Gambling Bill

– in the House of Lords at 2:30 pm on 22nd February 2005.

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Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage) 2:30 pm, 22nd February 2005

My Lords, I beg to move that this Bill be now read a second time.

I want today to explain why the Bill is important and urgent and how it delivers new protections. I also want to make proposals for some further improvements to the Bill.

The House will know that when this Bill was published, it was greeted by a frenzy of media alarm about the coming invasion of mega casinos on every street corner. An innocent observer could also have been forgiven for concluding that the Bill was concerned only with casinos. But it is about a good deal more.

We need the Bill now because controls on gambling are being undermined by technology. As the House knows, the principal Acts of Parliament dealing with gambling were passed in the 1960s. Because of the age of the legislation, the Government and the regulators are losing control and, if we do nothing, there will be more and more abuses.

The Government's objective in the Bill is, therefore, to put in place a framework of new regulation that delivers strong new protections for the public and allows a gradual and controlled evolution of the gambling industry. The philosophy of the Bill is set out in its licensing objectives. They are: to exclude crime and disorder, to ensure fairness and to prevent harm to children and vulnerable adults.

At the centre of the system is a new national regulator for all commercial gambling. The Gambling Commission will police the development of commercial gambling with new powers enforced through a system of operating and personal licences. The Bill also provides a new, comprehensive set of criminal offences that combat illegal gambling and require children to be excluded from gambling that may harm them.

The Government also want local communities to have a stronger role in deciding how gambling should develop in their areas. Local authorities will therefore have new strong powers under the Bill. They will be able to reject individual applications if they believe that the gambling proposed might represent a danger to the Bill's licensing objectives.

The House will agree, I hope, that the proposals for a new structure of regulation enjoyed a fair degree of consensus in the House of Commons. However, equally, I accept that the new choices for adults in the Bill have caused controversy. The Bill takes a different approach to gambling from that adopted in the 1960s legislation. At that time, gambling was seen as a rather seedy activity. Gambling today is a broadly accepted leisure activity, which a significant proportion of the adult population enjoys regularly.

The overwhelming majority of those who choose to gamble appear quite capable of having fun and walking away when they have spent enough, whether they have won or lost. We therefore take the view that adults should be able to access the full range of gambling products in carefully regulated environments. Of course, that does not mean that gambling can be treated like any other leisure pursuit. It obviously brings risks that need control. Some of those controls will have to be strict. But the Bill provides those controls and gives the regulators wider powers to impose tougher standards. When I say tough standards, I think it is important that we understand the scope and strength of these new powers.

The Bill gives us powers to control the speed of play on gaming machines. It can control the design features of gambling premises to remove features that reinforce incentives to repeat play. It can require information about odds and actual wins or losses to be given to players at specified intervals. For Internet gambling, it can require operators to interrupt play so that the user has to confirm that he wants to continue playing. If licensees fail to live up to those tough standards, their licences can be modified or revoked.

I now move from general principles to the specific, and say something about the Government's approach to different types of gambling. Turning first to casinos, there is no clearer demonstration of our precautionary approach. At each step of policy development, the Government have taken the more cautious route. Sir Alan Budd recommended a minimum size for new casinos of 200 square metres. We thought that too risky because it could have led to many hundreds of new casinos. We wanted a lot fewer, so our minimum size is 750 square metres, more than three times the size recommended by Sir Alan. This drove down the number of new casinos likely to emerge under the new regime.

The Joint Committee on the draft Bill recommended that unlimited prize gaming machines be permitted in each of the three categories of casinos, subject to caps. We accepted the recommendation on caps, but also decided that only the largest casinos should be permitted unlimited prize machines. We did that in part because of the evidence about the causes of problem gambling. By common consent, the evidence base is patchy. But what coherent evidence there is points to accessibility and game characteristics as important drivers of problem gambling behaviour. As I said, the Gambling Commission will have new powers to interfere in the detailed operation of machines. We, for our part, have been very cautious about the accessibility of new types of gaming machine.

Of course, we want a far better research base for policymaking. We are working together with the Responsibility in Gambling Trust to deliver an extensive programme of new work. But for the time being, we are acting on what the research tells us to protect the public. The evolving picture on research is another good reason why we need to keep the flexibility that the Bill provides, so that we and the commission can respond effectively to evidence of new problem gambling threats.

When the House of Commons considered the Bill, it asked the Government for a still more cautious approach on casinos, and we delivered it. The Bill has been amended to limit the number of new-style casinos to no more than eight each of new small, large and regional casinos. There will be no increase before Parliament is content that those casinos have not increased social harm. While the test is in progress, existing casinos will have to continue operating largely as they do now.

The licensing authority areas that may license new casinos will be selected by the Secretary of State, taking into account the views of an independent advisory panel. The panel's job will be to propose a range of locations that it believes will provide an effective test of the new style casinos. Subject to that primary criterion, it will be able to take into account which areas might benefit particularly from the regeneration potential of new casino developments. In that, the panel will take into account the advice of regional planning bodies. It will recommend up to 24 licensing authority areas to the Secretary of State. That work will take a little time, but we hope that the panel will be able to propose areas to the Government towards the end of next year.

I want to make clear to the House that any local authority that does not want to be considered for new casinos can resolve not to license any new casinos. If it makes such a resolution, that decision is final, even if the Government may have considered that authority an appropriate area for new casinos.

Those areas selected for new casinos will be able to invite applications for the premises licences allocated to their area. Where there are more applications than licences, the authority will have the power to choose between the applications for each licence. It will be able to take into account the range of benefits that the applicants are willing to offer in addition to the gambling facilities. Those benefits may well involve specific regeneration projects and other investment in the local area. The authority will have all the powers it needs to make sure that its area benefits.

The House will know that there have been loud and expensive complaints of late that the British casino industry is being damaged by our proposals. I have to say that I completely disagree with that view. First, existing casinos can and will benefit from the removal of membership and advertising restrictions. Secondly, British operators can—and, I am sure, will—apply for all the new licences under the Bill. They have experience of British customers. They have a long history of fair play and freedom from crime. They already have large market capitalisation and can raise capital just as well as foreign companies. They will have a head start in applying for new operator licences.

It would be an insult to British casino operators to suggest that they are incapable of taking full advantage of any new opportunities. I shall not insult them in that way.

Some have demanded that all existing casinos be allowed to become new-style casinos, with many more gaming machines—up to 10,000. I have to say quite categorically that the Government cannot accept that proposal. We must be cautious about new casinos. I am sorry that that involves disappointment for some casino operators, but I fear that the public interest and the precautionary principle must come first.

The Government have been in detailed discussions recently with representatives of the British casino industry. One aspect of these discussions has been the treatment of fully automatic roulette terminals, a hybrid casino product that has emerged under the present regime. The Government are considering whether these products can be controlled effectively through a bespoke regime, rather than through the standard regime for gaming machines. If that approach were adopted, it would of course be necessary to ensure controls on numbers, design and speed of play. Those discussions continue and I will provide a further update to the House.

The Government have also reflected on the views expressed in the House of Commons on the matter of credit cards in casinos. The Bill already bans the use of credit cards in gaming machines and the direct offering of credit by casino operators to customers, but the Government also acknowledge the concerns expressed about the use of credit cards to purchase casino chips. We agree that customers in casinos should not be able to turn to their credit card if they have used up their available cash in their wallet or on their debit card. Again, I will move an amendment to achieve that.

Let me move on to lotteries. The Bill provides, for the first time, a statutory definition of a lottery, which will ensure a clearer distinction between lotteries for charities and commercial prize competitions. Only the larger lotteries will need to be licensed by the Gambling Commission. Those that are licensed will be allowed to offer rollovers. The Government also moved an amendment in the Commons to ensure that so-called ticketless lotteries will be able to continue as now. I understand that this point was of particular interest to the charity sector, and I hope that that clarification will be welcomed.

The House will know that one of the more controversial issues surrounding the Bill is the extent to which children may play gaming machines. For more than 100 years, children have been allowed to play on some low-prize gaming machines. On balance, the Government have taken the view that children should be allowed to continue playing on these machines. But we propose in the Bill that the Government hold in reserve a power to impose an age requirement if more compelling evidence emerges about enduring harm to children.

In the House of Commons, Richard Caborn pledged that the Government would reflect on the need for that power. Earlier this month, my officials chaired a most useful round-table meeting with industry representatives, faith groups and interested academics. The meeting was a fruitful and constructive occasion, and as a result I want to make some new proposals today.

On the general principle, we remain of the view that there should remain a power for the Government to ban children from all gaming machines, so we will keep a reserve power. But I want to reassure the House that we will not use that power without wide-ranging consultation and on the advice of the Gambling Commission. I therefore propose to table an amendment to Clause 58, adding a requirement on the Secretary of State to consult the Gambling Commission, representatives of relevant businesses and persons concerned with the social impact of gambling before she can propose to Parliament a minimum age limit.

I also propose to amend the Bill to give Ministers power to limit the effect of any new age requirement for playing machines to particular types of gaming machines. We will be able to exclude other machines, such as penny pushers and crane machines, where there is general agreement that no harm can arise. I emphasise that gaming regulation covers only a proportion of the amusement machines available in seaside arcades. We do not regulate dancing machines or computerised driving machines. We are talking only about genuine gaming machines, which need careful regulation. The risks that there may be for children demand that we ensure that the Bill has all the powers that we need to give children the protection that they need.

Lastly, the House will want to know that the Government have listened carefully to the many concerns of the family amusement industry about machines with non-monetary prizes. They are played mostly by children and often give prizes such as teddy bears. The Government recognise that the £8 prize available in such machines has not caused significant problems. We are confident that the Bill provides strong controls over machine gaming. In the light of those controls and the concerns expressed, the Government now propose that the maximum value for such prizes should remain at £8 rather than be reduced to £5.

I know that there have been some concerns about integrity in horserace betting. The Government are completely with those who believe that strong action is needed to weed out cheats. In that context, I welcome the recent report of the All-Party Betting and Gaming Group, many of whose recommendations are addressed in the Bill.

The Government propose to require every user of betting exchanges to be registered, so that we can have information about everyone using the exchange and share that information with sporting regulators. There have been constructive suggestions, not least from the All-Party Group, about how a registration procedure might work in practice. I want to make clear that the Bill as drafted, in Clause 77, can encompass all the proposals that I understand have been made to the department.

On the greyhound industry, I want to be clear that the Bill will maintain the exclusive right of the occupier of a track to conduct pool betting on that track. It also allows betting offices to accept pool bets on greyhounds, opening up a new market for the industry to sell its product.

On a final specific point, the Government appreciate the strong feeling that Christmas should be off-limits to commercial gambling. We intend to move an amendment to prevent licensed gambling premises offering facilities for gambling on Christmas day.

The Bill is essential if we are to protect the public. It will restore effective regulatory controls on an industry that needs to develop in a way and at a speed that is acceptable to the public and to Parliament. Central to the acceptability is a confidence that the public interest can resist commercial interests and ensure that social harm is minimised. I am certain that the Bill delivers those powers. I commend the Bill to the House.

Moved, That the Bill be now read a second time.—(Lord McIntosh of Haringey.)

Photo of Lord McNally Lord McNally Shadow Minister (Broadcasting), Culture, Media & Sport, Leader In the House of Lords, Leader, House of Lords, Liberal Democrat Leader in the House of Lords

My Lords, perhaps it would be best if I started with a non-declaration of interests: I once worked for a public relations company, but I no longer do so. For anybody looking for ulterior motives for the speech that I am about to deliver, there is none—although there is a passion, which I shall come to later.

I welcome the spirit in which the noble Lord, Lord McIntosh, introduced the Bill and his emphasis on the three key aims: excluding crime, promoting fairness and protecting the vulnerable. About 15 years ago, I did some work for the Rank Organisation on the reform of gambling. During that work I had talks with some senior officials in the Home Office, which was then responsible for the matter, about possibly reforming the betting, gaming and lotteries Acts of the 1960s. I was told frankly that such legislation would be so large and complicated that it would be easier to deal with the matter in a piecemeal fashion under various deregulation powers. That was certainly the pattern of the 1990s.

However, underlying the piecemeal changes was a fundamental change in public policy and attitude, to which the noble Lord, Lord McIntosh, referred. For successive governments there was no longer an attempt to use the law to try to make moral judgments about how people should use their leisure time and disposable income. Over time it meant, among other things, gradual changes about when people could watch sport and other forms of entertainment, when and where they could buy a drink and where and how they could gamble.

Those changes made us a freer, more relaxed—dare I say it to some of my noble friends?—and more liberal society. But they have also brought social challenges in their wake. I do not underestimate the scale of those social problems. As we have seen with binge-drinking and 24-hour drinking, some of this still has to pass its way through our society. But I do not believe that we can respond to those problems by a return to the nanny state.

With this Bill, the DCMS has now gone where the Home Office angels of the 1990s feared to tread. It is, as my Home Office advisers warned over a decade ago, a large and complicated piece of legislation. Nevertheless, the Government are to be congratulated on introducing the Bill. The 1960s Acts are no longer fit for purpose, in terms of either the sociological or technological challenges of the 21st century.

The Government are also to be congratulated on the very thorough pre-legislative approach that they have adopted, with widespread consultation, a very full report from the committee under the chairmanship of Sir Alan Budd and two excellent pre-legislative scrutiny reports from the Joint Committee under the chairmanship of John Greenway.

The Bill has also had a full passage through another place, with a majority at Third Reading of 198. My honourable friend Don Foster said at Third Reading,

"many parts of the Bill have a great deal of support on both sides of the House . . . for example, the provisions concerning internet gambling, tougher social responsibility requirements, and a tougher regulator in the shape of the gambling commission".—[Hansard, Commons, 24/1/04; col. 130.]

He went on to say that much needed to be done in this House but concluded that the Bill was now far better than the one first introduced by the Government. We will have a chance today and in Committee to improve the Bill still further.

Given that the Bill was not opposed at Third Reading by either the Conservative or Liberal Democrat Front Benches, and comes to us with a majority in excess of the Government's overall majority in another place, I hope that our approach in this House will be to seek to improve rather than wreck or truncate the Bill.

From the lobbying that we have received on all sides of the House it is clear that we were looking at issues such as the prize value of slot machines in seaside arcades and the need for ID cards, issues relating to greyhound racing and wider issues about the protection of the vulnerable. I am pleased to hear from the Minister that we will also have the chance to discuss the size of teddy bears that can be won as prizes.

My noble friend Lord Clement-Jones will indicate our priorities in his summing up. I am also aware that a number of my noble friends will voice more fundamental objections to the Bill. Some of them do not gamble. Neither does my wife. I like the odd flutter but, as the Minister indicated, so does a very large proportion of this country and it is difficult to legislate for one's own prejudices. I hope that the Minister will listen to concerns which are real and valid but which can be met in other ways, rather than stopping this legislation becoming part of the law.

I would like to use the remaining few minutes to make a personal plea on behalf of my home town of Blackpool—this is where the passion comes in. I relate it to the Minister's introduction by his emphasis that this will be a local authority decision. Anyone who has seen those marvellous films unearthed in a Blackburn shop from over 100 years ago and shown in pristine condition on BBC2 will know that 100 years ago, Blackpool was already a major tourist attraction.

The civic leadership and individual entrepreneurs who showed such amazing enterprise fully lived up to the town's motto, "progress". The building of the tower, the building and expansion of the Pleasure Beach by the Thomson family, the construction of an electric tramway, the introduction of the illuminations and the building of over 20 theatres and cinemas along with three piers to accompany seven miles of golden sand made Blackpool Europe's most successful resort.

Photo of Lord McNally Lord McNally Shadow Minister (Broadcasting), Culture, Media & Sport, Leader In the House of Lords, Leader, House of Lords, Liberal Democrat Leader in the House of Lords

They even came from Yorkshire.

But cheap air travel to the sun and the decline of kings cotton and coal and other staple industries removed the core market for Blackpool.

Now, at the beginning of the 21st century, a new leap of the imagination is needed to enable Blackpool to revitalise and regenerate itself. I believe that the resort or destination casinos provided for in this Bill provide just such an opportunity. And it is this regeneration argument which is the tipping point in favour of this Bill.

For Blackpool, casino development is not what it might be for a major city—an attractive cherry on the cake of regeneration. For Blackpool, casino development, along with the hotel and other leisure facilities it would bring with it, would transform the whole nature of the town's tourism offer. No town has done its homework better or more thoroughly than Blackpool in preparation for this legislation. Neither is casino development seen as a one-shot solution. An ambitious redevelopment master plan has been produced to improve the town centre, the airport, the tramway, the sea defences and seafront amenities. Blackpool and Fylde College is already embarking on courses which will provide enhanced career opportunities and enhanced quality of service throughout the leisure industries.

There has been widespread consultation with the local community and all-party support on the local council. Local police and other bodies are involved in addressing the social and other possible downsides to casino operations. The whole regeneration master plan adopted by the council benefits from the guidance of Professor Peter Hall, one of our greatest town planners.

Blackpool has also completed a market testing exercise and established that international and UK-based casino industries look upon the resort as an attractive investment opportunity: 22 companies have registered interest and indicated that they would make multi-million pound investments in Blackpool as long as there is a limited development across the UK and a genuine UK commitment to regeneration, tourism and destination casinos.

I make it clear that in no way do I wish to anticipate the judgment of the advisory board. If this Bill does pass it will be a great opportunity for Britain to provide a resort experience which will attract visitors from far and wide. Blackpool has spent five years looking in detail at the social and economic condition and has concluded that the level of regeneration required has to be transformational. The creation of a self-sustaining resort economy in Blackpool will only arise if there is urgent and fundamental change.

About 110 years ago Alderman Bickerstaff went to the Great Exhibition in Paris where he saw the Eiffel Tower and said, "We'll have one of them". I believe it is that spirit that exists today in Blackpool. Film buffs among us will know that great Kevin Costner film, "Field of Dreams". The message in the film is "If you build it, they will come". I passionately believe that if Blackpool builds it, they will come and we will have in the 21st century a resort to match the leadership Blackpool gave in the 20th century.

Photo of Lord Jopling Lord Jopling Conservative

My Lords, I will come to the issue of Blackpool in a few minutes. However, I remember as a boy my father once taking me to Blackpool and going to a show in which Charlie Chester was addressing the audience. He was talking about the neighbouring town of St Anne's. He said, "St Anne's—yes, it is beautifully laid out. I don't know how long it has been dead, but it is beautifully laid out."

I dislike this Bill very much. However, I am not opposed to its tightening up and cleaning up of regulations. Anything that improves the regulation of gambling has my support. My dislike of the Bill comes principally from my dislike of gambling as an activity. That is due partly to the fact that I detest using my resources where I know that the odds are that I shall be the loser at the end of the day. However, I dislike it much more because I hate seeing the devastation that an addiction to gambling can create. Such devastation can affect the rich—I could, but I will not, name large estates that have had to be sold as a result of addiction to gambling—or occur on a more modest scale.

I remember an old farm worker from my own village who used to frequent the village pub. He was a pensioner with little money. He used to trot off continually to the fruit machine and put huge sums into it. I used to say to him, "George, for goodness' sake don't waste all your money on that damnable machine. You cannot win. It is there only for the benefit of the landlord". But still the old boy went on. He was unstoppable. He paid a huge price in his own life and the way that he had to support himself because of his addiction to gambling.

I have no doubt that the casino and other elements of the Bill will increase the amount of gambling opportunities and therefore the volume of gambling in the United Kingdom. It will therefore inevitably increase the number of people addicted to gambling. I have seen a current estimate of the number of those addicted to gambling in this country which puts the figure at 300,000. I also have a note from a report by Professor Griffiths, professor of gambling studies at Nottingham Trent University. When the Bill was first introduced, he estimated that its effect—I know that the Bill has been changed—would be to increase that figure by between two and four times. I ask the Government, "Do you really want that? Do you really want to increase dramatically the number of people in this country who are addicted to gambling?".

What is the evidence that there is any demand for such an extension of opportunities to gamble? I have here a note that came to me from a Dr Raabe. I do not know him, but he sent me a note in which he quotes the Guardian of 19 October last year. He says that a recent NOP poll done for the Salvation Army showed that 93 per cent of the British public thought that there were already enough opportunities to gamble. I agree. To my old friend, the noble Lord, Lord McNally—I should declare an interest in that I worked for him in the public relations business many years ago—I say that it is no part of the nanny state to oppose the extension of gambling when there is little demand for that extension.

I am also alarmed about what the 24 new casinos will look like. I have visited casinos. I am glad to tell your Lordships that I do not think that I have ever walked out of a casino more than £20 out of pocket, so it has not affected me much. However, I have seen some of the huge operations in Las Vegas.

I recall visiting, not terribly long ago, an exceptionally beautiful casino in St James's Street here in London. However, I was president of the organising body for the TT races on the Isle of Man, and I used to go to the races more or less every year. One year, many years ago, I visited a casino on the promenade in Douglas. That casino may have changed; I do not know. Having gone once, I never wanted to go again. I can describe it only as a squalid hell-hole, where one needed a pair of stout shoes to stop one's feet getting wet from all the beer swilling about on the floor. I shall need a great deal of convincing that a casino in, say, Blackpool, would not turn out much more like the one in Douglas than the one in St James's Street. I cannot conceive that it would be different from what one would find today in a place such as Douglas. I remain to be convinced.

If we are to be saddled with such developments, I am opposed to the terms on which they would happen and the effects that they would have on the existing operators. I cringe at the thought of the big, Las Vegas-type operators moving into the United Kingdom. I have a note from the same Dr Raabe in which he names some of the big organisations that, he tells me, are poised to come here from places such as Las Vegas. They include MGM Mirage, Caesar's Entertainments, Las Vegas Sands, Isle of Capri—another Las Vegas-based casino operation—and the owners of Sun City in South Africa. All I can say about that is that, when I was a member of the government many years ago, we were all instructed to have nothing to do with Sun City as members of the government. I cringe at the thought of some of those big, American-style casino operations moving into this country.

I cannot understand why there appears to be a freeze on existing operators in the United Kingdom—with regard, for instance, to the number of machines that they may have—and limits on bets and prizes. How can that be fair, if the newcomers in the eight largest new casinos are allowed to have, say, 1,250 machines with unlimited bets and prizes? It is no good the Minister telling me, if that is what he is of a mind to do, that not all the 1,250 machines in the biggest casinos will have no limits in practice. The point is that they can have limits in practice, although the market will, of course, cause the size of bets and prizes to find their own level. While that is going on, the existing operators are limited to £1 stakes and a maximum £2,000 prize. Why not impose on the newcomers the limits that exist for casino operators already here? That would be the only way of creating a level playing field.

I suppose that the Minister will say, "If you put the same limits on the newcomers as exist on those already here, they may not come". I can only say, "So what?". Do we really need them? I hear no demand for such an extension of organised, big-money betting.

The Government's proposals seem to me to be a reincarnation of what I would describe as the worst sort of cheap Harold Wilson gimmickry. I do not want to see the Bill being used as a first step back to the gambling cult in this country that so ruined parts of our society at all levels. I do not know how many Members of your Lordships' House have read that extraordinary book Georgiana: Duchess of Devonshire, by Amanda Foreman. It relates the activities of that lady and all her gambling friends and shows how there was widespread misery and bankruptcy at that time. We do not want to go back down that path. That is why I feel so hugely uncomfortable about the Bill.

Photo of The Bishop of Coventry The Bishop of Coventry Bishop

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

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

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

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

"children and gambling don't mix".

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

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

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

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

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

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

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

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

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

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

"children and gambling don't mix".

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

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

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

Photo of Lord Pendry Lord Pendry Labour

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

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

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

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

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

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

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

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

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

Will the Minister consider making a commitment that the Government will do nothing to undermine seaside arcades or machine manufacture, to honour the promises made to maintain the viability of small-stake machines and protect the grandfather rights of existing businesses and that he will attempt to rebuild a dialogue with the trade association BACTA to ensure the continuation of arcade businesses?

I am pleased, as I am sure the House will be pleased, that the Minister is prepared to look again at the issue of prizes of £5 and £8 for different sizes of teddy bears. One would be 6 inches high and the other 14 inches high. Is it really the business of government to restrict the size of children's teddy bears? Do the Government seriously think that by forcing children to have a smaller teddy bear they will save them from gambling problems in later life? Yet that is what, in effect, the Government are proposing. By so doing, they will limit the attractiveness of harmless amusement machines and thereby undermine the seaside amusement industry itself.

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

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

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

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

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

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

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

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

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

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

Photo of Lord Mancroft Lord Mancroft Conservative

My Lords, as one of those who pressed the Government to commission a review of the gambling industry as far back as 1997, it would be churlish of me not to welcome the Bill—and I do.

I was, too, largely supportive of the general thrust of Sir Alan Budd's report—although I did not agree with every detail. I did not totally agree with the Government's response in A Safe Bet for Success, although it, too, contained some proposals that were pretty bizarre. I was, however, largely supportive.

I was happy to join the scrutiny committee because I was keen to ensure that the area of gambling in which I have an interest and have been involved with for 10 years—society lotteries—was not forgotten. Amidst the furore about casinos, betting exchanges, fixed-odds betting terminals and all the other headline-grabbing parts of the Bill, I was very concerned that the smaller part of the gambling industry—society lotteries—should not be forgotten.

The scrutiny committee was a fascinating experience. I hope that the House has noted that its members—from both Houses and of all parties and no party—agreed on virtually all of the key issues. I am delighted that the Government accepted most of our recommendations. It is interesting to notice that they have got into trouble—over casino numbers and machines, for example—in the areas where they ignored us.

Although there are not any votes in gambling—this remains an issue that does not divide the political parties—it is important. The UK gambling industry is significant; it is large; it is an important part of a growing leisure industry in Britain; and it provides jobs. But it is true to say, as the Minister said, that the laws governing it are now old-fashioned, in part because of the advent of so many technologies. When the Government want to modernise something, one should always look at it with great suspicion. But, in this case, modernisation is called for.

It is also true to say that the existing Gaming Board does not have the resources or the powers to operate in a way that a modern regulator should operate. That is not meant as a criticism. In fact, I should like to take this opportunity to pay tribute to the work of the Gaming Board, the chairman, Peter Dean, the retiring secretary, Tom Kavanaugh, and their teams, who have done a first-class job with great care and courtesy in their regulation of the industry. Nevertheless, we need the new commission.

I commend, too, the Government for their decision to regularise and regulate the new remote gaming industry—those which operate by Internet, mobile telephony and interactive television. Without the Bill, the remote gaming sector will continue to operate a free-for-all, which is not a good idea.

However, your Lordships will want to look at that part of the Bill closely. The balance between what is in the Bill and what can be addressed in codes of practice is not absolutely correct. I am not convinced that it is perfect. We will want to look at that carefully in Committee.

I start to part company with the Government in their handling of the casino question and in the detail of some of their proposals. I should make it clear that I have absolutely no interest in casinos. I do not gamble or visit them, except when, as during the past year, very kind operators invite me for dinner, which is very nice. I do not go to casinos because I do not find them entertaining.

I listened very carefully to what the noble Lord, Lord McNally, said about Blackpool. I wish Blackpool well. I listened carefully, too, to what my noble friend Lord Jopling said about St Anne's. I reflect that, apart from Blackpool, Manchester just down the road wants its own casino. I wonder how well they will go together. I remember that the great American, Mark Twain, once said that he would like to die in Manchester because the transition between Manchester and death would be so small as to be hardly noticeable. But I am not sure that that is very fair.

I recognise that casinos are an extremely important part of the British gambling industry. No one has said yet that in the UK we have an extremely efficient, demonstrably honest and well regulated casino industry, which conducts itself with commendable responsibility. Budd recognised that the restrictions surrounding casinos are largely based on 1950s morality and are inappropriate for the 21st century. It is difficult to disagree with that. I thought that the Government agreed with it: the scrutiny committee certainly did. It appeared that the Government recognised that, bar a few details—some of which are important and some less so. I believe that the industry was content with what the Government proposed, subject to the recommendations of the scrutiny committee.

But on 16 December that apparently changed. The Government's new proposals from that date—cobbled together, I may say, under fire—have resulted in the complete alienation of the industry. Frankly, that is a pity. To try to modernise an industry that has turned against you is silly, a pity and highly unnecessary.

I welcome, as I hope that any noble Lord would, any foreign investor who wants to bring business and create jobs in the United Kingdom. I do not think that the UK casino industry fears competition from the United States or anywhere else, provided that it is fair competition.

By the Government's current handling of the Bill, they have disadvantaged the existing industry. Any new casino, regardless of whether it is owned by an American, a South African or an existing UK company, will have a significant advantage over an existing casino and, if opened within its catchment area, will inevitably offer more attractive products.

The Minister said that he does not agree with that, but he is wrong. I do not know which of us is right, but there is little chance that this House will be able to make the progress that it needs to make if this Bill is to reach the statute book before the general election unless the Government are prepared to look at the UK casino industry's concerns rather more favourably than they have up to now.

We cannot all agree on every detail in a complex Bill like this, but it needs to achieve a greater degree of consensus if I am to give it my wholehearted support. I shall be looking for early signs of that consensus during the Bill's passage.

I hope that your Lordships will have seen the report of the All-Party Group on Betting and Gambling, to which the Minister made reference. The group was very ably chaired by the noble Lord, Lord Faulkner of Worcester. I am delighted to hear that the Government will be taking its recommendations into account, some of which are already catered for in the Bill and others I hope we will see coming forward.

I should like to focus the remainder of my remarks on my main concern; namely, society lotteries. The company of which I am founder, chairman and a shareholder is a certificated external lottery manager. We have managed daily lotteries, weekly lotteries, instant lotteries and frequent-draw lotteries for 30 charities over 10 years in Britain. We have raised more than £10 million for different charities. I think that we are now the largest and most experienced society lottery manager in Britain—our two largest competitors having given up the struggle and having packed up. But there are a plethora of charities and sporting clubs for which lotteries are a vital source of income.

The Government have repeatedly stated that they recognise the role of society lotteries. But after so many committees, reports and extensive consultations in the past few years, it remains a source of frustration to us that the key issues identified by Budd are the same key issues that are still outstanding today. Perhaps your Lordships will allow me to flag them up quickly, before we look at them in greater detail in Committee.

Our main concern is that the Government have still not fully dealt with the issue of prize competitions. It is a difficult issue, of course. For those of your Lordships who are unfamiliar with prize competitions, they can be legitimate and reasonable. They are skill-based competitions with a variety of prizes. But all too often the skill test is not a great test. I wonder how many of your Lordships could answer the question: where is the Tower of London? It does not take a lot of skill to answer that one.

In effect, a great number of them are pseudo lotteries. Whereas society lotteries are registered and are highly regulated, prize competitions are unregistered, unlicensed, unregulated and free to do much as they like. I accept that it is difficult to find the right wording to define them separately, but both the Lotteries Council and the Gaming Board are of the view that as the Bill stands it is still open to abuse. In Committee, we shall have to look at ways of tightening that up.

Your Lordships may consider this a side issue, but perhaps I may put it into context. The regulated society lottery industry in Britain turns over about £126 million every year. The casino industry, about which we have just been talking, turns over about £4 billion. But the prize competition industry, which the Government are content to leave wholly unregulated, is estimated to be worth about £5 billion a year. I am not sure that £5 billion a year is a side show, particularly when children and other vulnerable groups that the Government profess to be so concerned about are encouraged to buy entries without controls. That is why we will have to come back and look at it.

The Budd report and the scrutiny committee recommended the abolition of stakes and prize limits for society lotteries. The Government have removed the limit on stakes, which is the easy bit, but have maintained arbitrary limits on prizes and pool sizes. There is also an annual limit on the number of tickets each charity can sell. I have asked every Minister and official that I have come across in the past 10 years why such a limit exists. I have yet to receive an answer, whether silly or sensible. I have received no answer at all. I shall ask again in Committee.

The Government believe that an increase in prizes will undermine the National Lottery. I accept that the Government have a reasonable and legitimate desire to protect the National Lottery, but it needs to be reasonable, which I do not think that it is at the moment. We would like to come back to that in Committee.

As an alternative, we can look at the business of triennial reviews. The Minister in another place thinks that they work. But in my view, in order for a triennial review to take place, it needs to happen every three years: in our part of the industry, we have had two since 1994. That does not sound like triennial. The solution is to put that in the Bill. If the Government do not like it, let us go the Budd and scrutiny committee route and abolish them. We need to look at that, too, in Committee.

The Government propose to allow societies to sell tickets by machines. This is a modernisation Bill, and that is a sensible thing to do. However, in seeking to differentiate a lottery terminal from a gaming machine, the Bill, at clause 229(2)(d), insists that the draw is not "determined by the machine". That is right, as lotteries require a pool of players. The clause also says that the machine cannot display the result. The object of this last point is to prevent instant lotteries being played like a gaming machine—not that that has ever happened anywhere in the world.

However, there is a drawback. I do not know of any game in the world, played either for pleasure or for money, in which the player cannot determine the result. Why would I play? Can you imagine a machine where, having played and won, I cannot collect my prize; where the operator does not know if I have even won a prize, and cannot even tell how many tickets I have sold? I did a bit of research for my own entertainment, and there are somewhere between 500,000 and 750,000 lottery terminals in the world. Every single one of them displays the result. We need to congratulate our good old British Civil Service for the remarkable feat of finding a potential problem that has so far not occurred anywhere in the world. We might want to look at that at Committee.

There is a wider concern that the language of the Lotteries and Amusements Act 1976 is a bit archaic, and needs to be brought up to date. That is why the Government removed the phrase "ticket or chance", as the Minister mentioned, to try and allow for ticketless lotteries, which is clearly sensible in the 21st century. The Minister believes he has resolved that problem, but I am not certain he has. That too is an issue we can come back to in Committee.

Finally, Clause 258 gives the Secretary of State a reserve power for either himself or the commission to restrict the frequency of lottery draws. There is a case for allowing the commission—or, at a stretch, the Secretary of State—a reserve power, in case for some reason a lottery, or any product, becomes unacceptable or undesirable. This, however, is not that power. In a letter to the chairman of the Lotteries Council in December, the Minister appeared to confirm that the order-making power would be used immediately to restrict lotteries to once every hour.

I do not propose to rehearse the arguments today, particularly as I see the numbers on the clock. Suffice it to say that these lotteries are completely harmless, and the Government know it. I know it, because mine is the only company in Britain that has ever run such lotteries. We are quite experienced in them now. We have run 150,000 of them since 1997 through 2,000 outlets, and sold 10 million tickets. Do your Lordships not think, if the potential problem feared by the Government were going to appear, that it would have done so by now? We might want to consider that in Committee as well.

Of course, I should be delighted, as always, to sit down with the Minister to find a way of meeting the Government's concerns. I do not think that would be difficult, and it would avoid needlessly destroying an important source of charitable fundraising.

We are all aware of the Government's three main priorities, but it is worth pointing out that that is where we are today under the present legislation: protecting children and the vulnerable, keeping gambling crime-free, and ensuring that it is conducted in a fair and open way. The object of the Bill is to modernise that regulatory system without jeopardising those goals. In the process, the Government need to explain why some areas of the industry should be relaxed while others should be further restricted.

The modernisation part of the Bill requires a framework piece of legislation that gives the commission the power to regulate flexibly as circumstances and technology change over time. If there is too much on the face of the Bill, the legislation will be out of date before it hits the statute book. If there is too little, neither the Commission nor the industry will know where Parliament stands. I am not sure the balance is quite right yet, or if the Government have been able to resist the temptation to over-regulate. It will be your Lordships' task to find that balance.

I will be unhappy unless I see the UK casino industry demonstrably treated fairly. I would hope, too, that I have said enough to convince the House that we need to see some changes in the regulation of lotteries. These are changes not of principle but of practice, and without them the Bill remains unacceptable. The Bill's fate lies in the Government's hands. Regardless of any statements put out by the Department for Culture, Media and Sport, if the Bill falls, it will be because the Government have mishandled it. It is that simple, and the whole world knows it. Fortunately, the Secretary of State has an extremely able and experienced deputy in the shape of the noble Lord, Lord McIntosh, who, if allowed to by his Secretary of State, can get the Bill through.

I wish the Bill well, but it will require a great deal of give-and-take on all sides of the House if we are to get it on the statute book before the general election.

Photo of Viscount Falkland Viscount Falkland Shadow Minister (Culture, Media & Sport (Lords)), Culture, Media & Sport, Spokesperson in the Lords, Culture, Media & Sport

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

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

"almost all relevant British gambling legislation predates the Internet. Nobody had such a powerful communications system in mind when that legislation was being enacted".

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

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

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

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

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

The French system of allowing casinos to operate in spas and casinos, which only recently has been extended by the Chaban-Delmas law to allow towns and cities with populations of over half a million to operate one casino, is based on the idea that opportunities for gambling may be extended only where the people make a deliberate decision to do so. The principle is that people should not gamble by chance simply as a result of walking down the street. Someone must go and stay in a resort with, presumably, a limited amount of money. The money is spent on gambling while one eats well and stays in good hotels before going home again. That is preferable to someone playing on slot machines that are available on every street corner. I think that the Government agreed with the basic principle, so I was surprised and a little disappointed to see that around half way through the committee deliberations the notion of the regional casino was introduced. That is quite a different idea from the casino resort, now wrongly being described as the "super casino".

A large regional casino sited in an urban area is deemed desirable for economic reasons, but that notion seems absolutely to go against what the Government and the committee agreed; that is, that any widespread intentional increase in gambling facilities should be carefully constructed and limited as much as possible in order to take account of the very real problems associated with gambling, which I shall address in a moment.

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

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

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

For those noble Lords who are not familiar with them, I should explain that the betting exchange is a very simple concept, one that predates bookmakers by providing a service whereby people can place their bets. Using sophisticated software, betting exchanges allow people to bet collectively even though they do not know each other. The exchange matches the investments made by various people for or against a particular event taking place. It has caused a great deal of concern, particularly in horseracing, because the concept of someone actually backing a horse to lose is one that has not entered anyone's thinking. It certainly had not entered mine and I have been following horseracing years. I wish that I had thought of the idea, but if I had I would not be addressing your Lordships. I would be a millionaire on a sun-drenched beach. Spread betting is a wonderfully simple idea taken forward by complex technology.

The committee felt that it was best to let things run, and I think that the Government feel the same. We shall see what the Treasury thinks of the taxation system for betting exchanges. We shall also await the decision of the Gambling Commission about them. If I were a bookmaker I would be energetic in opposing this new form of competition, but it is clear that betting exchanges are here to stay. Indeed, I expect that many bookmakers will themselves now consider becoming betting exchanges, so profitable is this new area of the business. Ideas are being mooted to register those using betting exchanges in order to limit the danger of securing information about horses that are going to lose or being privy to other insider knowledge. However, singling out betting exchanges for a registration regime should be approached with the greatest caution. I do not see why people should be registered as punters—and certainly those betting below a fairly high figure—any more than should those who place bets with fixed odds bookmakers. That is a discussion for the future, but it is important.

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

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

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

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

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

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

My Lords, I apologise for interrupting the noble Viscount, Lord Falkland, but if we look at the Companion to the Standing Orders it is recommended that speeches should be kept to 15 minutes.

Photo of Viscount Falkland Viscount Falkland Shadow Minister (Culture, Media & Sport (Lords)), Culture, Media & Sport, Spokesperson in the Lords, Culture, Media & Sport

My Lords, I am sorry. I did not look up at the clock. Anyway, children represent a very large problem in regard to gambling. Whether it is possible to stop children gambling in amusement arcades, I do not know. I honestly think that the culture is too deeply ingrained. Children ought, however, to be taught about gambling and its dangers. Having said that, I shall take the advice of the noble Lord and sit down.

Photo of Lord Walpole Lord Walpole Crossbench

My Lords, I declare, as did the Minister, an interest: I was a sitting magistrate for 20 years, including six years at Great Yarmouth. I am not sure whether it is the Blackpool of the east coast or whether Blackpool is the Great Yarmouth of the west coast. I am not sure. I am also vice-president of the East Anglian Tourist Board, and still keep up with tourism interests. It is from that background that I worked as one your Lordships' members on the pre-legislative committee. I was the only Cross-Bencher. I was not, as a noble Lord referred to me a moment or two ago, a "non-party member"; I am a Cross-Bencher. I think I was the only person on that committee who did not own at least one part of a horse.

The objects of the Bill are extremely good: the protection of children, the prevention of gambling becoming a source of crime and disorder and ensuring that gambling is fair and open. It is an ambitious Bill, because it repeals most of the existing legislation and starts with an absolutely clean sheet.

When I started to write my speech, I decided to try and choose a few points that no other noble Lord had said. As they have made most points, I should, with luck, be able to finish my speech by about 7.10 p.m.

I certainly welcome the increased powers of the Gambling Commission and the appeal tribunal. Quite honestly, however, I am concerned that the commission will not cover the National Lottery at the moment, and feel that, after the next round of operator appointments, it really should. The commission should include spread betting, which, for the moment, will stay with the Financial Services Authority. The full integration of all three, with the close co-operation of the sports ruling bodies, is an ideal we should be striving for. I look forward to secondary legislation, which will achieve this in the long run.

I still prefer the phrase "destination casino" to "regional casino", which keeps being used. Great Yarmouth wants them, as does Blackpool. Both places would be absolutely suitable, because they want them for exactly the same reasons. The Commons amendments keeping the numbers down are a very good idea. The Australian experience shows that if you let people have things, you cannot take them away from them afterwards. If we are going to have regional casinos—big casinos or little casinos—eight at a time, all over the place, for heaven's sake do not go beyond that. It is almost too high a number until we are absolutely clear what we mean.

The Minister and I are different. I am a mere scientist, and he is an economist. What I do not understand—no doubt he will able to explain it to me—is where the enormous amount of extra money for all this increased gambling is coming from. I fear that it will come from other sections of the tourism industry, leaving aside the problem gamblers. I share the unions' concern that all these extra jobs that will be created will be lost elsewhere, especially in the tourism industry. The Government, of course, are going to collect more money, but a very nice report from the National Audit Office—HC188, Session 2004–05, published on 14 January—suggests that Her Majesty's Customs and Excise has great difficulties collecting all gambling duties. From what I understand, that is not from the very nice casino operators. Their chances of not being accurate are less than some other areas of betting.

I also notice that local authorities will have many more duties under the Bill. I hope they will be able to cope. My experience is that I hold a justice's restaurant licence, and have done for some 20 years. As noble Lords will know, administration of this has now been transferred to our local authority. Last Friday, we received a letter from our local authority, inviting us to a seminar on how to fill in our form for an application for renewal. Whether the forms are appallingly badly designed, or we are incredibly stupid, or the local authorities cannot cope, I am not clear.

I have been encouraged, however. What am I encouraged about? I scribbled it down, so I cannot read it. I know it was Christmas Day, for one thing. There was an encouragement about teddy bears as well. I did not think teddy bears were anything to do with gambling. It was only when I got on to the committee that I discovered they were. I like penny falls as well.

At this stage, however, the Bill is a curate's egg. So let us try, together, to improve it.

Photo of Baroness Golding Baroness Golding Labour

My Lords, the British gambling industry is well respected and well regulated. Our 136 casinos have given little or no trouble, and neither have our betting shops, bingo halls, seaside arcades or adult gaming centres. But times change; gambling has changed, in part driven by technology. With the advent of remote betting, online gambling, betting exchanges and new machines, the industry has moved with the times, and the Government need to as well.

The Government urgently need to bring our laws up to date. This is not the 1960s; it is 2005. Technology will not stand still while we dither and try to put every little and dot and comma on the face of the Bill.

The pre-legislative committee on which I sat had the advantage of being able to look at the industry in some detail and talk to the people who work in it and are affected by it, whether they are trade unions, Churches, gamblers, bookmakers, casino operators or local authorities. Whoever we spoke to recognised that gambling had changed and that we needed laws to deal with that change.

Many people have failed to grasp how out of date the law is. How, for example, can a law passed in the 1960s be expected to cover the opportunities that unregulated Internet gambling offers for unrestricted gambling in your own home? Gambling is fairly easy to regulate in casinos and bookmakers' shops where people are seen, but if we do nothing, the big growth in problem gambling will be behind closed doors in front of computer screens.

People who criticise the need for the Bill should realise that it is overwhelmingly about regulation and not deregulation. It is about supplying a coherent framework that will give confidence to the consumer and the industry while allowing people to spend their leisure time in a variety of ways. Very importantly, it will help to protect people from addiction and put a coherent framework in place to help those who slip through the net.

That is not to say that there are not issues to be resolved. I know that there are. The Gambling Commission—the tough new independent regulator—has yet to be set up. How long will it take? Will it delay the implementation of the Bill? Can places such as Blackpool afford to wait? Given that local authorities have only just taken over power under the Licensing Act 2003, how long will they need to be ready to take over the additional powers of licensing gambling premises?

The bookmakers are concerned about licensing, or the lack of licensing, on the exchanges. They say that a bookmaker who has been refused a permit to operate can still lay bets on the exchanges, even though he has been deemed to be not a "fit and proper person". The question they reasonably ask is at what point does a layer begin to act as laying in the course of business, and should he or she then come under the same fiscal and licensing regime as bookmakers? Perhaps the Treasury should be looking at the question and showing an urgent interest in it.

Some people have expressed concerns about children continuing to be allowed in seaside arcades because of addiction. The pre-legislative committee found no evidence to support that point of view. If it were true, we would have more problem gamblers in this country. We do not have any more problem gamblers than other countries—indeed, we have far fewer. I hope that the Government's amendments will give the seaside arcades the reassurance for which they have asked.

The casino industry continues to have some concerns, as do the small lotteries and greyhound racing operators. I look forward to dealing with those issues in Committee.

In conclusion, after a lot of hot air, the Government have got the Bill almost right. I hope that your Lordships will allow it to proceed without too much delay. The question we should be asking is not "Should we pass the Bill?" but "Can we afford not to?".

Photo of Lord Steinberg Lord Steinberg Conservative

My Lords, I wish to declare several interests. I am currently the non-executive chairman of Stanley Leisure plc, a company that has been in the gambling business for practically 50 years, as have I. I am also a large shareholder in the company, and have been involved in various trade organisations over the same period.

I am very grateful to the Minister for his concession about not having racing on Christmas Day. I hope that his same good graces can extend to Good Friday. Equally, on behalf of the racing side of my company, I am grateful for his comments about requiring betting exchanges to register all their clients. This is good progress.

I shall talk purely about casinos, the issue that has caused the Bill's main controversy. I should like to make my position clear at the outset. I do not intend to enter into the debate of what is right and what is wrong with the Bill, nor do I intend to criticise the Government or any other bodies concerned with the progress of the Bill, or the lack of it. I simply want to give the benefit of what little knowledge I have acquired over the years so that some of the misconceptions your Lordships may have can be laid to rest.

The first issue I shall tackle is money laundering. Let me start by giving a few statistics. Under the current voluntary money laundering code of practice introduced in 1996, the following transactions must be recorded: single transactions of £25,000 or more, or multiple transactions in one gaming session of £10,000 or more. The records are retained for five years. When the Money Laundering Regulations 2003 are implemented, the above trigger amount will be lowered to €1,000. There does not have to be any suspicious activity connected with the above transactions; the mere fact that the transaction takes place means that it must be recorded. An estimated 100,000 such reports are generated across the estate per annum. That number will be quadrupled when new regulations are introduced.

There is no lower monetary limit in connection with suspicious transactions. If a player exchanges £100 at the cash desk for gaming chips, does not play and later returns to the cash desk to exchange those gaming chips for a win account cheque, that could be regarded as suspicious and, if it is, it must be reported.

During 2003, our money laundering reporting officer submitted 96 suspicious transaction reports. During 2004, there were 103 such reports. In relation to those reports, there has been no prosecution of any person. I can also state that there has been no prosecution in Great Britain of any casino operator for money laundering matters. We have no knowledge of any prosecution resulting from a criminal attempting to wash his money via casinos by, for example, coming in with £10,000 in dirty money and walking out with £10,000 in clean money.

Money laundering is, with respect, carried out by transactions which are used to conceal ill gotten gains from criminal activity and from drug activity, which forms by far the greater part of the criminal proceeds. There is no opportunity for any transaction being handled through a casino which could result in money laundering. May I explain?

Each person who comes into a casino is either a member or a guest of a member. Each member has to sign in, and signs in for the guests. The guests have to produce identification separately from the member. This procedure has not helped people coming into casinos because of the need to produce passports, driving licences or utility bills to show their residence. But when these regulations were made, there was a small drop in attendance which has since been corrected.

If a person coming into a casino were intent on money laundering, he would have to conceal his identity; otherwise he would risk prosecution. The casino in no way helps individuals to do that. In order to change cash for chips, either at the cash desk or the table, a note is made of the person engaging in the transaction. If a substantial amount of cash is changed for chips, and the activity of the player is very minor in relation to the amount of money he has exchanged for chips, it is a sign that something is amiss. On cashing in his chips, if he has given in large amounts of cash and requests a cheque, he will not receive it. He will receive his cash back in exactly the same way as he gave it and the transaction will be reported.

Our company, with 41 casinos throughout the length of the country including four in London, has never been faced with a problem which has resulted even in an investigation. It is so important to understand that casino operators handle their transactions in an open and transparent way and that that ensures the prevention of money laundering in casinos. Everyone in the business is very aware that one of the arguments raised is that casinos are targeted for money laundering. Nothing could be further from the truth.

I hope that I have given noble Lords the background on money laundering. It is not for me to say where money laundering takes place. However, the opinion of the casino industry is that it is far more likely to take place through financial institutions than casinos.

One of the Government's headlines regarding the Bill relates to the protection of children. Nobody under the age of 18 years is allowed into a casino. I admit that there have been attempts, but they have been dealt with immediately at the reception area. There have never been prosecutions of any person or casinos where someone under the age of 18 has been allowed on to the casino floor. Like money laundering, it is a reason used to discredit the casino business. It is untrue in the same way that money laundering is untrue.

Betting shops and casinos display notices about people under the age of 18 not being allowed into betting shops and casinos. Reception and management staff are vigilant to ensure that nobody under 18 gets on to the casino floor. Therefore, points raised about money laundering and the protection of children are well looked after by the current industry.

The issue regarding the protection of the vulnerable is important, involving principally those who may have a problem with gambling. The record of the British industry shows that Britain has the lowest number of problem gamblers of any developed country in the world which allows casinos. Incidentally, as has been mentioned, Australia has the highest number of people registered as problem gamblers. What is a problem gambler? A problem gambler is someone who will gamble more than he or she can afford but will chase his or her losses; he is someone who will run up debt and effectively can cause a break-up in family life. It is the same kind of problem as that which faces an alcoholic. Basically, treatment is required by a psychiatrist who is able to deal with this type of disease—because it is a disease.

In Great Britain, fewer than 1 per cent of those who visit casinos have that type of problem. In the main these people identify either with Gamcare, the Samaritans or the National Council for Gambling. We in the casino industry do our part in trying to help refer people who have those tendencies to the correct organisation. The gambling industry recently put £3 million into a trust fund to help deal with the problem. We in the casino industry feel that there is nothing worse than having a problem gambler and we try wherever we can to eliminate it.

I hope that I have dealt with the issues of problem gambling, money laundering and the protection of children. I believe that the British casino industry is run in exemplary fashion. Casinos provide over £200 million per year in taxes. The gambling industry employs in total over 100,000 people. Our own company employs 7,000 people, of whom 60 per cent are employed in the casino division.

Gambling has been with us since time immemorial. Going back to Roman times, gambling was spoken of and written about. A couple of quotes from 2,000 years ago will demonstrate what I mean. In 43 BC, Virgil said:

"The God delights in odd numbers".

In 99 AD, Tacitus said:

"The more I reflect upon a great number of events, past or present, the more I recognise the effect of chance in all earthly things".

And, finally, from the same era, Cicero said:

"Probability is the very guide of life".

Gambling has been around for ever. There is a misguided perception that gambling is wrong. It is always shown on television with violence attached. The only good thing about the film "Casino" was Sharon Stone. Those kinds of dramatic events just do not happen. The violence, thuggery and concocted stories are all used in a surreal way but have absolutely no reality in life. But people love gambling. I am sure noble Lords have heard of the famous gambler, Nick the Greek. He said:

"The exhilaration of this form of economic existence is beyond my power to describe".

And he had another famous saying:

"The next best thing to playing and winning is playing and losing. The main thing is to play".

We get innumerable misunderstandings about the gambling business, some of which are laughable and farcical. We know that whenever a programme is likely to be shown on television with a gambling background, it will indicate a gambling problem. The great English essayist, Charles Lamb, said:

"Man is a gaming animal".

And, in 1780, in the House of Commons, Edmund Burke said:

"Gaming is a principle inherent in human nature".

We all try to run our business to provide pleasure and enjoyment in high quality surroundings. The food and service that one receives in London casinos are probably better than any 3-star Michelin restaurant. As I should not wish to be considered as engaging in advertising—even though it will be permitted under the Bill—I shall not mention the names of those casinos.

Perhaps I may give a few more statistics. Our 41 casinos have an average weekly attendance of 60,000 and during each week approximately 20,000 players leave having won money. The approximate average of money exchanged for chips in provincial casinos is £230 and the average loss is approximately £40. In other words, for their £230 each person receives back £190, an average margin of gross profit of 17 per cent. Yes, the odds are designed in casinos' favour but people can and do win. It is a form of entertainment. It is a challenge. It is a social activity. It is a place to go for people on their own. It is a place to go with friends and with business colleagues. I shall not be giving away any secrets when I tell your Lordships that my 87 year-old mother-in-law goes to her local casino twice every week where she meets her friends. It is so important for your Lordships to understand that a great many people get a great amount of enjoyment from it.

Michael Pakenham said:

"If you have never gambled, you are precociously rare and probably terminally boring".

I do not suggest that of any Member here.

The former chairman of the Gaming Board was Lord Allen of Abbeydale. He developed the Gaming Board in its current state, which runs well. We are all happy with the way in which the Gaming Board runs the industry.

That is all I wish to say. I could have said a great deal more because I have been in the business just short of 50 years. I have sought hard to give background and information. I hope that noble Lords have found it helpful.

Photo of Lord Roberts of Llandudno Lord Roberts of Llandudno Spokesperson in the Lords, International Development, Spokesperson in the Lords, Welsh Affairs

My Lords, I am completely overwhelmed by the knowledge with which we have been regaled today; it goes far beyond my experience.

The Bill has certain attractions, especially for folk such as my noble friend Lord McNally who see the situation in Blackpool, the possibility of regeneration and a future that is far superior to the present time. If the Bill is adopted, local authorities will see it as an opportunity for new income and new hope.

However, there is a flip side. We have received letters from many people who are worried about the Bill. The hospice movement, for example, is concerned about how some of the new regulations will affect it. I hope the Minister will be able to set my mind at rest. The movement will have to contact its members and that means that the postage will sometimes be prohibitive. I know that Ty Hafan in Cardiff and some of the hospices in my part of north Wales hope very much that the new imposition will not reduce their income.

Far more than that, there is also the issue of the whole principle behind the Bill and the tension between freedom and responsibility. It might look attractive to reject long-standing restrictions but we know that if we value our place in society we have a duty to act responsibly. If we all lived individually on little islands we would be all right; we could do exactly what we pleased and it would not affect anybody else. But in a society, in a community, we have to relate to others and we are responsible for the way in which we relate. This means restricting our own actions if they possibly could hurt or damage other people.

It is clear that gambling does harm. Even the Minister himself, in his evidence to the Joint Committee, admitted that the increased gambling which would follow from the Bill could lead to more problems and more problem gamblers. The amount of gambling is related, of course, to the number of people who suffer in that way. If gambling was not harmful at all, there would be no need for any regulation. The fact that there is regulation means that there is knowledge that gambling is harmful.

Last March, the Secretary of State responsible, Mrs Jowell, stated of the new Bill:

"I do not accept that it will lead to an increase in problem gambling . . . If this legislation gave rise to an increase in problem gambling then it would have failed and would be bad legislation".

That is not held out by the Minister in this House.

The Joint Parliamentary Committee stated:

"Almost all the evidence we have received points to the fact that this legislation would increase the number of people in the United Kingdom with a gambling problem".

One estimate, for instance, is that if the proposals for casinos were implemented, another quarter of a million people could become gambling-addicted. Figures from the United States show that in the state of Wisconsin an average of 5,300 additional major crimes a year can be attributed to the presence of casinos.

Moving from the high-level casinos to the more humble slot machines, the director of the Rhode Island gambling treatment programme, Mr Bob Breen, said only last week that slot players are more likely to become addicted—and faster. They say, for instance, "It's only a nickel. How much can I blow?". He said that within a year they have lost their investments, they have lost their retirement, they are getting divorced and they are stealing from their employer.

The extended opportunities of the Gambling Bill could have a totally detrimental effect on the lives of hundreds of thousands of people. When the Bill states that it will safeguard children from excessive gambling, how are we to safeguard the children of the families of gamblers? They will suffer deprivation, and all because of the Bill.

Who will benefit from the Bill? A street survey in my own part of north Wales, Llandudno, and in the university of Bangor found that only a handful of people were in favour of the proposed mega-casinos. But the Government carry on regardless of opposing voices. It seems from certain reports that the Government want positively to encourage gambling. In the Department for Culture, Media and Sport document of April 2003—The Future Regulation of Remote Gambling—paragraph 133 stated:

"It will need to bear in mind the Government's desire to see Britain become a world leader in the field of online gambling".

If that is not encouraging gambling I do not know what is. The only people who will benefit are those who have already made their fortunes in similar ventures in other places.

We are in for an interesting time debating this measure. But I would ask the Government—a Labour Government—whether this is part of their socialist vision. Does it assist the poor? Does it protect the most vulnerable? Is it a Bill that shares out the wealth of the nation in a more equitable way? It is time for the Government to think. This is not a part of their vision. It is totally contradictory to anything the Labour Party has ever stood for.

It would be well if this measure was defeated, or withdrawn by the Government at this stage, and another Bill introduced, after the election, which will deal with its weaknesses but which will also make certain that the number of people who suffer from gambling will not increase.

Photo of Lord Lipsey Lord Lipsey Labour

My Lords, I must start by replying to a couple of points made by the noble Lord, Lord Roberts of Llandudno. The figures he gave for the increase in problem gambling that can be expected as a result of the Bill were both scary and without foundation. I am a member of the advisory board of the Centre for the Study of Gambling at Salford University. To summarise the views of Peter Collins, the well respected professor there, if you have more casinos alone you will have more problem gambling; if you have more casinos with the measures contained in the Bill to deal with problem gambling in place, you will not have more problem gambling. He believes that an increase cannot be expected on the basis of the international evidence, so we should be very wary of the noble Lord's predictions.

The noble Lord, Lord Roberts, asked the interesting question of whether the Bill was a part of the vision of these Benches. My reply is this: it is not in line with the total tradition of socialist thinking in this country. In the days when it was, that vision was not getting the support of the people. In the words of my late boss, Tony Crosland, the people were not happy where total abstinence and a good filing system were the marks of a good socialist. The people wanted a bit of fun and pleasure. That pleasure—which in the case of gambling used to be confined to the ruling class—should be extended more widely so that people could have choice and the freedom to enjoy their leisure. For me, reasonable rules on gambling are very much consistent with the socialist philosophy to which I still adhere.

Before going any further I should declare an interest or two. One is the small investment I have made in my bitch, Tooting Becky, in the 8.15 at Wimbledon tonight—but, judging from the trainer's remarks, I would not recommend that all noble Lords rush from the Chamber, bookmakers' cards in hand, to join me in that investment. More importantly, I am chair of the Shadow Racing Trust which, under the legislation passed by this House, is to transfer the Tote to the ownership of racing, and chairman of the British Greyhound Racing Board. So the noble Lord, Lord Roberts, will understand why I feel strongly about these matters.

I want to talk a little about procedure on this Bill. For a long time I thought that the procedure was an absolute model of how the country should handle legislation. The Budd committee produced a remarkable and balanced report. A White Paper was produced entitled A Safe Bet for Success. There was the draft legislation and the admirable work of the Joint Committee, from many of whose members we have heard this afternoon—that committee was superbly chaired by John Greenway from another place—the Government's response and some reworking. But then things went awry. They went awry because the Daily Mail in its characteristic fashion launched what I thought was a rather scurrilous campaign against the Bill, but that is a matter for that paper. I sometimes wonder whether we in this country are still a democracy or a "Dacrocracy".

I considered that the result of that was extraordinary and unparalleled in my longish experience of politics. It was not so much that the Government and the Opposition made an immediate U-turn, but it was like one of those fireworks where streamers go off in every direction. The crackle could be heard round the land as the Government and the Opposition tried to find their bearings because the Daily Mail did not like the situation.

There followed a Committee stage and further proceedings in the Commons that cannot be regarded as satisfactory. As I say, the Daily Mail has every right to campaign if it holds certain views, but as a result of its campaign the Government focused too exclusively on the casino question, which is not the sole question of importance in this Bill. Wearing my British Greyhound Racing Board hat I refer to the proposals in the Bill on the future of the track's present monopoly of pool betting. In the opinion of those who know the industry best, the proposals would snuff out the nascent recovery in greyhound racing. I could not recognise the proposals in the Bill very easily from the description given by my noble friend the Minister. However, I do not think that I shall attract his attention to enlighten him even now.

What discussion was there of the proposals in the Commons? It amounted to half a column of Hansard. They were raised quite properly by Richard Page MP. The Minister gave an extremely sympathetic reply; we cheered "Hoorah", but when he got back to the department his officials evidently persuaded him that he was wrong to be sympathetic to the proposals, and that was the last we heard of them. Some 3.5 million people per year attend greyhound racing. Thirty-one tracks and tens of thousands of jobs are about to be torpedoed by a consideration that incidentally runs quite contrary to that in the Budd report. That is just one example. I am grateful to the noble Lord, Lord McNally, and the noble Baroness, Lady Golding, and others for raising the greyhound racing question.

Many of these issues arise in the Bill. We have heard about seaside arcades and society lotteries. Normally in this House we would allocate five or six days to this Bill in Committee, three days on Report and we would stand a very good chance of putting the matter right. However, the trouble is I do not think that we have that amount of time. There is something coming along called an election. I hope that my noble friend Lord McIntosh will persuade the Prime Minister to postpone that election so that the Gambling Bill can have proper consideration, but I suspect that that would stretch even his powers of oratory. That leaves the House in a very difficult dilemma. We do not want to lose this Bill. As the noble Baroness, Lady Golding, said, it is terribly important to the regulation of gambling. To be honest, I do not think there is any certainty that it will come back after an election given the Daily Mail's reaction to this Bill. I pity the poor Minister who tries to convince the legislation Cabinet committee that this should be the priority in a new government's first term, whatever that government's political disposition. The Bill may not come back and therefore we want to get it through. But equally we cannot shirk our functions. We cannot let seaside arcades or greyhound racing go under just because an election comes along and things get wrapped up in it. We must address these matters; we cannot just accept the Minister's say-so and the DCMS's views on all these issues.

Where does that leave us? It is now down to the Minister. I am glad that we have such an understanding Minister on this Bill. Ministers are trained to the adage, "If in doubt, resist—resist amendment". One understands the reasons why that is so, which include the belief of all governments and their advisers that they have a monopoly of wisdom. However, if that approach is taken on this Bill, we must resist the resistance. We cannot let the Bill go through without serious changes to address not the fundamental thrust of the Bill but the kind of issues that have been raised. I say to the Minister that, sticking as he must with the fundamental principles of the Bill, he must also exercise a much greater flexibility on the important details of the Bill in order to get it through this House. I believe that there is the will on all sides to reach a fair agreement on what truly represents consensus because in the run-up to an election consensus Bills only can be allowed through. It is necessary to win the support of the noble Baroness and of the noble Lord, Lord Clement-Jones. It is also necessary to gain the support of the great broad mass of Peers who with a few exceptions sympathise with the general thrust of the Bill but have concerns about the details.

I trust my noble friend the Minister to get this right. I hope that his seniors in government will not attempt to stand rigid in the face of the necessary questions that this House will raise. On the basis of the consensus that I believe to exist but also mindful of the changes that need to be made, I believe that if the Bill is lost it will be the fault of Ministers.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

My Lords, I am afraid that the noble Lord, Lord Wade of Chorlton, is not able to speak and I therefore rise to say my piece. We are confronted here with another giant highly technical Bill comprising 225 pages. It constitutes a licence for us lawyers; we at least will do well out of it. I sincerely hope that by the time this Bill reaches the statute book one will be able to say that of the public as well.

I realise that this is an extremely difficult area of human activity to deal with and police. I also accept that there are libertarian issues which are not easy; there is no point in pretending that they are. It is certainly not part of my case to be a killjoy, let alone a puritan. I believe that the current state of gambling, given a number of improvements suggested in the Bill, is in many ways acceptable. At least we have a clean industry—I am talking particularly of the casino end of it—and we have an uncorrupt industry. It is partly because I think that those two priceless attributes are at risk from some parts of this Bill that I shall make the following remarks.

I agree largely with the summary of the view of the Casino Operators' Association of the UK. As has been mentioned, there are 131 casinos. Some 115 of those are owned by four public limited companies, which leaves 16 smaller, mainly privately and family-owned casinos, and the Casino Operators' Association represents a majority of them. The Casino Operators' Association states:

"Whilst the Casino Operators' Association (COA) recognises the need to modernise the 1968 Gaming Act and strengthen legislation to protect children and the vulnerable, it has fundamental concerns that the Gambling Bill offers inadequate safeguards against increased problem gambling and crime and money-laundering. Despite changes to the draft Bill, the proposed legislation remains strongly anti competition".

A number of noble Lords—the noble Lord, Lord Mancroft, for one—made that last point strongly.

I should like, if I may, to spend a minute or two discussing the context of this Bill. I suppose that before doing that I should express my history within gambling as one of the founder members of the National Lottery Charities Board—one who, like my noble friend Lord McNally, has an occasional and happy flutter, and, indeed, one who in his early days in the legal profession was required by his principal to spend months of his life deep in the heart of the gaming industry, but I shall say no more of that now.

We are dealing with a context of a country currently spending over £8.5 billion a year on gambling—one of the highest per capita expenditures in the world. We have a huge and growing problem of personal debt in this country—again one of the highest in the world. Statistics from the National Association of Citizens Advice Bureaux, which deals with the problems of more than 8 million citizens a year, show that the highest category of problem is that of personal debt.

I do not wish to repeat the figures given by the noble Lord, Lord Jopling, beyond saying that the work of Professor Mark Griffiths at Nottingham University, which is devoted exclusively to gambling, flies directly in the face of the comments just made by the noble Lord, Lord Lipsey. The professor's statistics, which pointed to there being around 300,000 problem gamblers, were not disputed by the noble Baroness, Lady Golding, or the noble Lord, Lord Steinberg. The gist of their remarks was that that was not too high a figure in relation to the size of the industry and the size of the population.

The point is that if you hugely increase gambling, as the Bill certainly will, and hugely intensify gambling, as the Bill certainly will, it is common sense that the problem figures will rise in step. The evidence given to the Joint Scrutiny Committee was clear. For example, the Royal College of Psychiatrists said:

"It is clearly a fact that if the facilities for gambling in a population increase, the total amount of gambling also increases. This affects all individuals in that population and inevitably leads to an increase in the number of those who gamble to such a degree that damage results".

Perhaps I may also quote from an eloquent letter that I received from a psychiatrist, Dr Nicholas Land. He stated that,

"like any other psychiatrist I have seen the huge damage gambling addiction can cause to patients and their families. The money that families and individuals need for everyday essentials is instead diverted into the pockets of the Treasury and the gambling industry. One of the key factors for problem gamblers to avoid the temptation to return to gambling is limiting their immediate access to casinos. This is greatly helped by the current 24-hour membership requirement", which will be scrapped under the Bill. He continued:

"Thus removing this 24-hour membership requirement, together with the proposals to increase the numbers and visibility of casinos, substantially undermines the cognitive strategies used to help problem gamblers".

There is a disproportionate concentration of poor people among those problem gamblers, and they are three-and-a-half times more likely than the well off to have gambling problems. I am referring to statistics from the British Gambling Prevalence Survey of 2000. Those statistics were given to the Joint Scrutiny Committee. The same relationship can be found in research in the United States.

I turn to the demand from the public for the huge extension in gambling proposed by the Bill. What do we find? Nothing. No evidence whatever. My noble friend Lord Roberts of Llandudno performed his own local survey and the results of that would be borne out anywhere in the country. There is no demand or cry for an increase in gambling, let alone on this scale, except from the big end of the industry itself.

The 1968 Act requirement for those seeking licences to demonstrate need is to be scrapped. Why? Surely that is the most profoundly commonsense and useful provision that the 1968 Act had. Yet it will be swept from the board. What is the reality? This will be a charter for hugely increased gambling in all its dimensions—outlets, machines, stakes, prizes, advertising and freebies. That is what this Bill is about. On the evidence that I have seen—and I have no axe to grind—there will certainly be an equal and opposite increase in problems connected with gambling.

I suggest that we proceed extremely gingerly with the Bill. The recent Licensing Bill went through this House with much debate and contention. Various protestations were repeatedly made by the Government about how it would do this and not do that. Now, a year or so down the road, there has been an immense public outcry. That could easily be the consequence of this Bill.

Knowingly and intentionally to encourage a massive increase in and intensification of gambling, when the problems created by it, whether of debt or addiction, will increase, as both common sense and research indicate, is an extraordinary step for a legislative House to take. I believe that the more strongly due to the disproportionate damage that it does to the less well-off.

Lastly, I refer to some statistics on prize machines, because the evidence suggests that they are particularly dangerous to the poor and psychologically vulnerable. Under the present law, prize machines can have a maximum stake of only 50 pence; the maximum prize is £2,000; the maximum number of machines in any casino is 10. Under the new law, the maximum stake is unlimited; the maximum prize is unlimited; the maximum number of machines per casino is 1,250. So, one new regional casino can have in it nearly as many prize machines as the whole of the casino industry can currently operate.

We would be fooling ourselves if we believed that the Bill will not create enormous social problems. It is not open to us properly to allow the Bill through in its present form, permitting these super-casinos. Finally, the Bill's third objective states that it is for,

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

The Bill not only does not do that, it actually adds to the harm and exploitation that gambling can cause. I am sorry to be so negative about certain aspects of the Bill, but we ignore these realities at our peril.

Photo of Lord St John of Bletso Lord St John of Bletso Crossbench

My Lords, I welcome the Bill, both in its objective of modernising the UK gambling laws and its attempt to do so while addressing many of the concerns of problem gambling. I appreciate the concerns that the noble Lord, Lord Phillips, outlined. I have for the past five years been involved in a web hosting company, with many of our customers being online gaming companies.

There is a widespread misconception that the Bill will open the floodgate to remote gaming. On the contrary, it is a means to regulate and provide protections for something that already exists. Without the Bill, UK citizens are exposed to unregulated and possibly disreputable offshore companies that may be unscrupulous in their business dealings. The Bill will make the operators subject to probity tests and the gaming software and equipment subject to fairness testing. That will certainly build in protections to deal with problem gambling.

There is much detail omitted from the Bill which is left to subsequent regulation to be developed by the Gambling Commission. However, one of my concerns about the equipment for online casinos is that the current proposals require remote gaming operators to be either "all in" or "all out" of the United Kingdom. That will effectively require companies primarily based in the UK with some offshore activities such as call centres to move them onshore. Conversely, it will require primarily offshore companies to obtain licences where they only have limited UK connections and equipment or use UK services such as banks here. That may result in some companies moving entirely offshore with the ensuing job losses and loss of Treasury revenue.

That "all in" or "all out" test will create the exact opposite effect of the intent of the legislation, which is to provide a compelling proposition for remote gambling companies to remain in or move to the UK. A better approach is for the Gambling Board to have a worldwide right to audit the equipment and operations of its licensees.

Moving from remote gaming to land-based casinos, I am particularly in favour of the Government's proposal for regional casinos, where the gaming space comprises only 10 per cent of the overall facility, with the remainder made up of hotels, restaurants, cinemas, sporting and conference facilities. I certainly support the cause of the noble Lord, Lord McNally, for Blackpool.

As someone who does not gamble, I have often visited Sun City in South Africa for its leisure and conference facilities. It has excellent family facilities. I do not agree with the negativity of the noble Lord, Lord Jopling, about foreign operators investing in regional casinos in the UK. With each regional casino projected to cost about £250 million, they will inevitably deliver significant regeneration, planning and tourism benefits.

It is estimated that if each of the eight regional casinos are successfully developed, they will not only represent an investment of more than £2 billion over the next three years; they could create more than 50,000 direct and indirect construction and operational jobs.

However, I have reservations about the proposal of some commentators to retain compulsory membership of casinos, particularly the regional casinos. Research on the viability of regional casinos around the world shows that a regional casino must attract between 5,000 and 6,000 people a day in order to succeed. The model is premised on public access.

The argument by those in favour of compulsory membership that such membership will prevent money laundering is disingenuous. All casinos have to comply with applicable European Union money-laundering directives, which do not require membership. Moreover, the industry code of conduct deals with problem gamblers. Any further decrease in the number of regional casinos would further destroy the competitive balance between the different types of casinos, thus further diminishing the delivery of regenerative benefits to the UK.

However, I certainly agree with my noble friend Lord Walpole that eight regional casinos is sufficient for the time being. That would obviously have a detrimental knock-on effect on inward investment.

It has been argued that regional casinos could be detrimental to the National Lottery. I defer to the expertise of the noble Lord, Lord Mancroft, with his operational knowledge of society lotteries, but I understand that the evidence in the United States suggests that lotteries have not gone into long-term decline when other forms of gambling were introduced.

If any pattern can be determined, it might be that as gaming expands, lottery revenues experience a temporary decline for up to a year, with normal growth resuming thereafter. There is also considerable evidence to support the fact that national and state lotteries in jurisdictions without other forms of gaming often decline for other reasons such as poor product appeal.

I shall leave my views on category A and category B machines to the latter stages of discussion of the Bill.

I commend the excellent report by the Joint Committee on the draft Gambling Bill. With the general election likely in May, we have a tight schedule to complete and improve the Bill. After all the expensive preparatory work, it certainly deserves a smooth passage and I commend it to your Lordships' House.

Photo of Lord Faulkner of Worcester Lord Faulkner of Worcester Labour

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

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

I have one commercial interest that I should declare at the beginning. For many years before I entered the House, I was an adviser to Littlewoods Pools, having been retained initially at the time of the Royal Commission on Gambling under the chairmanship of Lord Rothschild in the late 1970s. I continue to be an adviser to Sportech, the current owners of Littlewoods, although I severed that link when I served on the main inquiry of the joint parliamentary scrutiny committee. In my view, it would not be appropriate for me to speak about the clauses of the Bill that cover its business this evening, and I shall not. I also have two unpaid trusteeships that are relevant. One is of the Foundation for Sport and the Arts and the other is of Gamcare. Both are good causes that obtain funds from sections of the gambling industry.

As I said, I served along with four other members who have already spoken in the debate, on the Joint Scrutiny Committee, which I found an enlightening and fascinating experience. We worked together constructively on an entirely non-partisan basis and it is worth putting on record that the Members of this House achieved an impressively high attendance record during our sittings.

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

"saved her [the Secretary of State] and us [the country] from disaster" because we had,

"stopped many of the bill's worst features in their tracks".

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

"the Bill is essential because without such legislation, gambling technology is leaving the law in its wake. If we do not modernise, people will not be protected. Without the Bill, there would be no gambling commission with the objective of social responsibility in gambling at its heart, internet gaming would continue to go unregulated, and there would be no powers to deal with roulette machines in bookmakers' shops."—[Hansard, Commons, 24/1/05; col. 127.]

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

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, it has been fascinating to listen to the noble Lord, Lord Faulkner of Worcester, my noble friend Lord Falkland and other noble Lords. One thing is clear: the Bill is a good advertisement for pre-legislative scrutiny. I hope that it will also be applied to other complicated measures before they come to us.

I can declare no interests with regard to gambling. It is not something that I do much. On one occasion, about 40 years ago, my girlfriend—now my wife—and I were about the last people to leave the Liberal assembly in Scarborough. We suddenly realised that we had been relying on each other for our bus fare. We thought, "It's either hitch-hiking to Leeds, or there is one of these one-arm bandit things". We put what we had into the machine, and, when we had enough money for the bus fare, we went and got the bus. I remembered that one of my relatives, who was a gambler, had said to me, "When you're ahead, quit". I quit when I was winning, and I have never seen the need to go back and lose the money—four and sixpence or whatever it was—that I had won. So, I am not a gambler.

One of the things that I find interesting about the debate is the fact that few noble Lords have felt it necessary to talk about the ethical issues. That would not have been the case in the 1960s, when, I am sure, a lot of people would have talked about the immorality of gambling and the fact that it was an undesirable activity that we should clamp down on. There is a difference now in attitudes towards gambling. The House of Commons Library research paper on the Bill published on 28 October said:

"The underlying philosophy at that time"— the 1960s—

"was that gambling was a social 'sin' to be tolerated but not encouraged".

I do not consider myself to be an expert in sin. There may be other Members of the House who know more about it than I do, but it is not something that I am comfortable discussing.

The Minister said that gambling was seen as seedy in the 1960s but was now socially acceptable. I am not sure that things were all that different then. My father filled in the football pools, but we were not socially ostracised as a result. My grandfather used to get all his cigarette money—he smoked about 40 a day—from the horses. Plenty of people gambled in those days.

It is not just the technology that is different now; a lot more people have a lot more money. That allows gambling to take place on a larger scale than before. It is not so much a matter of puritans against sceptics, as it was 40 years ago; the puritans have become sceptics, and the sceptics have become enthusiasts. That is the underlying ethical issue with regard to the proposal for casinos. I do not understand why the Government think it necessary to promote the idea of large new casinos in this country. I do not understand why we need them, and I do not understand why the Government—a Labour government—are promoting them. That is the result of the underlying ethical activity.

I do not know whether there are people who believe that gambling is an activity like any other activity—like playing tennis in the park or spending your money at the pictures. I do not think that it is an activity like any other activity. It is one of those things that, in old-fashioned terminology, would be called "vices". There is something about gambling that, if it gets out of hand, creates problems, which puts in along with all the other vices that are alleged to exist.

I have to say that I am not against vice. Many vices are extremely enjoyable. Some of them will kill you if you indulge in them too much—perhaps all of them will, who knows?

I am not speaking with a puritan attitude, but if some activities are allowed to get out of hand and allowed to develop on too large a scale and if we allow people to become addicted or otherwise harmed by them then harm will be caused to society in general. In those circumstances we accept that the Government have to step in and regulate. I do not believe anyone present wishes to criticise the need for the Bill, as the noble Baroness, Lady Golding, suggested, but most of us feel that 80 per cent of the Bill might be improved, although it is good legislation. However, some of us have a problem with the large new casinos. There is an ethical dimension to the Bill and a question mark to be put against that.

When I was in the sixth form, the prefects' common room in my school was a gambling den. We used to spend half our time swatting for our A-levels and half our time playing brag and poker. I have not played them since, but if anyone wants a game, who knows? One minute we would be studying Francis Bacon for A-level English and the next minute we would be playing brag and shouting at each other.

One of Bacon's most famous quotes is,

"money is like muck, not good except it be spread".

I believe that that applies generally to vices. As long as vices are spread around among us all and provided each person does not have too many vices for his or her own good, they are all right. When vices are concentrated or when individuals are harmed by them we have to start worrying about them. Underlying the debate there is an ethical dimension and I do not believe that we should avoid it.

I was lectured by my noble friend Lord McNally about who was more liberal—if he wants, I could have a discussion with him for ever on that—and returning to the nanny state. The whole Bill is about the nanny state. It is about regulation. The phrase "nanny state" is a silly phrase. It is not a matter of whether we regulate, but how, what and to what degree we regulate. He also suggested that one should put one's individual prejudices aside. I am reminded of the comment that one person's prejudices are another person's principles with which he does not agree, or vice versa.

The noble Lord spoke about Blackpool and mentioned the wonderful black and white films shown a few weeks ago on BBC2 made by Mitchell and Kenyon from Blackburn. One of the most amazing scenes in those films was one of the mills in Colne, which is the largest mill in Waterside, the ward I represent on the local council, showing the mill losing, as they said, or the mill workers clocking off. From the way they were dressed, it looked as though they were off on their summer holidays to Blackpool. Summer holidays had just been brought in. One had a week off work without pay and they all had to go to Blackpool by train. It is absolutely right that that source of economy and wealth in that town has gone. No one goes to Blackpool now other than for a day trip or on a coach one evening to see the lights—that is all.

However, Blackpool needs urgent and fundamental change. It desperately needs investment and something doing to it. If that depends on Blackpool becoming north-west England's answer to Las Vegas, there is something very wrong with this country and very wrong with our society.

Generally, I associate myself with the remarks made by the noble Lord, Lord Jopling, the right reverend Prelate the Bishop of Coventry and my noble friend Lord Roberts of Llandudno, so I shall not repeat what they have said.

The fundamental question that can be asked without affecting the rest of the Bill is: do we need 24 new large casinos and eight regional casinos—or super-casinos as they used to be known? Is there an urgent need in this country for these? Or is there an opportunity to think again and ask why we need these and what effect they will have?

Parts of the new Labour Government who we do not see in this House seem to be obsessed and besotted with certain aspects of big business, the glitzier, richer and more powerful the better—and casino operators fit into that pattern. I do not believe that the people of this country are crying out for these. If the Government were to withdraw those parts of the Bill that refer to those new casinos, I do not believe that they would suddenly lose the general election. It might even do them some good.

The Minister said that local authorities will have the final say and that Ministers will not be allowed to override them. That may be the case. But that is not how the real world of local government works. I know that only too well as a member of a local authority in Lancashire that is in the middle of difficult negotiations and discussions over housing market renewal at the moment. That is a very different issue. Millions of pounds are being promised to our authority so long as we toe the line and knock down enough houses, a suggestion that we blanch at.

Regeneration money very often comes with bullying, blackmail and bribery. If a resort like Blackpool refuses to have a casino, will the answer be, "Well, you had your chance for all this opportunity and investment. You do not want a casino. So you are now at the bottom of the list"? That is how it works—and how it will work—in the real world, I am sorry to say.

There are a lot of questions to be asked if these large casinos are to go ahead. We need to be clear what the Government intend to do to make sure that the presence of a large casino in a town such as Blackpool, Weston-super-Mare or Margate boosts the resort's economy and tourist trade and does not either have no effect at all on it or, worse, drain trade and resources from it. It should bring more business to the existing businesses there.

My noble friend waxed lyrical about how people in Blackpool are dancing in the streets at the prospect. There are a lot of traditional boarding house keepers and private hotel owners in Blackpool who are beginning to realise that they may get none of this trade whatever. There may be problems there. That is a matter we will want to probe.

We need to be clear that such a new large casino in such a resort is aimed at bringing in visitors and that local people are discouraged from going there. When the new casinos were first envisaged it was thought that there might be some in large population centres such as Manchester, Salford or Leeds. People said that the problem in such places was that they would get a lot of trade from local residents who could walk in and get addicted. Alternatively, they might just spend too much of their brass which they should spend in the local pub or on their wife or whoever.

There are at least 100,000 people living in the immediate vicinity of Blackpool. Those people—although not as many as in Greater Manchester—will be at similar risk. We need to be clear that the Government are taking action to prevent casinos in such places from doing their best to get trade locally. We also want a number of other locally based guarantees of that kind, though I doubt that the Government will be able to provide them.

On the role of the state in such matters, William Blake wrote:

"The whore and the gambler, by the state

Licensed, build that nation's fate".

Why is it that the Government want this country to become internationally famous for having the biggest and best casinos, for having the best online gambling and for being the best place to attract people to that kind of trade? Surely, that is not the image, leadership or position that we want in the world. If it is, I am ashamed to be a citizen of this country.

Photo of Baroness Howe of Idlicote Baroness Howe of Idlicote Crossbench

My Lords, it has been illuminating to listen to the differing views and expertise expressed on this subject. I have learnt a lot, as, I imagine, have others of your Lordships. There is obviously support for much of the Bill. Clearly, a huge amount of work went into pre-legislative scrutiny and debates in the other place. As a result, many important changes have already been made.

There is clearly a need to update current legislation, not only because—as with the Charities Bill which the House is also considering—40 years have passed since there was any major overhaul, but also, more importantly, because technological advances have led to considerable growth in online gambling, with an absence of any powers to deal with it.

As for the decision to legislate and allow a whole new range of casinos and gambling machines into this country, like many noble Lords who have spoken, I remain concerned and somewhat sceptical about the motivation behind it. We have heard about the very high percentage of those who think that there are enough gambling opportunities in this country already. I shall not repeat those arguments.

Like other noble Lords, I am particularly uneasy about one aspect of the legislation; namely, the possible impact on children and other more vulnerable members of society. Perhaps I may begin by expressing my rather limited expertise on this subject. I am not much of a gambler. I have a certain addiction to playing bridge but I seldom do so for money. If I do, I will do so only for about 10p a 100. Once or twice a year, if I remember, I may have a modest flutter on the Derby and the Grand National.

On the whole, I am mercifully untempted by gambling. I recognise, as the evidence given to your Lordships makes very clear, that gambling is or can be seriously addictive for some who are mainly—not all of them, but mainly—from deprived backgrounds. Above all, it can impact indirectly as well as directly on their children. As so often happens, it is the young and even children who are the most easily tempted.

For all those reasons, our society, our customs and even our laws have always—and, in my view, rightly—leant against gambling. As I understand it, even today a gambling debt cannot be recovered through the courts because the law wants no part in that kind of business. As long as we get the balance right and do not try as we once did to drive gambling underground, it will be a perfectly sensible state of affairs.

As the Secretary of State has repeatedly reminded us, the first of the three objectives of the Bill—by reference to which, once it is on the statute book, everything will be judged—is the protection of children and other vulnerable people from harm or exploitation. Now that we are near the end of the debate, I am sure that noble Lords will be pleased that I intend to keep my remarks almost entirely to the first objective, of protecting children and vulnerable people.

The first of the Government's three "locks", as described by the Secretary of State, is designed to achieve the Bill's objectives by requiring all organisations that are based in Britain and operating remote gambling businesses to obtain a licence from the Gambling Commission. I certainly accept that it makes sense to legalise that form of gambling, if only to set clear boundaries on what will and will not be legal in future. It is already estimated that 16 per cent of the British visit an Internet gambling site every month. Those numbers are likely to grow even faster through the escalating use of third generation mobile phones, about whose growth we have already heard from the noble Viscount, Lord Falkland. Apparently, a primary requirement for granting a licence will be for firms to demonstrate precisely how they will exclude children from using their sites and other facilities. The effectiveness of that provision, if it can be guaranteed, is clearly going to be of paramount importance in protecting children, and has been much welcomed. But can we be sure it will be effective?

There will also be new offences that will make it illegal to invite or permit a child or a young person to gamble. Here, again, it is necessary to remember that problems are likely to multiply with unscrupulous Internet operators operating outside UK jurisdiction, and I hope the Minister will tell the House exactly how the Government can be sure that the Bill will deal with them. Already we know how difficult it is to regulate undesirable broadcast content accessed via the Internet.

If we are aiming to tidy up past anomalies in the legislation, surely it is important to make it quite clearly illegal for children to use some of the machines in category D. As others have mentioned, we have all had strong representations from the Salvation Army and the Methodist Church. They are the people who see the results of children's gambling on the ground, and they continue to urge that the category D machines be split in two, with only the non-fruit machines—that is, only those that give non-monetary prizes—available for use by children. I find their arguments and their research compelling.

As we have heard, no other western country permits children to gamble in this way. There is a serious worry that the seeds of addiction can all too easily be sown by the use of that kind of machine. I realise that the Bill contains power that could be used in the future, but would not the Government be wise to think again about this point and act now rather than waiting until then? I remember well from my juvenile court days the many reports we heard that amusement arcades were all too frequently a magnet of temptation for truanting children.

Moving on from children, I am less clear about the extent to which, if at all, other vulnerable people are to be protected. I have not heard very much about that. As Alan Simpson pointed out in the other place, there are three times as many problem gamblers in households earning less than £15,600 as there are in those with earnings twice as high. The increased gambling opportunities that the Bill clearly offers are hardly going to help to tackle the Government's proclaimed priority objective of poverty elimination. Perhaps the Minister will be able to expand a little on that when he replies.

In the same context, but specifically in relation to casinos, I am also concerned, like others who have spoken, that the Government propose to drop the 24-hour membership rule before one is allowed to gamble, and that they do not apparently consider it necessary for a casino to require some proof of identity. I hope there will be opportunities to pursue those issues later.

Finally, the citizens advice bureaux have drawn attention to a rather unrelated, but important, issue. I refer to the plethora of bogus lotteries and prize draws that assail us all in increasing quantities, either by mail or, often, from other countries, again through the Internet. It may be that caveat emptor should be sufficient, but it is clear that for many it is not. Indeed, it is plain from the cases quoted by the CABs that, once again, it is the vulnerable who are the real victims. Is not this a problem which a Gambling Bill should address? I hope that the Minister would be willing, in the name of the Government, to consider an amendment in Committee to address the problem.

Photo of Baroness Thornton Baroness Thornton Labour

My Lords, the last speaker must face the fact that almost everything has already been said, but on the other hand there is the prospect that you can say anything you like about what others have said and there is nothing they can do about it. This Bill has been a long time coming, and on reading it I wondered why the Government did not save themselves from a certain amount of confusion in the media, already alluded to by my noble friend Lord Lipsey, in having to explain at every turn that 80 per cent of the Bill is about control, protection and regulation by naming it for what it does: the regulation of gambling Bill.

I should declare an interest from my close association with the children's charity NCH. I congratulate the Government on the care taken on the scrutiny of the Bill and their willingness to consult with and take on board the concerns of children's and other organisations. As the Minister knows, I have in mind particularly the issue of Internet gambling and the fact that a child as young as 11 could and still can gamble online as long as they have the use of a Solo or other form of debit card. The age verification systems used by most Internet gambling organisations are either weak or non-existent. When this was revealed to the Government, I am happy to say that they took it on board and I understand that the aim is to strengthen age verification systems in the Gambling Commission's guidelines. My noble friend will not be surprised to learn that we will be watching this development with great interest.

So there is much in the Bill on which to congratulate the Government, which is very necessary because in many ways the law is out of date and irrelevant as it applies to the availability of modern gambling habits. I shall not comment on the issue of casinos large or small, and I shall certainly not venture into the area of Blackpool or not. Noble Lords would not expect a Yorkshirewoman to do so, although I am one who for many years went to Blackpool in her childhood. Rather, I shall confine my comments to two fairly discrete areas of concern.

The other day I was introduced to a young man at a briefing meeting held by the Salvation Army and the Methodist Church. He has kindly agreed to allow me to relate his story to your Lordships, and I am very grateful to him for doing so. I shall quote his statement:

"My name is Mark. I am now 23 years old and live and work in South London. I can't remember exactly when I started gambling but it started to be something I specifically remember enjoying when I was about 12 or 13. This was playing on fruit machines in the arcades when we used to go on holiday to Weymouth in Dorset. Even at this stage, the continuous buzz of the fruit machine got me hooked and I often ended up spending most or all of my holiday pocket money.

"When I was 14, I was allowed out of my school grounds at lunch times and would often go to the local bowling alley where there were 5p fruit machines and would spend my lunch money plus any more I could get my hands on. At this stage sometimes I would get lucky and win a jackpot but for some reason I would always end up putting it back in so I guess even then by this stage I was properly addicted.

"As I got older and at 16 went to college I started to go into bookmakers and play on the higher value machines as well as starting to gamble on the horses and the greyhounds. After six months of college I had to drop out as I had not attended college enough as I had been gambling. This was all very secretive because I didn't want people to know how much or how often I gambled because inevitably the question would come up as to where my finance came from. Of course the answer is that it was stolen, from my family, from my friends and from my workplace. I'm deeply ashamed of this and am still trying to pay some of these debts back now.

"I finally hit rock bottom when I spent over £1,000 in 3 days on gambling and was found out by my family. This was when I had to face up to it, and despite a lot of hurt I live my life normally now. I believe that I have been able to turn away from gambling for many reasons including the support I have received but I believe a lot is down to the fact that I am an adult now and am able to understand the consequences of my actions better.

"The addiction still affects me now in that I am still paying off debts due to gambling and because I am still tempted to gamble now. As a child, playing on these fruit machines caused me to steal and truant, and the effects of these things have had a major impact on my life".

The issue I wish to raise concerns category D machines. I profoundly disagree with my noble friend Lord Pendry and, indeed, BACTA, whose briefings I have received in the last few days. As the right reverend Prelate the Bishop of Coventry said, the only limiting factor to a child using a fruit machine is whether he or she is tall enough to put money in the slots. As other noble Lords have said, if the Government believe that children and gambling do not mix, I feel bound to ask why, then, are they happy to allow children to play on fruit machines. Do the Government not recognise that the use of these machines is gambling? If slot machines are addictive to adults, how much more addictive are they likely to be to children? Why should the amount of the stake matter, either in terms of vulnerability to likely addiction, or for its appropriateness for children? Anyway, I do not think 10p is an insignificant amount for a small child, and winning £5 is certainly a great deal of money.

At present, category D machines include both fruit machines, and the penny falls and the teddy bear grabbers. I welcome—and I hope I understand—what the Minister said, that the Government will be drawing a distinction between these machines and the slot machines. It seems a simple and obvious thing to do. I wonder how many of your Lordships would be comfortable at the sight of your young children, or grandchildren, playing on fruit machines. How young might they be? Five, six, seven or perhaps 10 years old. How much do you think they should stake? 50p, a pound or more? Perhaps you might think they would learn an early lesson if they lost all their money, but what if they won? What is the message that they take away with them? Perhaps, like Mark, they might think it is easy money and come back for more. No, we need to tackle this issue head on.

I found the briefings I received from BACTA yesterday and today both irresponsible and misleading. To suggest that those who wish to protect children and young people from gambling are in some way killjoys, or spoiling family entertainment, is offensive. Indeed, there is evidence to suggest that children are at risk. I realise that some Members in the other place had a bit of fun at the expense of teddy bear grabbers and penny falls, which allowed them to miss the point. I hope that the Government will not do so.

Nor do I believe that not allowing children to gamble will be the death-knell for arcades and amusements in British seaside resorts. It is telling that BACTA refuses to say how much money would be lost by banning children from their fruit machines. Perhaps even it realises that this figure would be an embarrassment, because it would tell us how much it has taken out of our children's and young people's pockets.

Perhaps, like BACTA, I could slightly over-egg this pudding. Throughout history, people who make money from children and young people always fight to be able to continue their exploitation, and they always say that change will destroy business. It is never true—or, at least, if it is true, it is not a reason for not protecting our children. I am sure chimney sweepers said the same about not sending young people up chimneys. I am sure gin manufacturers said the same about not feeding gin to babies. I am sure mill owners said the same about not sending children under their mill machines. All those making profit from children should consider this. I ask the Government to bite the bullet on this issue. Like the right reverend Prelate the Bishop of Coventry, I would say they are nearly there, so let us go the whole way.

The other issue I would like to raise is that of identification. Clearly this is a very important issue when protecting young people, with their propensity to see age limits as a challenge to be overcome. I have a 16 year-old, and I can testify to this. As far as I can see, positive ID is not required either to enter regional casinos or, perhaps more importantly, to play category A machines. I asked this question at one of the useful meetings the Minister organised for all Peers, and I am afraid that I completely failed to understand the answer I received from the official concerned. He spoke at length and helpfully about European regulations and money laundering. I am sure it was my own stupidity, but I did not know whether he was saying yes or no, so I am going to have a another go at this question. How will the Government prevent young people—probably in the 15 to 18 year-old range—accessing the new casinos and playing on category A machines?

In conclusion, I congratulate the Minister on his introduction of the Bill, thank him for the discussions that have already taken place, and assure him of my support in getting this important Bill into legislation.

Photo of Lord Clement-Jones Lord Clement-Jones Shadow Minister, Health, Spokesperson in the Lords, Culture, Media & Sport

My Lords, I thank the Minister for introducing the Bill with his customary forcefulness and clarity. Getting to this point has been a long and tortuous process. As a newcomer on these issues in the House, I pay tribute to the quality of the debate and express my respect for the expertise which has been displayed by, in particular, those who have been involved in the scrutiny process, with the Joint Select Committee and the inquiry into the effects of betting on sport carried out by the All-Party Group on Betting and Gaming under the chairmanship of the noble Lord, Lord Faulkner of Worcester. Noble Lords have today revealed much racier pasts, certainly in the case of my noble friend Lord Greaves, than I ever anticipated hearing.

Although over the years I have been involved with some 20 or so Bills in this House to date, I confess that I have never seen a briefing and lobbying process in which the regulatory and commercial realities were more difficult to discern. Even the Budd report at the time confessed the difficulty of deciding on certain issues. It said:

"We have found the issue of gaming machines to be one of the most difficult we have tackled".

I echo that.

For every point of view on aspects of the Bill, there is an equal and opposite view from all Benches, often based on commercial self-interest—I absolve noble Lords from that—from outside lobbyists, with anti-competitive motives occasionally dressed up as moral imperatives. It is very important to distinguish the genuine issues from the special pleading that we have heard.

I believe that the Government have tried to negotiate between the reefs and shoals—notwithstanding the Daily Mail—and it would be easy to criticise them for some initial naivety and—dare I say it?—over-enthusiasm. But they have listened to date, and I hope that they will continue to listen, not least to today's debate. Several issues, however, still need exploring.

One of the most memorable phrases used by the Joint Select Committee was "cliff edge", referring to the sharp differences between the different types of casino and other establishment which it thought existed. There is no doubt that there is still a need to discuss many of those differences, which are enshrined in the Bill, and the reasons for them.

Looking back to the Budd report, I believe that its general approach to regulation was correct. It was, by and large, an enlightened report in terms of its regulatory philosophy, which I share; namely, that the issue of regulation is essentially one of the need to deal with risk, not one of morality. The main aim should be to keep gambling crime-free, be fair to players and ensure protection for children and the vulnerable so that we do not increase problem gambling.

The extension of choice envisaged under the Bill must be seen in the context, as many noble Lords have emphasised, of making sure that there is no increase of risk in these areas. We will have to test the Bill by that very general set of objectives. Seen in that way, the balance of the Bill is still not right.

There are many positive aspects of the Bill. It establishes the Gambling Commission, with wide powers to enforce gambling regulations. It modernises outdated legislation and has the flexibility to regulate new forms of gambling, as many noble Lords have mentioned, including remote gambling and possible forms in the future, such as interactive television.

The Bill provides for the removal of machines from some unlicensed premises. There are tougher laws to protect children and problem gamblers. It improves the powers available to local authorities in respect of licensing gambling premises.

There is also the potential for the regeneration of seaside towns such as Blackpool, mentioned by my noble friend Lord McNally, by not only casinos but additional services such as entertainment, referred to by my noble friend Lord Falkland, and the hotels, shops and cinemas associated with those casinos. Supporters say that this will attract tourists to casino locations, increase land values in and around casino areas and encourage other leisure developments. If there is a demand for such facilities, they will be built. If there is no demand, I am sure that they will not be.

Having said that, I wish to underline, above all, that we need to ensure that the Bill does not increase the risk of problem gambling. I have listened today with great care to my noble friends on these Benches and to other noble Lords. For compulsive gamblers, the increased opportunity may impose moral, ethical and social costs on the community and great personal costs on some families. But it is important to remember, as a number of noble Lords stressed, that our problem gambling rates are among the lowest in the world. I do not accept the doomsday scenario put forward by some noble Lords about the outcome of the Bill.

I appreciated the new Labour term coined by the noble Lord, Lord Lipsey, in the context of discussing his gambling experience. The word "investment" was used. I know that it is a much favoured Treasury word. The noble Lord seems to be bringing it into a new context.

Despite extensive discussion of the draft Bill by the Joint Select Committee and in the Commons, there are still aspects which we on these Benches believe must be changed before it leaves this House. There are a number of areas where, quite simply, the Bill gets the emphasis wrong.

First, we have a straightforward issue of definitions in Clause 14. The time to debate the matter in full will be in Committee. Because of the time available I shall not spell out the precise reasons why the definitions are unworkable. But Clause 14(5)(a) aims to define a prize competition. The test set out is aimed at requiring a skill, judgment or knowledge element of a competition to be set at such a level that a significant proportion of active participants gets the answer wrong. The problem is that entrants to a competition are, to a great extent, self selecting. In other words, people bother to enter a competition only if they are pretty confident that they have the correct answer—irrespective of the apparent relative difficulty of the competition.

There are similar objections to Clause 14(5)(b). If those definitions which are now statutory under the Bill, as opposed to being developed under common law, come into effect it could well affect the value of the prize competition market which the Government have acknowledged is an essential part and generator of revenue for media of all kinds, including television and mobile phone operators. I ask the Minister about his approach now in the face of the many objections which have been put forward.

A number of noble Lords have put forward points about the production of identity and membership of casinos which will no longer be required after the passing of the Bill. The Budd report recommended retaining the need for ID cards for casino entry. It appears, however, that when the Government introduce regulations to implement the Draft Third EU Money Laundering Directive these will not follow previous regulations and require ID on entry but will require ID only on purchases of a certain denomination of chip.

Currently, every customer entering a casino must either be a registered member, having registered at least 24 hours earlier, or the guest of a member who can provide satisfactory evidence of identity. Such ID checks have enabled the casino industry to remain relatively crime free since 1968 and have ensured that children and young people cannot gamble in a casino and have allowed for the effective operation of self-barring schemes for problem gamblers.

Under the new regime, there is no proposal for identity checks for customers entering casinos. I believe that on social grounds it is important for all casinos to retain ID requirements. It would ensure that age of entry is controlled to protect children and under-age young people and that problem gamblers can be excluded.

Although some aspects of the Bill on planning and licensing are welcome, we need further clarification. The nature of the commitment given by the Government on the question of a separate use class for casinos is not clear. Will casinos be sui generis with their own use class, as promised by the Secretary of State at Second Reading in the other place?

Correspondence between Keith Hill of the Office of the Deputy Prime Minister with the Evangelical Alliance has been far more equivocal. I very much hope that the Minister can give greater clarity in that respect. There seems to be much vagueness around the edges of the original undertaking by the Secretary of State.

Even then it may be that local authorities have power either to allow casinos or refuse them all. Local authorities should have the power to decide whether or not to allow particular types of casinos. They should also be allowed to take social factors into account when granting planning consent, otherwise an artificial situation will be set up where licensing authorities assume that as planning consent has been granted they should give a casino licence without examining social factors.

Many noble Lords have referred to the issue of what regional casinos really are. The change of name from resort or destination to "regional" casinos was rightly questioned by the Joint Select Committee and mentioned by my noble friend Lord Falkland and the noble Lord, Lord Walpole. What does this mean? Can regional casinos be in town centres? If not, why change the name? Will there be direct competition with traditional casinos in town centres?

How exactly will the advisory committee operate? Will there be adequate consultation with the local community when the pilots are being agreed?

Turning to the thorny issue of machines, the availability of particular types of machines is at the heart of the debate about whether the Bill is operating correctly in relation to children and with fairness to all operators. My first memories—my noble friend Lord Roberts may approve of this—are of going to arcades in Rhyl and Prestatyn. But that does not alter my view, which conforms much more closely to that of the noble Lord, Lord Pendry, and the noble Baroness, Lady Golding, than it does to that of the right reverend Prelate and my noble friend Lord Roberts.

I believe that there is no evidence that it leads children on to problem gambling if they are allowed to play category D machines. Much has been made of the so-called "giant teddy bear" issue—and, of course, it is a serious problem that needs to be addressed—but I believe that the case has been made by the seaside resorts and I very much welcome what the Minister said in that respect.

Indeed, I believe that the Secretary of State's reserve power to ban children from using category D machines should be introduced through an affirmative resolution of both Houses; it should be debated on an evidence basis and we should look at the research at the time we do that.

The thorniest issue is the inter-relationship between category A and category B machines. Is the granting of rights to install category A unlimited prize machines for regional casinos and new large and small casinos disproportionate in that context? Is it right that regional casinos should be allowed, possibly in town centres subject to the Minister's reply, to set up in direct competition with existing casinos without any percentage cap on unlimited prize category A machines of which they will have a monopoly?

There is a strong view that this is undue discrimination against tried and tested UK operators in favour of US operators. My answer is not to give the UK operators of existing casinos the right to operate category A machines; that would lead to proliferation, which would be highly undesirable. However, it would be fair for those UK operators to have the ability to operate additional category B machines to give them something extra in the face of the competition they will face from the other casinos. At the same time we have to be mindful of the knock-on effect of any changes.

Much has been made of the 888 formula introduced by the Government in December. How the evaluation will work is absolutely crucial. How exactly will it operate? Will there be piloting for three years after the first licence has been granted? Surely that may mean that only one casino is in operation. The evaluation should operate when we have a critical mass of casinos actually up and running.

Time is running out. I am glad that the issue of greyhound racing has been addressed by the Minister in terms of the betting pool which will in future be operated by greyhound racing operators. However, it is not clear whether that is a short or long-term solution. We also believe that it would be right to have an affirmative resolution for any regulations that would change the winter opening hours for betting shops. I very much agree with those who want to see a ban on any form of betting on Christmas Day and I am very pleased with the Minister's assurance on that.

We obviously have a substantial game of poker ahead of us in Committee. I look forward to hearing the Minister's reply but I believe that we shall need to make many changes in Committee to improve the Bill.

Photo of Baroness Buscombe Baroness Buscombe Shadow Minister, Home Affairs, Spokespersons In the Lords, Home Affairs

My Lords, this has been an interesting and in some respects a difficult debate. So many diverse and often conflicting interests are watching with real concern to see whether this Bill will make the statute book and, if so, the form it will take.

I should like to begin by paying tribute to my colleague in another place, John Greenway MP, who chaired the joint scrutiny committee so ably. It is a pity that the Government did not follow more of the committee's recommendations or they might have avoided the "kill the casino" Bill campaign. The huge media furore following publication of the Bill masked some of the key reasons for this legislation; that is, to establish a Gambling Commission, to regulate online betting and gaming and to introduce some new safeguards to protect both children and the vulnerable.

I accept the concerns expressed this evening, particularly those of my noble friend Lord Jopling. I do, however, strongly believe that we must now seek to regulate remote—that is, Internet and interactive—gambling, to protect the consumer and particularly children. I agree with the noble Baroness, Lady Golding, that no change is not an option. Without this legislation we will have more problem gambling.

I also want to express my thanks to all those who have briefed me in recent weeks and say that while I do not agree with all the many views presented to me, they have been enormously helpful in developing what we believe to be a cogent and balanced approach to the Bill.

I will not take time this evening revisiting the history of this Bill—a task performed admirably by my colleagues in another place. I want to use this opportunity to focus on some of the more pressing outstanding issues that I believe we should consider in your Lordships' House. That said, I and, I trust, the Government are acutely aware of just how unhappy some— in fact, most—interested parties remain. The exercise so far has been a classic example of the Government trying to please everyone and in the event pleasing no one.

What is of crucial importance is to ensure that this Bill provides a strong and clear framework within which the Gambling Commission will operate—without that aim at the forefront of our minds, we might as well all pack up now. Indeed, we will seek to amend the Bill in order to underpin the duty of the Gambling Commission to follow the Better Regulation Task Force's five principles of better regulation. This duty is similar to one that I proposed, and the Government accepted, for the regulator Ofcom during the passage of the Communications Act. It acts as a practical check and balance to ensure a consistent, objective approach to be followed by the commission and nudges the commissioners to keep the three principal objectives set out in Clause 1 in the forefront of the decision-making process.

I shall deal with each of the key issues in turn beginning with casinos. In short, my focus is upon what is best for UK plc and for the culture of Britain. Much of the wider interest in this Bill has been with regard to the proposed regional casinos. While we welcome the prospect of substantial inward investment in principle, we believe that it is important to proceed with great care. We think it is right to consider the first regional destination casinos as pilots in order to measure outcomes. I am concerned with ensuring that we monitor the effects of these enormous leisure resorts—the effects upon individuals and communities at large. In addition and of equal importance is the effect these proposals will have upon the existing industry in all its forms from the high stakes in exclusive casinos to the bingo halls and pubs and other licensed premises. I am not going to argue about the exact numbers regarding whether we should have four, eight or 12 regional casinos. It is all a shot in the dark.

I have some remote experience of the kind of regional resorts which we might envisage, having twice enjoyed the fantasy world of Las Vegas. I used the word "remote" since we should not replicate here either the density of Las Vegas in one area, or the details whereby the whole experience of gambling and entertainment is merged into one. We want to see clear, defined areas separating the gambling experience from family and other adult entertainment and leisure facilities. Without that, one can hardly begin to talk about a "safe bet" for success and protection for children and the vulnerable. In addition, I urge the Government to transcend all the arguments put to them and their officials about how the requirement to present identification in these areas would kill the business. That is nonsense and the operators know it.

Technology is improving all the time and if the Government are serious about the key objectives of the Bill, they must support identification wherever there is gambling, not just in response to EU directives, but in response to common sense. In relation to that, I agree with the noble Baroness, Lady Thornton. Indeed, I am concerned that those who continue to believe that identification would be impractical have not taken on board our insistence that the gambling experience must be physically separate from other leisure facilities.

I have referred to the culture of Britain. Little has been said about the other entertainment facilities that might be offered in addition to gambling. We should take this opportunity to encourage the Gambling Commission and local authorities to look closely at what is on offer and to think strategically about facilities that will support more live music, sport and the arts. It is true that many people in this country are against the idea of regional casinos in principle. Frankly, given the prospect of all-night and binge drinking in their towns and cities, coupled with the rise serious crime, it is easy to understand why people see this as yet another ingredient in the mix that will further undermine our collective quality of life.

I have said before in your Lordships' House, and I say again, that more live music means less trouble. Let us have new facilities for promoting a variety of live shows that could significantly enhance our quality of life and diffuse the "evils of gambling" debate.

The location of these new casinos is extremely important. I note that when the Bill was debated in another place, much was said about the need to locate them away from places where people work and live and, instead, have them, for example, in seaside towns. That is strange—and the noble Lord, Lord Greaves, referred to this. The last time that I went to Brighton, it was full of people who lived and worked there. The same goes for many of our seaside towns. In short, much more consideration must be given to the criteria to be applied when determining where the new casinos should be located, be they regional, large or small.

The proposals for an advisory panel, appointed to determine where the new casinos could be based, will make sense only if the Minister can persuade your Lordships that the panel will comprise people with proven calibre and experience in planning and social issues and who have a strong sense of commercial reality, as opposed to filling politically correct boxes or parking places for the quangos set. These decisions are too important for mistakes to be made and I worry that this is another example of where the Government would rather wash their hands of any responsibility by creating another tier of bureaucracy to distance themselves in case it all goes wrong.

In any event, a key factor to be considered must be regeneration, both social and commercial, but, please, where it makes sense, not where it might be nice. I wish to declare my support for Blackpool. I agree with—and am happy to receive kisses blown by—the noble Lord, Lord McNally, that in Blackpool there has been a strong connection between civic leadership and local entrepreneurs. Blackpool has done its homework and deserves our support, but there is more to be done before the Bill can be put on the statute book.

There remain some important questions regarding the extent to which local authorities will have real choice. If the regional spatial plans say "yes", to what extent can the local—I mean local—authority concerned influence the outcome? I agree with the Salvation Army's point that:

"Communities must be given the opportunity to express their concerns and fears in the planning process—and these concerns and fears must be listened to".

Moreover, the planning regime should enable social factors to be taken into account when decisions are made. I would appreciate the Minister giving us some reassurances on that today.

On the issue of large and small casinos and the existing estate, we shall press the Government to accept a more equitable arrangement. Although, as the Minister stated, current UK operators will be able to apply for one or more of the new licences, where existing casinos have sufficient floor space to allow an extension in the number of casinos they should not be prevented from so doing.

The Government's position on that is not cogent; it is anti-competitive and anti-UK plc. The Government say that that could lead to a proliferation of casinos. Well, they should have thought about that before embarking upon this exercise. If their way out of a public relations pre-election hole is to discriminate against the existing estate, we will fight it. My noble friend Lord Mancroft is right: the existing British casino industry is well organised and well run; it does not fear competition but is asking for a level playing field.

I join other noble Lords in confirming our support for grandfather rights for existing operators in seaside arcades, family entertainment venues, pubs and bingo halls. Those rights should include existing machines, products, stakes and prizes. To that end, I am really pleased that the Government have bowed to Conservative pressure and decided that we are right to insist on maintaining current stakes and prizes. With the prospect of more opportunities for gambling in new and larger venues as well as the growing attraction of fixed-odds betting machines available on the high street, surely it must be right to safeguard grandfather rights for pubs, for example, in the Bill.

In addition, the reduction of the stakes from 30p to 10p as a token gesture to those who believe that children playing those stakes are tempted for life just did not make sense. Either you believe that it is wrong in principle that children should play those games or you do not. Although we appreciate the concerns of those who genuinely believe that gambling and children do not mix at any level, we do not believe that gambling for children in all its forms should be banned.

Although we welcome the proposal to ban slot machines from all unlicensed areas, we shall press the Government to go further than the Minister has agreed tonight and drop altogether the Secretary of State's reserve power to ban children from using category D machines. While we welcome the Minister's proposal to exclude certain machines from this reserve power, that concession does not address the principle. We feel that the existing businesses are being unfairly penalised against the new entrants, which, in contrast, will be licensed to operate an extraordinarily high number of machines with unlimited payouts.

I agree with the noble Lord, Lord Clement-Jones. I just feel that the Government still have more to do to present a balanced and fair approach to their proposals for the casino industry and one that, I hope, could be described as based on a modicum of good sense. At the moment, we have a maximum payout in pubs of £25 for category C machines in one corner of the ring, together with 136 existing casinos, which in all likelihood will collapse over time from their inability to compete in the marketplace. Meanwhile in the opposite corner will be 24 new casinos, eight of which will have unlimited stakes and huge payouts. There will be no requirement for ID, apart from some roving security guys, whom, I suspect could not tell whether many teenage children were underage—especially girls these days. No doubt such casinos could offer huge enticements, way beyond the £8 teddy league, to encourage dad to go off for the afternoon to gamble. I am, however, pleased with the Minister's concession to ban gambling on Christmas Day.

We need practical legislation to regulate the new and developing interactive and Internet gambling capabilities. They are here to stay and are very popular with the punter. It is our duty to the best of our ability to ensure that they operate in a way that is open, transparent, protects the integrity of the games with which they are linked for betting purposes and, above all, protects the consumer.

In this context there are further issues regarding offshore gambling. The Bill fails to take account of how offshore gambling operators organise their businesses. That concern was raised by the noble Lord, Lord St John of Bletso. At present some have their service situated offshore while their offices, management teams, administration and banking facilities are based in the United Kingdom. The cumulative effect of Clauses 35 and 87 is that these businesses would be defined as all onshore or all offshore. Operators have warned, loud and clear, that if that is the case they will be driven entirely offshore, in which case there will be no opportunity to protect the consumer or support UK plc.

There are further concerns expressed by the bookmakers regarding the degree of regulation of betting exchanges; the betting exchanges are working hard to reassure us that it is not possible to run a betting business on a betting exchange and that there is a clear and defined audit trail showing who is participating and at what level; in other words, sufficient self-regulation. Of course this may not always be the case for all betting exchanges, depending upon the systems for gaming and betting they may adopt. There is no doubt that the Gambling Commission must be responsible for keeping a very close eye upon the new, and as yet unimagined, methods of internet gaming as technology develops, as it

Turning now to the proposal regarding lotteries and prize competitions, we will be proposing amendments on a number of important issues, in order to try and minimise the regulatory burden, particularly for the lotteries raising moneys for good causes, whilst recognising the priority of protection for the consumer. And here I defer to the experience of my noble friend Lord Mancroft but I agree, for example, that it simply does not make sense to single out lotteries for a reserve power to prevent repetitive play, at least where there is no established evidence that rapid draw lotteries represent a particular risk for problem gambling.

We also believe the test for distinguishing lotteries from prize competitions is at the moment unworkable. I agree with the concerns raised by the noble Lord, Lord Clement-Jones, in relation to Clause 14 of the Bill in this context and the possible impact upon the broadcasting and advertising media. We will therefore be proposing another, better approach for defining games of skill to differentiate skill from chance. This is not easy I grant, given that, what your Lordships may consider an element of skill, could be described as rocket science by some aspiring GCSE entrants who we hear think Cromwell fought at the battle of Hastings.

The Government appear to hold the view that it will be possible to address all the issues of concern via the explanatory notes and guidance notes to be issued by the Gambling Commission at some unknown point in the future. As I said at the beginning of my speech, it is for Parliament to introduce a clear, unequivocal framework within which the commission will then operate.

There is still time to get this Bill right, even though we do not know what the Prime Minister may be thinking about a general election or, more correctly, what Alastair Campbell will decide. I want, at this point, to thank the Minister who has already given me and others the opportunity to discuss matters relating to this Bill. More importantly I look forward to our debates in Committee when we will have further opportunities to encourage and hopefully persuade the Minister that our concerns should be met.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, this is a difficult debate to sum up because there has not been a consistent thread throughout it. There have been, of course, those whose views I strongly respect who are against gambling altogether and wish we were not doing any of this. I have to address those noble Lords but I do not have any significant hope of converting them from a lifetime's convictions.

I take heart from the noble Lord, Lord Greaves, who like me was, at a very young age, started off on the wrong path. In 1949, I think, my parents took me to the Derby where I bet on a horse called Galcador to win and it won seven to one, yielding me 35 shillings. I should therefore have been doomed to a life of addiction to gambling thereafter. I take heart from the experience of the noble Lord, Lord Greaves, and from my own experience. Not all of us get caught in that way. I take heart as well from the motto of the South African Responsible Gambling Trust, "Winners know when to stop". I think that that is the lesson that we should all take. So, I declare an interest, I suppose, as one who is really rather frightened of gambling.

I am not just a non-gambler but would be nervous about being involved in gambling in any other way. I knew nothing about it until I took on these responsibilities in the summer of 2003. It has been an eye-opener for me. I have met some very nice people and have enjoyed the time that I have been engaged in the matter, but it is not something that I will continue with when my responsibilities in the area come to an end.

I take the view that the debate has identified four major issues that the House will want me to deal with more thoroughly. First, there is problem gambling; secondly, there is gambling and children; thirdly, there is what is called the level playing field for British casino operators and those from abroad; and, fourthly, there is the more general issue of why we have casinos in the Bill. I will, if I may, race through the other issues before coming back to those important points. At the end, I shall sum up by saying what I feel to be the balance of advantage in the Bill and why we believe that the Bill should go through much as proposed. Then, I shall talk about the way forward and how we can resolve any outstanding issues that may arise.

I shall deal with the other issues first. The first is relatively simple: Internet and remote gambling. All of us agree that Internet and remote gambling is capable of being the most dangerous of all. As my noble friend Lady Golding said, it takes place behind closed doors and in front of computer screens. Worse than that, it can take place on your mobile phone. The issue is not whether we approve of it—it is happening—but whether there is any chance of it being controlled or any chance of bringing such activities onshore, so that they can be regulated by the Gambling Commission.

I heard what the noble Baroness, Lady Buscombe, said about having "all in or all out". It is a serious issue, and the noble Lord, Lord St John of Bletso, made the same point. I doubt whether we could have what he asks for by way of worldwide rights for the Gambling Commission, but there are things that we can do. We could, in some ways, control advertising from outside the European economic area. We will work on the question of having all in or all out, and we will discuss that with noble Lords who are interested between now and Committee stage.

I do not think that there is a great deal of disagreement about regulation and the Gambling Commission. I was grateful for the tributes to the Gaming Board from the noble Lords, Lord Mancroft and Lord Steinberg, among others. My noble friend Lady Golding asked how long it would be before the Gambling Commission was in operation. My answer is that it will be in operation in good time. The noble Viscount, Lord Falkland, asked how much money it would need. We have set aside money for the early stages. After that, the Gambling Commission will be funded by the industry and will be covered by licence fees. We have no fears on that score.

There were several questions about premises licensing and the burden on local authorities. I think that the noble Lord, Lord Phillips of Sudbury, referred to it. The number of licences that are new, other than the renewal of bookmakers' premises licences, for example, will be much smaller than the number of alcohol and entertainment licences under the Licensing Act 2003. I do not foresee particular difficulties with that. We are working closely with the Local Government Association to ensure that local authorities are ready for their new responsibilities. I categorically confirm to the noble Lord, Lord Clement-Jones, that there will be a separate use class for casinos and that planning permission will be required for other premises to become casinos.

All I would say about the transition to the new system is that I agree with the noble Lord, Lord Phillips, that on such issues we have to take changes extremely gingerly. That is the thrust behind what we are doing and the thrust behind our decision to limit the number of what we call regional casinos and what one could call destination casinos or resort casinos. There is no difference in the names; what matters is how they are defined. I believe it is recognised that we are taking that extremely gingerly.

I say to the noble Baroness, Lady Buscombe, that of course in the end the decision on location has to be taken by the Secretary of State. But she made a good point about the composition of the panel, that it should contain people with experience of social conditions and planning matters and not simply be a recycling of quango queens or kings—although she did not say that.

The fundamental point is that when the process has been completed and a decision has been made on up to 24 locations, local authorities will have all the powers that they need to take into consideration the benefits that they are offered in terms of the facilities in and around casinos. That was the point made by the noble Baroness, Lady Buscombe, about encouraging the arts and music. If that is what local authorities want, they must bargain for it and it is good that they should do that. It is not just that there should be sports halls and hotels, but they must decide what they want. They can take into account the regeneration effects and the benefit or otherwise of what is being offered in addition to the casino premises. They have all the powers that they need to run a competition to their best advantage. I agree with the noble Viscount, Lord Falkland, that the benefits that will come from that are not in gambling alone, but in the associated benefits for local authorities.

On money laundering, I agree with the noble Baroness, Lady Buscombe, that the issue of identification is wider than the European directive. I believe there is some confusion about the European directive. The default position is that identification should take place when money is taken in or out. The Commission says that identification on entry is an acceptable alternative. We are still negotiating about that. I believe that the description of the noble Lord, Lord Steinberg, of the money laundering situation as it is at the moment was entirely accurate. The noble Lord, Lord St John, is right that identification of customers, record keeping and the reporting of suspicious transactions is a matter on which we have to continue to negotiate within the context of the money laundering directive, but also in the context of the way in which casinos are run.

I have no fears that casinos of the kind that we are describing will allow children in to gamble. Under the Bill it would be specifically illegal to do so. My experience, such as it is, is that operators will be desperately keen to keep children out and to avoid that kind of distortion.

Very little was said on betting exchanges. I believe that there is general agreement that registration of all users of exchanges is the right thing. If there is to be an issue, as raised by the noble Baroness, Lady Golding, in relation to users of exchanges in the course of business, as in all matters—this is a tax issue—the courts will decide and of course we are in consultation with the Treasury on that. I fear that any attempt to define a threshold for non-recreational users, which some have urged us to do, would prove arbitrary and would fail. No one has found a wording.

Some interesting points were raised about lotteries and prize competitions. There have certainly been criticisms of the problem of the skill test in the Bill. The noble Lord, Lord Mancroft, and the noble Baroness, Lady Buscombe, both referred to this matter. I promise that we have been listening to everybody who has raised these issues. Our starting point is that the level of skill should not be derisory but I appreciate that it is different for different audiences. Our discussions are continuing and I sincerely hope that we will be able to bring forward amendments to those clauses in Committee.

I should tell the noble Lord, Lord Mancroft, that we have already doubled the prize limit to £200,000. We cannot scrap the prize limit because that would risk affecting the National Lottery. I can reassure the noble Lord, Lord Roberts, that the changes we made at a late stage in the Commons affecting ticketless lotteries and hospices have been generally welcomed. Those fears have now been put to rest.

I have taken 12 minutes to get to the major issues. It is generally recognised that we have a low level of problem gambling. Levels of gambling are undoubtedly rising and there is therefore an increase in the risk of problem gambling. In looking at the outcome of this legislation, we have to balance two elements: the effect that the Bill might have in increasing the total amount of gambling—and I suspect that any increase in casino gambling will be much less than the continuing increase in on-line gambling; and the protection that the Bill provides through the greater powers of the Gambling Commission and the industry's voluntary undertaking to encourage research, treatment and publicity against problem gambling.

How can this be measured? I am convinced that if we abandon the Bill now, problem gambling will increase faster than if we enact it as it is now envisaged. I cannot prove that but, having evaluated the different elements of the Bill, that is my conviction. We do not know everything we should about problem gambling, but we do know that accessibility of gambling is an important consideration, as is repeatability. The Bill—and the way in which the Gambling Commission will approach it—shows that this has been at the forefront of our thinking.

The views expressed on children and gambling have been so contradictory that it would be impossible to reconcile them. I respect the views of those who say that children and gambling should not mix at any level. But the experience of children engaging in commercial gambling—that is gambling in seaside arcades and family entertainment centres—does not indicate any significant risk of increased addiction either in children or adults. If there is any subsequent evidence for that, I say to the noble Baroness, Lady Buscombe, that we must keep the reserve power. I profoundly disagree with her on that matter. It would give the wrong message to say that there was no reserve power to stop children from commercial gambling. The people of this country would not thank us if we did that.

The noble Baroness, Lady Golding, said that we have children gambling in this country. That is unusual. We also have a low adult gambling problem. Those facts have to be taken into account and reconciled. We will think about those matters when we make these judgements which, I accept, are very difficult. My instinct is that non-commercial gambling—such as the sixth-form room brag and poker games described by the noble Lord, Lord Greaves—is a good deal more prevalent among children than limited commercial gambling in seaside arcades.

I had hoped that I was explicit in my opening speech about British casinos and the level playing field. I rewrote it a number of times to ensure that I would be explicit. The noble Baroness, Lady Buscombe, recognised that we cannot allow the 137—or however many there are today—existing casinos to have unlimited or even a significantly large additional number of machines. That would completely disrupt the pilot number, which she emphasised, of the "8, 8 and 8" regional, large and small casinos.

Photo of Baroness Buscombe Baroness Buscombe Shadow Minister, Home Affairs, Spokespersons In the Lords, Home Affairs

My Lords, perhaps I may interrupt the Minister. I said that we should have a more equitable arrangement. I am not looking for parity between existing casino estate and new entrants, but I would like to see a significant increase in the number of machines. The noble Lord, Lord Clement-Jones, referred to a significant increase, but not for category A, only for category B.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, I am very resistant to that. A simple calculation tells you that if you have 137 casinos, with a limit of 80 for small casinos, you would have more than 10,000 more machines in 137 locations. That is not what I call approaching the matter extremely gingerly or the precautionary principle. But let us talk about whether there is anything between those that we can do.

Fundamentally, I have every confidence that the British casino industry cannot only take advantage of the changes proposed for existing casinos—the abolition of the 24-hour membership rule and the abolition of the ban on advertising, which will be enormously advantageous to existing casinos—but also will have at least as good a chance as anyone else and, in my view, a much better chance, of obtaining the licences for the "8, 8 and 8" new casinos.

For example, if an area is designated for a new small casino, and there is already an existing casino that is capable of becoming a small casino, the local authority would have to take that into account and accept an application from that small casino. It would have to be considered alongside any application from a new location in the area. It is a perfectly level playing field.

The British casino industry has the money, if it wants it. It has the investment potential. It has the understanding of the UK market. It has all of the advantages that, in my view, give it at least a level playing field, if not a tilted playing field in favour of existing operators. It would be insulting to say anything other than that.

The final and perhaps most important point is why we do not drop the casino section in order to save the Bill. The noble Viscount, Lord Falkland, the noble Lords, Lord Jopling, Lord Roberts and Lord Greaves, and the right reverend Prelate the Bishop of Coventry have advanced that view. The noble Lord, Lord Clement-Jones, made a wise comment when he said that if there is no demand, they will not be built, which I am sure is correct. If, of their own volition, people in this country should not want them, we would not have any new casinos.

But there are five reasons why it is necessary and desirable for the casino section to be in the Bill. First, there has been much agreement today about regeneration. Many local authorities want the inward investment. They want the new jobs and visitors that casinos will bring. They want the range of gambling facilities and the other facilities that will be available as a result of new casinos.

The second reason is ethical and philosophical; I make that point to the noble Lord, Lord Greaves. People enjoy gambling as a mainstream leisure activity. We want to ensure that they are protected, particularly the small minority for whom gambling becomes a problem, but we think it is right to ensure choice for everyone.

I was challenged by the noble Lord, Lord Roberts, as if he were the socialist and I were something different. I will be glad to welcome him to the Labour Party, but he should look behind him to his noble friend Lord Greaves, who is throwing him out, as far as I can see.

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, I am sorry to intervene, but I was merely pointing out that the number of socialists left on the Labour Benches diminishes by the day.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, there are many of us who are proud to call ourselves socialists, and always have been. However, I would remind the noble Lord, Lord Roberts, of the wise saying of his countryman, Aneurin Bevan, "Nothing's too good for the working class". If it is acceptable for the sons and daughters of gentlepersons to gamble in high-priced members' clubs—in streets that I had better not name, as the Gallery is full of casino representatives; I certainly will not name any streets where Stanley Leisure is represented—then it is good enough for the working class, and I do not apologise for that.

Thirdly, the casino industry has proved itself worthy since the reforms of the late 1960s. New technology, the new games and changes in society mean the industry is different from how it was in 1968, but it is capable of developing. If we were to refuse to amend the law so that the industry can continue to develop, we would be doing something against nature. It is right that we should recognise the changes in society and technology, and allow them to occur.

Fourthly, there is a fundamental point, which the official Opposition are constantly making, about unnecessary regulation. Outdated regulation is unnecessary and undesirable, and that is just what the casino industry has had, along with large parts of the gambling industry. I agree with anyone who says that the Gambling Commission should abide by the tenets of the Better Regulation Task Force—although that does not need to be on the face of the Bill, as it will have no choice. It will have to do so because that is what the law says. We have to ensure that regulation, along with interference with people's lives and their businesses, is kept to the minimum. That is as applicable to a socialist as it is to anyone else.

Finally, let us consider what the alternative would be. If we took out the casino section from the Bill, we would be left with an industry whose regulatory regime was created for a different industry at a different time. Development would be permitted only in an arbitrary number of urban areas. The membership and 24-hour rules, I can assure the House, would have to remain; we cannot pick and choose. There would also be strict limits on the number and type of machines casinos could have. I would not urge anyone to pursue the issue of removing casinos from the Bill.

The Bill is coherent and stands up as a whole, and deserves to be considered in the form that I present it to the House tonight.

On the way forward, we have a provisional Committee date of 10 March. There will be plenty of opportunities to discuss all these issues informally, in private or in public as noble Lords wish. I have written to the Front Benches to describe the nature of the government amendments that we have agreed to put forward so far and I will copy those letters to all noble Lords who have taken part in this debate. My door will be open between now and 10 March. I have every hope that the issues we have been discussing tonight will be capable of resolution and that we shall end this process with a Bill we can all be proud of.

On Question, Bill read a second time, and committed to a Committee of the Whole House.