§ 3.20 p.m.
§ TILE LORD BISHOP OF CHESTERrose to call attention to the state of gambling in this country; and to move for Papers. The right reverend Prelate said: My Lords, it is some considerable time since your Lordships' House had the opportunity of considering gambling. Since this is a subject which ought to be scrutinised from time to time, I have ventured to table the Motion which stands in my name. The subject is one, I am well aware, which is apt to rouse strong emotions, and in introducing this debate it will be my object to avoid, so far as possible, any remarks which may increase the heat or appear to suggest a moralising of the situation. I hope that we may examine the facts dispassionately and see whether it seems desirable that the law which controls gambling should be modified in any way. It is a vast subject, and if I were to attempt to cover the whole field I should strain the patience of your Lordships to breaking point. So I must be selective, and leave it to other speakers to raise specific points which I may have omitted and which they would wish to have discussed.
§ May I then first place before your Lordships the figures which are involved in gambling in this country? The only agency which assesses them each year is the Churches' Council on Gambling, a body of which I had at one time the honour to be chairman. It has just published its estimate of the amounts of money involved in 1965. In general terms, it calculates that the turnover in gambling, apart from gaming clubs and gaming machines, was £915 million. This figure was made up by £610 million on horse-racing; £125 million on greyhound racing, £100 million on football pools, a rough estimate of £35 million on bingo in commercial clubs, and a further £45 1088 million on fixed-odds football betting. Premium Bonds and other forms of gambling, such as funfairs.
§ This figure of £915 million represents a rise of £10 million on the previous year, and a rise of £155 million over the figure for 1961, in which year the new legislation became effective. If we add the sums involved in gaming clubs, the figure is well over £1,000 million a year. It should be noted that this is the turnover for these forms of gambling, and does not represent the amount of new money which passes between the gambler and the gambling agent. The figure for turnover, however, does serve a useful purpose in reminding us of the volume of gambling and, therefore, of the manpower, equipment and time which must be employed to meet it.
§ I would ask your Lordships to consider first the end to which this very large sum of money is directed. It provides a service for those who wish to gamble. It gives a measure of interest to those who enjoy the element and excitement implicit in gambling. Certain forms of gambling, such as bingo, provide fellowship for lonely people, who fill in the time which cannot otherwise he occupied. Much of it is pretty harmless, and most of it is within the law. But gambling has now become a major industry in this country. It is not content merely to provide a service for those who want to gamble: it is actively occupied in creating a larger gambling public, in persuading people to become gamblers who would not otherwise be so; and it is using all the devices of mass persuasion to achieve this objective.
§ The industry has its School of Turf Accountancy; it has its trade periodicals; it has its exhibitions of gambling equipment, and so on. The number of betting shops has risen from 13,340 in 1962 to 15,638 in 1965. And all this outpouring of effort and money is on an enterprise which is fundamentally sterile. It adds nothing to culture; it is entirely uncreative; it contributes nothing to productivity or to the national economy, save in the cut which the Chancellor of the Exchequer takes from the Revenue.
§ It is dangerous to try to estimate what may be the general effect of this volume of gambling on those intangible matters I of national morale. It is certainly putting 1089 temptation in people's way and is contributing to the increase in the number of those who are becoming compulsive gamblers. It is opposed to the general trend of social reform, for the practice of gambling is likely to exercise the imagination and the emotions in a way clean contrary to that required for the popular support of broad economic and social aims which have been set before the country by successive Governments. Nine hundred and fifteen million pounds is a lot of money to be involved in an activity which makes no contribution to the betterment of society and, so I would believe, to its happiness. The intention of the 1960 Act was to contain the situation and to prevent excess. The results of that legislation have been far from this intention. Therefore, in general terms, I would suggest that the situation needs very careful scrutiny.
§ There are three specific aspects of the gambling situation to which I would call the attention of your Lordships. The first is a matter which has been of recent concern—namely, gambling on the results of a General Election. From the publicity which was given to this activity, both in 1964 and in 1966, it is clear that this is now big business. Some bets may have been designed as a kind of insurance against the consequences of one victory or the other; some may have been to make money; and others were a mild "flutter". I have no evidence that publication of the odds in any way affected the manner in which people voted. But I do suggest to your Lordships that this is not a desirable form of gambling. It detracts from the dignity of Parliament; it introduces a cheapening and frivolous element into the electing of Members of Parliament, which is essentially a serious business. It is unwholesome, and I hope it will be stopped.
§ I should like to say a word or two about bingo. I imagine that most of your Lordships have taken part in this occupation under one or other of its many names—bingo, tombola or housey—housey. It is one of the forms of gambling permitted in the Royal Navy, and provided an innocuous way of passing time during those wearisome hours of boredom which are such a feature of war time. Incidentally, it was only the other day that I realised that I have for 1090 a considerable time in my life taken part in a form of bingo more often than I realised, for in my home one of the games permitted on Sundays was Biblical lotto, and I have now discovered that this was nothing more nor less than bingo. It did, however, have the valuable consequence of teaching me the names of the Kings of Israel and the minor prophets. To-day, of course, bingo is a legal game; and however dreary a way of passing the time most of us may think it to be, it undoubtedly provides companionship, and in the case of the more modest efforts the prizes are not so great as to cause any major social disruption. This, however, is not so true of the very large games being organised by commercial clubs on a national level. The promoters of this type of bingo are out to make money, and therefore the situation is potentially dangerous.
§ Participation in the game appears to be pretty steady. There is evidence, however, that bingo players are being encouraged to move towards a more sophisticated form of gambling. Last year the Craywood Club (1965) Company was established to provide small gaming clubs to which patrons would be attracted after bingo sessions. The Essoldo group, which has bingo clubs in fifteen large cinemas, has developed its own form of gambling called "square deal roulette". It looks as if the comparatively innocent gambling involved in bingo is being used to lead the customers on to other forms of gambling in which more money will be involved, with greater gains and losses.
§ This brings me to the most serious aspect of the problem, which is the rise of the casino-type gambling clubs. The difficulty in discussing these clubs lies in the fact that no one knows how many there are or the extent of the money involved. There was an inquiry under Section 2 of the Finance Act 1963, which reported in February, 1964, but the information given in the report is very tenuous, and there is no estimate of the money involved. In any case, the situation has developed considerably in the last two years. These clubs are operating without any control at all, yet one has only to read the newspapers to learn of their plush comforts and to realise that they are probably not doing too badly.1091
The most recent establishment of this kind is the Playboy Club, of London, which advertises as one of its attractions
the plush black, red and gold setting of the Playboy's Penthouse Casino. Here is a casino designed for a fun flutter. Stakes start at 2s. 6d. and are deliberately kept minimal at all of the games members have asked us to provide—black jack, American dice, roulette and chemin de fer".
It goes on:
Even though the Playboy Casino atmosphere is gay and exciting, the standards of gaming are high enough to satisfy the most serious player, as all games are under the supervision of a management team from Crockford's—one name in gaming that is in itself an absolute assurance of integrity.
Noble Lords will no doubt note the protestations that this casino will be run honestly. Many noble Lords have no doubt been invited to join this club, including the right reverend Prelates who sit on these Benches. One could wish that such optimism could have been put to a more profitable use.
There is no doubt that there are a very large number of casino-type gaming clubs in the country and that in many of them very large sums of money indeed are changing hands and, so my information goes, a number of people have lost money which they could ill afford. The point I wish to bring to your Lordships' notice is not so much the vulgar ostentation which all this involves, but that the establishment of these clubs is clean contrary to the intention of Parliament when the Betting and Gaming Act 1960 was framed. At that time Parliament had no intention of interfering with private practice, and was prepared to sanction a charge being made in a club for the use of a room in which members could take part in gaming for money. But it intended to prevent the commercial exploitation of casino-type gambling. The Royal Commission had stated that the law should
prevent persons being induced to play for high stakes for the profit of the promoter.
They said that this could best be achieved
by the prohibition …of those types of gaming in which the organiser has a direct financial interest in the stakes.
Therefore, on the advice of the Royal Commission, Parliament made it illegal for any cut to be taken from the stakes, for the house to hold a position of
advantage in the play, and for any charge to be made to take part in the gambling.
Parliament did, however, make this provision to meet the needs of bona fide clubs: if gaming formed an activity of the club, it was permitted to make a charge, being a sum determined before the gaming began. However, the intention of the Government was well expressed by the noble and learned Lord who then sat on the Woolsack, when he said:
…it is the aim of the Bill to free private gaming for pleasure from restriction, but at the same time to make unlawful any practice by which large profits might he made from the commercial exploitation of gambling."—[OFFICIAL, REPORT, Vol. 223, col. 1132; 23/5/60.]
The Government of that day was warned that this provision, unless it was defined explicitly, would open the door to the very thing that Parliament intended to prohibit. But in the Committee stage of the Bill the Minister in charge stated:
Those who are concerned with the commercial exploitation of gambling would not think it worth while to impose a sufficiently high charge to get a profit.
No doubt the Government had in mind sessions of play lasting an afternoon or an evening, and that the charge would have to be so high as to price the gaming out of existence. But instead, clubs have devised means whereby sessions could begin and end at frequent intervals, and a worthwhile charge be made for each. Here, I must assure your Lordships, I speak from hearsay rather than from personal knowledge. As regards chemin de fer, the law is powerless. It takes about half an hour to exhaust a shoe, and in the case of Mills v. MacKinnon the law has held that each shoe may constitute a separate session for which a charge may be made. I understand that charges of £1. £2, £5 or even £10 in the salon privée may be charged.
§ With regard to roulette, it is difficult to see how it can be played legally in this country, and the situation bristles with difficulty. If, as on the Continent, the bank has the sole benefit of the zero, then it is at an advantage vis-à-vis the other players and, therefore, illegal in that form. There is not an obvious break in the play which may mark the beginning or the end of the session, and the 1093 law has held that it is illegal to make a charge for each throw, or to put up a notice to say that there will be a fresh session every so many minutes. One can suppose that the players could be invited to take the bank, but the sums involved are such as to preclude most participants. And in the case of Kelland v. Raymond, Mr. Justice Paull expressed the opinion that if the club, in the person of the croupier, holds the bank in a game of roulette, the club is in fact taking part in the game, which is illegal, since the club cannot be a member of itself or a guest of one of its own members.
§ I quote these instances, my Lords, to illustrate how unsatisfactory is the present situation. Even more so is the fact that there is no register of these gaming clubs, no inspection of their practice, or of their books. No one knows how many there are or what is going on in them. A gaming club may have only gaming machines with no more than a sixpenny stake, or it may have an unlimited number of tables of a variety of games with unlimited stakes. We in this country are apt to think that the Continent is the place where you can go and get a good gamble and taste the experience of being rather daring. We do not appreciate that on the Continent gambling is very strictly controlled by the Government; the number of casinos is limited, and every detail of the gaming is watched with meticulous care. I am told that in France there are in fact only 156 casinos, and compared with those countries on the Continent which have had long experience in running gaming clubs and have evolved their controls as essential if trouble is to be avoided, the laxity of control in this country is hardly credible.
§ There is one further point I would stress. The Royal Commission stated as one of the principles that as much information as is practicable should be made available to the public about the extent of gambling and, wherever possible, the conduct of various forms of gambling. It said that it attached importance to the third principle because it was believed that gambling was more likely to be kept within reasonable bounds by the development of public opinion than by restrictive legislation. Very little information has been available about the state of gambling in this country, and I hope that now there 1094 is going to be a 2½ per cent. tax on bookmakers it will be possible for the Customs and Excise to provide information of the way in which things are going in this country.
§ I would press the Government to introduce amending legislation to enforce the intentions of Parliament in framing the most recent Statutes. It should prevent the commercial exploitation of gaming by setting a limit upon the charge which may be made to partake in each session of the gaming, and this should be determined by regulation from time to time. It should set a limit to the number of sessions which may be held in any period of 24 hours. Such amendment should lead to the fulfilment of the original intentions of Parliament. Should this prove to be impracticable then I should hope that all gaming places would be licensed and the nature of the proceedings and the apparatus used be subject to scrupulous inspection, and some means devised to implement the advice of the Royal Commission that excess should be discouraged or prevented.
§ I have never felt that there was any great moral danger in the mild flutter, the occasional ticket in a sweepstake, the odd shilling with a friend on the result of a match. The pity is that commercialised gambling has taken the fun and enjoyment out of what might be quite an innocuous entertainment. No amount of legislation will prevent a fool and his money from being parted, but at least the law can, and should, provide some protection against those who seek to exploit human weakness for material gain. We do what we can to limit the opportunities for the dope addict and the alcoholic to get what he craves for; should the law not also do what it can to protect the compulsive gambler?
My Lords, I undertook at the beginning of my speech not to moralise, and I think I have avoided the temptation to do so, but in closing I would ask you to allow me to record an opinion. It is this: that large-scale gambling tends to corrode everything that it touches and to make unclean what could and should be healthy. The doping of horses and greyhounds and the rigging of matches is directly attributable to the gambling element. Indeed, it seems that whenever any great social evil is uncovered, the element
of gambling will be found there. One remembers the words of Saul Kane in John Masefield's poem The Everlasting Mercy.
They'd backed me. See, O Lord, the sin
Done for the things there's money in!
The vast increase of gambling in the last few years has no doubt been due to the advent of the affluent society, with more money and shorter working hours. That process will doubtless continue and the opportunities will increase. Already the promoters of gambling are getting ready. Mr. Timothy Holland said on the Independent Television a year ago:
There is a tremendous future in gambling… People are not equipped to cope with their leisure… When in 20 or 30 years' time they find they only have to work a 20-hour week, what are they going to do with their time?… I say they are going to gamble.
§ It is for Parliament to say how far gambling shall be permitted and what are the necessary restraints upon it. I hope the Government will act before the situation again gets out of hand and it is too late for control. I beg to move for Papers.
§ 3.45 p.m.
§ LORD DERWENT
My Lords, I am sure the whole House is grateful to the right reverend Prelate for raising this subject, if I may say so with respect, in a very moderate manner and in a manner full of common sense. It is important that it should be raised now, partly because, as the right reverend Prelate said, it is getting—if it has not got —out of hand, and we ought to take a careful look at it, and partly because it is a good opportunity to discuss the taxation which is proposed on betting and which has now been announced. It is also important that it should be raised now because I think I am right in saying that Her Majesty's Government have said that they intend to introduce legislation in due course to amend the present Act, which I think needs amendment. I am not going to follow the right reverend Prelate in quite such general terms, because I want, to start with, to deal with certain facts of gambling as it is at present, including the taxation aspect, and in the second part of what I am going to say to deal entirely with casinos and gaming clubs and my suggestions for their control, because I think we are all agreed that control does not really exist now, and control must exist.
1096 As your Lordships know, the present Betting and Gaming Act was passed, although of course against certain opposition, with support from all sides of both Houses, and, if I may put it slightly differently from the way in which the right reverend Prelate put it, I think the main object of the legislation was to bring such gambling as there was, or might be, into the open. There were gaming clubs before the Act, but they were hidden away in what one might term "dark corners", and there were street bookies. There was plenty of gaming and gambling, all of it illegal, and one of the main intentions of the Act was, as far as possible, to bring it into the open and thereby enable some form of control to be set up. Up to a point we have succeeded in those objects, but it has now been found that the controls are not sufficient, and so we get, as we know, so-called gaming clubs: some of them are real gaming clubs, some are within the law, and some are still outside the law. Many of them have led in certain cases to protection rackets, strong-arm chuckers-out and all the unpleasantness which should be controllable.
As the right reverend Prelate has said, it is a vast subject and I do not want to deal with the main topics of it but only with one or two. I am not going to deal with the question which is always debated —whether on the racecourse there should be only the Tote or whether there should be bookies as well. It would not be appropriate for me to do so because I might be considered biased. I was at one time on the Tote Board and for a short time even a director of Tote Investors, Ltd. Although I am going to talk about tax later, I should like to bring in the question of the new betting tax in regard to one small point. If, as I hope is not the case, the new betting tax promised by the Chancellor of the Exchequer goes forward in its present form, the 2½ per cent. tax on the stakes will have to be paid by the punter when he bets with the Tote. Automatically that tax is passed on to the winning punter because it is deducted from the pool. It is not envisaged, so far as one sees at the moment, that it should be mandatory on a bookmaker to pass the tax on to a winning punter. He does not have to. It would be very difficult to pass it on to a losing punter. If you are going to have bookies and the Tote it is right that they should 1097 conduct their business on level terms. I suggest that this point should be looked at. Bookies paying out to a winning punter should make him pay the tax. There is another point in this. The large bookies in competition with their smaller brethren will probably be quite prepared to pay the tax, and their profits are such that it will not worry them. It may put the small bookie almost out of business if he pays it all without passing any tax on to the punter. This means that the very small bookie may go underground again. I would suggest it should be mandatory for bookies, the same as it is for the Tote, to pass the 2½ per cent. tax on to the winning punter.
§ THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM)
My Lords, if I may interrupt the noble Lord, 2½ per cent. of what? If a man puts £1 down and wins £5, does he pay 2½ per cent. on £5 or £1?
§ LORD DERWENT
If the noble Lord looks at what the Chancellor of the Exchequer said, he will realise that it is on the stake. I think that is correct. I am glad the noble Lord brought it up.
I do not want to say much about betting shops. They of course have had the one desired effect of getting the street bookie off the streets. Whether there are too many of them might he looked at. Perhaps the hours of opening should be looked at again. There are arguments both for and against making them shut at 2 o'clock or the time of the first race and not open during subsequent races. I believe many betting shops would like to shut at the time of the first race. It is a matter which should be looked at.
There is a matter that can be dealt with without legislation. I think it would be an excellent idea if a circular could go from the appropriate Ministry to the planning authorities. There are quite a lot of cases where betting shops have become a local public nuisance, not because of the way they are conducted but because of their actual site. I think it has been too easy for betting shops to be allowed by planning authorities. The situation ought to be watched very carefully, and I would suggest that Her Majesty's Government might warn planning authorities that because of the number of people going in and out at certain 1098 hours they can be a local nuisance because of their situation.
§ LORD COHEN OF BRIGHTON
My Lords, may I intervene? As a member of a planning committee, I can say that we are very worried about these betting shops. We have been told over and over again that we have no power once the magistrates have granted permission; we have no power to prevent them or control them in any way.
§ LORD DERWENT
I am grateful to the noble Lord for putting me right on that. I am sure he is right. I am merely asking if the Government cannot see whether something can be done about this very real problem.
I should like to come to the proposed taxation. On March 1 the Chancellor of the Exchequer went into details in another place in the debate on the economic situation. Perhaps I might add here that I am not a gambler myself. I like an occasional bet on a horse, but I am not a gambler, but because I disapprove but because it bores me. I therefore have no axe to grind as to one form of tax or another. On March 1, the Chancellor said, among other things:I have come to the conclusion that, while in the case of betting a tax on stakes is feasible, this is not so in the case of gaming. In this field, I prefer a system of annual licence duties as the practical approach."—[OFFICIAL REPORT, Commons, Vol. 725, col. 1123.]I am absolutely convinced that if the Chancellor wants a tax that will raise money and be easy to collect, he has his intentions exactly back to front. A tax on stakes on betting has been tried before. It was far too expensive to collect. There are endless possibilities of evasion and a large number of bets go "on the back of the book", as it is called, particularly some of the bigger ones. This was found to be the case last time.
I do not know whether your Lordships realise that when we had this tax on stakes 28 per cent. of the betting tax collected was paid by one firm of bookmakers who kept their books propertly. That is a fantastic figure. They certainly did not do 28 per cent. of the betting business of the country. In my view the proper way to tax bookmakers is on their premises, and premises should include a stand on the rails at a race meeting. It is an easy tax to collect and extremely 1099 difficult to evade, and that, I believe, is the proper, cheap, and successful way of collecting that tax. My right honourable friend Mr. Iain Macleod in the other place paraphrased the problem rather well. He said that it is a sensible idea to tax "one-armed bandits" but it is not a very sensible idea to try and tax the sixpences put into them. The same, in my view, applies to bookmakers.
As regards bingo, I think the tax on premises must be right. I do not see how else you are going to tax it. And the figures are about right. The Chancellor said:For bingo the annual rate of licence duty will be £100 where the rateable value is not above £1,000. The duty will be £1,000 where the rateable value exceeds £1,000." [Col. 1124.]I think that is about right because the bigger the bingo hall the more money in it, and it does not sound out of line.
Up till now I believe and hope I have had the support of my noble friends on these Benches. From now on I am going to give my own views on certain matters. I do not say that because I think noble Lords behind will not agree—I know that some of them know what I am going to say and in fact do agree—but the matter has not been fully discussed, so I do not want to commit my Party to my views. These are my views. For the rest of my speech I want to speak about casinos and gaming clubs. I think the wording of the Chancellor when he was discussing these matters was to some extent in shorthand, but when I refer to casinos I mean places where the general public can go, and when I refer to gaming clubs I mean places where you have to be a club member in order to be admitted.
I believe that in the case of casinos and gaming clubs there should be a tax on stakes; that is much more profitable for the Government, as has been found in France. Really the proposed tax on the rateable value of gaming clubs is one of the craziest ideas even this Government have thought of. The Chancellor said:For casino gaming, the duty will be £500 where the rateable value is not above £1,000, and the duty will be £5,000 where the rateable value is between £1,000 and £3,000. Where the rateable value is above £3.000 the duty payable will be £50,000 a year."—(Col 1124.)1100 Let us take as an example in the West End of London two gambling clubs about the same size. The first club, singularly fortunate, has a rateable value of £2,995 and every room in the premises is used for some form of gambling. Because its rateable value is just under the £3,000 limit it is going to pay £5,000 in tax. Round the corner is the second club, with much the same number of rooms; but it is largely a social club and has a restaurant, library, drawing rooms, sitting rooms, and so on, and two rooms set aside for gaming. This unfortunate club has a rateable value of £3,005, so its gaming tax is going to be £50,000. What an absurd situation: £10 difference in rateable value, £45,000 difference in tax, and the club that does the most gambling pays the smaller tax.
That cannot be right. To me it is absolutely crazy. It is going to encourage establishments solely for the use of gaming. It is going to encourage gaming in inferior premises. It is going to have the effect of being most unfair to certain cities or seaside resorts which desire to encourage a major development, and want to have under the same roof a restaurant, dancing, a theatre, a bingo hall and a few small rooms for some sort of gaming. They would have to pay tax according to the rateable value of all those premises, so the development would not take place.
This is not a difficult matter. We have an absolute blueprint in France where the stakes which are placed in gambling clubs or casinos are taxed. May I briefly say something about the French system? It is perfectly simple, but it has a tight control, which is what we are looking for. I might say that, under the French system, the Government, the municipality (as we call it: the local authority), and the concessionaire who runs the place, all make a nice fat lot of money; and in France the rules which are most important, are exactly the same for casinos as for gambling clubs. There is no difference in the rules. When a concessionaire wants to apply for a concession he goes to the municipality and says, "Would you like me to open?"—it may be a gambling club; it may be a casino. The municipality cannot move without the permission of the Ministry of the Interior (equivalent to the Home Office), and frequently the Ministry of 1101 the Interior refuse, on perfectly good grounds, either because there is another casino close by and a second one is not necessary, or because the locality has enough gaming clubs and more are not necessary. They say, No; and that is the end of it.
If they agree, and the municipality grants the concession, it has been found most satisfactory not to charge the concessionaire cash for his concession. It may be done in that way, but the concessionaire is usually made to undertake a not too profitable development for the benefit of the locality. We have one such development nearer home, in the Isle of Man. The new concessionaire was told by the Government of the Isle of Man to build a 100-room hotel which is needed in the Isle of Man. Such an hotel would not make enough profit to induce a hotel company to build it, but the Government there made the new concessionaire for the casino build the hotel. The concessionaire hopes that the hotel will just about pay its way, though he is not going to make a large profit out of it. But he will be getting his concession, the casino, and the locality will get the benefit of the hotel. In France, this sort of arrangement often results in a new golf course or something like that being provided. But there can be a cash charge to the concessionaire.
The rules of gambling, and the conduct of casinos or gaming clubs in France are laid down by the Ministry of the Interior, even to the extent in any particular casino or club, of what form of gambling shall take place. Some of your Lordships will know that in small casinos in some of the French seaside towns, if you wish to gamble you have to resort to playing boule, which is not too exciting. That is controlled not by the municipality but by the Ministry of the Interior.
When it comes to the real controls, there are tight rules about how things should be conducted. Any serious breach of the rules results in one or both of two things: either the concessionaire loses his concession without compensation and/or (and this is by far the most stringent sanction) the premises may be disqualified for ever. Your Lordships know perfectly well that a prosecution against a club here means that it opens 1102 the same night, ostensibly under different management, but the same fellow is behind it. This happens time and again. The Ministry of the Interior in France have power, and uses it, if there are serious breaches of the rules, to disqualify the premises for ever for gambling. This means that in France the gambling clubs and casinos obey the rules. That is what we want here.
Another rule is that there must be an entrance fee. To a club this is a membership fee, and to enter the casino you have to pay, probably about 10s. It is found with people who do not normally gamble, but who may be tempted inside, and may then lose their heads, that often, if they have to bother to take out 10s., they do not go in. That is a fact that has been proved to the satisfaction of the French. So there must be an entrance fee. Then 5 per cent. of every stake is deducted. I will not go into the safeguards—they are perfectly simple. But various safeguards are undertaken. There are Government inspectors who go around the clubs. Some of your Lordships may not have realised it, but you may have seen, in some casinos, a little desk or cubby-hole in a corner, with a man tearing up pieces of paper and writing down figures He is employed by the Government, not by the casino. He sits there all night, and he sees that the place is properly run. This 5 per cent. is divided in certain proportions between the Government, the municipality and the concessionaire. The figures vary a little in proportion, according to the locality. These proportions, again, are settled by the Ministry of the Interior.
The next and most vital point is this. If you do not want people to lose more money than they can afford, no credit is allowed in any circumstances. There is no signing of a chit. The counters or chips must be bought, either for cash or by cheque, before they are handed over. To present a "dud" cheque is a criminal offence. Normally 28 days is given to clear a cheque. If a man loses too much, he may sell some stocks or shares, or do something. But if the cheque is not met at the end of the period a criminal offence is committed, and the man will probably go to prison. In addition, at the end of the period, the concessionaire is bound in law to prosecute. If he does not, he loses 1103 his concession. So he is bound to take action.
As your Lordships know here it is difficult for a gambling club to collect what is owed. Sometimes it takes months to do so. Knowing that, in the last resort, they will not have to pay—or at least not for a long time—some people gamble for more than they can pay. The French rule stops that. If we are to have gambling clubs, we must have that sort of system here. The situation will become worse every day if we do not have proper control; and this means limiting the number of clubs and casinos. The Government in France take a direct interest in the enforcement of law, as well as a profit, by way of tax. I am sure that that is the way these things ought to be handled, and not, I repeat, by this crazy idea, and this appallingly unfair system of trying to get your money back by taxing the rateable value. That does not make sense. Other ideas will be put forward by your Lordships this afternoon. I hope that Her Majesty's Government will listen to them. If they do, they may then, for a change, get their new legislation right.
§ 4.10 p.m.
§ LORD WADE
My Lords, I should like to join with the noble Lord, Lord Derwent, in thanking the right reverend Prelate for introducing this debate to-day and for doing so with such moderation and, at the same time, with such conviction. I think this is one of many occasions when your Lordships' House is able to provide a forum for a valuable debate. I should like to make it clear at the outset that anything I have to say represents an expression of my own personal opinion.
I start with the basic principle that money, whether it be a coin or a piece of paper, represents the right to call upon the services of my fellow human beings —and I am using "services" in a much wider sense than that used by the present Chancellor of the Exchequer. Personally I cannot find any moral grounds on which I could justify gambling with that right; but it is only a personal view and I would not presume or attempt to force it on others. It is a matter of personal judgment. There is another sound principle, namely, that in a free society individuals 1104 should have the greatest possible amount of liberty to act as they think fit and to spend their money as they think fit. Certainly any attempt at the prohibition of gambling would be no more successful than was the prohibition of the taking of alcohol in the United States.
I agree with the words which were uttered by the right reverend Prelate. Gambling is indulged in (or, if you prefer it, enjoyed) for a variety of reasons. For some, life is rather dull and they appreciate the excitement of gambling. For others, it is just the conventional thing to do. A friendly bet is part and parcel of normal life, and to refuse to take part may seem unsociable. I think it was Mark Twain who said,Be good and you will be lonely",I do not accept that as a conclusive argument for not being good, but I take the point.
To-day, however, we are considering not the occasional friendly bet, but something very much more serious. We are considering large-scale commercial exploitation of the desire to get something for nothing. I think this is a matter for concern for the community as a whole, and the question is whether it should be encouraged or discouraged. The right reverend Prelate has given us some figures, and I would suggest that, if anything, they are an underestimate. I have been very anxious to get accurate information, and I have had some correspondence with the Secretary of the Horserace Totalisator Board. I received a letter from him the day before yesterday, in which he pointed out the difficulty of obtaining accurate information. He wrote me as follows:An article appeared in the Sporting Life on 6th April, 1966. Based on the figures quoted in the article, and using a mean figure of average weekly turnover within each of the brackets quoted, we calculate the turnover for licensed betting offices alone to be £797 million per annum. This would, of course, include betting turnover on other mediums of betting, e.g., greyhound racing, but betting on horse racing would undoubtedly provide by far the greatest part of the betting office turnover.You will see that the figure for the number of licensed betting offices quoted in the article is 11,585. The latest official figure for the number of cash betting office licences granted, as at 1st June, 1965, for the whole of England, Scotland and Wales, is 15,638.I do not want to trouble your Lordships with complicated calculations, but my estimate is as follows. Excluding gaming 1105 in clubs and gaming machines, the total turnover on gambling is over £1,000 million per annum. Therefore I think that we have here a social problem. The increase in gambling could well affect the ability of the nation to face the challenge of the years that lie ahead.
The right reverend Prelate has referred to the remarks of Mr. Timothy Holland and his forecast for the future. I am always chary of proposing restrictive legislation, but I think we have to consider whether the kind of future that Mr. Timothy Holland forecasts is one that we should welcome and whether we should encourage that to come to pass. When the Betting and Gaming Act 1960 was passed, it was recognised that there were a number of anomalies, and I think many people felt that the working man should be put on an equal footing with those who could afford to bet legally on credit by telephone. But I consider that the time has now come when there should be a review of the effects of both the Betting and Gaming Act 1960 and the Betting, Gaming and Lotteries Act 1963; and I understand that legislation is under consideration. For example, is the proliferation of betting offices really necessary? Is it the result of genuine demand; or have some of the betting offices been opened in order to create a demand? There is an important distinction. I shall be interested to know what is the policy of the Government on this matter.
In the figures of turnover which I quoted, I did not include gaming in clubs. The subject of clubs has already been dealt with quite fully in this debate, and I do not propose to discuss the subject of clubs at length. I understand the noble Earl the Leader of the House is going to deal with clubs, and I shall listen to what he has to say with great interest. I have only one specific question to put to him, and it is this. Is any action being taken to deal with protection rackets? Clubs in London are still being smashed up and customers assaulted. The blackmailing of club proprietors used to be related to illegal gambling and the threats of exposure. I understand that the approach is now more subtle. By the use of threats of violence the racketeers gain a concession to run all the gaming in the club and take all the proceeds. What steps, if any, are being taken to ensure that this 1106 does not happen? Is anything being done to check racketeers?
May I turn to an entirely different aspect of gambling, one which was briefly touched upon by the right reverend Prelate? We have a comparatively new phenomenon in our political life in the publicity given to betting on Elections. This raises some interesting constitutional issues, and possibly some dangers. At the last two General Elections a great deal of attention was paid in the Press and on the radio and television to opinion polls and betting odds. I am not discussing the subject of opinion polls. There are some who would like to forbid opinion polls during an Election campaign. I am not convinced that that is necessary, and, in any case, it is not relevant to this debate, but I think that the combination of opinion polls and the daily publication of betting odds has created a new problem. It has tended to turn a General Election into a kind of glorified horse race—with this difference: in a horse race, if I put my bet on a horse and thereby gain a stake financially in that horse's success, I cannot then go along to a polling booth and vote for that horse to win.
I do not wish to say anything derogatory of another place; I will try to be as objective as I can; but perhaps this is an appropriate time to raise this subject, with an Election behind us, with a somewhat calmer atmosphere and another General Election possibly quite a long way off. Certainly, there have been very substantial increases in betting on Elections, both on Parties and on individual candidates. First, there was the General Election of 1964, where I think betting was featured for the first time on television, and there was a still greater increase in betting at the last Election which was extended to individual constituencies.
According to the Sunday Times of March 13 this year, on the day after announcing the decision to take bets on individual constituencies Ladbroke's took £100,000 on marginal constituencies, and the total turnover on betting at the last Election was approximately £21 million. I understand that at first much of the money came from the Stock Exchange, or perhaps it would be more accurate to say from those who had investments and who feared that the price might fall 1107 if the Labour Government was returned. They therefore bet on Labour to win, in order to hedge against possible losses on their shares. But smaller bets followed from individual electors.
I think the general interest raised by the publication of betting odds has created a somewhat new situation, because the elector has a direct financial interest in a particular candidate getting in, in order that he may win his bet. Again, I do riot wish to be unfair or to minimise the intelligence and good sense of electors, but I think there is at least a problem here to be considered, and we are entitled to ask: where will it lead? The publicity in the Press and on television is, of course, the crux of the matter, and the time may come—I hope it will not—when the Party which wins will be the one with the greatest skill in influencing betting odds in marginal constituencies by the careful placing of bets. In that case, of course, the posters and the conventional propaganda will be comparatively unimportant. I am somewhat inhibited in providing evidence, because I do not wish to say anything which would be a breach of etiquette, or to refer specifically to Members of another place, but I think anyone who examines this will find that there is some evidence for the view that some candidates believe that their success was partly due to friends coming forward and betting large sums on them to win, and so altering the odds.
I do not think the bookmakers are entirely happy about this. According to a report in the Press, Hill's at firstadamantly refused to bet on elections or any other political matters".But later it was reported in the Daily Mirror on October 8, 1964, that Hill's were advertising as follows:In response to public demand we now offer the following odds…There was an article in the Sunday Telegraphon April 3 this year, written by Ian Sproat, in which he said:Although William Hill believes it is morally wrong to bet on issues of national importance, the company will, if no laws are passed by the next Government forbidding it, go on taking bets on general elections— We have to stay in business'.The question is: What can be done about it? I think it would be difficult, if not impossible, to prevent private bets 1108 on particular Parties or candidates. But if the publication of betting odds during an Election campaign were not permitted, the whole matter would cease to be of any serious constitutional importance. I suggest that the Government might consult with representative bodies of opinion, to consider whether anything should be done, and perhaps also institute an inquiry to ascertain whether there is a need for legislation, and consider what practical difficulties would be involved in any such legislation. I understand that this is not on the agenda of the Speaker's Conference, and therefore, I hope I am right in raising it to-day.
In conclusion, if I may return to the general theme of my remarks, I think we have here a major social problem. There are, in fact, some unfortunate people who are compulsive gamblers. They just cannot stop, and often they bring very real tragedy to their families. It is no use lecturing them on the folly of it all; that is absolutely useless. The compulsive gambler is similar to the compulsive alcoholic. Therefore I should like to pay a word of praise and of gratitude to a body known as Gamblers Anonymous, who are trying to tackle the problem sympathetically and to help those who are suffering from what can only be regarded as a disease. But the fact that this exists seems to me to provide evidence that we are considering this afternoon not just a harmless pastime, but a serious social problem which the community cannot afford to ignore.
§ EARL FORTESCUE
My Lords, before the noble Lord sits down may I make one correction and a protest? He stated that a large part of the gambling on the Election results came from the Stock Exchange. I was a member of the Stock Exchange for nearly 40 years, and no reputable firm ever had anything to do with gambling on the Election results. I think I am right in saying that the Stock Exchange Committee have passed rules to that effect. The fact that the public sometimes put their money to use in the Stock Exchange and sometimes in gambling on Election results has nothing whatever to do with the Stock Exchange, and these are two entirely separate problems.
§ 4.27 p.m.
§ THE LORD PRIVY SEAL (THE EARL OF LONGFORD)
My Lords, I am sure that we are all truly grateful to the right reverend Prelate the Bishop of Chester for raising this grave question in the House to-day in his impressive speech. If I may say so, he has shown just the right degree of knowledge of betting. He is deeply versed in the social aspects of it, without any suggestion that he has misspent his youth, and we have all listened to him with very great interest. Although he has referred to gambling in general, I intend in this speech to confine myself almost entirely to the problem of the gaming clubs, leaving my noble friend Lord Stonham—who, of course, is a Home Office Minister—to deal with other aspects of gambling which have been, or may be, raised in the debate. I will cover, if I may, some of the points raised in the interesting speeches of the noble Lord, Lord Derwent, and the noble Lord, Lord Wade, but others of their points will be replied to by Lord Stonham.
First, a very few words about gambling in general. Mr. Alan Wykes, in his learned and fascinating work on the subject, points out that the word "gambling" derives from the Anglo-Saxon "gamenian"—to sport or play (I hope I have pronounced that word correctly: there may be some old student of Eng.Lit. of Oxford University who would pronounce it better). But that is where the word starts. He stresses the fact that gambling involves us in unnecessary risk taking. The Reverend Gordon Moody, Secretary of the Churches' Council on Gambling, whose recent Report is just as absorbing as Mr. Wykes' treatise, describes a gamble more elaborately. According to the Reverend Gordon Moody, a gamble is a redistribution of wealth on the basis of an artifically created risk involving gain without service rendered for one party at the loss of another party on an appeal to chance. That is a fairly comprehensive definition.
Sir Winston Churchill once said that the history of the human race 1110 is war, which did not prevent him and the rest of us from trying to abolish war. Gambling, I suppose, can be said to have been at least as endemic as war down the centuries, but that does not diminish our ardour in trying to bring it under control. We find traces of gambling in ancient Egypt and ancient China. There was a certain amount of gambling in Greece, though much more among the Oriental peoples, apart from the ancient Hebrews, who were not at all keen on gambling; and the Teutons gambled a great deal in different centuries. Many eminent men have been gamblers, from Henry VIII, who, according to tradition, lost the bells of St. Paul's Church in a game of dice, to Dostoievsky, who ruined himself and his wife through his gambling mania and, we are told, fed like a leech on the masochistic pleasure which gambling gave him. So many very foolish people have gone in for gambling, and some great geniuses.
Mr. Wykes singles out eight reasons for excessive gambling, which I offer in his presentation: first, the acquisition of unearned money—i.e., a form of greed; secondly, social cachet—or, more bleakly, snobbery; thirdly, sexual compensation; fourthly, masochism; fifthly, boredom: the refuge of an empty mind: sixthly, intellectual exercise; seventh, the desire to prove one's superiority to the forces of chance; and, eighth, inexplicable excitement. Those are the eight reasons which Mr. Wykes has arrived at after a very profound study of the whole history and philosophy of gambling, and it is up to noble Lords to add any others which occur to them from their experience.
But neither as a Minister nor as an individual do I wish this afternoon to pronounce on gambling in general. A social survey carried out for the Royal Commission on Betting, Lotteries and Gaming, 1949 to 1951, suggested that at least four out of five adults in all walks of life in Britain have taken part at some time or other in some form of gambling, including trivial forms such as raffles, whist drives, private sweepstakes and an annual "flutter" on the Derby or Grand National—and I gathered that the right reverend Prelate did not object to the milder forms of "flutter". But the Royal Commission concentrated its attention on 1111 the dangers of what it called "immoderate gambling", which was also the approach of other noble Lords, including the noble Lord, Lord Wade; and it is from that angle that I approach the Motion before us.
My Lords, I do not wish to dispute the figures of commercial turnover which have been produced by the Churches' Council on Gambling and quoted to us this afternoon. As the right reverend Prelate would agree, there is necessarily an element of speculation in them. The noble Lord, Lord Wade, I think, thought they were rather an understatement; but I would say, on my information, that they are not very wide of the mark. What is particularly significant about these figures, which will have occurred to anybody who has read the Churches' Report, is that they omit any estimate of the amount of money which passes in the gaming clubs. That item does not occur in the statistics. That is an indication—and an alarming one—of the uncontrolled and unforeseen growth of the gaming industry, to which the noble Lord, Lord Derwent, directed most of his attention.
During the last five years there has been a truly remarkable development of organised gaming in this country. Whatever views noble Lords may hold on the ethics of gaming, there is no doubt that the rapid spread of gaming clubs in London and in the large towns in the provinces has created a most serious social problem. Even the most libertarian among us—and this House, I suppose, is becoming increasingly libertarian —would hesitate to choose Las Vegas as the model for gaming here; and yet I believe we are closer to the system of Las Vegas (if it can be called a system) than we are to that of, for example, the French and continental casinos, which were dealt with quite fully by the noble Lord, Lord Derwent.
My Lords, I do not believe that any of us would pretend—and certainly the Government would not pretend this—that the provisions on gaming which were introduced in the Betting and Gaming Act 1960, and consolidated in the 1963 Act, have worked in any way as Parliament intended. I think it is common ground that they have not worked out as was hoped or expected. The object of those provisions, broadly speaking, at any 1112 rate, was to give effect to the recommendations of the Royal Commission on Betting, Lotteries and Gaming, 1949 to 1951. The Royal Commission based themselves on the principle that there should be as little interference as possible with individual liberty to take part in gaming; hut, as the right reverend Prelate has pointed out, the Royal Commission went on to say, in paragraph 412 of their Report, which we regard as the very kernel of the matter—and I am now quoting the Royal Commission Report:the main object of the criminal law should be to prevent persons being induced to play for high stakes for the profits of the promoter.It is now manifest to all of us that gaming is to-day being commercially exploited on a wide scale and on an ever-increasing scale, and to the very considerable profit of the promoters; and to commercial exploitation we have seen added one by one all the abuses that naturally follow. I do not for a moment say that there are not a number of gaming clubs which are honestly and decently conducted, but there are others which do not scruple to play on every form of human weakness and cupidity and rapacity, and to resort, when it suits their purposes, to forms of pressure, amounting at times to intimidation.
If I may, I will leave to my noble friend Lord Stonham the particular question raised by the noble Lord, Lord Wade, in that connection, but I accept the fact of the problem which arises here. The large amounts of ready cash tend to attract a dubious clientele—not, of course, everywhere, since, as I repeat, many of the clubs are highly respectable; but this respectability is far from universal. And the increasing competition between clubs, particularly during the last year—and quite recently there has been a very rapid expansion—has led, as one would expect, to the growth of so-called "protection" (it is a horrible use of the word "protection") and other rackets. This is emphatically, as all the previous speakers have said, the time to take stock and consider where this new and surprising development is leading us.
But first, my Lords, what exactly has gone wrong? Quite simply, the safeguards inserted in the law have proved insufficient and capable of widespread evasion. Those safeguards were of two main kinds. First, there is the general provision, now 1113 contained in Section 32 of the 1963 Act, that for gaming to be lawful the chances in the game must be equally favourable to all the players—and the players were intended to include the banker where there was one. That was the first safeguard. Secondly, there is the provision in Section 36, which applies particularly to clubs, that the only charge made to take part in gaming should be a single charge consisting of a fixed sum of money determined before gaming begins. Parliament intended by these means to confine the profits of club proprietors to one charge for a whole session of play; and, while they did not prescribe any maximum, Parliament believed, not unreasonably, that few people would be prepared to pay any very high sum for gaming before it had begun and before they had been caught up in the heat of play. So those were the two safeguards—what I might call the rule of equal opportunity, and this rule of one charge for a whole session of play.
My Lords, this system—the system as foreseen, on the whole, by Parliament—is the one on which the bingo clubs operate. A single and usually modest charge is made to take part in the play, and thereafter all the money that is hazarded is returned in prizes among the players, the management taking nothing. I should hesitate to say that when Parliament passed the Act of 1960 it foresaw this tremendous development of bingo, but I would think it right to tell the House that bingo has, generally speaking, been conducted according to the principle which Parliament had in mind. There may be differing views about bingo; some may think it a very boring way to spend one's time, but at any rate it does not give rise to the aggravated abuses that I have been describing and which other speakers have rightly dwelt on and denounced. Therefore I do not propose to say any more this afternoon about bingo.
My Lords the most serious developments have been in the exploitation of what have been loosely called the "casino games"—I mean games such as chemin de fer, black jack, craps and roulette. Almost as soon as the 1960 Act became law, the club proprietors sought means to evade its restrictions; and plainly with considerable success. First of all, there is the weakness that the Act does not 1114 define the period of play for which the initial charge must be made. Certain forms of roulette were attempted which involve the almost impudent expedient of making a charge for every spin at roulette; but the courts put a stop to that. I think the noble Lord, Lord Kilbracken, is rather an expert on this aspect of the matter—at any rate that is my information. As the noble Lord told us, the courts have sanctioned a separate charge for each shoe at chemin de fer, on the ground that completion of a shoe constitutes a natural break in the gaming. A shoe takes only about half-an-hour; and charges up to £5 and £10 have been made for each shoe. There is clearly here a considerable profit for the proprietors in a way unforeseen by those who introduced the Act.
But there is more: the recurrent table charges made in the course of the play exploit the natural human weakness not to break off when gaming is fully under way; and so all sorts of pressures and crafty inducements are brought to bear to lead the gambler to continue. There is every incentive for the proprietor to fix the stakes at the highest figure at which people can be induced to play.
There has been another development which is particularly associated with roulette and which has defeated the other safeguards. Your Lordships will be aware that in the games of roulette as played on the Continent there is a definite and acknowledged advantage to the bank. Precisely. But, without going into the complexities, this ranges from about 1.4 per cent. of the stake money on the so-called "even money chances" to about 2.75 per cent. on the single number chances. Of course, with high stakes, and with each spin averaging about two minutes, the opportunities for profit to the bank are very considerable. Now it is almost invariably the house that provides the bank—some people would say that in their experience it is invariably so. But, at any rate, one might say that it is almost invariably the house that provides the bank. The condition that the chances of the game must be equally favourable to all the players, which was, of course, essential in the thinking of the Act, has been got round by the expedient of "offering" the bank, in one form or another, to the players; but in the reasonably safe expectation that none will be 1115 prepared to run the very considerable short-term risk of accepting the offer. The bank tends, therefore, nearly always to remain with the house and the long-term profits accumulate.
In saying this I am aware of the recent decision of the High Court in the case of Kursaal Casino Limited v. Crickett which was broadly to the effect that whether offering the bank complies with the law depends not simply on form but on reality. I agree with the right reverend Prelate that in the light of this ruling the legality of the present practice, or subterfuge, of "offering" the bank is very dubious. But the precise practical import of the judgment still remains to be worked out, and other cases are pending on which I must not comment. In any case, our somewhat bitter experience is that as soon as the courts check one form of evasion the proprietors are ready with another, which it may take many weeks or months to challenge effectively. It is an undoubted weakness that all the restrictions are statutory, so that any defect discovered can be corrected only by fresh legislation; so in each case the proprietors get a head start before the law can start after them and catch up.
My Lords, there are many aspects to this problem, but one in particular deserves mention. This is the provision, which dates from the Gaming Act 1710, which makes gaming debts irrecoverable in the courts. Gaming on credit is more than a convenience: it is a strong inducement to excess. To the unscrupulous proprietor it is an attraction, but the problem of recovering the debts remains. Your Lordships will realise how a situation of this kind can lead to intimidation or blackmail, ranging from the subtle to the downright crude. The giving of credit in these circumstances contributes to the unhealthy atmosphere surrounding so much of the gaming in this country to-day. Your Lordships will note how I have carefully phrased the words without pointing out the precise solution of the problem.
This is necessarily a sketchy and incomplete description of the circumstances which exist to-day in the gaming world. We shall all agree, I hope, in this House —and, broadly, in the country—that the situation cries out for remedy. The noble Lord, Lord Derwent, said that we 1116 must have control and that control does not exist to-day. I am less certain that we shall all agree on the remedies that ought to be applied. The right reverend Prelate and other speakers will perhaps forgive me this afternoon if I confine myself to indicating the general attitude of the Government, leaving more precise proposals to emerge in the light of this and other debates.
As a generalisation there are two very different approaches which have been suggested to this very grave problem. The first approach takes as its model the casino system as it has developed on the Continent and particularly in France. This was the line followed by the noble Lord, Lord Derwent—and I gather that he was speaking at that stage primarily for himself—and it is a view held by a number of those who have given much thought to these questions. He himself described the system, but perhaps the House will forgive me if I risk a certain amount of repetition and go over some of the points again. This system, which might be called the Continental system, involves a tight and meticulous control over all gaming establishments, none of which may open without express governmental authorisation, given subject to the most detailed safeguards and conditions. These conditions, as the noble Lord explained, deal with the premises, the character of the promoters and staff, the games to be played, the rules of play, the admission charges, the stakes, the hours, the inspection, the accounting, the tips, and a lot of other things, including in some cases even the clothes of the croupiers—in not allowing them to have any pockets.
The object is clearly to ensure, with the benefit of more than sixty years' experience, that so far as is humanly possible the gaming is honestly, decently and openly conducted in proper surroundings and to ensure the elimination of criminal elements. There is no place in the Continental system for the sort of squalid clubs that have tended to proliferate—with increasing speed, I am ashamed to say —in our larger cities in the last year or two. But the noble Lord, Lord Derwent, advocates this kind of system and made no secret of any of these aspects. But this system is by its very nature a centrally-controlled cartel and it is one in which the municipalities and the State itself have a very considerable financial 1117 interest. That would not appeal to everybody; it would not appeal to quite a number of people here; but it is a fact which needs to be weighed for good or for ill.
The system is in no way intended to limit profits. Indeed, the profits are in most part derived directly from the stakes, either by odds in favour of the bank or from a percentage of the winnings, and the authorisations normally proceed by fixing a minimum stake and then allowing a maximum of one thousand times that amount. It is a system essentially designed and, for the most part, restricted to the spas and holiday resorts for foreign visitors and holidaymakers, not for the ordinary man in the street. In this country gaming has developed and is now firmly rooted in London and in the large industrial towns, and these are points of contrast, but I am trying to set out the attractive and the less attractive features of the Continental system.
My Lords, the other approach, which may be called the approach from the other end, is based somewhat on the analogy of bingo, the bingo clubs here. While not ruling out commercial gaming altogether, this system would restrict it or would return it more closely to the original intentions of the law, reinforced however by defining the length of the session for which a charge might be made, and by fixing a maximum charge at a figure to rule out all inordinate profits. There are many people who would favour this course. I think that the right reverend Prelate himself is disposed to favour it. But certainly in the form propounded by the right reverend Prelate, with no more than three sessions in any period of 24 hours, and a maximum charge for a session limited to £1 or thereabouts, the effect would be quite clearly to kill the fashionable and expensive gaming clubs, that is the casino-type clubs, altogether. That may not be the objective, but I am sure that would be the result of a system if operated on the lines advocated by the right reverend Prelate.
There is, of course, a question here of judgment. Some would say there is a place in our country for the expensive club with high stakes if it is honestly run and without the worst forms of inducement to excess or to blatant profiteering, just as there is a place for the bingo hall.
1118 To others, as I realise, the "high-gloss" clubs are particularly objectionable since they not only themselves involve large and spectacular profits but they may act as trend-setters; they may influence the general thought of the country towards commercial gaming. But it can be argued (and I am not trying to pronounce a final opinion on this side of it now) that if you try to drive out one evil another will always arise. It can be argued that if club proprietors are not allowed to fleece the rich, they will concentrate on fleecing the poor; that their prevailing incentive will be the desire to persuade more people to gamble more often; in other words, they will be driven to exploit the mass market. There are those who are nervous that if we manage to bring these "high-gloss" clubs to an end, we should see that the last state would be worse than the first. I do not want to say anything final on that this afternoon, but I must record that point of view.
My Lords, I have purposely simplified these alternatives. Obviously there are many variants and many differences of degree and (I say this, offering my own opinion which is not, I think, out of line with the Government approach) it should not be impossible to find a middle way. I do not say that one has to have one solution or the other. I would myself feel that a middle way can be found. But all the proposals put forward tend to start from one end or the other; from one of these approaches or the other, according to individual conviction, temperament or interest. My concern to-day is not to attempt a final judgment but to illustrate the great complexity of this subject, not only technically, but in what matters more to most of us, the field of social and moral values.
All I have said applies only to the commercial clubs, but it must never be forgotten that up and down the country there are many genuine members' clubs which provide modest facilities for gaming as an ancillary to their other objects, and not primarily for motives of gain. Yet at the moment the same law applies to those members' clubs as to the casinos or bingo halls. Clearly in any amendment to the law we must make sure that the interests of the members' clubs are properly considered. It would be quite absurd and unnecessary to attempt to 1119 apply to them any rigorous system of control such as might be thought fitting and applicable to the commercial establishments where such great profits tend to be made.
My Lords, it is manifest that there must be a tightening of the law for commercial gaming clubs of all kinds. That seems to me beyond all argument at the present time. As your Lordships know, the Government are now conducting a thorough and searching review of the whole subject and, while I am not in a position to-day to announce their decisions (indeed it would hardly be courteous to the House to do so in advance of this debate), there are certain general principles to which I would rather hope that all of us can subscribe. I would mention three only. One, gaming, wherever it takes place, must be seen to be honestly conducted, in decent conditions and under proper public supervision, so as to reduce, if it cannot entirely eliminate, the criminal activities which have increasingly come to be associated with it. Second, whatever profit is left in gaming should not be in a form which gives positive encouragement to the club proprietors to exploit human improvidence, weakness and other failings. Third, the law must be sufficiently flexible to enable new abuses which show themselves to be stamped out firmly and promptly. I do not myself see (and I speak deliberately here, after proper consultation) how these objects can be achieved without the introduction of some system of licensing or registration, or both.
I fully understand, indeed I share, the widespread anxiety to see that the present defective laws are replaced as soon as possible. The situation in which we now find ourselves illustrates, if anything has ever illustrated, the dangers of hasty and improvised legislation, however well-intentioned. The Government are determined that we shall not find ourselves in that particular awkwardness again. And we are determined that any legislation that is now introduced should not only be based on sound moral principles, which was certainly the case in motive before, but be capable of effective enforcement, not only in theory but in practice.
1120 Your Lordships will have noticed I think that I have said nothing this afternoon about the gaming tax proposed by my right honourable friend the Chancellor of the Exchequer in his Budget statement, on which the noble Lord, Lord Derwent, had some not altogether flattering comments to offer. But this question of gaming is a matter in which I believe that the fiscal and the social considerations should be kept apart, so far as that is possible—and it is not perhaps completely possible. But in the view of the Government it is the social considerations that are predominant. We must form our national policy for gambling or gaming on social grounds and then adjust our taxation system accordingly. Parliament must be free to decide how gaming should best be controlled in the interests of the community, leaving future fiscal policy to be adjusted to that. If something were in fact immoral, for example, in our view, we should not support it on the ground that it brought in a lot of money to the Exchequer. I have no doubt that my right honourable friend the Chancellor of the Exchequer will be fully equal to the task of finding or adapting taxes to fit whatever social policy is produced.
It is, as I said earlier, my Lords, a diagnosis that I am offering to-day, not a prescription of remedies. That is not to imply that my right honourable friend the Home Secretary has not a number of ideas of his own as to the form that the remedies should take. In fact he has done a great deal of work on the subject already, and his ideas are fairly well-defined. But I should not like to leave the House with the impression that the Government approached this subject with a closed mind or have reached the point where they are not susceptible to argument. They are anxious, before committing themselves on this highly involved subject, to obtain the fullest possible consensus of moderate and informed opinion. It is for that reason that we particularly welcome this debate. I can assure the House that the suggestions that have already been put forward, and those that will be put forward, will be carefully studied, and I hope it will not be long before we can find a proper remedy to the evils which we all acknowledge. I would once again say how grateful we are to the right reverend Prelate for introducing this debate.
§ 5.1 p.m.
§ LORD MANCROFT
My Lords, the noble Earl, Lord Longford, has made a significant and helpful contribution to our debate, and I know that his words will be carefully studied. I hope he will forgive me if I do not follow him and continue the debate on the question of clubs. In order to save your Lordships' time, I wish to devote myself to one point, and one point only, and that is the question of the Tote monopoly and the bookmakers. At the beginning of his speech the noble Earl, Lord Longford, reminded us that the Ancient Hebrews had little use for gambling. That goes for this one, too. I think the biggest bet that I have ever had in my life was £5 on New College to bump Corpus before the bend on the first night of Eights Week. I am happy to say that I won my bet, and more particularly happy since the captain of the New College boat was none other than the present Lord Bishop of Chester.
The right reverend Prelate, in the course of his extremely appreciative speech, regaled us with some of the advantages of those who will visit the gambling rooms of the new Playboy Club. I, too, have received an invitation to join the Playboy Club, together, I believe, with most of the Bishops and Archbishops in this House, not to mention my Uncle Charlie, who has been dead for four years. I have a desire to join the club, though not, I am afraid, because of its gambling facilities.
The noble Lord, Lord Wade, reminded us that you cannot abolish gambling, it being part of human nature. But I agree with him that we have allowed the argument to run away with us, and the present extent of gambling has now become a serious social matter. In my speech I wish to address myself solely to horse racing. In horse racing we are undoubtedly getting the worst of all worlds. There is financial legislation before Parliament dealing with the question of betting. I do not know how carefully your Lordships have looked at the relevant clauses in the Finance Bill—Clause 14 and so on. I am quite certain that the proposals will not work, and I do not think that the experts think it will work either.
I always used to think that the highlight of legislative farce was reached in 1122 the ill-fated Shops Bill, which your Lordships may remember took 34 lines to lay down the principle that only a Mohammedan or a practising Jew could operate as a barber in Scotland on Sunday. But here we have in Clause 14(6) this remarkable statement concerning this betting tax:'Premises' includes any place whatsoever, and any means of transport".That I must remember as I drive home in my premises this evening.
We never did very well with the fixed odds betting tax last year. I believe that this tax will result in a great increase of illegal betting. I believe that the accumulator type of bet will add to the difficulties, and in fact I am sure it will not work. I do not believe that the Government think it will work either. It suddenly occurred to me that this may be an idea on their part to get everybody to say that it is not going to work, and then to say: "Right. This is a good excuse for introducing the monopoly of the Tote". If they think that, then I will give them first prize for low cunning, and I will wholeheartedly support them in one of the few intelligent ideas that they have ever proposed. What is more, I think that about 95 per cent. of owners and trainers would agree with them.
There are two reasons why I think it will be to the benefit of the country if we have a Tote monopoly. The first is that I think it would benefit the racing industry generally, which is of great national importance for the country's prestige and for the economy. We know that racing is now in a difficult position, and, so far as I can understand, there is little hope of improvement in present circumstances. The prestige of British bloodstock is seriously declining. This is bad for the economy, and it is bad for the country. We who used to be supreme in this field are now running a bad third to France and the U.S.A., and we shall soon be running fourth with Japan overtaking us, too.
Why is this? You have only to look at the situation in France to see why there they are continually beating us with their bloodstock. They have attracted many of the leading owners in this country to France. The Aga Khan went first, and his grandson has decided to stay there. Many other owners here are 1123 transferring their interests to France. This is bad for us. Why are they doing it? It is simply because of the Tote monopoly in France. In 1965 the French Government took over £50 million out of gambling in France. That ought to make noble Lords opposite lick their lips with anticipation. And the racing industry there took £30 million. Here in Britain the bookies have contributed £2 ½ million, which is less than one half of one per cent. of the annual turnover of £500 million. In consequence, the French prizes are infinitely greater, and there is much more incentive all round. To take one example, Paddy Prendergast, who was our top trainer in 1965, won £73,000 in stake money. That was well below the trainer who came tenth in France.
Prize money in France continues to break all records. This is good for the industry; it is good for the racegoer, who gets much better facilities, with modern devices, starting gates, computers and so on, and for the general comforts around the racecourse, which are singularly lacking on many of our own. There is also money for breeding, training and for paying the salaries of the people who earn their living in the trade.
Here in this country, as I have said, the sport is obviously in a bad way. The attendance figures are well down on the 1950's, though I understand that there has been a slight recovery of late. And the row that is going on over Aintree is a portent of what will happen in the future. The amenities of many of our racecourses are dreadful, despite the announcement made by the noble Lord, Lord Harding of Petherton, on Tuesday, that we may hope for better things in the future. It will be a long time before they can match the amenities of racecourses in other countries. Charges for admission are too high, and although the Levy Board have increased prize money recently and certain commercial sponsors have entered the field, it is still not enough to sustain the industry, and is still "chicken feed" when compared with our foreign rivals. I am told that the overall deficit to owners is running at about £4 million per annum. As a result, trainers and owners are having to bet. This is bad for the sport and bad for the punter. Soon racing will be a 1124 sport only for the very rich men. That is also a bad thing. And now, to make matters worse, the employment tax comes as an added burden. So I think that for the British racing industry the Tote monopoly would clearly be of immense advantage.
There is another completely different advantage. We all realise that there has been a great increase in doping and fraud here, and it has become almost a national scandal. Despite the vigorous counter-action taken by the racing authorities it is occupying far too much police time. It is causing great anxiety in the whole of the industry and is bad for everybody. I am not going to suggest for one moment that the bookies are all crooks—that would be an entirely wrong thing to say. They are no more crooked and no more honest than the butcher, the baker or the candlestick-maker—not that I know many candlestick-makers. But that is not the argument. The argument is that crooks must use the bookie system; that is the basis of the whole trouble. The Tote monopoly would, as it has in other countries, kill the whole of this fraud practically stone dead. The Tote is disinterested in the things which attract the crooks. The present system is siphoning off enormous sums of money which should be giving benefit to the industry and to the supporters of the industry. It is going into the wrong hands.
What is the argument against it? There are two points, and two points only, that I ever heard advanced. First, there is the fact that the bookies add to the gaiety, of the scene; they are part of the racecourse world. I find they nearly always have too good a pitch and they get in the way. That, of course, is a matter of opinion. Secondly, the bookie provides better odds for the punter. This may be so, but I am doubtful whether it is always true. By and large, the bookie system is killing one of our most valuable industries. I do not stand up and lightheartedly propose a scheme that will do away with the livelihood of a great many decent people. What I suggest is that the 16,000 betting shops should be as soon as possible turned into Totes, and the staff of those betting shops should be taken on by a Tote organisation. It could be nationalised. I never thought the day would come when I should stand up in your Lordships' House and propose the nationalisation of anything, but 1125 that is what I am now doing. Bookies and their staff should be properly compensated. I think they should close at 1 o'clock (I think ante-post betting is always an invitation to crime), and this will get many more people on to the racecourse, where they should be.
I think we should grant no more licences to bookmakers. Nearly all civilised countries have abolished the bookmaker, at least off the course and unless more money comes into the racing industry for the general good of all branches of the industry, instead of going to the bookies, then the industry will die. The Government are losing revenue at the moment. I suggest a way in which they could recoup themselves by taking an enormous amount more revenue out of betting. That money—all these enormous sums mentioned this afternoon—can now be put to much better use. I should like to know from the Government what their reaction is to this suggestion. It is not a new point, but it is a difficult one. But something has to be done.
Legislation on other points is now proposed. I hope that the noble Lord will agree to take Clauses 11 and 14 out of the Finance Bill. For technical reasons that is not an easy thing to do in your Lordships' House. I hope they will not suggest that it should be done by Private Members' legislation, because that, with the present state of the political majorities, would take a long time. Not that that would deter me, because the last Bill I got on to the Statute Book took me eleven years, and by the time it was finally on the Statute Book the only part of the original Bill which still remained was my name on the back, "Mancroft", and the price, 4d. I am prepared to have a shot at it if needs be, but I would much rather hear the Government spokesman at the end of this debate say that they are prepared to reject those clauses in the Finance Bill, or introduce my proposals in the new Gambling Bill which is now under consideration. I am willing to bet that 95 per cent. of the racing fraternity, with the exception of course of the bookies, will be on my side. If I have to take that bet, I should like to bet with the Tote rather than with the bookies.
§ 5.13 p.m.
§ VISCOUNT MASSEREENE AND FERRARD
My Lords, I should like to thank the right reverend Prelate for intro- 1126 ducing this Motion. I should also like to say that I heartily agree with everything he has said. We have, of course, far too much gambling in this country now. But at the same time, I should like to say that the Conservative Government were quite right in bringing in the Betting and Gaming Act in 1960. We could not possibly foresee the great increase in gambling, and particularly the amazing mushrooming of these gaming clubs throughout all our great cities.
With reference to what my noble friend Lord Mancroft has just said, I heartily agree with him. As a very small and poor owner, I should like to say that he is, of course, quite right in everything he said regarding the Tote monopoly. But I do not want to be too hard on bookmakers, because I have quite a soft spot for them. They have always been very nice to me, and they have sometimes waited quite a considerable time. But I think that without a doubt we should have a Tote monopoly in this country for the health of racing. It would bring a tremendous amount of money into racing, and it would also bring a great amount of revenue to the Government. It would also stop (I do not want to suggest that bookmakers do it: I do not think the majority of them do) a great deal of the doping to stop favourites which goes on, because obviously on the Tote you do not know which horse will be favourite. I do not want to appear hypocritical, because I gamble. I gamble on horses. I try to gamble within my means, and I personally do not think gambling is a vice if you gamble within your means. I do not gamble at cards or roulette in casinos.
The great cause for concern in this country, as the right reverend Prelate pointed out, is the increase in the number of betting shops. I think he said that they have increased from 13,000 since the Act was passed to over 16,000 now. If any of your Lordships are up early in the morning, as I am sure the majority of you are, and you pass a betting shop before nine o'clock, you will see the queues outside. It is a very unhealthy thing in our national life.
I should like to quote two Americans who made a survey of English betting shops two or three years ago. One of the facts that they found was that the turnover increased in ratio to a rise in 1127 unemployment. They reported to the New York State Assembly in 1964:The great bulk of increased turnover has come"—they are, of course, talking about betting shops—from those in the lowest strata—contributing to an unhealthy and largely unproductive shift of wealth, via betting, away from lower income families.The Annual Review of the Churches' Council on Gambling quotes an inspector of the National Society for the Prevention of Cruelty to Children as saying:Too many are spending their National Assistance on the horses instead of on their families …many men come out of the National Assistance or dole office and have to pass a betting shop on the way home. The temptation is too much in many cases.Of course, the question is: what is to be done? My noble friend Lord Mancroft made the same suggestion as I have thought of. Why not nationalise the betting shops? If you like, put them under the Tote. If you nationalise them, you will at least have one nationalised industry which makes a profit, so why not do so? The other great advantage of nationalising them is that it would do away with the protection racket. I fear that we have a bit of Chicago creeping into England, and that is an extremely dangerous trend. In the past two or three years we have had one or two rather suspicious suicides. I think this is a real danger in this country. There might not be much harm in these gambling clubs—and I am talking now of the small casinos and gambling clubs that have sprung tip like mushrooms everywhere—if they were run according to the law, but the trouble is that there appears to be no inspection of them and they are not licensed.
I think inspectors should go round to see that they are being managed according to the 1960 Act, but this is not done at all. We have hundreds of clubs where the games are heavily loaded against the players. No doubt some of the larger casinos, such as Crockford's, are properly run, and they may well be a help to the country from the point of view of the tourist trade: they may bring in hard currency. But the point is that if we are going to have these casinos we really must see that they are run properly and that they accord with the law.
1128 To turn to bingo, I personally think it is a highly unproductive form of occupation. On the other hand, as I think the right reverend Prelate said, there are many people in this country who are lonely and it is an opportunity for a social "come-together" for them. But it is a great pity that we cannot try to create some more productive social "come-together ". There is one thing about football pools that I have never been able to understand. A man wins £300,000 on the football pools; he has only put a few crosses on a coupon, which necessitates no effort at all. Why does he not have to pay the capital gains tax? A man spends his whole life building up a small business, and if he then sells it he has to pay 30 per cent. capital gains tax. It seems to me to be highly illogical that a man can win £300,000 without any effort and does not have to pay tax at all.
Gambling is here to stay and we must ensure that it is carried on according to the law. I cannot repeat this too often. All these gambling casinos and clubs must be licensed and inspected. I should like to support my noble friend Lord Derwent in what he said about the French casinos. We ought to try to regulate our casinos as is done in France. My noble friend Lord Derwent said it was quite impossible to tax the bookmakers on the bets, and they could only be taxed on the premises, but in Eire they are taxed on the basis of winnings. Perhaps it is easier to tax the premises, but the other system seems to work all right in Eire, and the larger part of the tax goes to racing. As I said previously, it is really preferable to have a Tote monopoly.
§ LORD STONHAM
My Lords, I wonder whether the noble Viscount, Lord Massereene and Ferrard, would go a little further with this. I asked the noble Lord, Lord Derwent, a question on the subject of taxing winnings, which presumably means both the stake and the amount won, and I did not get an answer which was clear to me. As I understand it, the tax is a turnover tax, which should be on all the money staked. If you tax only the winnings, then you get a tax only on part of the total money, because the bookmaker gets his profit and expenses.
§ VISCOUNT MASSEREENE AND FERRARD
My Lords, I was only speaking from my knowledge of what happens in Eire. I may be wrong, but I frequently go to Eire and my understanding of the situation is that the punter pays a tax on his stake and his winnings, but if he places a losing bet he does not pay any tax. I have always understood that to be the position.
I should just like to add that I find myself in the extraordinary position of having agreed with every speaker in the debate so far. We all appear to agree that there is far too much gambling, and I can only hope that we shall be able to do something to regulate it and to ensure that people are not lured into gambling. It is probably impossible to do anything about the completely dedicated gamblers, but I think one could prevent people who have not gambled before from being drawn into it.
§ 5.28 p.m.
§ LORD KILBRACKEN
My Lords, perhaps I might begin by clearing up the point between the noble Viscount, Lord Massereene and Ferrard, and my noble friend Lord Stonham, which was also raised by the noble Lord, Lord Derwent. With regard to the payment of the betting tax, the position in the Republic of Ireland, to which the noble Viscount referred, is that by law 2 ½ per cent. is payable on all money actually staked. There is a differential in that if you have a bet in a betting shop the tax is higher than if you have a bet on the course, and I think that is a good system. The bookmakers have found that it is difficult to pay the 2 ½ per cent. tax on stakes, partly because it is a fiddling little sum and they are very busy laying the odds at the time the punter is placing the bet, and therefore by arrangement they deduct a 5 per cent. tax from winnings, which includes the stakes, and since more or less half the money goes out in winnings this comes to approximately the same thing. If I stake £1 on a horse at 4 to 1 and I am fortunate in that the horse comes home, instead of collecting £5 I collect £4 15s.
The system has these advantages. First, no one likes paying tax, but one likes it a lot less if one has just had a winning bet than if one is just placing a bet and is going to lose. Secondly, there 1130 is much less accounting involved; and, thirdly, the bookie has a nice slack period after each race when no bets are being laid, so it is more convenient for calculating the amount of tax he has to deduct, than if he has to take 6d. out of every pound at a time when he is laying bets as fast as he can.
I know we are all extremely grateful to the right reverend Prelate for introducing to-day this very important and controversial subject, which is also a very topical one, with the Epsom Derby Meeting this day week. I do not think there would have been even the attendance we see had the debate been on the Wednesday. I have listened with the deepest interest to the right reverend Prelate's remarks; and even though they did not, perhaps, have the benefit of personal experience, I felt that the research was admirable. I fear that practically all my knowledge is based on experience; indeed, I listened with some alarm to the indictment of bookmakers by the noble Lord, Lord Man-croft, because I can claim to have been a bookmaker myself though at rather an early age. To be precise, I was 16 at the time and pursuing my studies at that educational academy which is so conveniently placed for Windsor Races and only slightly less so for Ascot.
I had over 100 clients in the school, and as some of them were members of the sixth form, others were members of "Pop", and others again were future Members of your Lordships' House it gave an aura of respectability to the proceedings. I was for me a very unfortunate experience, partly because it was a losing book—I think I must be the only bookmaker who ever lost money on his gambling. Also it led to a very painful meeting with the Headmaster after a maid had discovered me counting the stake money for the day, which amounted to the enormous sum of £17 l0s 0d. However, unfortunate as that experience was, I fear that I was hooked by gambling at an early age and have gambled much too often ever since, in almost every possible game. So my own knowledge is not only empirical but has also been exceedingly expensive—and expensive of a kind not, unfortunately, accented as a charge on one's income by the Inland Revenue.
I intend to confine my remarks mainly to gaming, as did my noble friend Lord Longford. I feel, when one reads the 1131 present Act, which I think is a very bad one, it is hard to tell what Parliament intended and what games, if any, it wished to legalise. Before considering Parliament's intention, as opposed to what the effects of the Act have been, I think it is important to draw particular attention to the fact, which has not yet been made clear, that the so-called casino games fall into two quite separate basic categories. There are those in which members play simply among themselves, and where the croupier employed by the casino is merely a spectator and referee. The casino provides the cards and the chips, and regulates any gambling disputes and so on.
The most important game falling into this category is of course chemin de fer; also poker and bridge, though they are of much smaller importance. On chemin de fer, therefore, the casino or the gambling club makes its money (and let us face it, a casino has to make money one way or another) either, as in Britain, by charging the members who play, or else, as in France and Monaco and most Continental countries, by deducting a percentage when the bank wins. Then there is a quite separate category of casino games in which the casino hopes to make its profit—and here, of course, it is not certain that it will make a profit, although in the long run that is bound to happen—offering odds against a certain eventuality which are somewhat under the mathematical odds in that case. I will go into the details in a few minutes. Into this second category, where the casino makes its money in that way. fall all the other so-called casino games: roulette, boule, trente-et-quarante, black jack, craps and baccarat aux 2 tableaux.
On the point made by the noble Lord, Lord Derwent, concerning the principles followed in the French Casino, he mentioned that this tax was deducted from all casino games, but I believe, from my personal recollection—I have not been able to check it—that the tax is deducted only in the case of games falling into the first category where the gamblers play among themselves. It is not deducted in roulette or in any of the true casino games. Also it may be of interest that the French Casino does rather as the Irish bookmaker does: it takes 5 per cent., but only from winning banks at 1132 the chemin de fer table, so that if the bank loses no tax is deducted. It is 5 per cent. out of the winning bank, which means an average 2 ½ per cent. on all stakes.
I believe that the Act of 1960 definitely intended to make games in the second category illegal. The chances are not equal to all the players, because, of course, the banker has the mathematical advantage, and not all the money put down as stakes is paid back to the punters as winnings, which is another proviso in the Act. On the other hand, it seems definitely to legalise games in the first category (that, to all intents and purposes, means "chemmy"), provided that the house derives its revenue by charging members to play, instead of following the custom followed in France.
Here I would comment for a moment on my noble friend Lord Longford's suggestion that it was intended that only a single charge should be made on entering the gaming club. That may well have been the case but, if so, it would involve very great difficulties, because of course, at any club or casino some people want to go in for half an hour, some want to spend the evening there, some want to play for very low stakes, and some want to play for very high stakes. It would be very difficult indeed to find a charge payable on entry which would be acceptable to the small gambler and which would enable the man who wants to spend the evening there, gambling for high stakes, to get a game of the dimensions he is looking for.
The present custom is to charge shoe money—that is, to charge a certain sum for each shoe as played—and the amount charged in shoe money will vary according to the maximum bank that is allowed. Figures of £1, £5 and £10 have been mentioned in the course of the debate, but perhaps your Lordships are not quite aware of the scale which gambling has reached in London at the present time. I can tell your Lordships that there is at least one table in London where the shoe money is £100 a shoe there are nine players at a table, so the fortunate club in this case is receiving £900 every thirty or forty minutes in shoe money. This particular table usually has a minimum bank of £1,000, and as for the maximum, the sky is the 1133 limit. However, I personally do not feel that shoe money is offensive. I do not think it is a bad principle. As we have been told the Courts have ruled that it is legal under the Act.
I have been speaking so far of what I assumed; was Parliament's intention when this legislation was drafted. I can speak with much greater certainty of what the effect of the legislation has been. It is, quite simply, that every recognised gambling game, whether they are games played at Las Vegas or the games played in Monte Carlo or Le Touquet, with the possible exception of some of the obscure games played in Hong Kong and Macao, are now played in London—which, of course, long ago surpassed Monte Carlo for volume of betting and variety of games, and also for the facilities provided by the clubs, when one thinks of that awful old Casino at Monte Carlo, and imagines the marvellous food and excellent entertainment we have in London.
Indeed, London must now be strongly challenging Las Vegas as the world's premier gambling city. Large numbers of American gamblers are being flown over from New York, Chicago and Texas, with all expenses paid by the gambling clubs, so that they can have a week's free gambling in London. Of course, it is not free in fact. It is a most expensive week. But it pays the gambling club well to fly these gentlemen over from Dallas. They find it is better to fly to London than to go to the former centre of Las Vegas.
This position, the fact that all these games are being played, has been achieved owing to the fiction which has been invented by the clubs that any member may take the bank in roulette, craps, black jack and so on. Because he can take the bank it is said that the chances in the game are equal to all players. We have already had reference, by my noble friend Lord Longford, to the Kursaal Casino case, which your Lordships will remember was held to be illegal because, although the bank was offered—it was technically offered, but it is practically never taken up—to any member who liked to take it, it was found that all members could not afford to do so if they had so desired.
It is, without exception, always the case at roulette or any other casino game, 1134 that not every player present can afford to take the bank. Even at the smallest roulette game you must have £100 in your pocket to take the bank. At a big roulette game in the Victoria Sporting Club, or the Olympic Casino Club or Crockford's, you have to have £5,000 in your pocket to take the bank. In fact, they will not let you take it unless you have £5,000 in your pocket. It is absolute nonsense to pretend that the one or two small people sitting on the table who are willing to lose a couple of quid, or are wondering whether to have 10s. on an égalit é, are in a position to take the bank. This is so not only with roulette but with every other game except chemin de fer yet, for some reason, all these games are still being played completely openly in London and everywhere else in the country. The chances in the game may be equal but, like the animals in Animal Farm, some are "much more equal than others".
That, I think, is the present highly unsatisfactory position. I feel that it is absolutely essential, as has already been suggested all over the House, that amending legislation should be introduced in the light of the experience that has been gained in this country. The noble Earl, Lord Longford, seemed to indicate that all gaming, as we now know it, should cease. The right reverend Prelate seemed to feel, too, that all gambling clubs and casinos should cease to operate. If I were to ask myself whether I agreed with this, I must say that I should find it difficult to reply because my own feelings about gambling are of extreme ambivalence. On the one hand, I love gambling from time to time, and, as the noble Viscount, Lord Massereene and Ferrard, said, the one important thing is to keep within what you can afford. Unfortunately, I often do not keep within what I can afford. I admit that I am a compulsive gambler. Therefore, in many ways I want gambling to continue. On the other hand, I am only too aware of the completely disintegrating effect that gambling can have on a man, has had on me, and how it can destroy all worthwhile standards, not to mention the money that one can lose.
Here perhaps I may be permitted one true anecdote, which I think may also give noble Lords some idea of the scale of gambling in London at the present 1135 time. On a recent occasion a gentleman whom I will refer to as Mr. X was playing "chemmy" until two or three in the morning. He won £70,000. He went home with his cheque and went to bed. Unfortunately, he could not go to sleep for thinking about what he might have won had he stayed a little longer. He went back to the club, cashed his cheque, walked to the "chemmy" table and saw that a banco of £40,000 was being offered on the turn of one card. He took the lot and lost. The banker then put up another banco of £40,000. Mr. X could not resist, he banco'd it again and he lost a second time. The banker then put up the same sum on a third occasion, and Mr. X banco'd it a third time and lost a third time. So he had succeeded in losing £120,000 in approximately three minutes, and instead of being £70,000 up he was £50,000 down. He then went home and went to bed, but I cannot say whether he slept or not. That is the kind of scale of gambling in London to-day, although of course that illustration is a little exceptional.
Despite that little tale, I do not myself feel that all gambling should be illegal; but I think that the time has come for amending legislation. I think that it should be based on completely different principles. In particular, I do not think that ipso facto there is anything wrong in the games just because the house is the banker. The mathematical advantage in favour of the house may in fact be less at roulette than it is at "chemmy"; it depends entirely on the player. If some old darling sits down at a chetmin de fer table, a big table, and pays shoe money of £10 and then only stakes £1 every five minutes when the shoe comes round to her, the house stands to make much more out of her at chemin de fer than it would in the long run at roulette. What does matter is whether a game is basically a fair one—nobody wants to legalise the three card trick or crown and anchor—and whether the particular game is played fairly. I do not mean by this that there is any risk of a crooked roulette wheel or of loaded dice; I really do not think that sort of thing happens any more. I mean whether the odds in that particular game are unfairly or overly weighted in favour of the house.
1136 To determine this it is necessary to consider each game separately and the way in which it is played, because some games are played differently in different clubs. I do not see any reason why an Act should not specify, by name, instead of resorting to vague, legal language, the games which can be played, and should not lay down, perhaps in a Schedule, the particular rules under which that game ought to be played.
Perhaps I may give one or two examples. Roulette is a very fair game if played according to Monte Carlo rules. My noble friend Lord Longford seemed to think that the percentage in favour of the bank was exceedingly excessive. If that is the case, he really ought to go along to one of the clubs to-night and take the bank for an hour or two and have that excessive percentage in his favour. I know he used to be a very successful banker in the City, and he might be equally successful at the gaming table; but, on the other hand, he might find that 1 .4 per cent. on the égalit és and 2 .8 for the numbers is not a big margin to work on, even if you do not have overheads to come out of it.
§ THE EARL OF LONGFORD
My Lords, if I might interrupt the noble Lord to say one thing, it is this. When I was chairman of a bank in another sense, I had the money of the shareholders and the depositors behind me. On this occasion I should have only my private fortune and I could not face it.
§ LORD KILBRACKEN
Perhaps I could find the noble Earl a small game at a dingy little club somewhere which would be within his resources. But I do not feel that 1 .4 per cent, is a lot, particularly when many clubs are giving free champagne and caviar all night. It is a good tip for anyone who wants a free dinner. A lot of people are doing it. You can go along and have all you want "on the house". That is all coming out of the 1.4 per cent.
Another point I wanted to make is that, in betting on horse racing, on average the bookmaker wins approximately 10 per cent.—it varies—of the stakes, and on the football pools it is around 40 per cent. of the stake money which does not go to the punter. Therefore, the 1 .4 per cent, at roulette in fact makes it into a very fair game, and I can tell the 1137 House that there is only one casino game at which they can get better odds, and that is trente et quarante, where it is about 1 .2 per cent., but it is such an excessively boring game that practically nobody ever plays it. Then with roulette one has to remember that it is much less fair, it is twice as unfair, if there are two zeros on the wheel; and some clubs have two zeros and still only pay out at 35 to 1; or if, in addition to getting a point under the odds, table money is payable, because then the casino is getting its "cut" in the two different ways. My noble friend mentioned me by name, and he was talking about the payment of table money before each spin. I have never heard of table money being paid before each spin at a roulette game. I think it would be difficult. I cannot imagine everybody forking out half-a-crown each time before the wheel is spun, There may be some "clip joints" where this occurs, but the general practice is to pay a certain sum for each session of twenty minutes or half-an-hour.
It is true that the French—we keep referring to the French—consider that roulette has something especially pernicious about it, and they severely limit the casinos in which it may be played; moreover, the local residents are not allowed to play. if you are a Nicois you may not play at the municipal casino at Nice; if you are a Monagasque you have to play at the casino in Cannes. They try to keep it to the tourist trade. Curiously enough, as the noble Lord, Lord Derwent, mentioned, the horrible game of boule is allowed almost universally in France, although the odds at boule are in fact far less favourable to the punter than they are at roulette. In boule there are nine numbers, so the mathematical odds are 8 to 1, and you get paid at 7 to 1. This compares with getting 8 to 1 at roulette on a carre when the actual odds, of course, are 8 ¼ to 1. However, despite the fact that the odds are much less favourable to the punter, or perhaps because they are, the game of horde is permitted all over France. But I cannot see that roulette is especially pernicious. My own weakness happens to be chemin de fer. I can play that all night on occasions, and that is the one game which is indisputably legal.
May we just consider for a moment the great American game of craps. It is 1138 interesting to note that this too was outlawed by the French, I believe under Louis Quatorze because of its pernicious nature. It was then known as "Hazard" and was introduced into the United States by French mercenaries in New Orleans. "Craps" is a corruption of the French word crapauds. Craps is a very fair game by my standards, but only if you confine your bets to win and lose pools where the percentage in favour of the house is less than 5 per cent. But other bets on the craps table are very much less fair. For instance, the mathematical odds against throwing a seven are 5 to 1, but the odds which the casino gives are 4 to 1. That means that 20 per cent, of all money staked on average goes to the house. Similarly, the odds against throwing a two or twelve are 35 to 1, and the house normally pays odds of 30 to 1 against your performing this little miracle. So in this case 18 per cent. of all money staked on twos and twelves by the law of averages ends up with the casino. It is much the same with the other "side bets", as they are called, on "hardways", "Big 6", "craps", and "the field".
Let us turn to black jack for a moment. It is a very special case, because it is actually a game in which skill is involved. The odds at black jack actually favour the punter, if he has a memory like an elephant and a mind like a computer; he not only has to know whether or not to draw a second or subsequent card—that is basically elementary — but also has to remember all the cards that have been played in the game up until then. This is possible to do, and there are several university professors in the United States who are making a steady income by going around the casinos playing black jack—and several are paid large sums of money to keep away from the casino. However, it is exceedingly unfair in those clubs where the punter loses if his hand is equal to the banker's. This alters the whole odds grossly in the bank's favour. It is also, of course, a fact that many black jack players are extremely unskilled. I have seen someone stand on a 12 when the banker already has a 10, which, of course, is insane. With "chemmy" you cannot do that, because the draw is obligatory with very few exceptions. But with black jack you can always decide 1139 whether or not to draw, and if you make a mistake you are absolutely certain to lose in the long run.
Finally, I would refer to the whole question of credit and, in particular, to the cashing of cheques. This is about the most pernicious feature of the casinos, and I strongly agree with those noble Lords who have spoken against the ease with which cheques may be drawn in most clubs. The noble Earl, Lord Longford, suggested that this was encouraged by proprietors, but I think they have very mixed feelings about cashing cheques, because so many of them are "bouncers". I was told by one club proprietor that over 10 per cent. of all cheques he received "bounced" the first time they were presented, if not on subsequent occasions, and the managements have to spend most of the following day going round members' banks to cash cheques. If the banks are out of town, they have to send telegrams to the managers to find out whether funds are available. I think that many of them would welcome legislation which made it less easy to cash cheques.
If this were the case, I know that, so far as I am concerned, I should have to decide, in all sobriety and several hours in advance, just how much I was prepared to lose. I would cash a cheque for whatever that sum was and take it with me; and if I lost it I should then have to leave. But at present, if I can just ask for £100 or £200 or even, on one terrible occasion, £300 and get it without the smallest formality, I am very likely to do that. I am very likely indeed to lose more than I can afford, although this does not happen every time I play. I agree that a law such as I have mentioned would be difficult to enforce, but at least it would reduce the freedom with which cheque books are bandied about in clubs at the present time. I think it would be a very great advantage if, in some way or other, this practice could be restricted. I think it only remains for me to hope that noble Lords have a "Right Noble" Derby on Wednesday.
§ 6.3 p.m.
My Lords, the law does not say that such-and-such a game is lawful. What the law does, in fact, say is that such-and-such a game is not unlawful, provided that it complies with 1140 certain rules. The first rule is that the chances in the game are equally favourable to all the players, or that the game is so conducted that the chances therein are equally favourable to all the players. After all, if it is a game that has a banker all the players must have an equal opportunity of being banker. In a recent case, a game of roulette was being conducted on certain premises. The evidence disclosed that the bank's chances were slightly more favourable than those of the players, and that the players were allowed to take the bank only alternately with the management. That was a contravention of the Act.
There is a way of overcoming that difficulty, which I will tell your Lordships as a dead secret. Suppose that I am the proprietor of a casino, and a game is being played where the bank's chances are more favourable than those of the players. I appoint four of my bosom friends to be inspectors in the casino. The inspectors wear ordinary mufti, mix with all the other players and do not know me. That is the essential part of the secret: that the inspectors do not know me. Then some game is played where there is a bank. Let us say that seven people sit down to play that game, and among those seven players are the four inspectors. Everyone has an equal chance to take the bank; indeed, the bank is taken in turn by all the seven players. No one knows, but the management has scored by having four of its friends among the players. This is the kind of secret that I must not reveal, as I may be putting ideas into your Lordships' heads.
The second rule which must be complied with is that all the money put down as stakes must be disposed of as winnings to the winner; that is to say, there must be no "cut" on the stakes for the benefit of the organiser. The third rule is that there should be no payment for the right to take part in gaming, subject to certain modifications in respect of clubs, to which I will refer later.
I need do no more than merely refer to some of the games that are played in this country. I think the noble Lord, Lord Kilbracken, has given us a very classical account of most of these games. First of all, there is bingo. There are two types of bingo—English and American. Some of your Lordships may remember that in the Army there is a game 1141 called housey-housey. English bingo is the immediate successor to housey-housey. Then there is a famous game called "kalooki," which is sometimes known as American rummy. Then there are baccarat, chemin de fer, roulette, black jack and dice. The American type of dice is known as "crappie."
Some of the betting may be of a very high order. Take the case of baccarat. I do not know whether your Lordships have ever played baccarat, but it is a very old game and was played in France in the days of Louis XIV. You may go into a casino where baccarat is being played. The minimum stake may be £1 and the maximum stake £600 à cheval—and à cheval means on each horse. In baccarat the banker, who is the dealer, stands in the centre, with a table on his right and a table on his left. Metaphorically speaking, each table is a horse, and therefore £600 à cheval means that you place £300 on the horse on my right and £300 on the horse on my left. It would be interesting to know what are the winnings in such a case, especially if one is the winner.
Now let us come to the most controversial point of all—namely, whether any payment can be required for a person to take part in gaming. No such payment may be required except in the case of a club. In the case of a club, there may be an annual subscription for membership of the club, and it is also permitted to charge a fixed sum of money determined before the gaming began. What is a club? I do not know, and I will tell your Lordships why. There is no definition in law of a club. That is just as well. There is the club for which a person is duly proposed and seconded by a member of the club, and then his name is put on a list where it remains for a time—perhaps a year or more—before he may be duly elected to the club. At the other end of the scale, there is the sort of arrangement whereby a person is proposed by the cloakroom attendant, seconded by the head waiter, pays one guinea and is duly elected a member for life. So there is a great variety of clubs. Let us call a spade a spade, and not a sociological shovel. A great number of these places in London that are called clubs are no more clubs than my hat.
There may be all manner of establishments which call themselves clubs. The 1142 Government should look at Section 36 of the Betting, Gaming and Lotteries Act 1963, and see whether it is possible or practicable to introduce some meaning into the word "club". What are known as "casinos", I presume, are generally carried on under the name of clubs. I speak subject to correction, but I understand that taxation by way of licence duty on the rateable value of the premises in which the gaming takes place is going to be introduced. When that happens, I understand that the term "casino gaming" is going to be defined. This should be very helpful and may further assist the authorities in ascertaining the precise premises where gaming is carried on, and in determining what constitutes a club where gaming takes place.
Now what is the answer? Do not try to abolish gaming. If you try to abolish gaming, you will have exactly the same results as we had in another part of the world when we tried to abolish alcoholic drinks: you will only make it worse. What you must do is to try to regulate gaming. In the first place, try to define some of the principal requirements of a genuine club, and arrange for all such clubs and their premises to be registered. It will then be possible for such clubs to be entered, inspected and supervised. There are many other suggestions that I am only too keen to hear.
§ 6.12 p.m.
Loan ST. JUST
My Lords, I am approaching this subject in the way of a somewhat interested party. I must admit to your Lordships that I enjoy an occasional gamble. This afternoon we have heard many points raised, both for and against legalised gambling, and I should like to draw attention to one or two points concerning the whole problem facing gambling in private clubs. Later, I will come to the problem of putting a tax on gambling.
The right reverend Prelate mentioned that in certain cases at the present time there is a fee on roulette. After the Gaming Act came in, this was the case. Players paid £1 to play roulette for half an-hour or an hour. But the difficulty about this was that none of the clubs who ran the roulette tables were quite certain how the situation under zero worked. In fact, when it originally came in, if zero came up, the money remained there and the ball was spun again. Now zero is 1143 classified in the way it is on the Continent: you play on zero, or a combination of zero, one, two, three; and you normally do not have to place or pay any money when you play the game. It is true that if you enter chemin de fer you obviously pay a shoe deposit every time you play a shoe at the table.
My Lords, I think there is no doubt that the British as a race are rather gamblers at heart—and I do not think it is a very unhealthy thing. They will always gamble on something, whether it is horse racing, the dogs or in casinos. The second point I wish to raise, which has already been mentioned, is that it is far better to have gambling legalised than to have private games being played illegally behind closed doors. That is bound to cause troube. The third point is that in the good clubs in this country games such as roulette and chemin de fer are run scrupulously fairly. I think this is a very important point: there is no nonsense that goes on. Most of the people concerned in it are highly trained people, and the game is run dead honest. One is always hearing about the trouble in America of the games being "fiddled", but with the exception of a few clubs, I think that in this country this is not so.
There is another point, and a very important one, which perhaps can be looked into when the law is amended. There is no doubt that in the good clubs many players who go to play roulette or chemin de fer want to play on credit. A great deal has been said this afternoon in your Lordships' House about the question of credit. I think it is important that, before they start to play, players should have to put a limit on the amount they are going to allow themselves to play with. This limit should be held to by the casino. Then if, after a few hours, the player is getting slightly worried, or fuddled with what has been going on, and says, "I will now have another £100", the casino official refuses, telling him: "No, you will not have another £100. You set yourself this limit, and this is your limit for the evening". If such a system could be introduced into all private clubs, I think it would make a great deal of difference.
There is another point that has come up just lately, at any rate in the club I occasionally go to for a small "flutter".
1144 Now that the club has applied for a new licence to sell drinks, they have refused to allow their players to drink while playing. I think that this argument is two-sided, though in principle it probably is a fairly good idea. When people are playing, they cannot drink but have to go out to the bar. The clubs, I think, are against this. They feel that they can trust their players, and take the view: "Why should they not be allowed to have a drink at the same time?"
The main difficulty in the whole of this problem is how to get at the rather seedy, sordid clubs, where the actual games may be run correctly but where tough people are liable to congregate together and where fights such as we read about in the papers do break out. The problem of these clubs is a major one. There will always he clubs that are well run and, rather like night-clubs, those which are of a rather indifferent nature. I personally feel that one of the ways of dealing with this is to set a standard as high as possible and to keep a watchful eye on these clubs, especially those that sink below the standard. What has already been stated in this debate is, I think, very true: it is essential that there should be registration and inspection of all these clubs.
I feel that the responsibility of watching this problem falls rather hard on the police, with all the work they have to do, and I wonder whether the Government would consider appointing some inspectors to keep an eye on these clubs, if one could get them registered. These inspectors could be highly trained and could look into the situation. Some of these rather indifferent clubs have some amazing ways of getting round the problem of keeping the game legal, and if there is a specialist on the job he can look into it and, if there is any trouble, report the situation to the police.
I agree wholeheartedly with what my noble friend Lord Derwent said about the question of taxation of these private clubs. I am certain that the Continental system of taxing is the right one. Players pay an entrance fee, and, if a person runs a bank at chemin de fer, that is taxed, and the tax expert is sitting there beside the croupier to keep an eye on him, to see that he tears off the ticket at the appropriate moment.
1145 This, I think, is probably the easiest way to bring a taxing system into operation. On the Continent they understand it; they have done it for a long time, and I believe it would not be difficult to operate here. From what I can gather from various people I have talked to in the clubs, they are quite ready to abide by such a system.
My Lords, one hears—and I think it is true—that London is now becoming possibly one of the gaming centres of the world. This city of ours has taken many things in its stride, and I think it can take this in its stride. I do not think there is any fear of London ever becoming a second Las Vegas in any form. As I say, if this whole situation can be kept under control, and if inspectors are allowed to go round and keep the thing in its proper perspective, all may be well. Before I end, I must apologise to the noble Lord, Lord Stonham, that I may not be able to remain for his winding-up speech. This is a rule which I rarely break; but unfortunately I have an appointment later this evening and I may have to leave.
My Lords, we shall always hear of the disasters that take place at gambling, such as that of the weak-charactered young man who loses too much money, possibly trying to impress some girl friend. It is rather the same with the compulsive gambler. We shall always hear about him. It is a disaster; but it is true. It is like the compulsive drinker. But if the gambling houses were completely closed down throughout the country, then the compulsive gambler would gamble somewhere—not necessarily always at the gambling table, but possibly on the racecourse, and so on. And so long as the clubs play a scrupulously fair game and persuade their members to allow themselves to be limited on credit before they start to play, I do not think the evils of gambling are so very high. In fact, in many cases I think it allows perfectly respectable people a form of outlet for a few hours in the evening which does not do them any harm at all.
§ 6.20 p.m.
§ BARONESS STOCKS
My Lords, the statistics of this question have been adequately dealt with by the right reverend Prelate the Lord Bishop of Chester, and the technicalities have also 1146 been dealt with by other Members of this House. But I must confess I have learned a great deal, especially from the noble Lord, Lord Kilbracken. As a result of what he said I shall avoid black jack, and if I play craps I shall never stake on twos or twelves. But, that being so, I will not weary your Lordships with repetition; I will claim the privilege of a superannuated academic and get back to the first principles of liberty in relation to the State which I think lie at the back of this whole problem.
If your Lordships want to think about liberty, the best thing you can do is to return to that great "liberty boy", John Stuart Mill. And if you read his Treatise on Liberty you will find on page one, chapter one, paragraph one, that he refers to:the nature and limits of the power which can be legitimately exercised by society over the individual…a question seldom stated…but which profoundly influences the practical controversies of the age…and is likely soon to make itself recognised as the vital question of the future…He goes on:In the stage of progress into which the more civilised portions of the species have now entered, it presents itself under new conditions and requires a different and more fundamental treatment.It does.
I think we should all agree with the first principle, which some noble Lords have already mentioned, that, as Mill said, in a free society, adult, sane individuals must be left to mould their own destinies and express their own tastes as they feel fit. He put it very well when he said:The only purpose for which power can be rightfully exercised over any member of a civilised community against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant. He cannot rightfully be compelled to do or forebear because it will be better for him to do so…These are good reasons for remonstrating with him, or reasoning with him…but not for compelling him. The only part of the conduct of anyone for which he is answerable to society, is that which concerns others. In the part which merely concerns himself, his independence is of right, absolute. Over himself. over his own body and mind, the individual is sovereign.That is surely the philosophy behind the Bill introduced recently into your 1147 Lordships' House by the noble Earl, Lord Arran. It is the philosophy which conditions our attitude to drunkenness. I might get drunk in my own house; I might drink myself to death; but if I inconvenience and disturb others by being drunk and disorderly or drunk and incapable in the streets, then I am within reach of the coercion of the law. It conditions our attitude towards smoking. I may rot my lungs by cigarette addiction; that is my business. But there are certain places where I may not smoke because it inconveniences others. It may be that this principle is not altogether observed. One must sometimes be a little pragmatic. We are not allowed even in our own homes to dope ourselves with dangerous drugs or to acquire and play with unlicensed firearms. In certain respects we must be a little pragmatic.
But that is not the whole story, because Mill goes on to draw this conclusion:If people must be allowed, in whatever concerns only themselves, to act as seems best to themselves, at their own peril, they must equally be free to consult with one another about what is fit to be so done… Whatever it is permitted to do, it must be permitted to advise to do…So you may be permitted to bet and to smoke; but you also must be permitted to go to your friends and say that smoking is good for the nerves, that betting is good for morale because it is a sport. But Mill hesitates—and so, I think, must we. He says:The question is doubtful only when the instigator derives a personal benefit from his advice; when he makes it his occupation for subsistence or pecuniary gain, to promote what society and the State consider to be an evil…Ought this to be interferred with or not? Fornication, for example, must be tolerated and so must gambling; but should a person be free to be a pimp or keep a gambling house?And here he hesitates. He argues both sides and he comes down on the side of restraint, as I hope we shall do in the case of gambling. Where the interests of the persuaders are not disinterested, where they have a direct personal interest on the side the State believes to be wrong, and where they "confessedly promote it for personal interests only", he thinks—and I think; and I hope your Lordships think—that restraint is possible. Mill thinks in terms of gaming houses and brothels run for profit. To-day, as he 1148 foresaw in the quotation with which I began, the problem:presents itself under new conditions and requires different and more fundamental treatment.My Lords, what are those new condiditions of which he could not have been conscious in the 1880s? The first—and it has been referred to already in this House this afternoon—is the spectacular spread of purchasing power over practically the whole population and, more particularly, among the younger age groups—which makes, of course, the whole population a rich market for what you might call remunerative persuasion. The second, in connection with that, is the formidable increase which we have seen in the last twenty years, both in volume and technique, of persuasion by advertisement. I think the most pathetic figure of our present gambling boom is perhaps not the man who ruins himself. I think the most pathetic figure was shown us recently on a B.B.C. documentary television programme of a gambling house in Manchester. It was the figure of a girl, a nice girl—I cannot remember whether she was a croupier or a hostess—who said to the interviewer: "I cannot bear to see men coming in on a Friday night with their wage packets and putting it all on the table" Then she added, sadly, "But it is my job to persuade them to do it." No human being should be put into the position of that girl.
Never, I think, in history has the exploitation of our meaner and baser instincts been so profitable as it is to-day under these two new conditions which Mill did not see. Unfortunately, in the 1960 Bill the late Conservative Government let loose a devil. I am prepared to believe that it was a matter of inadvertence amounting to guilelessness rather than malice aforethought. I do not believe, as was the case when an earlier Government ignored the recommendations of the Ninth Royal Commission on Gambling in the thirties, that it was a question of well-organised financially interested pressure groups. I do not think it was—perhaps I am wrong. Anyway, they let loose not so much a devil as an unholy trinity of devils—bingo clubs, betting offices, casinos. And I sincerely hope that the Government now in power will put hooks in the noses of those devils.
§ 6.31 p.m.
§ LORD ALLERTON
My Lords, I join with other noble Lords who have spoken earlier in thanking the right reverend Prelate, the Bishop of Chester, for introducing this debate this afternoon, which he did so moderately, so fairly and so well. I have no interest to declare in this matter, but I must admit that in the years between the two wars I used to own and ride a few steeplechase horses of my own, most of which were sadly indifferent, and some rather better ones belonging to other people. From time to time I used to have a bet, whenever I thought that the circumstances were sufficiently favourable. The results, fortunately, were not entirely catastrophic, but I was not then, nor am I now, a gambler.
Almost everything else which I wanted to say this afternoon has been said already, very much more ably. But, as I see it, there are clearly two points of view, either of which one is entitled to take. One approves of gambling, or one does not. I read in an article in the Daily Mail on May 17 last something to the effect that the word "gambling" has become so overloaded with moral overtones that it is difficult to talk sensibly about it, and that the prohibition of gambling is socially destructive, although laissez-faire is almost equally damaging. This seems good sense to me.
It is clear to me that gambling has become too easy, and we all know that it has vastly increased in volume. I do not think that the rate of increase could have been forecast when betting shops and casinos were made legal. This increase in the volume of gambling can stem from many things. For example, one has always been told how taxation produces high gambling. More money and more leisure may also be contributory, but my own view is that it is largely because gambling has been made too easy. In the days of street betting and the so-called private gambling parties the difficulty of making a book or running a private party must have had a limiting effect. Gambling is not new, and a realistic approach to the matter should be taken. Some people like gambling and derive pleasure from it and nothing is ever going to stop them from gambling. So long as a man or woman is not a compulsive gambler no great harm is done.
1150 I should be the last to criticise the very large number of people who get great enjoyment from their almost daily small bets, although experience has led me to believe that their chances of being on the right side at the end of the year are very remote indeed. Nevertheless, I am well aware of the damage and unhappiness which inevitably result when a gambler gambles beyond his means. There is no easy solution to this problem because it is impossible to legislate against human folly, although it may be prudent to make human folly more difficult. I am strongly in favour of a tax on gambling. That must be right. All our simple pleasures are taxed and this tax would be no harder to bear than some others. But I doubt that the method of collection, as outlined in the Budget, as I understand it, is the correct one.
My noble friend Lord Derwent spoke on this point very clearly and well and I am in full agreement with what he said. But I would suggest to your Lordships that it might be worth considering the system which is used in Ireland which would seem to have something to recommend it. As I understand it, briefly, the system works like this. All betting slips in shops carry Revenue stamps and the same returns must be made both to the Revenue and to the Levy Board. The cost of the stamp is taken from the winner, whether it is the bookmaker or the punter. The penalties for evasion are very severe. I believe it is a £500 fine for the first offence and prison for the second. In consequence very little evasion is believed to take place.
On the course itself each book has to be made in triplicate and as soon as the race has started various Government officials go down the line of the bookmakers and remove the top copy of the book. This must have some effect in stopping what in racing circles used to be known as "back of the book" transactions. I think it must work in Ireland because I understand that when they want to have a big bet, the Irish place it in England rather than at home, which would seem to be some evidence.
§ LORD KILBRACKEN
My Lords, that is perfectly true. It happens very frequently, but it is absolutely illegal of course.
§ LORD KILBRACKEN
My Lords, it is illegal under Irish law to place any bet in England, either by telephone or by letter.
§ LORD ALLERTON
My Lords, I am much obliged to the noble Lord. I understand that it does happen. Perhaps they come over here to do it.
§ LORD ALLERTON
So I understand. Be that as it may, I suggest that this system might at any rate be considered.
Like my noble friend Lord Mancroft, I am completely in favour of a Tote monopoly, although at the moment this thought would seem to be rather ahead of public opinion, even though there would seem to be much to recommend it. Not only do the Governments profit considerably in those countries where the Totalisator has a monopoly, but so do the public and racing. I am strongly in favour of both Tote and betting generally contributing generously to racing, and I would express the hope that the Government would not be too avaricious. Racing is a big industry; it is a large earner of foreign currency, a considerable source of pleasure to a great many people and, in my view, it is something well worthy of support.
It would seem that to have a Tote monopoly would be rather hard on the bookmakers. But it can be said with some truth that, by and large, bookmakers are a very intelligent body of men, and it is unlikely that they will not be able to find some other equally remunerative employment. I venture to suggest that if a man can make money by making a book, he can probably make money at anything. Furthermore, the Tote has not yet, so far as I know, been mixed up with the doping of racehorses or the other malpractices which seem to be so prevalent now. This is a great deal more than can be said for bookmakers.
Casinos present a more difficult problem. I have no experience of them, and my views are gained only from hearsay. They have without doubt become numerous, not only in London, but throughout the country. Apart from advocating high taxation, I have no suggestion as to how best to deal with them.
1152 although I agree with my noble friend Lord Derwent, who again made such excellent suggestions. For my part, I am unable to see that casinos do any good; in fact, I consider that they do a great deal of harm, and I should be glad to see the end of them. I am well aware that this view is not shared by everybody, but it happens to be my view and I see no harm in stating it.
We have also heard this afternoon about the "protection racket". Quite clearly this has cropped up, and I should imagine that it will continue to crop up more and more. It can only be a question of time before smash-and-grab raids on the cash of these various establishments will take place, too.
I now propose to make the rather controversial suggestion—I hope your Lordships will tolerate it—that, in my view, there is a considerable argument in favour of some form of national sweepstake. The Irish Hospital Sweepstake has done nothing but good. Why should we not have a similar sweepstake here? No one is ever going to get into serious financial difficulty through buying a few tickets for this form of lottery. The amount of money it would bring in would be enormous, and many people would get a great deal of pleasure out of thinking they were going to win. In this way, a large sum of money could become available for charitable purposes. I should prefer to see most of the profit directed towards charity rather than to the Government, especially as charity seems to be having rather a rough time at the moment. But the Chancellor of the Exchequer might find the sum to be so large that he would feel it wrong to leave it completely untouched.
We already have a lottery in the form of Premium Bonds, and this is quite successful. Nobody has ever come to any harm through having Premium Bonds. I had some myself, though I did not come to any good: I got tired of them, and thought the small sum would be better invested in the stock market, which happened to be fairly buoyant at that time. The English people like something with a sporting flavour, and I am sure they would subscribe large sums to a sweepstake on the Grand National and the Derby. The name "Premium Bonds" is rather ponderous and savours of accountancy, and, therefore, does not 1153 make the same appeal. In conclusion, my Lords, I would say it is clear that gambling is here to stay, but let us make the best possible attempt to keep it under reasonable control.
§ 6.46 p.m.
§ LORD STONHAM
My Lords, we are greatly indebted to the right reverend Prelate the Bishop of Chester for giving us this opportunity to discuss a great and mounting social problem, in which your Lordships are once more giving a lead to public opinion—though I hardly expected reform of the House of Lords to go so far that I should hear two Conservative Peers, the noble Lords, Lord Mancroft and Lord Massereene and Ferrard, arguing passionately in favour of nationalization—the nationalisation of bookmakers.
I think that every debate in your Lordships' House reveals expert knowledge, and this has been no exception, because there has been deep and extensive knowledge revealed of every game of chance except ludo and snakes and ladders. I think the expertise reached its peak in the maiden speech from these Benches of my noble friend Lord Kilbracken, who revealed, not a misspent youth, but a whole life so far spent in pursuits which he understands to the full and enjoys even more.
§ LORD STONHAM
I was coming to that, because I was going to say that, with such deep knowledge as my noble friend revealed on this subject, we shall look forward to hearing him again on other subjects on which he also has great knowledge.
My noble friend Lady Stocks, the self-styled superannuated academic, reminded us that John Stuart Mill said all that needs to be said on this subject about 100 years ago. But it now falls to me to express the Government's view on some of the detailed points which have been raised. We have been considering a massive business, with a yearly turnover of more than £1,000 million; that is, more than £50 per family spent every year on nothing—nothing worth while. It is a business, whether the odds are 1.4 per cent., 5 per cent. or 10 per cent., where the dice are so loaded that the 1154 rich get richer and the poor get poorer. Unfortunately (and this was implicit in what the right reverend Prelate said), gambling draws much of its strength from two human weaknesses—greed and gullibility—and in many of its aspects it breeds gangsters.
Because gambling is with most of us an ingrained instinct, it is a weakness that cannot be eradicated by politicians. However, tough Parliament cannot cure it, we can control it; and subject to that important limitation, the Government intend to do so. The right reverend Prelate asked me to say whether the Government intend to act before the situation gets out of hand. We certainly will, although I cannot hold out any prospect of legislation this Session. This may not be a misfortune, because next time we must be sure that our Bill does not, like the 1960 Act, fail to achieve the intentions of its framers. For example, we do not think this would be achieved, as the Churches' Council appears to suggest, by merely limiting the number of sessions in each twenty-four hours and the charge per session, because this would leave untouched other forms of profit, such as through the bank, and, indeed, any profits related to the amounts staked.
Then again, the noble Lord, Lord Derwent, advocated the adoption of something like the French casino system, an honestly conducted monopoly, which confers on the proprietors something like a licence to print money. The profits are directly related to the stakes, and they start by prescribing, as my noble Leader pointed out, not maximum, but minimum stakes, with the maximum usually fixed at a thousand times the minimum. True, it is strictly controlled. There are no women employees in the gaming rooms, no "bunnies", with or without pockets, and no gaming on credit. But since the State and municipalities have a large share in the profits, it is in their interests to increase and not decrease the volume of gambling.
Clearly a system of this kind can operate only if there is a small number of casinos; and, as has been pointed out, in the whole of France in 1964 there were only 160 casinos. But what has not been said so far in this debate is that 124 out of that 160 are open only during the holiday season, and except in exceptional 1155 circumstances, no casino is allowed within 100 kilometres of Paris. French casinos are virtually restricted to the spas and holiday resorts, and obviously there would be no place for such a system in the industrial towns and cities which constitute our main problem. Indeed, the French system is one designed mainly for foreign visitors, or for the rich and the leisured. That is why it is understandably favoured by the fashionable London clubs who would, of course, like to share in the monopoly.
§ LORD DERWENT
My Lords, I am sorry to interrupt the noble Lord, but he is being a little unfair over this. Why is it not possible to restrict the number of clubs in an industrial area?
§ LORD STONHAM
I was coming to that in the course of my speech by giving some indication of just how many there are, not only in London, but in other towns in this country.
§ LORD DERWENT
I am sorry to interrupt the noble Lord again. I am not interested in how many there are. I am talking about restricting the numbers.
§ LORD STONHAM
That is precisely the point—and what they are. I am dealing with this question of profits and with the interest of the proprietors in maximising gambling and thereby maximising profits. Her Majesty's Government do not favour a system of high gaming with the State in partnership. In our view, it would be wrong to grant the rich a monopoly of the path to perdition.
Our problem covers gaming clubs that cater for all types of pockets, however well or ill lined, and we must devise a system of control which, whilst avoiding unnecessary interference with individual liberty, at the same time discourages excess and prevents the commercial exploitation of gaming, which I think has been the key point in the debate on all sides of the House. We must have regard to the growing evidence that many gaming clubs are in the hands of criminals, or the associates of criminals, and are used as a rendezvous for criminals and prostitutes. I refer also to the evidence that the offer of long-term credits on gaming debts, though not recoverable at law, leads to various forms of intimidation and blackmail. There is evidence of the growing protection rackets, to which the noble 1156 Lord, Lord Allerton, and other noble Lords referred, which, when the gangs muscle in on one another's territory, has led to violent affrays and death.
With all these things in mind, it seems that the best approach would be to make a clear distinction between genuine members' clubs, where gaming is a purely ancillary feature, and commercial clubs, where gaming is undertaken for profit. Registration would provide a simple system of control for genuine members' clubs, where conditions of management might well be similar to those in the 1961 Licensing Act and, as in that Act, it would not be necessary to grant the police the right of entry to a registered club except on warrant. As the noble Lord, Lord Meston, said, there must be a clear definition of what constitutes that type of club.
For commercial clubs which do not satisfy the conditions for registration, it would seem that a system of licensing would be necessary with fairly strict controls. These controls could deal, for example, with the nature, siting and standards of the premises, and the antecedents of the proprietors and management, with police powers of entry at any time. In our view, this would eradicate the criminality which so often surrounds these clubs. It would be necessary to ensure that no one concerned in the ownership or management, or employed in any capacity by the club, should participate in the gaming. And there would be the highly effective sanction that breach of the conditions of the licence would involve withdrawal of the licence, with the probable disqualification of both the promoter and the premises—a point which would appear to be in favour of the French system.
It also ought to be possible under the licensing system for them to regulate the sources of profit. There is much to be said for severing any direct connection between the amount of profit and the size of stakes. This means taking all advantage out of holding the bank, and limiting the profit to a single sessional charge, the period of which would have to be defined, as the right reverend Prelate suggested; although not necessarily three sessions every 24 hours. In this way, scope would be left both for the expensive clubs and for the more popular 1157 establishments, but with effective safeguards against the worse forms of profiteering and excess.
The noble Lord, Lord Derwent, and other noble Lords, emphasised the need to deal with the abuses connected with gaming on credit. There is a case indeed for forbidding credit altogether, but it would be clearly impossible to insist on all transactions being in cash. In the circumstances, the best course may well be to prohibit all credit, but to allow cheques to be given to buy chips or to obtain money for gambling and, at the same time, to amend the Gaming Act 1710 so as to provide that the passing of cheques for this purpose—but not in settlement of gaming debts or payment of accounts—should be actionable in the civil courts. It seems that a provision of this kind would help, if anything, to reinforce the prohibition of credit, as well as removing or reducing the present inducements to blackmail and intimidation.
With the proliferation of clubs all over the country, the need for such safeguards is very real. The chief constable of one Northern city told me that, prior to the Act, there were three known gaming houses, which were, of course, illegal and were raided regularly. Since the passing of the Act the number has increased to sixteen, but has now stabilised at about ten. This is about what the traffic can bear. On those ten, he comments tersely that three are well conducted, two are run by criminals for criminals, and three more are run by criminals for the general gambling fraternity, but are used for the recirculation of stolen money, receiving stolen goods, and as a meeting place for criminals. One, quaintly named the "Businessmen's Club", is run by a bookmaker for bookmakers. Some have been raided for contraventions of the 1963 Act, and closed. But they reopen under different names and allegedly different owners. If we want to end these illegalities, and the rackets and violence they often breed, we must arm the polic with the necessary powers. If we have the will to fight gangsterdom we must provide the means. In Manchester alone there are 83 licensed clubs, and the police estimate that three-quarters of them have facilities for roulette, chemin de fer, black jack, dice—the lot.
Mention has been made by my noble friend Lord Kilbracken of the volume of 1158 stakes in London and of the proprietors of one place earning £900 per shoe at a sitting. In some of the Manchester clubs the police say that £10,000 and £15,000 changes hands at a single session. Those noble Lords who saw the arresting document on Manchester's gambling and striptease clubs on the B.B.C. television last February, to which my noble friend Lady Stocks referred, will have an indelible impression of the whole atmosphere and of the faces and the demeanour of the gamblers. These places are more than ripe for control.
The noble Lord, Lord Wade, asked me directly and particularly what is being done about the protection rackets. The protection racket has been aggravated by the clubs but it is not new. It is not new to the police, and its victims are not confined to the proprietors of businesses of doubtful legality. The racketeers' method is to create trouble where none exists and then to demand money in order to avoid a recurrence, and through fear induced in this way honest people regularly pay protection money to the thugs who act as front men for the chief criminals. Naturally the protection racket flourishes, particularly where gaming takes place, and as gambling has increased so has the protection racket. Unfortunately the police are handicapped in taking action because the victims who pay protection money will not come forward and give evidence. The general attitude of the victims is that they are afraid of reprisals. They have the attitude that it is better to pay the money than to run the risk of having their business premises damaged or their wives and children assaulted.
I want to make it clear that the police not only know completely what is going on but they have full knowledge of the men involved and of their criminal records. I have seen what is being done, but for obvious reasons I cannot discuss it, and unfortunately the police cannot act without evidence. This evidence cannot be obtained unless the victims come forward and then act on police instructions. Yesterday noble Lords may have read in the Press that four men were sent to prison, one for four years, simply because a business man did come forward to the police. I appeal to everyone so concerned to come forward, because it is only in this way that they 1159 can be protected and we can deal with the criminals.
The noble Lord, Lord Derwent, and others have made reference to betting offices, which, as the right reverend Prelate mentioned, numbered some 15,638 on June 1 last year, or about one for every 2,000 adults in the country. Sitting on the Benches opposite when the Betting Act was passed, I forecast that the number would exceed 15,000, and no doubt the noble Lord will remember when he was standing over here and saying I was wrong. There is reason to think that the number is stabilising, although at a slightly higher level than the 15,000 which he then forecast.
The spread of betting offices has been criticised on moral and social grounds, and stricter licensing controls have been urged with the object of curtailing betting. There have been demands for amending legislation to enable local authorities to control the number of offices in their areas and for their planning powers to be modified to that end. However, it is not correct, as my noble friend Lord Cohen of Brighton said in an intervention when the noble Lord, Lord Derwent, was speaking, that the planning authorities have no powers at all in this matter. Under the 1963 Act any office requires planning permission. The location of the premises is, of course, an integral factor in planning, and licences can be refused if the premises are unsuitable.
The point about the betting offices is that after many years of the evil of illegal betting Parliament said that this was the way to avoid it—not to stop betting but to avoid the evil of illegal street and "hole and corner" betting; and it has virtually done away with it. If we were again to go back on our tracks one thing would be inevitable: a major return to illegal betting, which we have now abolished. The licensing authorities who have the job of granting licences are doing that job well according to the Act. There have been surprisingly few complaints. In theory one would expect that there would be noise and people crowding about. I have not seen it. Indeed, in the only betting shop I ever see, one in my village, it is so 1160 quiet that, but for the fact that there is a painting of a horse and not a hearse on the front, I should have thought it was an undertaker's premises. Therefore I do not think there is any pressing need to make any changes. But of course we shall watch the numbers. If there were reason for complaint, if there were disturbance or noise, that might well be a reason for refusing the renewal of a licence. Therefore it would cure itself.
The noble Lord, Lord Derwent, also commented on the Budget proposals and the bets tax, and he made some stringent comments on the £3,000 above and below and told a very touching story about £50 less and £50 more round the corner, and what it would mean. I have no doubt it is possible for such a case to exist, but I hope he will agree that these are financial matters which would be properly discussed in another place on the Finance Bill.
§ LORD DERWENT
My Lords, that does not stop the noble Lord from putting forward my remarks to the right quarters.
§ LORD STONHAM
The noble Lord has read so many Home Office briefs that he knows the precise time to jump up, when I am just going to say those very words; and, of course, that reflects great credit on him. At this particular point I was about to say that I shall see that representations made by the noble Lord and other noble Lords are brought to the notice of my right honourable friend.
I was particularly interested in this point about charging tax on winnings, and I interrupted the noble Lord, Lord Derwent, and indeed the noble Viscount, Lord Massereene and Ferrard, and I finally got the answer, as might have been expected, from the expert in the House, the noble Lord, Lord Kilbracken. He explained to me that in Ireland the tax is a turnover tax, the same as is proposed in the Finance Bill, and it is charged only on winnings. Obviously, since they only charge it on winnings, the Exchequer must go short, because since the bookmakers make a profit the punters draw less in winnings than the total stakes. Therefore the Chancellor of the Exchequer must go a bit short.
§ LORD KILBRACKEN
My Lords, may I interrupt the noble Lord? The point is that the bookmaker takes double the percentage that would otherwise be payable on the original stakes—5 per cent. instead of 2 ½ per cent.—so it comes out the same in the end.
§ LORD STONHAM
Of course it does not come out the same. If I might quote my noble friend Lord Kilbracken, he said the bookmakers' profits were 10 per cent. Accepting that, the winnings must come out of the other 90 per cent. Even if you just double on the winnings, that cannot be as much as the turnover tax on the whole thing.
§ LORD KILBRACKEN
My Lords, it is not that the winnings come out of the 90 per cent. It is that 90 per cent., on average, of the total stake money goes to pay the winning punters, and the 10 per cent is the bookmaker's profit. Therefore, if the tax is 5 per cent. instead of 2 ½ per cent., it is virtually the same thing.
§ LORD STONHAM
Then it seems to me that the bookmakers must be making extra profit, but I shall have to work it out on paper. I am too old to have served as a clerk to my noble friend when he was a bookie at Eton, but I can do simple arithmetic, and I will work it out and show it to him before I send it to my right honourable friend the Chancellor of the Exchequer.
The noble Lord, Lord Wade, and the right reverend Prelate the Bishop of Chester referred to betting on Elections. I think the right reverend Prelate said it was unwholesome, and that it should be stopped; he hoped that the Government would stop it. I think if there is one thing we are agreed on it is that it is quite impossible to stop people gambling. If there were nothing else, they would bet on flies crawling up the wall or raindrops running down the window. The main objection I had to the volume of betting on the last Election was that I consider it somewhat less than honest to bet on a certainty, and at the last Election Labour was certain to win. I would remind your Lordships that a question was put to my right honourable friend the Prime Minister on this point, and he answered it, in the shortest way, with a simple negative.
1162 In the context of the betting and gaming laws, a ban on bets on Elections would be a very considerable departure from principle, because the laws purposely leave people free to bet on whatever they please. Also—and this is a major objection—it would appear unenforceable and likely to lead to illegal betting on an even larger scale, an evil which we have always been particularly anxious to avoid. I think the noble Lord, Lord Wade, would take this point. At best it would only prevent the publication of betting trends; it would certainly not stop betting on Elections. The other considerations which the noble Lord raised on this point I think transcend the betting and gaming laws as such, and this debate does not appear an appropriate occasion on which to examine them.
I now come to the points which were raised by the noble Lord, Lord Mancroft. I was very sorry to have to leave the Chamber for a short period while the noble Lord was speaking, because, although my noble friend Lord Champion has given me an excellent note of what he said, I think your Lordships will all agree that a Mancroft speech heard is a very different thing from a Mancroft speech read. But I hope that I have the gist of the points he made. He criticised the section of the Finance Bill dealing with betting tax and expressed the view that it was probably unworkable. It is not realty a matter for us. I do not agree. Nor do I agree that it is probably unworkable because the Churchill Act did not work as the bookmakers did not play fair. They were not licensed then, and I think it is much more likely they will try to work this provision this time. They will have to do so.
But the really important thing from the point of view of racing, to which the noble Lord, Lord Mancroft, referred, as did the noble Lord, Lord Allerton, was the point that the bloodstock situation looks like being such, the amenities on racecourses being so comparatively poor, and costs going up under the influence of the selective employment tax and so on, that, as The Times said on Tuesday this week, we are in danger of becoming a second, third or fourth grade racing nation. It is true that the prize money in France is much greater than here, but the prize money here has very greatly increased, and only this week the Levy 1163 Board announced the distribution of another £1,700,000 in grants to 35 racecourses, which makes a total in the last two or three years of some £4 ½ million.
The Times, also said in their article that the future looks far from rosy:the prosperity of racing is not only linked but geared to the prize money available. If prize money goes up trainers' fees go up. If they do that the price of yearlings does the same. Stud and stallion fees can then be increased with no sense of guilt.If, happily, the prize money did increase, and the Levy Board was able to pay out more, even if the Board could double or treble its contribution, I have pointed to the inevitable happening: if prize money went up, the cost would go up to the same position. Prize money has greatly increased in recent years, but many owners cannot make it pay; they have to pay for their racing. In that way they are basically no different from the millions of punters throughout the country who also have to pay for their racing, and I think it will have to continue in that way.
The noble Lord, Lord Mancroft, and the noble Lord, Lord Allerton, suggested that one way would be to abolish bookmakers and create a Tote monopoly. I hold no brief for bookmakers, and of course the advantages of a Tote monopoly to the racing industry are obvious. It would certainly provide far greater funds than are obtainable at present through the levy raised on bookmakers and Tote together. That is only one side of the coin. From the punters' viewpoint, there are the usual disadvantages of a monopoly. It may be that the Tote would be capable of offering the great variety of odds on both small and large bets just as the bookmakers do; though I have doubts about 2s. 6d. win and place trebles or up-and-down double the stakes. The point is whether, without competition, the Tote would have any incentive to offer what is now offered by bookmakers.
§ LORD ALLERTON
With great respect, surely the Totalisator is a mathematical calculation. I do not think competition comes into it.
§ LORD STONHAM
Of course the Totalisator is a mathematical calculation; indeed it is a machine, and that is why noble Lords are able to claim that it is without sin, whereas bookmakers, 1164 like ourselves, are not free. I was not arguing that. The whole point of the case is that if there were a Tote monopoly, because all the net proceeds from the Tote would then be available to the Levy Board the sum would be greater. I am not denying that, but I am also saying that nevertheless the present system, offering a choice between bookmakers and the Tote, seems to suit the punters very well. They might be reluctant to see the total disappearance of the independent bookmaker. I find it difficult to believe, though I agree with Lord Allerton that bookmakers are intelligent people who would be able easily to find jobs just as profitable elsewhere, that they would accept their abolition with equanimity or become a mere agent of the Tote.
The main argument against a monopoly, in view of ingrained public habits and attitudes, is that it would most probably mean the resurrection of illegal bookmaking on a large scale. It is one of the indisputable achievements of the 1960 Act that it has reduced the evil of street bookmaking to quite modest proportions, and it would be wrong, now that it is virtually no more, to forget just how serious that evil was. On this point I realise what the case is, and how strongly it has been expressed in at least three speeches. I have no wish to take any final line on it. What has been said will be fully and carefully considered. But I must say that the Government would need to feel sure of their ground before they courted the danger of a considerable revival of illegal betting.
I think that I have covered the main points which have been put forward in the debate. I have tried to answer them. If there is anything that I have not covered, then I will certainly write to noble Lords. I think it has been an excellent debate. Certainly it has been most useful to the Government, in view of the wide and knowledgeable expressions of opinion. This is an important subject. We have to preserve the reasonable liberties and freedoms of the people; but, at the same time, when it comes to excesses, when it comes to damage, as my noble friend Lady Stocks said, and above all, when lack of control or no control means an invitation to open-ended crime, then the Government must act.
§ 7.22 p.m.
THE LORD BISHOP OF CHESTER
My Lords, we have travelled a long journey since we started out on this debate four hours ago, and we have gone into some strange country. I am most grateful to noble Lords who have spoken in this debate, both for the kind things they have said and also for the notable contribution which every speaker has made from his own particular point of view. I should like also to add my personal congratulations to the noble Lord, Lord Kilbracken, for one of the most outstanding "maiden" speeches that I have ever heard, and one which has whetted your Lordships' appetite for future contributions that he will be making from those Benches.
In the course of this debate we have had some moments of amusement and entertainment. But, for my part, I have found it a profoundly depressing experience to hear some of the things we have been told. To think how apparently intelligent people can allow the passage of these vast sums of money to depend upon the flick of a card!To think of this against the background of the appalling poverty of the world! It cannot but surely create a great deal of bitterness when one hears some of the things that have been recounted in this debate. Of course, I am not for the total suppression of gambling. I know that would be utterly impracticable, and would lead to even greater trouble. But I believe that this situation needs bold action and strong control, and therefore I have attempted to put before the House one or two alternatives—to examine whether it is possible to go back to the 1960 situation and to block the gap in the Act which has produced this unsatisfactory state of affairs; or, if that cannot be done, then to see how this situation can otherwise be controlled. Possibly, as I think the noble Earl, Lord Longford, said, a combination of the two is required.
1166 However, I am glad, as I am sure other noble Lords are, to hear that the Government propose to take action. I hope that they will consult with those who have had wide experience in these matters, such as those who know the situation on the Continent. If any of us who are interested in this matter, especially those who come from the Churches' Council on Gambling, which has a wide knowledge of all the effects, can be of any help to the right honourable gentleman the Home Secretary, we shall be only too glad to give what advice and aid we can. I only hope that the Government will not wait too long. I know the dangers of rushed legislation. None of us wishes for that. At the same time, these situations can easily consolidate themselves, and when we try to reform we are told that the situation has gone too far and that it is impossible to do anything about it. I hope, therefore, that Her Majesty's Government will be able to put before us their proposals for dealing with this serious situation quite soon. It is with that hope that I beg leave of the House to withdraw my Motion.
§ Motion for Papers, by leave, withdrawn.