Clause 4 - Remote gambling

Gambling Bill – in a Public Bill Committee at 4:00 pm on 9th November 2004.

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Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs 4:00 pm, 9th November 2004

I beg to move amendment No. 75, in

clause 4, page 2, line 18, at end insert

'other than that used for the playing of linked and multiple bingo under a bingo operator's licence.'.

The game of linked bingo is played simultaneously in a number of bingo club premises linked by a two-way audio connection, so that the drawing and the calling of the numbers are contemporaneous. The calling takes place in one of the premises and is heard in all the others. A claim in one of the premises is also heard in the others. That type of bingo may be played only under the authority of a bingo club licence issued under part II of the Gaming Act 1968. Almost 580 bingo clubs play linked bingo at some time, although they do not play it in one link because technology cannot yet accommodate that number of premises in a fully interactive mode.

Multiple bingo is played jointly in different bingo clubs, with the drawing of the number taking place before the beginning of the game at a central location licensed especially for that purpose. Those numbers are transmitted via a computer connection to all participating bingo clubs. The game is played in each of the participating clubs and numbers are called in a specified period that begins and ends at the same time for all clubs. Each club produces its winner, the details of whom are transmitted back to the central location. The overall winner is the person who called ''House'' with the lowest number of numbers called. That type of bingo was authorised by the Gaming (Bingo) Act 1985. It may be played only in bingo club premises licensed under part II of the Gaming Act. About 450 clubs play the main form of multiple bingo, which is called the ''national game'', every day of the year except Christmas day.

Thus, while the two games are slightly different, both use a link. That link between premises operates by means of remote communication. The clause on remote gambling discusses remote communication. The fear is that, because of the link by the normal communication channels covered in clause 4, the clubs will be faced with a licence under remote gambling as well as their licence for bingo. The amendment seeks to ensure that that is not the case and to include in the Bill provision that those clubs may derogate from the all-embracing catch-all situation outlined by remote communication in clause 4.

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

I will be commendably brief. I support what my hon. Friend said. I think that the area is a valuable one on which to get clarification. I, too, have

received various representations from those connected with the bingo industry. The clause is of great concern and, unless it is satisfactorily cleared up, it will be much more difficult for bingo clubs to compete with casinos with prizes of any value. I would be grateful if, when the Minister answers, he told me whether the clause also covers the linking of casinos for prizes. As he probably knows, if one goes into a casino, one can place a bet on poker and, by placing an extra sum of money, link into a central scheme that includes more than one casino, so that there may be quite a large jackpot at the end of the day. I am curious to know whether this part of the clause covers that.

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

Amendment No. 75 would exclude linked or multiple bingo from clause 4, which covers remote gambling. The Government are resisting that.

The Bill contains a clause setting out the concept of remote gambling to cover gambling where the participants are not face to face on the same premises. Players who participate in linked or multiple bingo in different bingo halls are clearly neither face to face nor on the same premises.

Linked or multiple bingo takes place in many separate bingo halls throughout the country. The Bill does much to remove the burdens on bingo operators, particularly those relating to linked or multiple bingo. Such bingo is currently subject to a host of detailed regulation, such as rules about conduct and financial limits. The Bill does away with that, but it would not be appropriate to exclude such bingo from clause 4. Any gambling that is operated with remote communication equipment must be regulated through the appropriate licence by the gambling commission. Companies wishing to offer linked or multiple bingo will require a remote bingo operating licence with appropriate licence conditions to ensure fairness and protection for players. Bingo halls with a general bingo operating and premises licence will be able to offer linked or multiple bingo if they hold a remote bingo operating licence, or they can use the services of someone else who holds a licence.

The Bill must maintain coherent regulation of remote gambling and the amendment would damage that, so I ask the hon. Member for North-East Cambridgeshire to withdraw his amendment.

In reply to the hon. Member for South-West Hertfordshire, the answer is yes.

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

So that there can be no doubt, will the Minister confirm that he said that the linked bingo games that currently take place will continue to take place and that nothing in the Bill will prevent that?

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I was a bit saddened to hear the Minister's comments. We had a discussion earlier today about level playing fields, competition, fairness and so on, but one part of our entertainment and gambling industry must apparently pay two licence fees. If I heard the Minister correctly, there will be one licence fee under the bingo operator regulations and another for remote gambling under clause 4. I

understood him to say that there would have to be such regulation. Bingo institutions are regulated under the gambling commission anyway, so I do not see a problem—they will come within the wider remit of the commission. They are extremely worried that if they are caught by clause 4 on remote gambling they will have to pay an extra licence fee.

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

The hon. Gentleman will no doubt share my concern about the future viability of the 519 remaining stand-alone bingo halls in the face of the threat from casinos. The issue that he is properly addressing is that we must ensure that they can continue without added cost or regulatory burden. However, did he hear the Minister say—perhaps he will ask him to clarify this—that, under the Bill, overall, the pressures on bingo halls, particularly stand-alone ones that want to link together, will be eased? Perhaps he will ask the Minister to give a clear assurance that the net effect will be a reduction in the financial and regulatory burden on such premises.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I am grateful to the hon. Gentleman for giving me an excellent question. I am not sure that the Minister heard it because he is involved in trying to find a way forward.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I was not being critical. I was just wondering whether the Minister heard the question that was asked.

The issue is whether bingo organisations will face an extra licence fee and extra regulation. The Minister promised that there would be relaxations in all sorts of areas. To summarise the question of the hon. Member for Bath, is the net effect going to be on the right side of the balance sheet? I suspect, as with all regulatory things, that the answer is no.

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

I did listen to the hon. Member for Bath, and I will try to answer his question. The Bill says that an operator needs an operating licence and a remote gambling licence, but a separate licence is already needed for multiple bingo. As I said when I explained why I want the amendment to be withdrawn—I suggest that the hon. Gentleman discusses this with the people who drafted the amendment—bingo is subject to a host of detailed regulation, such as rules about conduct and fines, which the Bill will do away with. It will simplify the operation of those licences. There will be two licences, but their operation will be simplified with the removal of detailed regulation.

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

I am grateful to the Minister for that answer, but, for the avoidance of doubt, and because the issue of bingo halls is going to come up on several occasions, will he write urgently to members of the Committee to set out that balance sheet in terms of added and reduced regulation and cost, so that we have the net pros and cons of the legislation as it will affect bingo halls?

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

I will do that. In the meantime, I will give the Committee details of the controls that will be

removed. Times of games, number of games and maximum stakes will all be in the single licence. That type of detailed regulation will be taken from the operators and streamlined, so that they will, I hope, be able to operate their businesses more cost-effectively.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, Cotswold

I hear what the Minister says, and I am sure that the reduction in bureaucracy attached to the licences will be welcome news to bingo halls, but, as they will be licensed by the gambling commission anyway, why cannot the Government scrap one of the licences, so that bingo halls will need only one licence? Surely that would be a much more sensible way to proceed, and would make it much easier for those fairly benign forms of entertainment to continue in business and to compete with the new super-casinos.

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

It is a different clientele. We believe that remote gambling should be regulated and licensed appropriately. I do not believe that the way in which we will operate the licences will bring a heavier burden. In fact, it will be much more holistic, and will no longer be about times of games, number of games and maximum stakes. The Bill streamlines that regulation and protects the customer.

One reason that we are discussing this Bill is remote gambling, not just here but across the piece. That is why the Budd report was initiated—we cannot control remote gambling under current legislation. The proposed licensing regime is reasonable and proportionate.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I am still not entirely clear as to what bingo clubs will end up paying. I see the purity of the Minister's argument. It is remote gambling. It is carried out using a communication wire, airwaves, or whatever, so it comes under the basics on remote gambling in the clause. We are not arguing about that. It may well be that that has to be the regulatory place for that particular type of game, but bingo clubs fear that it will translate into an extra licence.

There have been no problems with running those two types of bingo game. Bingo clubs have been doing so for some years. They are important to the clubs, which are saying, ''Can they not just be taken under our normal licensing and regulatory framework? Why do we have to go under this legislation as a completely new organisation if it means a new licence fee?'' We accept, and I am sure they do, that the Bill relaxes some of the bureaucracy that they have hitherto had to deal with, and that is a bonus for which I am sure they are very grateful. However, the Bill does not pay money out. They must pay out an extra licence fee from the bottom-line profit of their business.

At the same time, as we deregulate to provide more competition for our punters, bingo operators are saying that a new wave of gambling and casinos is coming, so they are under pressure as their cost base rises. If the Minister can assure us that their current fee to run linked and multiple bingo will be no different from the one that they will pay under remote gambling, they would like to see that on the record.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport 4:15 pm, 9th November 2004

The hon. Gentleman is being remarkably optimistic. If we wait as long for the fee structure under this legislation as we have for that under the Licensing Act, we will be in for a very long wait.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

The hon. Gentleman is absolutely right, but if the Minister could put on record that there will be no increased regulatory burden with extra licence fees placed on bingo clubs, some assurance and crumbs of comfort from him would not go amiss, because, according to the bingo clubs' reading of being caught by clause 4, that is exactly what will happen.

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

Although I have immense sympathy with the point being argued by my hon. Friend, I ask him to think of the problem that the Government have with slot machines in casinos that are not granted category A machines. What would happen if they wanted to link up their slot machines for remote gambling as well? They would have to be subject to a licence, so as much as I would like it I cannot see the bingo organisers being able to establish the link-up unless their top prize is limited to the same sort of payouts.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

It is my reading that the payouts under linked and multiple bingo are not as large as the potential payouts for linked machines in casinos. The Government have rightly said that those linked machines will not be allowed because the prize money would be too great. The Government will not countenance that at this stage, and I probably agree with their affording that protection. Linked and multiple bingo games have been played for some years and there has never been a problem. They are small-scale and low-key but important games for bingo clubs. The clubs may be under licence and they may pay a fee, which is fine, but all we need to know is that in future their licence fee will be the same as or less than what they pay now. They are fearful that their costs will go up.

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

I did not quite follow the hon. Gentleman's rationale. There are two sets of operations, including those that want to play only bingo and are not involved in remote bingo at all. I assume the proposition being made is that there is one licence fee, and those clubs that want to play only bingo, without remote bingo, will effectively subsidise the licence for those that provide remote gambling as well.

If there were only one licence fee, those that did not want remote gambling would have to pay for the licence for it, as they operate in a single entity. The reason for having two operations is that if those clubs that have a licence to operate without remote gambling decide to provide remote gambling on top of that, they must obtain a further licence. That is the rationale behind two licences. The system operates at the moment, because multiple bingo needs a separate licence. The Bill refines that system and removes many of the detailed constraints.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, Cotswold

The Minister is being very patient and I will try not to try his patience any longer. Why is it not possible to have a single licensing

procedure, but perhaps differential pricing for those wishing to engage in remote bingo?

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

The answer to that is that I do not know. I will ask my officials. No doubt the gambling commission, when it is set up, will consider ways in which it can refine the situation. However, the crude proposition that has been put today could result in a disadvantage to those single operators of bingo who do not want to get involved in remote gambling. They could find themselves paying a larger licence fee than they would do if we kept the two licences. I have no doubt that the gambling commission will, among its many and varied activities, be able to consider the continued refinement of the measures.

The whole idea of the Bill is to take us away from the 1968 Act, which was incredibly prescriptive. We are trying to give a macro-framework in which the new regulator, the gambling commission, will be able to take action and will have a tremendous amount of flexibility and power. It will report to Parliament. The 1968 Act is so restrictive that if people want to increase the payout of a slot machine, the matter has to be brought back to the House of Commons, so we are trying to move away from the Act.

I hope that the gambling commission will be able to take on board issues such as the one that we are discussing. It will have the power to continue to refine things and as long as it reports back to Parliament—it is accountable in that, as all the regulators are—we will see a much more efficient and effective gambling industry, with some of the unacceptable constraints and bureaucracies removed. The Bill provides a framework in which gambling can operate. The operation itself will be down not to Parliament, but to a gambling commission with the power to carry that out.

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

The Minister has already confirmed that linked bingo as we know it is not affected by the Bill. I am a little confused, however. He has stated that currently two licences are required. Will two licences still be required, or will it be three licences because of clause 4? Or, if we cut around all the verbiage, is it the case that there will be no difference whatever to the bingo regimes that we know already, that people will still be able to play linked bingo, and that there will not be any additional licences or fees? In other words, will we have the status quo?

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

I assure the hon. Gentleman that there will be no additional licences. There are two licences now and there will be two in future. What we will be doing is refining the operation of the system.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

The Minister's last statement was important. As I understand it, an assurance was given that there would be no increase in the fee structure.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

That is fine. I was just probing. I almost got there, but not quite.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Order. It is helpful if remarks are made through the Chair, rather than having a lot of interventions, because Hansard finds them difficult.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I have heard what the Minister has said and a lot of it is good sense.

Photo of Clive Efford Clive Efford Labour, Eltham

The hon. Gentleman has confused me a little, so I would like him to clarify things. When he tabled the amendment, was he aware that there are two existing licences? If he was, was his amendment intended to ask for the abolition of the licence fee for remote bingo games? If a bingo operator who does not have access to remote bingo is paying the same flat-rate licence fee as an operator who does, is that fair in terms of competition?

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

It is more a question of an unknown. At least operators know where they stand at the moment. They do not know where they stand under the arrangements proposed in clause 4. They do not know what being caught under the remote gambling clause will mean to them in terms of future costs. All that we have sought to do in the debate is get an assurance that the fee structure will not be wildly different. No one has set the fee structure for remote gambling yet. No one disagrees that this is an important clause. No one is saying that internet gambling is a key issue that we all seek to address, and that this is the clause that does that. People simply believe that what they have been doing quietly and comfortably for years without causing anyone problems is suddenly being brought into the regulatory net, which is there to catch a completely new form of gambling—internet gambling by remote communication.

The Minister has made his points, which are recorded in Hansard. No doubt the bingo people will come back to us, and we can deal with the matter later in our consideration of the Bill. I have put on record what they wanted to achieve. They did not want to press the matter to a vote. Only they can say whether they got the clarification that they sought. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

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

I wanted to deal on stand part with a possible role for Ofcom in this area. I vividly remember our very lengthy debates on broadcasting and communications Bills, and it rather surprised me to find that there was no reference to such a role, given that the lay observer or even the interested parliamentary observer might think that this was precisely the sort of policy area with which it would be appropriate for Ofcom to deal. It struck me that a debate on a clause entitled ''Remote gambling'' was a useful opportunity to probe the Minister on this issue, because I suspect that those in another place who will consider the Bill in due course might want to return to it.

I refer members of the Committee who do not have the good fortune, as I do, to sit on the Culture, Media and Sport Committee to my very recent experience as one of many taking evidence—from Ofcom, among

others—for the Committee's current inquiry into the BBC charter. It became clear that in this multimedia, multi-channel world in which we live, Ofcom is considering how all the aspects of the internet, television and all sorts of broadcasting are linked. Clearly, remote gambling is part of that.

The Government may believe that they have already given Ofcom enough power and do not want to give it any more. Given that remote communication in subsection (2) means communication using the internet, the telephone, television, radio or any other sort of electronic or other technology for facilitating communication, it strikes me that several subsections are already either in whole or in part under Ofcom's regulatory remit. I know that the main regulator set up by the Bill is the new gambling commission, but there should also be a role for Ofcom in remote gambling, and the Bill should set out the contrasting responsibilities of Ofcom and the gambling commission.

I raise the issue at this point in our consideration of the Bill because we are discussing the clause entitled ''Remote gambling''. We may return to the issue, but I suspect that the new gambling commission, which the Government will set up if the Bill comes into force, will find constant conflicts between its own remit and Ofcom's remit for dealing with the internet. It may be a recipe for problems if we do not write into the Bill something that defines their different remits. The Bill does not refer anywhere to Ofcom in this respect. I therefore express my concern now in the hope that the Minister and his officials will think about it, even if they have not yet done so.

I may be Cassandra crying in the wilderness, but I predict that, without such a definition, there will be problems in future if they cannot give me a definite answer today in this clause stand part debate, and if the Bill completes its passage and becomes law. I therefore hope that the Minister will think about the fact that there should be a role for Ofcom. The boundaries between Ofcom's remit to try to deal with the internet, and that of the new gambling commission, should be on the face of the Bill.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport 4:30 pm, 9th November 2004

I shall answer the hon. Gentleman's point about Ofcom. This is a Gambling Bill, not a communications Bill, and it is about licensing gambling. That is what the regulator—the new gambling commission—will do. The medium in which the gambling takes place is another issue, but the Bill does not address that.

Ofcom can play a role, and is closely involved, under part 16 on advertising. That is a limited part, but the Bill is about licensing gambling, not licensing the internet or any other form of communication. The arguments and questions that have been put forward have been predicated on the wrong basis. Ofcom regulates communication; the Bill regulates gambling.

Clause 4 contains a definition of ''remote gambling''. As has been suggested, it is an important clause. The Budd report was based on the need for the Government to regulate remote gambling. The concept—gambling by means of media such as the

internet and interactive television—does not feature in current gambling law, which was drawn up when those technologies did not exist. Consequentially, although remote gambling has grown a lot in recent years and looks set to continue to do so, it is not subject to any of the regulation that it needs. It is common ground that the Bill should make proper provision for remote gambling, bearing it in mind that it has characteristics that more traditional kinds of gambling do not.

Some of the characteristics of remote gambling present special risks, which the new system of regulation needs to address. Sometimes technology offers the prospect of new safeguards, which it is more difficult to incorporate into older kinds of gambling. The starting point for effective regulation is to define the activities to be regulated; that is what we do in clause 4.

The clause also recognises that technology will continue to develop, possibly in ways that nobody here can even start to anticipate. Where technology has led, gambling will surely follow. The system of regulation for which the Bill provides needs to be as flexible, and hopefully as future-proof, as possible.

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

I know that I am taking the Minister back to the first part of his remarks, when he responded to what I said. He is absolutely right, of course: part 16 is the one part that refers to Ofcom, because it deals with advertising. However, the Minister has slightly missed the point. I accept entirely that Ofcom has a role in advertising. However, as the Minister knows full well, it is not only the advertising of gambling that takes place over the internet, but the gambling itself. [Interruption.] Well, it is this clause on remote gambling and the internet, which talks about remote communication, that gives Ofcom no role at all.

Ofcom is trying to deal with a lot of other aspects of the internet, and the gambling is taking place over the internet, so the Government are mistaken in thinking that they can limit the issues that Ofcom will deal with only to advertising. The Minister has to think about that again, and I hope that at the very least he will undertake to consider with his officials the point that I have made. When the Bill comes into force, if it is in anything like its current form, Ofcom will be dealing with issues of gambling over the internet. It will not be good enough to say that it can only deal with advertising. The gambling takes place over the internet.

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

We can have discussion and debate, but I do not accept the premise of the argument. Ofcom does not regulate everything that goes on to the internet. We are talking about the act of gambling, and that is why we are setting up a new regulation for gambling, in whatever form that takes: whether it is through the internet, in a betting shop, in bingo halls or through the lottery—the whole lot. We are licensing the act of gambling. As for the fact that it takes place through the internet, then fine, we have not been able to control that under the old regulations and laws. We will be able to do that under the Bill. That is what Budd had to consider and it is why we set up the Budd review.

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

I apologise for interrupting the Minister, but I am increasingly confused by his responses. For example, let us consider the TV programme ''Have a go'', which is an interactive television gambling station that makes a great deal of money on a small audience. Clearly Ofcom will have a role in deciding whether ''Have a go'' should be granted access to the airways. There is an issue that the right hon. Gentleman raises with that one example.

Life could get complicated. If I were being facetious I could ask whether it would be necessary for the producers of ''Who wants to be a millionaire?'' to have a remote gambling licence when a contestant phones a friend. There is both an element of chance and an element of skill in attempting to obtain a prize. There are issues in which Ofcom will be involved. But that does not alter the points that are in the Bill. The Minister would do well merely to acknowledge that there is a role for Ofcom, without saying that it is necessary to include it in these clauses.

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

There is a role for Ofcom, because Ofcom is a regulator. Anybody with a related product will have to abide by the regulation of Ofcom. The gambling commission will regulate gambling. The hon. Gentleman is mixing up the two things. I resist his suggestion because his argument is predicated on the wrong approach to the Bill, which is about regulating gambling. Ofcom is the regulator under the Communications Act 2003.

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

This is my last point. The hon. Member for Bath has assisted me, although he gave a slightly far-fetched example. My concern was that it is not possible in these days of the internet to put categories of activity into distinct boxes as the Minister seeks to do. It is not possible to say that Ofcom regulates advertising and the gambling commission regulates gambling. That is not how the internet works.

I would trespass on your good will too far, Mr. Pike, if I referred to an amendment that had not been selected, but the Minister knows that there is huge concern that there has been insufficient regulation of things on the internet. For example, when using the internet, people can encounter pop-ups that try to tempt them into using a gambling site or to go to a pornographic site. When dealing with the internet, it is not possible to have separate and distinct pots. We are talking about a seamless web. That is why I foresee that—to some extent the hon. Member for Bath was agreeing with me—unless we recognise that that is how the internet operates, we cannot say that Ofcom will deal only with advertising.

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

We all watch football on television, but Ofcom does not regulate football either—probably some wish that it did. There are many examples that we could debate. Ofcom has a statutory responsibility as a regulator. It will carry out that duty. Where that affects this industry, it will be dealt with. The gambling commission is a regulator for gambling in whatever medium it is carried out.

The system of regulation that the Bill provides needs to be as flexible and future-proof as possible. We do not want to have to come back to Parliament with amendments that spring solely from technological advances that provide one more medium by which remote gambling can be carried out. Subsection (3) accordingly provides for statutory regulations that will enable the legislation to take account of changes in remote communication.

By definition we do not know what forms of remote communication might be involved or when—or indeed if—these powers might ever need to be activated. If we did, we would have made provision in subsection (2) already. Experience teaches us that it is necessary to have the reserve powers in subsection (3) as shots in the locker. We are trying to frame a piece of regulation and law that can be future-proof so that we do not have to keep coming back with amendments.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, Cotswold

I am sorry to raise a whole new avenue, but it is not covered by the clause and it needs to be addressed. I understand that it is possible to license only that material on the internet that originates from the UK jurisdiction. Has the Minister any ideas on how he will license gambling that comes via the internet but not from the UK jurisdiction?

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

The answer is no; that is the advice that I am given. Again, however, one might want to consider that issue. If there are reasons to do what is suggested, I shall get back to the hon. Gentleman.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, Cotswold

The Minister's reply is very interesting, because it has just opened up an evasion industry. Anyone who wants to gamble over the internet will simply go to another jurisdiction and avoid the provisions of the Bill.

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

In the real world, people will want to operate from the shores of this island, because of the regulation that we are putting in place. In addition, people will want to bet with companies that operate from the shores of these isles, because they will know that they will be treated fairly; indeed, they will get what they deserve.

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

I will in a moment. The Gaming Act 1968 has created what is probably the most credible betting and gambling industry in the world, because of the way in which we have been able to regulate and have regulated. The situation here is transparent. People are law-abiding and they get a fair crack of the whip. We are trying to translate that into the Gambling Bill. That is the context in which people will want to lay a bet. That is the real world. If we want to get into semantics, someone may go offshore, but anyone who bets with a company offshore will have to look very carefully at the terms of the regulation applying to that operator.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, Cotswold

I hear what the Minister is saying and I have every sympathy with it, but how will the consumer—the potential gambler—know which internet sites are properly licensed and which are not? Do the Government intend to establish, for example, a form of kitemark or give some warning so that people

know whether they are dealing with regulated or unregulated gambling providers?

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

I do not know what the British standard is for gambling, but I will find out because my officials will tell me. While I am finding out, I shall give way to my hon. Friend the Member for Eltham (Clive Efford).

Photo of Clive Efford Clive Efford Labour, Eltham

The internet is also a problem in respect of matters that are not related to gambling. I have been raising questions in the House about the sale of prescription drugs over the internet, where they are on offer from companies across Europe and not only elsewhere in the world. One would expect there to be some sort of partnership arrangement for regulating in such sectors, but drugs are on sale on the internet. People in this country can obtain drugs over the internet, although they should not be able to obtain them without a prescription in this country. The problem of that loophole exists not only in relation to gambling but in a range of sectors.

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

My hon. Friend is right. The consumer has to make the decision. If a company operates from these shores, it will be able to tell the consumer when they want to lay a bet that it is regulated by British regulation and by the gambling commission. That information will be there for people to see. If people do not want to operate in that way, there is nothing to stop them, but they know, or they may well know, that they will not get the protection that they get under British law.

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

Is the Minister aware that the majority of the industry that operates in this sector is very keen on this regulation? It believes that it is selling integrity and that the regulation provides it with evidence of that integrity. Is he further aware that Betfair, which is one of the largest providers of the type of facility that we are discussing, is desperately trying to persuade the Australian Government to introduce regulation of its activities in Australia and is desperately unhappy that that Government are failing to do so?

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport 4:45 pm, 9th November 2004

The hon. Gentleman makes a valid point. I spoke to the international regulators a little while ago, when I was dealing with the first stage of the proposals. There has been a great deal of discussion of whether international standards can be achieved. We, the Australians, the New Zealanders and, I think, the Americans were seriously looking at that. There is a case for it. In the light of what we are doing and the number of countries that are looking to the Bill, particularly after the experiences of Australia and New Zealand, there may well be a good case for international regulation, voluntary though that may be. It would give punters the assurances for which they are looking. The hon. Member for Bath is absolutely right. Many operators are asking that we bring in these regulations. Such regulation has them in good stead in the past and contributed to the integrity of the industry. It would be a win-win situation for the British industry if we could translate that into the Bill.

Photo of Kevan Jones Kevan Jones Labour, North Durham

I do not want to send the hon. Member for Surrey Heath into hyperspace, but could not the matter be considered by the European Union?

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

Very much so. As I said, the international regulators meet from time to time. I met them when they were at Earl's Court a little while ago—some 18 months or two years ago—and there was a great deal of interest expressed. The issue moves on. It is not just about problem gambling and the research that needs to be done on that. There is much around regulation besides the integrity of the industry. Also, problems can be addressed within the industry. The Australians were keen on it at that time.

Yes, there is a European dimension, but there must be an international dimension because of the internet and the ability to pass information electronically around the world at great speed. Regulations would have to be international if they were to be truly effective.

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

That was before my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) intervened and raised a different point. I assure the hon. Member for North Durham (Mr. Jones) that he will not send me into hyperspace. My point is a slightly different one.

On the issue raised by my hon. Friend, would not it be useful for British business if the Minister were to put something in the Bill to show that there was no regulatory gap between the two regulators, the gambling commission and Ofcom? If that were in the Bill, there could be something like an Ofcom kitemark for UK providers, which would give potential punters some sense of security. That might be very helpful for British industry, with which we as UK Members of Parliament ought to be principally concerned.

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

It would, were it permissible. I understand that it would not be permitted under European Union competition law and so would be out of court.

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

That just shows the problems with Europe, does it not?

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

That is another debate. We could debate Europe, but I am sure that you would pull me up, Mr. Pike.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

I certainly would.

Question put and agreed to.

Clause 4 ordered to stand part of the Bill.