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Gambling Bill

Volume 670: debated on Thursday 10 March 2005

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The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport
(Lord McIntosh of Haringey)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Lyell) in the Chair.]

moved Amendment No. 1:

Before Clause 1, insert the following new clause—


  • (1) The Secretary of State shall by order make provision for the conversion of all entitlements to the operation and citing of gaming pursuant to the Gaming Act 1968 (c. 65) and related legislation into premises licences under this Act.
  • (2) Such an order, as set out in subsection (1), shall provide that these pre-existing rights may not be in any way limited by the Secretary of State, the Commission or any licensing authority."
  • The noble Lord said: It is a great pleasure to start this Bill. I hope that colleagues will be gainfully occupied for most of the rest of today with the Gambling Bill, which is very appropriate, although I would not want to place a bet on the outcome of today's business.

    The Minister is well aware of the concern in the gaming industry about "grandfather" rights; that is, the retention of machine numbers on premises or the ability to offer particular games to customers in accordance with existing entitlements. The uncertainty is created because the Bill leaves to secondary legislation the detail of how effect will be given to that intention. It is therefore impossible, because that secondary legislation is not available in draft, for the industry to identify all the circumstances where current entitlements would stay or would be removed.

    The Government have accepted that certain matters are fundamental to the principles of the Bill. Indeed, they are enshrined in Clause 1. They are not left to the discretion either of local authorities or to the Secretary of State. The Government argue that Schedule 18 deals with grandfather rights, but it does so only in the sense that it gives the Secretary of State powers to make orders to deal with transitional arrangements to cover existing licences or permits without specifying the detail of how that will be applied.

    It is particularly important to the gaming industry that the principle of grandfather rights is spelt out, given that the new licensing powers that are being given under the Bill to local authorities increase their ability to curtail or remove existing entitlements. Without greater certainty, industry does not have the stable environment in which to plan and invest.

    The devil is in the detail as regards grandfather rights in particular. A specific example of how the Government's general assurances about grandfather rights do not provide any comfort at a detailed level can be seen in relation to their application to family entertainment centres.

    The Secretary of State wrote to Mr Tony Wright MP on 12 November 2004, giving the impression that all amusement arcades will benefit from those grandfather rights. She wrote:

    "I know the issue of 'grandfather rights' is also of concern for some amusement arcade operators. Amusement arcades with the lowest stake and prize machines currently operate under permit from local authorities, and this will be the case under the Bill (they will become unlicensed family entertainment centres). Such arcades will not be regulated directly by the Gambling Commission, although the Gambling Commission will be required to issue guidance to local authorities about a whole range of matters, including arcades that local authorities will have to take into account. When the Bill comes fully into force, probably some time in 2007, then at this point all arcades will be entitled to new grandfathered permits, entitling them to the same number of machines as under the current arrangements".

    In reality, only about 5 per cent of arcades would be covered by the terms of that assurance because it covers only those arcades that have only category D machines and are therefore not licensed by the local authority. While the bulk of their machines are category D machines, 95 per cent of arcades also have segregated over-18 only areas, which have entitlement to offer category C machines. So there are issues there about which the arcade industry, in particular, is concerned. I beg to move.

    In speaking to support the amendment tabled by the noble Lord, Lord Clement-Jones, I speak also to my Amendment No. 9, which is on similar points. The noble Lord's amendment raises significant, important issues regarding the support and maintenance of existing rights to games and machines by the current industry—be it pubs, bingo halls or small casinos.

    The industry, as we will discuss, believes that this Bill proposes an unequal playing field. It wishes to ensure that not only is there no reduction in the number of machines on premises, but also that there is no reduction in the ability to offer particular games to customers.

    As the noble Lord has explained, the Bill only appears to give parts of the industry these grandfather rights, which some have argued as undue bias. The new clause in my name after Clause 6 aims to look at the detail of a particular concern about Sections 16 and 21 machines, alluded to by the noble Lord, Lord Clement-Jones, while speaking to Amendment No. 1.

    The adult gaming centres are arguably faced with a double whammy. As currently drafted, a number of gaming areas do not fit neatly into the Bill. They include Sections 16 and 21 machines, which have been in operation since 1976 and 1968 respectively. Sections 16 and 21 machines currently operate under a voluntary code of conduct that is approved by the Gaming Board. Those machines are well regulated and controlled. On that basis, I ask the Minister why the use of those machines cannot be permitted to continue with the current level of stakes and prizes under a separate machine category—for example, a B5.

    I question whether Part 10 of the Bill gives adequate safeguards to secure current entitlements to existing games operating under Sections 16 and 21 licences, which the Government will no doubt argue in a moment. Moreover, a recent DCMS memorandum and the RIA suggest that those machines will not be able to operate as they do under existing legislation. I would appreciate details from the Minister on the position of those machines in this legislation and their operation under it.

    Can the Minister provide me with some information that I cannot find elsewhere on existing casinos? According to different sources, there are between 131 and 137 existing casinos in operation. Perhaps the Minister knows exactly how many. If those casinos were new casinos, under the Bill would they be classified as small or large casinos?

    I am very sympathetic to the motivation behind the amendment tabled by the noble Lord, Lord Clement-Jones. I want to give him the reassurance that he seeks about the clarity of grandfather rights. I know where these amendments come from and I well appreciate that the grandfather rights available in the Bill are scattered throughout it. Many of the assurances that have been given on them have been in the form of letters to Members of Parliament or in other ways. It is important that the grandfather rights, which are enshrined in the Bill and which I believe to be comprehensive, should be read into the record, as I propose to do now.

    The Government published a position paper on grandfather rights in February 2004, which might not have been brought to the attention of the noble Lord, Lord Clement-Jones. It made clear that the Government would use the powers in the Bill to convert, automatically, a number of existing permissions into permissions under this legislation. I shall give the Committee the detail.

    Those promoting lotteries, subject to the registration requirements in Sections 5 or 6 of the Lotteries and Amusements Act, will be deemed, where necessary, to have a lottery operating licence under the Bill. Licences for betting offices, betting tracks and approved horse racecourses under the Betting, Gaming and Lotteries Act 1963 will become betting premises licences under Part 8 of the Bill. A machine permit under Schedule 9 to the Gaming Act 1968 for all cash amusement-with-prizes machines will become either an adult gaming centre premises licence or a family entertainment centre premises licence.

    Gaming or bingo licences under Part II of the 1968 Act will become premises licences too. Permits for miners' welfare institutes and other clubs will convert automatically into club gaming permits under the Bill. Machine permits for coin or token amusement-with-prizes machines will be converted automatically into new style category D machine permits, although new permits will not be available for premises such as fish and chip shops, and so on. Lastly, premises licensed for the sale of alcohol that have a gaming machine entitlement now will, where necessary, be granted a permit under the Bill to carry on with exactly the same number of gaming machines as they have now.

    The House will know that it is quite normal for detailed transitional arrangements under legislation to be dealt with through secondary legislation, such as that in Schedule 18 to the Bill to which the noble Lord, Lord Clement-Jones, referred. The Delegated Powers and Regulatory Reform Committee, in its 11th report, passed no comment at all on the Bill's powers in that respect. So I hope I have been able to answer the first question posed by the noble Lord, Lord Clement-Jones.

    The noble Baroness, Lady Buscombe, asked me about Sections 16 and 21 machines and why the current level of stakes and prizes will not be the same under the Bill as it is now. We shall debate that on subsequent amendments and perhaps I can go into more detail then. Fundamentally, the principle is that the number and power, in terms of stakes, prizes and speed of play, of machines is proportionate to the nature of the premises; in other words, whether children are allowed in and the degree of hard gambling that takes place. I am very willing to defend our proposals for Sections 16 and 21 machine stakes and prizes on the grounds that that will be the theme of everything that I say on the precautionary principle in this Committee.

    The noble Lord, Lord Greaves, asked how many existing casinos are small or large. We do not have exact figures because we do not measure the table gaming areas in casinos. We have no authority to do that and I do not believe that he would wish us to do so. Our understanding is that only a minority of the existing casinos meet the minimum size requirements of the new casinos.

    While I am totally sympathetic to the purpose of the amendments, I believe that they are unnecessary. All the powers necessary to deliver fair grandfather rights are already in the Bill. A more substantial point on the amendments is that if they were accepted they would prevent the Government or the Gambling Commission or a licensing authority using their powers in future to control entitlements to gaming and gambling machines. I submit that that would undermine the central purpose of the Bill.

    The main reason for introducing the Bill now is because the present law is being outpaced by technology. That is more than just a debating point. As the law is out of date, operators have tried to exploit loopholes to introduce new products that were never intended to be authorised under the law. 1 am sure that the noble Baroness, Lady Buscombe, will agree that Sections 16 and 21 machines were never envisaged when the 1968 Act was passed, any more than fixed-odds betting terminals in betting shops were envisaged at that time. The reason we have roulette gaming machines in betting offices and family arcades is because the law is inadequate and in doubt and that is why we need the Bill.

    Section 16 of the 1976 Act and Section 21 of the 1968 Act were never intended to authorise the provision of gaming machines. So, the fact that these machines are being provided, in reliance on parts of the law never intended to authorise machine gaming, is part of the problem we are trying to solve. Our policy in the Bill, which I hope I have spelt out by the list that I have given, is to apply a single, coherent and comprehensive regulatory framework for gaming machines. We want to move away from the position where, because of supposed loopholes, it has been possible to provide gaming machines outside the regulatory framework of Part 3 of the Gaming Act 1968.

    It is absolutely essential that all of the regulatory authorities can use their powers to change licence conditions or entitlements if there is evidence that a particular product, or the way in which a product is being offered, is driving problem gambling or is causing a risk to the licensing objectives of the Gambling Commission. I will not compromise on that point. I know it has not been suggested, but I want to make it clear for the future that I shall not compromise on that point because our concern is to protect the public.

    We accept, of course, that the trade associations have agreed a code of practice with the Gaming Board that governs the provision of such machines. But that does not at all change our view on whether they should have been provided under these provisions in the first place. Given what I have said, and taking into account the use of the transitional powers under the Bill, I ask for these amendments to be withdrawn.

    I thank the Minister for the extremely clear nature of his reply, which was very helpful as he went through the different categories. Likewise, I have considerable sympathy with the second half of his remarks in terms of the purposes of the Bill and I have no quarrel with the intention to update gambling law to ensure that we have a properly ordered industry. The arcade industry will take comfort from what he has said. I shall have to consider the detail of what the Minister has said, but it seems to me that some comfort is given in terms of existing entitlements and their continuation. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Clause 1 [The licensing objectives]:

    moved Amendment No. 2:

    Page 1, line 6, at end insert—
    "() preventing an overall increase in the incidence of gambling in the United Kingdom,"
    The noble Baroness said: With the leave of the House I would like to speak not only to Amendments Nos. 2 and 3, but also to Amendment No. 4, given the time constraints placed upon us today. I understand that the noble Lord, Lord Northbourne, with the leave of the House, would also like Amendment No. 52A to be included in this group.

    3.30 p.m.

    Amendments Nos. 2 and 3 are contrasting amendments designed to discuss the Government's intention behind the Bill, something that is vitally important—particularly considering the constraints placed upon us—to the context of all the Committee amendments but I fear will otherwise be lost in the debate on the detail. These amendments flush out the thinking by adding an additional purpose to the licensing objectives in Clause 1.

    The amendments are self-explanatory. I would like to know from the Minister whether it is the Government's policy to prevent an overall increase in the incidence of gambling in the UK, or to enable it.

    In a statement on national policy made in December last year the Government stated that the Bill was based on three main objectives—to protect children and other vulnerable people from harm, to prevent gambling being a source of crime or disorder, and to ensure that gambling is conducted in a fair and open manner. Should we take these objectives within the context of my Amendment No. 2 or No. 3?

    The statement also said that Britain has a low level of problem gambling compared to other countries—less than 1 per cent of the population—and that the Government are committed to maintaining this record. How is the Minister committed to maintaining this record as the Bill currently introduces a range of regional and large casino facilities that are open to bids from companies over and above the existing estate? Or does he envisage a 50/50 increase by the existing estate versus newcomers?

    Does the Minister agree with many commentators that if you increase the access to gambling, no matter how well controlled, the numbers of those affected by addiction or problem gambling will rise? Or does the Minister hope that despite an increase in numbers the problem will remain within 1 per cent of those gambling overall, or that it will be the same 1 per cent just developing into increasing debt? GamCare's recent report shows—from what information it can obtain from clients—that debt has increased by £1,000 per individual: from £19,000 to £20,000 in the past year alone.

    Meanwhile the Government have also been criticised by academics who say that problems such as child gambling are far greater than the 5 per cent mentioned in the Department for Culture, Media and Sport's recent report.

    One of the reasons given for including the casino proposals in the Bill was so that this country could reap the increasing rewards of tourism and leisure industries contributing to our GDP. Yet a recent poll by YouGov and the Gambling Consultancy stated:
    "Half the public are not persuaded that making it easier for people to gamble and for casinos to attract customers will boost UK tourism".
    Therefore I ask the Minister what estimated figures for foreign tourists who would come simply to gamble, as well as those who would happen to gamble while they are here, have Her Majesty's Government been basing the growth benefits on? Can he make them available to the House for consideration?

    It is against this background of concern that I am led to ask the Minister to state to the Committee now whether it is his intention to fulfil the broad objectives of the Bill with a view to prevent an overall increase in the incidence of gambling in the United Kingdom, or to enable it.

    Amendment No. 4 is suitably connected with earlier amendments. It is concerned with the need to protect low-income groups, along with children and the vulnerable. I would like to tease a little more detail from the Minister as to how gambling addictions affect different echelons of society. Of the 1 per cent who suffer this affliction in the United Kingdom, can he give me the breakdown by income groups and by those at different stages in their life cycle and place a copy in the Library? Would he not agree with me that when we refer to the vulnerable we are often referring to low-income families to which the activity of gambling can be regressive, not regenerative?

    It is essential that there are precautions in place to protect those low-income family members who cannot afford to lose at any cost. Does increasing access to gambling, despite safeguards, really offer the protection that such individuals need?

    Amendment No. 52A, tabled by the noble Lord, Lord Northbourne, sets out proposals with regard to codes of practice which the Gambling Commission may introduce. The noble Lord is proposing an entirely sensible and wise condition, which is that before issuing or revising a code under this clause, the commission shall consult,
    "one or more persons who have specialist knowledge of the welfare of children and their families".
    I would go further than that. I would like to see such a person sitting as a full member on the commission itself. I would also hope that such a person would be consulted by the advisory panel. I beg to move.

    I should like to speak to Amendments Nos. 2, 3, 4 and 5 and to Amendment No. 52A in my name. I very much welcome the fact that the Government have included as a priority in the licensing objectives the protection of children and vulnerable persons. However. I do not entirely see this admirable policy unfolding in the body of the Bill. 1 hope that the Minister will help me on that.

    There are two major ways in which children can suffer from gambling. The first is by getting in the habit of gambling and becoming addicted gamblers. The second is by having parents who gamble and thereby impoverish the family, possibly causing family breakdown. Your Lordships may say, does this really matter? The answer is yes. There is now a mass of quality research which shows that children growing up in families in poverty and, a separate category, children growing up in single-parent families and families that are dysfunctional are more likely to have poorer health, poorer outcomes in school, and poorer outcomes in later life in terms of employment, crime and so forth, and in family formation later.

    In this country today we have 4 million children living in poverty, which means below the poverty line. Of those, about 2 million children are living in families which do not have enough money to provide some of the basic necessities of those children's lives. We have about 3 million children living in broken families. That is already a dangerously high level. I do not think we want through this Bill to increase the number of families in either of those categories.

    I am concerned by the picture I see emerging from the Bill of glitzy, glamorous new casinos and category A and B gambling machines advertised and promoted by personalities, film stars and football stars, and stories in the newspapers encouraging people to believe that gambling is an important lifestyle choice, in which if people do not participate they are deprived and disadvantaged. Probably the strongest danger is that people will attempt to go into the gambling arena because they feel that their status demands it or because they feel that they would be deprived if they do not. There will undoubtedly be large numbers of people who are disadvantaged in the sense that they do not have surplus money to spend on gambling, yet they will spend their money on gambling—it will come out of the housekeeping and it will leave more children in poverty. It will lead to more family discord, family breakdown and probably domestic violence as well.

    I hope that the Minister can show me how children and vulnerable families can be fully protected. If he cannot, I urge your Lordships to vote against what appears to be not only an unnecessary development of the gambling industry in this country, but also one for which there is little or no demand.

    As the noble Baroness suggested, Amendment No. 52A suggests that the commission should consult someone with expertise about families with children. The noble Baroness is right; such a person ought also to be a member of the commission. The impact of gambling on children and families is very complex. Just because we have had children and families does not mean that we necessarily know the answers. This is a subject on which professional advice would be extremely important to the commission. Therefore, I intend to move that amendment in due course unless the Minister can convince me that it is wholly unnecessary to do so.

    I find the amendments in this group curious. They invite Second Reading speeches. One can find plenty of faults with the Bill as a whole, but surely nobody can fault the objectives of the Bill, which are well conceived and well drafted. Of course, there will be an increase in gambling in this country—that is what the Bill intends. Furthermore, the Bill intends to ensure that the damage that comes from that increase in gambling is as limited as it can be. Whether there is any demand for this increase in gambling in the first place is another matter, but we dealt with that at Second Reading.

    The amendment of the noble Lord, Lord Northbourne, would include children and low-income groups. Children are well covered by Clause 1 (c) in the licensing objectives. Is it not rather condescending to refer to low-income groups? It became quite clear when those of us on the committee talked to members of GamCare and other bodies that not only low-income groups are vulnerable in these matters. but other people are, too. We actually saw somebody who had been a multi-millionaire in the City and lost all his money gambling.

    I fear that my expertise is not in gambling. My expertise, such as it is, is in low-income families and deprived and disadvantaged families. I have seen some of the problems that are caused by poverty. Indeed, all of us know, and I think that the noble Viscount will probably accept, that debt is one of the most important factors in making a misery of the lives of many families. That is my concern.

    I see where the noble Lord is going and from whence he is coming. I agree that there is a danger to children, particularly in technology gambling such as slot-machines—not so much in traditional forms of gambling such as horseracing, which was mentioned in the evidence that we had in the committee from those who worked at Gordon House. Slot-machines were the main cause of concern in relation to the evidence that they collected from the people whom they treated.

    Low-income groups are always going to be vulnerable to fantasy attractions of different kinds. However, all that is very well covered by the objectives. I am concerned, as is the noble Lord, by the fact that the Bill increases the amount of gambling. Even though it does that responsibly, I am not aware that there is any demand for it. To that extent I agree with him.

    As these amendments are very much about children and the protection of children as well as low-income groups, I would like to speak to my amendments, which come somewhat later—Amendments Nos. 96, 97 and 99. The intention of these amendments is to bring the UK into line with the rest of the developed world and to stop children playing on fruit machines.

    As the Gambling Bill has passed through its various stages, it has become clear that there is confusion about category D machines. Although category D includes machines such as teddy bear grabbers and penny falls, it also includes certain types of fruit machines. These machines are identical to the varieties found in categories A to C except for their stake and prize. The amendment tabled to Clause 45 of the Bill would stop children playing on fruit machines but not on these other machines.

    There was confusion about this in the other place; one wonders whether some of it was deliberately designed to obfuscate a serious issue. However, I will be clear at the outset—our amendment would not stop children and young people playing on teddy bear grabber machines and penny falls. Contrary to the briefing sent to Peers by BACTA, this amendment would not prohibit children from playing on penny falls and other such games. The second part of our amendment clearly enables the Secretary of State to make those forms of games available to children and young people.

    Fruit machines constitute some of the most addictive forms of gambling. Many adults struggle to control their gambling on them, as the GamCare helpline statistics show. They are structurally more dangerous than lots of other forms of gambling. They are fast, aurally and visually stimulating and rewarding, they require a low initial stake, provide frequent wins and may be played alone. Players can experience frequent "near misses" which encourage them to chase their losses with the hope of doing better next time. All of those characteristics make them particularly attractive, and dangerous, to children.

    The only difference between a category D fruit machine and categories A to C is the stake and prize. In effect, children as young as five and six are being exposed to every other kind of addictive trait that they would be if they were playing a category A machine. For many children, £5 is not a small prize—it may be twice their weekly pocket money.

    3.45 p.m.

    By now, many Committee Members will be aware that there is growing public unease about the status quo in the Bill. That is one reason why I wanted to speak to these amendments today. In less than a week, nearly 40,000 people have signed a petition organised by the Salvation Army, the Methodist Church and the National Children's Home—to which I am extremely grateful for a range of briefing—demanding that children be stopped from gambling on fruit machines. That is an impressive number in such a short space of time and shows the strength of public feeling on the issue. Perhaps one should not be surprised; in an NOP opinion poll, 82 per cent of people said that children and young people should not be allowed to gamble on fruit machines.

    BACTA makes much of the fact that in a YouGov poll 75 per cent of people said that they did not want to stop children playing on category D machines. Well, nor do I want to stop them playing on teddy bear grabbers or penny falls. But I do want to stop them playing on fruit machines. I have heard people say, even in this House, that "there is no evidence" that playing on fruit machines is dangerous to young people. I have to say to Committee Members that there is a significant body of evidence which all points towards fruit machines being unsuitable for children and young people.

    The Joint Scrutiny Committee on the draft Gambling Bill heard from the Royal College of Psychiatrists which said:
    "It has been firmly established that all gaming machines, regardless of the size of the stake or the amount of prize money, are unsuitable for children and young people".
    The Royal College of Psychiatrists also recommends that these machines should cease to be made legally available to them. The committee also heard evidence from other academic experts to the same effect. In fact, I believe that not one academic at that time gave evidence which contradicted this view. The DCMS commissioned a report from Lancaster University on this issue, but it has been roundly criticised by experts in the field for its many omissions and inaccuracies. However, even that report found that on average the rate of problem gambling among children and adolescents in the UK is around 5 per cent. That may sound a small figure, but it is one in 20 young people.

    Problem gambling among young people can cause huge difficulties—we have heard some of them mentioned—during the key phases of their development. It can involve truancy, as children spend more and more time at the machines and away from school; it can lead to fractured family relationships; it can even lead to a criminal record as young people turn to crime to fund their addiction. By the age of 18, young people can find themselves without much of an education, saddled with debt and carrying a criminal record. That is not a good way to be starting adult lives, and the activity that has contributed to this has be done perfectly legally. We really need to change that.

    Over the past few years it has been encouraging to see child protection issues march up the political agenda. I believe that we have a chance with this Bill to ensure that another piece of protective legislation is put in place. The Government have done much in the Bill to try to protect children and vulnerable people. By allowing them to carry on playing fruit machines, however, it has left a gaping loophole. The case is clear: gambling is and should be only an adult activity. Fruit machines, regardless of their size, can be addictive.

    The answer is that children should be prohibited from playing category D fruit machines, and the UK should now put itself on the same footing as the rest of the developed world. On the issue of children and gambling, the Government have come close to implementing a robust framework. The problem now is that they are failing to follow through on their own logic. If, as the Secretary of State says, "children and gambling don't mix", why are children still to be allowed to gamble on one of the most addictive games in the gambling industry? It is time to match up the rhetoric of child protection with the reality. It is the duty of society and, I believe, of this Government to try and protect these children from harm. By supporting the amendment when we come to it, we will have a wonderful opportunity to separate children from a potentially damaging activity. Frankly, without it, the UK will remain alone in the world in allowing children to do something that can ruin their lives.

    I ask the guidance of the Minister, as I had hoped to comment at this stage, under the cover of the amendment of the noble Baroness, Lady Buscombe, and in support along the lines of the noble Baroness, Lady Howe, regarding Amendments Nos. 96, 97 and 99, to which my right reverend brother the Bishop of Coventry has added his name. If he would rather that I did not make that speech at this time, perhaps he would tell me. It is a brief one, but I will be guided by the noble Lord.

    I am in a difficulty here. I am perfectly happy for any Member of the Committee to abbreviate the proceedings by debating more amendments together. I certainly agreed with the noble Baroness, Lady Buscombe, and the noble Lord, Lord Northbourne, about the way in which we should debate the amendments which she announced. The noble Baroness, Lady Howe, was entirely entitled to make her speech. I listened to it with great interest and a good deal of sympathy. But I hope she will not make it again when we come to Amendment No. 96. If the right reverend Prelate wants to make his speech now, that is fine, as long as he does not make it again.

    I thank the noble Lord. It is either now or later, I suppose. Like the overwhelming majority of people in this country, I believe strongly that gambling should be an adult-only activity. Indeed, I find it difficult to think otherwise. Gambling requires, we are led to believe, advanced mental processes which children simply do not have. The Secretary of State herself has said that children and gambling do not mix. Allowing children to gamble on fruit machines flies in the face of everyone's stated position, and it is a glaring anomaly.

    We have heard of the dangers of fruit machines, as mentioned by the noble Baroness, Lady Howe, just a moment ago. We already know that some of the most potentially addictive forms of gambling arise and stem from fruit machines, even in adults, let alone children. It is completely unacceptable that the United Kingdom is the only country in the developed world that allows children to gamble on these machines. It is a national distinction that we should be ashamed of, rather than proud.

    I know that many noble Lords will have had a briefing from the Salvation Army and the Methodist Church which outlines messages they have received from the public about children and gambling. Some of them make depressing and poignant reading. They all testify to a significant element of concern about this whole issue in the country at large. One lady wrote:
    "I emigrated to the UK from Australia in 2000, and now live in a rural town on the east coast of Scotland. Coming from a country where gambling is legally permitted only for adults, I was shocked to find that my son (then age 9) could gamble on slot machines with his friends at the local amusement arcade. He was thoroughly smitten with this for a while, spent most of his pocket money on the machines, and I suspect he stole money from my purse on more than once occasion to fund his gambling. Although that stage seems to have passed, thankfully, I am very concerned that he was and still is at risk through gambling being available to him so easily".
    Another person wrote in:
    "I have personal experiences in how gambling can damage people and their family. Both my husband and I have been problem gamblers and it has caused many financial and emotional problems. Growing up in a seaside town I had easy access to arcades along with many other children. The ease in which somebody of any age can gamble on a fruit machine worries me so much".
    These are not just sad, isolated incidents. A convincing body of academic literature—some of it carried out at Nottingham Trent University in my own diocese—estimates that 5 per cent of adolescents display signs of gambling problems. To ignore that evidence is to turn a blind eye to significant amounts of damage being done to young people. As legislators, we have a clear duty to protect those in our society who are most vulnerable. This House has often shown great courage in putting the interests of children and young people first. This is another opportunity for your Lordships to extend that record.

    Experts who have spent time studying this issue are at one: gambling on fruit machines is dangerous for children. It is not just an academic issue. This is about children's lives. How would your Lordships like to see one of your seven-year-old grandchildren feeding a slot machine? I have two grandchildren. Felix is nine this year, Elliot is seven. They live in France and are not allowed to gamble there. Yet, if they come here and go to Minehead with my wife and me, they can gamble at leisure. They can do so perfectly legally. Eighty-two per cent of the population think we should stop that. So do I, and I encourage your Lordships to think again.

    I was, uncharacteristically, going to remain silent during the debate on the amendments put forward by the noble Baroness, Lady Buscombe. Yet, since the noble Baroness, Lady Howe, has fired the gun on her amendment rather earlier than expected, I think it worth making a few comments. Like other noble Lords, I have received a huge amount of correspondence on this issue. The Methodist Church and the Salvation Army have mounted a significant campaign. Virtually every letter is identical, which causes anger in some quarters because one hopes for a little more creativity in some of the letters. However, in almost every case the letters are, in my view, based on a misapprehension. Looking at the effect of the amendment—I shall be guided by the Minister here—it seems to go much further than wanted by the noble Baroness, Lady Howe, who I respect enormously for her campaigning in a number of areas. It sweeps up into the net machines which are described as penny falls, derby races and so on, which children have been playing in seaside arcades for years. Indeed, all these machines have been played in seaside arcades for many years.

    Then we have the battle of the academics. I have read the summary of the report by the University of Lancaster. It is a very good review of the research. To call it flawed seems really to be one set of academics from Nottingham Trent University saying that their research was not taken into account as much as it should have been. Frankly, that is sour grapes.

    I have a seven year-old child—not just a grandson or a granddaughter; I am as concerned about children as any Member of the Committee, but the facts are not clear. Prevalence studies across the world are difficult to compare, because of varying age groups, definitions of gambling and problem gambling and research design. The studies with the most rigorous design, using large national random samples and recent coverage, find the lowest rates. "There is no evidence of pools competitions causing problematic behaviours"—that is the headline.

    4 p.m.

    I should like to ask the noble Lord two things. First, what is the source of the last figures that he gave? Secondly, I have worked for several years in this Chamber with the noble Lord's colleagues on child safety issues, and I am shocked that he, speaking from his Front Benches, is not looking at this from a child safety point of view. I am sure that many or at least some of his colleagues might take a different view from a child safety perspective, in looking at children's safety first.

    The noble Baroness will not shame me into supporting the amendment. I wish to see an evidence-based approach to these matters and, at the moment, the evidence is absolutely not there. There is a perfectly good mechanism within the Bill. The objective set out in Clause 1, which was endorsed by the scrutiny committee to which my noble friend referred and by the Budd report, which is in many respects an excellent report, gives the framework for future action. The ability of the Secretary of State to enable regulations to be passed by affirmative resolution which ban children from using the category D machines if the evidence becomes available is an excellent mechanism in the Bill. It is one of the Bill's better features, and I did not argue at Second Reading for the Secretary of State to be deprived of that power.

    There are many other inaccuracies, I am afraid. We are not the only country in the world that permits children to use these machines. One can trade any number of opinion polls, but it is not particularly constructive. The gaming industry did a series of polls that demonstrated a 75 per cent rejection of a ban, so to trade samples of opinion is unconstructive. I urge Members of the Committee, in dealing with a Bill of this sensitivity, to consider the evidence. That is extremely important. I feel rather sad that this campaign has been whipped up in this way before the Committee stage.

    The noble Lord seems quite happy with the fact that 5 per cent of children are already in a worrying situation with regard to addiction. We have all accepted that if there is an extra number of casinos, if the provisions go ahead, there will be more opportunities and a higher likelihood of children becoming addicted. Is the noble Lord really saying that he is not concerned at the numbers that we know exist already?

    If that was the evidence, I would be concerned, but that is the view of Professor Mark Griffiths. It seems to me that people have simply ramped up a whole campaign on the back of one academic from Nottingham Trent University. That is not an adequate basis for changing the provisions in the Bill.

    The noble Lord, Lord Clement-Jones, rightly used the words "flawed research". In my experience, flawed research is research that does not support the conclusion that one has come to independently and from prejudice before—and now we are seeing a swapping of such flawed research. The Nottingham Trent University figure of 5 per cent seems extraordinarily dubious and based on a very strange view of what constitutes addictive behaviour. Nevertheless, those who support that point of view will no doubt accept it.

    In all these matters we must have the evidence, yes, but we should also apply a little common sense, because these are all judgments as to where to draw the lines. I do not believe that anyone would deny that the whole thrust of the Bill is to make gambling less easy for children, not easier, and there are mechanisms built in to prevent it spreading among them.

    My other point is that it is not de facto obvious that any gambling by children is necessarily a bad thing. We heard about other countries in that regard. The French of course introduce their children to wine by giving them very small quantities of watered-down wine at their meals early on. I do not notice the French as being the country with a binge-drinking problem—that is the problem of a country that has a law that says that people can drink as much as they want when they are 18. I am not saying that gambling is absolutely analogous to that, but it is an argument that introducing children in a responsible way to gambling—and we can argue about where that line should fall—is the right thing to do.

    I have been gambling, although I like to call it investing, since the age of 11, when I won £4 13s 8d on a horse called Starclif at Newton Abbot, with the bookmakers McLauglans of Edinburgh, which obviously did not have very good age checks at the time. I am pleased to say that I now make fewer bets, for a stake that is certainly much smaller in real terms, let alone relative to my salary, than I did then. That is partly because 46 years of experience has convinced me utterly that it is a mug's game and that I will always end up losing.

    Everybody has their ways of getting to a situation in which they are not excessive gamblers. I happen to believe that the balance in the Bill is about right, though it is also right that the concerns of those who feel otherwise should be fully heard, if only so that they can be rejected.

    With regard to what the noble Lord said about the protections in the Bill for children, I believe that he commended those protections that limit gambling by children aged eight and under. Is the logic of that commendation that it would be better for there to be none at all? I ask that with a genuinely open mind.

    I am sorry that I have not made myself at all clear to the noble Lord, because my whole argument was that no, it would not be better—that a system in which children cannot have anything at all to do with gambling until they are 18 and then are suddenly free to invest their entire fortunes any way they want may be a less effective way in which to prevent problem gambling than allowing them relatively harmless forms. Most people would probably think that "penny falls" fell into that category, while we can ban the sort of hard gambling on big prize machines, which cause the harm. So no, I do not believe that it would be right to prevent all gambling by all children up to the age of 18.

    I should preface my brief speech by saying that I will follow the old-fashioned principle of confining my remarks to the amendments in this group. By not speaking at Second Reading, because I had a long-standing engagement to host a dinner elsewhere, I have spared myself the mass correspondence that other noble Lords have provoked for themselves. I realise that in my old-fashioned behaviour I am in a category of my own.

    When Arthur Balfour was Prime Minister, a senior civil servant put to him a memorandum that said, "Prime Minister, there are two things that we can do: (a) and (b)"—and he identified what (a) and (b) were. Arthur Balfour simply wrote at the bottom of the memorandum. "Yes. AJB". The civil servant said, "But Prime Minister, I wanted you to choose between the two". Arthur Balfour said, "No you didn't: you told me that there were two things that we could do and I was agreeing with you". Although Amendments Nos. 2 and 3 are obviously paradoxical, my noble friend Lady Buscombe has done the Committee a service in tabling them. From the narrative that led to the Bill that we are now debating, which bore some relation in terms of its route march to that enjoyed by the Licensing Act 2003, it seems reasonable to ask the Minister for his view on which of the amendments is more relevant to the Bill's purposes; although I suspect that he may end up giving the opposite answer to AJ Balfour and saying that neither is relevant on the grounds that neither have objectives.

    Because I am working from the orange third issue of the groupings list and I realise that there may by now be a fourth, I am speaking solely to Amendments Nos. 2 and 3. I appreciate that the paucity of time that we appear to have for discussing the Bill may have tempted certain Members of the Committee to speak to amendments grouped 300 or 400 amendments ahead, simply because we may never reach them under any other circumstances.

    The noble Lord, Lord Lipsey, told us how at the age of 11 he placed a bet on a horse and won—I think—£4 11s 8d Knowing some of the jokes that the noble Lord has told against himself in the House, all I can say is that perhaps when he was 11 he was big for his age—well, he has made jokes about that before.

    Like the noble Lord, Lord Brooke, I speak to Amendments Nos. 2 and 3. I have been slightly intrigued by the way in which noble Lords have been speaking to about half the amendments on the Marshalled List during the discussion and I thought that I had better join in, but I hope that I shall do so helpfully. It occurs to me that I should speak to my Amendment No. 5 in this debate and then not move it, otherwise it might lead to yet another Second Reading debate when we reach it, which would not be a good idea. I shall do that in a minute.

    Like the previous speaker I believe that the noble Baroness has done the Committee a service. It means that the Government can be asked to come clean about their estimate of the Bill's effects in its present state on the number of people who gamble and the amount of gambling that takes place in this country, however it is measured. Do the Government have an estimate of the percentage increase in gambling, whether as the amount staked or the number of people gambling, or whatever it may be, as a result of the Bill? If they do not, they have not carried out their research properly.

    The Bill is extremely important and there is a great deal of good in it, but it will clearly have considerable consequences, particularly the proposed new large casinos. The question posed by the noble Baroness is which consequence of their policies they believe will come about. First, if they believe that the Bill will result in an increase in gambling, what is that proportion in relation to current gambling?

    Secondly, what is their view of the increase in problem gambling that will occur as a result of the Bill; and specifically as a result of the provisions for new casinos; or do they believe that it will reduce gambling? What is their view, not of their policy on problem gambling—clearly everyone is against it—but of the consequences of their policies in that respect?

    The research of Professor Mark Griffiths at Nottingham Trent University has been mentioned several times. His estimates of the number of problem gamblers in this country: 275,000 to 325,000 were mentioned in Second Reading.

    Do the Government accept that? What is the Government's view of the current level of problem gambling in this country? How do they think that will change as a result of the Bill? I think that the Government have to answer those very important questions which are directly derived from the noble Baroness's amendment.

    4.15 p.m.

    Amendment No. 5, to which I shall speak briefly and then not move when we come to it, is an attempt to specify within the licensing objectives the question of outcomes in the scale and distribution of gambling in this country. It relates particularly but not exclusively to casinos.

    The licensing objectives set out in Clause 1 are excellent:
    "preventing gambling from being a source of crime and disorder…ensuring that gambling is conducted in a fair and open way … protecting children and other vulnerable persons".
    No one can argue with those. However, none of the objectives relates to the effect that the Bill will have on the communities and economies of the different parts of the country.

    In the amendment, I am asking the Government whether they believe that, in some towns, perhaps, or places, gambling may become such a dominant part of the economy that they could be described as "gambling towns" in the way in which Las Vegas, Atlantic City and others are the obvious examples? Do they envisage that as a possible or likely outcome of the Bill? It is a very important question.

    We all know what we are talking about when we talk about a predominant economy: we have had coalmining towns and villages, steel villages and tourist towns. Is it the Government's view that, even where one of the very large new regional casinos is being proposed, gambling should never become so dominant that the general feel of the place is that it is about gambling rather than other things, such as tourism and entertainment of which gambling might be just a part, or serving as a regional centre of which gambling might be just a part? I would like the Minister to apply his mind also to that important question.

    The Committee will be pleased to know that I have thrown away most of my speech. Considering that there is a game of ping-pong going on in the other place and in this, I have had my own game of ping-pong trying to get in before now. I had hoped to make a contribution later, but that is not possible.

    As the noble Lord, Lord Clement-Jones, rightly said, this amendment covers not only fruit machines but also low-stake and prize category D machines, such as Derby races and other novelty games as well. I think that it has to be seen in that context.

    Having, as I said, thrown away most of my speech, the only point that I wish to make is to argue the point that the Government commissioned Lancaster University—not Trent University—to review the available research on the very question of gambling for youngsters. It concluded that,
    "the current evidence is insufficient to make definitive judgments"
    about the prevalence of patterns of problem gambling among young people.

    I think that the Committee would be irresponsible if it did not respond to definitive facts on this rather than to the kind of letters we have had from various groups which have not been very well informed. All the academic evidence so far which I have been able to glean has not been conclusive either.

    So I think that we would be very foolish to deny young people the opportunity to have the kind of fun they have had when there is no evidence to say that gambling is doing any great harm to them.

    I was not going to be drawn into this debate. However, when I listened to the speech of the noble Baroness, Lady Howe of Idlicote, I felt that I ought to put in just a little plug for the sort of family-run traditional seaside amusement centres that provide harmless entertainment for many thousands of visitors of all ages.

    In a previous existence, I was Minister for Tourism and I used to visit many seaside reports that were rather faded—that is probably the right way of putting it—showing a little run-down in investment. One of the reasons for that, of course, is that Spain has more sunshine and low-cost air fares attract a lot of people there for their summer holidays. However, even that may be out of the reach of the low-income families about whom the noble Lord, Lord Northbourne, was talking.

    On a rainy day in Hunstanton, in Norfolk, the beach is not a very attractive place, but there is a very nice family-run entertainment centre where young people can go and while away what I suspect they would describe as a dreary afternoon playing with these category D machines. We have not mentioned the stake. The stake on a category D machine is, I believe, 10p. For a very small sum, not much more than they would need to go round the corner to buy a burger, chips and a soft drink, they can spend a relatively extended period having an extremely interesting afternoon which otherwise would be denied to them. I think we ought to get it into proportion; I understand the problems that may occur at a later stage, but I felt that I ought to add that tuppenny coloured.

    I am now responding to five different groups, which is perfectly satisfactory to me. I will start by rebutting what the noble Viscount, Lord Falkland, said. He said that the Bill is intended to increase gambling. Gambling is increasing in ways that are out of control at the moment. The particular increase is in online or Internet gambling, and we will come to that in later amendments. We ought to start from the point that nothing that the Government are or have been doing is causing an increase in gambling. Our job is to control any increase and ensure that it minimises any risks and optimises any opportunities.

    I am sorry to interrupt the Minister so soon, but how can he seriously say that, with the introduction via this Bill of the super-casinos with their 1,250 category A machines?

    I will not go into a sixth or seventh group, which is what I would be doing if I responded to that now. I like to try to deal with the amendments before us, even though I am flexible about which amendments are before us. I would rather stick to them at the moment.

    I was asking the Minister a question that is directly related to his twice-repeated assertion that this Bill is not about increasing gambling. My question was directly germane to that.

    The Bill allows some opportunities for increased gambling, and it reduces some opportunities for gambling. It controls some gambling that in part was not controlled. You cannot make a single judgment about it; you must look at the Bill as a whole to make judgments. If you want to change parts of the Bill, you put down amendments to change those parts of the Bill. That is the way in which we operate in this House.

    I am not going to make fun of the noble Baroness, Lady Buscombe, for having two mutually contradictory amendments. The noble Lord, Lord Brooke, has got her off the hook on that one. That is fine. I understand perfectly well what she is doing, which is what in the gunners we call bracketing. In other words, she is seeking to find out where we are in a range of possibilities. That is entirely legitimate, and that is how she introduced it.

    In practice, her Amendment No. 2 would make the Gambling Commission and others with regulatory functions responsible for controlling the amount of gambling that takes place in this country. Amendment No. 3 would apparently have the effect of asking us to increase the amount of gambling, which I have already referred to in response to the noble Viscount, Lord Falkland. There are two problems with this; everyone recognises that gambling is now a part of mainstream leisure, although it is a part with special regulatory risks that need appropriate safeguards. The Bill provides those safeguards. Whether adults gamble and how much they gamble are matters for their own choice. We may disapprove of their choices morally or aesthetically, or whatever way we like, but that is another matter. Whether the amount of gambling that takes place is disproportionately great surely is a matter of opinion and for moral debate, rather than for statute.

    In any case, Clause 22 states that the responsibility of the Gambling Commission is to "promote the licensing objectives" in everything that it does in exercising its functions. Those objectives pervade everything else in the responsibilities of the Gambling Commission in the Bill. Clause 22(b) states:
    "To permit gambling, in so far as the Commission thinks it reasonably consistent with pursuit of the licensing objectives".
    That is the middle position between trying actually to limit or trying actually to encourage the level of gambling which is already increasing in this country.

    Amendment No. 4 seeks to ensure additional protection for people on low incomes. Again, I sympathise with that purpose. One aspect of problem gambling—apart from pathological gambling, perhaps—is that people are spending money that they cannot afford to spend. Equally, those who have less money can afford to lose less; that is a matter of mathematics. However, it is demeaning to people on low incomes to imply that they are more at risk of gambling excessively than anyone else. No evidence suggests that they are.

    The intervention that I made was not a moral one. I made it because the behaviour of adults can deeply affect children and other vulnerable people. It is there that we may have a responsibility, as a nation and a parliament.

    I entirely agree. I was going to refer to that when I came on to the noble Lord's amendment and those in the group with Amendment No. 96. As I said by quoting Clause 22, the point is that the Gambling Commission is already charged to protect vulnerable persons from being harmed by gambling, whatever their income. In any case, surely there are practical problems about requiring gambling operators to check on people's income before taking them on as customers. I do not see how that could be carried out.

    Amendment No. 3 appears to encourage and increase the amount of gambling that takes place. I say on both Amendments Nos. 2 and 3 that we are doing neither. We accept that people want to gamble and that it is a legitimate thing for them to do. We say throughout that, subject to the overriding principles laid down in the licensing objectives, it is not the job of government to dictate to people how they spend their leisure time. However, it is the job of government to ensure that, so far as possible in everything that we do, we have regard to the precautionary principle.

    I am more than happy to agree with the sentiment behind what the noble Lord, Lord Northbourne, says with Amendment No. 52A. The commission will certainly want to take into account the protection of children and families in the preparation of its codes of practice. As he rightly said, it will take account of the problems of children both being addicted themselves and growing up in families with adults who are addicted. It is helpful that he made those two relevant points. The Bill also makes extensive provision for the control of advertising, credit and inducement, which is entirely relevant to the points that the noble Lord makes on the protection of vulnerable consumers and their children. I shall come to evidence in a moment when I deal with the points made by the noble Baroness, Lady Howe.

    The noble Baroness has been misrepresented to some extent. Her amendment is less wide-ranging than some people have said. Under it, children would be permitted to play category D machines with non-monetary prizes, or monetary prizes if the machines conform with regulations made by the Secretary of State. I presume that she wants the Secretary of State to exempt from any ban cash prizes such as "penny falls", which are usually accepted as being risk-free, but to outlaw children playing unsuitable types of gaming machine. If I have her right, some of the comments about her amendments were wide of the mark.

    I respect the intentions and the sincerely held convictions about that. We have looked carefully at the case for prohibiting young people from playing category D gaming machines. We accept that there is some evidence that low-prize gaming machines are no less harmful than higher prize gaming machines. The characteristics of certain gaming machines—traditional fruit machines, in particular—may be inherently addictive, and children may be more prone than adults to becoming addicted. But we do not believe that the existing evidence is sufficient to justify a ban at this stage, and I think that the debate that we have had this afternoon very much confirms that point.

    4.30 p.m.

    The amendments seek a ban on children playing fruit machines. I accept that these machines probably involve most risk of harm but I cannot accept that, even with those machines, the research evidence that we have is yet proven. The evidence suggests that only a small minority of children encounter problems with low-prize gaming machines. The figure that we have been given is that 5 per cent of children have problems. The difficulty with that evidence is that that 5 per cent of children with problems are also to be found in countries where gambling by children is not legal. The implication of that must be that most of the problems encountered by children are not due to commercial gaming at all but to games of poker behind the bike sheds or in the sixth-form room or wherever it may be.

    So I really do not think that it can be asserted that the kind of very mild gambling that takes place in seaside arcades or family entertainment centres can be responsible for a significant part of that 5 per cent of children with problems—if, indeed, we accept that research, and I think that that matter is still to be debated. The dispute between Lancaster and Nottingham Trent Universities gives force to that point. We do not know, but we accept that there is a debate to be had. We want to be in a position to react properly if a more compelling range of evidence emerges about substantial levels of enduring harm.

    We are taking action on this matter. My noble friend Lord Lipsey is right: we are taking away fruit machines from something like 6,000 locations—fish and chip shops and so on. That is a positive restriction on children gambling in premises which cannot be licensed or regulated.

    But the more important point is that we are keen for the evidence to be improved. We are keen to know the answer, and that is why we have a reserve power in Clause 58 to introduce a minimum age limit. I am surprised that the noble Baroness, Lady Buscombe, has indicated her intention to oppose the Question that Clause 58 stand part of the Bill because, to my mind. it is an essential part of this argument.

    I can assure the House that, if firm evidence emerges that playing any type of category D machine can lead to problems for children, after we have consulted the interested parties we shall not hesitate to ask Parliament to use that power in relation to those machines. I believe that Clause 58 provides the necessary assurances and safeguards which the noble Baroness, Lady Howe, is seeking, and I think it is right that we should postpone a judgment on something about which we simply do not know enough.

    I now turn to Amendment No. 5 in the name of the noble Lord, Lord Greaves. Again, I sympathise fully with the spirit of what he says. I would hate the idea of having in this country what he calls "gambling towns". I did not particularly like Las Vegas when I went there, and I can give him an unqualified assurance that the proposals in the Bill for eight large and eight small regional casinos will not result in anything like the vision that he conjures up of towns dominated by gambling. I think that that is true nationally, regionally and locally. This will not become an economy dominated by gambling—unless we make mistakes, which I do not believe the Bill does.

    If there is to be any change following the pilot phase, when there will be a limited number of casinos, then Parliament will have to give its approval and it will have to do so after very serious consideration by the Gambling Commission, local authorities, government and everyone else concerned. So I think that I can give the noble Lord the assurance that Amendment No. 5 is not necessary.

    I was asked a number of questions, some of which I cannot quite fit into a debate on the amendments before us. Nevertheless, I shall try. In particular, the noble Lord, Lord Greaves, asked me about the levels of gambling and problem gambling. The difficulty is that this is a moving target. As I said, gambling is now increasing. The issue is whether the people who gamble are to be protected effectively or not. This Bill provides levels of protection for people who gamble which are simply not available under existing legislation.

    The best numerical answer I can give to his question is that the level of problem gambling was estimated in the year 2000 to be at around 0.6 to 0.8 per cent of the adult population. Everything in the Bill is designed to keep that down. I cannot tell this Committee that there will be no increase in gambling or problem gambling. That would be to stop the world turning round the sun. I cannot do that: gambling is increasing. There would, however, be more of an increase in problem gambling if we did not have the protections in this Bill—that is why it is necessary.

    I have a lot of sympathy with all of the amendments in this inflated group, but I do not think any of them ought to go into the Bill.

    The Minister said the level of problem gambling in 2000 was 0.6 to 0.8 per cent of the adult population. Is that the same as 275,000 to 325,000?

    I think, without my calculator, the noble Lord, Lord Greaves, can do the sum as easily as I. Those figures—275,000 to 325,000—sound very suspicious to me. As a cookbook statistician, I would run a mile from anybody who was as precise as that.

    I am grateful to the Minister for allowing us to have a really important and good debate, not only on the amendments that were originally put down in this grouping, but on others that have been included.

    I noticed straightaway that the Minister quickly disagreed with the noble Viscount, Lord Falkland, who had said that the Bill is intended to increase gambling. Of course, the noble Viscount, Lord Falkland, was a member of the draft scrutiny committee. It is interesting that he felt so certain that the Bill is intended to increase gambling. As the Minister said, gambling is increasing. The Bill, he will accept, facilitates that, albeit within—as he has argued—a controlled framework, and with safeguards. I can entirely accept why noble Lords have questioned whether the safeguards are sufficient.

    I thank my noble friend Lord Brooke of Sutton Mandeville for assisting me in articulating why I have proposed Amendments Nos. 2 and 3. The noble Lord, Lord Greaves, said that it was time to come clean about what the percentage increase in gambling is, and research needs to be done into this. What research is there that has, perhaps, driven this Bill and the policy behind it? What about the consequences? I agree with the Minister that it is a matter for moral debate. However, we also have a responsibility to ensure that we all do what we can to protect the interests of children and the vulnerable in particular.

    Before the noble Baroness, Lady Buscombe, leaves the point of research, I would like to say something that I may not have the opportunity to say again.

    I feel passionately about the issue of research. It is true that the last prevalence study we did was carried out in 1999–2000. It is accepted worldwide as being one of the best research projects into gambling prevalence and problem gambling that there has ever been, because it is based on a very large random sample, of which the minority who have to be examined in more detail were given psychological screening tests for problem gambling. It is good stuff, and we are going to do it again. We are going to start very soon after Royal Assent, and it will be available before any of the provisions of the Bill come into force. I can assure the noble Baroness that we take these research issues very seriously indeed.

    I thank the Minister, as I am sure that all Members of the Committee will, because I recognise that noble Lords who spoke on Second Reading felt that this area was hugely important. As we have all accepted this evening, time may he of the essence so wherever possible it is important for us to give such assurances for the future, both in seeing the Bill on to the statute book and thereafter. I hope and infer from that response that research will be ongoing.

    On my Amendment No. 4, yes, we referred to those on low incomes. I would certainly not want to be accused of being patronising in any way. I refer to the assistance given by the noble Lord. Lord Northbourne, who explained that we want to protect those who can ill afford to cope with an effect that will be more powerful on those who have less to lose, if I may put it that way. I do not believe that people on low incomes are at more risk of more gambling, but the effect on people on low incomes may be more powerful.

    In that sense, I am grateful, as I am sure is the noble Lord, Lord Northbourne, for the Minister's response to Amendment No. 52A, when he accepted that it will be important for the commission to take into account children and families when assessing or reviewing codes of practice for gambling and gaming in future.

    I am concerned about the amendment of the noble Baroness, Lady Howe. We are considering a similar issue of evidence. It is tremendously important, if such a big decision is to be taken to remove the right of children to play category D machines, that that is based on serious evidence. In that event, we are talking about destroying an industry—yes, it is an industry—that has existed for many years and, as my noble friend Lord Ullswater said, provided a huge amount of enjoyment for young people—including me, when I was a child. In fact, I must say that I was quickly put off gambling for ever, rather like the noble Lord, Lord Lipsey, although I thought that he said that he bet on a dog—

    I did not see it; quite quickly, when I had lost my entire pocket money, which was half a crown—perhaps it is rather ageing to say that—I realised that that was a pretty lousy way of spending one's money and that sweets were rather more enjoyable and long term. I do not mean to make light of what is a terribly important issue. I recognise that the Government have said that they will continue to review it.

    There needs to be more research. I agree with the noble Lord, Lord Clement-Jones: all of a sudden there has been an awakening of deep concern about children using such machines expressed in an awful lot of identical letters, as though it is a new issue. Children have been playing those machines for many years. To deprive them of that enjoyment—because it is fun—must require a huge amount of serious research and further thought. That said, much of what the noble Baroness, Lady Howe, said, I entirely respect and have sympathy with.

    The noble Lord, Lord Greaves, also helpfully referred to his amendment, Amendment No. 5. Again, that provided more opportunities for the Minister to explain where the Government are coming from in proposing the Bill. I am grateful to the noble Lord for his full reply. There are many important issues. As someone has said, this is a truly important Bill, and I am glad we have the opportunity to raise some of the issues so early on in our debates. For now, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [Amendments Nos. 3 to 5 not moved.]

    Clause 1 agreed to.

    Clauses 2 to 4 agreed to.

    4.45 p.m.

    Clause 5 [Facilities for gambling]:

    I remind the Committee that if Amendment No. 6 is agreed to I cannot call Amendments Nos. 7 or 8 because of pre-emption.

    moved Amendment No. 6:

    Page 3, line 3, leave out subsection (3).
    The noble Lord said: I will be brief in moving this amendment, because, as it happens, the Minister has fulfilled the expectations of him in putting forward his own amendments under this group, Amendments Nos. 7 and 8.

    The Explanatory Notes to the Bill state that mobile telephone operators,
    "who do nothing more than act as a carrier of information for persons providing facilities for gambling or for consumers partaking in gambling"
    will not require regulation under the Bill. My motive in putting down Amendment No. 6 was simply that subsection (3) appeared to be one of the areas in the Bill that did not reflect this principle, and there was a risk that mobile operators could be required to be licensed merely for providing third-party gambling services. The Minister has now cured that with his amendments. I beg to move.

    I do not specifically have anything to say on Amendment No. 6, but it is the first opportunity I have had to speak since Amendments Nos. 2 and 3. I did not speak on Amendment No. 4 in my first speech, because I thought I would have the chance to speak on it later. If we are going to move way beyond amendments, and they are not going to be moved when we reach them, it would be helpful to have advice in advance that that will be so, so that one can bring one's speech into the original group.

    I specifically said that. The noble Baroness, Lady Buscombe, said so when she introduced Amendment No. 2. I said it when I responded to her, and in an intervention before the right reverend Prelate spoke.

    I apologise to the Minister. I did not hear the first remarks of the noble Baroness, Lady Buscombe, so all his subsequent remarks were academic, in a sense, because they were hung on the noble Baroness's original comment. I do not begrudge my loss.

    I will be brief. Forgive me if I repeat some of what the noble Lord, Lord Clement-Jones, has already said. I welcome the Government's concession to the concerns raised by the mobile phone operators to Clause 5. They welcome the explanation on page 10 of the Explanatory Notes to the Bill, which clarifies subsection (2)(c) of Clause 5, stating that mobile telephone operators,

    "who do nothing more than act as a carrier of information for persons providing facilities for gambling or consumers partaking in gambling"
    will not require regulation under the Bill. However, several areas remain in the Bill that do not appear to reflect this principle, and there was a clear risk that mobile operators could be required to be licensed, as the noble Lord, Lord Clement-Jones, has said, merely for providing third-party gambling services.

    There are still issues with Schedules 1 and 2, which we will discuss later. In particular, Clause 5(3)(b) explained that the exemptions in subsections in subsection (2)(c) are disapplied if,
    "the facilities are adapted or presented in such a way as to facilitate, or draw attention to the possibility of. their use for gambling".
    Mobile operators currently provide access to a number of third-party betting intermediary services that are available from their WAP portals. This provides a direct link to the gambling operators' own branded websites. In this situation, the mobile operator is merely providing a link between the third party and customers, yet would seem to be caught by the definition in the unamended Bill.

    It was argued that it is too simplistic to say that merely pointing to a gambling site is providing facilities for gambling and will unnecessarily bring within gambling regulation platform providers for whom it would simply not be relevant to acquire a gambling licence.

    Can the Minister indicate the type of criteria that may be used in subsection (4)(c) and (f) of the government amendment?

    I am grateful for the manner in which the amendment has been moved and I am glad to respond by speaking to Amendments Nos. 7 and 8, because they are intended to clarify the circumstances in which providing facilities for remote communication will fall within the definition of providing facilities for gambling in the Bill. I shall be honest and say that when I first read Clause 5 I did not understand it and when I first read my amendments I did not understand them. I can best answer the noble Baroness, Lady Buscombe, by giving examples, rather than by talking about the type of criteria, because I do not think that I would understand that, either.

    Generally, Clause 5 exempts from regulation those who act as mere carriers of electronic information by providing facilities for remote communication. However, we want to ensure that this exemption does not mean that people escape regulation where they make facilities for electronic communication available, such as computers or mobile phones, with the express intention that the facilities should be used for gambling. For example, it would be wrong if a person could use an Internet café to offer dedicated and exclusive Internet access to gambling and avoid the regulation of the Bill.

    On the other hand, if you switch on the Sky TV interactive menu, Sky should not be treated as providing facilities for gambling. So the Internet café in my example would be in and Sky interactive would be out. That is the explanation of the amendments that I understand and I hope that it will be acceptable to the Committee.

    I thank the Minister for that response. That is what is understood in the industry and is entirely acceptable. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Page 3, line 4, leave out "and"

    Page 3, line 6, at end insert ", and

    (c) the nature, adaptation or presentation of the facilities is such that—

  • (i) they cannot reasonably be expected to be used for purposes other than gambling, or
  • (ii) they are intended to be used wholly or mainly for gambling.
  • (4) The Secretary of State may by order, for the purposes of subsection (3)(c)—

  • (a ) provide that facilities of a specified nature, or adapted or presented in a specified way, cannot reasonably be expected to be used for purposes other than gambling;
  • (b) provide that facilities of a specified nature, or adapted or presented in a specified way, can reasonably be expected to be used for purposes other than gambling;
  • (c) specify criteria by which it is to be determined whether facilities can reasonably be expected to be used for purposes other than gambling;
  • (d) provide that facilities of a specified nature, or adapted or presented in a specified way, shall be taken as being intended to be used wholly or mainly for gambling;
  • (e) provide that facilities of a specified nature, or adapted or presented in a specified way, shall be taken as not being intended to be used wholly or mainly for gambling;
  • (f) specify criteria by which it is to be determined whether facilities are intended to be used wholly or mainly for gambling."
  • On Question, amendments agreed to.

    Clause 5, as amended, agreed to.

    Clause 6 agreed to.

    [ Amendment No. 9 not moved.]

    Clause 7 [ Casino]:

    Page 3, line 42, at end insert—

    "() In this Act "casino premises" means premises in respect of which a casino premises licence has been granted under section 148(1 )(a)."

    The noble Baroness said: In moving the amendment, 1 shall speak also to Amendments Nos. 12, 180, 221 and 363.

    This group of amendments addresses the important issues of identity and money laundering. The three licensing objectives that underpin the Bill are: first, preventing gambling being a source of crime or being associated with crime; secondly, ensuring that gambling is conducted in a fair and open manner; and thirdly, protecting children and other vulnerable persons from being harmed or exploited by gambling.

    However, it remains unclear how the Bill can achieve those objectives in respect of casinos, when it will also remove the current requirement to check the identity of every customer before they enter a casino. Currently, every customer entering a casino must either be a registered member, having registered with the casino at least 24 hours earlier—as stated in the membership rule—or a member's guest who can provide satisfactory evidence of their identity.

    I wish to take a little time to outline the detail of the amendments. The first is essential and all the other amendments in my name consequentially flow from it. Amendments Nos. 10 and 363 deal with the definition of a casino. It is currently defined in the Bill under this clause as "an arrangement" and, therefore, includes online casinos. The amendment is necessary to include a definition of "casino premises" to identify the physical building where the public may enter and where ID will be required.

    Amendment No. 12 ensures that an offence under Part 4, with regard to allowing a child or young person to gamble, will be treated as an offence against the mandatory conditions of a licence as prescribed by my Amendment No. 221 to Clause 165.

    Amendment No. 180 to Clause 149 is particularly important in this debate on identity. It ensures that the gaming floor is a "designated gaming area", separate from other entertainment facilities that may be available within the casino premises. Having been to Las Vegas with my family, that point is especially close to my heart. Such segregation is not only essential to help protect the young and vulnerable but also provides space inside, out of the rain, as often happens in the UK, whereby identity can be checked before gambling. However, that process will not detract from the entertainment of the evening as a whole or access to other non-gambling facilities.

    My amendment to Clause 165 inserts mandatory conditions on a casino premises licence; namely, that no gaming tables or machines can be operated off a designated gaming area, as I have already described; that no individuals can be admitted to that gaming area unless there is satisfactory evidence of identity; and that door supervision to the gaming area is maintained at all times when it is open. I believe that satisfactory evidence of identity should be a means of establishing the name, address and a photographic likeness of the person producing the evidence. That could easily be produced by tourists in the form of a passport, which would not rule out this important trade for casinos. It would simply require a little advertising regarding the need to bring it along.

    Once identified for the first time, it is possible that their records will be kept on a system maintained by the casino for such purposes, as many loyalty member details already are. Such ID checks would eliminate any doubt about the age of customers and enable the effective operation of self-barring schemes for problem gamblers. Most importantly, mandatory ID checks would allow for any suspicious or criminal activity, such as money laundering, to be more easily monitored and eliminated, as the details of every person on the premises would be recorded and readily available.

    At this point I make it absolutely clear that with regard to proposed regional casinos I am not asking the Government to impose an identity requirement at the entry point to the casino building itself, or buildings if it is a large complex, that is, the overall leisure facility. I am asking simply for ID to be mandatory at the point of entry to the gaming areas. In that respect, I would appreciate the Minister making it absolutely clear in his reply that there will be no merging of gambling with other leisure facilities.

    I know from personal experience that in many existing casinos across the world you will find slot machines at the point of entry to the casino building. I remember that when I visited Las Vegas for the first time, we had a difficult time checking in because we could not find anything even approaching a conventional reception desk—only machines. That must not happen in this country. We must send a clear message to the Gambling Commission that that was not Parliament's intention. The Joint Committee also made that point very clear in its Recommendations 5 to 8. In particular, Recommendation 5 states:

    "We support the Government's proposals to allow children into the non-gambling area of regional destination casinos, provided that there are appropriate barriers and a suitable distance between the gambling and the non-gambling areas".

    In spite of that, the Government have so far resisted calls to make ID on entry to the designated gaming areas of casinos a legal requirement, which would appear to be inherently inconsistent with their determination to introduce a national identity card scheme to protect us all from illegal, criminal and terrorist activity. The Government have argued that in the fight against crime and money laundering, money laundering regulations themselves will he sufficient. However, I believe that that is not as clear cut as the Minister would like us to believe.

    5 p.m.

    It is vital that the principle of requiring ID on entry to all gaming areas within casinos is enshrined in the Bill, so that the casino industry can remain free from money laundering and associated crimes. The appeal to criminals of a casino with no ID requirements is well illustrated in the National Money Laundering Strategy report of 26 October 2004, provided by the National Criminal Intelligence Service to Her Majesty's Treasury. It states:

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

    If every customer has to provide ID on entry to a gaming area, as is currently the case, it will counter any suspicious or criminal activity, such as money laundering, and allow it to be more easily and effectively monitored and eliminated.

    Currently, the EU second money laundering directive requires ID only when buying or selling a minimum of 1,000 worth of chips. However, the UK Money Laundering Regulations 2003, which implement the directive in the UK, tightened the requirements so that ID is required on entry to a UK casino. Clause 8 of the directive states:

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

    That tightening obviously ensures consistency with the Gaming Act 1968 24-hour rule on membership.

    The danger though is that if there is no requirement in the Gambling Bill for ID on entry to a casino, as there is in the 1968 Act, the Government are very unlikely to tighten the third EU money laundering directive currently under discussion, which, as I understand it, follows the same principle as the second directive and merely requires ID on buying or selling 1,000 worth of chips. If ID is requested only when a purchase of 1,000 or more chips is made, many customers will simply slip through the net unrecorded, which is unacceptable. I beg to move.

    I support the amendment put forward by the noble Baroness—to which we on these Benches have added our names—which she admirably and comprehensively introduced. I shall speak also to Amendments Nos. 19 and 139 standing in my name and that of my noble friend Lord Addington.

    It is worth saying the provenance of all those amendments. It is a very interesting mixture. which demonstrates the range of support across the board. Both UK casino trade associations and the Evangelical Alliance demonstrate the spread of concern—strongly shared on these Benches—that the 24-hour rule is going out of the window in this Bill. Currently, it is not being replaced by anything. We strongly believe that this Bill should have a sine qua non, an ID requirement, for entry into the casino areas.

    I support what the noble Baroness said. When we are referring to resort casinos, we are not talking about entry into the total facility, we are talking about entry into the gaming areas. The fact is that nowadays, particularly with the continental driving licence, producing ID and having it processed quickly should not be an issue.

    Immediately after putting down these amendments, we obviously received representations from some of the larger overseas operators about the problems associated with—

    I thank the noble Lord for giving way. Will the proof of identity be just a proof of age or does it have to have a photograph? Do you have to have a driving licence? Do you have to have a passport? If you have nothing with a photo, will it be acceptable? How will it work?

    It should be quite clear that it should be photographic proof of ID, along the lines of a driving licence. Nowadays, old driving licences, even for people like me who have held a driving licence for a long time, are, increasingly, being replaced by that kind of photo ID. The argument made by those larger operators is that it takes three minutes per person to process ID in this way. Frankly, on this form of ID there is a photograph, a date of birth and a name which should be very easy to process when entering a casino.

    I am sorry to persist, but suppose you do not have a driving licence or a passport or anything with a photograph of yourself on it. Are you then prohibited from entering a casino?

    It is quite clear that such a person should be prohibited; he should have proof of identity. Changing from a system under which one had to sign up 24 hours before entry to this system, one cannot simply allow a free-for-all with the new casinos. It seems to me that that is a bridge too far and is precisely why these amendments have been tabled.

    Let us be clear. Is the noble Lord saying that if you do not drive a car—if you do not have enough money to drive a car—and if you do not go abroad so do not have a passport, there is no way you should enter a casino? Surely, that is discriminatory. Will we not get into trouble for that?

    All the major casinos have plans to issue identity cards of their own to those who have their identity vetted. They would do that through a utility bill or whatever. Those who do not have on-the-spot ID can obtain ID generated by the casinos. It seems to me that that is an extremely sensible check. If someone were to exchange chips of a certain denomination in a casino he would require such an ID. Are we really saying that ID is not needed simply to stroll around a casino, particularly if under-age? I do not believe that that argument is sustainable.

    I am sorry to persist; please forgive me. If you have no method of saying. "This is me", should you take an electricity bill or a gas bill to a casino to prove who you are? You could be anyone.

    I do not believe that it is beyond the wit of most people to prove that they are who they are and people should be required to do that once they enter such areas. I do not believe that that places too high a burden on people. Currently, if people wish to enter a casino, they need to have membership. This is a relaxing of that rule. We are not trying to reintroduce membership; we are saying that ID should be required.

    Money laundering may well be dealt with adequately under the third directive. At Second Reading the Minister made it clear that it was advisable not to confuse the issue of ID on entry with the issue of money laundering. The exchange of chips will be dealt with by the third directive and no doubt we can discuss that when the regulations are debated by the House.

    It seems to us on these Benches that moving straight from a situation where we change from a 24-hour requirement to a nil requirement will fuel some of the issues about which we have already spoken today. First, there is the issue of problem gambling. Currently, as I have said, we have a very low rate of problem gambling. Voluntary self-barring schemes to deal with addiction are in operation in many UK casinos. They enable problem gamblers to request that their casino membership is suspended and entry denied to them. If there is no requirement for I D on entry to a casino, such schemes can no longer operate. That is not acceptable to us.

    There is also the ability to prevent under-age gambling, about which we have already spoken today. Without IDs, casinos will have to rely on the vigilance of their staff. We have received representations saying that when anyone appears to be under the age of 25, the casinos will try to ensure that they ask him or her to produce ID. It is difficult to see how a Bill with the stated aim of protecting children and the vulnerable can disregard the requirement to check the age of all customers at the most efficient place, the point of entry to the casino.

    I know that the Government have the best of intentions as they have included Part 4 of the Bill entitled "Protection of children and young persons", but we do not believe that that is sufficient to prevent under-age gambling. That part of the Bill does not require that the age of every customer is checked on entry and, moreover, age control alone is not sufficient to counter the potential for crime, money laundering and so on.

    The arguments of the larger operators have not been met. Football grounds and concert arenas have successfully proven that thousands of people can be admitted in a short space of time following a ticket check and often a bag search. Therefore there is not a valid reason for excluding ID entry requirements from this legislation.

    What I know about this issue is what I learned when I was on the scrutiny committee for the Bill. As my noble friend Lady Buscombe said, we recommended that the space between the leisure complexes within the large casinos and the actual casino part should be well protected. But the evidence that we took from those who are likely to invest in the casinos persuaded us that they have extremely efficient systems for dealing with this transfer of people. Only adults would be allowed to transfer. We were satisfied with that.

    The important point is that it is the responsibility of the casino operators—all of whom are licensed in some form or other within that area—to make sure that they comply with all the rules within the Bill. In that sense they have a responsibility to ensure that that system of movement from the leisure part to the casino part is well policed. The evidence persuaded me that they were very well aware of that and from their experience knew how to deal with it.

    Over the issue of money laundering I was impressed by the evidence from my noble friend Lord Steinberg who said that from his experience there had been no incidents of money laundering in casinos. More to the point, from what I know in the finance industry, all the cards and hills you might have of what you pay does not stop money laundering. What stops money laundering most of all is not being prepared to take cash.

    The fact that you have a card to get into the casino does not mean you will not have your pockets stuffed with cash and that you put one lot of cash down and get another lot of cash back. That is the key to the money laundering system. I do not think that a card will deal with that issue. If there is a determined person who has masses of cash that he wants to launder, he will find a way of laundering it.

    I am not all that sympathetic to the amendments. We are adding an extra cost and a problem for people who want to transfer easily from one part of the casino to the other. I am not satisfied that identification cards will solve the problems that are being suggested might arise. I have considerable confidence that the casino operators are by far the best to decide. The Bill does not prevent casino operators issuing cards if they so wish. If they find from their experience that is the best way to deal with that issue, then by all means they can do it. But I am not satisfied that it is necessary to put in the Bill that everybody has to do it.

    I support these amendments and the intention behind them. I admit that I would still prefer to have in place a 24-hour cooling period when people can decide whether they wish to go into the casino part of the grand establishments that we are told are being proposed as super-casinos. But if we cannot have that the ID is an essential requirement. I would not be satisfied with leaving it entirely in the hands of the casinos, however much they protest that they are quite capable of doing it and would take responsibility for anybody who transgresses.

    Having a photo is the easiest possible way and would not take much time. I can give your Lordships an example because it happened to me the other day. When I was delighted to be chosen to represent your Lordships in a bridge match against the other place it took place at Crockfords—a very hallowed institution which I had not entered before. They knew I was coming, but as I entered I was firmly made to have my photograph taken and it did not take three minutes—it took about two seconds. It would also be a check on the age aspect because photographs tend to make people look younger than they are. Almost certainly, a photograph of oneself will be a fairly true representation and someone who is underage is unlikely to get in.

    I hope that the Minister will give proper consideration to this point. As I said, I would prefer a 24-hour rule, but this measure is essential if we are going to do without that.

    5.15 p.m.

    I also support the intention behind this amendment. I have listened very carefully to the speech of the noble Lord, Lord Clement-Jones, and the intervention of the noble Baroness, Lady Golding, and to the debate, which is what I hope we all try to do. I understand the concept of identifying people and we can argue about whether cards should have photographs. We know why they should have photographs: so that we can compare the card to the person who is holding it. That is fair enough. However, I cannot understand why anyone thinks that knowing who the person in front of you is will have any effect on that person's behaviour.

    If I was on the turnstiles of a casino or even in your Lordships' House and someone who I have never seen before in my life appears and produces a bit of plastic with their photograph and maybe their thumbprint on it, I can see the photograph and thumb print and write their name down. If someone then says, "Who is that chap'?", I can say that he is John Smith or Joe Bloggs. But that has absolutely no effect on that person's behaviour when they have gone through that door, whether in your Lordships' House or in a casino. It will have absolutely no effect on problem gambling that I can see—if that is the intention and desire behind this measure. I cannot see the logic of it.

    I can of course see that there is some logic in having a card with a photograph that will identify someone's age—that is helpful—but I do not think that it would require a card with a photograph on it to persuade one of the Doorkeepers of your Lordships' House that we are all over 18. I regret to say that there are other methods that they can use to tell that we are all over 18. For most people going into these casinos or anywhere else, it is completely pointless because it is obvious that they are over 18. There will clearly be a group of young people—although obviously not very small people in short trousers, who are clearly under 18—over whom there will be a question mark. I do not know what percentage that will be. If it is a licence condition of these establishments that they do not admit people under 18, and if letting them in will cost them their licences and wreck a massive investment in those businesses, I suspect that they will focus very carefully on making sure that people under the age of 18 do not get in. The few pence or pounds that those under-18 year-olds may spend will be nothing compared with the damage that would be sustained to that business if it had its licence taken away. That is the great incentive. It is well within the powers of the commission in the Bill to keep looking at this particular issue, to identify, improve and resolve it.

    Although I totally understand the intention behind this measure and have great sympathy with it, in practice it will not work and cannot be made to work. I do not see that there are any major advantages in inflicting it on casino operators.

    I also have a great deal of sympathy with the thinking behind these amendments. I have listened to this debate carefully and with some appreciation to the debate that has taken place. The issue is to look at the arguments that are put forward in debate, to look at the amendments themselves and to see how far the Bill as drafted satisfies the objectives that have been expressed. I am pleased that the debate has concentrated on two issues—on keeping out under-18s from casinos and on money laundering. I was pleased to have the explicit assurance of the noble Lord, Lord Clement-Jones, that the objective of these amendments is not to slow down entry to casinos as such.

    I will take each of the amendments in turn, go on to the arguments in debate and then return to the amendments. Frankly, I do not see what Amendments Nos. 10 and 363 add, because casinos are defined in Clause 7 and the issue of casino premises' licences later on in the Bill applies to those casinos as defined in Clause 7. So I do not think there is any particular affect to those two amendments.

    Amendments Nos. 19 and 139 would introduce a requirement that persons may only enter the designated area on producing proof of age and identity. Amendment No. 110 says that, where anyone involved in running a casino commits one of the children and young person's offences under the Bill, the casino breaches its premises licence as well as committing an offence under Part 4. Amendment No. 180 would introduce a new requirement that each casino premises licence identifies the gaming area for the casino, and the noble Baroness, Lady Buscombe, referred to that in her speech as being sure that we are not merging the gaming and non-gaming areas. Amendment No. 221 makes it a mandatory condition that gaming tables and gaming machines are only operated in designated gaming areas, that no person may enter the designated gaming areas without producing satisfactory evidence of identity, and that there is door supervision.

    The purpose of these amendments is, I understand, twofold: keeping out under-18s and money-laundering. We have to look at entry rules in the light of those two purposes. Of course the Gaming Board has many years of experience already and great success in co-operating with the industry in making sure that only adults use casinos and other gambling premises where children are excluded. Casinos in other parts of the world have extensive experience of keeping children out. The Bill does not take away from any of that, it builds on it. It contains tough and comprehensive powers to ensure that children will be kept out. In British casinos there will be rigorous barrier checks—I think that is the question I am being asked—enforced by trained and licensed staff. I am grateful to the noble Baroness, Lady Buscombe, for the assurance that she is not talking about checks on entering into the non-gaming area, but I can certainly confirm to her that there is no merging of gambling and other facilities, and that there will be rigorous barrier checks on entering into the gaming area. I can also confirm, referring back to Amendment No. 221, that there will not be any gaming tables or gaming machines outside the designated gaming area.

    There will be a separate gaming area, entry to which will be controlled by staff members. Where staff monitoring entry have any reason to doubt the age of any person entering the adult-only area, they will be required to challenge them to produce identification that proves their age. All this is in the Bill now, and it will be reinforced by premises licence conditions. I am grateful to the noble Lord, Lord Wade, for the arguments that he made on this point.

    Of course there will be substantial penalties. If casinos allow children or any person under 18 into the gaming area, they will commit a specific criminal offence in Clause 45, of causing or permitting a child or young person to gamble. If they allow a person under 18 into their casino and did not take all reasonable steps to confirm the age of the person, they will not be able to avail themselves of the defence in Clause 62 which provides a defence on reasonable belief about a person's age. The onus of responsibility, of law and of regulation, is on the operators of casinos. They must keep gambling and non-gambling areas physically separate, they must be able to prove that they took every reasonable step to confirm the age of persons entering the gambling area, and if they fail to meet those standards, they risk losing their licences and they can face unlimited financial penalties.

    We are also giving the Gambling Commission the power to enforce this, to police it properly. For the first time, the Gambling Commission will be able to use mystery shoppers, under the age of 18, to test the effectiveness of these controls. If any of those children get through, casinos certainly run the risk of prosecution. Those are tough protections which reflect the Government's absolute commitment for the protection of children. With those measures in place and with what I have said about the separation of gaming and non-gaming areas, I believe that the measures suggested by the amendments are not necessary. They would require every casino customer to carry photographic identification on each visit to the casino which also proves their name and address. The noble Baroness, Lady Golding, made the point that we have driving licences with photographs and our address on them, but an awful lot of people do not.

    Would the Minister not agree that at the moment, if somebody wants to gamble in a casino, they accept quite readily that they must provide some sort of ID and must go through some sort of membership process in order to do so? Why, then, is it right suddenly to lift that sensible barrier to allow people to go into those gaming areas, when it is entirely a game of chance whether they will be checked?

    I think I should turn that argument around. This Bill abolishes membership requirements for casinos, and nobody has suggested that they should not be abolished. Once you abolished those requirements, you have to look at the purpose of identification. If the purpose is two-fold—first, proof of age, and, secondly, money-laundering—it is not rational to require photographic identification for everybody. Not a single one of us here would pass for being under 18. No. I am sorry—the noble Lord, Lord Addington, would.

    Perhaps that is true.

    We must look at what these provisions are for. They are not to slow things down or reintroduce membership by the back door but to protect young people from getting into casinos, prevent casinos admitting young people and to protect us against money-laundering. If the amendments are taken too literally they will amount to a reimposition of membership criteria. Nobody, throughout the whole process that we have gone through—whether the Greenway committee or anyone else—has suggested that.

    And nobody has suggested in the course of the debate that that was the intention. The noble Baroness, Lady Howe, may have regretted that the 24-hour rule did not apply, but there was no intention on the part of any of the speakers in favour of the amendment that that should be the case.

    I am glad to hear it. With regard to proof of age, there are perfectly good analogies in other areas in which under-18s would not be allowed, and those should be applied to casinos as well. The penalties for failing to observe proof of age are very powerful.

    I turn to the issue of money-laundering and shall return later to any other issues that the Committee may have. Under the second directive, money-laundering checks are imposed on entry to the casino and require identification checks. With other member states, we are considering a third directive on money-laundering. I cannot predict what form that directive will take; it is before the European Parliament at the moment. The first option is that the checks of identification, which will be far more thorough than simple photographic identification, will take place on cashing in or out of the casino. Identification on entry is an acceptable alternative—and that is what we have in the second directive. I do not know what the result of that process will be and, as the noble Lord, Lord Clement-Jones, said, we shall debate it when it arrives.

    The existing requirement on entry is not in the 1968 Act but in the money-laundering regulations. That will continue until any new directive comes into force, when it is transposed into UK law. I will make another point on a remark by the noble Baroness, Lady Buscombe. The Joint Committee did not recommend that there should be identification at the point of entry but that there should be effective barriers, which is what the Bill provides.

    5.30 p.m.

    As the noble Lord, Lord Wade, rightly said, we can have membership cards. Casinos in other parts of the world have membership cards: they call them loyalty cards. They are enormously valuable to them for marketing; they identify people and enable the casinos to make them offers and encourage them in ordinary marketing ways. I imagine that any casino in this country would take advantage of that obvious marketing tool. However, that is different from making them compulsory.

    When we look back at the objects of the exercise, I hope that the Committee will accept that the Government are entirely committed to taking whatever action is necessary to protect children. We agree with the movers of the amendments on that principle. We drafted the Bill with that objective clearly in mind, and we have everything in place to achieve our shared goal. With that in mind, I ask for the Committee's support that the amendment should be withdrawn.

    I do not want to delay the Minister, but I do not understand why knowing someone's name and address is going to help stop money-laundering. Will he explain?

    I specifically said that for money-laundering purposes a photo-identification is not necessarily the only requirement. The identification rules under the money-laundering directive are complicated and it would be inappropriate for me to set them out in detail, even if I had them before me. I can assure the Committee that there is no intention to derogate in any way from anything in the money-laundering directives. We have sometimes even gold-plated them, but we have certainly adopted them in full in this country and we will continue to do so.

    Noble Lords will agree—if I may say so to the Minister—that those in the money-laundering business make sure that they have very good methods of identification.

    That was rather what the noble Lord, Lord Steinberg, said on Second Reading.

    I thank the Minister for his fulsome reply. I will begin by responding to the good parts. I am grateful to him for making it clear that it is the Government's intention that there should be no merging of the gaming experience with other leisure facilities. That is something about which I and other noble Lords have been deeply concerned.

    The Scrutiny Committee, which took such great care to consider the draft Bill, felt strongly that it should be made clear in the Bill that there will not be what many of us referred to as the Las Vegas experience of being able to be immersed in the gambling experience on arriving at one of these amazing facilities.

    Absolutely. I was there not so long ago with my children. We were able to play bingo over breakfast if we so wished. That will not be the case in these areas.

    I accept a lot of what the Minister said about money laundering. My concern lies with responding to what a number of noble Lords have said about ID. I hear what they have said—that there will always be people determined to beat the system—but surely that is not a good reason for us not to send a clear message to the Gambling Commission that on principle it is hugely important that we impose minimum safeguards in the Bill.

    We are talking about the possibility of creating a shift in our culture through the introduction of these regional casinos. Noble Lords will accept that at no stage in our proceedings to date have I said that that is a bad thing. But I feel genuinely passionate about the need to impose minimum safeguards over and above those rigorous practices which I understand the operators themselves will impose and do with regard to their current operations.

    What I do not understand is why having minimum safeguards in the form of ID should in some way destroy their profits, and therefore—as I have been told—will destroy regeneration, which is one of the key reasons why most noble Lords would accept the introduction of these casinos at all. I simply do not accept that having some form of ID will destroy that. It certainly does not destroy it when 44,000 people are trying to get into a football match of an evening.

    I appreciate that the noble Baroness, Lady Buscombe, is considering what she wants to do with these amendments. May I make a suggestion to her? She has talked about a simple form of ID. I am not clear what a simple form of ID is, other than photographic identification such as a House of Lords pass, a driving licence or a passport. I have not really heard the answers to the questions of the noble Baroness, Lady Golding. Can we talk about this? I think what she wants can be achieved in Gambling Commission directions. But, if necessary, once we have talked about it and established exactly what is meant by simple identification, I would be prepared to table an amendment to the Bill in order to achieve that.

    I very much appreciate the Minister's willingness to discuss this, as we have already had some discussions on other aspects of the Bill. However, I want to make it very clear that, in my view, this is crucially important to seeing the Bill go on to the statute book.

    I hear what noble Lords have said—that the operators will impose rigorous safeguards. However, I have a note here from an extremely successful and well known operator. I shall not name it, but I have the note here. It says:
    "Given our experience in the US, we believe the most effective way to ensure that underage gambling does not occur is for the new Gambling Commission to require operators to check the ID of any individual who appears to be under the age of 25".
    That is something that that operator itself does in the United States. Not only does it require ID; it requires ID at the entrance to the actual building or casino leisure centre, the destination area.

    I am asking for much less than that. I am asking for much less than the noble Baroness, Lady Howe, has suggested—that we should retain the membership. I have had discussions with some of the operators who have sought very strongly to encourage me to desist from this minimum safeguard. Apart from anything else, I believe that it sends out a clear signal to people that these operators care, as I know they do in practice, very much that only people who are of the right age and who are not what we might call particularly vulnerable or subject to problem gambling actually reach the gaming tables and the machines.

    The noble Baroness may be under the impression that I did not want a proof of age if there was a challenge to the person's age, but I was not saying that. I chair CitizenCard, a proof of age scheme, and we have issued many hundreds of thousands of cards for proof of age. They are to protect people such as bookmakers, by preventing young children going into a bookmaker's. If there is a challenge to a person's age in a bookmaker's such as Ladbrokes, they have to produce proof of age. Otherwise they are not allowed to gamble. The same applies to many other organisations such as Camelot, which also is part of the proof of age scheme. Why should you have to have proof of age—identification—other than when you are challenged when going into a casino if you do not have to have it to go into a bookmaker's?

    That poses the question of whether perhaps we are being too lenient on bookmakers. We are creating something entirely different from the bookmaker experience here. Through the new casinos, we are encouraging a whole-family experience. I welcome the opportunities that I hope the leisure facilities will provide in terms of family entertainment and family fun. I also see that they are destination areas far removed from the bookmaker experience, whereby families and individuals groups of young people will be encouraged to spend time in all sorts of ways, but in particular in gambling, in which case we are—

    I am so sorry to interrupt again, but there will be provision for bookmaking areas within some of the destination areas. Is the noble Baroness saying that because casinos should have proof of age, or identification, the bookmakers that are in those destination leisure facilities should also have them, when they are all linked in together?

    I hear what the noble Baroness has said. I am asking for the gambling experience to be separate from the other leisure areas. The Minister has agreed that is exactly what the Government also intend. What flows from that is that, yes, the bookmakers will be separate from other leisure entertainment, and they will be in those cordoned-off gambling areas. If you are cordoning off, if you have rigorous checks, what is wrong with putting some sort of low-level safeguard in the Bill, which many companies ask for already in terms of having a form of ID? I am also thinking to the future in terms of technology. This will be a process, whereby the Gambling Commission will be able to watch. As technology improves, people will be able to walk into those areas and have photo-recognition sorted within seconds. We are not asking for something that will create a burden for the operators.

    Let me try again. I have looked carefully at all the amendments, and apart from wording or drafting issues, we differ on only one issue. Parliamentary counsel would never allow me to accept an amendment as drafted; it would have to be rewritten. In terms of policy, we differ in only one place. That is on Amendment No. 221. Subsection (6) of the amendment states that there must be,

    "evidence which is reasonably capable of establishing (and does in fact establish … ) the name, address and a photographic likeness of the person producing the evidence".
    I have problems with photographic evidence, as does the noble Baroness, Lady Golding. The amendment goes on to state,
    "and that such person is over the age of 18 years on each occasion that satisfactory evidence of identity is required to be produced under this Act (including the proffering on a second or subsequent occasion of entry of a card or token issued to them by the licensee of the casino premises) for the purpose of verifying the identity of such person by reference to a photographic image stored visually or electronically upon the card or token".
    If I say that I will accept the thrust of every other part of the amendment, but I want to talk about that bit of it, can we not talk about it rather than press the amendments to a vote?

    Let me ask a question, because the Minister delivered that at fairly high speed.

    Is the Minister saying that he wants to discuss the photographic element? Is that the one point at issue as far as he is concerned? ID is no problem but photographic ID is what he is talking about. One of the issues here for decision—I am sure that the noble Baroness will need to take this decision—is about demonstrating to the Minister the strength of opinion on this matter on the Opposition Benches. The issue is whether to go for a vote and conclusively demonstrate that beyond peradventure, or whether the Minister's assurance is strong enough in those circumstances. Therefore, the more strongly the Minister can give us that assurance, the more possible it is that a vote can be avoided.

    5.45 p.m.

    My assurance is unequivocal. I did not finish quoting. Proposed new subsection (6) in Amendment No. 221 states,

    "upon the card or token, or upon a system maintained by the licensee of the casino premises for such purpose".
    If that happens, it means that the casino actually has to keep a photographic record of everyone who comes into a gaming area. I have serious difficulty with that. I have no difficulty with the thrust of any of the other amendments. Subject to agreement with parliamentary counsel about the wording and whether the matter is not covered elsewhere in the Bill, I give an unqualified undertaking to go along with them. I want to talk only about photographic identification.

    I hope that my noble friends on the Front Bench will listen very carefully to what the Minister said; it seems a sensible way forward.

    I thank the Minister for his reply, which is extremely welcome and tempting. However, given the strength of feeling expressed to me by so many beyond the House with regard to the matter, it is difficult for me to decide where we go. I am deeply concerned. I have been addressed by a number of different operators that have sought so clearly to persuade me that no ID at all is necessary—that somehow we will destroy their attempts at regeneration—that I am concerned that, if I withdraw the amendments, they will have their way.

    They will not. I shall demonstrate to the noble Baroness that the provisions are in the Bill. I am willing to examine all the other parts of the amendments, because I believe that they are in line with government policy. If by any chance anything is there that is not in the Bill. I undertake categorically that it will be put into the Bill. However, we need to talk about photographic identification, because there are unresolved issues in the way in which the matter has been presented.

    The Committee has had a good debate; its Members have had an opportunity to consider the issue in great detail. I am enormously grateful for that, but it does not require the proper consideration of the amendments to be concluded for the present—until we have had the relevant discussions—with a vote.

    Is not photographic evidence one of the issues on which the Minister needs persuasion? As he said, we probably have only one day in Committee. Many of us would prefer not to vote in Committee, but he made it clear from the outset—when business was discussed—that he wanted demonstrations of the House's sentiment in certain areas. We accepted that from the start. The photographic aspect is of considerable concern and interest to those of us on these and other Benches.

    We have a second day of Committee on the list of forthcoming business. All right; there is reasonable scepticism about that. However, I assure the Committee that the concerns have been heard. I would not have said what I did unless I had fully taken account of what has been said.

    The intention of the Government is to pursue this Bill through both Houses of Parliament.

    Then I cannot see what the Opposition's problem is. Why cannot we proceed in the normal manner, having the discussions between now and Report and, if necessary, bringing back the issue to a vote at Report stage?

    I am not sure whether I am entitled to intervene at this point. The fact is that we are in one of those peculiar situations called "wash up" where we shall not have a conventional Report stage. We shall have a formal Report stage and Third Reading, but it is highly unlikely that we shall have a two-day period when we can debate these issues.

    A decision must be made. I am hugely grateful for the assurances given by the Minister this evening. However, given the extraordinary position in which we find ourselves, we are unlikely to have other opportunities to show and confirm the strength of feeling among your Lordships on such issues. Therefore, I should like to test the opinion of the House.

    5.51 p.m.

    On Question, Whether the said amendment (No. 10) shall be agreed to?

    Their Lordships divided: Contents, 123; Not-Contents, 105.

    Division No. 5


    Addington, L.Liverpool, E.
    Alderdice, L.Livsey of Talgarth, L.
    Ampthill, L.Lucas, L.
    Anelay of St Johns, B.Luke, L.
    Ashcroft, L.Lyell, L.
    Astor of Hever, L.McColl of Dulwich, L.
    Avebury, L.Maclennan of Rogart, L.
    Barker, B.Maddock, B.
    Beaumont of Whitley, L.Marlesford, L.
    Bonham-Carter of Yarnbury, BMayhew of Twysden, L.
    Bowness, L.Michie of Gallanach, B.
    Bradshaw, L.Miller of Chilthorne Domer, B.
    Brougham and Vaux, L.Monro of Langholm, L.
    Buscombe, B.Monson, L.
    Byford, B.Montrose, D.
    Carlisle of Bucklow, L.Morris of Bolton, B.
    Clement-Jones, L.Murton of Lindisfarne, L.
    Colwyn, L.Naseby, L.
    Cope of Berkeley, L. [Teller]Newby, L.
    Courtown, E.Newton of Braintree, L.
    Crickhowell, L.Northbrook, L.
    Denham, L.Norton of Louth, L.
    Dholakia, L.Oakeshott of Seagrove Bay, L.
    Dixon-Smith, L.O'Cathain, B.
    D'Souza, B.O'Neill of Bengarve, B.
    Dykes, L.Park of Monmouth, B.
    Eden of Winton, L.Pearson of Rannoch, L.
    Elles, B.Peyton of Yeovil, L.
    Elton, L.Phillips of Sudbury, L.
    Falkland, V.Rawlings, B.
    Falkner of Margravine, B.Redesdale, L.
    Fearn, L.Renton, L.
    Ferrers, E.Roberts of Llandudno, L.
    Fookes, B.Rodgers of Quarry Bank, L.
    Fowler, L.Rogan, L.
    Freeman, L.Roper, L.
    Garden, L.Rotherwick, L.
    Garel-Jones, L.Russell-Johnston, L.
    Geddes, L.Ryder of Wensum, L.
    Glentoran, L.St John of Fawsley, L.
    Goodhart, L.Saltoun of Abernethy, Ly.
    Greaves, L.Secccombe, B. [Teller]
    Hamwee, B.Selkirk of Douglas, L.
    Hanham, B.Sharp of Guildford, B.
    Hanningfield, L.Shaw of Northstead, L.
    Harris of Richmond, B.Shutt of Greetland, L.
    Higgins, L.Smith of Clifton, L.
    Hodgson of Astley Abbotts, L.Soulsby of Swaffham Prior, L.
    Hooper, B.Steel of Aikwood, L.
    Hooson, L.Stewartby, L.
    Howe, E.Thomas of Swynnerton, L.
    Howe of Idlicote, B.Thomas of Walliswood, B.
    Hurd of Westwell, L.Tope, L.
    Hylton, L.Tordoff, L.
    Jenkin of Roding, L.Trumpington, B.
    Kilclooney, L.Vallance of Tummel, L.
    Kimball, L.Waddington, L.
    Kingsland, L.Wakeham, L.
    Knight of Collingtree, B.Wallace of Saltaire, L.
    Layard, L.Walmsley, B.
    Linklater of Butterstone, B.Wilcox, B.
    Windlesham, L.


    Amos, B. (Lord President of theBach, L.


    Bassam of Brighton, L.
    Andrews, B.Bernstein of Craigweil, L.
    Ashton of Upholland, B.Billingham, B.

    Blackstone, B.Jones, L.
    Bragg, L.Jordan, L.
    Brooke of Alverthorpe, L.Kennedy of The Shaws, B.
    Brookman, L.King of West Bromwich, L.
    Campbell-Savours, L.Leitch, L.
    Carter, L.Lipsey, L.
    Carter of Coles, L.Lockwood, B.
    Christopher, L.Macdonald of Tradeston, L.
    Clarke of Hampstead, L.McIntosh of Haringey, L.
    Clinton-Davis, L.McIntosh of Hudnall, B.
    Colville of Culross, V.MacKenzie of Culkein, L.
    Corbett of Castle Vale, L.Mackenzie of Framwellgate, L.
    Crawley, B.McKenzie of Luton, L.
    Davies of Oldham, L. [Teller]Maxton, L.
    Dean of Thornton-le-Fylde, B.Mitchell, L.
    Desai, L.Morgan of Drefelin, B.
    Donoughue, L.Pendry, L.
    Drayson, L.Plant of Highfield, L.
    Elder, L.Prosser, B.
    Erroll, E.Ramsay of Cartvale, B.
    Evans of Parkside, L.Randall of St. Budeaux, L.
    Evans of Temple Guiting, L.Rendell of Babergh, B.
    Falconer of Thoroton, L. (Lord Chancellor)Rosser, L.
    Farrington of Ribbleton, B.Sainsbury of Turville, L.
    Faulkner of Worcester, L.Sawyer, L.
    Filkin, L.Scotland of Asthal, B.
    Gale, B.Sewel, L.
    Gavron, L.Simon, V.
    Gibson of Market Rasen, B.Snape, L.
    Gilbert, L.Stone of Blackheath, L.
    Golding, B.Symons of Vernham Dean, B.
    Goldsmith, L.Tenby, V.
    Goudie, B.Thomas of Macclesfield, L.
    Gould of Potternewton, B.Tomlinson, L.
    Graham of Edmonton, L.Triesman, L.
    Grocott, L. [Teller]Truscott, L.
    Hart of Chilton, L.Tunnicliffe, L.
    Hayman, B.Turnberg, L.
    Henig, B.Turner of Camden, B.
    Hilton of Eggardon, B.Wade of Chorlton, L.
    Hogg of Cumbernauld, L.Wall of New Barnet, B.
    Hollis of Heigham, B.Warner, L.
    Hoyle, L.Weatherill, L.
    Hughes of Woodside, L.Wedderburn of Charlton, L.
    Hunt of Chesterton, L.Whitaker, B.
    Hunt of Kings Heath, L.Whitty, L.
    Janner of Braunstone, L.Williams of Elvel, L.
    Jay of Paddington, B.Williamson of Horton, L.
    Winston, L.
    Young of Norwood Green, L.

    Resolved in the affirmative, and amendment agreed to accordingly.

    6.2 p.m.

    I remind the Committee that if Amendment No. 11 is agreed to, I cannot call Amendment No.12 because of pre-emption.

    moved Amendment No. 11:

    Page 4, line 5, leave out subsection (4) and insert—
    "(4) The Secretary of State and the Gambling Commission shall consult with HM Customs and Excise to ensure that gaming duty is levied as a percentage of gross gaming yield for all casinos and that profits bandings are set on a progressive basis through regulations."
    The noble Baroness said: In moving Amendment No. 11, I shall also speak to Amendment No. 284. These are probing amendments on the gaming duty and amusement machine licence duty grouped under the guise of taxation.

    Scrutinising the casino element of the Gambling Bill, with no indication from the Government as to the future tax regime for casinos, is highly questionable. In the greater scheme of things, all amendments to this Bill are irrelevant compared to the tax and duties that casinos will have to pay in the future. The rates at which gaming duty and machine licence duty are to be set will have a huge impact on the profits or losses of large and small operators from the UK and overseas alike. Being in the dark on this issue means it is impossible for existing and future operators to plan with certainty, and an inappropriate tax regime could undermine the deliberations and intentions of Parliament.

    I appreciate that this is not a money Bill. No doubt the Minister will inform us that tax issues are for Her Majesty's Treasury, and not for the DCMS or this Bill. However, it is crucial that the Government make some firm assurances on future duties and taxes, as that will have a major impact on operators. Indications on tax levels will also influence the debate currently raging in Parliament about the number and location of new casinos, as operators will have no appetite for new casinos if tax levels are set too high. Equally, the delicately balanced existing industry could be driven out of business by too high a level.

    The current taxation system for casinos has been developed over many years to accommodate fairly the large range of operating factors that characterise the British casino industry, from mass-market provincial casinos offering low stakes and prizes to local customers right up to internationally recognised casinos offering the highest stakes and prizes to a world-wide clientele. It is for these reasons that we advocate tiered percentage rates of tax based on profits for both gaming duty and amusement machine licence duty akin to the current gaming duty system.

    Will the Minister please inform the Committee whether the current system, where casinos pay a duty based on the "gross gaming yield" for premises where table gaming takes place—that is, stakes minus players' winnings—will continue? I understand the duty is calculated on a sliding scale according to the yield. The lowest rate is 2.5 per cent for the first £258,250. The highest rate of 40 per cent is for all yields over £2,408,500. Operators need to be sure that they will all be subject to fair and equal treatment under the forthcoming tax regime.

    At the moment, an amusement machine licence duty is a set sum that is levied annually for a machine, be it in an arcade, casino or bingo hall, according to its category. Confusingly, the current categorisation of machines, as I understand it, makes category A the lowest stakes and prizes machines, found, say, in a seaside arcade, and category E, as can be found in casinos, the highest rate stakes and prizes machines. That is the opposite to the categorisation in the draft legislation.

    Existing casinos may currently have up to 10 category E jackpot, high-rate gaming machines and operators pay a duty of £1,915 a year for each machine. In 2003, a consultation on the modernisation of gambling taxes indicated that there was support in the gambling industry for a gross profits tax on gambling and amusement machines, either at a flat or tiered percentage rate. That would make the system fairer in terms of profits and also simpler to administer, particularly in the case of category A machines, as discussed in the Bill.

    Despite those discussions, there has been no change, as yet, to the current system. Can the Minister reveal the outcomes of discussions that he and his department have had on this issue, especially with the Treasury, and propose any change that we can expect, if any? I beg to move.

    I must congratulate the noble Baroness, Lady Buscombe, on managing to get the amendment on the Marshalled List. The device of saying that the Secretary of State and the Gambling Commission shall,

    "consult with HM Customs and Excise",
    is brilliant. I wish that I had thought of that when I was in Opposition. She knows perfectly well that I cannot respond on taxation matters in the Bill and that if the amendment were carried, it would be rejected by the Commons on grounds of privilege. Still, it was a good try.

    I shall try to be helpful, because I have always recognised that there are three elements in gambling policy: one is regulation, with which we are dealing now; another is planning, which is the responsibility of the Office of the Deputy Prime Minister; and the third is, of course, taxation. I referred to that in my evidence to the Greenway committee—the pre-legislative scrutiny committee—as a "three-legged stool". The noble Baroness is absolutely right to say that you cannot see the whole picture unless you have all three.

    We have made remarkable progress on the planning side. For example, there is the achievement of ensuring that you will need planning permission to convert other leisure facilities into gambling premises. That will be widely welcomed. But, even if we were able to speak for the Treasury, I am sure that the noble Baroness will understand that the Chancellor will not determine or publish taxation policy until he sees the regulatory and planning system that will be in place. In other words, he can consider the taxation position only after he has seen the outcome of the Bill. Any government would say the same. I can see only two former Conservative Ministers on the Benches at the moment—I am not trying to provoke them onto their feet—but I am sure that they would say the same thing. I cannot speak for the Chancellor, but these matters will be considered in due course by HM Treasury.

    I thank the Minister for his response. I hear what he says and I also accept with alacrity his congratulations on my ability somehow to talk money in your Lordships' House, which is important, because, in the Bill, we will be encouraging people to invest huge sums of money in this country.

    I understand that the regional casinos may require up front spending of some £300 million. Therefore it is enormously important that those investing in this industry have some comfort that it will be worth their while from a commercial standpoint. Notwithstanding, I accept entirely that the Chancellor of the Exchequer will not consider the taxation position until after he has seen the outcome of the Bill. At the same time, I hope that the Minister will encourage the Chancellor of the Exchequer to consider carefully the points that I have raised, in the sense that this represents an enormously delicate balance in commercial terms. I hope that the Minister will accept that and, on that basis, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    moved Amendment No. 12:

    Page 4, line 6, after "of" insert "casino"
    On Question, amendment agreed to.

    The next amendment is Amendment No. 13. I must advise the Committee that if Amendment No. 13 were to be agreed to, I would not be able to call Amendment No. 14.

    moved Amendment No. 13:

    Page 4, line 12, leave out paragraph (a).
    The noble Earl said: In moving Amendment No. 13, I shall speak also to Amendment No. 177.

    At the outset, I reassure the Minister that this is a probing amendment. Notwithstanding that the amendment would remove the reference to regional casinos from the face of the Bill, at this stage I am, on balance, ambivalent towards them. I acknowledge, too, that the Government have sought to respond to the considerable anxiety that has been expressed about them throughout the scrutiny of the Bill. I commend the Government for that. Nevertheless, for many of us a number of concerns remain. Accordingly, my purpose is to articulate some of those concerns in the hope that we shall be afforded greater insight of the thinking underpinning the Government's policy.

    I willingly concede that the Government acknowledge that regional casinos represent a significant shift in the culture of the gaming industry in the UK. Moreover, as the Minister for Sport and Tourism commented on Report in another place, they also,
    "will bring risks that are untested in Great Britain".—[Official Report, Commons, 24/1/05, co1.72.]
    In that context, the Committee will be aware of the existence in Nassau, Bahamas, of the Atlantis resort complex. At its heart is a super casino, the largest in the Caribbean, comprising 78 gaming tables and 980 slot machines. Indeed, although neither as a residential guest nor a gambler, I was there over Christmas. The place was full of individuals, obsessed and oblivious of anything else going on around them, hunched over their category A machines of choice. It seems to me that that sort of pitiful sight is the kind of risk that has been untested so far in this country. Against that background, I wonder from where the policy initiative for regional casinos was derived. As the Government admit, they are alien to our existing gaming industry. I think I am right in saying that a single regional casino will have more machines than the existing estate. Moreover, the proposals envisage a single regional casino potentially having 1,250 category A machines, although I recognise the Government's expectation—it is no more than that—that they will constitute only about 10 per cent of the total. Viewed logically, as pointed out earlier by the noble Lord, Lord Greaves, it is well nigh impossible to imagine anything other than that the consequence of that will be an increased incidence of problem gambling or addiction—a contention supported by numerous academics, Church groups and charities.

    I note in passing that the introduction of fair odds betting terminals in betting shops, arguably the closest approximation to category A machines of which there has been some recent experience, led to an increase in calls to GamCare of 27 per cent. Moreover, GamCare continues to maintain that FOBTs are the leading individual cause of problem gambling in the UK. It begs the question how much worse this will become when the huge number of category A machines that the Bill envisages are up and running.

    6.15 p.m.

    I repeat that I commend the Government for having sought to address this by limiting in the first place to eight the number of regional casinos. Nevertheless, I remain very much puzzled by their apparent equanimity over the issue, which is something that we have already touched on in our debate on Amendment No. 2.

    With that in mind, perhaps the Minister would be prepared to share with the Committee any qualitative and quantitative analysis that the DCMS may have conducted in that area. In particular, there remains a fair degree of controversy over the initial limit of eight. What criteria were applied to settle on that figure?

    Perhaps, more importantly, what will be the Government's response in the event that the Gambling Commission's review reveals that the introduction of regional casinos has exacerbated the risk of problem gambling? Given the insistence of the Secretary of State that,
    "If this legislation gave rise to an increase in problem gambling then it would have failed and it would be bad legislation",
    surely, the logic of the Government's position is that in such circumstances they would be obliged to close down any regional casinos for which permission had been granted. How else could the Government's key principle of social responsibility in the gambling industry be satisfied?

    It also occurs to me that it is hard to credit that any self-respecting commercial organisation would be likely to make the anticipated inward investment of £150 million to £300 million for a period of operation that may last no longer than three years.

    I am equally puzzled by the Government's arguments about the regeneration benefits implicit in the proposal for regional casinos. I do not dispute that their development will give rise to employment opportunities, but there are vexed questions relating to how precisely the Government are defining regeneration in that context. Where, to whom and in what ways do they suppose that those putative benefits will accrue? Over what time period are they expected to run? Has any cost-benefit analysis been conducted, particularly in respect of regenerative gains measured against the potential social costs arising from any increase in problem gambling? Notwithstanding that UK firms can apply for the licences, what bankable guarantees are there that moneys earned by the companies involved will not leave the country, thereby undermining the aspirations for regeneration?

    In that context, I note that the statement of national policy on casinos in December last year states:
    "The planning permission [for any regional casino] is likely to be subject to a planning obligation".
    I fully understand the practice. Indeed, in circumstances where, in order to succeed commercially, each regional casino would have to attract an average of 5,000 people per day, with peaks of up to 20,000, there may be good grounds for supposing that operators should be subject to appropriate obligations. After all, the strains that that sort of throughput will place on local infrastructure will be immense, as well as potentially having a detrimental effect on regeneration.

    But, equally, there is a problem—not least that the process currently envisaged presents local authorities with an inherent conflict of interest. As I understand it, rumours have been circulating that some casino operators have been expressing a willingness to make "contributions" to local authorities. Given that they are the bodies which award the appropriate planning permissions and the licences, that is, to my mind, inappropriate. Indeed, given the sums of money involved, it may well be that requirements for planning obligations may be just as inappropriate. Here I suspect that I echo concerns expressed earlier by the noble Lord, Lord Greaves, and articulated in Amendment No. 202, in the name of the noble Lord, Lord Clement-Jones.

    There is perhaps a current example of the problems that this can create. The Minister will recall his response to Written Questions from my noble friend Lady Hanham about the North Greenwich Peninsula. He stated:
    "We understand Kerzner has entered into an agreement with Anschutz Entertainment Group to build and operate a hotel on land adjacent to the Dome site and to provide a regional casino at the Dome site if the Gambling Bill is enacted".—[Official Report, 3/3/05; col. WA 43.]
    I recognise of course that the noble Lord cannot anticipate any of the various decisions associated with that, and I realise that there is the added protection, in due course, of the advice from the independent expert panel. Nevertheless, I am sure that he can appreciate that this new chapter in the saga of the Dome runs the risk of creating an impression—false, I am sure—of too cosy an arrangement between the various players, which is precisely the sort of inherent conflict of interest that we should seek to avoid.

    Therefore, I would be grateful if the Minister can tell the Committee whether any discussions have taken place on the policy proposals of the Bill between Kerzner International, himself, the Minister for Sport and officials. Additionally, has Kerzner International made any representations or offered any advice on the potential significance of a regional casino to the financial viability of plans to regenerate the Millennium Dome complex and the north Greenwich peninsula?

    I need not detain the Committee further. I merely hope, that given all these issues, the Minister will be in a position to make a better and rather more robust case for regional casinos than has been achieved thus far.

    The noble Earl has made some interesting points and asked some searching questions. I understood him to say that his intention, at this stage, was simply to obtain answers from the Minister. The change of description for the largest category of casino from a resort casino to a regional casino surprised many of us. The Minister may say that that term seemed more appropriate. A regional casino may, ultimately, mean a resort casino. However, I was surprised. Perhaps he will explain the matter further to the Committee.

    The idea of a resort casino sprang from the Budd report, which interested us a great deal and which was discussed in your Lordships' House. It was a novel idea to regenerate seaside resorts and to move along the lines used by other countries; namely, the United States and South Africa. I understood that, to avoid a proliferation of gambling, one of the Government's aims was to introduce casinos in whatever way they chose. They chose not to produce a strategy, but to leave it to the market. That was the reason they changed from resort casinos to regional casinos and they thought it was more appropriate to call them regional casinos.

    It seems to me, as it may to others who think about such matters and who have been abroad and seen public policies on gambling, that resort casinos are places where gambling takes place in locations to which one has to travel, when one has made a decision to gamble. One may go for a weekend or for longer periods of time, such as during a holiday period, and have a particular budget to use in a casino. The name "regional casino" suggests that it is in a conurbation, where there are residential areas, and large concentrations of population who may be encouraged to gamble because the casino is around the corner or on the next street. That is a matter of concern to many people. Perhaps the Minister will feel inclined to explain that.

    Amendment No. 14 is in this group with the agreement of the noble Earl. In a probing discussion on regional casinos, it is sensible to discuss my amendment as well. Like the noble Earl, I tabled this probing amendment for discussion, although it raises some important issues. I agree with a great deal of what the noble Earl said and what my noble friend Lord Falkland has said, as he trespassed on the area covered by my amendment, which I welcome.

    Words have meanings and they matter. Changing the name of something is significant. It is not just a matter of presentation or what people might feel is appropriate. For example, these very large casinos might be called "regional casinos" rather than "resort casinos" or "destination casinos"—which is a much touted way of describing them—or, as I suggest, "very large casinos". The press calls them "mega casinos" and "super casinos". I understand why the Government might not want to use those particular words which is why I have used fairly basic value-free words, such as "very large", which are simply descriptive. Perceptions matter. What they are called may have as much impact on where and what they are and how people see them as a mass of detailed legislation.

    At Second Reading the Minister talked about limiting the number of casinos. He said:
    "of what we call regional casinos and what one could call destination casinos or resort casinos".
    I think he is suggesting that there is no real difference between these words.
    "There is no difference in the names"—
    which is clearly not entirely true at one level—
    "what matters is how they are defined. I believe it is recognised that we are taking that extremely gingerly".—[Official Report, 22/2/05; col. 1201.]
    I am not sure whether that is how they are defined. The Minister seems to be suggesting that these words do not matter, but they do.

    The whole concept of destination casinos—which, as my noble friend said, originally came from the Budd report—is that they are places to which people make a deliberate effort to travel a reasonable distance, and perhaps a great distance, to gamble there. They are not casinos to which people will walk from their houses, down a few streets and through the door, or catch the bus or, in Blackpool, a tram. There is a real concept that they are places to which people make a determined effort to go.

    There has been a lot of debate about whether these casinos should be in resorts such as Blackpool or Great Yarmouth, or whether some of them, at least, could be in big cities. One hears places mentioned such as Olympia in London, or even putting a casino in the Dome and finding a use for it at last, or places such as Manchester, Birmingham or Glasgow—some of the cities which appear to be willing to consider having casinos, unlike more sensible cities such as Liverpool which has said that it is doing quite well and does not want one.

    Can a regional casino be in a city centre? It is the obvious place. If you have a regional casino the first place you think of is the big cities. Could they be in areas which suffer deprivation—run-down inner city areas? Could we have one round the corner from Coronation Street? Could Coronation Street become a casino? That would change the plot a bit. There is a great difference between putting one of these casinos in a resort such as Blackpool, or in a big city centre, or in a run-down urban area. We want to know from the Minister in what sort of areas the Government think the casinos are going to be. It is no good saying that they can leave it to the advisory panel, which will come up with ideas. These are major, fundamental issues that the Government must have a policy on and tell us what they think and want.

    How do the Government define regions? If they are regional casinos, is there an assumption that there is one casino per region? Or could there be three or four in one region and none in other regions? The assumption is that if you have things on a regional basis then you share them out among the regions, and perhaps one in Scotland and one in Wales. What are the locational implications of calling them regional casinos rather than having simply a neutral description referring to their size?

    What is the difference in locational terms, given that there will be eight of the three categories, between calling the biggest ones regional casinos and describing the others by their size? Will it mean that, in locational terms, the Government will have a different policy and different way of deciding where they should be? What will the criteria be for deciding where the casinos will be? Those are important issues and I look forward to hearing the Government's response.

    6.30 p.m.

    I am sorry that I cannot support my noble friend Lord Northesk on this occasion because I disagree with the logic that he is putting forward in his amendment. I believe that the Government are right in their pilot of establishing regional casinos—whether they are regional, resort or destination means not a bit of difference because the size of these casinos is just an offering.

    My noble friend talked about a large investment—somewhere between £150 million and £300 million per casino. Much of that may be inward investment. who is to know? It depends on whether the market in this country can come up with that sort of cash because of the size of the investment. In the briefing that I have received, I understand that something in the region of 7,000 new jobs may be created and there will be regeneration on top of that in the areas where the casinos are located.

    We have already heard that the gambling bit will be really quite a small percentage of the whole offering that is made—maybe only 10 to 15 per cent. On top of that there will be conference centres, convention centres, hotels, theatres, cinemas and so forth. This is the only area where category A machines will be available, so part of the pilot is to see how category A machines fit into the whole offering of gambling. There will be a limited number and they are very distinct. There is a great deal of difference between regional casinos and the current offering of casinos.

    If my noble friend had picked not on regional casinos but on large casinos, I would have had some sympathy and would have wanted to support the amendment, but I fail to see where the concept of large casinos fits. I readily see where that of the regional casinos fits, but I am much more doubtful about the large casinos. Unfortunately, I cannot support my noble friend on this occasion.

    I will be extremely brief. I recall how the definition of casinos by names as against by numbers developed at a certain point in our deliberations on the Joint Committee on Pre-Legislative Scrutiny. We had to choose names and I cannot for the life of me remember what name we chose: the important thing was that it should have a degree of logic.

    I am applying exactly the same argument at this juncture. I have no difficulty at all in living with "regional casino" as the name, particularly as the regional planning strategy will play so large a part in the preparations for the decision about whether a casino should be allowed in a particular place.

    The one area of difference that I recall from the Joint Committee was on the issue of where such casinos should be. The Government—perfectly reasonably—took the view that there was no point in changing their basic strategy, which was that, ideally, new developments should occur in cities rather than on their edges, in line with the whole policy about supermarkets and so forth. We took a different view because we believe that putting a regional casino with category A machines into the centre of a city would make it more accessible to people who might have an addiction. Frankly, however, that would be decided by the planning authorities on the strength of the cases put to them. I myself would be perfectly happy with the logic of regional casinos as the largest kind.

    I am grateful for what has been said because it has been thoughtful and I was really interested in some of the arguments. Of course. regional casinos have attracted attention and the Joint Committee that scrutinised the draft Bill, with a number of people here taking part in it, looked very carefully at the place of regional casinos. We have always believed that the development of the regional casinos should be done cautiously, and with appropriate safeguards. Regional casinos are a fundamental part of the casino package. We listened to what was said and came up with revised proposals with a cap on regional casinos to make sure that these new leisure destinations are carefully tested.

    The noble Earl, Lord Northesk, asked me what the magic is about eight. There is not any, although that is not an invitation to replace it by six, 10, four, two or 20. It seems to be a reasonably acceptable compromise number, and it is large enough to allow us to look at the possibility of the effect of casinos in a range of areas, which could include seaside resorts, towns away from the coast, or suburban areas in towns. The noble Earl says that it is not good enough for me to say that the advisory panel will make its judgments on that, but there is no point having an advisory panel unless you give it an area over which to make a judgment. Given the objective—if I may finish the sentence—which is to see what the effect is in terms of economic regeneration, benefit for the local community and social outcomes in a variety of different reasons, that is a good remit for the advisory panel.

    I will have to make sure when I read Hansard, but I was commending the Government for the independent panel of experts, rather than the reverse of that, as the noble and learned Lord just implied.

    I am sorry if I have misunderstood, but I thought the noble Earl was asking me to prejudge what they said.

    He asked me a number of questions which are really quite difficult to answer because they depend on events which will take place in the future, and will depend on market actions as well as the actions of government. I do not know whether there will in fact be eight successful applications for regional casinos. I think there probably will be because there was interest expressed in more than that, but I cannot guarantee to the Committee nor put it in legislation that that is going to happen. He asked me to define regeneration. I admit that the regulatory impact assessment is out of date in the sense that it was produced before the 16 December policy statement, but I think it does make a serious attempt to look at the regeneration and local benefit effects of regional casinos.

    I was a bit surprised that he said it was no good if the earnings left the country. If we did not accept the principles of inward and outward investment, I do not think anybody would ever do anything. They are still of benefit to the country if the earnings are made here, people have jobs, and facilities are provided which people want to use. He asked me about rumours of contributions by local authorities, and my only advice on that is not to pay attention to rumours. He asked me specifically about the Dome and Kerzner's, and as he indicated I have already replied to a number of Written Questions about meetings with Kerzner's and other companies. There has been no substantive discussion about any proposal to build a regional casino at the Dome.

    The noble Viscount, Lord Falkland, and the noble Lord, Lord Greaves, both seem much concerned about the significance of the name. They are dragging me unwillingly into semiotics, a place I really do not want to go. The noble Lord, Lord Greaves, says that words mean things. Of course they do, but words used in this sense are not the words which will actually be used in public. The Mickey Mouse Casino will not be called a Mickey Mouse Resort Destination Casino, or the Al Cap Casino, or the Asterix Casino, or whatever it may be, choosing deliberately neutral names. They will not be called "resort destination casino" or "regional casino" or "resort casino"—they will just be called casinos. We have called them by a name for the purpose of the legislation; we could have called them A, B, C or D—and perhaps it would have got rid of a lot of trouble if we had. The real point is that the actual content of the legislation relating to casinos has not changed as a result of the change of name. That is the limitation on the undoubted truth of the noble Lord's remark that words mean things.

    The noble Lord also asked me whether the word "regional" means that there will be one casino per region. No, it does not. It is just a convenient way in which to say that they will all be in regions; there will not necessarily be one per region, but they will be in a variety of places, and to call them "resort", as was the original intention, would be misleading. There is no other significance or sinister purpose behind the change in name.

    Regional casinos, or casinos of this kind, have been a part of thinking on the reform of gambling regulation since the time of Budd, who did not recommend resort casinos but simply said that casinos should have a minimum size for gaming of 2,000 square feet. Unless we are to go back on four years of work and follow what the amendment would do, which is to take out regional casinos altogether, the names do not matter.

    I want to press the Minister on two issues. First, on the contribution by local authorities, is it not the case that any planning application of any significant size, from 10 houses upwards and perhaps some smaller than that, involves planning obligations under Section 106 of the Town and Country Planning Act or in other ways, by which developers pay money to the local authority for certain defined purposes? There is no doubt whatever that authorities which want to have big casinos in their areas are thinking on those terms. There is no point in pretending that is not the case; it is how the planning system now works. If you are giving planning permission for an entertainment, industrial or residential purpose, or for anything else, you expect contributions from the developers towards other local facilities, road improvements, contributions to bus services or whatever else. That is just a fact of life, and it will certainly be a fact of life on planning applications for casinos.

    My knowledge of these things is very out of date, as I have not been a chairman of a planning committee for nearly 40 years. But yes, Section 106, as I understand it, does exactly what the noble Lord, Lord Greaves, described—and yes, if there is an area in which there is a premises licence available, as identified by the advisory panel, and if there is more than one applicant with a casino operator's licence as granted by the Gambling Commission, the local authority will choose between those applicants. It will choose on the basis of whoever offers the best benefits to the local area. That seems to me exactly as it should be.

    The local authority will be giving a premises licence and may well be choosing; between two or three or 25 people bidding. After that, there will have to be an application for planning permission. The inter-relationship between the two is not very clear at all and will be very muddled.

    They will happen at the same time and whichever applicant wins must get both a premises licence and planning permission. But they are different in the sense that the premises licence in these circumstances is competitive. However good a lot of applications are, only one person can get one premises licence. Planning permission, on the other hand, is granted on the merits of the case and is not competitive. In educational terms, I believe, one would say that it is norm referenced rather than criterion referenced.

    6.45 p.m.

    I thank the Minister for his characteristically clear and eloquent response. I recognise that some of my questions had a chicken-and-egg character. Nevertheless, I thank him for the answers that he has been able to give. I am grateful, too, for the kind words of the noble Viscount, Lord Falkland, and the noble Lord, Lord Greaves.

    I am not in the least offended by the strictures from my noble friend Lord Ullswater. As I said in my introduction, my purpose was entirely probing. I was using the amendment as the means of eliciting further information. I had no intention of striking regional casinos from the Bill, and still do not. I entirely take my noble friend's point that the Committee might benefit from further information about large casinos as opposed to regional casinos and maybe I should table an amendment about that as well.

    I am content that the debate has at least given other noble Lords the opportunity to articulate some of their ongoing concerns and to ask additional questions. Those concerns have not been done away with entirely. In the unlikely event that we end up with a further stage, I may need to return to the issue, but in the meantime I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [Amendment No. 14 not moved.]

    moved Amendment No. 15:

    Page 4, line 13, leave out paragraph (b).
    The noble Baroness said: In moving the amendment I shall speak also to Amendments Nos. 16, 178, 226, 230, 235, 245 and 364. It brings us to an important issue that created a great deal of concern among your Lordships on Second Reading with regard to the existing estate—or as I call it, UK plc.

    I wish to speak to the variety of grouped amendments, all of which deal with a possible solution for the existing gambling estate with regard to casinos as dictated by the Bill. There is a range of suggestions. I make no apology for that because it is important that we use the opportunity of Committee to try to eke out some sensible solutions to create a fair playing field for all involved in the industry.

    As such, I ask once more for your Lordships' patience while I explain the options carefully to avoid confusion. There can be no doubt that this remains a serious sticking point in the Bill. Despite the numerous government amendments—although noticeably not on this issue—it remains an issue that is yet to be resolved satisfactorily. I assume that this upset has caused the noble Lord, Lord Greaves, to table a clause stand part debate to the casino sections of the Bill.

    I would first like to expand on Amendment No. 239, which is what the industry initially proposed and would ideally like. The amendment would give the existing British casinos and their customers the same rights and opportunities that would apply to the new small and large casinos under the Bill. In essence, it would allow existing casinos the same machine-to-table ratio—namely, 2:1, up to a maximum of 80—as small casinos; or, in the case of those that match minimum size criteria for a large casino, five machines to one table up to a maximum of 150, as well as the right to offer customers sport betting facilities.

    Contrary to claims made by Ministers in another place, the amendment would result in an overall increase in the number of machines of less than 5,000 over a period of five years from the issuing of new licences, as the existing casinos have on average between 12 to 15 tables per casino. The machines would be the same limited stake and prize machines currently available in existing casinos, not the much-discussed category A machines to which the Secretary of State has been referring in the press. In our view, the debate with regard to the existing estate has moved on.

    This amendment would allow the existing estate to compete fairly with new entrants in line with the Government's policy position of June 2004. New Clause 173A, Amendment No. 245, is another option and to me the better one given that this removes the large category of casinos completely from the Bill. I was interested to hear the comments of my noble friends Lord Northesk and Lord Ullswater on the category of large casino. Amendment No. 245 results in a paving amendment, Amendment No. 15, which leads this group and removes the reference to the category in Clause 7. Amendments Nos. 16, 178, 226, 230, 235 and 364 are all consequential on this option.

    In the removal of the large category, this amendment ensures that all existing casinos, whatever their size, will be deemed as a new small category, allowing two machines per table up to a maximum of 80 and the ability to offer betting, while the minimum floor space requirement for the new small casinos will be retained as currently outlined in the Bill. However, the amendment will not allow existing permitted areas under the 1968 Act automatically to become new permitted areas and offer new licences without further application and examination by the advisory panel.

    What that does is to ensure that the advisory panel becomes a permanent element of the licensing process rather than for an experimental period only. In that regard, I thought about whether this role should rest with the Gambling Commission. However, there is a concern that that could create some conflict. Therefore, it is better to have an advisory panel that is at arm's length from the regulator, the Gambling Commission.

    The advisory panel and the power of the Secretary of State can thus be used to control proliferation on a continuing basis by defining new permitted areas and the number of licences that each may grant. That would in effect increase the number of permitted areas in a controlled way as defined by the Secretary of State. So there is a strong safeguard.

    As I understand it, local authorities wishing to grant a new small casino licence would apply to the Secretary of State. The advisory panel would advise, and the Secretary of State would issue permission for a local authority to grant one or more licences as he or she sees fit on that advice. The local authority is then obliged to grant its licence or licences in a manner directed by the Secretary of State.

    The main advantages of these proposals are as follows. The definition of the experiment becomes much clearer in that it refers only to the new regional casinos which are obviously and genuinely different from any other casino in the United Kingdom, particularly given that they are the only casinos that will have category A machines—the machines the software of which is capable of unlimited stakes and payouts, though in fact that will not be the case in all category A machines; the software as is normal is flexible.

    There are just two categories of casino—regional and small—giving clarity of offer to the public. The machine definitions remain intact. By removing the large category, 1,200 category B machines are also removed. The control on proliferation of location and numbers of machines is continuing and could be flexed or tightened by a Secretary of State in response to advice from the commission and the advisory panel. This combination of local democracy and a centrally driven strategy provides a strong social policy.

    The process is initiated by the local authority, passes through the strategy and control exercised by the advisory panel in conjunction with the Secretary of State, and returns to the local authority for both planning and licensing. The designation of existing casinos as small casinos removes the need to reclassify automatic versions of table games. The existing industry has a much fairer opportunity of competing with new entrants in seeking a small licence. It gives regulatory simplicity. In addition, there are no competition issues, as an even playing field exists for the new small licences with this amendment.

    The retention of the advisory panel as a key element of the process, and the designation of new permitted areas, means that there is a further triple-lock—local authority desire, advisory panel recommendation and the Secretary of State's approval—before a local authority can consider planning and then licensing. In effect, this is, including the commission's role, a six-lever lock. Those are strong hurdles that need to be overcome for there to be a new licence. This regime genuinely delivers the kind of gaming regime that the industry, inward investors, and commentators would find safe, workable and regenerative, without asking the Government to confront any presentationally significant issues.

    There are many aspects of this proposal that can be properly claimed as a further tightening, particularly given that we are talking about removing altogether the category of large casinos and the number of machines that they would contain. If adopted, the changes would ensure the unequivocal support of the British industry and significantly help the Bill's passage.

    I understand that the Minister may be concerned about applications currently being considered by either the Gaming Board or justices. Growth in casino numbers over the past five years has been in single figures. The existing licensing process is effective and controlled by the Government's own regulator, the Gaming Board. I am conscious of time, but I wanted to outline the amendments clearly. I beg to move.

    I briefly wanted to register interest in, if not total support for, what are ingenious proposals. It is unfortunate that we have only a day in Committee, and we probably do not have many further stages of the Bill, to tease out Amendment No. 245, which is extremely interesting. It has merit in the way that it simplifies the structure of the Bill.

    When I first came to the Gambling Bill, there was the rationale behind new small, old small, large, and so on, to consider, and then reading through the deliberations of the scrutiny committee and the previous Budd report and so on, the logic of where we have got to and why escapes all but the most careful analysis. This proposal has the merit of great simplicity. As the noble Baroness said, it makes clear what the experiment is. The experiment is the regional casinos that we have heard noble Lords speak about on previous amendments. The mechanisms for the piloting and for the approvals need to be particularly strong, whereas in a sense we are talking here about a much more conventional size of casino; we are talking small.

    When one analyses the actual number of machines which are not category A machines, as the noble Baroness has made clear, probably the net effect is to increase the numbers by about 1,500, given that there are no casinos in the pipeline. Obviously one would need to examine that situation to give an absolute statement, but it seems that something like the maximum number of machines currently permitted is 1,370; the proposals would produce a further 2,740, and then one deducts the machines that could be in the large casinos, which are abolished under the proposals. That leaves a net 1,500. I know that the Minister, with his statistical background, is well able to do mental arithmetic on this.

    That is an interesting approach. My one worry about it is the proliferation aspect. That is why I say it is interesting rather than saying it is to be supported. Certainly, in terms of understanding what these casinos are and the nature of the proposal, it is a great deal more transparent. Frankly, both licensing authorities and the general public would find this much simpler.

    7 p.m.

    This is a very important series of amendments. My noble friend Lady Buscombe has explained exactly what is meant by them, so I shall not repeat that. However, I invite the Minister to explain the unequal treatment between the new, small casinos and the current casinos, which is unfair to the current estate. There must be a reason; perhaps I have not gathered it.

    In my remarks on a previous amendment, I hinted at my support for the removal of large casinos. We are talking about the machine definition remaining exactly the same for the new, small casinos and the existing ones; we are not talking about introducing category A machines into any part of that. I very much support the amendments.

    One thing that everyone from all parts of the Committee has had in common is a desire to get the Bill through if we can, for the reasons that we all know and that do not need repeating now. I have absolutely no interest in the casino industry, but it seems to me that the chances of getting the Bill on to the statute book without what you might call an agreement with the existing British casino industry are very remote. We are all aware that up to date—from 16 December until now—it has been extremely unhappy, and that unhappiness has pervaded the past few weeks on the Bill.

    I do not know whether we should advise that large casinos should go, but the amendments —although they seem to be a change from what the Government had proposed—seem an interesting way forward. They might be a new way forward as well, which is difficult at this late stage. I am clear that we must find a way forward on what appears to be deadlock at the moment, and the amendment or a variation on the theme may be it. As my noble friend Lord Ullswater said, it appears rather easier to explain as a policy than the one that we have had until now.

    Like the noble Lord, Lord Clement-Jones, I am concerned about proliferation. Fear of proliferation was one of the bases of the policy at the start. There might be concern that the Government wanted to avoid having a small casino as a gambling den on every high street, but there is no danger of that; that is tabloid stuff and is not realistic. However, my natural inclination would be not to remove large casinos. As I said, this is not an area of great expertise for me, but I hope that the Government will look at the amendment carefully to see if it cannot be a way of reaching agreement on all sides so that we can move the Bill forward and get it on to the statute book.

    I must start with a comment on what the noble Lord, Lord Mancroft, said. I have huge respect for the British casino industry and the four major firms that dominate it. They have run for many years honest and crime-free casinos that have not had any particular record of causing problem gambling. They have substantial financial security. I yield to no one in my respect for them. However, it should not be said that we need their agreement to get legislation through Parliament, which is rather what he implied.

    I obviously did not choose my words carefully, but this is a large and complex Bill. Apart from anything else, it is about reforming and modernising an industry. If you are doing that, it is usually a good idea to try to carry that industry with you. The past few months of the passage of the Bill have been somewhat sour. Even before the Bill arrived, the discussion had been going on for five years. It is a pity that we have that situation; it would be nice to get back on to a set of rails. Not everyone will agree with everything, of course—that will never be the case—but the level of disagreement that there was following 16 December undoubtedly ruined the atmosphere.

    I have to be concerned with policy rather than atmosphere. Having said that, of course we have taken very seriously the concerns expressed by the British casino industry. We have seen members of the industry on every occasion that they have asked to see us; we have read their advertisements with great interest and increasing incredulity; and we have heard them say, as has been said today, that the Bill treats them unfairly and puts existing casinos at a competitive disadvantage. We think that those concerns have been, at the very least, overstated, but we recognise that there is an issue here which these amendments are intended to address. However, I have to say that I am unable to support them. I want to explain why and I shall go on to explain to the Committee what we see as a better approach to the issue.

    In bringing the Bill before Parliament, we have made clear from the outset our view that public protection must be a priority. In the Bill before the House, we have adopted a precautionary approach, holding back on the liberalisation of regulation until we can be sure, on the basis of practical experience, that we are not going too far too fast and that we are not letting problem gambling run out of control.

    It was on the basis of that precautionary principle, and recognising the concerns expressed very forcefully in another place at Second Reading, that we introduced an initial limit of eight as the number of casinos in each category allowed under the Bill. Whether and when those limits can be eased will depend in due course on an assessment of their impact by the Gambling Commission and on the agreement of both Houses of Parliament.

    Those limits will not affect the entitlements of existing casinos. They will continue to be able to trade as now. They will be able to enjoy some important benefits from the new system of regulation, including, for the first time, the freedom to advertise. I expect the casinos to take full advantage of this opportunity.

    But it is the case that those 137 casinos will not immediately be entitled to all the entitlements of new-style casinos. In particular, they will be limited to 10 gaming machines rather than up to 80, as proposed in the amendments, and they will not be allowed to offer betting in combination with casino gaming. We think that the impact of casinos with the additional entitlements needs to be tested and carefully evaluated before the door is opened more widely. On the other hand, the impact of a small number of new-style casinos on the existing industry —that is, eight plus eight plus eight—should not be exaggerated. New-style large and small casinos will not be able to offer different or better kinds of machine. People who want to play a category B machine in an existing casino will be able to do so just as readily as in a new-style casino. I think it is now accepted that category A machines, which are new, should not be introduced outside regional casinos at present.

    Nor must the pudding be over-egged in terms of betting. Existing casinos already have to compete with more than 8,000 betting shops—some of them literally next door. The addition of eight or 16 new-style casinos will not change that comparison much.

    We also need to bear in mind that we are not proposing to freeze the position of existing casinos for all time. Some have suggested that the Bill is putting them in aspic. But it seems to me that aspic dissolves; I think they really mean "concrete". But that is not the case. If the initial eight/eight/eight stage is satisfactory, it will certainly be possible to extend the entitlements more widely, including to existing casinos.

    I turn to the amendments themselves. It seems to the Government that, in straining so hard to protect existing casinos, the amendments give rise to problems far worse than those they seek to address. The first and most important point to make is that they would substantially dilute the precautionary principle. I think that if we were to return to the House of Commons a Bill which was significantly less precautionary than the one which left the House of Commons, we would receive very powerful resistance—I do not know about Front-Benchers but certainly from Back-Benchers of all parties.

    Instead of testing, as we are doing, in a number of locations the impact of casinos which have a significantly increased number of machines, we would be rushing straight into allowing every casino in the country to do so, together with additional new casinos. The machines may be familiar, but the effects of concentrating them and allowing proliferation of venues are not familiar. We would, almost at a stroke, be looking at 10,000 new category B machines and potentially far more than that—I shall explain my figures in a minute—without any kind of prior test or assessment. The number of casinos allowed to have 80 category B machines each could easily double.

    The point is that between Royal Assent and the commencement of this part of the Bill the existing 1968 Act will still apply. That means that new casinos can open up in permitted areas. If we have the attraction of the benefits offered to these casinos by these amendments, then there is—I am not good at betting analogies—a high probability that a significant number, possibly double the number of existing casinos, would open between now and the time the Act comes into force. The noble Baroness, Lady Buscombe, says 5,000. I think it could be significantly more than 10,000 before we get to the end of this process.

    I apologise to the Minister for interrupting. He is giving a full and helpful reply. Can he confirm, for the assistance of all your Lordships, when he sees the Bill coming into force? That is important in relation to this point.

    We have a number of preparatory steps to make and there will be different commencement times for different parts of the Bill. It will certainly not be less than 18 months from now.

    As I have said, there is a clear prospect under the Bill as drafted that existing casinos will become small or large casinos depending on their size. By the way, they have 10 or 15 machines at the moment, as the noble Baroness, Lady Buscombe says; but there is nothing to stop them under grandfather rights from buying the shop next door or opening up another floor, and having more space for more machines within the 2:1 ratio. It would be dangerous and wrong, however, to prejudge the outcome of the testing period of the impact of the new casinos in a limited number of areas.

    The second point is that the arrangements proposed in the amendments for deciding where the new casinos might be established, and how many there would be, might be arbitrary. There are huge difficulties which the amendments do not address. Supposing Hammersmith and Fulham or the City of London were to be designated as new permitted areas, what criteria should determine the number of casino licenses available there? It is one thing to look to an independent advisory panel to identify the right areas to test out new-style casinos—the task we are setting the advisory panel on a once-and-for-all basis—but another thing to expect the panel to undertake a permanent system of rationing. That is what these amendments do. It would be impossible to codify and police. We would be keeping exactly the elements of the present law—permitted areas and demand tests—which have proved the most unsatisfactory.

    The third point is related to that: that the amendments maintain barriers to entry. British casinos have been talking about a level playing field. This is not a level playing field. These amendments would tilt the playing field permanently to the advantage of the existing casinos. They would have all the entitlements of the new-style casinos immediately, whereas potential newcomers would have to compete against each other for a rationed number of new licences, and to meet the costs of winning those competitions. That is not a sustainable position.

    We do not want to freeze the number of casinos opening under the present law. It must be right to allow some natural growth in the market between now and the implementation of the Bill. We are proposing, subject to consultation, to make changes in planning use classes to guard against uncontrolled proliferation during the transitional period. In other words, we will need planning permission to open new casinos.

    The amendments, however, would make the grandfather rights enjoyed by existing casinos far more valuable. There could be a huge surge in applications in order to get in under the wire. That would be thoroughly undesirable. It could risk creating exactly the proliferation of casino gambling which we want to avoid. The number of casinos, as I have said, could quickly double.

    The fourth point is that the amendments propose the removal from the Bill of the category of large casinos. I find it strange that we have been criticised for departing in relatively modest ways from the advice of the scrutiny committee, but the Opposition are now proposing a much more radical departure.

    I must say that I started by thinking that the removal of large casinos was a precautionary measure, because we are getting rid of the potential for 1,200 machines, but, if we look at it realistically, what it would achieve is not so much the removal of 1,200 machines but protection for the new, small casinos, which are the existing casinos plus some others. I do not find that an attractive prospect.

    7.15 p.m.

    So I fear that, taken together, the amendments will not facilitate the development of a fair and open gambling market. They will place more emphasis on the protection of a small number of companies—basically, four companies—than on the protection of the public as a whole.

    The Committee will think that I have been rather aggressive about that, I am sure, and I probably have, because I am really concerned about the protection of the public and avoiding proliferation and increases in problem gambling. But we have looked again at what can properly be done to recognise the legitimate interests of the established industry, and I have always, as I have today, praised it for having a good track record of responsibility and integrity.

    In the first place, we have prepared Amendment No. 233, which is in the next group, which takes automated casino gaming tables of the kind now on offer in many casinos here, out of the definition of gaming machines. We think that that is right because there is a reasonable basis for distinguishing the equipment from gaming machines. That will also mean that casinos do not have to count those machines against their allowance of gaming machines. In other words, casinos will not be penalised for innovation.

    Secondly, we think that it would now be reasonable, without weakening the overriding precautionary principle, to increase the entitlement to category B machines in existing casinos from 10 to 20. That is in addition to the reclassification of automated tables. By the way, that does not involve any change in the Bill.

    If there is any requirement for it, we would be prepared to discuss some increase in the prizes—the maximum limit—for category B gaming machines. We could very well discuss that with the casino industry. Of course, any change of that sort would have to be very carefully monitored.

    So I am not resisting without any possibility of change, discussion or negotiation, but I hope that the Committee will agree that the changes that I am talking about, together with the arguments against the amendments, go as far as it is reasonable and prudent to go in the direction of helping the casino industry but not gambling with the protection of the public. We are simply not willing to do that.

    Will the Minister confirm that there is no restriction on who applies for the eight, eight and eight, so that all UK companies, existing companies and new companies from around the world can apply?

    Yes, of course, we have said that all along. We said it twice in the Statement on 16 December, although the British Casino Association advertisements claim that it was excluded. We said it twice in that Statement. That has always been the case, and I have made it clear, that those casinos have a very strong case for doing well, because they know the markets; they have the experience; they have the staff; and they certainly have the ability to raise the money for casinos of that kind. I think that they will have a very good business opportunity and they would be very unwise to throw that away by endangering the passage of the Bill.

    Just for clarification, can an existing casino apply to become a new casino?

    Yes. If there is an existing casino in an area identified by the advisory panel as, let us say, the location for a small casino, an existing casino could apply to become a small casino under the new legislation.

    I will read Hansard with considerable interest tomorrow. What the Minister had to say was welcome, in terms of the movement being made. I hope that degree of movement will be sufficient to reassure the established industry that it is not all doom and gloom where they are concerned.

    The first three pages of Clause 346 contain a long list of definitions. The Minister was searching for a phrase that could convey a high degree of probability with language taken from the betting field. I offer him "a racing certainty", but, more colourfully, I offer him the great words of Damon Runyon:

    "It may be that the race is not always to the swift, nor the battle to the strong—but that is the way to bet".
    If he uses "Damon Runyon" as shorthand in future, we will all know what he means.

    I will seek to avoid gambling analogies as fiercely as I do sporting analogies, because I do not understand them.

    I made clear on Second Reading my understanding that the existing casino industry will be able to apply for the new licences. It is important to stress that. Notwithstanding that, I urge the Minister to think again about some of the issues we have debated this evening.

    I agree with the noble Lord. Lord Clement-Jones, that these proposals require careful thought, particularly the latest proposed solution that gets rid of the large casinos. Neither the noble Lord, I suspect, nor I would wish to allow, albeit inadvertently, proliferation without care. We are simply looking for, as I put it carefully in my speech on Second Reading, a more equitable arrangement.

    The noble Viscount, Lord Ullswater, referred to the removal of large casinos, and said we would not be piloting small ones. We do not need to pilot them, as we already have them. and I do not understand why we are doing so. Small casinos already exist.

    These proposals involve significant hurdles. It is important to stress that we are talking about a different gambling experience when we talk about small casinos versus regional. I accept that this Bill means the membership rule will be dropped, there will be some freedoms to advertise, and the existing estate will be able to continue to trade as now. That continuation, however, will be limited to 10 machines. The Minister wants to test and evaluate carefully the effects of the eight, eight and eight pilots. We all accept that these new regional casinos will have some significant impact upon our culture. However, those in the existing estate, which have proved, over the last 40 years, that they are responsible businesses, are now saying that, as it stands, the Bill will freeze their position in time—or, as the Minister suggested, in concrete. I have sympathy with their view.

    That cannot be the case. Between Royal Assent and the commencement of this part of the Bill, they will have the opportunity to open new casinos under the 1968 Act. When the Bill comes into force, they will have the advantage of the abolition of 24-hour membership requirements and the advertising ban. I cannot see how they are being "frozen".

    They will have the opportunity of opening casinos between now and the enactment of this Bill. But the Minister confirmed to me that that may be 18 months from now. There is a limited ability for most clubs to grow in current premises, and moving the entire British estate to new premises would take years. It takes time to process the introduction of new premises. I cannot see that there would be a mass proliferation under the wire between now and the introduction of the new legislation.

    There is also genuine concern that if others are awarded licences to open casinos within close proximity to the current estate, they will be allowed to have many more machines and a much more exciting venue as a result. Also, large size means the possibility for more payouts. We are considering what we believe to be an anti-competitive situation. I heard the noble Lord say that he believed that the proposal put to him this evening would create an anti-competitive position with regard to the new entrants. I cannot see that. Under this proposal, new entrants would be allowed to apply on an equal basis with enormously strong safeguards. We are not talking about a triple-lock, but a six-lock approach.

    The Government are talking about a precautionary principle. But I do not believe that we are seeking would remove the precautionary principle if at the same time we would remove the category of large casinos altogether—that would remove 1,200 machines from the Government's proposed landscape. The Minister has suggested that the proposal would lead to an additional 10,000 machines. I do not accept that.

    There will be a test period, during which the Government propose that the existing estate will not be able to increase the number of machines. However, there is a real concern that during that period the new entrants will be given opportunities of which the existing estate will be deprived. I take on board the example that the Minister gave regarding Hammersmith and Fulham having to decide the criteria that should determine whether or not a new casino should be opened. Maybe we should look again at the amendment and, instead of relying entirely on a permanent advisory panel to police this, consider how we could more carefully link in the regulatory role of the Gambling Commission to this proposal.

    I do not wish to press this issue tonight. However, there are opportunities between now and Royal Assent for noble Lords to think with care and to urge the Minister to take these proposals on board. I accept, and welcome, that the Minister wants to assure the current estate that its future is not as bleak as it has suggested—that the future is, indeed, rosy—but I still need to be persuaded of that. I believe that between now and Royal Assent it might be possible to find a solution that might be more equitable than that proposed by the Government. For now, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [Amendment No. 16 not moved.]

    moved Amendment No. 17:

    Page 4, line 15, leave out paragraph (d) and insert—
    "(d) sub-small casinos previously licensed under the Gaming Act 1968 (c. 65)"
    The noble Baroness said: In moving Amendment No. 17, I shall also speak to Amendments Nos. 179, 227, 229, 231, 232, 233 and 367.

    I am so sorry. I need a drink. I hope that will not appear in Hansard. As I am sure the Committee is aware, the existing casino industry is concerned that the legislation does not fully integrate it with proposed new casinos. As such, the amendments in this group aim to create a fairer arrangement for the United Kingdom plc and the existing industry. 7.30 p.m.

    Clause 7(5) lists the categorisation of casinos as either a regional casino, a large casino, a small casino or one below the minimum size for a licensed casino. According to the Government's size criteria for new casinos, the vast majority of the existing casino estate would fall below the minimum threshold for a small casino. The inference from the wording of Clause 7(5)(d), however, is that existing casinos should not really be licensed and therefore should not exist. I have been led to understand that the legal implications of that wording may well be dubious. Therefore, it is tremendously important that we should consider them today.

    As it stands, the Bill also proposes to restrict existing casinos to their current entitlement of 10 gaming machines per casino up to category B and ban bingo and betting on real or virtual events. Those proposals are seen by the current industry as unfair and uncompetitive and will give a huge competitive advantage to regional casinos and new casinos at the expense of the existing estate—not the right basis, we suggest, for a free market. Many have questioned why a Labour government have come up with such legislation on casinos. Why should current casinos be restricted to 10 machines, although proposed regional casinos will be allowed 1,250 machines in total?

    My amendments are designed to ensure that new and existing casinos are categorised by size, with a new definition of a "sub-small casino" covering those existing casinos that fall far below the size requirements for a small casino. I envisage that the sub-small category of casino would have entitlements equal to those of the small casinos.

    I would also like the Minister to explain why the Government feel that casinos should not have equal entitlements to bingo, betting and gaming machines as determined by their size category. I believe that the opposite is a more logical and competitive manner of operation. That is why I have tabled these amendments. I beg to move.

    The Committee will forgive me if I do not repeat my encomiums to the British casino industry. I think they are well understood. Why Members of the Committee should laugh, I do not know.

    I believe that these amendments would take matters too far and too quickly. They would allow every one of the existing 137 casinos to become new-style casinos. Instead of the 24 new-style casinos that the Government propose, there would be at least 160 new-style casinos in every part of the country. Even if all the existing casinos were limited to the entitlements of a new small casino—we know that some of them are big enough to qualify for large entitlements—I am sure that the noble Baroness, Lady Buscombe, cannot deny that there could easily be 10,000 extra gaming machines.

    The result of the amendment would be nearly to double the number of casino gaming machines in the country, and to multiply by more than four the number of locations in which significant concentrations of gaming machines could be found. That would take matters too far and too quickly, particularly because while the old regime continued, any existing operator would be free to expand its floor space and new entrants would rush to obtain permissions for new casinos, even those equivalent in size to regional casinos under the existing law. That would therefore signal a proliferation of larger casinos, which is exactly what the House of Commons rejected and why we said that we needed the restrictions that we introduced in December. If the new-style casinos presented problems that required us to be tougher than we envisage, we would be faced with 160 or more premises that needed tighter controls, rather than the limited number that we envisage.

    We have a clear choice. The Government offer a gradual and controlled evolution of the casino industry where Parliament and the public know how many casinos there will be and can decide at each stage whether to go further. These amendments would destroy the certainty and control that we have guaranteed. They would put the industry in the driving seat at the expense of public protection.

    I have listened very carefully to all of the representations that the department has received. The message that comes out loud and clear from all that I have heard is that the public expect the Government to keep firm controls over the industry. They accept that adults should be treated like adults. They want to be sure that change will be gradual and that at all times commercial interests will not get the better of public interest. The Government have delivered precisely that, and I cannot allow our controls to he undermined by amendments such as these.

    Perhaps I may move on to government Amendment No. 233, to which I referred in the previous group. At Second Reading, I said that the Government were considering how auto-roulette terminals could be controlled most effectively under the Bill. Those terminals are offered in casinos now. They operate just like traditional casino table games, except that the wheel is spun and the ball is propelled by mechanical means rather than by a croupier.

    In the Bill, as drafted, the equipment is designed as a gaming machine. We have discussed the treatment of those terminals with the British Casino Association and others and we have come to the view that auto-roulette can be controlled effectively outside the gaming machine regime. We believe that in the special environment of a casino these terminals, which are similar to table games, can be offered subject to controls on the way they operate and the maximum number of player positions.

    The Government propose to use the powers under these amendments to allow casinos to provide automated casino games in addition to their gaming machine entitlement. The Gambling Commission will control the specification and the number of player permissions by licence condition. We hope that the casino industry will welcome this proposal as a sensible solution to a genuine concern that it raised with the Government.

    Perhaps I may make a general point. On the evidence that we took in the Scrutiny Committee, it is clear that the eight regional casinos will not really be casinos. They will be very large hotels with a very wide range of leisure facilities within them. A relatively small part of those very large facilities will be a casino.

    They will attract people who will travel some distance with their families for entertainment over perhaps a weekend, three days, or whatever. The general view that came across to the committee was that people would lose, on average, about £50, which they see as the sort of money that they may pay for a dinner or for taking their family to Chester Zoo—although that would cost more than £50. It is part of what they enjoy doing.

    However, the really big players will go to the very smart, smaller casinos that will be in the large casino category where the facilities will be nothing but casinos. That is probably where the Government have not quite got it right. In a way, we have restricted the facilities where the biggest amount of money will be gambled. There will be a much greater variety of facilities in those places where people will not be gambling that amount of money, which is where they see gambling as part of a leisure activity.

    I understand what my noble friend Lady Buscombe said. The arrangement in the Bill does not represent what the market wants, which is to offer opportunities for high gamblers in the large casinos, and even small casinos, where the facilities are ripe for the big players. Yet, we have ended up with the reverse, where the biggest opportunities to gamble will be where the big gamblers do not go or are less likely to go.

    I understand why the noble Baroness is bringing these ideas forward in order to redress that balance. I understand exactly the points made by the noble Lord that the amendments probably take things wider than he would want and, probably, even wider than the industry needs.

    On these issues, I ask the Minister to consider my point that something needs to be done to ensure that the balance is right. Although, by and large, I understand all the issues—I do not believe that the Bill has found the right balance—I still believe that there is further to go in the direction that I have identified. If they can be given some consideration, that may address the issues raised by my noble friend and the issues that concern the casino industry.

    I am grateful for that. I wish that we had had time to reconvene the Pre-legislative Scrutiny Committee to consider these matters. Noble Lords are happy with that idea; they must have really enjoyed themselves. I do not believe that the noble Lord, Lord Wade, is right. Nothing in the Bill restricts large and small casinos, as defined, from having non-gaming attractions.

    I probably have not made myself clear. It is not the non-gaming facilities that I want to see in the smaller casinos but the ability to cope with the very high rollers. The high rollers will not go to the big regional casinos, where there are category A machines and opportunities for much higher levels of gambling; they will be more likely to go to the smaller-sized casinos.

    That is way beyond my level of expertise. I would have thought they would be more likely to stay at the existing casinos in Mayfair.

    I think the high rollers will play baccarat and blackjack and other games and not the machines.

    I entirely agree with the noble Lord, Lord Wade, on the proposed regional casinos. I visited Las Vegas and I do not remember taking part in any betting. I was there for the leisure facilities and to see the amazing spectacle. When I have, on rare occasions, visited smaller casinos where the high rollers play, I have seen that the focus is on gambling. It seems extraordinary that we are putting category A machines in the huge regional casinos and minimising the different gambling opportunities within the smaller casinos.

    This has been an interesting debate. I take on board what the Minister has said. I shall consider it with care and read what he has said in Hansard, particularly in relation to his Amendment No. 233 and to auto roulette. Those are all important issues. In some sense, we are all conscious that time is not on our side. Unfortunately, notwithstanding the fact that the Bill has received pre-legislative scrutiny, noble Lords are quite rightly used to debating all the important, and sometimes not so important, issues on the Floor of your Lordships' House at leisure, but tonight we are very much constrained. I am grateful to the Minister for what he has said and, for now, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    had given notice of her intention to move Amendment No. 18:

    Page 4, line 16, leave out "may" and insert "shall"
    The noble Baroness said: I am grateful to the Minister for confirming to the Committee, when debating the Amendment No. 10 group of amendments, that the gambling experience will be separate from other leisure facilities within regional casinos. That was the purpose of tabling Amendment No. 18. I am grateful to the Minister for his clear assurances on that issue.

    [Amendment No. 18 not moved.]

    [Amendment No. 19 not moved.]

    7.45 p.m.

    On Question, Whether Clause 7 shall stand part of the Bill?

    I rise to oppose the Question that Clause 7 stand part of the Bill. That heads a long group of amendments in my name including Amendments Nos. 102 and 107, whether Clauses 149 and 164 stand part, Amendments Nos. 224 and 234, and whether Schedule 9 stands part. It should also include Amendments Nos. 176A and 176B, which I apologise got delayed a day in their circulation in the supplementary list because for some reason the clause and line numbers that I submitted had gone through some sort of random number generator before they got to the Public Bill Office and they were therefore gibberish. They can be taken as discussed.

    I have made a fairly rough and ready attempt to remove those parts of the Bill that refer to the new casinos—regional, large and small. I do not claim that I have done a proper filleting job on the Bill. I will attempt to do a much better, more efficient and more comprehensive job and bring it back at Report for further discussion. I look forward to that exciting occasion. In the event, I am clearly putting this forward as a probing set of amendments to allow the matter to be discussed.

    There are two possibilities. One is that we all meet again on 7 April and then the Bill goes through to Report. The second is that it all ends up in the wash-up. I believe that there is a large body of opinion that large and complex Bills like this going through the wash-up is not satisfactory. The Bill, by and large, is regarded as a good, worthwhile measure and one that has had a great deal of discussion and consideration.

    The sections referring to the new casinos, on the other hand, are far more controversial from a number of different points of view. I had an interesting communication this morning from the Casino Operators' Association of the UK—the COA—which wrote to me as follows:
    "There is somewhat of an impasse in negotiations with DCMS. Unless the Government makes concessions in line with our substantial recommendations, we feel that the most prudent next course of action would be to remove the casino sections from the legislation altogether. The Government and the casino industry needs more time to consider the best way forward and it has become increasingly apparent that this will not be possible until after the General Election".
    The COA sets out a number of reasons for that, which have essentially been covered and discussed in Committee today, only one of which has been satisfactorily dealt with perhaps—the question of ID on entry. I will not read them all out because they are well known and have been raised from various parts of the House during the debate.

    I tend to come from a rather different direction from that of the COA, in believing that, nevertheless, the best course of action would be to take the casino provisions out of the Bill—particularly if there is to be a wash-up procedure—and for the Government to bring back a new Bill after the election in which these matters can be further discussed.

    As my noble friend said, there are many things in the Bill that we ought to discuss in detail, for which we are not now going to get time. I do not intend to discuss them in detail now, not least because the time for dinner is rapidly approaching. But on the matter of the three new categories of casinos, there is a great deal that needs to be discussed, scrutinised and looked at hard. The Government have not got the system properly sorted out yet. We had a long discussion about regional casinos earlier, but I did not get satisfactory answers from the Minister—I am sorry to tell him that.

    The question of advertising is highly controversial, though that is not so much advertising for people to travel in the destination or resort sense to gambling casinos. If people are travelling from London to Edinburgh to visit a big new casino, that is one thing, but whether local advertising is desirable to attract local people in—whether in a big city or a relatively medium-sized place such as a seaside resort, where they may be 60,000, 100,000, 150,000 or 200,000 people living nearby—needs to be thrashed out properly.

    On inducements, there is a lot of evidence from places such as Detroit that providing free food, hotel rooms and transport—buses or trams to visit the casinos if it is Blackpool—can contribute greatly to addiction and problem gambling. I do not believe that the question of problem gambling as a public health concern in the surrounding areas of the casinos has yet been discussed properly.

    I listened with a certain amount of bewilderment to the previous discussion about the interaction between the different permissions that will be needed for casinos. The relationship between the national decision-making process dealing with which places will be allowed to have casinos, which involves the Secretary of State and members of his advisory committee—whoever they turn out to be—and the operators licences is fairly straightforward. However, the premises licences and the planning permission for some of the big, controversial proposals have not been sorted out properly. Inevitably, there will be a sense in which national decisions are made, a list of places is drawn up and effectively that will be a fait accompli. The rollercoaster will start and the local planning and premises licence processes will be a matter of bidding—how it will be done, where it will be and what it will be like rather than, "Is this something that we want, yes or no?" That will lead to a huge amount of local public anger and confusion. The process has not been thought out at all.

    I do not think that competition with existing local businesses and the local economy has been thought out properly. I do not know whether the Government have produced estimates—they do not seem to have produced estimates for many things that will be consequences of this Bill.

    I hesitate to interrupt the noble Lord, but did he find nothing in the report of the Joint Scrutiny Committee of any use at all in answering some of the questions that he says have not even been looked at? The Joint Scrutiny Committee, which contained a number of his distinguished noble friends, came to unanimous recommendations that covered all these matters. The committee looked at all the opportunities for regeneration and the difficulties and so forth. I beg him to read it if he has not had time to do so.

    If I said that I had read every word of that report, I would not be telling the truth, but I have read a great deal of it. I have certainly gone through it all. At Second Reading, I complimented the committee on its work because the Bill as a whole is now very much better than it would have been had that process not taken place. I made that absolutely clear. I believe that the Bill as a whole, apart from the casino provisions, is actually a good Bill that deserves to be passed by this House. My answer to the noble Lord is that the questions that I am raising have not been answered.

    The question of job displacement has not been satisfactorily sorted out. Evidence was given to that committee but the committee does not appear to have taken satisfactory note of it. I do not believe that the Government have come to a view about how many of the new jobs that are created in the big new casinos—whether regional, large or whatever—will simply be displacing other jobs either because of competition within the gambling industry or competition generally. Apart from people travelling long distances, there will not be any extra money. The people who go locally may visit in large numbers but they will not have extra money. They will simply be spending it in different places.

    Finally, we ought to have a serious argument about whether eight is the right number. The Minister said there is nothing special about eight, it is just an adequate number. If the Government really want trials and pilots, then eight seems too many. They could have their trials and pilots by having two at seaside locations and two at major urban centres, as an excellent report from NERA— I have forgotten its full title—points out. That would provide all the evidence needed to—

    The noble Lord has referred to the NERA report. Is he able to tell the Committee, because NERA cannot or refuse to, who commissioned that report? Then we would be able to judge the evidence it put before this Committee more fairly than we can when it suppresses that fact.

    No, I cannot tell the noble Lord, Lord Lipsey, that. It is a question I asked myself as I read the report, but it was just one of the large number of items in piles of stuff that came through the computer and through the post which I read with interest. I have a right to consider arguments from people whoever commissions them and whoever produces them, and that particular argument seems a very sensible one.

    The Government, and we, should ask what is the minimum number that is necessary, in order to carry out a satisfactory pilot. The only reason I can think of for it being eight is that there will be people in all the different regions wanting one each, but the Minister has already told us that that is not the case. They are not going to be divvied out one per region; it is simply going to be the best places. Two different seaside resorts and two different major urban centres are surely enough, unless there are other areas—perhaps a freestanding casino in the middle of the countryside. The Minister was evasive about that and just said that everywhere can be considered—suburbs, small towns, big towns, cities, the seaside anywhere. I do not think that is satisfactory.

    There is a huge amount still to be discussed about this Bill, and rushing it through without proper further scrutiny of these matters will lead to considerable dismay and will not do our House any good in the forum of public opinion, if that is something we are interested in.

    I do not know if I have to move that it stand part, but I do not think that I do, I am just opposing the Motion.

    The noble Lord, Lord Greaves, has made a series of thoughtful and interesting speeches in the course of our Committee today, and the speech he has just made is no less thoughtful and interesting. I ought to put on record from the Front Benches that we do not agree with his view about the continuation of Clause 7, as I made clear on Second Reading.

    Of course no one part of the industry is deliriously happy about Clause 7. It is a series of compromises, and I take some comfort from the fact that no one part of the industry is entirely happy because I suspect that therefore the balance is roughly right. Like the noble Lord, Lord Greaves, I do not know why the eight, eight and eight formula should have been arrived at at the end of last year. Whether it is a Chinese lucky number or some other theory, I do not know. The issue about piloting is precisely in order to see whether there is going to be demand for this type of leisure centre cum casino. One has to give it a shot, and I do not believe that going much lower in terms of numbers is a particularly sensible way forward.

    Although there are some ingenious amendments, and Amendment No. 245 that we have already debated today can be counted among that number, I do not believe, before wash up, that we are going to find some great new solution to all of this. Strangely enough, although the noble Lord, Lord Wade, when he talked about the current structure, was trying to demonstrate how illogical it was, to me he actually made quite a lot of sense. He made a distinction between the great leisure centre/casino, which was a regional destination casino, and the rather more esoteric, private club where high rollers go to play the tables. They do not go to play the machines—they go to play Black Jack, Baccarat and other games that people play who put down chips worth £1,000. They are not going to put coins in machines, by and large; perhaps people who accompanied them would, but they themselves would not. So those places are very different, as the noble Lord said, and we do not currently have that form of regional casino. We have received a very interesting series of letters from places that would be regarded as destinations, such as Blackpool. It is very interesting how they have set out their stall. Of course, there is a huge amount of optimism, and I very much hope that they are not disappointed by the outcome of the process. On balance, now that we have the ID requirement that we secured today—and obviously we shall have to discuss with the Minister how that will take effect in the Bill—on our Front Benches we believe that we are getting close to a solution that can take us forward, subject to further clarification in some areas. On those grounds, I would not support my noble friend.

    I am glad that the noble Lord, Lord Greaves, said that this was a probing amendment, because I certainly cannot agree with it. The idea that you can suddenly remove the casino portion from this important Bill at this moment and expect suddenly to be able to resurrect it as a single item after the election is—well, the noble Lord has his own views about it, but I certainly would not propose that it should be done.

    For anyone who has any experience of visitors coming to London, the one thing that this Bill will do is to remove the membership rules. There must be thousands of people who come to London and who want on occasions to go to a casino to have an interesting evening and are frustrated by the fact that they have to apply in person for a membership card and wait 24 hours before they go to gamble. Nowhere else in Europe are you expected to do such a thing, and I believe that the way forward that the Government have come up with is the right way to go.

    If there is one thing that came across to me when meeting the various casino owners over the past few months is that they are very smart businessmen. To build a big leisure casino, you have to commit something like $0.5 billion if not more—say £300,000 or £400,000 minimum—to create it. That decision is not going to be taken by anybody unless they are very confident that it is going to work and that they are going to have the infrastructure around it necessary to make it a success. For such an investment, something like 2.5 or 3 million people will need to visit the premises to make it pay; most of them will pay for the leisure facilities rather than the gambling, and the gambling will put the cream on the cake and make the whole thing possible.

    I have no doubt in my mind that those casinos that are built will be a credit to wherever they are built; they will add many benefits and create more employment than they disturb. I assure the noble Lord, Lord Greaves, that the committee considered very seriously the alternative businesses that might suffer in moving employees from one type of business to another. We took evidence on that and came to the conclusion that, with everything taken into account, there would still be considerable economic benefits wherever such a construction was built.

    We considered the matter very seriously, and I have no doubt that whatever regions end up with some of these larger casinos, all parts of the community will benefit as a result.

    I listened very carefully to the noble Lord, Lord Greaves, and well understand the point that he is making, which is a principled case against having casinos in the Bill at all. I assume that what he means is that there should he no change in the casino law. It does not really matter what the amendments say; clearly they could be sorted out afterwards if there were general support for them. But I take it that he means to leave casino law as it is at the moment rather than to abolish casinos altogether; he is nodding, so I believe that must be right.

    My position is that the Government's policy is a cautious and sensible approach to a part of our national life that the majority of people regard as a safe and normal activity. Therefore, I do not think that the noble Lord's position truly represents what most people think about casinos. Most people look on casinos and gambling in general as a leisure choice for informed adults. They know that it has risks like many activities in life and they accept that with careful regulation it can be a normal part of a good night out.

    I am glad that the noble Lord raised the core point of whether the Bill should deal with casinos because I want to set out what we would lose if we took out the casino part of the Bill. We would lose the potential for regeneration. Many local authorities want the inward investment, the new jobs and the visitors that casinos will bring with them. New casinos provide not only a range of gambling facilities but hotel accommodation, conference facilities, restaurants, areas for live entertainment and so on. If there is an issue of job displacement, the membership of the committee of the noble Lord, Lord Wade, shows that it has been carefully considered.

    Lots of local authorities have written to us saying that they would welcome such developments. We think it is right that we give a limited number of local authorities the opportunity. That is why the powers for local authorities in Schedule 9 to secure benefits for their area are so important. At the same time, there is provision in the Bill for any local authority that wishes to opt out altogether from new casinos. So there is no forcing casinos down the throats of communities that do not want them.

    If we did not have this part we would abandon choice for consumers. Many people enjoy gambling. We want to ensure that protections are in place for the small minority of people for whom gambling becomes a problem, but we think that it is right to extend choice for adult gamblers. We would set back the development of the British casino industry, which has proved its integrity and probity over the past 40 years. With new technology, new games and changes in society it is different from the industry regulated by the Gaming Act 1968, which would have to continue in force. The industry has earned the right to be allowed to develop, cautiously. Without this provision, we would keep unnecessary and burdensome regulation. We think that it is right to remove outdated regulations that do not contribute to the delivery of the three regulatory objectives. The industry and the customers would be left with a regulatory regime that was created for a different industry at a different time. Casino developments would be permitted in a relatively small number of urban areas. The membership requirement—the 24-hour rule—will remain. We will heavily restrict the ability of casinos to advertise and there will be strict limits on the number and type of machine that they have.

    Without this provision, a great opportunity to achieve a modern and responsible regulatory framework would be lost and an important and successful part of the leisure industry would be stopped in its tracks. We think that every part of the Bill contributes to the well-being of the country.

    Clause 7 agreed to.

    Clauses 8 to 11 agreed to.

    I beg to move that the House do now resume.

    Moved accordingly, and, on Question, Motion agreed to.

    House resumed.

    My Lords, I beg to move that the House do now adjourn during pleasure. In moving the Motion, I indicate to the House that we will continue the consideration on the Prevention of Terrorism Bill at about 10 o'clock. We do not know the precise time: it will be displayed on the indicator.

    Moved accordingly, and, on Question, Motion agreed to.

    [The Sitting was suspended from 8.9 to 10.15 p.m.]