Joint Committee on the Draft Gambling Bill Minutes of Evidence

Examination of Witnesses (Questions 1720 - 1739)



  Q1720  Dr Pugh: My point is, it would put them in a particularly exposed position. Speaking from where I am at the moment, we have a situation in Merseyside where the same Development Agency is probably not going to fund a number of projects which it was thought it was going to be funding, and we have the possibility of forfeiting up to £60 to £80 million-worth of Objective 1 money. In that environment, to consider smoothing the way for American operators in Blackpool is going to make their role somewhat politically contentious, is it not?

  Lord McIntosh of Haringey: I do not think it is a matter on which we can express an opinion. I do not think it is the responsibility of my Department or those involved in gambling regulation.

  Q1721  Dr Pugh: But you concede it will be contentious?

  Lord McIntosh of Haringey: I do not think I should even express that opinion.

  Dr Pugh: Right.

  Q1722  Lord Mancroft: The Committee has heard quite a lot of evidence which has been critical of the 10,000 square foot threshold for unlimited casino machines. Do you accept a higher threshold, with the requirement for these larger casinos to be approved by the regional planning body and to contribute to regional development, would not be a better way to prevent the proliferation of machines and ensure the massive investment available is harnessed for urban regeneration?

  Lord McIntosh of Haringey: I do not think our minds are completely closed to that suggestion, no. That is what we are talking to the ODPM about. They have to have a definition of what is of regional significance from their point of view and we have to have a definition of what is a large casino from our point of view, and I think I said in response to an earlier question that there would be no harm at all if those two definitions were harmonised.

  Q1723  Chairman: It is one of the areas where you, very helpfully, have not changed the policy you announced on 7 August.

  Lord McIntosh of Haringey: I have not. I have expressed it in very cautious terms because I am not changing the rules.

  Chairman: Thank you. Carry on please.

  Q1724  Lord Mancroft: Is there a case for requiring smaller casinos to contribute to local development schemes as opposed to just the larger casinos?

  Lord McIntosh of Haringey: I think anybody who wanted to get contributions from the private sector for the public good ought to be given support. Whether that means an amendment to the Bill, I rather doubt.

  Q1725  Lord Mancroft: Looking at it from a slightly different point of view, is a 5,000 square foot threshold necessary to prevent the proliferation of small casinos, or could this be achieved through a machine to table ratio by itself?

  Lord McIntosh of Haringey: What we have proposed is the two together—a combination of square footage restriction and a machine to table ratio—and that was the basis on which we consulted and on the whole that was reasonably well received considering the range of different positions people were coming from.

  Q1726  Chairman: The Office of Fair Trading sent me a letter arguing that 5,000 square feet as opposed to the 2,000 suggested by Budd was somehow anti-competitive. Do you have a view on that?

  Lord McIntosh of Haringey: I saw a copy of that letter.

  Q1727  Chairman: I sent it to you.

  Lord McIntosh of Haringey: You did. Thank you very much!

  Q1728  Chairman: I did not ask for the letter to be sent.

  Lord McIntosh of Haringey: I understand that. I was surprised. I would have thought it was within the competence of Government to say, "We wish for social reasons to restrict the proliferation of small casinos on the high street", and that is what we have done, and I still think that is the case.

  Q1729  Chairman: I have to say to you I was not surprised, but people in the racing industry will know why I was not surprised.

  Tessa Jowell: Said with feeling, Chairman.

  Chairman: Yes. Thank you for that.

  Q1730  Lord Faulkner of Worcester: Going back to small casinos, and I apologise for labouring this point, if you have read the evidence from some of our witnesses, particularly those with a Blackpool base, we were told very clearly the prospect of there being a regeneration of seaside resorts led by casino development would disappear if they were not given, as it were, a fast track in terms of development in the North West? In other words, they were saying if such developments went ahead simultaneously in Manchester or Liverpool, there would be no prospect of Blackpool benefiting from that.

  Lord McIntosh of Haringey: That is their judgment, is it not, and similarly it is the judgment of casino operators. The casino operators whom I saw in the United States said, "We are free marketers, we do not believe in restrictions of this kind, we will go for it if we think it is going to be profitable regardless of the rules." These are not judgments for me to take or for the Government to take.

  Q1731  Lord Faulkner of Worcester: But you do appreciate that some expectations have been raised in Blackpool and elsewhere that this Bill provides a route to regeneration which, by the nature of your answer this afternoon, you are effectively closing off?

  Lord McIntosh of Haringey: No, I do not think any answers I have given or the Secretary of State has given have closed off any routes. We have a proposed regime on which we consulted in August, on which we have had the results of consultation and I do not think they have involved any significant change in policy.

  Q1732  Lord Brooke of Sutton Mandeville: Still on the same subject, if the absence of limits for medium and large casinos, that is upwards from 10,000 square feet, were to kill the enthusiasm among large resort casinos for investment so there was no significant regeneration, would you regard that as a set-back for the nation even if it were not a set-back for the Bill?

  Lord McIntosh of Haringey: If I were in the Chamber, Lord Brooke, I would make a debating point and say that was a hypothetical question. I do not think I accept the premise. I think these are matters where the market will make a determination and it is in our interest to ensure we have a gambling regime and in particular a casino regime which is consistent with our licensing objectives and yet provides opportunities for operators who wish to enter the market to do so.

  Q1733  Lord Brooke of Sutton Mandeville: Do you accept there is a strong argument, Secretary of State, for excluding betting and bingo from casinos for a period of, say, five years, in order to reduce the effect of creating a much harder gambling environment and blurring the distinction between hard and soft gambling?

  Lord McIntosh of Haringey: That smacks of protectionism to me. It seems to me if people want to go to casinos and if they want bingo as an ancillary, or other forms of gambling, it is not necessary for the state to intervene. That is why we have not proposed it. I am willing to listen to arguments on that score.

  Q1734  Lord Brooke of Sutton Mandeville: Given the manner in which bingo is currently conducted, would you say there had actually been a demand for bingo to go into casinos?

  Lord McIntosh of Haringey: I have no evidence on that at all.

  Q1735  Chairman: Do you have concerns, on this bingo issue, that the ability to include bingo within a casino, given the current likely planning regime of Class D use, may lead to a number of bingo clubs effectively being converted into casinos, exposing the bingo club members to gaming machines that they do not seek in all that many numbers in their bingo clubs now?

  Lord McIntosh of Haringey: Yes, I saw that suggested in the Henley Centre Report which backed the Commission and which you have seen as well and which you have quoted from. Since I have only seen the summary of the Report I do not know the argument behind it and I do not know whether it has any basis in analysis. I do not have any evidence on that point.

  Q1736  Chairman: But it would, if it were true, mean that a number of quite large casinos could be established in existing gambling premises?

  Lord McIntosh of Haringey: Yes, it would, and that might mean, if people wanted only bingo, they might have to go somewhere else or set up another bingo club, or it might mean all sorts of things. I think we are in danger of speculation about market developments which we do not have enough information to speculate on.

  Q1737  Chairman: I understand your point and you said in one of your earlier answers you have no great view on whether or not US-based operators would want to invest here, but is not the other side of that coin that the regulatory environment you create with this Bill will more or less attract them more or less?

  Lord McIntosh of Haringey: That is a very cautious question, Mr Chairman. The view has been expressed to me by large casino operators in the United States that the regulatory regime which we are proposing in this Bill will be attractive to investors from the United States. But I have consistently pointed out to those who have said it that there are two other elements which are not comprised in this Bill. One of them is the taxation regime, which we do not know yet, and the other is the location regime, which is not entirely the subject-matter of this Bill. Any investor ought to take into account all three of those elements in making an investment decision.

  Chairman: Can we move on to gaming machines?

  Q1738  Jeff Ennis: Can you explain to the Committee how Fixed Odds Betting Terminals will be treated under the new regime? Will they be deemed to be Category B machines and, therefore, available to all venues that can install this category of machine, or will their proliferation be restricted by according them a special category and restricting them to particular types of venue?

  Tessa Jowell: The Fixed Odds Betting machines will be treated as gaming machines under the Bill and our intention has been that they should be classified as Category B machines and therefore available in adult gaming centres, bingo clubs and betting traps as well as in betting shops. However, at our request, the Association of British Bookmakers is commissioning research into the effect of Fixed Odds Betting machines, the effect on problem gambling, and we will make a final decision on this one when the research is completed. We expect the research to be available this year while the Bill is still before the House. This is one of the areas I know the Committee has received many representations about and I am very keen to take your views and your conclusions into account before making a final decision.

  Q1739  Jeff Ennis: That is very clear, Chairman, as to exactly where we are with FOBTs. Turning to another question, do you intend to review the provisions relating to prizes for redemption machines, given the evidence we have received on this issue, particularly from BACTA?

  Lord McIntosh of Haringey: This is an issue which was of course considered by Budd, and Budd said there could be a risk of excessive play for children. Although we did not say children should not be allowed to play these machines, we did say that the minimum stake should be reduced to 10p from the present 30p and the maximum stake should stay at £5. We think it is important that harmful gambling and children should not mix and we should draw a distinction between Category D machines and Category A, B and C machines which are only for adults.

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