Clause 7 — Casino

Orders of the Day — Gambling Bill – in the House of Commons at 4:45 pm on 24th January 2005.

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Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport 4:45 pm, 24th January 2005

I beg to move amendment No. 102, in clause 7, page 4, line 2, at end insert—

'(2A) In this Act "casino premises" means premises in respect of which a casino premises licence has been granted under section 146(1)(a).'.

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

With this it will be convenient to discuss the following: amendment No. 101, in page 4, line 8, after 'of', insert 'casino'.

Amendment No. 96, in page 4, line 14, leave out paragraph (a).

Amendment No. 100, in page 4, line 17, leave out paragraph (d) and insert—

'(d) sub-small casinos previously licensed under the Gaming Act 1968.'.

Government amendments Nos. 2 and 8.

Amendment No. 93, in page 37, line 23, leave out Clause 85.

Amendment No. 97, in page 38, line 43, clause 88, at end add—

'(3) A casino operating licence may be subject to a condition imposed by virtue of section 73 or 75 specifying rules relating to—

(a) opening hours,

(b) smoke-free areas, and

(c) alcohol-free areas.'.

Amendment No. 103, in page 72, line 35, clause 161, at end insert

'or not to issue more than a specified number of such licences.'.

Amendment No. 104, in page 72, line 37, at end insert

'and in particular may take account of the likely social impact of permitting casinos or more than a specified number of casinos to operate in its area.'.

Amendment No. 105, in page 72, line 38, at end insert—

'(za) must specify the maximum number (if any) of casino premises licences that the authority is willing to issue.'.

Amendment No. 116, in page 73, line 29, clause 162, at end insert—

'(4) Each casino premises licence shall by virtue of this subsection be subject to the mandatory conditions that the licensee—

(a) shall not operate gaming tables or gaming machines of Categories A or B outside a designated gaming area prescribed in relation to the relevant casino premises under section 147.

(b) shall not permit any person other than the licensee or a person employed by the licensee to perform any function within the casino to enter a designated gaming area whilst the same is being used in reliance of the casino premises licence without the production at the entrance thereto of satisfactory evidence of identity; and

(c) shall maintain a condition of door supervision in respect of the designated gaming area at all times whilst the same is being used in reliance of the casino premises licence; and

(5) Regulations under this section may, in particular, add or exclude gaming machines of a particular category or categories from gaming machines which are the subject of subsection (4) of this section provided that such regulations shall not permit gaming machines of Category A to be so excluded.

(6) In subsection (4) "satisfactory evidence of identity" means evidence which is reasonably capable of establishing (and does in fact establish to the satisfaction of the person who obtains it) (a) the name, address and a photographic likeness of the person producing the evidence, (b) establishing that such person is over the age of 18 years on each occasion that satisfactory evidence of identity is required to be produced under this Act (including the proffering on a second or subsequent occasion of entry of a card or token issued to them by the licensee of the casino premises) for the purpose of verifying the identity of such person by reference to a photographic image.

(7) For the purposes of subsection (6) a photographic image may be an image stored (a) visually or electronically upon the card or (b) upon a system maintained by the licensee of the premises for such a purpose.'.

Government amendment No. 13.

New clause 7—Membership role—

'(1) No premises licence shall be granted if conditions are not in place for the effect that no person shall participate in gaming or gambling in casinos unless either—

(a) he is a member of the casino specified in the licence who, at the time when he begins to take part in the gaming, or gambling, is eligible to take part in it, or

(b) he is a bona fide guest of a person who is a member of that casino and who, at the time when the guest begins to take part in the gaming, or gambling, is eligible to take part in it.

(2) For the purposes of subsection (1) a member of the casino specified in the licence is eligible to take part in gaming or gambling at any particular time if he was admitted to membership of the casino in pursuance of an application in writing—

(a) made by him in person or on the premises, or

(b) sent by him to those premises and at that time at least 24 hours have elapsed since his application was made or received there.'.

New clause 11—Going equipped to cheat—

'(1) A person commits an offence if, without reasonable excuse (the burden of proof of which shall lie upon him), he has with him in a casino any article that is capable of or is intended for recording, analysing or predicting—

(a) the outcome of a game;

(b) any cards played or to be played in a game;

(c) the probability of the occurrence of an event relating to a game; or

(d) the strategy for playing a game.

(2) The provisions of subsection (1) shall not apply to any article which is used for making a handwritten record in respect of a game.'.

New clause 13—Gaming machines in established casinos—

'(1) A casino premises licence for an established casino shall, by virtue of this section, authorise the holder to make gaming machines available for use on the premises provided that—

(a) each gaming machine is of Category A, B, C or D; and

(b) the number of Category A gaming machines is not more than one-fifth of the total number of gaming machines of any Category made available for use on the premises.

(2) In subsection (1) references to a casino premises licence include any licence for an established casino which, by virtue of Schedule 18 or anything done under it, is treated as if it was a casino premises licence issued under section 169.

(3) In this section "established casino" means any casino premises which are in use or could lawfully be used for the operation of a casino under section 1 of the Gaming Act 1968.'.

Amendment No. 117, in page 65, line 36, clause 147, at end insert

'and

(i) specify an area (being all or part of the casino premises) for the purposes of section 162(4) in relation to those casino premises ("a designated gaming area") and identify the same upon or by reference to the plan to be included under paragraph (g) above.'.

Amendment No. 143, in page 77, line 2, clause 170, leave out 'eight' and insert 'four'.

Amendment No. 141, in page 77, line 3, after 'casinos', insert 'subject to subsection (3A)'.

Amendment No. 142, in page 77, line 7, at end insert—

'"(3A) In calculating for the purpose of subsection (1) the number of casino premises licences which have effect at any time, no account shall be taken of any established casino but—

(a) an established casino which meets the requirements of regulations made under section 7(5) as to the classification of large casinos shall for the purposes of section 167 be treated as if it is a large casino;

(b) an established casino which meets the requirements of regulations made under section 7(5) as to the classification of small casinos shall for the purposes of section 167 be treated as if it is a small casino; and

(c) an established casino which is below the minimum size for a licensed casino shall for the purposes of section 167 be treated as if it is a small casino.

(3B) In this section 'established casino' means any casino premises which are in use for the operation of a casino under the Gaming Act 1968 when this part of this Act comes into force.".'.

Amendment No. 119, in page 77, line 30, at end insert

'provided that no order under this section shall be made until the expiration of a period of five years after the granting of the eighth casino premises licence under subsection (1).'.

Government amendment No. 29.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

The time it has just taken you, Madam Deputy Speaker, to read out the amendments in this first group reinforces the manner in which our proceedings will be dealt with.

Amendment No. 102 has been tabled in my name and that of Mr. Whittingdale and others. The genesis of the Bill goes back to the Budd report of 2001, and it is worth reflecting that, in the early stages of his work, Sir Alan Budd sent a note to members of his committee that included a paragraph entitled "The Chairman's Dream", which optimistically stated:

"I hope we shall be able to establish principles which are acceptable to all sensible people and shall make proposals consistent with those principles. The (unanimous) report will then be published (to schedule) to widespread acclaim and all its recommendations will be accepted."

I suspect that Sir Alan and members of his committee will be bitterly disappointed that, following his report, as well as two detailed reports from the Joint Committee of both Houses of Parliament and endless discussions in Standing Committee, we are still a long way from achieving "widespread acclaim" for the Government's Gambling Bill. As you have just demonstrated, Madam Deputy Speaker, the Bill is characterised by innumerable amendments, many of which have been tabled by the Government. As we can see from the amendment paper, many more have still to be debated.

This first group of amendments deals with the important issue of casinos, and it is worth reflecting on the fact that there has been much support from all sides for the Bill's provisions, including the establishment of a new tough, independent regulator through the creation of the gambling commission, which will replace the Gaming Board. We understand from a press notice today that the new body is likely to be located in Birmingham. The measures to increase requirements in respect of social responsibility for all involved in the gambling industry, and to bring remote gambling—interactive television and internet gambling, for example—under regulation for the first time have also received support. Many hon. Members were delighted when the Secretary of State announced on Second Reading that casinos would be designated as a single-use category under planning regulations, although I hope that the Minister for Sport and Tourism will tell us when we can expect to hear more about that.

The Minister has often claimed, perhaps rightly, that as much as 90 per cent. of the Bill has the support of hon. Members on both sides of the House, but it is the issue of casinos that causes the greatest controversy. The Government's proposals on casinos came as a huge shock to many members of the public and many Members of the House. They simply could not understand why a Labour Government wanted to increase greatly the opportunities for gambling, and, in particular, launch a massive growth in the number of casinos, when, bizarrely, no member of the Government could even tell us with certainty how many casinos currently exist.

In particular, many of us simply could not reconcile the Government's initial plans to allow the unlimited introduction of new super-casinos, each of them having up to 1,250 new so-called category A machines—which are untried in this country—with unlimited stakes and prizes, with the statement made by the Secretary of State to the Joint Committee that,

"If this legislation gave rise to an increase in problem gambling then it would have failed and it would be bad legislation".

Stung by the criticism, the Government backed down and made a welcome U-turn—not all U-turns are bad—for which there was a great deal of support. The Government then told us, despite having told us previously that they thought that it was a bad idea, that they intended to cap the number of new regional super-casinos at eight. The Committee was much amused by the musings of Mr. Banks on why the figure of eight had been chosen. He wondered, for instance, whether it was related to the atomic number of oxygen being eight, or whether it had some connection with the Buddhist eightfold path to enlightenment. Whatever the reason, however, the cap was a good idea. I note that there is an amendment in this group to reduce that number from eight to four. I want to make it clear that we will not support that amendment if a vote is called on it.

Perhaps more surprising, however, was the Government's announcement that it would also cap the number of new large and small casinos at eight. That now means caps of eight, eight and eight, which is remarkably reminiscent of the internet gambling site www.888.com. There are arguments for a cap on the number of large and small casinos if, crucially, that does not unduly prejudice the existing British casino industry. That is why amendments Nos. 141 and 142 are crucial, and why, if there is a vote on them, we will support them. After all, the British casino industry has an enviable record of being responsible and free of crime. It would be a huge mistake were we to allow the Bill to pass without ensuring that our industry is given a fair chance against the foreign competitors who are already at our door, seeking to pick up the spoils that the Bill creates. As the Bill stands, the indigenous industry could lose out significantly. If the hon. Member for Maldon and East Chelmsford catches your eye, Madam Deputy Speaker, I hope that he will explain in detail the nature of that threat and the solution to it.

I want to give one example of why, unless we guarantee both grandfather rights and the right to allow some trading up as proposed in those amendments, we could see many existing casinos lose some of their machines, while new casinos will be allowed a far greater number. At present, existing casinos are allowed 10 machines. They also have a number of electronic roulette or auto-roulette devices. A Bournemouth casino, for example, has 26 such devices, one in Birmingham has 38, and many others have 10 or more. In part 10 of the Bill, however, those devices are redefined as machines. Therefore, since casinos will only be allowed a total of 10 machines, unless we provide grandfather rights and the right to trade up, as proposed in amendments Nos. 141 and 142, every existing casino would see a reduction in the number of their current machines.

On amendments Nos. 102, 100, 101, 116 and 117, removing restrictions on casinos has been a key focus of this Bill since its inception. It proposes the removal of the 24-hour rule and membership of casinos. Following those relaxations, identification is no longer necessary for someone to enter a casino.

While liberalising the gaming industry has its benefits, we must be diligent about the possible dangers. Casinos without some form of identification requirement could easily attract criminals. As can be seen in the Treasury's anti-money laundering strategy document, the National Criminal Intelligence Service said as recently as 26 October last year:

"Money launderers can take advantage of the facilities offered by casinos to disguise the origins of their funds. Launderers can take 'dirty' cash into a casino, exchange it for chips, spend a few hours gambling, and then exchange the chips (with a gain or loss according to their play) for a casino cheque which can subsequently be presented as an apparently legitimate source of funds."

We tabled the amendments with the aim of preventing crime and money laundering from infiltrating our casinos. They clearly set out a system under which well-monitored areas in casinos will be designated for gaming. To enter such areas, gamblers will have to provide identification for the casino operators, who will then use the information from identification to keep track of those who frequent their casinos. Those measures will not only curb money laundering and crime, but help with problem gambling. We are well aware that many casinos currently operate self-barring schemes, enabling problem gamblers to request that their casino membership be suspended and entry denied to deal with their addiction. If there were no requirement for ID on entry to a casino, it would be very difficult for such schemes to operate. I consider that unacceptable, as many operators find the schemes particularly beneficial in combating customer addiction to the new high-price slot machines.

Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley

I agree with what the hon. Gentleman says about problem gamblers, but how would he get around the problem of those who are refused entry at casinos but then use the internet to continue their gambling? That still worries me.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

The hon. Gentleman is right to express concern about internet gambling. Recent evidence suggested that young children currently had no difficulty in gambling on the internet. The hon. Gentleman will be pleased to know that there is a great deal of support—in, I think, all parts of the House—for the clauses that will bring internet gambling under regulation, and that proposals in a later group of amendments will toughen the arrangements still further. There remains the problem of internet gambling operations that are based in the UK, but have a server based somewhere else. I know that the hon. Member for Maldon and East Chelmsford has tabled an amendment to deal with that.

The issue of children is clearly important. The amendments propose the establishment of a clearly identified area for high-stakes machines, which will be heavily supervised. Children will not be allowed into such areas, as long as we know who is defined as a child in the legislation. If we do not have a system of identification, it will be difficult for those doing the supervising to know who is under 18, for example. We have discussed that in other contexts, such as the licensing legislation: landlords will have a problem if there is no identification system. A number of benefits would accrue from the amendments, which would not only deal with money laundering but protect young children and help with problem gambling.

In Committee, the Minister said that although ID was currently required for entry to all casinos,

"we are not persuaded that it would be right in future to require identification on entry in all cases . . . The casinos of the future will not be the same as casinos now."—[Official Report, Standing Committee B, 2 December 2004; c. 351.]

But despite the complications and difficulties that I accept may well arise for the big regional casinos dealing with large numbers of punters streaming in on Saturday nights, I think it imperative for a mechanism to be established to protect the British gaming industry from crime, as well as protecting young people and problem gamblers.

The Minister may well tell us that the Government are awaiting the outcome of European Union deliberations on the third directive on money laundering, but one thing is clear: the Government themselves have accepted that the gambling commission must establish a clear set of guidelines. Indeed, clause 24 states that arrangements must be made for the purposes of

"ensuring that gambling is conducted in a fair and open way", for

"protecting children and other vulnerable persons from being harmed or exploited by gambling", and for

"making assistance available to persons who are or may be affected by problems related to gambling."

I genuinely believe that the provision of identification would help in all those cases, and that it would be consistent with the terms of the third directive and with what the Government claim that they wish to achieve.

I turn to amendments Nos. 103 to 105. Although regulating access to a gaming area is an important issue, so are the powers that we give to local authorities over the introduction of casinos in their area. Local authorities should be given as much freedom as possible, within the proposed caps, to take advantage—or not—of the increased gambling opportunities afforded by the Bill. As currently drafted, clause 161 empowers local authorities to say no only to any casino whatsoever; it does not enable them to say that they want, for example, only one casino, or only two or three casinos. Amendments Nos. 103 to 105 would enable local licensing authorities to place their own cap on the number of casinos in their area, and at a figure other than zero. When such authorities review premises' licences, they should have as much freedom as possible to determine what kind of premises they want in their area and how many there should be.

Finally, the purpose of new clause 11, which deals with cheating, is to make it illegal to carry articles into a casino that could help in analysing or predicting the odds or outcome of the game. It tackles the problem of so-called "advantage players", who use such articles to help them during the game, but who argue that they are not cheating because they are not interfering with the game. We tabled a similar amendment in Committee, but we withdrew it after the Minister assured us on 30 November last year that a gambler who does anything that unfairly increases his chances of winning is cheating and is therefore covered.

Despite that assurance and others given by the Minister in subsequent conversations, we are not convinced that the Bill as drafted would result in "advantage playing" being considered an offence. Current legislation certainly does not consider it so. On 6 December—only a few days after the Minister gave us that assurance in Committee—The Times reported an incident at the Ritz casino in which the use of a device in a mobile phone enabled the players in question to predict the outcome of every spin of a roulette wheel. As a result, they scooped £1.3 million. However, according to legal advice, because the device had not interfered with the game the gamblers were not in breach of current law, and were therefore able to hold on to their winnings. The purpose of new clause 11 is to change the system, so that we can be absolutely sure that so-called "advantage" cheaters will be unable to get away with such things.

Many jurisdictions—in Nevada, in South Africa and in a number of Australian states, for example—already explicitly legislate against practices such as that employed during the Ritz episode. They have laws that prevent not only the sort of cheating described by the Minister in Committee, but offences relating to the possession or use of the devices mentioned in our new clause. Our suggestion is therefore already in operation elsewhere, and its use would not be unprecedented.

There are a number of other amendments to which many Members will wish to speak, but I should make it clear before I finish that the part of the Bill dealing with casinos is still a long way from being likely to achieve the widespread acclaim that Sir Alan Budd referred to. I hope that our amendments are accepted, so that they can at least move the Bill in the right direction.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend 5:00 pm, 24th January 2005

I must admit that I am not an expert in all the complexities of the Bill. I was happy to see the extension of regulation of new forms of gambling, but—as I said on Second Reading when I voted against the Bill—I am very disturbed by the opening of the gates to super-casinos and the way in which the Bill will allow people to gamble much more easily than they can at present.

I appreciate that in Committee the Government have adjusted the likely number of super-casinos and have proved willing to experiment first, but I have still tabled amendment No. 96, which would delete regional casinos from the Bill. Other amendments to which I have put my name would provide for smoke-free areas, a ban on alcohol at the tables and limits on opening hours. The gambling commission will have control over those issues, but they should be covered by the Bill. There are some 13,000 casino workers in the UK at present, but the Bill would lead to a huge increase in that number. It is only right that they should not have to work in the smoke-filled rooms that seem to exist in many casinos. It is also right that no alcohol should be allowed at the tables. I understand that some casinos have been operating that policy for about 18 months. It gives people the opportunity to have a break from the tables and perhaps think about what they are doing. I believe that there should be a ban on consuming alcohol in the gaming areas. If alcohol is sold on the premises, it should be kept away from those areas. As I read the Bill, it would allow casinos to be open for 24 hours. The gambling commission should have the right to set opening hours, and I am willing to leave that to custom and practice. By and large, casinos are open from 2 pm to 4 am. That is way beyond any time that I personally would like to see them open, but if that is the rule of thumb that operates at present, I am content to allow that to continue. However, I do not favour 24-hour opening.

I wish to support the amendments tabled by my right hon. Friend Joyce Quin to maintain the 24-hour membership rule—the cooling-off period. It protects the person who goes out on a Saturday night and has a few drinks, and then their friend says, "Come on, let's go to the local casino." Before they know it, they are inside. They may have already drunk too much, but still have money in their pockets—of course, under the Bill, they could even use their credit cards to get money to gamble. I have tabled some amendments on that point later in the Bill.

Photo of Mr Jon Owen Jones Mr Jon Owen Jones Labour/Co-operative, Cardiff Central

I do not know whether there are any plans to build a super-casino in Bridgend. The nearest super-casino, if one is built, will probably be in Cardiff. Is my hon. Friend aware that the Liberal leader of Cardiff council has accepted a £6,000, all-expenses-paid trip to Las Vegas to inquire about casinos? Was it proper of him to accept that trip?

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

I can only thank my hon. Friend for providing me with that information. Given the context of the Bill, that decision is highly dubious, and I certainly hope that there will not be a super-casino in Cardiff.

There is much evidence about the impact of super-casinos. The famous Atlantic City survey showed that unemployment there fell by very little and that the nature of its businesses changed. By 1996, some 1,000 businesses had gone, and there are now only 60 independent hotels there.

Photo of Mr Nick Hawkins Mr Nick Hawkins Conservative, Surrey Heath

I know that the hon. Gentleman holds his views on the matter extremely sincerely. Will he accept that the Atlantic City survey to which he refers is extremely contentious? Those of us who compare the terrible state that Atlantic City was in during the 1970s—it was a run-down place of the past—with how it is after the huge amounts of regeneration that have resulted from the creation of resort casinos would certainly say that it is a more attractive, vibrant and successful place now. Many of us who believe that a good outcome of the Bill would be regeneration want to ensure that the one-sided picture of Atlantic City, as presented in the survey to which the hon. Gentleman refers, is not the only information before the House.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

I thank my honourable colleague for that description of Atlantic City.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

The hon. Gentleman is a colleague in the House—a Member.

Although I accept that the physical changes to which the hon. Gentleman refers have occurred, despite the creation of the super-casinos, the unemployment rate in Atlantic City has hardly changed—it has gone down by only 2 per cent. However, there are now 71 per cent. more bankruptcies recorded in Atlantic City than in the rest of New Jersey. Of course, we do not know the huge problems that super-casinos leave in their wake for gamblers whose lives have been destroyed, and so on.

Photo of Gwyneth Dunwoody Gwyneth Dunwoody Labour, Crewe and Nantwich

If the Government see fit not to accept the minimal protection that my hon. Friend wishes to build into the legislation, and given that it is not at all clear where this tacky Bill has come from, would it not be a good idea to vote against it?

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

I voted against the Bill on Second Reading. One important consideration is whether the Bill will be amended in the other place to address my concerns. If that were to happen and the House agreed to such Lords amendments, I could support the Bill. However, I could not support it in its present form and without my amendments.

Photo of Mr Teddy Taylor Mr Teddy Taylor Conservative, Rochford and Southend East

I am interested in the points that the hon. Gentleman is making about Atlantic City. Will he make an additional point? Should we not bear it in mind that in the first few years after the super-casino went to Atlantic City, crime rose by 107 per cent.—that is a fact, not just an opinion? At the same time, crime in America overall increased only moderately.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

The hon. Gentleman is quite right. I would have made that point myself, but he has saved me the trouble.

Although the Government have moved their position somewhat, if they do not remove super-casinos from the Bill this evening, I hope that they will allow the other place to do so. I also support amendment No. 119, which would ensure that the pilot scheme to examine the effect of super-casinos—if they are created—would last for at least five years from the time at which the eighth such super-casino started to operate so that there could be a proper in-depth study of the situation.

I hope that the Government will react positively to this group of amendments, say that they have had second thoughts and will now abandon the idea of regional casinos altogether. That would lift my spirits. As I said on Second Reading, I blame myself in part for what has happened. I did not take a close interest in the proposals. I simply thought on reading them that no Labour Government would ever want to accept the opening up of the gambling business in the United Kingdom.

I certainly know that there is no public demand for such casinos. As far as I am aware, no one has commissioned a single opinion poll to suggest that any more of these casinos are wanted. In fact, the only poll that has been commissioned indicated that more than 80 per cent. of people thought that there were sufficient opportunities to gamble in the United Kingdom. I agree overwhelmingly with that response, and look forward to a positive reaction from the Government.

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport 5:15 pm, 24th January 2005

Although we have to cover 12 groups of amendments before 9 o'clock, the group relating to casinos deals with perhaps the most contentious part of the Bill. In some ways, it is a shame that the Bill has come to be seen in the public mind as the casino Bill. It contains many other important measures about which there is little dispute in the House as to their necessity, but casinos have caused most of the argument.

Unlike Mr. Griffiths, we are not completely opposed to the idea of regional casinos. We have always recognised that regional casinos could bring huge regeneration benefits to areas that are in desperate need of that investment. We supported the original concept when they were to be termed "destination casinos" simply on the basis that we could see that potential for regeneration. However, we have always been very much aware that they are a type of gambling institution that is entirely new and untested in this country. They represent gambling on a scale that we have never seen before. Therefore, we have always felt that it was sensible to proceed cautiously.

On Second Reading, the Secretary of State argued that the controls in the Bill at that time would be sufficient and that, as a result, the market would limit the number of regional casinos to perhaps 20 to 40, each of which would represent an investment of £150 million or more. The business model on which they are based requires 20,000 people or more each week to gamble in those casinos. That represents an increase in gambling on a scale not seen in this country before.

We felt strongly that the Bill contained no provision that would have necessarily limited the number to 20 to 40 and that in any case that was too high a number, particularly as each of the new regional casinos could have up to 1,250 category A gaming machines that have never been seen before in this country. There is a widely felt concern that that could lead to an explosion of problem gambling. That is why we have always argued for a cautious approach. Rather than rely on the Secretary of State's expression of hope that the proposal might lead to no more than 20 to 40 regional casinos, we believed that there was a strong case for the Government to introduce a pilot scheme to test the impact of a small number of regional casinos to see whether problem gambling increased as a result. That is why we proposed in Committee that there should be a pilot scheme with just four regional casinos.

Having argued on Second Reading that a pilot scheme would be a bad idea and was not necessary, the Government then did their first major U-turn of the Committee stage and announced a cap of eight on the number of regional casinos. At the time of that announcement, we made it clear that we welcomed the Government's surrender, but found it difficult to see where the number of eight had come from. Mr. Foster referred to some of the speculation that took place in Committee about why eight had been chosen. It certainly does not represent one per region, which would have been one way to proceed; instead, it appeared to be an entirely arbitrary figure. Certainly, the Government have never offered a real justification for choosing that number. The purpose of our amendment No. 143 is therefore, first, to press the Government to explain why eight is the right number.

Photo of Geraldine Smith Geraldine Smith Labour, Morecambe and Lunesdale

I welcome the fact that the Government are considering having just eight regional casinos instead of what they were proposing on Second Reading. Can the hon. Gentleman tell the House why he thinks that the number should be four and explain the logic behind the Opposition's thinking?

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

I can, and was just about to. First, as I said, we want the Government to tell us why eight is the right number. They are, after all, the Government, and they must justify their proposals. We proposed four because we feel that it is much more sensible to start off with a small number, test the impact and, if it appears that there are no problems, increase. Although we recognise the possibility of the regeneration benefits which the Government hope for, and which we would certainly like to see, it is not right to risk a dramatic rise in problem gambling. We have to be satisfied that there has not been a massive rise in problem gambling before we go on to seek those potential regeneration benefits.

The Secretary of State said right at the beginning that if the consequence of the Bill were a rise in problem gambling, the Bill would have failed. Our concern is that eight regional casinos could lead to a significant increase in problem gambling, particularly because there could be up to 10,000 category A machines. At present, there are no category A machines in this country, yet as a result of one pilot scheme we could have up to 10,000 of them.

Also central to the purpose of our amendment is the fact that it is possible to start with four and increase, whereas it is not realistic to start with eight and go downwards. It is unthinkable that investors would commit the sums that we are talking about—£150 million per casino—if there were any risk that after a few years their licence would be taken away.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

The hon. Gentleman described category A machines as a potential problem that needs to be monitored. Does he believe that the scrutiny Committee was right to say that category A machines should go into large and small casinos? Does he believe that that is still the case today?

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

We have tabled another amendment, to which my hon. Friend Mr. Page will speak, if he has the opportunity, which would allow a limited number of category A machines in large and small casinos. That would allow a proper test of their impact in each type of casino.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

Does the hon. Gentleman believe that category A machines should be allowed in the 136 casinos that currently operate under the Gaming Act 1968?

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

As I said, we believe that a limited number of those machines should be allowed in large and small casinos in order for there to be a proper test. However, I point out to the Minister that amendment No. 143, by reducing the number of regional casinos from eight to four, would halve the number of category A machines to 5,000, as opposed to the 10,000 that the Government currently propose.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

Perhaps the hon. Gentleman will now answer the question. Does he suggest that category A machines should be not only in regional casinos but in large casinos, in small casinos and in the 136 casinos that operate under the 1968 Act? Does he agree that category A machines should also be in those places?

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

Existing casinos are those that have never given rise to a significant gambling problem. We believe that if there is to be a proper impact test, it makes sense that there should be a limited number of machines tested in each type of casino. That is the purpose of new clause 13. I hope that we will have the opportunity to address that in more detail. However, the answer to the Minister's question is yes.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

On category A machines, there is an important difference between what the Government are saying and the Opposition's suggestion. The pilot or experiment is limited to category A machines at eight sites throughout Great Britain. The Opposition are now suggesting that we have category A machines in 150 sites. That is my understanding. If that is not proliferation of category A machines, I do not know what is.

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

If the Government adopt our amendment, it would mean considerably fewer category A machines than if they were to proceed with the eight regional casinos. There are other safeguards that we strongly believe are necessary—I am about to refer to them—which would provide additional protection to that which is available under the Bill. Our concern is to take account of the warnings that have been given, especially about destination casinos—regional casinos, as the Government term them. That new type of casino has given rise to the concerns that have been expressed by many bodies, such as the Royal College of Psychiatrists, the British Psychological Society, the Methodist Church and the Salvation Army.

Existing casinos have not produced a major increase in problem gambling and have a good record of responsible behaviour. However, a cautious approach needs to be taken to the new regional casinos, which are entirely untried and untested. That is why we have suggested that the pilot scheme should involve only four casinos, perhaps two in major cities and two at destination locations. That would enable a proper trial to take place. If it is shown that there is no significant problem attached to those four sites, we could proceed to increase that number. To start with eight means a huge increase in the number of machines and it would be almost impossible to move down from that number.

Amendment No. 116 relates to an ID requirement. It provides for an important additional safeguard that we would like to see in place alongside the proposals to bring in regional casinos and introduce category A machines.

Mr. Griffiths said that he wished to retain the 24-hour rule. We see no great purpose in retaining that rule, which is now largely anomalous. Adults who decide that they wish to visit a casino should be able to do so without having to wait 24 hours in case they change their mind.

The arguments for retaining an ID requirement are much stronger. Such a requirement would provide an additional protection for those known to be suffering from gambling addiction. Existing casinos maintain a register of people who suffer from gambling addiction and who therefore cannot use their premises. It would also provide an additional means of ensuring that age restrictions are enforced. An identity requirement would mean that people under the age of 18 could not obtain access and use category A machines or the regional casinos.

Perhaps most importantly, it would help to prevent money laundering. The second money laundering directive requires ID for anyone using a casino in this country:

"A person who operates a casino by way of business in the UK must obtain satisfactory evidence of identify of any person before allowing that person to use the casino's gaming facilities".

The proposed draft of the third money laundering directive will change that identification requirement, so that it applies only to people who purchase or exchange gambling chips with a value of €1,000 or more. However, emails between officials in the Department and the American casino operators revealed that the Government were asking what figure they would regard as acceptable. It seems that the Government propose actively to lobby to try to increase that threshold to a much higher level, as the American operators believe that that is necessary for their business model to work. The domestic industry has no difficulty with an ID requirement. Rank is happy to retain such a requirement; indeed, it accepts that it could have positive advantages, as does the Casino Operators Association. Some operators of regional casinos are happy to accept an ID requirement. Sun International told us that its South African casinos that are equivalent in size to regional ones in the UK require someone to use a smart card, for which ID is necessary, before they can use category A machines.

Operators of regional casinos say that it is perfectly possible to have an ID requirement, and they accept that it would provide additional protection, both for people suffering from gambling addiction and as a measure to prevent money laundering. The amendment to reduce the number of regional casinos from eight to four and the amendment introducing a requirement for ID represent the cautious approach that, we believe, is necessary. We accept that there could be great benefits, but the last thing that we want is something that the Secretary of State spoke about when the Bill was introduced. If the Bill leads to an increase in problem gambling it will have failed. The amendments are designed to ensure that that is not the case.

Photo of Janet Dean Janet Dean Labour, Burton 5:30 pm, 24th January 2005

My hon. Friends will be aware that from the brewing industry, which began in my constituency more than 1,000 years ago, grew the gaming machine industry, which originated in pubs. Leisure Link and other companies in my constituency service machines throughout the country, so I am keen to protect our home-grown casino industry, which has proved to be responsible over the years. I spoke to that effect on Second Reading.

I welcome the Government's decision to limit the number of regional casinos, but my hon. Friends will be aware of concern about the unlevel playing field that disadvantages the existing UK casino industry. There are anxieties that the introduction of category A machines in regional casinos—such machines are not produced by the home-grown industry and would have to be imported—would have an impact on other casinos, whether in their existing form or in the proposed arrangement of eight large and eight small casinos. I hope that when the Bill goes to the Lords there will be more discussion with the industry about how we can make sure that there is not an adverse effect on existing casinos.

Photo of Gwyneth Dunwoody Gwyneth Dunwoody Labour, Crewe and Nantwich

I have the greatest admiration for my hon. Friend, but is she suggesting that the House of Commons should pass sub-acceptable legislation on the assumption that another place will throw it out? That is a rather sad doctrine.

Photo of Janet Dean Janet Dean Labour, Burton

I accept that we should not have to rely on the other place to amend our legislation, but while the House of Lords exists and the business that proceeds through this House carries on there, I hope that gives the Government more time to talk to the industry. The Government have spent much time discussing all these matters with the industry over a long period. Hon. Members have commented that the Bill underwent pre-legislative scrutiny and that we have had Adjournment debates in Westminster Hall and elsewhere on the Budd report. There have been lengthy discussions, but more are still needed to ensure that we protect our home-grown industry.

It is ironic that people and organisations that oppose the development of casinos agree with those in the home-grown industry who want fewer regional casinos and more safety introduced into the development of those regional casinos. Both ends of the spectrum—those in the industry and those who oppose it—want us to proceed carefully. I hope the Government will make sure that we do that.

There are concerns about the development of regional casinos and the introduction of category A machines. The question was asked whether the Opposition support category A machines in all casinos. It might be better to go the other way, continue to have category B machines in all casinos, and support our home-grown industry. I hope Ministers will be able to provide the reassurance that I seek.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

With the reform of gambling, and the broad agreement in most quarters, the House can welcome many aspects of the Bill—the establishment of a gambling commission, further help for problem gamblers and new forms of control of new gambling, such as the internet and betting exchanges. However, the Minister seems to have adopted the line—I have seen it manifest itself twice, first in response to me and then in response to my hon. Friend Mr. Whittingdale—that attack is the best form of defence. After his Committee performance, this is the only home he has to go to. He said that the Government had listened and that the statement that he made was a result of the Government listening. I have already expressed my sympathy to the Minister for being lumbered with the Bill. He is a nice chap and it was not his fault. I do not know who gave it to him and ordered him to take it through the House, but they are the smart ones. They got out of doing it and lumbered the Minister with it. Now he must live with it.

The Minister said that he had listened to concerns and produced what I call the 888 statement, but the existing casino operators said they had not been consulted. The statement came as a bolt from the blue. The point has been made by Mr. Foster. I keep calling him my hon. Friend, because we had a relationship in Committee that grew warm and friendly as the days went by. No doubt an election will soon cause it to come asunder. He said, and I repeat, that the existing casino operators were not consulted prior to the 888 statement. Nothing that I have heard so far contradicts that. Perhaps the Minister will say that he consulted deeply with the casino operators before making the statement.

I support the hon. Member for Bath on the damage that will be caused to the existing industry. It is an industry that has a good reputation. To the best of my knowledge, it has caused no more than small problems in one or two areas. Compared with the industry in the rest of the world, we can feel pride in and respect for ours, so why are the Government trying to damage it? Normally, with any Government, I would think that there was a deliberate plan to knock the existing casino industry. But with the chaos and confusion that has surrounded the Bill's passage, I can only assume that this is a mistake—one of the many blunders that have been made along the road. I sincerely hope that, in the fullness of time, possibly when the Bill is in the other place, the Minister will table some amendments that will restore the balance for the existing casino system and its operators that they justifiably deserve. I hope that he will take that point on board and look after the industry that has served us well without letting us down and which has a good reputation.

I support amendment No. 143 and the move from eight to four casinos. I shall not reiterate all the arguments advanced by my hon. Friend the Member for Maldon and East Chelmsford, but simply say that destination resort casinos are a new phenomenon. We have licensing authorities with no experience and regeneration benefits that are as yet unknown.

The scrutiny Committee, chaired by my hon. Friend Mr. Greenway, who is sitting next to me poised to intervene later, to which I look forward, said:

"Whilst we acknowledge the Government's reluctance to publish national guidance relating specifically to regional/leisure destination casinos, we believe that it could help to ensure a consistent approach between regional authorities and avoid the need for applications to be called in for determination by the First Secretary of State."

The Committee was remarkably tactful in making that point, because it was saying that the Government have got it wrong and have no idea of the chaos and confusion that will be visited upon them if they do not have proper national planning guidance.

As we know, chaos and confusion did descend upon the Government, which is why I welcome the Minister's statement and the news that we will have an advisory panel to look at these matters. That is a substitute for planning guidance and procedures—the new way out of the bind that they have got themselves into. I support all that, but not the 888 proposal, because I think that that is too large a figure for the quicker process of evaluation and assessment that I want to see. In Committee, there was doubt about the timetable to be followed: whether it would be a drip, drip, drip affair, where assessments would take place as each casino ran up a number of years, or whether they would wait to the end. That is one reason why I support having four regional and leisure casinos. The assessment process would be quicker, we would get the results quicker and we could decide how to proceed on the basis of those results.

Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley

If the hon. Gentleman is so concerned about the numbers, why did he not go for a further reduction to two of the large casinos, one in a town, and one a destination casino?

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

I do not know whether the hon. Gentleman has any statistical background, but the larger the sample, the better the result that one will get. However, at the same time, the larger the sample, the longer it will take, so we come to a trade-off. I could take his argument and say, "Why not have just one?" He might say that we need one in a town and one in a resort, such as Blackpool, which Mrs. Humble would be only too glad to see. But what would happen if one of those samples was incomplete and inaccurate, not a fair one? By having two in each area, we can make a proper comparison. If they are vastly different, we might have to extend the cycle. I want to see the results as soon as possible, so that we can go forward as soon as possible. At the moment, we are in limbo and the quicker that it is resolved, and the quicker that we know where we are, the better.

Photo of Mr Alan Howarth Mr Alan Howarth Labour, Newport East 5:45 pm, 24th January 2005

I wish to speak in support of amendment No. 96 and new clause 7.

My right hon. Friends have already responded constructively to anxieties expressed by the public about their proposals to open the way for regional or mega-casinos. Instead of market forces determining how many such casinos there should be, there will now be eight in a first wave to be tested during a trial period, albeit a short one. Can we hope that my right hon. Friends might go further and withdraw their proposals for regional casinos all together? I am not very optimistic about that, as my right hon. Friend the Secretary of State was reported on 17 November as saying:

"I don't describe this as a cap . . . A cap is a once-and-for-all limit—what we are doing is introducing regional casinos more slowly than was the original intention."

I have had the opportunity to have some conversation with my right hon. Friend, for which I thank her, and she told me that the Government's view on the matter was neutral and that it remained to be seen how, under the dispensation that they are creating, regional casinos would eventually develop.

The question that I would like to put to Ministers is, who wants any regional or mega-casinos? The public do not. I understand that a national opinion poll survey found that 93 per cent. of respondents opposed the extension of casinos. Doubtless, the industry wants them, although it is interesting to note that it is not the United Kingdom industry. Some local authorities have expressed an intrigued interest and no doubt the Exchequer is attracted to the proposal. My right hon. Friend the Chancellor received £1.35 billion in gambling duties in 2003–04, and I fear that the Treasury's addiction to gambling revenues may grow. The Treasury should be encouraging saving, not gambling.

Why should the character and quality of life of our communities be at the mercy of the executives of Caesars International—it is a very long time since we were last invaded by Caesar, and we have taken some national pride in the fact that it is many hundreds of years since we have been successfully invaded—Las Vegas Sands or MGM Mirage? I hope that the latter name is apt. It certainly is as far as gamblers' dreams go: this is an industry that profits only as its customers lose. I hope that, similarly, the £1.1 billion and more that MGM Mirage promised, or threatened, to invest in Britain will prove to be a mirage.

I am not so puritanical or impractical as to seek to ban all gambling, but I believe that a responsible Government should tightly restrict it. Of course, that is what most of the Bill does, which is why I was content to vote for it on Second Reading. My right hon. Friends are right to take account of technical change, including the development of remote gambling and the arrival of video roulette games. I support their proposals on licensing, the establishment of the gambling commission, codes of practice and consultation of local authorities, the police and the public, but their proposals for mega-casinos—that we should have these casinos with up to 1,250 slot machines and £1 million jackpots—run entirely counter to the thrust of the rest of the Bill. I have noticed that the British Amusement Catering Trades Association, at some risk of self-contradiction, has described the machines as

"untried, untested and highly addictive".

My right hon. Friends say that their intention is to promote socially responsible gambling, but I find myself at a loss to understand the conception of socially responsible gambling. I have heard Ministers declare, perhaps somewhat romantically, that the poor should be enabled to enjoy the same pleasures as the rich, but I think we should ask the poor what they want. I noticed that women who were surveyed were particularly strongly opposed to the extension of gambling. So many women have seen the male so-called breadwinner taking a disproportionate share of the household income to the betting shop or dog track, and they know the consequences. According to the National Audit Office, gambling has a £53 billion turnover in Britain through betting shops, casinos and, of course, the national lottery. In passing, I wonder whether the proposals will not prove deeply damaging to the national lottery. That would mean a serious blow to culture, which it is my right hon. Friends' responsibility to defend.

The Methodist Church and the Salvation Army have urged the Government to exercise greater restraint and more care. They have been at pains to be reasonable and I go further than them. I joined the Labour party because I thought that it took the view that it is the Government's responsibility to protect vulnerable people. That is what this Government want to do and that is what they do so very well in so many fields of policy, but I cannot see how the creation of mega-casinos will protect vulnerable people. I understand that we have in this country some 300,000 problem gamblers, and members of their families, their employers and their fellow employees are, of course, affected.

Last November, the San Francisco Chronicle reported:

"Economist Earl Grinols has studied the rates of crime, lost productivity, domestic abuse and other social ills in counties with and without casinos. He found that the 3 to 5 per cent. of players who become problem gamblers each end up costing society about $11,000. States would need to seize half a casino's profits, calculates Grinols, to cover the 'social wreckage' it generates. In Missouri, for instance, gambling tax revenue brought in a 'seeming windfall' of $242 million in 2002, yet the state lost an estimated $572 million in related business failures, crime, unemployment and other social costs."

In contrast, in South Carolina,

"six months after it banned slot machines in 2002, two-thirds of the state's Gamblers Anonymous groups had disbanded and calls to help lines had plummeted."

Citizens advice bureaux have a great deal of experience of helping individuals who have got into severe multiple debt as a result of their gambling addiction. A citizens advice bureau in south Wales has reported a case that may be characteristic:

"A 62 year old pensioner approached a CAB in South Wales for advice about her debts. She had a problem with gambling and had built up £80,000 debt on various credit cards. When she got into difficulties she approached her bank who lent her a further £25,000, although her only income was £600 per month."

Mega-casinos have historically been associated with people's propensity to self-destruction, vice and crime. We are introducing 24-hour drinking at the same time as we are discussing the abolition of the 24-hour rule that requires people to have been members of a club for not less than 24 hours if they want to go into casinos and gamble. My hon. Friend Mr. Griffiths spoke eloquently about that point in his advocacy of new clause 7, and he is right. One can imagine someone who has had too much to drink and who is armed with cash and a credit card going into a casino and ruining him or herself and their family. We should keep that sobering-up period. I am pleased to see that the British Casino Association itself wants the 24-hour membership requirement kept at all casinos.

Photo of Jim Cousins Jim Cousins Labour, Newcastle upon Tyne Central

In focusing all his fire and attention on mega-casinos, my right hon. Friend opens up the possibility of no mega-casinos, but a proliferation of casinos that are merely described as "large". On 16 December, my right hon. Friend the Secretary of State clearly stated that a cap will be imposed on not only mega-casinos, but large casinos, which was a significant step forward.

Photo of Mr Alan Howarth Mr Alan Howarth Labour, Newport East

I agree with my hon. Friend that that was a constructive step. I also appreciate his point that a good deal of the argument that I am developing in relation to mega-casinos is applicable to large casinos, and we must be equally wary of the dangers posed by a proliferation of large casinos.

On 31 October last year, The Observer reported on the situation in Australia, which is instructive. Gamblers in the mega-casino in Melbourne have incurred vast losses of more than £3.2 billion over the past 10 years. The article stated that that mega-casino is used for the laundering of drugs money, and I thought that Mr. Whittingdale made some good points about the danger of crime associated with mega-casinos and the desirability of retaining an ID requirement, which, as he noted, would also help problem gamblers who are making efforts to exclude themselves from casinos and the policing of the age limit.

I wonder whether my right hon. Friends the Ministers noticed that when Judge Derek Inman sentenced a violent serial mugger who robbed to fund his betting shop addiction last November, he proposed that Parliament might wish to take that particular case into account in its consideration of the Gambling Bill. Sir Teddy Taylor discussed the rise of crime in Atlantic City when a mega-casino was established. In Sydney, it is reported that a Russian mafia has been running prostitution rackets, which is exactly what one sees if one visits Las Vegas. The report in The Observer quoted an Australian academic:

"'It is a crime inflicted on the community by the government. It has been an absolute curse on the state of Victoria. It is a money-making venture that maximises returns by ensuring that people lose a lot of money'".

I have seen mega-casinos in Las Vegas, in Genting in the Malaysian highlands and in Australia, and they seem to offer death to the soul.

The only other country I am aware of that is energetically promoting large-scale gambling is North Korea—curious company for us to keep. There must be better ways in which to regenerate our cities. On 30 October, The Times reported the opinion of the respected venture capitalist Wilbur Ross, who said that the casino and gaming sector is the next to go belly up and that

"'That whole industry is based on junk bonds'".

Do we really want such developments in our great cities?

My right hon. Friend the Secretary of State said to me that it is better for people to gamble in mega-casinos than online, but I do not believe that the reality will be like that. If it is easy to gamble on the internet, why will people make a journey across the country to a regional casino or even across the city to a big casino?

My right hon. Friend the Secretary of State said that planning authorities will provide a safeguard, but I fear that local authorities will all too readily be seduced by the prospects of planning gain and the anticipated extra revenue as a result of the presence of casinos. The Local Government Association's so-called safer communities board, which seems a somewhat Orwellian title given the context, expressed disappointment at the limit of eight casinos. I impugn the integrity of no individual, but it is dangerous to put such temptation in the way of planning officers and members of planning committees. We are dealing with an industry that disposes of very large sums of money and that is prepared to be entirely ruthless.

My right hon. Friend the Secretary of State also said to me that the gambling commission will be the judge of whether operators are fit and proper, which is true, but the difficulty is that the unfit will gamble and the improper will batten on them.

If this is the first wave, I do not want the tsunami. If the Bill is carried, I hope that my more apocalyptic fears will not prove justified, but I cannot see how any good can come out of the policy.

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

The right hon. Gentleman has spoken for about 14 minutes and has not yet said a word in favour of the Bill. Will he sum up in one sentence why he thinks that his Government are introducing it?

Photo of Mr Alan Howarth Mr Alan Howarth Labour, Newport East

I respond to the hon. Gentleman by saying that my right hon. Friends are good people and good Ministers who are animated by concern for public well-being, and I am completely baffled as to why they are putting forward this policy. I do not want it and I will not vote for it.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I propose to speak to amendments Nos. 142 and 116 and new clauses 13 and 11. We shall vote on amendment No. 116, and hope to press amendments Nos. 142 and 143 to a vote. I shall be relatively brief because I know that several Members wish to take part. That underlines the fact that the two hours that we have been given for this important debate on casinos is inadequate, as is the time allowed for the whole debate.

I begin by considering the issue of casinos in the round. The Government have changed tack dramatically—I will not call it a U-turn. Their proposals are predicated on trialling, or piloting, regional casinos. The Bill retains the proposal for having 1,250 category A machines in the selected eight regional casinos. The existing industry, which consists of about 136 casinos—the number is sometimes cited as 131 or a few more, but let us take 136 as a ballpark figure—and which has had an unblemished record for 40 years and done extremely well in terms of its social responsibility, has been completely and utterly ignored. The Bill makes no mention of it; it seems not to exist as far as the Government are concerned.

Through the 888 pilots, the Government propose a completely new situation with regard to category A machines, but the same numbers of category B machines in the eight new large and eight new small casinos as are allowed in the existing casino estate, where the maximum is only 10 machines per casino, irrespective of its size. That does not make any sense—it is illogical. The Government's idea of a trial does not stack up. If they want a real trial, they should put machines into the existing estate, not leave it without any extra machines and virtually no changes other than to membership requirements and the demand test. We should have a proper trial, but let us not ignore the existing industry, because the impact on it will be immense.

Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley 6:00 pm, 24th January 2005

Under the hon. Gentleman's proposals, would existing casinos be allowed category A machines?

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I shall come to that in a moment, because it relates to new clause 13.

The Government's proposals on casinos are analogous to saying that if an American supermarket interest—I will not refer to any particular supermarket—wanted to come into this country in a huge way, and was allowed to do so on the basis of regeneration, it would be allowed to sell anything and everything it wanted, while the existing supermarkets were told that they were limited to selling, perhaps, tinned food. That is the kind of situation that we face. Existing casinos can have a maximum of 10 category B machines, while the new casinos that the Government propose under the 888 proposals will have 150 category Bs per large casino and 80 per small casino. That completely eclipses the existing casino estate. If the Government want to test these proposals, they should do it across the board and limit the number of regional casinos from eight to four. That would, at a stroke, reduce the number of category A machines available from 10,000 to 5,000.

Photo of Clive Efford Clive Efford Labour, Eltham

Is the hon. Gentleman aware that there are 131 existing casinos in Great Britain, and 24 across London alone? By suggesting that we should suck it and see, as it were, is not he promoting a proliferation of those machines all over the country?

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I hope to show that I am not proposing any more machines than the Government are. I propose that the existing casino industry should be part of the trial. Why should it be dismissed? On the day the Government announced the 888 configuration, £0.5 billion was wiped off the share value of the four major casino businesses in this country—not £500,000 or £5 million, but £500 million. The Minister scoffed when that was raised in Committee, but it is a huge amount of money to be wiped off, and it happened because of the complete imbalance in the Government's approach to the future of the casino industry.

Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley

I do not want to argue about whether there are 131 or 136 casinos, but would the hon. Gentleman limit the number of category A machines that they have? If he is saying that there would be no more category A machines than the Government propose, and possibly fewer, what number does he envisage?

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I shall come to that when I have finished developing my argument. It is an important point, of course, and I will not leave the hon. Gentleman in suspense for long.

We propose that an existing casino that qualifies as a large casino in terms of floor area should be allowed to have, instead of just 10 category B machines, the number allowed to the new large casinos on a machine-to-table ratio of 5:1. With an extra, say, 20 large casinos, that would provide an extra 3,000 category B machines—or rather 2,800, as there are already 200. Under amendment No. 142, existing casinos with a 2:1 machine-to-table ratio would be categorised as small casinos. Those that do not qualify as large or small but are sub-small, and come under the 5,000 sq ft threshold, would have the same machine-to-table ratio. Many of them are very small and cannot get many gaming tables in, so, as the Joint Committee proposed, the limitation on machines would be a qualifying measure.

New clause 13 would extend the trial. It poses this question: why should the punters in existing casinos such as those in London—where we have, in the form of the membership clubs, some of the top casinos in the world—be restricted to playing category B machines, while a new regional casino somewhere else in London will enable people to play category A machines? New clause 13 would allow a fifth of all the machines in a casino to be category A. That would mean, for example, that the large casinos in the existing estate would have a total of 600 category A machines, or 30 per casino. For the small casinos, there would be 480, or 16 per casino, and for the sub-small, there would be around six per casino. The idea that such machines, with unlimited stakes and prizes, will pay out millions of pounds is nonsense, because they cannot be linked from casino to casino. If there are just six in one small casino, the stakes and prizes will be similar to those for the category B machines that already exist.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

The hon. Gentleman knows that I have great reservations about his proposals for category A machines, and several hon. Members may be concerned about his earlier proposal for trading up. He mentioned the additional machines that would be introduced as a result. Will he confirm that the number will be about 6,000 or 7,000 additional machines, compared with the 10,000 category A machines that the Government propose and the approximately 33,000 fixed-odds betting terminals that currently exist?

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

The hon. Gentleman makes a good point, which I was about to cover. He has stolen some of my thunder, but he is right. We contend that the 10,000 category A machines in the regional casinos should be reduced to 5,000, and that more category B machines—and some category A machines—should be put into the established casinos. The total under Government proposals—I am now answering the question asked by Mr. Hoyle, so perhaps he will concentrate—is 10,000 category A machines and 3,240 category B machines. That encompasses the machines in the new casinos—the eight and eight—and those in the existing estate. Our proposals are for 5,000 category A machines in the new regional casinos and 8,540 category B machines throughout the estate, including the new eight large and eight small casinos. The total is 13,540. That should be compared with the figure of 13,240 under the Government's proposals, but with half the number of category A machines.

New clause 13 provides an alternative proposal and would introduce category A machines instead of category B machines in some casinos. That would mean 6,985 category A machines and 6,555 category B machines, and therefore a total of 13,540. We do not propose to increase the number of machines throughout the country; we are keeping to the Government's figures but contend that our approach, involving a trial of all casinos, is a better way of going about it, and a better test than the Government's proposal.

I promised to be brief. I have made my points and I simply reiterate that we shall divide on the three amendments to which I referred at the beginning of my speech.

Photo of John Greenway John Greenway Conservative, Ryedale

I apologise for not being here at half-past 4 when proceedings started. I had to go to North Yorkshire today to attend the funeral of a close friend.

Ideally, we would have longer to discuss the Bill. However, I want to reflect on some of the issues that the pre-legislative scrutiny Committee considered and its general conclusions. I hope that that will be helpful. First, the Committee recognised that the decision to introduce category A machines into United Kingdom casinos for the first time was bound to be controversial, but we did not challenge the principle of that, as some now try to do. The policy decision seemed clear to us. From the Budd report, through the White Paper, the draft Bill and the Government's proposals that they presented to our second inquiry last July, there was a seamless robe of agreement that the proposal was a good idea and that it was time to relax some of the restrictions on our UK industry. The availability of category A machines was an example of that relaxation.

However, we also believed that key issues about numbers and accessibility to the machines needed to be considered. We established an important principle, which forms the basis of our debate tonight, that the original Budd and White Paper proposals for unlimited category A machines throughout the estate was neither necessary nor desirable. We also acknowledged that operators needed flexibility. I therefore believe that in the fullness of time, the Government have to resolve category B limits if there are not to be category A machines in the existing estate.

We also believed that the largest casinos, which the Government have chosen to call "regional", posed several challenges to policy across Departments. There is undoubtedly capacity for regeneration. Alan Howarth asked who wanted the proposals. He should go to Blackpool, for which there is no plan B. Even the Churches, representatives of which met my Committee, said that they supported the proposals, because Blackpool needs jobs and regeneration. We believed that the number of large casinos would ultimately be limited by the market but that programmes of social responsibility, especially for operators from outside the UK, who have no experience of the UK market, are crucial. We are considering big leisure destination casinos and major leisure complexes, which would support and offer many other facilities. They would not need unlimited numbers of machines, but their location would be important, for the avoidance of easy access.

However, when the June proposals were published and the Government introduced the subject of size for the first time and the decision on category A limits, the Committee believed that the ideas had not been properly thought through and that the result was that too many casinos, which the Government initially envisaged as large, would be encouraged into the big regional category as a means of getting hold of the category A machines. We were also doubtful about the mechanisms for selection of sites through regional spatial strategies. The structure to do that simply does not exist.

The key question that hon. Members should ask me tonight is whether we would have perceived pilots as a good idea, had we been asked to make that judgment. Given the general tenor of the scrutiny Committee's comments, we probably would have found the idea of pilots attractive on balance, but we would have been worried about the competitiveness of the existing industry, especially with regard to machine entitlements. We did not consider keeping category A machines from the existing estate, but we said that the Government needed to be cautious. If there are to be pilots for the largest casinos, especially because of their size and the number of category A machines, is there also a case for trials for large and small casinos?

I have given much thought to that question, and the only basis on which one can justify trials is that the large casinos will have 150 machines and the smaller casinos will have 80. That is significantly fewer than was first envisaged, but many more machines than exist in the current casino estate, although we are considering category B machines. Professor Peter Collins told the Committee that there was no evidence that category A machines were more harmful than any other sort of gaming machine, including a category C machine with a £25 jackpot in your local pub, Madam Deputy Speaker—although I do not suggest that you would go there to play one.

The need for research, and to test the market and public reaction, was brought home strongly to us. Trials can therefore be said to be sensible. We are left to argue about two matters. First, what are sensible numbers for the trials? Secondly, what do we do about the existing estate? We felt all along that there was a need to be cautious. Once the genie is let out of the bottle, it cannot be put back in. I differ with my hon. Friends on the Front Bench about the figure of four; eight is a sensible number. On Second Reading, I urged on the Government a policy that would have limited the number to 20.

Photo of John Greenway John Greenway Conservative, Ryedale

I have not got time—I shall wrap up my speech shortly.

We need a trial in seaside resorts, in urban areas and in city centres. Scotland and Wales will want to be part of the programme. However, we also need to ensure flexibility over time. Hon. Members must realise that we have the opportunity to make primary legislation only every 40 years or so, and the Bill must therefore create the blueprint for the gambling industry for the next 20 to 30 years, or longer. We must also trust the new gambling commission to do its job, and we need fairness for the existing industry. The Minister can use statutory instrument powers under the Gaming Act 1968 to increase the number of category B machines allowed in the existing estate. I know that he is considering that, and I urge him to do it.

My hon. Friend Mr. Moss spoke about amendment No. 116. It does not constitute a membership requirement, but supports the principle that the casinos should know their customers. I should have thought that gambling commission codes of practice were likely to incorporate similar provisions on age, money laundering and the supervision of areas where category A and category B machines are to be located. That principle applies now to arcades, to limit access to category C machines by children.

The Government now have difficulty with these provisions in only one respect: fairness to the existing industry. I hope that the Minister will give that question further consideration, and that even in the other place, there will be an opportunity to do more about it. The industry has a world-wide reputation for probity, and is respected across the entire casino world. We should therefore trust it to do a little more than the Government are currently allowing it to do.

Photo of John Pugh John Pugh Shadow Spokesperson (Education)

I was on the Joint Committee and the reconvened Joint Committee, and I enjoyed a brief half-life on the Standing Committee until the Railways Bill was introduced. I know more about gambling now than I have ever done. The conclusion that the Joint Committee reached was that there should have been two Bills: a gambling Bill and a casino Bill. On the issue of a casino Bill, the Government disagreed with the Joint Committee, specifically in regard to the size, number and categories of machines. "Casino" was perhaps a misnomer all along; what we are talking about are sheds full of machines.

The Government took our advice and then kept changing that advice. It is really difficult to understand the twists and turns that they have made. Those moves are profoundly puzzling unless we decide that the script has been written around a particular outcome, and that the bottom line is that certain key players—Americans or whoever—must have their way. If we assume that to be the case, all else falls into place and things start to make sense.

My objection to the proposal for super-casinos is that there is simply no demand for them. That is an industry-led proposal. There is no necessity to use them as a regeneration tool. My constituency is regenerating itself without any proposal for a casino. The requirement in the Bill for regeneration is more notional than real. It is dependent on very weak planning controls and falls far short of what happens on the continent, where major revenue benefits are secured as part of the package. The assessment of the benefits has been extraordinarily partial. Neither the losses to small businesses nor the threat of ambient gambling to resort communities has been fairly considered.

I have concluded that casino developments are a licence to print money, a cash cow for the Chancellor. They represent a doubtful prospect for any community, and will aggravate problem gambling and lead to a further redistribution of wealth from the poor to the rich. Blue-collar workers from all over Lancashire are going to find recreation a lot more expensive. Despite such a dim prospect, I am fairly confident that there will be some tiny victories tonight. However, the thread running through the legislation tells me that the greatest satisfaction will be experienced by those in the corporate headquarters for whom the Bill seems to have been written. No amendment before us will change that.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

I would like to say to Mr. Greenway that, if one could respond in a fair way to the existing industry, one would do so. The last thing that we want to do is to put our own industry at a disadvantage. Equally, however, we must assure the House that what we are doing reflects what hon. Members want, not just in relation to certain proposals but the entire Bill.

The Government have tried to set out a cautious course of reform. When we debated the Bill on Second Reading, hon. Members gave us the clear message that they wanted us to be more cautious and to put in place a structure that would give people more certainty about the shape and size of the new industry. We listened to the House. It is patently obvious that we all agree with 90 per cent. of the Bill's provisions. The part that is under debate this evening relates to casinos and associated matters.

Our new proposals gave hon. Members what they asked for: controls on the number of new casinos and on the number of new gaming machines. Perhaps it would help if I started by giving the House a very brief explanation of the Government amendments in this group. Government amendment No. 2 is purely a drafting amendment. Government amendment No. 8 ensures that the gambling commission will focus on an applicant's commitment to social responsibility when considering applications for casino operating licences.

Government amendment No. 13 answers one point that worried the Standing Committee: what would happen to regeneration benefits if the casino owner were to sell on the casino and the premises' licence? Where the previous licence holder has entered into an agreement about local benefits, the substance of that agreement will continue to be a condition of the new licence. This means that any commitments will have to be fulfilled by the new operator. Government amendment No. 29 requires licensing authorities that are permitted to issue casino premises licences to publish a statement setting out the principles that they intend to apply when judging the licensing competition under schedule 9.

Amendment No. 96 is tabled in the name of my hon. Friend Mr. Griffiths and my right hon. Friend Mr. Field. I understand that they have a great problem with the whole notion of unlimited prize gaming machines in new-style regional casinos. They have explained that clearly, and they have every right to do so. However, unlimited stakes and prizes are by no means new to Britain. They are available every day in betting offices, at roulette tables and online. Gambling for unlimited prizes is open to the British public now.

I acknowledge, however, that new casinos will bring risks that are untested in Great Britain. That is why we took the decision to limit the numbers of these casinos to eight. It does need to be restated that these casinos will be subject to the most intense regulation. Every aspect of their conduct will be carefully controlled. Casino gaming in regional casinos is a legitimate leisure activity for adults, and at the end of the day, I believe that adults need to be treated like adults.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport

No, I do not have time.

Amendment No. 119, tabled in the name of my hon. Friend Mr. Grogan, goes a little too far. I made it clear in Standing Committee that the Government would take a commonsense approach to reviewing the impact of the regional casinos. We have also said that the review will take place no less than three years after the beginning of the new regime. However, we will not begin the review until we are confident that a good number of casinos are established and operating in a reasonable spread of locations. It would be foolish to speculate now on what the right number or spread would be, when we do not know where the casinos will be. But the Government will not rush into the review if we cannot be confident about the quality of data that we might get out of it. My hon. Friend's amendment is therefore over-restrictive. It might be possible to draw reasonable conclusions about the impact of regional casinos when, say, five or six are established and in operation.

Amendment No. 143 was tabled by members of the official Opposition, and returns us to a subject that we debated at length in Committee. The official Opposition want four regional casinos; we recommend eight. At the end of the day, this is a judgment call. It is not an exact science; far from it. What is important—and, indeed, what lies behind our decision—is the need to strike the appropriate balance between providing for a number that will enable a proper assessment of social impact to be made, while minimising the risk of social harm. We think that eight casinos will give a sound basis for a reasonable test. Four would be too few.

Amendments Nos. 103, 104 and 105, tabled in the name of Mr. Foster, would give local authorities a power to determine in advance the exact number of casinos in their area. We think that that goes too far. We accept—indeed, it was we who proposed it—that some authorities should have the power to reflect strong local opinion and not allow any new casinos in their area if they are not wanted. The decision of local authorities can also reflect the view that there is a sufficient number in their area. We do not accept, however, that local authorities should be able to specify a number in advance. Amendment No. 104 would give licensing authorities a power that they already have, because clause 161 already gives them the power to have regard to "any principle or matter". That is intentionally very broad, and would clearly allow an authority to take account of the likely social impact of new casinos.

Amendment No. 100 was also tabled by the hon. Member for Bath, and I do not think that it is needed. Casinos that are licensed now under the Gaming Act 1968 will continue to be licensed after that Act is repealed through transitional provisions in an order made under schedule 18 to the Bill. The order will deem those casinos, under powers in paragraph 9 of schedule 18, to have premises licences under the Bill, but they will be limited to 10 gaming machines of up to category B1. Under the powers in paragraph 10 of the same schedule they will not be allowed to provide betting or bingo. Those provisions will provide a mix of casinos, on the basis of which the House, in future years, can make a sound decision on how it wants to move forward.

Clause 7(5)(d) makes it clear that a separate category of casinos, which are below the minimum size for a small casino, will exist under the Bill. Paragraph 3(a) of schedule 18 makes it clear that a casino premises licence may be issued for such a casino, despite the fact that it does not meet the size requirement. Clause 7(5)(d) is needed purely to exempt the casinos from the minimum size requirement that applies to new casinos. Nor does amendment No. 101 have any effect on the meaning of clause 7, as casino games provided on premises can only be provided on casino premises. Therefore, no harm arises from the single reference to "premises" in clause 7(4).

Amendment No. 102 is also unnecessary. The Standing Committee had concerns about multiple licences on a single premises, but as I have stated previously, such an arrangement is not possible under the Bill.

Amendments Nos. 116 and 117 lead us on to the linked topics of identity and membership. The amendments in the name of the hon. Member for Bath make two new proposals: first, that everyone entering the gaming area of casinos should show photographic ID to door supervisors; and secondly, that gaming machines should be allowed in what we have called the non-gambling area. The Government agree entirely with him that casinos have a responsibility to confirm the age of customers. That is why a person who fails to do that is guilty of a criminal offence under clause 46. I do not agree, however, that we must impose the requirement that he seeks.

The hon. Member for Bath is also concerned about money laundering and I agree that strong controls are necessary. I do not agree, however, that those controls should take the form of identification on entry. He misled the House, probably unwittingly, when he misquoted the second money laundering directive, which does not require ID on entry. Instead, it requires that ID must be given when buying and selling more than €1,000 of chips. As we discussed in Standing Committee, that is how money laundering controls are enforced now, but it is possible to maintain the same level of vigilance without checks on entry, and we should not impose excessive burdens on the industry without good reason.

On the other aspects of the amendment, I must disagree with the hon. Member for Bath. The non-gambling area of a casino should be exactly that—free from gambling of any type. The purpose of such an area is to give gamblers a readily available break from gambling, which is hardly possible if it is full of pub-style gaming machines.

I recognise that my hon. Friends have the best intentions in proposing new clause 7 and amendment No. 93, but I cannot agree with them. The current membership rule and 24-hour delay before play provide no significant protection to consumers, and nor are they practical to operate for any large casino when large numbers of people are likely to arrive at peak periods. I remind my hon. Friends that casinos provide adult entertainment, and if an adult wishes to enter a casino, it is not reasonable to ask that person to become a member, any more than it would be reasonable to ask someone to be a member of their local pub or betting office.

Amendment negatived.

It being two hours after the commencement of proceedings on consideration of the motion, Mr. Deputy Speaker put forthwith the Questions necessary to dispose of the business to be concluded at that hour, pursuant to Order [this day].