Select Committee on Delegated Powers and Deregulation Twentieth Report


Memorandum by the Lord Allen of Abbeydale

  The Committee have asked for evidence, and as I am referred to in the Home Office memorandum, I thought I should send in a note elaborating a little the views briefly ascribed to me there.

  The Betting and Gaming Act, 1960, which legalised casinos for the first time, provided for not more than two gaming machines, with a stake not to exceed sixpence. This provision was re-enacted in the Betting, Gaming and Lotteries Act, 1963. The failure of the casinos provisions, notably the lack of powers of enforcement, led to a great upsurge of criminal activities, including protection rackets in regard to the hundreds of casinos which sprang up. I was Permanent Under Secretary of State at the Home Office when we tried to restore order in the Gaming Act, 1968. Gaming on licensed or registered premises was dealt with in Part II of the Act, and gaming by machines was dealt with separately in Part III. We decided to repeat in that part of the Act the Facility of not more than two jackpot machines, with a stake of not more than one shilling, with power to increase. Casinos in this context were treated in the same way as registered clubs and miners' welfare institutes. I have a pretty clear recollection that we thought that, now there was to be a proper machinery of enforcement, it was reasonable to continue to make a modes provision of some alternative occupation for those who for some reason did not want to go in for hard gaming at the tables.

  Against this background, I have always hesitated a bit over the suggestion that it is perfectly all right, for casinos, to blur the distinction between Part II and Part III of the Act and greatly to extend the use of these machines because they are in a hard gaming ambience. It can obviously be argued that the principle has already been conceded by the decision to increase the number from two to six and now it is just another four. But the Home Office memorandum makes it clear that this is not the end. It is just one more step; and although further moves will be taken with cautions, there is a clear prospect of allowing "very large numbers of machines". A Home Office consultative paper in August 1998 discussed a figure of twenty, and saw no objection in principle to casinos having the same type of slot machines as was common in other countries - including, presumably, Las Vagas, where as I recall as much money is taken from machines as from the tables.

  It may well be, as the Home Office memorandum suggests, that attitudes towards machines have changed since the 1960s and that machine gaming is now regarded as a mainstream activity within gambling. But I wonder if the powers of the 1994 Act are so extensive as to permit the introduction by the back door, as it were, of what would in effect become a new form of hard gaming in a way which is so remote from the plain intentions of the 1968 Act; and whether this might be an occasion for a reminder that there are limits to what can be done in this context by way of deregulation.

11 May 1999

Memorandum from GAMCARE - National Association for Gambling Care Educational Resources and Training

Having read the "Draft Statutory Instruments" and "Explanatory Memorandum" we wish to make a further representation in respect of postal applications for membership and age restrictions.

GamCare does not consider signing a declaration on the application form that the applicant is over 18 is a sufficient safeguard.

Whilst casinos generally exclude under 18's, having to apply in person has provided an opportunity for a visual judgement of age to be made. Despite this check the GamCare Helpline in its first year of operation recorded six cases (from four callers) of under 18's reporting a problem with casino gambling. One of these was aged sixteen and three aged seventeen. The total number of calls relating to casino gambling was one hundred and fifty (11 per cent of the total of problem calls). Whilst this is a small number it means that 4 per cent. of calls regarding a problem with casino gambling were underage. What we do not know is how many social gamblers who visit casinos are under eighteen. In view of the high-payout and increased number of casino jackpot machines it is likely that this form of gambling will become increasingly attractive to young people. Unless sufficient safeguards are introduced it is, in our opinion, very likely that the number of underage casino gamblers will increase - and increase further once limited payout machines are allowed.

It therefore appears to GamCare that it would be sensible to build in a safeguard to minimise the possibility of under 18's gaining entry to casinos. This could be achieved by asking the applicant to state their age on the application form. The form would also carry a note that proof of age might be required. Then on their first visit all applicants with a stated age close to 18 could be asked for verification. This would eliminate annoyance to old customers whilst building in a protection for the casino as well as a regulatory safeguard.

We are not seeking to appear before the deregulation committee on this issue, but would willingly do so should it be requested.

27 April 1999

Letter and memorandum from London Clubs International

Casino Deregulation

The climate which prevailed in the late sixties and early seventies within the British gaming industry is no more. The 1968 Act has done its job. The involvement in the industry of publicly quoted companies and the attendant additional regulation and supervision that comes with that status have also significantly contributed to probity. The achievements of the British casino gaming industry are now held out by the Gaming Board itself as a model to new jurisdictions, and we now properly and proudly draw attention to the integrity of the current industry and the absence of crime and criminal involvement.

Since 1968 there has also been a sea change in the perceptions of the role of government in the broader area of regulation and control. The change from the all pervasive 'nanny state' to an more open and plural society offering wider personal freedoms and extensive self determination is taking place. Across a wide spectrum of public activity there is far greater maturity, personal responsibility and expectation of choice.

The growth in international travel has been exponential in the last thirty years and changes domestically, including the advent of the extensively advertised National Lottery, have exposed a huge cross section of British society to gambling in a huge number of forms. As, quite literally, another dimension in communication and leisure activity opens through the Internet, that awareness will grow still greater.

The 1968 act now also threatens to isolate the industry, as the world banking system - which is at the cutting edge of information technology - moves rapidly to a 'cheque free' regime. We believe that gaming legislation will find itself increasingly out of step with other finance legislation and common commercial practise.

The almost total exclusion by the Act of casino gaming from portrayal as a normal and legitimate leisure activity stigmatises and reduces the public perception of the industry to a seedy and mysterious back street business to be found among criminals and drug dealers. Indeed it is easier to find a prostitute in the telephone book than it is a casino! This is grossly unfair to an industry which is alone in knowing, through the rigorous processes of licensing and regulation, that its employees are honest and free of criminal convictions: that they are 'fit and proper' individuals. It is also unfair to the thousands of honest people who enjoy casino gaming.

The time is long overdue to fully remove the shroud of secrecy that distorts the reality of the British gaming industry and let the public make informed choices about casino gaming as they do with every other aspect of social activity, even those which involve risk. We have responded in detail to the proposal in respect of advertising, but they are far from liberal and at their best they seem to let the industry 'out on licence'.

Whilst all forms of gambling require supervision, taken together, these four factors: the inherent integrity of the new industry, the change in the role of government, the greater sophistication of the public and the technology driven changes to the world banking systems, there is absolutely no evidence whatsoever that the adult population any longer needs or require the levels of so called 'protection' afforded to them by the 1968 Act or that the Act is a suitable vehicle for the regulation of gaming in a global market place in the 21st century.

London as a Special Case

As London operators we ask the government to consider whether London should be treated differently from the rest of the country. The deregulation document makes reference to the differences between the UK casino scene and foreign 'resort' casinos It does not, however, go on to acknowledge that London is among the greatest tourist resorts in the world.

Many London casinos already cater extensively for international tourism. Often visitors, particularly business visitors, only stay in the capital for a very brief period and are denied a leisure facility available to them elsewhere in the world by a regulation which arguably was not ever directed towards their protection in the first place. As a transient population their exposure to the dangers of prolonged problem gambling - at least as far as London is concerned - is limited to the duration of their stay.

Greater discretion could be given to local magistrates to allow immediate membership to casinos by overseas residents on production of a passport and proof of extra-UK residency.

London Clubs International plc warmly welcomes the deregulation proposals. Following the recent very substantial tax increases and with absolutely no opportunity to pass on costs, the gaming industry now faces a very difficult time. As a labour intensive business offering employment and training to the young and unskilled, a reduction in the size of the industry would have a significant impact on job opportunities in the leisure sector. As it now appears there is little or no realistic chance of broader reform in the immediate parliamentary calendar we believe it to be vital that every effort be made to be generous towards the industry in the deregulation process.

Whilst we have responded in detail to the points raised in the consultation paper, we urge that nothing in our response to the paper, or to the more general issues which we raise in this covering letter, should in any way be seen as an invitation to government for more or wider consultation: change is urgently needed and further delay will be harmful to the industry. That said we take this opportunity to express an operator's view, on a wider and more strategic basis, of the need for fundamental changes to the law.

Finally, we note in particular the comment at para 7.11 relating to the issue of 'resource considerations' for the Gaming Board acting as a constraint on deregulation, in particular in relation to slot machine. The British casino industry is now (on the governments own estimates) contributing an additional £25 million per year through the increased Gaming Duty to the exchequer and resources for supervision cannot any longer possibly be a legitimate excuse for further impediments to progress.

Roy C Ramm
Compliance & Security Director

Response to the Government's proposal for a Deregulation Order on Casino membership, advertising and jackpot machines

1  Postal Applications

1.1  We very much welcome the proposal to remove the requirement that application must be made , '..or notice given, in person on the premises.'

1.1  We note the comments by the Gaming Board that they would accept 'any method of delivering the an application, including post and fax, on condition that the application is made in a standard form with a signature.'

1.2  Accepting any method of application is a step forward and we accept that the signature gives some degree of comfort that an application has been made by the person sending it, but we submit that it is it stretching the perceived safety net of protection too far to suggest that signature is any more than an indication of identity or intention (to game) and its absence should not defacto invalidate an application.

1.3  Failure to specifically include e-mail applications, presumably because few will have a signature, is a disappointment and does not recognise the increasing use of electronic mail in commercial and private life. Many businesses and individuals now rely on electronic mail for the bulk of their communication needs. The fact that hand written signatures are not evident on most documents sent by e-mail (although some do contain scanned signatures) is not a bar to their use in countless commercial applications and should be considered precedent for greater relaxation of the need for signature.

1.4  The argument that the Gaming Board evinces that signatures provide protection from agents or touts completing applications, perhaps without the knowledge or consent of the applicant, should not in our view be persuasive to government. We acknowledge that allowing e-mail applications does leave the door open for agents to submit applications on behalf of players, but even if an agent did complete an application that in itself is not necessarily reprehensible, and agents are hardly likely to submit an application for someone who has not expressed a wish to visit a particular casino. As 'junkets' are no longer fundamentally objectionable (4.9) and that the conduct of agents would fall on casino operators themselves (4.13), we suggest that there could be sufficient checks and balances built into the process for the GB also to be satisfied with the integrity of e-mail applications.

1.5  The Deregulation document indicates (4.5) that operators would have to verify the identity of postal or fax applicants on their first visit to the casino and that an amendment would be made to the Code of Practise on Money Laundering. By requiring, as at present, any applicant to produce identification and to conform that the application sent was sent by them or with their direct consent, reception personal could be reassured that the person arriving at the casino was identical to the applicant. We strongly suggest that a very simple, but statutory question to any postal, fax or e-mail applicant, on a first visit to a casino, along the lines of , "Is this your application and do you wish to proceed with membership?" would overcome any possibility that a person was being improperly enticed into a casino.

1.6  Finally we note the comments (4.11) in relation to the code forming 'the basis of arrangements' in relation to junkets. We want to be clear that, as in the past, the Gaming Board will be willing to reconsider the content of the various codes at the request of operators to address issues such as junkets without need for further deregulation or legislation. (Below because of the content of 6.14, further comment is made in relation to the status of the various codes)

2  Group membership

2.1  We welcome this proposal. We suggest the following procedure should apply to help groups maintain their own customer bases, whilst allowing the membership role of a particular club to be purchased or sold with the premises, without either exposing the entire group membership to a purchaser, or creating a need for fresh applications for membership of a club by existing members simply because ownership of the particular premises has changed

2.2  Where a member of a club in a group wants to enter another club in the same group they should be required to apply for membership of the second club and should immediately become a provisional member, ie without waiting 24 hours and should be allowed access to the premises to game with all the rights and privileges of full membership.

2.3  A further benefit of this approach is that where a member ship needs to be withdrawn from one club for any reason, the memberships of other clubs in the group are not automatically prejudiced because the decision to withdraw membership is made by a specific club membership committee.

3  Advertising

3.1  Once again we broadly welcome the proposal. We hope that government would rely on a clear statement of principle rather than be minutely prescriptive and then rely on the work of other regulatory bodies, such as the Advertising Standards Authority to ensure compliance.

3.2  There are however, two areas in need of clarification for us. The location of advertisements in publications should not, in our view, be restricted to 'classified sections'. This is to a large extent an outmoded concept in publishing and classified columns are no longer found in all publications. In other publications, such as tourist guides, the entire publication or the great majority of it is advertising or 'advertorial' (sic). It may be more appropriate to indicate where the advertisements should not be found e.g., in children's sections than to specify where they can be.

3.3  If the government feels it necessary to be restrictive on size, then an unambiguous and universally understood measure such as the International Metric standard, of say A5, should be stated.

3.4  Para 6.4: the proposal includes 'how to apply for membership' but it is unclear whether a membership application form could legitimately form part of the advertisement. We would argue strongly that the relaxation of the rules on postal applications should allow an advertisement to carry an appropriate membership application form. Membership applications will be an integral part of advertisements published outside the UK and it seems entirely inconsistent not to allow the publication of forms within the UK. It seems unfair and somewhat odd to us that someone planning a weekend break in the capital could apply for membership by post from an ad., in say, Paris Mach but not from an ad. the Peterborough Post.

3.5  Para 6.14: the proposal intimates that a 'GB Code of Practice' would be drawn up to guide operators. Is the absence of the BCA deliberate in this title? Is this a code which the Gaming Board solely will define or will the usual consultation process and 'joint ownership' as with the Gaming Board and British Casino Association joint guidelines apply.

3.6  The restriction on television and radio advertising is unclear as to whether 'in house' advertising on closed circuit hotel systems is permissible.

3.7  Of particular concern is the lack of clarity over the use of the Internet for advertising. The Internet should not in our view be regarded as a natural casualty of the proposed continuing general restriction on radio and television advertising (6.4). Advertising on the net is passive and requires a user to actively seek out the web site, it is not in any sense intrusive as radio or television may be argued to be. The inclusion of the Internet in the deregulation order would also make the use of e-mailed application forms - which would form part of a clubs web site - a simple matter.

3.8  To restrict operators in the UK from using the Internet is also unrealistic as far as international operators is concerned. We, as such an operator, can lawfully advertise our overseas operations via the net from the UK. This is a facility we intend to extensively use with the advent of the Alladin project in the USA, Lucayan in the Bahamas and our various South African projects and with any other international project. We could also, we are advised, lawfully launch UK advertising from an offshore site which would be, to all intents and purposes, indistinguishable from our on-shore advertising for off-shore operations!

3.9  We have so far chosen not to pursue the 'off-shore' options open to us in the hope that UK regulators would accept that the passive nature of Internet advertising and the whole new dimension of electronic addresses for commerce was deserving of a coherent approach. This is a nonsensical situation which needs resolution.

4  Slot Machines

4.1  Para 7.11: We welcome the relaxation as proposed, but strongly urge that government move quickly to allowing the introduction of at least twenty machines and a proper casino slot machine regime.

4.2  We are concerned that the deregulation does not address the need for payments to be made other than from the machine. Massive coin payments restrict the development of machines, inconvenience the player and causes significant management and administration problems. We would strongly urge that the order makes provision for jackpot payments to be made wholly or in part through the cash desk and includes the ability to pay jackpot winners by cheque.

4.3  In our view. a move to a machine regime which accords more closely with standards in other jurisdictions would mean the machines then available to operators would also allow for features such as imbedded bill acceptors, credit play on winnings and monetary exchange. At the same time they would provide regulators with more and better information.

October 1998

previous page contents

House of Lords home page Parliament home page House of Commons home page search page enquiries

© Parliamentary copyright 1999