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Lord McIntosh of Haringey: I always try to be as sympathetic as I can. I acknowledge straightaway that the concerns that lie behind the amendments are understandable. The noble Lord, Lord Lipsey, goes too far in supporting them if he thinks that they will relieve him of the difficulty that he anticipates, as chairman of the shadow Racing Trust, of the
possibility of a revocation of an exclusive licence. The amendments would change the conditions under which an exclusive licence could be revoked, but they would not change the fact that it could be revoked.We all seek the same thing but we are doing so in an arcane area of administrative law that is very difficult to make clear to ordinary people such as myself. I shall start by taking Amendments Nos. 16 and 18 together because they broadly cover the same ground. Amendment No. 16 seeks to introduce the concept of materiality into the Gaming Board's consideration of a breach of licence conditions and to compel the Gaming Board to give 28 days' written notice before revoking the exclusive licence. Amendment No. 18 prescribes the procedure that the Gaming Board is required to follow if the licence is to be revoked.
As I said, I appreciate the concerns behind the amendments but we believe that the Gaming Board will, like any public body, have to act reasonably in any case where it is decided to revoke the licence. Clause 8(9) does not, of course, preclude the Gaming Board giving notice to the successor company to remedy a breach of the licence term or condition. Therefore, one of the provisions that the amendment seeks is already available.
On the other hand, the likelihood is—it is a likelihood; we cannot anticipate every single case—that the licence would be revoked only when it was clear that a serious and unjustifiable breach had occurred or was occurring. In such cases, the revocation of the licence might need to be immediate for the protection of the betting public. I hope it is clear that during the 28-day period to which the amendments refer, the exclusive licensee would continue to trade.
The Gaming Board is a well-known, experienced and well-respected regulator of gaming. It is one of the most experienced and respected anywhere in the world and it has these responsibilities already. For example, it has these responsibilities for casinos—and it may be necessary to close down a casino straightaway. Similarly, it might be necessary quickly to revoke an exclusive licence or to stop an exclusive licence being exercised if there were a severe risk to the gambling public.
I do not think that is what would happen in practice. I think that the Gaming Board would say, "We are minded to revoke this licence". That would be its protection against challenge under administrative law.
As I say, the Gaming Board has a long and successful track record of regulating different sectors of the gaming industry. Without changing the nature of that regulation, the Bill extends these responsibilities to horserace pool betting. These are not unprecedented rules and powers; they apply to all the kinds of gaming already regulated by the Gaming Board. I am confident that any fears expressed in the amendments, that the Gaming Board might behave in a disproportionate and unreasonable way, are unfounded and, indeed, capable of challenge in the courts in the ordinary way. I therefore cannot accept the amendments.
I was asked what will happen if the licence is revoked and that decision is quashed by the court. Of course, if the court overturns the Gaming Board's decision to revoke, the revocation is of no effect. The court will have the power to grant interim relief in the meantime, for example, by restraining the Gaming Board from acting on the revocation. That is why the Gaming Board would, in practice, be likely to say, "We are minded to revoke the licence" rather than to do so immediately.
Amendment No. 17 would require the Secretary of State to seek parliamentary approval before being able to direct that the Gaming Board revoke the licence. Of course, the Secretary of State can issue a direction to revoke a licence only in the very limited circumstances when, as the noble Lord, Lord Moynihan, acknowledged, the successor company is wholly owned by the Crown. I have made it clear that we expect that to be a very short period indeed—it might be a period of only a matter of hours—but we cannot be certain of that.
In making such a request, the Secretary of State is required by Clause 9 to consider the matters listed in subsection (1); namely, whether it would be in the best interest of members of the betting public and the sport of horseracing, as well as promoting certain licensing objectives designed to protect the vulnerable. Subsection (8) of Clause 8 also ensures that the Secretary of State specifies the reason for any decision to revoke. That will better enable the successor company to challenge by way of judicial review the direction to revoke the licence.
In the light of those protections, which are already included in Clauses 8 and 9, as drafted, I hope that it will be considered not appropriate for there to be a reference to Parliament in such circumstances.
Again, I am entirely sympathetic to the motivation behind the amendments. If noble Lords opposite would consider the fact that the Gaming Board is already acting under those rules for other parts of gaming—notably, for casinos—and has done so for many years without challenge, they would recognise that the wording in the Bill is suitable for its purpose.
4.30 p.m.
Baroness Noakes: Can the Minister help the Grand Committee by giving an example of the circumstances in which the protection of the public might necessitate an immediate revocation of the licence? I am sure that the Gaming Board, which has done an excellent job in relation to casinos for many years, will know what it is looking for in relation to casinos but I am not clear what it will be looking for in relation to the Tote. Can the Government describe the kinds of situations that lie behind their apparent desire to give sweeping powers to the Gaming Board for the Tote as well as for casinos? I think that they are quite separate and should not be put on a par?
Lord McIntosh of Haringey: I do not know that they are entirely separate. I think that the noble Baroness, Lady Noakes, could imagine ways in which casinos could cheat, such as nudging the table. There are all
kinds of ways to cheat. It is also possible for a Tote to cheat, such as by mathematically manipulating the pool dividends. After all, mathematical formulae are used. It is as possible to cheat on the Tote as it is on anything else. I am not suggesting for a moment that the Tote has cheated in its 76 years of history, but who knows?
Baroness Noakes: I should like to clarify this. Is the Minister saying that we need the provision because the Tote might be cheating on the application of its formulae in operating the pools?
Lord McIntosh of Haringey: I am saying that the Gaming Board must have protection against that kind of eventuality.
Viscount Falkland: Hell will freeze over before that happens. Perhaps the Minister may give another example. That example is so much in the realms of fantasy that I cannot begin to contemplate it. When dealing with the matters that will go into the Bill, there must be some basis of reality. As far as I am concerned, what the Minister has just said is so extreme and extraordinary that it is virtual reality legislation.
Lord McIntosh of Haringey: This is a very touching faith. I did not say that the Tote would officially be indulging in fraud but any employee of the Tote—or any other organisation—can try to beat the system to his or her advantage. These things do happen. The law must be framed to protect against them.
Viscount Falkland: I am sorry to persevere with this. In the event of an employee creating a kind of fidelity crime, the Tote will have the machinery to deal with that. If it does not deal with it, that is a different situation. But the Tote—as in any business—will be perfectly capable of dealing with employees who may be tempted to cheat in some way from time to time. In fact, it has been known in the history of the Tote, when such matters have been dealt with and stamped on immediately. Certainly there would not be any cause for the Gaming Board, or its successor the gambling commission, to revoke a licence should that occur.
Lord McIntosh of Haringey: Again, that is a touching faith. Large city institutions have been brought to their knees by the behaviour of employees that was against the rules and which was not discovered or, for managerial reasons, not discoverable for many years. One must provide against such an eventuality.
Baroness Noakes: Perhaps I may suggest to the Minister that it is rather far fetched to drag in a situation such as Barings—to which I think the Minister was referring—where the actions of one employee in the Far East brought Barings to its knees. It was not protected by any regulator and does not provide any precedent for the kind of power that we are seeking in this Bill.
It seems that we are slavishly applying casino-like rules to the Tote for no very good reason. It would be easier to understand if there were the kind of
safeguards implicit in my noble friend's amendment; namely, notices given or periods in which representations could be made. Those are civilised ways in which differences of opinion or clarification of facts can be sorted out. But to treat the Tote as if it were some casino of low repute in this legislation flies in the face of any fact that we know about it. It then puts us in the very difficult position that the Tote would be wholly reliant on administrative law and judicial review.
Ministers in respect of many briefs have to stand at the Dispatch Box and say, "Well, of course, this legislation is all right because we can always rely on judicial review to sort everything out". I am sure that the Minister knows that judicial review is the most unsatisfactory remedy. It is clumsy, time-consuming, can be quite expensive and cannot deal with situations where businesses are being wrecked by the arbitrary actions of an arm of government. I hope that the Minister will look at the matter before Report, because it raises very serious concerns.
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