Examination of Witnesses (Questions 1720
- 1739)
MONDAY 1 MARCH 2004
RT HON
TESSA JOWELL
MP, RT HON
LORD MCINTOSH
OF HARINGEY
AND MR
ELLIOT GRANT
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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