Examination of Witnesses (Questions 20
- 39)
THURSDAY 1 JULY 2004
RT HON
LORD MCINTOSH
OF HARINGEY,
MR ELLIOT
GRANT AND
MR GREIG
CHALMERS
Q20 Mr Meale: You said to Lord Donoughue
and Lord Wade "We do not want to determine" but it seems
that all the restrictions and numbers you are laying down are
doing exactly the reverse. For instance, by restricting Category
A machines to regional casinos, are you not in effect creating
a monopoly for foreign investors/operators to come in?
Lord McIntosh of Haringey: No,
I do not think so at all. I cannot see where the word "foreign"
appears. I cannot see what conceivable reason there should be
why British companies should not be able to develop large scale
casino activities, including regional casinos, if they want to,
and they can do so either on their own or in partnership with
anybody else. They have access to capital markets, they have the
expertise. If they need expertise in management, they can hire
expertise in management. There is no monopoly here. The principle
behind the restriction of Category A machines—and I do not
mind saying it as often as I get an opportunity—is the protection
of vulnerable people, and the way in which we are approaching
protection in an area where these machines are completely new
to this country, where nobody has any experience of them in this
country, is to limit the accessibility to them. That is our motivation.
Q21 Mr Meale: If they have the expertise,
they know how to operate, why then restrict it to regional casino
areas rather than those clever, decent, known operators that are
there already?
Lord McIntosh of Haringey: But
the clever, decent, known operators have exactly the same opportunity.
Indeed, if they are clever and decent and known, they have a better
opportunity to operate in the areas which the regional authorities
decide are suitable.
Q22 Mr Meale: Minister you also said
you did not want to create scarcity, but by restricting to region
are you not making it exclusive? In that respect you are achieving
scarcity.
Lord McIntosh of Haringey: I did
not use the word scarcity. It was your Chairman who used the word
"scarcity" in his first question. I said accessibility,
because such evidence as we have—and we know the evidence
about problem gambling is inadequate—is that there are particular
dangers with unlimited stake/unlimited prize machines and those
particular dangers are exacerbated if there is ambient access
to them (in other words, if there are lots of them all over the
place) and limited if accessibility is limited. That is the way
we want to approach it. We believe we are behaving responsibly
here and in response to the concerns which have been expressed
about problem gambling. The solution we have come to is in line
with those who are most expert on the issues of problem gambling,
and I think the limitation of accessibility is very difficult
to argue with unless you want to move away from the precautionary
principle which is at the back of the responses we have been giving
to your Committee.
Q23 Mr Meale: Minister, I can assure
you that you did use the word "scarcity" in responding
to the Chair, and you quite rightly state that he did bring that
up. Coming to another point which you raised, Lord Wade asked
you a question about the ratios of tables to machines. Where did
you pluck the figure 25 from? You have 41 to unlimited, and you
have other numbers here and there, where suddenly did you pluck
out of your pocket the number 25.
Lord McIntosh of Haringey: Where
did you pluck your figures from?
Q24 Mr Meale: Minister, I am asking
the question.
Lord McIntosh of Haringey: I am
sorry, that was unworthy. Seriously, in August last year we set
out certain ratios. People commented on those ratios and you commented
on those ratios, and most of the concerns which were expressed
were that the ratios were in fact too liberal—had been of
course a lot more liberal but were still too liberal—and
ran the risk of having casinos which were dominated by machines
rather than by tables. So we made a change to what we proposed
as the ratio for small casinos from three machines per table to
two machines per table. But, more important, we looked at your
recommendation that the maximum size of machines in any casino
should be 1,000 or 1,250. We looked at what that meant and we
said, "Okay, let us have a higher minimum number of tables
in order to get the maximum number of machines than for regional
casinos." If we say there should be a minimum number of 50
tables to get the 1,250 maximum—which you proposed then
that ratio is 25:1. It has a sort of rationality.
Mr Meale: It does. Thanks very much.
Q25 Chairman: Under your proposals
you are saying that existing casinos and new small or large casinos
will not have Category A machines. That means they will have Category
B machines.
Lord McIntosh of Haringey: Yes.
Q26 Chairman: You have also said
in response to us that you think that FOBTs in betting shops should
be Category B machines. We made a comment that the stake and prize
maxima that had been agreed with the Association of British Bookmakers
in your memorandum of understanding with them were greater than
the likely regime for Category B machines. That is why we thought
they were Category B machines. This begs the question—and
it may be you will think about this and respond to us in writing—whether
you have a view, that, perhaps subject to Gambling Commission
advice, there might be different regimes of stake and prize for
Category B machines in different gambling premises. What might
be suitable for a casino with a Category B machine stake and prize
may be rather different from what would be appropriate for a bingo
prize or for an adult gaming centre in the high street. Is it
your view that there could be a range of stakes and prizes within
the Category B definition?
Lord McIntosh of Haringey: Yes,
it is. It would not appear on the face of the Bill, of course,
but certainly our view is that the Gambling Commission could well
take that view, and I could see the sense in it.
Q27 Chairman: So some of this machine
entitlement in the small and large casinos for now Category B
machines might allow them to introduce machines which are not
perhaps in the market at the moment because of the existing limitations.
Lord McIntosh of Haringey: This
is the point I was trying to make earlier on. One of the freedoms
which is being given to all casino operators is not to have types
of machines which are laid down by statutory instrument but to
have the freedom which you have talked about of being innovative
in new kinds of machines. I think the issue of minimum stakes
and minimum prizes will have to be laid down in secondary legislation
and therefore would come to Parliament for decision. But, having
said that, there are all sorts of ways in which you could achieve
that.
Q28 Chairman: Is it therefore feasible
that that secondary legislation, those statutory instruments,
could specify maximum stakes and prizes not generally but in relation
to particular premises?
Lord McIntosh of Haringey: Yes,
it could do.
Q29 Chairman: One of the responses
to the Committee which we find most confusing is that, concerned
as you are about proliferation—and we are glad that you
have picked up that concern, because the Committee was concerned
and it ran through our report—we did not think that FOBTs
or FOBMs were appropriate to have in adult gaming centres or bingo
clubs but you think they are, presumably because you will have
a lower stake and prize limit on them than exists in betting shops.
Lord McIntosh of Haringey: I do
not want to commit myself to the fine-tuning which will not be
in the legislation but I accept the principle behind what you
are saying. I accept and I welcome that it is entirely possible
that an effective argument could be put for having different limits
for the same kinds of machines, the same category of machines,
in different premises, and you might have different limits in
adult gaming centres and in betting shops than in casinos.
Mr Grant: Indeed, Chairman, that
was already spelt out in the Government's previous proposals,
where you will remember that a different maximum prize limit was
envisaged for Category B machines in members' clubs as opposed
to casinos.
Q30 Chairman: In that case it was
a restriction appropriate only to members' clubs, but it did introduce
the principle, I do concede that. I am pressing you on this because
you will, I am sure, be aware of the real disappointment and concern
in the existing industry that if Category A machines are going
to be restricted only to new regional casinos—and we will
come in a moment to how many there might be—what new kind
of product are they going to be able to offer? I think what you
have said gives us sufficient information for us to explore that
further.
Lord McIntosh of Haringey: You
do not need to press me. We are at one on this.
Q31 Jeff Ennis: Does that mean that
it will be for the Gambling Commission to determine after consultation
with various sectors from within the industry the actual maximum
prices for each setting?
Lord McIntosh of Haringey: No.
I have said it will be done in secondary legislation and therefore
it will be for the Secretary of State to make a recommendation
to Parliament.
Q32 Jeff Ennis: Presumably that will
be after consultation.
Lord McIntosh of Haringey: Absolutely.
The consultation will no doubt be carried out by the Gambling
Commission but it is for the Secretary of State and Parliament
to make these decisions.
Chairman: The Commission's advice will
be crucial in this.
Q33 Mr Page: If I could turn the
questioning to the determination of where these regional casinos
will be located. When you gave evidence to us initially we were
told that it was going to be "a matter for the market".
In the latest policy determinations or statements that have come
out you gave regional planning authorities the responsibility
for deciding the location of regional casinos. The Under-Secretary
of State from the Office of the Deputy Prime Minister told the
Committee that there would not be a national strategy for the
location of casinos, "I do not think it would be appropriate
for us to have pinpoints on a map strategy from a national level
as to where casinos should go." Could you put the policy
on the record so that we all know where we are?
Lord McIntosh of Haringey: Sure.
I do not think there is any contradiction here at all. I think
this is a two-stage process. The first stage of a process is for
regional planning bodies in England—Wales and Scotland are
separate on this—to decide how many areas, if any, they
want to designate as suitable for regional casino development.
They can decide where those areas should be and they can decide
how widely they are drawn, whether they want to include a whole
local authority area, as was done in 1968, or whether they want
to define it more closely. That is entirely up to them. But then
that is where the market kicks in. It is for the market to decide
how many regional casinos would be developed in those areas and
how well they do. It is not for us—it could not be for us—to
judge what kinds of casinos will be successful. It is quite possible
that there could be areas designated where nobody wants to go
in and start a casino. On the other hand it is quite possible
that there could be an area designated where several companies
see a good business case, even with more than one casino in the
same area. I do not see any contradiction in that at all. It depends
on the nature of the region, it depends on the approach which
the regional body wants to take, and then after that it depends
on the commercial judgment of the operators.
Q34 Mr Page: Could I ask you to develop
this a little bit. When we went to France we found there was a
very strong central direction on where there would be a casino
and its location, and the market came in on just how much regeneration
there was going to be provided in a local area. What would you
do if you had two regions both working up their plans but in fact
working in conflict with each other in the viability of a regional
casino?
Lord McIntosh of Haringey: Do
you mean the boundary between one region and another?
Mr Page: Yes.
Q35 Chairman: A good example might
be Bournemouth and Southampton. Bournemouth is in the south-west
and Southampton is in the south-east.
Lord McIntosh of Haringey: If
they have any sense, they will talk to each other, will they not?
Q36 Mr Meale: That is not usual in
local government, is it!
Lord McIntosh of Haringey: If
they do things which are not attractive to the market, if they
designate areas which are not attractive to the market, the market
will not go there.
Q37 Chairman: Does the Government
have an optimum number of regional casinos in mind?
Lord McIntosh of Haringey: No.
I think that was obvious from what I said to Richard Page. No,
we do not. Our concern is to protect the public, to protect children,
to protect vulnerable adults. We think that if you take the package
as a whole it will do that. We do not think the protection which
is provided by the pattern of identifying suitable areas and then
seeing what the market will bear is at all in conflict with that
protection. You do not change protection if you have incrementally
one more or fewer regional casinos in any particular area.
Q38 Chairman: But, given your very
clear message that the purposes of policy is to avoid proliferation
and an increase in problem gambling, at what point does the number
of new regional casinos reach a stage where there are far too
many? Before you answer, could I say the British Casino Association
has already sent their written evidence to us saying that the
proposals you put forward will probably lead to up to 40 regional
casinos being developed, and if they each have 1,250 Category
A machines, that is 50,000 machines. I can quite understand your
reluctance to specify a target figure, because I understand your
point about letting the market choose where it thinks there are
possibilities here, but, if the purpose of this is to limit problem
gambling, would not 40 with 1,250 Category A machines be far too
many?
Lord McIntosh of Haringey: I am
interested in what the British Casino Association says—I
treat their views with respect, as always—but I am not in
the speculation business. I can say—and I do not think anybody
can contradict this—that the number of locations with Category
A machines, the regional casinos, will be smaller than the number
of locations with Category A machines which would have been allowed
in the proposals which we put to your Committee earlier this year.
Chairman: That is clear.
Q39 Lord Wade of Chorlton: From what
you are saying it will be entirely up to the regional organisations
to decide on where regional casinos go.
Lord McIntosh of Haringey: No,
it will be up to them to decide which areas are suitable. That
does not mean that they will go there.
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