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The Lord Bishop of Coventry: My Lords, I am pleased to be able to speak on this important legislation. We are all aware of the controversy that it has generated in the country at large, and it is good that we can finally turn our attention to some of the proposed measures.

Like all Members of the House, I willingly acknowledge that new gambling legislation is overdue. Technology has outpaced the law, and new and potentially dangerous forms of gambling exist in a completely unregulated state. The formation of the Gambling Commission is a welcome step and should enable social responsibility to be put at the heart of all future gambling regulation. However, we must be clear: the Government are not simply re-regulating an existing industry. They have used the opportunity to open the doors to potentially dangerous forms of gambling that do not exist in this country, such as the high-value fruit machines in Las Vegas-style casinos that have been mentioned. That has been done as a deliberate policy choice, despite the fact, as has been
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said, that opinion polls show that 93 per cent of the population think that there are already enough opportunities to gamble in the UK.

While the debate has raged around the new super-casinos, there has been relatively little comment about another important aspect of the Bill: child protection. I applaud the fact that one of the stated objectives of the Bill is the protection of children. The protection of the young and vulnerable must, of course, be one of the primary factors in any new legislation. What is more, the Government have made some welcome moves in this area, particularly the removal of fruit machines from unlicensed premises where they could be accessed by children and young people.

However, there is one area where the reality is failing to live up to the Government's rhetoric. The Secretary of State for Culture, Media and Sport has said that,

I wholeheartedly agree with that statement, as I suspect do the vast majority of Members of this House. But the Bill allows children to gamble and I believe that it is a situation that must be remedied.

While the focus has understandably been on the high-value category A fruit machines, very little attention has been paid to the fact that children of any age will continue to be allowed to play on category D fruit machines, which have a top prize of £5. That is not a vast amount of money, but it is not an insignificant amount of money to, for example, an eight year-old who may get £3 a week pocket money. These machines share many of the same addictive characteristics of the higher value machines, including flashing lights and rapid play, differing only in the amount that they can pay out. The only regulation on who can play the machines at present is simply a person's height. If someone is too short, he or she cannot put the money into the slot.

I am very glad to hear from the noble Lord, Lord McIntosh, of the possibility of some further amendment to that aspect of the Bill. I would urge that it goes beyond reserving the power to impose an age limit, but that children should emphatically not be allowed to continue to play those machines.

Category D machines also include the so-called teddy bear grabbers, machines that were referred to in another place in a somewhat surreal manner—I have read the report of the debate. That is highly unfortunate for it means that there was virtually no discussion of the potential problems associated with addiction to category D fruit machines among young people—and addiction is not too strong a word.

The research that has been done in this area suggests that as many as 5 per cent of adolescents exhibit behaviour that would categorise them as problem gamblers. That is potentially one in 20 young people with a gambling problem, which is more than five times the rate of adult problem gambling in the UK and should give all Members of this House cause for alarm. Judged by calls to GamCare's helpline, fruit machines are one of the most addictive forms of
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gambling for adults. If adults are unable to control their gambling behaviour on a fruit machine, why are we surprised that children find it difficult?

It may come as a surprise to Members of the House that the UK is the only country in the developed world that allows children to gamble at all, let alone on fruit machines. It is an historical anomaly which, I believe, is having a damaging effect on young people's lives. Problem gambling during adolescence causes immediate problems, including truancy and criminal activity, but it also has knock-on effects. Missed schooling and a possible criminal record can lead to severely reduced life chances, even after a gambling addiction has been conquered.

I know that many Members of this House have been surprised and disturbed when they have found out the truth; namely, that category D machines include fruit machines, which are not banned to children. It is a fact that has passed many people by. Their categorisation as amusement machines is unhelpful and, I suggest, deeply misleading.

However, the public have strong views on this issue. Again, polling shows that 82 per cent of people think that children and young people should not be allowed to play on fruit machines. The experts are in agreement: children should not be allowed to play fruit machines. The Joint Committee on the draft Gambling Bill heard evidence from the Royal College of Psychiatrists, as well as from internationally renowned academic experts from Nottingham Trent University and Birmingham University. All said that category D fruit machines were dangerous for children and that the Government should take this opportunity to stop children playing on them. Concerned faith groups that carry out a lot of work with children and young people, including the Salvation Army and the Methodist Church, have said the same. Even the 2001 Gambling Review Body chaired by Sir Alan Budd said that if it were creating the regulations from scratch, children and young people should not be allowed to play on gaming machines.

Given the strength of opposition to children playing these machines it is almost unbelievable that the Government are set to allow children to carry on playing them. Category D fruit machines form only one part of the activities offered by amusement arcades and could be replaced by other category D machines. Moreover, while the amusement arcade industry has been quick to point out the potential damage to their business of stopping children playing fruit machines, they have been rather slower in coming forward with actual figures regarding the amount of their income that is derived from children playing those machines.

Ultimately, this must be seen as a child protection issue. Legalised gambling for children makes a mockery of the Government's claim that,

The case is clear: gambling is an adult activity. Fruit machines, regardless of their size, can be addictive. There is already convincing evidence that a significant number of children and young people have gambling problems arising from category D fruit machines. So
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what is the answer? Surely, children should be prohibited from playing such fruit machines and that the UK should put itself on the same footing as the rest of the developed world.

The Government have taken a risk with regional casinos. If the level of problem gambling goes up as a result of their introduction into the UK, then the Government will rightly be held accountable. On the issue of children and gambling, however, the Government have come so close to implementing a thoroughly robust framework. The problem now is that they are failing to follow through their own logic. If, as the Secretary of State says, children and gambling do not mix, why are children still allowed to gamble on one of the most addictive games in the gambling industry?

It is time to match up the rhetoric and the reality. It is the duty of society and the Government to try to protect children from harm. Here is a wonderful opportunity to separate children from a potentially damaging activity. I urge the Government to take it.

Lord Pendry: My Lords, I rise to take up one or two points of concern about the Bill. I recognise immediately that the Government have been listening to legitimate concerns during the passage of the Bill, which has been improved as a consequence. However, there is much more to be done to improve the Bill further and even at this late stage I am hopeful that further concessions can be made following this debate.

As a boy, I grew up at the seaside in the towns of Broadstairs and Ramsgate on the Isle of Thanet and I have many fond memories of those seaside towns. Indeed I frequently return to them. I remember well playing in the arcades of Ramsgate, known then as Merrie England. Although Merrie England is no longer there, traditional seaside arcades are still an important part of the economy of the Thanet towns today. The towns in Thanet—Ramsgate, Margate and Broadstairs—are like other seaside resorts in having traditional arcade economies, but that is not recognised by the Bill.

These arcades are not just about fun but are very important for many areas which have high unemployment and deprivation levels. In recent decades these areas have suffered greatly. Although the work being done by the current Government is helping them to get back on their feet, they certainly do not need another challenge to overcome. The loss of seaside arcades would indeed be a challenge too far.

In the case of Ramsgate and Broadstairs, the implications are even more serious. Your Lordships will have seen that among the most popular machines in a seaside arcade is the "pusher". To play these games you roll a coin on to a moving paddle, and once enough coins have built up on the paddle one or two are knocked off as prizes. What your Lordships probably do not know is that these machines were invented, and are now largely made, in Thanet. The world's two leading makers of these machines are in
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Thanet and they are very successful export businesses. The development work they do—the work that underpins their export business—is based on revenues from the British market.

If seaside arcades are no longer viable because of changes introduced in the Bill, then the traditional British seaside resort will disappear with them. If the seaside arcade is undermined, then pusher sales will be undermined. If pusher sales in the UK are undermined, then the export business for these machines will no longer be viable. Export business will decline and the high levels of unemployment in places such as Thanet will end up higher still. So whatever we do in the Bill, we must not undermine the seaside arcade.

Your Lordships will also know that the Budd report produced ideas that seriously challenged the viability of the seaside arcade. Those ideas were based on a view—a mistaken view in my opinion—that exposure to machines like cranes, pushers and low-stake fruit machines at a young age led to problem gambling in later life. That is nonsense, despite what has been said. There is not a shred of evidence to that effect.

When the Budd report was published, the campaign to ensure that seaside arcades remained viable was led by the Member for South Thanet in another place. He is now a Minister in the Department of Health and so no longer able to speak publicly on this issue. He put together a cross-party alliance to make the case that small-stake gambling in family centres did not create problem gamblers and successfully demonstrated that some of what Budd recommended would threaten the economic viability of low-stake machines and, by implication, threaten seaside arcades and seaside resorts. And the Government accepted that view at the time. Ministers agreed that low-stake machines could have a 30p stake and an £8 prize. The industry argued that these figures must be raised in line with inflation and Ministers agreed that, subject to future research showing no link with problem gambling, they would look at the issue again.

Ministers also promised that today's arcades would be able to continue as arcades and that councils could not retrospectively take decisions that would stop people selling their businesses as going concerns.

These promises largely satisfied the industry. They were made in another place, in private meetings and in speeches by Ministers to the industry. They are a matter of public record. And yet, on the face of it, the Government are now largely reneging on many of those promises. Although the Minister was helpful earlier, we are going to look for the amendments that he mentioned.

Will the Minister consider making a commitment that the Government will do nothing to undermine seaside arcades or machine manufacture, to honour the promises made to maintain the viability of small-stake machines and protect the grandfather rights of existing businesses and that he will attempt to rebuild a dialogue with the trade association BACTA to ensure the continuation of arcade businesses?
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I am pleased, as I am sure the House will be pleased, that the Minister is prepared to look again at the issue of prizes of £5 and £8 for different sizes of teddy bears. One would be 6 inches high and the other 14 inches high. Is it really the business of government to restrict the size of children's teddy bears? Do the Government seriously think that by forcing children to have a smaller teddy bear they will save them from gambling problems in later life? Yet that is what, in effect, the Government are proposing. By so doing, they will limit the attractiveness of harmless amusement machines and thereby undermine the seaside amusement industry itself.

It is no good the Government saying that the Bill is protecting children. What it is doing is stopping children doing something they have always done and which does them no harm. And if by doing that they destroy an important part of the British seaside, they will have done neither children nor adults any favours.

It is also no good the noble Lord saying that resort casinos will bring regeneration to places such as Thanet to make up for the loss of arcades because no one is likely to build a resort casino, say, in Thanet—and if they do, it will only replace the district's two existing casinos.

I played in seaside arcades as a youngster and it did not turn me into a gambler. The most I have ever done is dabble on Littlewoods Pools and have the occasional flutter on the lottery when I remember to do so. Surely if anything can be said to be an example of harmless fun it is a young child trying to win a Winnie the Pooh doll in a seaside arcade.

If anyone develops a problem with gambling in later life, it will have had nothing to do with them playing pusher machines for 2p a time or winning a cuddly toy with a crane when they were children. I implore my noble friend to reinstate all the promises made to the seaside industry just a few years ago and to ensure that this harmless business can continue.

Before I sit down, I should perhaps mention that, despite what the Minister says, it is not just arcades in seaside resorts that are being unfairly treated by the Bill. British casinos, which have a proven track record of over 30 years of social responsibility, are being unfairly frozen out by the new regulatory environment—relegated to becoming second-class businesses by being denied the ability or right to compete with the new casinos.

That point made was made clear by the chairman of the Joint Committee, John Greenway, when he urged the Secretary of State for fairness to the existing industry. As the noble Lord, Lord Jopling, pointed out, a level playing field is all our British casinos are asking for.

Perhaps I may briefly bring to the Minister's attention another important issue that affects one of my other passions—football. The House will know that I am president of the Football Foundation. It has recently been brought to my attention by the football leagues in both England and Scotland that various betting companies—including pools companies and bookmakers—are refusing to pay copyright fees for use of their football fixture list when offering on-line fixed
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odds betting or running pools competitions. Such action could threaten the future of many smaller clubs. In the Scottish Football League, revenue secured from betting and pools companies is 21 per cent of the league's annual income.

Copyright in football fixtures was secured by the leagues in 1959, yet the pools companies have recently decided unilaterally not to pay. Such an issue would normally have been the subject of commercial dispute between the two parties. This issue has however been complicated by a recent judgment of the European Court of Justice regarding the database directive. This is a decision which is subject to legal scrutiny.

My time is up. However, I ask the Minister to look at this issue. I urge him to review the situation urgently in order that he can consider in detail the full range of options that we have to tackle on this issue and, we hope, introduce measures on the face of the Bill or in secondary regulations to the Bill.

I hope that the Minister will refer to those points in his reply.

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