HL Deb 05 July 1962 vol 241 cc1384-92

5.30 p.m.

Order of the Day for the Second Reading read.


My Lords, although short, this Bill at first sight appears to be extremely complicated. However, its purpose is fairly simple. It is to define, once for all, I hope, what is meant by the phrase "for private gain" in relation to clubs and societies. The necessity for this Bill arises out of a ruling given in your Lordships' House in the case of Payne v. Bradley on June 1, 1961, which concerned the Huddersfield Friendly and Trade Societies Club. This is a working men's club, which had been organising tombola, Bingo and other games, the profits of which were paid into the club's general fund. The money was used to finance various social activities of members and to provide facilities for members. The Huddersfield Club acted in the widely held belief that Section 4 of the Small Lotteries and Gaming Act, 1956, would allow this appropriation of the proceeds of its activities for the general purposes of the club. But your Lordships' House ruled that that was not so.

The noble and learned Lords, Lord Goddard, Lord Morton of Henryton and Lord Guest, held in their ruling that Section 4 of the 1956 Act did not allow the application of proceeds to the Club and that if the proceeds were paid into the general fund of the Club, the Club, and that means the individuals forming the Club, do obtain private gain. On the other hand, the noble and learned Lords, Lord Denning and Lord Morris of Borth-y-Gest, maintained that Parliament had intended the words "the purposes of private gain" to mean the direct benefit which accrues to an individual where money goes into his pocket or money's worth gets into his hands as distinct from indirect benefit which accrues to him as member of a society or a club. As a result of this majority ruling by your Lordships' House, any club which organises a lottery for the benefit of club funds is at the moment breaking the law, and this position is not the wish of Parliament. Section 4 implemented a recommendation contained in paragraph 419 of the Report of the Royal Commission on Betting, Lotteries and Gaming, 1949–51, that whist drives organised in support of local institutions should be made lawful. The conditions in that section laid down that the element of gaming must be small. I am sure that your Lordships will agree that clubs and institutions should be allowed to organise games and lotteries in support of their funds. This Bill enables them to do so.

I will try to explain the Bill itself. I fear that I shall take a little time, as I am not so experienced as some of your Lordships in explaining these rather difficult provisions, and if I look at my notes a little more than usual, I trust that I shall be forgiven. Your Lordships will see that the Bill consists of one main clause. Subsection (1) (a) covers Section 23 of the Betting and Lotteries Act, 1934, which exempts from the general prohibition lotteries which are promoted incidental to entertainments such as bazaars, sales of work, fêtes, dinners, dances and sporting and athletic events. Paragraph (b) covers small gaming parties for members and bona fide guests, including whist drives, bridge drives, the famous Bingo and other games of that description. As I have already explained, Section 4 of the 1956 Act is inoperable. Paragraph (c) covers certain provisions of the 1960 Act which were intended to allow gaming machines in places such as golf and social clubs and also the giving of prizes at bazaars, sales of work and activities of that description.

Subsection (2) covers small lotteries promoted on behalf of a society registered by a local authority under the 1956 Act. The reason for covering this activity in a separate subsection is purely one of drafting convenience. The provisions referred to in subsection (1) include as a condition that the proceeds of the entertainment, lottery or gaming must be devoted to purposes other than private gain. Subsection (1) of the 1956 Act is drafted differently. It authorises the promotion of lotteries by a registered society, being a society which is itself established and conducted wholely or mainly for purposes other than private gain. Subsections (1) and (2) of the Bill are designed to enact that the proceeds of the various activities promoted on behalf of a club or society, calculated to benefit the club or society as a whole, shall not be held to be applied for the purposes of private gain—this is really the purpose of the Bill—by reason only that their application for that purpose results in benefit to any person as an individual. In short, these subsections mean that if proceeds are applied to club funds, in the case of a non-proprietary club, the law is not broken.

Subsection (3) deals with hiring charges for gaming equipment. First of all, there are the gaming machines commonly known as "one-armed bandits". The subsection makes it clear that it is lawful for a club to rent a machine and pay a fixed rental for it, but that it is not lawful for a club to pay a rental which is dependent in any way on the amount of the takings of the machine. I think the easiest way to explain that is to say that in the past some clubs have not rented a machine but have gone "fifty-fifty", or some other percentage of the takings, with the owner. That is not legal. What is legal is to pay a fixed rent for the hire of that machine. This subsection also deals in a similar manner with any hiring charge for equipment for carrying out other gaming activities. For example, sideshows involving the use of gaming equipment might be provided at a fete organised by a club for the benefit of its funds. Under Section 23 of the 1960 Act (which concerns amusements with prizes at such entertainment) the expenses incurred in connection with the provision of such amusements are an allowable deduction from the proceeds of the entertainment; and an argument might well arise in connection with gaming machines provided under Section 17. A similar situation could conceivably arise in relation to the hire equipment for gaming parties organised under Section 4 of the Small Lotteries and Gaming Act, 1956. It therefore seems desirable to close these possible loopholes also by specific provisions of this Bill.

My Lords, the Bill has no application to proprietary clubs, and it is not intended that any provision should be made to go beyond what is laid down. If this were not the case it might be possible for the proprietors of these clubs to gain from their own activities. Subsection (4) is specially designed to avoid infringement by payment of the proceeds into an account, separate from the proprietor's account, which was controlled by the members for the benefit of the club as a whole. The proprietor would not then himself obtain any direct benefit, but he might get indirect benefit in so far as more people might join the club on account of the activities; or the provision of facilities for members out of a separate account might relieve him of financial obligations normally paid out of his gross profits. Subsection (4) makes this impossible. The intention of the Bill is that proprietary clubs shall be excluded unless they are of a sporting or athletic nature—that is to say, golf clubs, cricket clubs and the like. All these clubs must be registered with a local authority under the 1956 Act. The need for registration still stands.

In conclusion, my Lords, I would say that this Bill, which was so skilfully piloted in another place by my honourable friend the Member for Bury and Radcliffe, was unopposed. There are three other comments I would make on it. The Bill does not extend facilities for gambling; it has nothing to do with commercial gambling; it seeks to permit people to do what Parliament intended them to be able to do under the three Acts which are quoted in the Bill. I am authorised to quote from a letter from the Churches' Council on Gambling which was written to my honourable friend in another place and which states: This Council's Executive Committee has considered the Lotteries and Gaming Bill and has decided to make no effort to oppose it. This is simply because it appears to be a logical measure, following the judgment in the Huddersfield Club case. If the Bill becomes law, it will enable people to do what it was generally thought they could legally do before under the existing Acts. I trust that I have explained this rather complicated measure sufficiently well to your Lordships. I beg to move that the Bill be now read a second time.

Moved, That the Bill be now read 2a.—(Viscount Goschen.)

5.45 p.m.


My Lords, may I say just a word in welcome to this Bill, and to thank my noble friend for intro- ducing it and for explaining its complicated provisions so lucidly? I do not know whether I ought to declare an interest. In truth, when the Huddersfield Working Men's Club started this game of Bingo it was done only to enable that club to pay its way. By having these games of Bingo once or twice a week the club managed to make sufficient profit to be solvent; and so the members had the benefit of it.

Unfortunately, and rightly, as I must now say, the majority of this House held that it was conducted by the club for the purposes of private gain: each of the individual members made a private gain because the whole of the members made a gain. My noble and learned friend Lord Morris of Borth-y-Gest and I dissented from that view, but as the majority of this House in judicial cases is always infallible, the ruling must be accepted. I should like to add that in other countries in Europe, and in the United States, the counts are permitted to look at what happens in the Legislative Assembly. If that had happened here, and the courts had been permitted to look at what was said by the spokesmen of those who introduced the earlier Bills, they would have seen that the words, "purposes of private gain", meant when money went into the individual's pocket, and did not apply to a case of this kind. This shows how careful we must be to get our words exactly right in the Bill.

What does the decision in the Huddersfield club case lead to? Not only is it unlawful for the Huddersfield Working Men's Club to organise a game of Bingo, or a lottery to be held for the parish fête which desires to raise by means of a raffle funds for heating the church or the parish room—that is, for the benefit of people as a whole—but under this ruling the event is "for the purposes of private gain". And so, indeed, where a working men's club, or a youth club, and so on, takes advantage of the opportunity which it now has under the Act of putting in a "one-armed bandit" or a fruit machine—they may put in two—if the proceeds go simply towards helping the running of the club, to help it to be solvent, it is held to be for the purpose of private gain.

Before this ruling, I believe that for some years people had acted on the basis that it was lawful with clubs of this kind—not profit-making clubs, but members' clubs—to carry on small raffles, lotteries or games of Bingo in this way. By supporting this Bill, your Lordships will only be putting in force what was the practice previously. I do not say anything about games of Bingo in other places, or about the by-products of profits that are made on refreshments and so on; that does not touch this case. This Bill is concerned only, as I see it, with deserving organisations that are making money, not for private gain but purely to help the concern to run. I hope that your Lordships will support the Bill.

5.50 p.m.


My Lords, I should like to congratulate my noble friend Lord Goschen for the very precise and lucid way in which he has explained this highly technical Bill to your Lordships. I should like also to thank the noble and learned Lord, Lord Denning, for intervening in the course of this Second Reading. I would only say that at one moment I thought there might be two noble and learned Lords intervening, in which case we should have been in the middle of an argument. Suffice it to say that the noble and learned Lord has put his side of the argument to your Lordships, as always, with brilliance and lucidity.

Your Lordships will be aware that this Bill is concerned with only one narrow point, which is of considerable importance to members of social and sporting clubs all over the country, as the noble and learned Lord has told us. It is concerned with the interpretation of a single phrase which occurs in several places in Statutes dealing with lotteries and gaming. All those Statutes are most complicated. The various provisions of these Statutes, to which my noble friend Lord Goschen has already referred, permit certain activities which, unless certain specified conditions are fulfilled, would contravene the general rules laid down in those Statutes. One alone, which is common to the various provisions, concerns our debate. This is a condition that the proceeds of the activity shall be devoted to "purposes other than purposes of private gain", and my noble friend has described these purposes to your Lordships. I say, quite frankly, that this was the Government's understanding of the phrase—that the club could use the proceeds of these activities for the club's funds—when we used it in the Betting and Gaming Act, 1960. I am most flattered to think that the noble and learned Lord and his colleagues should read through words of mine, or my noble and learned friend who normally sits upon the Woolsack, whenever they are taking on judgments in such cases. I think perhaps it is better from the noble and learned Lord's point of view that our affairs are run as they are, letting alone what may happen in the United States and elsewhere.

In these circumstances, your Lordships will readily understand why, on behalf of Her Majesty's Government, I welcome this Bill, the purpose of which is to permit the raising of money by a club or institution for its funds by such activities. The Bill puts Parliament's intended meaning of the "purposes of private gain" into legal language, and hence the complication. This time, as the noble and learned Lord has said, the definition of "private gain" must be as precise as possible.

I particularly welcome subsection (3) of Clause 1 of this Bill. As my noble friend Lord Goschen has explained, these provisions were added to the original Bill following fears expressed in another place that Clause 1, as originally drafted, might leave the door open for abuses of the proper purposes of the Bill. My noble friend has pointed out—and I only want to echo it to your Lordships—that the purpose of this subsection is to preclude any possibility than an individual, namely, the lessor of a machine or other equipment, might derive private gain under the cover of a general benefit to the society as a whole. I am sure that we should all agree that this is a wise and laudable precaution to take, and that the inclusion of the subsection is an improvement to the Bill.

However, I am advised that the drafting of this most important but somewhat technical subsection might still further be improved in some minor particulars, and I should welcome, therefore, the opportunity to discuss this point with my noble friend before the Bill comes before your Lordships in Committee. At this stage, I should mention that in the Home Office we have received a suggestion that the wording of another largely technical provision—Section 20 of the Betting and Gaming Act, 1960—might be improved. I should like to consider with my noble friend whether this very technical Amendment might be included in his Bill.

From what I have said, your Lordships will realise that the Government are in sympathy with the general intention of this Bill which, put simply, is to reverse the decision in the case of Payne v. Bradley, or, in other words, to lay down that the phrase "purposes other than purposes of private gain" should not preclude the raising of money by a club for its funds by the activities organised under the various provisions mentioned in the Bill. If your Lordships agree that this intention should be carried into effect, I advise your Lordships that this Bill is a suitable instrument for the purpose.

5.55 p.m.


My Lords, I should like to thank the noble and learned Lord, Lord Denning, for his support, and also my noble friend Lord Bathurst for what he has said. Of course, I am willing to discuss the Amendment to subsection (3), and also the technical Amendment which he mentioned. When I took on what I believed to be a legal Bill I was reminded that my legal training is nil, except for one or two courts-martial. In one case I was defending, and a friend of mine, who was a subaltern at the time and is also now a Member of your Lordships' House, was prosecuting. We got into desperate trouble in the end because we called each other "my learned friend". I do not think there is anything more I need say about this Bill, except that I trust your Lordships will give it a Second Reading.


My Lords, of course we on this side of the House support the Bill. It is a Bill to remove a doubt. We can only hope that, in the consideration indicated by the noble Earl, Lord Bathurst, when he said that he wished to discuss certain drafting points, we shall not have doubt introduced in some other place in the Bill. Legal refinements can be very dangerous in that respect. We support the Bill.

On Question, Bill read 2a, and committed to a Committee of the Whole House.