good working relationship with the department. There are
regular meetings and there is no friction at all that I am aware
of. The roles are separate. When it comes to the matter of the
creation of a new Bill, the relationship is necessarily rather
more complex because we, the Board and the putative Commission,
get drawn into matters of a quasi-policy nature. Equally, on the
other side of the coin, the department gets drawn into matters
of a quasi-regulatory nature, because one is talking about a change
in the nature of regulation. There is a whole elaborate process
of consultation within the industry. It is a more complex relationship
but it remains a perfectly good working relationship and one where
I am not aware of any particular friction. That is not to say
that we agree with the department on everything. We do not. Some
areas of disagreement have already come up but they are catered
for in a perfectly sensible and civilised way.
Q192 Lord Brooke of Sutton Mandeville: Would
it be fair to assume that in reaching a decision about not proceeding
with the case that emerged in part out of conversations with the
department?
Mr Dean: If the implication of
the question is that we were in some way leant on—
Q193 Lord Brooke of Sutton Mandeville: That
is not the implication.
Mr Dean: Yes, clearly it was a
tripartite arrangement in the sense that the bookmakers saw it
as being in their interests to negotiate with the department in
the first place as to what the regime should be under the new
legislation because that concerned their future very intimately.
The Board was not a party to that. That having been sorted out,
of course, the bookmakers for their part stipulated quite clearly
that they were not prepared to go ahead with that unless there
was an end to the litigation. We in turn had made it clear to
the department that as a matter of principle, if an accommodation
could be reached whereby the bookmakers would agree now to conform
to a regime which they were going to be able to enjoy under the
new dispensation, that is the situation in which we would contemplate
settling. It seemed to us that that was absolutely the right thing
in the public interest for the reasons which have already been
stated.
Q194 Lord Brooke of Sutton Mandeville: On
the agreement that betting shops would be restricted to a maximum
of four terminals or AWPs per shop, what would you expect to be
the outcome in terms of their use of their discretion?
Mr Dean: I cannot answer that.
That will depend upon market circumstances in each particular
betting shop.
Q195 Baroness Golding: Is there a danger
that gaming arcades could apply for bookmakers' licences to enable
them to have FOBTs in their arcades?
Mr Dean: Anybody can apply for
a bookmakers' licence right now. What is abundantly clear is that
they will not be able to have more than four of these machines.
I would very much doubt that that in itself provides a sensible
commercial incentive for them to do that.
Mr Kavanagh: To be crystal clear,
they could not apply to have four of these FOBTs in their arcade.
They could apply for a separate licence for different premises
as a bookmakers' office and in that put four FOBTs or whatever
they want but there is no question that they would be able to
put these machines into an arcade which was full of AWPs, for
instance.
Q196 Lord Faulkner of Worcester: On the
same subject of amusement arcades and gaming machines, I think
it would be fair comment that your paragraphs nine, ten and eleven
are an indication that you are quite unhappy with what the government
has decided to do with the Budd recommendations in this area.
You are saying that category D machines should be available in
family entertainment centres but remain uncomfortable about children
having casual access to gambling in other miscellaneous premises.
Do you also believe that family entertainment centres should be
confined to category D machines and not have adult areas?
Mr Dean: No, that is not the purpose
of these paragraphs. These paragraphs are addressed solely to
the matter of the appearance of these machines in what are known
in the trade as single site premises, fish and chip shops and
so forth. The point of principle is that, in principle, gambling
should be confined to premises which are wholly or mainly dedicated
to that purpose.
Q197 Chairman: The destination policy.
Mr Dean: That is right. There
are notable exceptions and there are some exceptions which have
been current for ages. They are catered for. We have drawn attention
to this particular area simply because of the practical difficulty
of regulation, where these machines abound in premises. We found,
as a matter of practice, that machines do appear in premises for
which there is no permit in the first place and, secondly, the
wrong sorts of machines appear in places where they are allowed.
It is very difficult to regulate.
Q198 Lord Faulkner of Worcester: You
do not have a regulatory responsibility in this area but you have
obviously looked at the subject and come to a view. Are you satisfied
that the amusement arcades which have category D machines and
adult areas are policing adequately the division between the two?
Mr Dean: I do not think we can
express a view one way or the other because we do not have a responsibility
in that area. I have to be agnostic on that.
Mr Kavanagh: In their case, it
is a particular condition of their permit that they do so and
there is an obvious sanction that can be taken against them if
evidence arises that they are allowing children into these areas.
I do not think we have any evidence to suggest that they are not
policing them well.
Q199 Mr Wright: On the question of fixed
odds betting terminals, are you happy in as much as the industry
is very good at self-regulation rather than the need for primary
legislation to control this type of thing?
Mr Dean: I am not taking a general
view about the industry being good at self-regulation. In this
instance, the incentive for the industry to behave itself and
observe the code is very good indeed.
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