Joint Committee on the Draft Gambling Bill

Joint Committee on the Draft Gambling Bill First Report

1 Introduction

1. Reform of the United Kingdom's gambling laws has been a long time in the planning. From the Rothschild Commission of 1978[1], through the Budd Report of 2001[2], and the Department for Culture, Media and Sport's response A Safe Bet for Success[3], the Government has sought to strike a balance between developing gambling as a legitimate leisure pursuit and mitigating its potential negative consequences. It recently summed up its belief in the following terms: "gambling should be seen as part of the mainstream leisure industry, offering fun and attractive products in a regulated environment." [4]

2. The motivation for a change in the law has come less from consumer demand than from developments in technology, and defects in the existing legislation.[5] The existing law is inflexible and requires primary legislation for amendments necessary to respond to technological and market changes. For this reason, the House of Lords Delegated Powers and Regulatory Reform Committee recently described it as being "in a mess", having been amended to the point of confusion.[6] This is, therefore, a timely and important piece of legislation.

3. The Government announced in July 2003 that it planned to submit the draft Gambling Bill to pre-legislative scrutiny. Our Committee was duly established "to consider and report on any clauses of a draft Gambling Bill presented to both Houses by a Minister of the Crown."[7]

The Committee's inquiry

4. From the outset, we recognised that it was vital to ensure that all those with an interest in the draft Bill had an opportunity to contribute to the inquiry. Following open calls for written evidence, we received over 170 submissions, and held 17 oral evidence sessions. The range of witnesses at these sessions was drawn deliberately widely - from Christian groups, the widest possible range of industry associations and academics, to a trade union. There was also an international element to these proceedings, with witnesses from the United States of America and Australia, as well as the United Kingdom.

5. We are publishing in additional volumes of this Report the memoranda we received, and the transcripts of the oral evidence (which were produced by Gurney's shorthand writers and the text corrected as appropriate by the witnesses). The full list of memoranda and witnesses appears on pages 294 to 302. Separate arrangements will be made by the Department for Culture, Media and Sport for the responses to its own consultation, which concluded in the final stages of our inquiry.

6. We took evidence from four Ministers - the Rt Hon the Lord McIntosh of Haringey, Parliamentary Under-Secretary, Department for Culture, Media and Sport, John Healey MP, Economic Secretary to the Treasury, Yvette Cooper MP, Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister, and the Secretary of State for Culture, Media and Sport, the Rt Hon Tessa Jowell MP.

7. We are very grateful to all those who submitted oral or written evidence. We would also like to express our thanks to our four Specialist Advisers, Paul Bellringer OBE, former Chief Executive of GamCare, Professor Peter Collins, Professor of Public Policy Studies, University of Salford, Bill Galston OBE, former Chief Inspector of the Gaming Board, and Professor David Miers, Professor of Law and Head of Cardiff Law School, whose expertise and experience have been invaluable.

8. At an early stage of the inquiry, the Committee decided to take the opportunity to travel in the United Kingdom, to discuss the draft Bill's potential impact with a wider range of potential interlocutors than would be possible in Westminster, and to learn more about the existing industry. We therefore visited Great Yarmouth on 1 December 2003 and Blackpool on 8 and 9 December 2003. The Committee also visited various sites in London - including the Grosvenor Victoria Casino, the offices of Betfair for a presentation by the Interactive Gaming, Gambling and Betting Association, the headquarters of GamCare to meet those affected by problem gambling, a licensed betting office and the National Lottery Commission. A list of these visits is produced as Annex 2 to this Report. We would like to thank all those who facilitated the visits and took the time to talk to us.

9. We also presented a case to the Leaders of both Houses of Parliament to amend our original orders of reference to permit overseas travel. Motions to this effect were subsequently agreed by both Houses in October 2003[8]. Following this, the Committee agreed to bid for funds from the Liaison Committee in the Commons and the relevant authorities in the House of Lords, to conduct two overseas visits.

10. A delegation of two members went to Australia for a week in February to see at first hand the implications of gambling deregulation there. The proliferation of video gaming machines ('pokies') in certain states has been highly controversial, and the delegation was able to meet prominent figures from both sides of the argument. This was also an opportunity to discuss remote gambling issues, and the process for the licensing of casinos. The Committee also travelled to France for two days, to Enghien les Bains and Le Touquet, to discuss the links between casino development and regeneration in seaside and semi-urban settings. Further details of both of these visits are, again, annexed to this Report (Annex 2).

11. In late 2003 and early 2004, the Commons Culture, Media and Sport Select Committee conducted an inquiry into National Lottery reform, which had some relevance to our work. That Committee's Report was published as our own inquiry was drawing to a close. We have drawn on evidence submitted to the inquiry where appropriate.[9]

The publication of the draft Bill

12. For pre-legislative scrutiny of this type, we would have expected the full text of the draft Bill to be available either before, or shortly after, the Committee was established. However this was not the case, and DCMS's piecemeal publication schedule has caused us some difficulty.

13. 50 clauses of the draft Bill were published shortly before we were established, in July 2003. These chiefly concerned the new licensing regime, and we were warned that they were subject to change. The introduction to that paper, signed by the Secretary of State, referred to the "whole Bill [being] presented for scrutiny in the autumn".[10]

14. Further clauses and schedules, making 242 clauses and 9 schedules in all, were published in November 2003.[11] This has since risen to 268 clauses and 10 schedules following the publication of additional material in February 2004, on gambling in alcohol licensed-premises, gambling in members' clubs, commercial clubs and miners' welfare institutes, a new offence of cheating and the introduction of powers to void unfair bets.[12] Another three clauses, on chain-gift schemes, credit and inducements, and credit, were published on 12 March 2004.[13]

15. The delayed publication of the bulk of the draft Bill had a knock-on effect on the submission of written evidence both to ourselves and as part of the wider government consultation exercise. We are grateful to those who submitted written evidence to us for complying with a very tight timetable. The Government's own consultation period ended on 28 February 2004, in the same week we finished taking oral evidence and started considering our Report. It has not, therefore, been possible to incorporate the bulk of the comments made to the Department in this Report.

16. At the time of agreement of this Report, clauses had not yet been issued on the licensing and regulation of the National Lottery; advertising of gambling; travelling showmen's pleasure fairs; licensing of vessels and vehicles; the Commission's powers to initiate prosecutions and share information through statutory 'gateways'; transitional provisions; and provisions on the Scottish Executive's powers in relation to the licensing of premises in Scotland, and for other arrangements in Scotland.

17. We note that draft Bills are relatively low in the priority list for Parliamentary Counsel, the Government lawyers who are responsible for Bill drafting. We commend the Department's efforts to keep us informed about the progress of publication, and its efforts to make policy information available in advance of the draft Bill clauses. However, our work has been hampered by the lack of key clauses until late in our lifetime, and there are some areas in which we have not been able to conduct any scrutiny whatsoever. Many of those who submitted written and oral evidence to us noted that this was unsatisfactory.[14]

18. Given the points made above, and the deadlines we were working under, we have not been able to examine the draft Bill in as much detail as we would have liked. In particular, we did not examine the Government's proposals on chain-gift schemes, which were published on 12 March, too late for us to request specific submissions.

19. This situation was exacerbated by the extent to which the detail of the proposed regulatory regime is to be included in secondary legislation, Codes of Practice and licence conditions to be issued by the regulator, which we deal with later in this Report.

20. We recommend that, in future, the Government should ensure that the full text of draft Bills is available to pre-legislative scrutiny committees in good time before they are asked to report. We further recommend that the clauses of this draft Bill yet to be published are, at the very least, referred to an appropriate Select Committee for consideration, and that the proposals relating to other parts of the United Kingdom are considered either by the appropriate devolved parliamentary body or territorial affairs Committee in the House of Commons, depending on whether they cover devolved or reserved matters.

21. We believe that there are a number of key questions yet to be answered by the Government concerning the draft Bill. The most important of these, we would suggest, is the threshold at which casino developments are considered by Regional Planning Bodies and are obliged to contribute to regeneration. We gather that a decision on this matter is due to be made by the Department for Culture, Media and Sport (DCMS) and the Office of the Deputy Prime Minister (ODPM) before the summer of 2004.[15] In this context there is a strong case for putting motions before both Houses to renominate this Committee in order for us to make a further Report on those matters. We urge the Government to consider tabling motions to reappoint this Committee so that we can finish the task we have started.

The Committee's approach to pre-legislative scrutiny

22. Pre-legislative scrutiny committees, whether ad hoc or departmental select committees to which draft Bills have been referred, have adopted different approaches to the task. These have fallen in a continuum between considering the policy behind the proposed legislation and examining the actual wording of the draft clauses. We sought to adopt elements of best practice from a number of our predecessors.

23. The Financial Services and Markets draft Bill Joint Committee[16] set itself a particular remit, and concentrated its inquiry on six specific issues. Like us, they asked a Bill team member to be present at every session, and put together panels of witnesses on particular issues who could respond to points not just from the Committee, but also from other witnesses. Unlike us, they had the benefit of a number of consultation documents issued by the Financial Services Authority (which had already been established) regarding the content of codes of practice and delegated legislation.

24. The Joint Committee on the Food Standards draft Bill[17] decided that it would not debate or question the basic principles underlying the legislation but made the following comments about scope: "we were also clear that we did not wish to examine the draft Bill clause by clause [...] We saw our role as examining as much what was not in the proposals as what was in them[…]."[18]

25. The Joint Committee on the draft Communications Bill[19] came to a similar conclusion, agreeing that its focus should mainly be on the proposed provisions of the draft Bill, "from their wording to their likely practical effect".[20]

26. We chose to look both at the policy behind the draft Bill, particularly those aspects which appeared to be confused and contradictory, and the wording of the draft clauses. Our aims were, first to test the clarity of DCMS's policy, second, to measure the draft Bill against it and, third, to assess the potential impact of the draft Bill in social and economic terms. Much of our questioning in evidence sessions concentrated on the broad themes of the draft Bill. However, we also recorded many of the specific comments we received on the clauses of the Bill in a table. This schedule was then put to the Department for its response to each comment raised.[21]

27. This Schedule of Detailed Comments on the draft Bill, including the Department's responses, is published in this volume as Annex 1. We refer to the points made in it throughout this Report. This proved to be an extremely useful exercise, and we are very grateful to the DCMS for responding to this substantial document so quickly and in such detail.

28. Two other factors influenced our approach: we were told by Lord McIntosh, Parliamentary Under-Secretary, DCMS, that it would be "helpful" if we were to consider the potential contents of the various Codes of Practice mentioned in the draft Bill,[22] and we were specifically asked to look at the policy relating to betting exchanges.[23]

29. The Committee also sought to assess the effectiveness of the balance struck by the draft Bill in a number of areas - including the general issues and safeguards contained within it.[24] We were particularly minded, throughout the inquiry, to examine the social implications of the draft Bill, and its potential impact on problem gambling.

Key issues

30. While we received a small number of submissions expressing strong concerns about deregulation in principle,[25] most of the evidence we received accepted gambling as a legitimate leisure pursuit, but one which needs to be subject to control because of its potential negative consequences.

31. The Committee therefore identified the key issues relating to the draft Bill and through a press release invited written evidence on the following:

the proposed functions, duties and powers of the Gambling Commission;

transitional arrangements;

licensing - the potential increase in the number of licensed individuals and the role of local authorities in premises licensing;

implications of the increase in size, functions (for example: social responsibility, powers of entry to Members' clubs) and cost of the Commission;

whether the Commission should regulate the National Lottery and spread betting;

the content of the various Codes of Practice referred to in the draft Bill and the associated consultation rights;

future proofing - will the proposals in the draft Bill create a regulatory structure that is robust over time?
protection of children and vulnerable persons;

provisions of the draft Bill relating to social protection;
Gambling Industry Charitable Trust (now the Responsibility in Gambling Trust) - its funding, role and independence; and the extent of existing research;

the proposed sectoral framework for gambling regulation;

casinos - the potential for US-style resort casinos, issues concerning their ability to regenerate rundown areas and their impact on other areas of the gambling industry;

betting exchanges - the ability to regulate them effectively and their impact on the rest of the betting industry, particularly bookmakers;
remote gambling - the ability to regulate this effectively, given the increased accessibility of gambling on the internet and its impact on consumers;
gaming machines and amusement with prizes (AWP) machines - the impact of the changes in regulation on businesses providing ambient gambling facilities, the potential exposure of children to gambling, the appropriate licensing regime, maximum stakes and prize values;