§ [Relevant documents: Volume of memoranda published by the Culture, Media and Sport Committee, Gambling, (HC 827) and the Minutes of Evidence taken before the Committee on 1 1 th and 25th June and 2nd July.]
§ Motion made, and Question proposed,That this House do now adjourn.—[Mr. Pearson.]9.33 am
§ The Minister for Sport (Mr. Richard Caborn)
When the Secretary of State announced the publication of "A safe bet for success" in March, she made it clear that we would continue to involve a wide cross-section of stakeholders in working up the detailed legislative proposals for the reform and modernisation of our gambling laws. Today's debate, which I am pleased to introduce, is an important part of that process, as is the inquiry being undertaken by the Select Committee on Culture, Media and Sport under the chairmanship of my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), to which I gave oral evidence earlier this week.
We want the debate on these important reforms to be open and inclusive. The changes that we propose will have significant implications not only for the gambling industry and those who work in it—I remind the House that the industry employs more than 100,000 people—but for the three quarters of the adult population who enjoy gambling as one of their leisure pursuits, whether that be on the racecourse or in the bingo hall, the betting shop or the casino. That is reflected by the fact that we received almost 5,000 responses to our original consultation, and many more in response to "A safe bet for success".
Constructive debate and dialogue continue, and I am well aware of the interest that many colleagues in the Chamber have in our proposals, so I was pleased that the House business managers could offer a slot today, in advance of the major Bill that will be needed if we are to implement most of the changes. The debate, like the discussions that we are having with the industry and other stakeholders, will help to inform our detailed policy development as we begin to draft the necessary legislation.
Our overriding objective is to create an environment within which a well regulated British gambling industry can flourish and prosper, under sensible modern laws that deliver adequate protection for its customers and for society as a whole—an industry equipped to respond rapidly and effectively to the technological and customer-led developments in both the domestic and the global marketplace.
514 As right hon. and hon. Members will know, three major Acts of Parliament, with a vast array of subsidiary orders and regulations, cover gambling. The Betting, Gaming and Lotteries Act 1963 covers betting in its various forms, the Gaming Act 1968 covers bingo, casinos and gaming machines, and the Lotteries and Amusements Act 1976 covers charitable lotteries and amusements. There is also a separate Act covering the national lottery.
As hon. Members will know, the legislation was drafted at a time when gambling was seen as a rather shady activity that needed to be carefully controlled and managed. If we cast our minds back 30 or 40 years, we will remember that the social climate demanded that gambling should be frowned upon as a leisure pursuit—I come from a strong Methodist background, so I know all about that. The prevailing tone of the resultant statutes reflected that attitude, and the legislation of that day could be described by the phrase "grudging toleration".
During our consultations it has been clearly shown that things have changed dramatically. Our gambling industry has earned itself a reputation for integrity and quality, and is respected world wide. Gambling is now seen as a legitimate mainstream leisure activity that gives pleasure and excitement to millions of our citizens. Many people relax by going to the races, the bingo club or the casino. Business opportunities are growing with the increased globalisation of gambling products, across regulatory jurisdictions, by electronic means such as the Internet and interactive television.
Our laws, however, have not kept pace with that activity. They are woefully out of date, hard to understand, inflexible and difficult to amend. Hon. Members know how many times we have had to introduce orders and other statutory instruments, which eat up valuable parliamentary time. The present law certainly does not cater for the electronic communications age. It is now an obvious one-liner to say that the e-revolution is here and affects all our lives—and that revolution has not bypassed the gambling industry. One of the reasons for the review was the fact that information can now be passed electronically.
Businesses are saying that they are being held back, and opportunities for this country are slipping away. Consumers are beginning to look elsewhere for variety and choice, particularly in online gambling. Reform and modernisation of our system of regulation are long overdue.
§ Mr. Gareth Thomas (Harrow, West)
I entirely endorse my right hon. Friend's point about the need to regulate online gambling. May I highlight the issue raised by the BBC programme "Kenyon Confronts", which examined the problem of betting exchanges? People can place bets there, which allows people who have not passed the "fit and proper person" test to act as bookmakers. That threatens the integrity of our bookmaking industry. Will the regulation of online gambling be able to deal with that?
§ Mr. Caborn
Very much so. As my hon. Friend knows, the new gambling commission—which I shall discuss in due course, and to which we will give considerable powers—will deal with the eventualities to which he refers.
As we embrace the need for change and modernisation, we must not lose sight of the fact that gambling can harm some of our citizens. That is why, when the then Home 515 Secretary announced the gambling review in 1999, he stated that, while seeking to relax some of the outdated controls, the Government's aims were that the industry should remain crime free, that players should know what to expect and not be exploited, and that children and vulnerable people should be protected. We attach the utmost importance to those aims, and I shall return to them shortly.
The gambling review report—published in July 2001—was researched and written by the independent gambling review body, which was ably chaired by Sir Alan Budd. The review's remit was to consider the gambling industry today and how it may develop over the next 10 years, in order to update outmoded legislation. It was asked to evaluate gambling's social impact, weighing up the costs and benefits. The need to protect the young and vulnerable from exploitation, and to protect all gamblers from unfair practices, were key factors to be taken into account. Those issues were addressed in the case to which my hon. Friend the Member for Harrow, West (Mr. Thomas) refers.
The scope for criminal infiltration is a very serious consideration, particularly given that, as I have said, current legislation was in part a reaction to infiltration of the industry by organised crime in the 1960s, under cover of what were then legitimate gambling businesses. The terms of reference also required the review body to consider the availability and effectiveness of treatment programmes for problem gambling, and to make recommendations for their future provision. It was also asked to look at the need for new, more streamlined approaches to the practical regulation of the industry.
The review body was not asked to consider changes to the national lottery itself, but it was expected to consider and assess the impact on the lottery of any recommendations that it might make. In short, the review aimed to bring gambling legislation into the 21st century, while ensuring that gambling remains a transparent and fair activity, and that the vulnerable in society are properly protected from its downside effects.
I have already explained that the existing laws no longer meet the needs and expectations of today's gambling industry and its customers. Advances in technology are not provided for within current legislation, and Britain is missing out on the opportunity to keep pace internationally. In some instances it is hard, in today's context, to fathom the reasons behind the rules, which are holding back legitimate business. Some regulations appear to defy common sense, although there were doubtless good reasons for their introduction at the time. However, do we really need regulations that prevent casinos from offering any form of live entertainment—not even a pianist or a string quartet, let alone Tom Jones or Shirley Bassey, who are probably of greater interest to people like the hon. Member for Ryedale (Mr. Greenway) and me—or which stop betting offices serving anything other than pre-packaged food? Why, for example, is it okay to visit a casino in Reading or Brighton, but not in Swindon or Worthing? What is the sense in obliging those of our citizens who wish to game on the internet to choose between gambling sites based and regulated in central America or the south Pacific, for example, while preventing the operation of such sites in the UK?
516 These are by no means the only examples of regulations whose sell-by dates have passed. The relaxation of gambling laws worries many people, and we must respect and respond to those concerns. Like many hon. Members, we have received many letters from individuals who are worried about exposing some of our population, particularly children and vulnerable adults, to a more deregulated gambling regime. For example, my Department recently received a letter from a lady who was married to a compulsive gambler for many years. The husband managed to conquer his addiction, but unfortunately the marriage broke down during the process. Thankfully, they have got back together, but she is extremely concerned that loosening the restrictions may increase the risk of her husband's exposure to gambling, thereby causing him to slide back into his former habits. I am sure that many hon. Members have heard similar stories. These fears are real, and the House cannot and should not ignore them.
The prevalence of problem gambling in this country is reckoned to be low by international standards—the figures were given to the Select Committee only this week—but that is no reason for complacency. I make it clear on the Government's behalf that we must ensure that deregulation and the relaxation of controls go hand in hand with effective measures to minimise harm. We must ensure that children do not develop gambling problems and take them into later life. Many of the proposals in "A safe bet for success" are geared to ensuring that children are properly protected—a point that applies particularly to gaming machines, from which the review body considers that children are most at risk. We did not agree with all of Sir Alan's recommendations about such machines. In our view, the evidence did not support a complete ban for children, but a clear distinction should be drawn between machines that children may continue to play, and those which they should not.
Getting the balance right between freeing up regulation and ensuring that proper and proportionate safeguards are in place is a challenge, but I believe that this can be achieved, and that the proposals in "A safe bet for success" will enable us to do so. The key component in the new regulatory system will be the gambling commission. The creation of this new regulatory body will, for the first time, centralise responsibility for the licensing of all gambling operators. The commission will have a vital role in monitoring the conduct of gambling in this country. and in responding to developments, whether on its own account or through advice from Government.
At the heart of the relationship between the commission and the industry that it will regulate must be an acknowledgement by operators that corporate social responsibility will be an integral feature of the way in which they run their businesses. My dialogue with industry representatives in the past six to nine months has left me in no doubt that they understand and accept that responsibility, which will attach to the additional opportunities offered to them. I have been particularly impressed by the way in which all sectors of the industry have embraced the review body's recommendation that an independent trust be established to fund research not only into the day-to-day issues of problem gambling, but into the equally important issue of why people get involved in such gambling—a problem that the Budd report highlights. However, nobody should be in any doubt that 517 the Government and the gambling commission will monitor developments very closely, and that we will be ready to respond if standards are allowed to slip, or commitments are not honoured.
I want to put one myth to bed. Several critics have said that our review was led by fiscal considerations and the prospect of significantly increased revenue from additional gambling activity. It was not. Although we asked the gambling review to take into account the implications for the current system of taxation, and the scope for its further development, that was not the main driver for reform. Although the changes may generate more revenue from gambling, our assessment is that such increased spending will mostly constitute money previously spent on other taxable leisure activities. Consequently, we do not expect any extra revenue from gambling or significant increases for the Government coffers.
What will change? What are the likely impacts? The reforms outlined in "A safe bet for success" will have a profound impact on the gambling industry. Casinos are significant winners, with major deregulation affording substantial business opportunities and customer benefits. Bingo clubs will also enjoy greater freedom, with many restrictions removed following changes in the deregulation order that I laid before Parliament in March.
The world of online gambling will, at last, be properly opened to British businesses, and the Government are committed to ensuring that our e-gaming services are as well regulated and enjoy the same reputation for fairness and transparency as the bricks-and-mortar gambling premises. Society lotteries will also do well out of the changes with higher stakes, sales and prize limits that allow them to raise more money for their good causes.
I am pleased that we have already been able to implement some modest reforms, as we promised in "A safe bet for success". For example, we have already lifted restrictions that prevent customers in casinos from enjoying a drink while they are gaming. We have doubled the stake, sales and prize limits on society lotteries, as they requested. Orders will be laid before Parliament before the recess to increase bingo limits and allow live entertainment in casinos. An order has already been debated to allow betting shops to offer a more attractive range of refreshments, but not alcoholic drinks.
All this should have a positive spin-off for our tourist industry, which we all want to return to its former glory. It was badly affected by last year's foot and mouth crisis and the events of 11 September in the United States. Anything that we can do to help it become a vibrant, major industry again is welcome. It would be good to think that we could attract to tourist destinations in this country punters who prefer to play in the large resort casinos, but currently do so abroad.
We will allow UK casino operators to offer a broader and more attractive leisure experience in a well planned and pleasant environment. I am sure that that is welcome. Places such as Blackpool are making great strides to ascertain whether they can be first out of the starting blocks. I wish them well.
As I said earlier, we did not accept all the review body's proposals, but we did not reject many. Out of the 176 recommendations, the Government rejected only nine. We decided that another 10 needed further substantive consideration. I am not surprised. The report 518 has been acknowledged to be solid, well thought out and sensible. That is a testament to Sir Alan Budd's professionalism and that of other members of the review body. I want to put on record our appreciation of their work. It was a professional job, which enabled the Government to do their job much more easily. I hope that it will lead to good quality legislation.
§ Mr. Gareth Thomas
I endorse my right hon. Friend's comments. However, I ask him to keep under review the recommendation for the floor space devoted to table games in casinos to be 2,000 sq ft. Does he realise that there is much anxiety about that? Paul Bellringer of Gamcare suggested that the floor space should be 10,000 sq ft and that space of 2,000 sq ft would lead to many more casinos on the high street, perhaps threatening existing bookmakers and exacerbating problem gambling.
§ Mr. Caborn
We are in the process of consulting, and we are prepared to consider such representations. As my hon. Friend knows, my officials have maintained a close dialogue with Gamcare and others who have genuine anxieties about deregulation. Gamcare's approach has been positive; it welcomed the Budd report. We are trying to work out a way in which to implement the recommendations.
Of the nine recommendations that we rejected, the one that appeared to cause most concern was the recommendation that members' clubs should lose their entitlement to jackpot gaming machines. We received over 3,400 representations on that proposal. I would be surprised if any hon. Member had not written to me about the matter, and I have received strong representations from my city of Sheffield. I am sure that hon. Members have received letters on the subject. We listened to what people said and were persuaded of the harm that a ban would do. As an honorary member of the Working Men's Club and Institute Union, I shall now expect to visit any club in the country free of charge.
The Budd report may have reached the wrong conclusion about jackpot gaming machines, but it is important to consider its rationale on the matter. The review body was worried about children's access to the machines. We have had effective discussions with the industry and the clubs, and I thank hon. Members who have been involved in that. We have held constructive dialogue with them, and they accept the need to ensure that children do not have access to the machines. We are considering methods that will achieve that.
We also rejected the recommendation that side betting should be permitted on national lottery results. I accept that there are conflicting views. We acknowledge that the available evidence on the possible impact is conflicting and, some would say, inconclusive. However, in the context of the other opportunities that are being offered to the commercial gambling sector, the Government were not willing to gamble, as it were, with the future income for good causes that flows from the national lottery.
The reforms will not be cost free. My hon. Friend the Member for Harrow, West asked about the way in which we will regulate them. The gambling commission will be expected to recover its costs fully through licence fees paid by operators. The same will apply to local authorities; under our proposals, they will assume responsibility for licensing all gambling premises. In "A safe bet for success", we provided some initial estimates of the likely cost of the new regulatory arrangements.
519 Our initial estimate is that the arrangements will cost between £11.3 million and £17.7 million. That is a net increase on current regulatory costs of between £5.7 million and £12.1 million. Those estimates will be refined as we develop detailed proposals for the way in which licensing and regulation will work in practice. The Government are clear that any additional costs will be a small price to pay for the increased freedoms and opportunities that reform will bring.
Where do we go from here? We will continue our dialogue with the industry and others in the coming months as we put more flesh on the bones of our proposals. We have had a good dialogue with those who have a vested interest and those who could be affected. As I said earlier, we aim to introduce a major gambling Bill as soon as parliamentary time permits. I hope that will happen in the 2003–04 Session.
In the meantime, I look forward to hearing hon. Members' opinions in today's debate, which we view as an important part of the consultation process. It will enable us to introduce legislation that is fitting for the 21st century.
§ Mr. John Greenway (Ryedale)
I welcome the opportunity to debate the Budd proposals for modernising Britain's gambling laws. However, I think that the House will agree that it is disappointing that this important issue is being debated on a Friday, when many Members are unable to be present due to constituency commitments. Were this debate to have been held between a Monday and a Thursday, I think that a considerable number of Members would have been present because, as the Minister said, there is great interest in the issue across Parliament.
That said, the Conservative party welcomes the long overdue review of our gambling laws by Sir Alan Budd. It facilitates the reform of outdated gambling legislation and seeks to bring gambling even more into the mainstream of the leisure sector.
The Government's response to the report, by and large, has been measured, and we agree with and support many of their conclusions. However, there remain a number of areas in which, on points of detail, reconsideration may be appropriate, and the debate today greatly aids that process. I welcome the Minister's comment that more discussion can take place because we hope that this will not be the last word prior to the Government introducing a draft Bill. If that happens in 2003–04 at the earliest, there is plenty of time for further consultation and reflection.
In addition, and perhaps more importantly, the White Paper responses represent decisions of principle and policy. Those decisions, in turn, beg a great many more questions concerning the implementation of the proposals. I want to take the opportunity of this debate to outline what we see as some of the more important issues for the Government and the industry in the light of what the Government intend.
We agree that the national lottery income stream for good causes should be safeguarded, subject to the lottery's continuing success in the longer term. The national 520 lottery's ability to operate under an exclusive contract should continue for the foreseeable future, and ensuring continuity of that income stream for good causes remains vital. Of course, right hon. and hon. Members would expect me to say that as it was a Conservative Government who established the lottery in the first place.
We believe that the performance of the National Lottery Commission has been unconvincing thus far. We are unimpressed by the reports of the reforms planned by the Secretary of State for Culture, Media and Sport. We understand that the right hon. Lady is unwell and send her our good wishes for a speedy recovery so that we can hear more of what she plans for the commission and other matters. However, it seems relevant, given that this is a wide-ranging debate, at least to pose the question whether we need a separate regulator—a lottery commission—or whether the Government should be moving towards the lottery coming under the same regulatory supervision as the new gambling commission will provide.
We agree that the creation of a new single regulator for all gambling is a good idea. However, the case for continuing to exclude the national lottery indefinitely is not entirely persuasive. We note the Government's White Paper commitment to review the issue, but suggest that it may need to be decided quickly so as to accommodate any change in the forthcoming Bill, even if the proposal is permissive. As the right hon. Gentleman has said, gambling deregulatory measures come before the House all too rarely in the form of primary legislation.
We accept that the national lottery should continue to enjoy the exclusivity of a single licence, but we must also bear in mind the value and importance of society lotteries, which raise much needed funds for many national and local charities. Similar lotteries are run for the benefit of local football clubs—most professional league clubs have one—and many are facing financial crisis. The income stream from such lotteries has been seriously dented by the creation of the national lottery. That was anticipated when the lottery was established by the inclusion of charities. It was not originally intended to do so but charities were included during the legislative process as one of the good causes. Nevertheless, it was also envisaged that society lotteries would continue to exist. We need to be sure that the regulatory regime in which they operate is not unduly restrictive, or more than is necessary, to ensure the pre-eminence of the national lottery.
The Budd recommendation that maximum stakes and prizes for society lotteries should be abolished met with huge resistance from Camelot. The Government's response to allow doubling of stakes and prizes makes sense. In fact, at the Lotteries Council conference—where the right hon. Gentleman was stuck on a train one day and I got stuck in traffic coming back the next day—I suggested that a doubling would be a sensible compromise. So we welcome the changes introduced by the statutory instrument that took effect last month, to which the right hon. Gentleman referred, as was evidenced by our passive response to the measure.
The Government should consider whether they need to do more. The Lotteries Council is also pressing for roll-overs or accumulators to be permitted. It took me a while to work out what the effect would be, but I understand that that would involve only a proportion of prize money, there would be a limit on the number of lotteries over which the roll-over would operate and, 521 consequently, the amount payable. Within those limits, such rollovers, which would be very useful to the society lotteries, would be unlikely to pose any threat to the national lottery. I hope that when the Minister has time and meets up with the Lotteries Council again next year, this can be examined further.
Despite the White Paper's suggestion to the contrary, charity lotteries frequently return a bigger proportion of money to good causes than charities will ever receive from the national lottery. The hon. Member for Knowsley, North and Sefton, East (Mr. Howarth) knows the work that Littlewoods does in promoting and supporting many of these lotteries. Should right hon. and hon. Members wish to have this information to prove my point that I am making, it is available.
Whatever Ministers decide now, these issues will come up again in the future. There will be a need to keep these stakes and prize limits under further review. So we think that in the longer term, it could well make better sense to include both the national lottery and the society lotteries under the same regulatory umbrella, subject of course to the caveat that some of the smaller lotteries have local authority licensing. That would ensure a more even-handed approach, notwithstanding the general requirement to protect the national lottery's exclusive national licence. There is a precursor for this, because when the Government decided to move the legislative responsibility for gambling from the Home Office to the Department for Culture, Media and Sport, some people wondered whether there would be a conflict between the national lottery, which the Department for Culture, Media and Sport has the responsibility to promote, and other forms of gambling, but it has not worked out that way. The same could well be true of a single regulator.
It would in my view be unforgivable if Parliament and the Government unfairly disadvantaged the future prospects of society lotteries and, as a consequence, damaged the fundraising activities of the many worthy charities that depend on society lotteries for their income. A single regulator would help facilitate an independent judgment on the right regulatory environment, and the gambling commission would be well placed to do that.
As to the success of the commission more generally, much will depend on the quality of the new regulator and those appointed to the commission. They will need wide experience of a complex industry and it is important that they command confidence and respect not only within the industry but from the public. The commission will have a crucial role in shaping the new landscape post-deregulation, especially in the growth of harder gambling opportunities, casinos and the increased use of machines in dedicated premises. It is important that they make a good and certain start. I wonder, therefore, whether the Minister has considered establishing a shadow commission. That might help the Government and the industry facilitate and manage change with consistency and confidence. The commission would clearly have a major role in, for example, determining the suitability of applicants and their planned projects for new casinos. There is much work to be done in this area, as I will explain later.
A shadow authority would have the time in advance to work with the Government and the industry to put in place the structures that the new process will require and give direction to the industry in the new gambling environment. The concept of a shadow authority has 522 worked well for the financial services industry in the creation of the Financial Services Authority. We hope that Ofcom, which has been created as a shadow authority by the Department for Culture, Media and Sport, will also be a success. I hope that Ministers will consider whether a shadow gambling commission makes equal sense, so that we avoid the big bang of a new regulator coming in on the day that the Bill receives Royal Assent.
§ Dr. Stephen Ladyman (South Thanet)
Far be it from me to agree with the hon. Member for Ryedale (Mr. Greenway), but his idea is excellent. One of my concerns about framing the legislation is what needs to be in the Bill and what we can afford to leave to the commission. A shadow commission would allow us to decide what works in the commission's hands and what needs to be in the Bill.
§ Mr. Greenway
I am grateful to the hon. Gentleman for his support. I think that it is already clear that we do not need to fall out with the Government on this matter—indeed, I hope that we can help them.
The society lottery community is not the only part of the present gambling environment that is fearful that it will be put at a competitive disadvantage by deregulation in other sectors of gambling. For example, the horse racing industry is being offered little if no opportunity to widen the distribution of its product, yet racing and bookmaking face a number of competitive threats from the new betting opportunities in communities where previously the local betting shop was the main or only gambling outlet. The hon. Member for Harrow, West (Mr. Thomas) made that point in an intervention.
Although the recent agreement between the betting industry and horse racing on a new five-year rights deal to settle their dispute over the horse racing levy is extremely welcome, racing and bookmakers are not in agreement about the places where off-course betting on horse races should be permitted. I hope that the new sense of partnership between racing and bookmakers will encourage bookmakers to maximise the proportion of turnover derived from betting on racing. Bookmakers are certainly disappointed that the Government have rejected the Budd recommendation to allow side betting on the outcome of the national lottery, especially as the lottery has permission to promote its own game, Hot Picks, which is side betting by any other name. The racing industry none the less agrees with the Minister and, on balance, so do we.
The key point for bookmaking and racing is that unless the racing industry can be confident in the belief that the present structure and distribution of betting shops delivers the maximum possible return for racing from betting on horse races, it will continue to press for other retail outlets to be permitted to offer small stake, big win prize betting opportunities on a set number of events.
One suspects that ministerial concerns about the impact on the national lottery of, for example, a Tote terminal in pubs is as important a consideration as the impact on betting shop viability. In that sense, the protection afforded to the lottery disadvantages both bookmakers and racing in a way that cannot be justified by any other argument. For example, there is little if any opportunity for repeat play and the immediate chasing of losses in the type of bet that I mentioned, about which the Budd review 523 expressed concerns in recommending that the mix of gambling and alcohol should not be permitted. However, that argument is inconsistent with the agreement that alcohol should be allowed on the gaming floor. Indeed, I welcome what the Minister has done in bringing that about. People can already drink themselves silly while playing high-stake, high-prize machines in certain premises so, for that reason alone, we should continue to resist credit card payment in gaming machines.
The racing and bookmaking sectors are equally concerned to ensure that the integrity of both the racing product and the operation of betting shops is beyond reproach. The Jockey Club has constantly expressed concern about the sport's vulnerability to criminal activity, and I commend its briefing document for this debate to the Minister and his officials.
I know that the right hon. Gentleman agrees that the highest standard of integrity is crucial. I assure him that that is appreciated by the racing industry. None the less, will he have regard to the concerns of bookmakers—who generally have confidence in the present system—that the introduction of firmer regulation of the betting industry, especially the proposed replacement of magistrate licensing with a new role for local authorities, will be fair and consistent?
Racing's enthusiasm for early reform of the gambling laws, coupled with the anxieties of those in the betting industry about what that will mean for them, offer a further reason for the establishment of a shadow gambling commission, as it might aid progress and provide reassurance.
The publication of the Budd report a year ago and its recommendations on gaming machines prompted widespread concern across the gaming industry that the Budd review body held a particularly negative view on gaming machines in premises that are not dedicated for gambling. The Minister has already pointed out that he has sensibly rejected the proposal to ban jackpot machines from clubs, and we strongly agree. One of the few benefits of opposition is that I was 'able to announce our position long before the Minister could make an announcement. I am not making a political point by saying that—it was obvious that the proposal was a non-starter, and we welcome the Minister's comments.
We must ensure that children aged under 18 should not be permitted to play gaming machines. It would be sensible to ensure that the reformed legislation makes it a criminal offence to allow under-18s to play such machines. We agree with the Government's decision to reject the Budd proposal to allow local authorities to institute a blanket ban on gambling premises in a specified area, although the legacy of that recommendation has been to increase the anxiety and nervousness with which proprietors of premises in which gaming machines are situated view the proposal to strengthen the role of local authorities in licensing. Despite the rejection of the proposal, that nervousness is clear in various submissions to me.
The recategorisation of gaming machines seems sensible and should end the confusion about which machines are permitted in various locations. I agree with the Minister that it must be clear which machines can and cannot be played by children. However, the proposals in 524 the Government's response to Budd about gaming machines in pubs and the future of amusement-with-prize machines in seaside arcades require further thought.
If the law is strengthened, as I have suggested and as I believe the Government intend, is it really necessary to insist that machines sited, for example, in public houses should be in separate areas? That would create serious administrative and logistic difficulties for pub landlords. Many licensed premises have an open-plan environment, especially those which encourage families and offer meals. Will the Minister explain why it is thought insufficient to rely on strong management, proper staff training and the successful prosecution of those who break the law? Furthermore, there would be clear signs on the machines stating "No under-18s to play". Indeed, Business in Sport and Leisure has carried out research that suggests that 92 per cent. of the public believe that the law currently forbids under-18s from playing because of existing signage to that effect.
The Budd report recommended that a maximum of two machines should be permitted in pubs and other premises that have a liquor on-licence. The Government's response was that local authorities should have discretion to grant more permits. However, that is entirely arbitrary and takes no account of the fact that some public houses are significantly larger than others—in some cases the equivalent of three or four pubs are in the same building. The Minister will know that the trade in general thinks that licensed premises should be allowed up to four machines as of right, with further machines permitted on application. There is concern that limiting pubs to two machines could create serious administrative difficulty for local authorities and that about 12,000 licensed premises might have to reapply for permission for additional gaming machines. I hope that we can come to a sensible agreement on that point.
There is huge relief that the Budd proposals to restrict low-stake, low-prize machines, such as those in seaside arcades, to cash prizes only have been rejected. The hon. Member for South Thanet (Dr. Ladyman) led the campaign on that and, as he knows, he had Opposition support. Nevertheless, there is disappointment that the Government intend to reduce the current maximum stake on amusement-with-prize machines, recategorised as category D machines, to only 10p and the maximum prize to £5 or equivalent value.
There is no doubt that we need more research on that matter—as we have constantly pointed out. However, we must not predetermine the outcome of that research. There appears to be no mechanism that will subject those minimum stakes and prizes to review in future. Will the Minister consider giving the gambling commission the requirement to undertake such a periodic review in the light of the outcome of the research?
§ Dr. John Pugh (Southport)
Does the hon. Gentleman agree that such machines could become uneconomic and that, in effect, they are among the more innocent forms of gambling?
§ Mr. Greenway
Yes. Indeed, the hon. Gentleman anticipates my next comment.
It should be beyond argument that children must be discouraged from playing even amusement-with-prizes machines without supervision. However, for many 525 families a visit to the amusement arcade is an integral part of their seaside experience—it certainly was for me and it did me no harm. Those arcades are also a vital part of the seaside local economy. Like the Minister, I came from a very strict background, where gambling was frowned on, yet we were allowed to play amusement and prize machines at Blackpool. With seaside tourism already under pressure, we must take care not to impose unjustified restrictions without clear evidence that harm is being done; otherwise, as the hon. Member for Southport (Dr. Pugh) said, there will come a point where these machines become uneconomic and a valuable part of the seaside experience will be lost.
The future of seaside tourism is an integral feature of another major Budd recommendation, which the Government have accepted: the removal of current restrictions on the location of casinos, giving rise to the opportunity to create Las Vegas-style casino resorts. However, we need to be clear in our minds as to what we mean by a casino or a resort casino. It should not mean wall-to-wall high-pay-out slot machines. It should mean the availability of gaming in a leisure mix. That is why the ability to enjoy live entertainment, a drink and a restaurant all within the same premises makes sense and will make the casino experience something that people look forward to, as an event that is out of the ordinary and not something that they would wish to partake of every day, or even every weekend.
The popular game of bingo is inextricably linked to the deregulation process, because it provides the opportunity to include bingo in casinos. As the Minister knows, the industry is divided on the sense of that, as many smaller operators fear that it will lead to a decline in the number of stand-alone bingo clubs. We must listen carefully to those in the industry who have expressed a fear that over time the local bingo club might lose its original primary identity and be transformed into a casino dominated by gaming machines with unlimited stakes and prizes. What was once a soft gambling environment, where the housewife or pensioner could enjoy social company and a bit of fun at a limited cost, may be gradually transformed into a hard gambling environment, where the opportunity to lose money is unlimited. Players are not always conscious of the addictive effects of trading up and chasing losses. I shall discuss the consequences for increased problem gambling in a moment.
Of course, it is quite likely that such a hard gambling environment will have little appeal to a great many people who enjoy bingo now, although, with bingo turnover profits already in decline, the order that the Minister is going to lay might begin to reverse that process; we hope so. Nevertheless, the temptation for bingo hall proprietors to maximise alternative income streams will prove hard to resist.
A key question for the reform process is whether the new regulatory framework should at least provide the opportunity to protect bingo as a distinct form of soft gambling. Many in the industry believe that it should, while others believe and argue that we should leave it to the market. However, there is a real danger that the relaxation of planning and licensing could lead to bingo being used as the first step towards the establishment of an amusement arcade with amusement machines in, for example, retail outlets in resorts that cater for adults only. That would not be a bingo hall in the soft gambling 526 environment; it would become a very hard gambling environment. However, it would have an adverse impact on bingo-only premises. We should have a mind to that.
Although we are in general agreement with the Government's decision to deregulate the casino industry, we have real concerns that deregulation should not lead to proliferation and a consequent rise in problem gambling. Even the creation of, for example, a casino resort experience such as that proposed by the Blackpool challenge partnership would be undermined if deregulation leads to the establishment of small casinos in just about every small working-class town in the north-west. Why should people want to go to a resort casino in Blackpool if they already have a casino opportunity in Wigan, Skelmersdale, Burnley or, as I suggested to the hon. Member for Knowsley, North and Sefton, East, even Knowsley? For that reason I believe that the suggestion made by the Blackpool challenge partnership that Blackpool might be a pilot area has attractions. I hope that the Minister and the Government will consider it. There are reasons to doubt that the market or the Government's proposal for a minimum floor space of 2,000 sq ft alone will provide adequate barriers to entry.
The guidance that the Government issue to local authorities on the planning aspects of casino developments and, of course, the robust licensing and regulatory framework that the new gambling commission will need to put in place, are crucial elements of the ability of Government to deregulate and yet control expansion. Indeed, the more I read the White Paper, the more it seems to me that its authors within the Department for Culture, Media and Sport recognise that. I do not think that we are talking about a difference of concept. We now need to progress to considering the ways in which that will be achieved, and that is one reason why a shadow gambling commission would be such a good idea.
Local authorities will need to have regard to many considerations. For example, in assessing the proposed location, they will need to have regard to the current practice that casinos remain open until 6 am. While the industry is keen to ensure that there is consistency of decision making and an appeal process where outcomes can be reasonably predicted, many existing casino operators have expressed concern that if the planning process is too easy we could see the creation of a significant number of relatively down-market establishments, which characterised the industry in the early 1960s, before the current legislation was introduced. I was in the police at west end central when the Gaming Act 1968 was introduced, and I have seen some of these places in London. The casino industry has now been professionalised and brought into a world of total integrity and probity. We do not want to return to the previous situation, but there are dangers that if the process is too easy, that is precisely what will happen.
Other responsible elements within the gaming industry generally have equally expressed anxiety that deregulation should not lead to the creation of what are little more than gaming machine warehouses. These would have high social costs but bring low economic benefits. As I have indicated, they would also be to the detriment of economic regeneration if they discouraged the development of specialist resort casinos.
527 We believe that the gambling commission must have the powers necessary to discourage that type of approach, and the necessary power and responsibility to ensure that persons seeking licences are beyond reproach and that criminal elements are prevented from permeating an industry that currently has impeccable standards of integrity and probity. In that, controls to prevent opportunities for money laundering are vital.
Another issue for planners could be to require the operators of new casino developments to demonstrate how their proposals will aid the regeneration of the area in which they hope to locate. That could be particularly appropriate for planned developments in seaside resorts and other tourism destinations. Arguably, planning guidance might be framed so as to be generally favourable towards granting consent in locations where the leisure industry is crucial to the economy.
The support or endorsement of the regional development agency may be another factor to consider, as the RDA is well placed to judge where a casino development fits into the plans for urban renaissance within the region, and its view would be of benefit.
The ability to demonstrate tangible benefits to a local community might also be relevant. That is certainly the view and intention of the Blackpool challenge partnership. It wants to support good causes from gambling profits, although its ability to do so will of course depend on the tax structure that the Government introduce. An accusation was levelled at the Government that higher taxation was behind the deregulatory process. I was actually asked at the Bingo Association conference whether our response was generated by concerns about how much revenue we might make when we get back into government. Well, we might well be back in government when these proposals are implemented, but I agree with the Minister—I do not believe that taxation is driving this agenda. However, taxation is crucial to the ability of gambling to benefit the local communities in which these casinos are likely to be placed, so when may we expect to see some guidance on the likely taxation environment? It will be important to have the Government's view on that by the time that Parliament begins to deal with the Bill.
The concept of community benefit sits well with the attitude of the gambling industry at present about social responsibility and the need to minimise the negative social consequences of deregulation. That brings me to the final point that I want to address: the proposal for the establishment of a new gambling trust, to which the Minister also referred. The British Casino Association and others have taken the lead in working with other trade bodies in the industry to establish the gambling industry charitable trust. I am sure that there is no need for me to restate the excellent initial progress that has been made by the trust, but its future funding remains an issue yet to be finally resolved.
Although I am sure that responsible elements in the industry will be willing to provide their fair share of the cost of supporting the trust's work in helping people who develop problems with their gambling as well as researching the issue, that apparent willingness is no guarantee that the entire industry will be as forthcoming or that the necessary funding will be secured. Some 528 people in the gambling industry have already commented that it would be a bit rich if they were asked to pick up the social cost of developments that they advised against at the start.
The Minister has said that, if necessary, the Government will impose a statutory scheme. I should be grateful to him if, in his winding-up speech, he would give the House and the industry some indication of the basis on which a statutory scheme would be established. If he cannot do so today, perhaps he will consider doing so in the weeks ahead. We agree that the imposition of any levy must apply to the entire industry, not merely to the members of the trade bodies.
We generally support the Government's approach, although of course we are concerned that deregulation should not lead to an increase in problem gambling, with the difficult social consequences that that would bring. Nevertheless, I hope that we can work with the Government to establish a common way forward and that, in that spirit, the Minister will accept that what I have said today is intended to be constructive and helpful in ensuring that this once-in-a-lifetime opportunity to create a gambling environment more appropriate to contemporary society is properly secured. Proceeding at a sensible pace and always with a clear eye on the importance of social responsibility and economic regeneration will help to achieve our objective.
§ Miss Anne Begg (Aberdeen, South)
I suppose that I should begin by congratulating the Government on dropping their plans for members' clubs. I have to admit that I was one of the many hon. Members who had deluged the Minister with letters that I received from my constituents and from everything from the local trades club to bowling clubs and golf clubs, which thought that a valuable part of their income would be lost.
I find it slightly amusing that I am speaking in a debate about gambling. I am one of the 3 per cent. of the population who has never bought a lottery ticket in their lives. Apart from taking part in the ubiquitous raffles that seem to pervade every social event in Scotland, I do not gamble at all, although I have to make a big confession: when I was teaching, I quite enjoyed the end of term sweepstake—we called it a sweepie—that we used to run on the length of the head teacher's speech on prize-giving day.
I always took a very hard-headed approach to gambling and knew that the figures always mean that people lose more than they ever win. That concept brings me here today, and I want to concentrate on a specific part of gambling legislation. I wish to refer to some of my constituents' experience of a pyramid gifting scheme called Women Empowering Women. It is an insidious scheme that tricks women into parting with large sums of money in the belief that they will win back even larger sums.
I have pursued the issue of pyramid gifting schemes for some time. I did so initially with the Department of Trade and Industry, as it issued warnings against such schemes on its website, saying that women in particular—although men have been involved—should not become involved in them. I had naively assumed that such schemes might be covered by the Trading Schemes Act 1996, the regulations of which came into force in 1997. Of course, that Act covers the regulations regarding pyramid selling.
529 I had thought that pyramid gifting schemes would be covered under that legislation, but the DTI says that that is not the case. It claims that only pyramid selling is covered and that goods and services have to be involved. I found myself in a circular argument with the DTI about whether gifting schemes should be covered by that legislation, but it says no. I have asked parliamentary questions, and found that there have been no prosecutions under the legislation. The DTI kept telling me that any such scheme should be covered under gambling legislation. That is why I am here today to make my plea to the Department for Culture, Media and Sport to ensure that it will seriously consider such gifting schemes.
Such schemes should not be regulated, but made illegal. I wish to take some of the House's time to explain how such schemes work. Women Empowering Women is the current scheme, but there are many more, and they keep changing their names. Apparently, a new one called Diamonds is now doing the rounds in the midlands. Women Empowering Women came from the United States of America, started on the Isle of Wight, made its way up the country and reached Aberdeen as a brand new thing last summer.
Lots of women were sucked into the scheme, believing that they would make lots of money, but when the scheme hits a new area, women are invited to a party and asked to invest—that is the word that is always used—£3,000 of their own money. If they then recruit two friends to the scheme, they will work their way up the pyramid from the gifting level to the receiving level. They are told that they will get £24,000 when they get to the receiving level, and that happens.
The first people to go into those pyramids win large sums. We can imagine the excitement. The schemes are often arranged at parties, and women go along and get sucked in because they see wads of money being thrown down on the table and women walking out with £12,000 or £24,000, which they have picked up that night. They are carried along with that spirit of excitement, and they pledge their £3,000.
In Aberdeen, with a fairly buoyant economy, that happened for some time. Believe it or not, quite a number of women can put their hands on £3,000 ready money, but the arithmetic obviously does not add up and, very quickly, the number of women who can put their hands on that kind of money soon dries up. Of course the amounts that then have to be pledged are reduced to about £100.
At Christmas last year, leaflets went through letter boxes in Aberdeen telling women that if they invested—again, the word "invested", not "gamble", was used—£100, they would have £800 for Christmas. By the time that the scheme reaches that stage, the women who get involved tend to be the poorest and most vulnerable.
Just last week in Scotland, the Daily Record and the Sunday Herald ran articles saying that, in Glasgow, some of those women are going to loan sharks to borrow the money. Of course they lose the money and are then at the mercy of the loan sharks.
The scheme is appalling. The women who are involved in it do not even think it is a gamble; they think that it is an investment, and there is a strange belief that, like the stock market, more money will be created somehow.
I shall briefly explain why the arithmetic does not add up. For one person to win, eight people have to lose. For those eight people to win—I suppose that this is the 530 gambling terminology—64 people have to lose. If those 64 people were to win, 512 would have to lose. For those 512 people to win, 4,096 have to lose. So it is obvious that all those people in an area who are gullible enough, or who have not really appreciated what they are getting themselves into, quickly lose their money.
The scheme always gets legs again in an area because the men then get involved. The scheme has run out of women, so men are encouraged to become involved. I know of a pensioner in Aberdeen who has lost £1,000, which was his holiday money for this year. He intends to take a case against the women whom he thinks tricked him out of £1,000 to the small claims court in Aberdeen next week. I have no idea how well he will get on, but the police have told him that such schemes are not illegal and his lawyer has said that it is not worth engaging him because of the sums involved.
The way in which schemes are perceived is a problem. The folk involved do not believe that they are gambling or that there is anything morally wrong with them. Of course they are morally wrong; it is a con trick. Like the cleverest and best con tricks, there always have to be winners to fool and persuade others that perhaps they can be winners too. I am most concerned about vulnerable people.
I spoken to many people about such schemes, and I found myself appearing on GMTV, for example, this morning. Those who have won say, "Oh, but it's just a gamble. People know that they might lose." I am afraid that, very often, people do not know that they will lose. It is not a gamble; if it we were, it would be regulated, as gambling generally is.
The participants do not believe that they are gambling. They think that they are investing their money and that, somehow, they will get that money back. Pyramid gifting schemes cannot be regulated: they need to be completely outlawed. That has been done in some states in the United States, and there have been successful prosecutions. The prosecutions have been of people who participate in the schemes, not necessarily those who organise them—it is difficult to work out who is at the head of the pyramid. As schemes move into an area, the people involved are not necessarily those who thought up the scheme.
I am raising the issue again this morning because I am still not convinced that the Government have got the message. I hope that I will get a good response from the Minister this morning. On page 23 of the Government's response to the Budd report, under the title "Prize Competitions", it states:The consultation, however, threw up a number of concerns, and we are not, at this stage, satisfied that all of the potential issues have been fully identified. We therefore intend to undertake a separate, detailed review of prize competitions and similar quasi-gambling products.I suspect that Women Empowering Women and other gifting schemes are the quasi-gambling products. That is fine. As a result, I tabled a parliamentary question a few weeks ago to discover that that separate report was announced on 23 May; I must have missed it. The consultation paper mentions quasi-gambling products.
In relation to the consultation document, chain letters are mentioned, which work in a very similar way. Letters are sent saying, "Send £10 or £200 to the person at the 531 top of this letter, put your name to the bottom of it, and send it to 200 people you know,"—or do not know, as the case may be. The consultation document states:There is a legal ruling of long standing to the effect that a chain letter…can come within the definition of a lottery. The legislation on gambling which the Government now plans to promote—and whose broad outline is set out in 'A Safe Bet for Success'—may provide an opportunity to improve legal safeguards, in as far as these are necessary, and that is something which we will need to consider.Pyramid gifting schemes, however, are not mentioned unequivocally. I want to make sure that pyramid gifting schemes will definitely be covered in any new legislation. The Government's intention to bring in new legislation on prize competitions as part of the Bill that may come out of the report that we are discussing is mentioned at the end of the document.
I do not want to be in the same circular position that I was in with the Department of Trade and Industry. I am fairly sure that the Department for Culture, Media and Sport is not like the DTI at all, and I will not get fobbed off as I feel that I have been—slightly—by the DTI. I make a plea for a definition not only of chain letters but of a pyramid gifting scheme—it cannot be called Women Empowering Women, as, by the time that the legislation is introduced, that particular scheme will have been and gone. The idea of these schemes continues to have currency, however, and they have been bubbling around for a number of years. A definition would allow us, at long last, to outlaw them. We should make it absolutely clear to anyone who takes part in such a scheme that it is immoral, wrong and illegal.
I have taken the Department of Trade and Industry's advice, and I am pursuing the matter through the gambling legislation. The ball is now in the Government's court. I make a plea to the Government to make the legislation watertight and to outlaw these odious, insidious schemes once and for all. We should make it absolutely clear to the vulnerable, and to those who do not realise what they are getting involved in, that this is a gamble, and a gamble that they will lose.
§ John Thurso (Caithness, Sutherland and Easter Ross)
May I begin by picking up on the excellent point made by the hon. Member for Aberdeen, South (Miss Begg)? I learned this morning that a number of women in the company that I left shortly after the election had become victims, after my departure, of the scheme to which she referred. They have lost quite a lot of money. These are intelligent, hard-working, professional women and, as the hon. Lady said, it is the excitement, the party atmosphere, and, possibly, having a few glasses of wine, that makes it far more a gamble than anything else.
The hon. Lady was right to mention that those who perpetrate these schemes pretend that it is an investment, which it clearly is not. I would say that it is not even gambling, as there is almost no hope whatever of winning. The hon. Member for Ryedale (Mr. Greenway), with his police background, would probably be able to advise us of the proper term for it, but it is probably fraud and obtaining money by deception. The Government should take note of that, and I hope that they will take it on board. The hon. Lady might like to consider submitting a short 532 memorandum to the Select Committee on Culture, Media and Sport. I see other members of that Committee in the Chamber, whom I think were equally struck by these schemes, and we may want to include them in our report.
I am pleased that we have this opportunity to discuss the Budd report and the Government's response to it. I congratulate the Government's business managers on having it brought forward—like the hon. Member for Ryedale, I am sorry that the debate is on Friday; it would have had an even greater attendance had it been held between Monday and Thursday. We should be grateful, however, and I am delighted that we have the debate. It might have been better to hold it a little later because the Culture, Media and Sport Committee's inquiry is at an advanced stage. I anticipate that its report will be available in the not-too-distant future. I hope that it would have added to our debate.
Notwithstanding that, I warmly welcome the Budd report, which was excellent. It dealt with the issues in considerable detail, as well as the many recommendations that were put forward. I congratulate the Government on their response to the report, which, in the main, was measured, and showed that there is considerable agreement in all sectors and in all parts of the House on the recommendations and any eventual legislation.
It is clear that the gambling legislation needs to be reformed because it is a piecemeal agglomeration from the 1960s. That alone would be a significant reason for reform, but there is another reason. A significant change in attitude has taken place since the 1950s and 1960s, when gambling was fairly frowned on. It was tolerated in the sense that, if people had to do it, they could do it somewhere fairly uncomfortable. Today, however, it is broadly recognised as an acceptable leisure pursuit, and it is therefore right that regulation should be relaxed.
Budd appropriately considers first principles, and that is where our debate today should begin. I am glad that the Minister referred to that. Clearly, there is a balance to be struck between the individual freedom that any person may have to do what they choose, and the appropriate control of an activity that clearly has a downside. A difference also exists between the rights of individuals to enjoy gambling in good premises that are well looked after and properly protected and the rights of companies. I do not think that companies have a right, as such, to offer gambling: they are permitted to offer gambling provided that they obey the rules that are set out and operate in a fit and proper, generally responsible way. There is a difference between what individuals are entitled to do and what companies should be permitted to do.
The central thrust of the report is the way in which gambling is to be controlled in the future. Liberal Democrats welcome the concept of a single regulator—a gambling commission—to bring all the central issues together. The key principle behind that is set out in paragraph 1.9 of the Government's response, which says:gambling should be crime-free, honest and conducted in accordance with regulation…players should know what to expect and be confident that they will get it and not be exploited…there should be adequate protection for children and vulnerable persons.I am sure that we all agree that such principles should be the basis for regulation.
I may not look it, but I am just old enough to remember reading the newspapers in the 1960s. I remember the stories of the Krays and the Richardsons and the problems 533 that surrounded gambling. It is imperative that we exercise a certain caution as we relax the legislation to ensure that there is no chance of those days returning.
We should also pay regard to the sophisticated money laundering that now takes place. I am not sure where I learned this, but I believe that the best and cheapest way to launder money is through an on-course bookmaker. In considering the relaxation of the legislation, it is important to ensure that we do not allow money laundering activities to increase. The punter should be able to play an honest, fair and open game with a clear knowledge of what he can win and lose.
Of the three key principles stated in the Government's response, the protection of children and of those who suffer from gambling are at the top. The proposals for a single controlling body will go a long way to help to achieve that aim. The gambling commission must set out clearly the rules that will be applied to the individuals who take part in gambling and stipulate the basic requirements for each premises. In particular, I welcome the proposal for increased application of the fit-and-proper test to people involved in offering gambling activities.
Clearly, there is tension between the central and local provisions for the licensing of premises. I welcome the move away from licensing justices to licensing authorities. It is an essential part of local democracy that elected people can be held to account for the decisions that they take. I was a licensee in England and I owned a licensed premises in Scotland, so I have seen the workings of licensing justices in England and licensing local authorities in Scotland in relation to places that sell alcohol. There is no substantial difference between the two. One is as likely to get a good local authority as a bad one in Scotland, and one is as likely to find good licensing justices as bad ones in England. Therefore, the question is not whether we should have licensing justices or licensing authorities, but how the legislation is passed and the instructions that are given.
A local authority, with the backing of its electorate, should be entitled to say that it does not want gambling in its area. Companies should not necessarily have the absolute right to intervene to offer gambling wherever they want if local people do not want it.
I welcome the increase in the use of the fit-and-proper test to deal with problem gambling and the move to place a duty of care on casinos. It is right that casino employees should have a duty of care. I am sure that they know when a person is a problem gambler, so the employers should be part of the solution and not part of the problem. In that regard, we would benefit from more research. I hope that the Minister will reflect, in the months before any legislation is introduced, on what research can be undertaken on problem gambling. That would give us a proper idea of its extent. There is not much research going on at the moment.
An industry trust is an excellent idea. A statutory levy would be better than a voluntary one because it would be clear-cut and laid down by Government with no one excepted from it. That is the best way for people to contribute. I accept that it is more likely that we will start with a voluntary levy, but I hope that we will have provision to make the levy statutory should the voluntary one not work.
aaaa 534 The lottery is clearly different from other forms of gambling; it is at the softer end of the spectrum. It also exists to deliver funds for good causes. I disagree with the hon. Member for Ryedale in that I believe that we should leave the national lottery with a separate and independent regulator, because there are many differences between it and the rest of the gambling industry. However, I happily accept that, in the fullness of time, my view may prove to be based on an incorrect assumption. I therefore agree with him that there should be provision in the legislation to bring the lottery within the remit of the central gambling commission should that become necessary. That is a sensible suggestion.
I would be unhappy to see side-betting on the lottery. I am convinced by the evidence that I have heard in the Select Committee on Culture, Media and Sport that that is dangerous. However, I am not convinced by Camelot's arguments about society lotteries. As has been said, they are an important way of funding a number of charitable causes, so we should be careful about over-regulation.
I welcome all the Government's suggestions about gaming machines and, as every hon. Member who speaks is likely to say, I welcome the proposals for members' clubs. I welcome the fact that the Government listened on that issue even if one sometimes needed a megaphone to make one's point. I also believe that the changes to category D machines will be good, but the reduction in the stake from 30p to 10p will make them a borderline economic activity. As my hon. Friend the Member for Southport (Dr. Pugh) pointed out, they might become uneconomic. It is another issue on which we should show flexibility.
On casino resorts, the Minister will be aware of my long connection with the tourism industry. Some seaside resorts, such as Blackpool, Brighton and Bournemouth, will have an opportunity to develop an exciting product that can help to regenerate their areas. However, I add a note of caution. We will not be able to create a casino resort in every county—there is not room to do that—so they will not be a general panacea that will attract tourists to all parts of the country. The Minister and the Department would therefore be wise to consider how best to manage the process. The worst of all worlds would be to have 20 seaside resorts simultaneously competing for business when there is not sufficient business for them all.
I am delighted that e-gambling and e-commerce will be brought within the law. Clearly, it is better to have them covered by UK law, as that will enable us to control them.
The Minister suggested that he hoped that legislation would be introduced in 2003–04. Four years ago, I remember being told by a Minister that he was hopeful of introducing legislation on alcohol licensing in the not-too-distant future. We are still waiting for that. I hope that the Department for Culture, Media and Sport has the resources and the power to introduce legislation on gambling, because many of the suggestions that have been aired have excited an appetite for change within the industry. If we do not have change, we will face problems.
§ It being Eleven o'clock, MR. DEPUTY SPEAKER interrupted the proceedings, pursuant to Standing Order No. 11 (Friday sittings).