That the Grand Committee do report to the House that it has considered the Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2010.

Relevant Document: 4th Report from the Joint Committee on Statutory Instruments.

The purpose of these regulations is to increase the maximum participation fee for prize gaming in bingo premises and the maximum amounts that may be paid in prize money in respect of such gaming. The regulations we are debating today refer to a type of gaming where players are notified of the prizes in advance rather than where the winnings are made up from the stakes of the participants.

Prize gaming forms an integral part of the business model for the bingo industry. Many operators have traditionally offered what is referred to as “prize” or “interval” bingo under prize gaming rules; that is, smaller, faster games run in between sessions of mainstage bingo. The industry generally regards prize or interval bingo as an essential revenue stream that can account for up to 20 per cent of bingo sales in some clubs.

The Committee will be aware that in June last year, the Government introduced the Gambling Act 2005 (Limits on Prize Gaming) Regulations 2009. The regulations increased the limits on participation fees and prize levels for prize gaming in a number of different types of premises. It was the Government’s original intention that all venues entitled to offer prize gaming should benefit from an uplift in stake and prize levels. However, prize gaming in relation to bingo premises is regulated under a separate framework within the Gambling Act and is governed by a separate parliamentary procedure. I know that the noble Lord, Lord Clement-Jones, will recall this from our deliberations on the Gambling Bill that we so much enjoyed a number of years ago. As a result, the 2009 regulations could be applied only to adult gaming centres, family entertainment centres and fairs, and not to bingo halls.

Since June 2009, therefore, the Government have held discussions with a number of stakeholders about whether these new prize gaming limits ought to be applied to prize gaming in bingo halls. Following the completion of those discussions, there is no reason why not. Throughout the discussions there have been three key points for the Government to consider: first, whether the economic and social case for increasing prize gaming limits in adult gaming centres, family entertainment centres and fairs could equally be applied to the bingo industry; secondly, whether any new limits could translate straight across into the bingo industry’s business model or would need to be refined in order to meet its needs; and, thirdly, whether increasing limits for prize gaming risked undermining the character of bingo premises as softer gambling environments.

When the Government reviewed stake and prize levels for category C and D gaming machines in 2008, they included proposals for prize gaming. That was in response to a number of compelling points made by stakeholders. The Government could not ignore the fact that issues raised around prize gaming and the needs of small businesses such as seaside arcades were comparable to those raised in connection with the category C and D machines.

In June 2009, following two public consultation exercises, the Government duly increased the participation fee and prize levels for prize gaming in certain venues accordingly—that is, to a maximum £1 participation fee and £70 prize. It soon became clear in discussions with the industry that a similar case existed in relation to bingo, in terms both of the needs of the industry and of the risk to the licensing objectives.

Many bingo premises continue to feel the effects of a severe long-term economic downturn across the industry, and while the Government have stepped in to help where they can—most notably when in February last year we increased the number of B3 gaming machines that bingo premises could offer—many operators still appear to be facing difficult trading conditions.

Prize bingo generates significant levels of income for many bingo clubs, and the Government want to see these businesses benefit in the same way as adult gaming centres and family entertainment centres did in June 2009. The regulations that we are debating today will therefore not only allow bingo operators to retain an important revenue stream but also enable them to develop and maximise that revenue to its fullest potential.

We should be aware that the current regulations governing prize gaming limits in bingo premises operate on a slightly different basis from those in respect of other types of premises. They specifically distinguish between premises where games are played in the presence of children and where they are not. This allows the operators to offer different maximum prize limits accordingly, thus reflecting the different levels of risk that each type of premises poses in relation to the licensing objectives of the Act.

At present, bingo clubs can offer a maximum stake of 50p and a maximum prize of £35 where children are permitted on the premises, and a maximum prize of £50 where they are not. Following discussions with a number of stakeholders, we have concluded that this difference in maximum prize levels between games played in the presence of children and those that are not should indeed be preserved; in our view, to do otherwise would run the risk of undermining an important revenue stream, especially for many smaller and medium-sized clubs.

These regulations will introduce a new maximum stake of £1 and a maximum prize of £70 where those under 18 years of age are permitted on the premises when a game is being played. Where under-18s are not present, we propose a maximum prize of £100. Of course, the Government are keeping the licensing objectives at the forefront as well as the risks that the new limits might pose to them.

As the Committee will know, the prize gaming limits implemented through the Gambling Act are intended to reflect Parliament’s view that prize gaming should remain a low-risk gambling activity suited to venues that are more oriented towards the family or the wide community. The limits were considered necessary in order to mitigate the effects of any significant commercial exploitation of the prize gaming rules that might undermine the nature and character of prize gaming as a low-level gambling activity.

Such concerns were paramount when the Government’s original proposals regarding prize gaming were included as part of the two public consultation exercises carried out in 2008. None of the responses to these consultations raised any issues that would suggest problems with these similar proposals, so the Government wrote to stakeholders informing them of their plans and, following further discussions, we are confident that these new limits for bingo balance the needs of the industry with the Government’s commitment to consumer protection.

The regulations will ensure that the bingo industry can, in these difficult economic times, secure established revenue streams and develop further a product that is highly popular with players, while retaining the character of prize gaming originally intended through the Gambling Act. We are confident that these regulations do not prejudice the licensing objectives and in particular the protection of children and the vulnerable.

The regulatory framework implemented by the Gambling Act recognises that gambling is not a homogenous activity. Rather, it covers a range of experiences. As a result, the cornerstone of the Government’s gambling policy is to regulate gambling premises based on the levels of risk that they pose to the licensing objectives of the Act. Bingo is, of course, a low-risk gambling activity. Indeed, the Committee will appreciate the important social functions that bingo clubs perform within their areas and many other local communities. The bingo industry continues to face significant economic pressures. Given the valuable role that bingo clubs play in many people’s lives, the Government believe it is right for them to benefit from a similar increase in prize gaming limits to those which other types of premises benefited from in June last year. I commend these regulations to the Committee and I beg to move.

My Lords, given that this order merely brings into line the limits between one establishment and another of similar nature, and that these regulations have been debated in relation to establishments that already have these limits, I see no point in objection.

My Lords, I thank the Minister for his full introduction, which was a bit of a contrast to the response of the noble Lord, Lord Howard. Just to add to the Minister’s regulatory pleasures, I shall be fairly brief, but perhaps not as brief as the noble Lord, Lord Howard.

The key question on the issues faced by the bingo industry is: what has taken the Government so long to come up with these regulations? Between 2003 and 2009 some 115 bingo premises closed, with a loss of 4,000 jobs. Since April last year, it is estimated that a further 24 have closed. The Explanatory Notes explain that an affirmative resolution such as that which we are debating is needed to approve an increase in participation fees for prize gaming in bingo premises—but the opportunity was there last March, when stakes and prizes for category C and D machines were increased, as the Minister said. Why could not this consultation—he called it a “discussion”, which was interesting—have taken place at the same time as that for category C and D machines? That is rather strange and does not appear to be the action of a Government who are concerned to nurture a valued form of gambling which is enjoyed by more than 3 million people in this country.

The Government have done some good things in this area. They have removed VAT on participation fees and they have permitted the doubling of the number of category B machines allowed on bingo premises. However, they then proceeded to fiddle with GPT, which cost the industry some £1.5 million. They do not have a completely blameless record in that respect. The Minister should answer the question about the uplift in stakes and prizes for category B machines. This is of great significance to the bingo industry and to the seaside arcades that he mentioned.

The wait for this review has been agonising. The commitment to it was made 18 months ago. What is the situation? What is the hold-up? Where is it coming from? However, we support the regulations and, in fact, we strongly welcome them. I look forward to the Minister’s reply.

My Lords, I am grateful to both noble Lords for their contributions. If I am slightly more grateful to the noble Lord, Lord Howard, I am sure that the noble Lord, Lord Clement-Jones, will understand why. Brevity being the soul of legislation, the noble Lord, Lord Howard, was succinct enough for me to limit my response to him to expressing my gratitude for his support for these benign and constructive regulations.

I hear what the noble Lord, Lord Clement-Jones, says about the regulations; would that they had been introduced earlier. The bingo industry has benefited from actions taken by the Government over the past few years. The increase in stake and prize levels for category C gaming machines that we introduced in June last year has benefited the industry, and in February 2008 we doubled to eight the number of B3 gaming machines that bingo clubs could offer.

We have the interests of the bingo industry very much in our minds and we recognise the pressures on it. However, the noble Lord, Lord Clement-Jones, with his usual standards of fairness, will recognise that most industries are under pressure in a period of recession, and certainly those industries that cater for leisure time and somewhat limited surplus funds are bound to feel the impact more than others.

The consultation that we held last year led to improvements for the industry. I accept the noble Lord’s point that Governments can always act more rapidly on consultations, but we have to be assured about the issues. The whole construct of the Gambling Act—on the preparation of which he and I spent many happy hours in distant years gone by—contained very clear principles, particularly in relation to gambling where children are present; and when introducing actions to liberalise and extend limits in the industry, we have to go back to the first principles that govern the Act.

Bingo halls are an important part of the social fabric of many areas. We want to see them flourish and sustained but, by the same token, we do not want their social ethos to change and we certainly do not want them, in any way, shape or form, to represent any conceivable risk to social life, either in terms of gambling or its effect on children. That is why we are so careful with this industry.

I accept the noble Lord’s criticism. It is always easier in opposition to suggest that the Government could do things more adroitly if only they followed the principles of the opposition parties, which have good ideas every second day and then discover that they take rather longer to implement. In government, the responsibilities are such that we have to measure matters with some care. However, given that noble Lords are prepared to give a fair wind to these regulations, we have reached our major objective of parliamentary consent to beneficial orders.

Does the Minister have any comfort for me on category B machines?

My Lords, as regards category B machines, I know that the noble Lord is concerned about undue delay. However, the review of these machines is bound to be controversial. The key issue for many stakeholders will be the high street bookmakers and their concern to protect a significant revenue stream. Parity with bookmakers is a serious issue.

The casino sector is also seeking government intervention in relation to stake and prize levels for category B machines in existing casinos. Its chief concern is the impact of the current economic climate on its position. Unlike in the 2008 review of C and D machines, with its focus on seaside arcades, there is not the same economic case to justify our intervention to increase stake and prize levels for category B machines. Industry opinion is not uniform on this. Earlier, I freely acknowledged the strength of the bingo industry’s case, but that is not the case with regard to category B machines. Of course, that reflects the fact that the different sectors of the industry have different concerns. Community groups express anxieties in these areas, but not with regard to bingo halls.

I hear what the noble Lord says on the matter. We are concerned about all sections of the industry that are going through difficult times. No doubt some in the industry can express the obvious case that it would improve their business position if we altered our position on category B machines, but there is not the same unity of position as is represented by the bingo halls. That is why I concentrated on bingo halls today.