Clause 14 - Lottery

Gambling Bill – in a Public Bill Committee at 3:00 pm on 11th November 2004.

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Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs 3:00 pm, 11th November 2004

I beg to move amendment No. 53, in

clause 14, page 6, line 24, leave out 'simple.'.

Photo of Roger Gale Roger Gale Conservative, North Thanet

With this it will be convenient to discuss the following:

Amendment No. 54, in

clause 14, page 6, line 29, leave out subsection (3).

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

Amendment No. 54 is consequential to amendment No. 53, and would remove the whole subsection relating to complex lotteries. These are probing amendments to ask the Minister why the Bill makes a distinction between a simple lottery and a complex lottery. Subsection (3)(c) makes an addition to the definition in the case of a complex lottery, stating that

''the prizes are allocated by a series of processes''.

I am not sure what that means, and it is the only reason given for the difference between the two lotteries. Why do we have to make a distinction between simple lotteries and complex lotteries? Surely a lottery is a lottery.

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

The amendments are intended to simplify the definition of ''lottery'' in the context of the arrangements that need to be included. They would remove the distinction between a simple and a complex lottery. The distinction is made in the clause for a particular reason. Lotteries may involve a group of persons paying to enter and a prize being allocated among all those persons. Those lotteries are covered by the simple lottery definition in subsection (2). Lotteries may, however, also involve a number of processes. For example, a group of people may pay to enter and after the first draw there may be a further competition, or some further competitions, to determine the ultimate winner. Those further competitions may not rely wholly on chance. They could, for example, be tie-breakers. Such lotteries are caught by the complex lottery definition in subsection (3).

Deleting subsection (3) would therefore exclude from the definition of ''lottery'' those arrangements in which there is a draw based on chance and a subsequent competition. We want to ensure that such arrangements are regulated as lotteries under the Bill; I am sure that the hon. Gentleman agrees with that. If we do not do that, we risk commercial enterprises exploiting that loophole. With that explanation, I ask him to withdraw the amendment.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs 3:15 pm, 11th November 2004

There is a feeling that clause 14(3) was included because of a legal case in 1967—the Director of Public Prosecutions v. Bradfute and Associates. If so, chance formed the first stage of an arrangement

and skill the final stage. That is pretty much what the Minister said. Will he confirm to the Committee that it was that case that brought about the Government's thinking? Is a case from 1967 relevant today?

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I am glad to have got that on the record. One of the difficulties in interpreting the clause is that few competitions these days follow the pattern established in clause 14(3). As there are virtually no competitions of that ilk, there is some doubt about why it was relevant. The Government and the Minister seem to think that it is, in which case it is probably better that it is in than not in. On that basis, unless information contrary to that comes to my notice, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I beg to move amendment No. 50, in

clause 14, page 6, line 27, leave out 'members of a class' and insert 'persons who participate'.

Photo of Roger Gale Roger Gale Conservative, North Thanet

With this it will be convenient to discuss the following amendments:

No. 51, in

clause 14, page 6, line 32, leave out 'members of a class' and insert 'persons who participate.'.

No. 52, in

clause 14, page 7, line 2, leave out 'members of the class' and insert 'persons who participate.'.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

The issue is what the Government mean by ''members of a class''. I think that the wording ''persons who participate'' is much clearer. The amendment is a probing one to establish the definition of the words in the Bill. What do they really mean?

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

The amendments seek to simplify the definition of ''lottery'', but they would exclude arrangements that need to be included. The amendments change the reference to the group among whom prizes can be allocated from ''members of a class'' to ''persons who participate''.

A lottery may involve the distribution of a prize among persons who enter the lottery, but it may also involve the distribution of prizes among a smaller group of persons. That would be the case where, for example, there are a number of ''rounds'' in a lottery, each round working on the basis of elimination. We do not want to exclude that type of lottery from the regulation. The current wording is wide enough to achieve that aim and the proposed change risks not doing so. So, to future-proof the issue, I hope that the hon. Gentleman will withdraw the amendment.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 14, in

clause 14, page 6, line 35, leave out subsection (4).—[Mr. Caborn.]

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I beg to move amendment No. 55, in

clause 14, page 7, line 4, leave out subsection (6).

The amendment would remove subsection (6) in its entirety. It is a probing amendment. There are, obviously, reasons for the subsection to be in the

Bill. We understand where the Government are coming from. The Lotteries Council is concerned about the issue and has no doubt raised it with Members on both sides of the Committee. The interpretation of the subsection is important.

The Government are trying to make a clear distinction between certain games or competitions that require the exercise of skill or judgment and so on, and those in which, to put it nicely, there is an element of scam involved: people are drawn on and of course it costs them more and more money. If we are to pass the legislation, there must be a clear-cut interpretation in law so that the two parties—those who run the competitions and the charities' lotteries—would be happy with the interpretation that is given. We are simply saying that the wording in the clause is not as clear as it needs to be.

The subsection states that, in certain circumstances, skill and judgment would be disregarded and the scheme treated as if it relied wholly on chance. Such a situation would arise if the competition prevented a significant proportion of participants from receiving a prize or prevented a significant proportion of people who might want to participate from doing so. At the heart of the question is the term ''a significant proportion''. Quite what that means is unclear. Presumably, a significant proportion is somewhere between, say, 1 per cent. and 99 per cent., but where exactly does the boundary lie?

Equally, will not the concept of the application of skill vary from individual to individual, and how will it be possible to judge whether a significant proportion of persons had been prevented from participating in the competition? Indeed, those running the competition would presumably need to know before it commenced how many potential participants would be prevented from winning. How could they possibly know that? Proving a negative is a difficult affair at the best of times, but that requirement, if it is the intention behind the wording of the Bill, would be nigh on impossible to meet. Clause 14(6) would therefore place a significant and unnecessary administrative and legal burden on many businesses.

Another potential problem thrown up by subsection (6) relates to competitions that may inadvertently succeed in attracting the same number of entrants, or indeed fewer entrants, than there are prizes available, which we are reliably informed can occasionally happen. I would be grateful if the Minister would clarify whether such a competition would have to be regarded as a game of chance and, therefore, a lottery on the basis that the skill element did not prevent a significant proportion of participants from receiving a prize.

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

This is an interesting area, and it has been around the course many times. Amendment No. 55 would remove the test in subsection (6) for determining whether a process relied wholly on chance. Although necessarily complicated—we all acknowledge that—subsection (6) is vital to prevent lotteries from being dressed up as prize competitions and thus avoiding regulation under the Bill. That is important in terms of protection of lotteries, and we

have seen quite a lot of it recently. That is why we must get this right, and we believe that we have.

Examples of such so-called competitions are those in which participants are required to answer questions, the answers to which are so easy that they are almost universally known. We want such competitions to be regulated as lotteries. If we were to accept the proposed amendment, which would delete the whole of subsection (6), such competitions would continue to be run without regulation.

Several people have criticised the words in the Bill but no one, including the eminent QCs to whom the hon. Gentleman referred earlier, has been able to propose anything better. The matter has been much debated. Indeed, it was raised by the scrutiny Committee. It asked us to include the test and we did. The measure is the result of the response to the scrutiny Committee and we believe that it gets the balance about right.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

We share the Government's intention to prevent certain competitions from masquerading as lotteries, and I made that clear. However, a large cohort of people interpret the matter differently and are worried that because the proposal goes almost too far, it will catch legitimate competitions in the net. The Minister has not offered to go back to the drawing board.

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

It is unfair of the hon. Gentleman to say that. We have been back to the drawing board four or five times because we are mindful of getting the provision right. The hon. Gentleman referred to the QC who gave evidence to the scrutiny Committee and there was a long debate in the Committee. We took that on board and believe that with that process of consultation and advice we have the best provision. The deletion of subsection (6) would not enhance the position or move the matter forward. We believe that we have got the balance about right in what has been a difficult exercise. We have taken advice and held consultation and we believe that the provision is about right.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

I accept the Minister's point. I said that the amendment was a probing one. We did not like the wording of the subsection and, in suggesting that it should be deleted, we more or less invited the Government to come forward with something that makes a lot more sense to more people. If the Minister is saying that the Government have been round the houses and taken all the legal advice they could possibly take, we must take that on board. However, we reserve judgment and may revisit the matter later. I am happy with many of the Minister's responses and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

I beg to move amendment No. 129, in

clause 14, page 7, line 14, leave out subsection (8).

I can be brief. This is a probing amendment. I referred earlier to my unhappiness about the number of times in this primary legislation the Government are taking powers to enable the Secretary of State to do

things by regulation. My hon. Friend the Member for Cotswold (Mr. Clifton-Brown) rightly pointed out in a helpful intervention before lunch that the real problem is that we do not have much opportunity to debate statutory instruments that introduce regulations. Such debates as we have are very short and are on a take-it-or-leave-it basis. We cannot try to amend statutory instruments. They must be voted through or not and, with the Government's huge majority, they tend to be voted through.

I am used to Ministers standing up and saying in answer to any point that Conservative Members make, ''You're just against modernisation.'' There is a new phrase in this Committee—future-proofing. I suspect that we shall hear it a lot, including in the Minister's response to this amendment. He wants the Secretary of State to be able to respond by regulation and to say whether something is a lottery. My concern, to which I shall return when we debate the next amendment, is that we do not lose the opportunity for clarity in deciding whether something is a lottery.

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

I apologise for interrupting the hon. Gentleman as he was coming to the end of his comments, but I hope that he will address an additional concern. He is rightly concerned about the increased number of powers that the Bill gives to the Secretary of State, but I hope he agrees with me that in this proposal it is sensible to future-proof in respect of any new type of product that may come along when there is uncertainty as to whether it fits into the current definition. That being the case, does he not find it odd that under subsection (8)(a) the Secretary of State will be given the power to amend definitions in respect of existing products as covered by the earlier part of the clause?

Photo of Mr Nick Hawkins Mr Nick Hawkins Conservative, Surrey Heath 3:30 pm, 11th November 2004

That intervention is helpful because the hon. Gentleman helps me to make my point. The problem is not just about future-proofing. The Secretary of State's powers go further and, as will be made clear in my next amendment, which would protect the valuable work by existing lotteries that support hospices and hospitals, I am trying to ensure some clarity to protect the worthwhile work already being done. I do not want to anticipate the next debate, however. I agree with the hon. Gentleman that the Minister must go a bit further than saying, as he has done, that the provision is just about future-proofing; he must justify why the Secretary of State will be able to redefine matters in primary legislation.

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

Subsection (8) gives the Secretary of State the powers to provide that specific arrangements are or are not lotteries for the purposes of the Act. It also gives the Secretary of State the powers to amend subsection (2). The powers are necessary to deal with future arrangements that we may want to regulate as lotteries but which have been crafted to fall outside the definition. If there were any doubts about how the new arrangements should be treated, subsection (8) will put the matter beyond doubt. If that subsection were removed, we would lose the ability to cater for and determine how to regulate the new types of lottery that might be developed. It would put us in an unsatisfactory position, and it would not allow us to

act with certainty. Even at this stage, we are unable to say what the nature of developments might be or when they might take place, but we need to cater for them should they occur. I ask the hon. Gentleman to withdraw the amendment.

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

The Minister gave me the answer that I was expecting, but with respect I do not think that he dealt with my broader point, which was amplified by the hon. Member for Bath (Mr. Foster). We all saw that the Minister read out his pre-prepared brief and did not really deal with our wider point.

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

Before the hon. Gentleman generously begs leave to withdraw his amendment, I hope that he will push the Minister to get an answer to the question why subsection (8)(a) needs to be in the Bill. The hon. Gentleman will note that the Minister clearly repeated in his own words what I said in an intervention on the hon. Gentleman earlier. The Minister said the provision was necessary for new products that try to get around the definition in the Bill. I still fail to understand why, in regard to existing products, the existing definition needs to be changed and powers given to the Secretary to State to undertake the change almost at will in the circumstances that the hon. Gentleman describes.

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

I agree. The hon. Gentleman anticipates me, because I was about to say before withdrawing the amendment that—if he will forgive the phrase—I would aim over the head of the Minister. I hoped that his officials had been listening carefully to this debate, and we might find the Minister ready later to go a little wider than his brief and write to the hon. Member for Bath, to me and to other members of the Committee, dealing with the point that we have made.

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

Any action by the Secretary of State will be in the form of a statutory instrument under the affirmative procedure, which will be open to scrutiny as it normally is. The hon. Gentleman is jumping around and looking at things that are not there. They are a figment of his vast imagination and they will have to stop there. We believe in all the safeguards and we believe that the power is right. We must ensure that the powers take account of any new products or changes to existing products. I do not know how the hon. Member for Bath interprets the provision.

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

The Minister may not fully understand that the hon. Member for Bath and I are talking about the unusual way in which the Secretary of State's powers are specifically not constrained by the provisions in the earlier clauses of the Bill. That is quite unusual. We recognise the purpose of subsection (8)(b), but subsection (8)(a) basically says that the Secretary of State can in the future do whatever she likes by way of a statutory instrument under the affirmative procedure and ignore everything in subsections (1) to (7) in the primary legislation. That is a pretty wide power, and is rather unusual.

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

The Minister has further muddied the waters by saying that resolution will be through the affirmative procedure, because it shows that he does not understand parliamentary procedure. There are three types of order: one below the line, against which there is no

prayer; affirmative resolution; and negative resolution. If it is to be an affirmative resolution, that needs to be specified in the Bill.

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

I am grateful to my hon. Friend, who has once again shown his mastery of the procedure of this place, for putting that on record. Perhaps it will put more pressure on the Minister, but it was, of course, the Minister who volunteered the words ''affirmative procedure''. Perhaps he does not fully understand the procedure.

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

Again, these are figments of the imagination. Things must catch up with the hon. Gentleman at this hour of the afternoon. It will be an affirmative resolution .

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

We hear what the Minister says. No doubt, there is something—

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

That is very helpful. We are certainly clarifying the matter as we go along. Perhaps I was right to aim over the Minister's head, as it were.

Following that debate, which was slightly more interesting than I expected when I tabled this probing amendment, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

I beg to move amendment No. 130, in

clause 14, page 7, line 20, at end add—

'(9) Nothing in this section shall have effect to alter the arrangements for those lotteries which existed prior to the coming into force of this Act which exist solely for the purpose of raising funds for local hospices or hospitals.'.

I touched briefly on this matter in the last debate, because the two matters are linked to some extent. We are going to hear a lot in our debates about grandfather rights; for example, when we consider machines in pubs or when we debate gaming machines, which is one of the big issues in the Bill. With this amendment, I seek some protection for work that I think Members on both sides of the House would recognise has usefully been done over many years by lotteries that raise money specifically for local hospices and hospitals. There may well be other good causes, but I did not want to widen the debate too much by trying to think of every local lottery that does good.

I thought that the amendment might attract some support, or even some further thought. I do not expect the Minister to accept it immediately, but I hope that he will at least say that he and his officials will take the idea away and see if something can be introduced on Report or beforehand, on Third Reading or in another place.

I think that we all agree that there are few better causes than the enormously important work that hospices have done in recent years as the hospice movement has grown. I have had the privilege of visiting a number of hospices and I know the importance of the work that they do. Some of the people who organise that valuable fund-raising for hospices are concerned that the changes to the lottery laws may threaten their lotteries. Can we have a provision that says that any lottery that is perfectly

valid under current law, and exists when the Bill comes into force, will be protected if it is not changed?

If people are able to carry on running such lotteries under the new legislation, we will keep that valuable source of fund-raising. I am sure that the Minister will accept the spirit of what I am trying to do, although my drafting may not be perfect. I hope that he will, at least, take the idea away. He may be able to reassure the Committee and me that all such hospice and hospital lotteries are completely protected, but I raise the matter because I have heard this concern expressed by several people. If the law on lotteries is being changed, the Bill should include a provision to ensure that everything that has been working well remains valid when the Bill is enacted.

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

As the hon. Gentleman said, he and others have been asking for that reassurance for some time. The Government fully recognise that lotteries are a popular and important means of raising money for charities and other good causes. I assure the hon. Gentleman that we are fully aware of the valid contribution made by lotteries to the successful running of hospices.

For society lotteries, the Bill in essence replicates the provisions of the Lotteries and Amusements Act 1976. Lotteries run solely for charitable purposes will be permitted. They can be run by licensed or small society lotteries, or by any person who is incidental to a non-commercial event, and promoted wholly for purposes other than for private gain.

Clause 14 is designed simply to define lotteries and to make provisions about payment to enter them and win prizes. It does not impose any additional limits on lotteries run by societies for charitable purposes. The powers in subsection (8) deal with the new arrangement that might be developed to circumvent the ban on large-scale commercial lotteries. The Government do not intend to use those powers to prevent lotteries run solely for charitable purposes from being promoted. Thus the Bill will continue to protect lotteries that are genuinely run to collect money for good causes such as hospices. I trust that that gives hon. Members the assurance that they seek.

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

The Minister used the phrase ''charitable purposes'' more than once. How broad is that term? I can think immediately of two fund-raising activities that are not charitable: one is the Labour party tote in Essex; the other is Colchester United lottery.

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

Let me give the definition, because this was widely discussed in a document published this February, which said that small society lotteries registered with local authorities will have their registration automatically converted into registration under the schedule. I am happy to repeat that: the definition also covers non-commercial societies. That is key.

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

The Minister is very helpfully placing on the record his understanding of what will happen to the lotteries mentioned by the hon. Member for Surrey Heath. He will recall that there was much debate

during consideration of the Licensing Bill some time ago about whether or not golf clubs would lose out. At that time, because of the uncertainty, he kindly produced a helpful document for all Members of Parliament to send to such clubs. I have received numerous representations about hospital and hospice lotteries, as, I suspect, have many others members of the Committee. Will the Minister agree to provide such a briefing note for us to use as a standard response to people who write to us?

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

The answer is yes, although I do not want a repeat of the golf club briefing note. I had to write to every ruddy golf club in this country because the matter was being whipped up.

As I said, the document was published in February 2004, and I will ask my officials to pull out the relevant bit and stick it on the web. We will make sure that it is there, because we do not want to start a lot of hares running. We want to ensure that such lotteries understand that it is business as usual.

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

This has been a very helpful, albeit short, debate. The Minister's response to my points and to the very helpful points made by the hon. Members for Colchester (Bob Russell) and for Bath has been useful.

I have noticed that this Minister's Department—like Departments in general—seems to have adopted the policy that it is enough to put something on its website. I am not criticising the idea of putting information on the website, but I return to the request made by the hon. Member for Bath: could all hon. Members have a hard copy of whatever the Minister's officials will produce, because that is much easier for us than saying to hospice organisers throughout the country, ''You have got to look at the Department's website?'' Not all small hospices will necessarily be run by someone with the same IT capability as the Minister and his officials. Sometimes it is too easily forgotten by Departments that not everyone uses the internet in the way that Government officials do.

What the Minister has said is enormously helpful; I look forward to receiving the document, and I hope that it is a hard copy sent in the post to all hon. Members. There are certainly quite a few Government Members who say that they want hard copies of documents rather than having everything on the internet. A lot of our constituents feel that way, too. I understand that the Minister is saying that all existing lotteries will be protected; that is enormously helpful and will provide a lot of reassurance.

Photo of Richard Caborn Richard Caborn Minister of State (Sport and Tourism), Department for Culture, Media & Sport 3:45 pm, 11th November 2004

I was just thinking that I might send copies out with my Christmas cards. I do not want to go over the hon. Gentleman's head, but a copy was put in the Library in February. I hope that, besides visiting our website—a very good website—he will visit the Library, and he will get a double whammy.

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

I know. What was produced in February—the serious part of the Minister's

response—is not what the Minister is talking about now, which is a response to the point that was made by the hon. Member for Bath. I am talking about something new. It would be helpful to have the hard copy because it would enable us to reassure people—[Interruption.] I am grateful that the Minister is confirming that. Having received helpful answers, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 14, as amended, ordered to stand part of the Bill.

Schedule 2 agreed to.