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Lord Steinberg: My Lords, I wish to declare several interests. I am currently the non-executive chairman of Stanley Leisure plc, a company that has been in the gambling business for practically 50 years, as have I. I am also a large shareholder in the company, and have been involved in various trade organisations over the same period.
I am very grateful to the Minister for his concession about not having racing on Christmas Day. I hope that his same good graces can extend to Good Friday. Equally, on behalf of the racing side of my company, I am grateful for his comments about requiring betting exchanges to register all their clients. This is good progress.
I shall talk purely about casinos, the issue that has caused the Bill's main controversy. I should like to make my position clear at the outset. I do not intend to enter into the debate of what is right and what is wrong with the Bill, nor do I intend to criticise the Government or any other bodies concerned with the progress of the Bill, or the lack of it. I simply want to give the benefit of what little knowledge I have
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acquired over the years so that some of the misconceptions your Lordships may have can be laid to rest.
The first issue I shall tackle is money laundering. Let me start by giving a few statistics. Under the current voluntary money laundering code of practice introduced in 1996, the following transactions must be recorded: single transactions of £25,000 or more, or multiple transactions in one gaming session of £10,000 or more. The records are retained for five years. When the Money Laundering Regulations 2003 are implemented, the above trigger amount will be lowered to €1,000. There does not have to be any suspicious activity connected with the above transactions; the mere fact that the transaction takes place means that it must be recorded. An estimated 100,000 such reports are generated across the estate per annum. That number will be quadrupled when new regulations are introduced.
There is no lower monetary limit in connection with suspicious transactions. If a player exchanges £100 at the cash desk for gaming chips, does not play and later returns to the cash desk to exchange those gaming chips for a win account cheque, that could be regarded as suspicious and, if it is, it must be reported.
During 2003, our money laundering reporting officer submitted 96 suspicious transaction reports. During 2004, there were 103 such reports. In relation to those reports, there has been no prosecution of any person. I can also state that there has been no prosecution in Great Britain of any casino operator for money laundering matters. We have no knowledge of any prosecution resulting from a criminal attempting to wash his money via casinos by, for example, coming in with £10,000 in dirty money and walking out with £10,000 in clean money.
Money laundering is, with respect, carried out by transactions which are used to conceal ill gotten gains from criminal activity and from drug activity, which forms by far the greater part of the criminal proceeds. There is no opportunity for any transaction being handled through a casino which could result in money laundering. May I explain?
Each person who comes into a casino is either a member or a guest of a member. Each member has to sign in, and signs in for the guests. The guests have to produce identification separately from the member. This procedure has not helped people coming into casinos because of the need to produce passports, driving licences or utility bills to show their residence. But when these regulations were made, there was a small drop in attendance which has since been corrected.
If a person coming into a casino were intent on money laundering, he would have to conceal his identity; otherwise he would risk prosecution. The casino in no way helps individuals to do that. In order to change cash for chips, either at the cash desk or the table, a note is made of the person engaging in the transaction. If a substantial amount of cash is changed for chips, and the activity of the player is very minor in
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relation to the amount of money he has exchanged for chips, it is a sign that something is amiss. On cashing in his chips, if he has given in large amounts of cash and requests a cheque, he will not receive it. He will receive his cash back in exactly the same way as he gave it and the transaction will be reported.
Our company, with 41 casinos throughout the length of the country including four in London, has never been faced with a problem which has resulted even in an investigation. It is so important to understand that casino operators handle their transactions in an open and transparent way and that that ensures the prevention of money laundering in casinos. Everyone in the business is very aware that one of the arguments raised is that casinos are targeted for money laundering. Nothing could be further from the truth.
I hope that I have given noble Lords the background on money laundering. It is not for me to say where money laundering takes place. However, the opinion of the casino industry is that it is far more likely to take place through financial institutions than casinos.
One of the Government's headlines regarding the Bill relates to the protection of children. Nobody under the age of 18 years is allowed into a casino. I admit that there have been attempts, but they have been dealt with immediately at the reception area. There have never been prosecutions of any person or casinos where someone under the age of 18 has been allowed on to the casino floor. Like money laundering, it is a reason used to discredit the casino business. It is untrue in the same way that money laundering is untrue.
Betting shops and casinos display notices about people under the age of 18 not being allowed into betting shops and casinos. Reception and management staff are vigilant to ensure that nobody under 18 gets on to the casino floor. Therefore, points raised about money laundering and the protection of children are well looked after by the current industry.
The issue regarding the protection of the vulnerable is important, involving principally those who may have a problem with gambling. The record of the British industry shows that Britain has the lowest number of problem gamblers of any developed country in the world which allows casinos. Incidentally, as has been mentioned, Australia has the highest number of people registered as problem gamblers. What is a problem gambler? A problem gambler is someone who will gamble more than he or she can afford but will chase his or her losses; he is someone who will run up debt and effectively can cause a break-up in family life. It is the same kind of problem as that which faces an alcoholic. Basically, treatment is required by a psychiatrist who is able to deal with this type of diseasebecause it is a disease.
In Great Britain, fewer than 1 per cent of those who visit casinos have that type of problem. In the main these people identify either with Gamcare, the Samaritans or the National Council for Gambling. We in the casino industry do our part in trying to help refer people who have those tendencies to the correct organisation. The gambling industry recently put £3 million into a trust fund to help deal with the problem. We in the casino
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industry feel that there is nothing worse than having a problem gambler and we try wherever we can to eliminate it.
I hope that I have dealt with the issues of problem gambling, money laundering and the protection of children. I believe that the British casino industry is run in exemplary fashion. Casinos provide over £200 million per year in taxes. The gambling industry employs in total over 100,000 people. Our own company employs 7,000 people, of whom 60 per cent are employed in the casino division.
Gambling has been with us since time immemorial. Going back to Roman times, gambling was spoken of and written about. A couple of quotes from 2,000 years ago will demonstrate what I mean. In 43 BC, Virgil said:
Gambling has been around for ever. There is a misguided perception that gambling is wrong. It is always shown on television with violence attached. The only good thing about the film "Casino" was Sharon Stone. Those kinds of dramatic events just do not happen. The violence, thuggery and concocted stories are all used in a surreal way but have absolutely no reality in life. But people love gambling. I am sure noble Lords have heard of the famous gambler, Nick the Greek. He said:
We get innumerable misunderstandings about the gambling business, some of which are laughable and farcical. We know that whenever a programme is likely to be shown on television with a gambling background, it will indicate a gambling problem. The great English essayist, Charles Lamb, said:
We all try to run our business to provide pleasure and enjoyment in high quality surroundings. The food and service that one receives in London casinos are probably better than any 3-star Michelin restaurant. As I should not wish to be considered as engaging in advertisingeven though it will be permitted under the BillI shall not mention the names of those casinos.
Perhaps I may give a few more statistics. Our 41 casinos have an average weekly attendance of 60,000 and during each week approximately 20,000 players leave having won money. The approximate average of money exchanged for chips in provincial casinos is
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£230 and the average loss is approximately £40. In other words, for their £230 each person receives back £190, an average margin of gross profit of 17 per cent. Yes, the odds are designed in casinos' favour but people can and do win. It is a form of entertainment. It is a challenge. It is a social activity. It is a place to go for people on their own. It is a place to go with friends and with business colleagues. I shall not be giving away any secrets when I tell your Lordships that my 87 year-old mother-in-law goes to her local casino twice every week where she meets her friends. It is so important for your Lordships to understand that a great many people get a great amount of enjoyment from it.
The former chairman of the Gaming Board was Lord Allen of Abbeydale. He developed the Gaming Board in its current state, which runs well. We are all happy with the way in which the Gaming Board runs the industry.
That is all I wish to say. I could have said a great deal more because I have been in the business just short of 50 years. I have sought hard to give background and information. I hope that noble Lords have found it helpful.
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