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Viscount Falkland: My Lords, first of all, I apologise. I missed the first few minutes of the debate today as I was unexpectedly delayed in getting to the House. I shall read the Minister's speech, although I think I am familiar with much of its content, having served on the pre-legislative scrutiny committee, as mentioned by the noble Lord, Lord Mancroft. I do not know how many of your Lordships have read the report of the committee. A great deal of water has passed beneath the bridge since the report was published and the Bill has substantially changed.

There is one principle with which none of us could disagree. The Minister alluded to a statement from the Department for Culture, Media and Sport that,

That to me is the main reason why the Bill should go on to the statute book in short order.

The 1968 legislation, excellent though it was, is quite unable to deal with new technologies. Although there is pressure on government to catch up with new
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legislation, it would have been preferable if they had dealt solely with new technologies before taking on the Budd report on casinos. I am not saying so in hindsight; I thought so then, and so did others. The Bill is more complicated than I would have wished when I heard the Government were planning to introduce draft legislation on gambling.

Destination casinos would have the effect of drawing in big investment and, principally, regenerating seaside resorts. That is an interesting idea. Not many of us agreed with the idea of having casinos all around the coast of Britain, but the concept of having casinos in several large resorts was well worth exploring. One problem was identified by many people involved in the casino business, both here and the United States. They said, "You will find it extremely difficult. The idea that you can regenerate through gambling alone is very short-term thinking". Even in Las Vegas, where gambling was the principal motor for generating great profits, it is now entertainment that generates those profits, and gambling is only part of that.

I would have preferred it to have been clearly stated right from the outset that in Blackpool, for example, which was referred to so eloquently and in his usual humorous style by my noble friend Lord McNally, we would be seeking investment for entertainment, possibly including casinos where appropriate. Blackpool is an obvious place for such a resort casino development.

That is the situation that pertains, for example, in France. France, being a very dirigiste country, has tackled gambling in a way we could not possibly attempt. In fact, there is a curious anomaly in world legislation, or at least in Europe. In France gambling is illegal, but the system allows exceptions to be made. Thus certain activities are allowed without destroying the general public policy on gambling. France operates the pari mutuel system in horseracing—for which our equivalent in horseracing is called the totalisator, a word that originated in Australia—and for many years has permitted casinos to operate in resorts and spas. I wish that that simple principle had been more plainly incorporated in this Bill.

The French system of allowing casinos to operate in spas and casinos, which only recently has been extended by the Chaban-Delmas law to allow towns and cities with populations of over half a million to operate one casino, is based on the idea that opportunities for gambling may be extended only where the people make a deliberate decision to do so. The principle is that people should not gamble by chance simply as a result of walking down the street. Someone must go and stay in a resort with, presumably, a limited amount of money. The money is spent on gambling while one eats well and stays in good hotels before going home again. That is preferable to someone playing on slot machines that are available on every street corner. I think that the Government agreed with the basic principle, so I was surprised and a little disappointed to see that around half way through the committee deliberations the notion of the regional casino was introduced. That is quite a different idea from the casino resort, now wrongly being described as the "super casino".
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A large regional casino sited in an urban area is deemed desirable for economic reasons, but that notion seems absolutely to go against what the Government and the committee agreed; that is, that any widespread intentional increase in gambling facilities should be carefully constructed and limited as much as possible in order to take account of the very real problems associated with gambling, which I shall address in a moment.

The Gambling Commission is a key part of the Government's plans as set out in this legislation. It is to have a manifold role with huge responsibilities. While I am sure that the commission will be well led and adequately staffed—those who have been following the development of the Bill know that it will be a new form of the existing Gambling Board for Great Britain, which has done such a good job since 1968—I am worried about how it is to be funded.

I cite, for example, the huge growth in sports betting and the use of mobile telephones. Sophisticated mobile phones with screens allow people to be entertained and to gamble. One study has forecast that by 2010 the profits generated by mobile phone betting alone will be around $20 million a year. Indeed, it suggests that that may be an underestimate. In his speech, the right reverend Prelate referred to the dangers of exposing children to gambling opportunities. Children use mobile telephones and will have greatly increased access to gambling opportunities. If the forecasts are correct, mobile telephone gambling will put the dangers of the slot machine in the shade.

Because of the proper and fundamental concern of the DCMS on the fast rate of technological change and the need to keep pace with it, it is essential that the Bill is not delayed on its way to the statute book. No doubt when we consider the provisions in Committee, many noble Lords will be particularly concerned about the growth of casino provision, but the Gambling Commission will have to deal with all kinds of other matters as well. I mention one that we could not deal with all that satisfactorily. The committee and the Government fully intended to come up with a solution to the problem of betting exchanges, but could not do so.

For those noble Lords who are not familiar with them, I should explain that the betting exchange is a very simple concept, one that predates bookmakers by providing a service whereby people can place their bets. Using sophisticated software, betting exchanges allow people to bet collectively even though they do not know each other. The exchange matches the investments made by various people for or against a particular event taking place. It has caused a great deal of concern, particularly in horseracing, because the concept of someone actually backing a horse to lose is one that has not entered anyone's thinking. It certainly had not entered mine and I have been following horseracing years. I wish that I had thought of the idea, but if I had I would not be addressing your Lordships. I would be a millionaire on a sun-drenched beach. Spread betting is a wonderfully simple idea taken forward by complex technology.
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The committee felt that it was best to let things run, and I think that the Government feel the same. We shall see what the Treasury thinks of the taxation system for betting exchanges. We shall also await the decision of the Gambling Commission about them. If I were a bookmaker I would be energetic in opposing this new form of competition, but it is clear that betting exchanges are here to stay. Indeed, I expect that many bookmakers will themselves now consider becoming betting exchanges, so profitable is this new area of the business. Ideas are being mooted to register those using betting exchanges in order to limit the danger of securing information about horses that are going to lose or being privy to other insider knowledge. However, singling out betting exchanges for a registration regime should be approached with the greatest caution. I do not see why people should be registered as punters—and certainly those betting below a fairly high figure—any more than should those who place bets with fixed odds bookmakers. That is a discussion for the future, but it is important.

Sports betting has exploded in this country. Most people betting recreationally on sporting events use not only fixed odds bookmakers and betting exchanges, but also deploy spread betting, another area we have not touched on. Spread betting is now a very popular means of following football, tennis and other sports.

All that brings us to address the question of cheating. I am afraid that cheating is always found in the presence of large sums of money, as well as in sport and gaming. The noble Lord, Lord Faulkner of Worcester, ably chaired a group which produced an excellent report on this issue. He invited the noble Lord, Lord Condon, to submit evidence on the incidence of international cheating in sport. The noble Lord, Lord Condon, asked us a most interesting question: globally, which sport did we think was the origin of the most widespread cheating? We all considered the obvious ones, but curiously enough it turned out to be cricket. I had always thought cricket to be a gentle game, one where I used to pick daisies while at longstop on a pleasant afternoon. Apparently, however, in the Far East and other places it is a hotbed of skullduggery.

We shall be discussing matters of this kind in Committee. However, as I have said, other jurisdictions such as France keep a tight control on gambling activity through strict public policy. The Ministry of the Interior holds gambling tightly by the throat. Indeed, taxes on casino operators in France are very high. They are visited by police officers—they may not be in uniform, but they are police officers nevertheless—on a regular basis to see that they are operating correctly. You cannot get a slot machine in France, even though you have permission to operate, unless you have operated satisfactorily for one year. This means not just operating a clean house but producing good restoration, live entertainment and all the other matters.

I have never thought that the strategy for large casinos could be left to the market, whether they be regional casinos, which I personally hope will not
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happen, or casino resorts, which I hope will happen for the reasons mentioned by my noble friend Lord McNally. Blackpool is an excellent place to start, with its huge tradition for entertainment and enormous energy, although the future is uncertain. Because of the economic displacement and social problems, however, there needs to be a central strategy. I do not see how this can be left to the market without creating even greater problems than we have now. Many of the existing operators who depend on grandfather rights—previously supporters of the Bill—are now shouting very loudly because they are worried about the larger jackpot machines which will deprive them of business. I entirely sympathise with them. The Government have a great deal of work here, and I am sure that we shall be able to sort some of that out in Committee.

In so far as children and gambling do not mix, I do not know. I could play poker, vingt et un and back horses on a regular basis before I was 12. I wish I had not. I am delighted that none of my children has shown the slightest interest in gambling. My parents, who were not gamblers, told me, "Beware, there is gambling in your family". My grandmother was a compulsive gambler. Gambling is done for psychological reasons. Perhaps it provides excitement and fantasy, things which people need in their lives to lift them from possible depression. I do not know what it is. I am standing here today, however, and I am not bankrupt. In my day things were very different. There were no slot machines, which are a great problem at the moment, to tempt young people as there are today. One cannot talk down to children in this area any more than any other.

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