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Lord Faulkner of Worcester: My Lords, I start by thanking my noble friend Lord McIntosh of Haringey for the clear and straightforward way in which he introduced the Bill. Those of us who have been following the subject over recent months or, indeed, years, know that it has not been easy for him or his ministerial colleagues in the Department for Culture, Media and Sport and I certainly pay tribute to him for the way in which he stood up to that criticism and has robustly defended the Bill today.

I cannot recall an issue where there have been so many vested interests at work. Some are promoting change because they see business opportunities. Others are resisting it because they want to protect their own position from unwelcome competition. The straightforward commercial interests are not the only ones who have been busy. Some authorities see the Bill as an opportunity to regenerate and rebuild. On the other side are legitimate religious organisations, such as the Methodist Church and the Salvation Army, which are uncomfortable with any expansion of gambling opportunities. As someone who was brought up in the Methodist tradition, I understand and sympathise with that point of view and, indeed, with what the right reverend Prelate said earlier about the dangers of exposing children to risk in amusement arcades.

I have one commercial interest that I should declare at the beginning. For many years before I entered the House, I was an adviser to Littlewoods Pools, having been retained initially at the time of the Royal Commission on Gambling under the chairmanship of Lord Rothschild in the late 1970s. I continue to be an adviser to Sportech, the current owners of Littlewoods, although I severed that link when I served on the main inquiry of the joint parliamentary scrutiny committee. In my view, it would not be appropriate for me to speak about the clauses of the Bill that cover its business this evening, and I shall not. I also have two unpaid trusteeships that are relevant. One is of the Foundation for Sport and the Arts and the other is of Gamcare. Both are good causes that obtain funds from sections of the gambling industry.
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As I said, I served along with four other members who have already spoken in the debate, on the Joint Scrutiny Committee, which I found an enlightening and fascinating experience. We worked together constructively on an entirely non-partisan basis and it is worth putting on record that the Members of this House achieved an impressively high attendance record during our sittings.

In the main report we made 139 recommendations, of which the Government, to their credit, accepted 121. I would not go as far as the leader-writer in the Guardian of 23 September last year, who claimed that the Joint Committee had,

because we had,

But it is undeniable that the Bill is very different from the draft Gambling Bill that first saw the light of day in 2003.

Underlying that is the Government's repeated determination—we heard it first from the Secretary of State at the Joint Committee—not to pass legislation that would directly increase the number of problem gamblers in Britain, and to regulate properly and fairly the new aspects of the gambling industry that have grown up over the past 30 years.

I agree with the two noble Lords who spoke from the Liberal Democrat Back Benches that the Joint Committee warned that the Bill in its original form would have added to the number of problem gamblers. But the fact that the Government accepted 121 of the committee's 139 recommendations reduced that risk. The risk was reduced further by the additional changes made in the Standing Committee in the other place, when the scale of the Bill was substantially altered.

The crucial objectives of protecting the vulnerable and children will be assisted by measures in the Bill and are the central reason why the Bill must be enacted before any general election. They include support for the Responsibility in Gambling Trust, with the reserved powers to impose a levy on the gambling industry if necessary; removing gaming machines from unlicensed premises such as minicab offices and fish-and-chip shops; carrying out a national survey into gambling participation and problem gambling, and reserve powers relating to the admission of children to amusement arcades.

The objectives will also be helped by the decision to reduce the number of new casinos to 24 rather than allow the market to determine the number. At one point we were looking at the possibility of 20 to 40 very large regional casinos. Although the Joint Committee did not recommend a specific number, the approach that the Government adopted in the other place and that is contained in the Bill is very much in line with the committee's view.

The Government's decision to appoint an independent panel to advise on the location of the new casinos also makes a great deal of sense. It is a pity that the committee was not told about that when it was carrying out its scrutiny because I am sure that all our
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members would have been interested in it and would have welcomed it. I hope very much that the wise people who make up that panel will take seriously the Joint Committee's comments about the need to ensure that regeneration benefits flow from any decisions to approve mega regional casinos. In our first report, starting at paragraph 388, we described what those benefits could include.

I listened with great interest and enjoyment to the remarks of the noble Lord, Lord McNally. The Joint Committee was much impressed with the evidence that it received from Blackpool, which was the only local authority able to demonstrate to us that it had thought seriously about the potential for casino-led regeneration, and had secured the support of its own residents for it. I agree with what the noble Lord, Lord McNally, said on the subject.

The proposal for Blackpool is very different from the dangers, about which we were told, arising from the proliferation of casinos and other high-stake gambling outlets in town centres and on high streets. Even the most cursory examination of Australia's experience with "pokie bars" in pubs, clubs and so-called hotels shows the risks inherent in the easy availability of high-stake gambling of that sort. The closest that we come to the poker machines found in Australia are the fixed-odds betting terminals (FOBTs) now found in virtually every high street betting shop. The Government are right to keep those under review, and the bookmakers, in turn, are wise to maintain limits on stakes and prizes. A lot more work needs to be done on the effect of those machines over the next two to three years.

New technology creates new opportunities for the gambling industry to make money, but it also brings with it new risks for the vulnerable gambler who has a problem. Other noble Lords, including the noble Lord, Lord St John of Bletso, talked about the growth of internet gaming, which is an example of that. The creation of a new regulatory regime administered by a new gambling commission is the most important element in the Bill and the foremost reason why the Bill should be enacted as rapidly as possible. It is central to many of the issues raised in the Bill.

One of the issues that exercised a number of us who are members of the All-Party Group on Betting and Gambling—my noble friend Lady Golding is the chair and other officers include my noble friends Lord Lipsey and the noble Viscount, Lord Falkland—is the effect that the growth of betting opportunities has had on the integrity of certain sports.

The Joint Scrutiny Committee had had drawn to its attention a number of allegations over the integrity of betting and in particular suggestions that the probity of racing could be threatened, partly but certainly not exclusively as a consequence of the establishment and the growth of the betting exchanges.

It was not possible for the scrutiny committee to examine these allegations in detail. The All-Party Group on Betting and Gambling therefore decided to set up its own inquiry to look at the incidence of, and potential for, irregular and corrupt betting on sports
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and the improper use of inside information. The group came to a number of conclusions and made 15 specific recommendations. There is not time for me this evening to describe these in detail, although copies of the report are available. I am happy to make them available to your Lordships and the Library of the House also has copies.

I appreciate what my noble friend Lord McIntosh of Haringey said about the report and also the kind words of the noble Lord, Lord Mancroft, and the noble Viscount, Lord Falkland, about the way in which we went about our inquiry.

We accepted that the betting and gaming industry in Britain is one of the most respected and highly regarded in the world, and compares favourably with a number of other countries. We found no evidence of widespread or systematic corruption in any UK-based sport. However it did become clear to us that the public has become concerned about the integrity of betting on certain sports and needs to be reassured that cheats are prevented from prospering at their expense.

The use of inside information is one aspect of that and we took some particularly interesting evidence from the Financial Services Authority, which left us in no doubt that much of the information made available to bookmakers and selected punters would fall foul of their market abuse regime if the rules the FSA applied to spread betting applied equally to the gambling industry as a whole.

These concerns have intensified since the growth of the betting exchanges, mainly because of the opportunities that they offer punters to bet against each other, with one backing and the other laying any given event. It is of course self-evident that it is much easier to ensure that a horse, for example, loses rather than be certain that it is going to win the race.

This takes us into the realm of cheating, which is the subject of two of our recommendations. One is that a better definition is needed, which is already contained within the Bill. The second—and one which is strongly supported by the noble Lord, Lord Condon, whose evidence on tackling corruption in cricket was immensely valuable—was that the penalties need to be greater than those envisaged in the Bill.

I enjoyed what the noble Viscount, Lord Falkland, said about his discovery of corruption in cricket. Indeed one can read the evidence from the International Cricket Council about the sort of bets that were offered in recent Test series, where bets are taken on players who wear jumpers, those who wear shades and the number of times that bails are taken off during the course of an innings—these are the sorts of things on which bets are being laid. And if the noble Viscount, Lord Falkland, was fielding at longstop and picking daisies, then somebody would probably be betting on the number of daisies that he was picking.

We strongly supported the principle of establishing audit trails in the betting industry. We commended the steps that the betting exchanges had taken to establish those and believe that the online and credit customers of bookmakers should be covered in the same way. We also attached huge importance to the memoranda of
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understanding signed between sports governing bodies and the betting operators. We feel that these should be extended as widely as possible so that all sports on which betting is conducted should have memoranda of understanding in place with the people who are accepting those bets. We also feel that the sports themselves should have a say on what types of bets should be offered on their sports, again because of the evidence we were receiving from the International Cricket Council.

Processes need to be put in place to identify those responsible for large or unusual bets. When these arrangements are linked to the memoranda of understanding with the sporting bodies it should also be possible to identify those individuals who are breaching their own governing bodies' rules on who may or may not bet and lay in their sports.

Out of our 15 recommendations, eight involve the Gambling Commission, whose role in all these matters will be crucial, in terms of protecting punters and improving the integrity of sports betting. For the commission to be established, it will be necessary for this Bill to be enacted. I close with what the Secretary of State said on Third Reading in another place on 24 January:

That strikes me as a pretty good reason for passing this Bill and I hope that your Lordships will do so.

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