§ 3.22 p.m.
§ THE MINISTER OF STATE, HOME OFFICE (LORD STONHAM)My Lords, I beg to move that this Bill be now read a second time. Your Lordships will recall that just over two years ago we had a valuable and far-ranging debate on the state of gaming in this country on a Motion moved by the right reverend prelate the Bishop of Chester, whom I am pleased to see in his place to-day and from whom I am sure we shall receive wise advice during our discussions. Our previous debate was in the nature of a survey or diagnosis of the evils which uncontrolled commercial gaming had brought upon us. We are now faced with the much sterner and more intractable task of solving a problem which has always hitherto baffled the ingenuity of legislators. I do not say this in any spirit of pessimism. I believe that the Bill which I am now introducing to your Lordships, long and complicated though it is, holds out a very good hope of curb- 852 ing the evils that have grown up around us.
Your Lordships do not need me to describe in detail the situation with which we have to grapple. There have been some developments over the past two years, but very little change. A measure —the Betting and Gaming Act 1960—introduced with the best and most liberal of intentions, and with the most touching innocence, has been abused and perverted by commercial gaming interests of every kind, able to afford the best of legal advice and using every advantage that legal processes can offer. As a result, the 1960 Act has been riddled through and through and Parliament itself made to look ridiculous. The very thing that the 1960 Act was intended to prevent—the commercial exploitation of gaming for high stakes—has in fact been fostered by it, and in such a measure that there is no comparable situation anywhere in the Western World. In saying this, I do not exclude Nevada, because the gaming there is at least controlled.
Nor am I forgetting the important judgment reached by the House of Lords on the very day that this Bill was first introduced in another place, which effectively put a stop to the method which the gaming proprietors had found of exploiting the advantages in the bank at roulette. Admirable and salutary though that judgment was, we should, I fear, be deluding ourselves if we made too much of it, because the damage had already been done. The ingenuity of the gaming proprietors is endless and the whole fabric of the present law rotten. I could myself suggest a number of new and interesting ways through and round it, but understandably I shall refrain from doing so; but if the present law were to remain we should see them all.
My Lords, it may be that the chief criticism of the 1960 Act is that it allowed, indeed encouraged, commercial gaming to develop in a wholly uncontrolled way. If commercial gaming there must be—and I am afraid it has gone beyond the point where we could eradicate it—then we must ensure that it does not force itself upon society and propagate into a great social disease. But the law must recognise gaming before it can be treated and contained. If it is left uncontrolled then we shall get not only profiteering, cheating and fraud, but 853 criminality of every description, including blackmail, intimidation, violence and murder. We have had all these things, and the only wonder is that we have not had more of them. Many of the gaming clubs are responsibly and—within the limits of commercial morality—honestly run; the better known of them have managed to lend an air of respectability to the whole business; but all of us know the darker side.
There have been very similar developments in the supply of gaming machines. The 1960 Act legalised their use in clubs, which were to be allowed two apiece, but omitted any proper safeguards. There was a complete failure to realise just how addictive, and therefore profitable, these machines can be, and no attempt was made to regulate the odds they offered, which has meant that the machines are sometimes set to keep back as much as 40 per cent. of the money put into them. Profits like that were the magnet which attracted criminals into the business of supplying them—not on conventional terms or by ordinary commercial methods. Here again, the majority of the suppliers are, no doubt, entirely reputable, but a minority has been engaged in racketeering and strong-arm methods of every kind, and some very nasty scandals have resulted. The time has come to clamp down hard on the supply of these machines and to make proper safeguards for their use. Nor can this be done without dealing at the same time with the "amusement machines" which are supposed to give only strictly limited prizes and for that reason can he installed on local authority permit in public places. The two types of machine are often identical in design and retailed by the same people; the temptations to abuse are similar, in kind, if not in degree; and the distinction between them and the true gaming machines could easily become blurred.
It is in fact one of the difficulties of this subject that once we start to deal with a single facet of gaming we are compelled by logical sequence to deal with all; from the baccarat and cheminde-fer provided in exclusive West End clubs to the wheel of fortune at fairgrounds, and from the "one-armed bandit" to the pin table and crane-grab. If this Bill is lengthy it is largely because all these activities tend to shade into each 854 other, so that we are confronted inescapably with the whole spectrum. The Bill deals with all, but with each, I hope, in its correct place and in the right way.
My Lords, against such a background, which is not disputed, what are the objects of the Bill? First, we have been compelled, like it or not, to accept the fact of commercial gaming and to realise that it has now taken such a hold that if we do not grant legal recognition we shall drive it irretrievably into criminal hands. The one hope of controlling or even containing it is to make it lawful—but on our terms. This is far from saying that we believe the present volume to be irreducible; the number of commercial gaming clubs could be cut back sharply before any serious danger should arise of driving the activity underground; and indeed, unless their number is reduced to a manageable proportion, effective control will be impossible.
But here the Government make one important distinction. In the case of the casinos—that is to say, clubs offering "hard" games such as chemin-de-fer, roulette, black jack or craps— out object is to reduce the total number, perhaps to as few as two to three hundred; that is. to about a third or a quarter of those now operating; and, having done that, to discourage further propagation by imposing strict tests of demand, restricting advertisement, discouraging impulse gaming, slimming off surplus profits, and a combination of other measures. We shall allow the habitual or determined gamester to game legally, but that is all.
In the case, however, of the numerous bingo clubs we do not intend to go so far. This is—or should be—a relatively harmless form of gaming of a sociable and neighbourly kind, although to some of us it is a sobering thought that there are 10 million members of bingo clubs. But provided it is kept within proper bounds we have no wish to harass it unduly; and so, while it is brought within the general structure of control established by the Pill, certain small but valuable concessions are made: for instance, the concession that will allow a person belonging to one club in a large organisation to game at any other— and so when away from home on holiday or business to indulge his obsession. But these concessions will apply only to bingo clubs which are prepared to abandon absolutely 855 other and more serious forms of gaming like roulette and black jack, which have been popularised very largely because the bingo clubs have taken them up. And if that carrot does not work then there are powers in the Bill to apply the stick by forbidding the combination absolutely; and the Government are determined, if necessary, to apply it.
I turn now to the control system, which is the very essence of this Bill. There are broadly two approaches to this sort of problem: local licensing—as, for instance, with the betting shops and publichouses—and a single central direction as with the casinos and gaming houses houses in France and Nevada. We have blended the two methods with great care, so as to produce what we believe to be a particularly potent mixture. Basically the controls rest on a system of licensing of commercial clubs, and registration of members' clubs, by the local justices, on conditions to be enforced by the police; but only the more fundamental of the conditions are laid down in the Statute itself and a very large area is left to regulations.
If your Lordships wish to see just how strong and flexible these regulation-making powers are let me draw attention to Clauses 13 to 15 and then to Clause 22 of the Bill. You will find there, first, that the sources of profit in every game that may be permitted in a commercial club will be laid down in regulations, be it a table charge, a cagnotee on stakes or winnings, or advantages in the bank which the club will hold. You will see also that Clause 22 in particular contains certain novelties. Thus, the Secretary of State is empowered in subsection (2) to make regulations: "for preventing the use of any indirect means for doing anything which, if done directly, would be a contravention of this Part of the Act or of any regulations made thereunder".
We do not intend to play any more cat and mouse games chasing the gaming proprietors through the courts.
And, among many other powers taken in this clause—to restrict the hours of gaming clubs, to prevent dishonest play and so on—there are also powers to require the justices to refuse to grant or renew licences in particular circumstances, or to attach prescribed conditions to licences. These powers could be invoked, 856 for instance, to prevent gaming licences from being given to cabaret clubs, which have played no small part in the popularisation of gaming, or to remove all "hard" gaming from the bingo clubs.
The general approach, therefore, is a blending of national and local responsibilities and interests in such a way as to reinforce each other. A system of this kind requires a strong linchpin, and this we have provided in the Gaming Board, which is to be established by Clause 10. Indeed, it would be scarcely any exaggeration to say that the whole efficacy of the system will turn upon the Board. On the one hand, the Board are required to be consulted on all regulations; on the other, they are empowered to advise the justices over the whole range of the responsibilities which they exercise and so, for instance, to guide them in assessing the demand for gaming, which may often transcend purely local considerations.
The Board are entitled, under Schedule 2 of the Bill, to appear before the justices to object to licences; they may appeal against their decisions to quarter sessions, and they may indeed take up and champion, on appeal, objections made by other parties, such as the police or local residents. To help the Board with these duties they will have their own permanent staff and also a small but, I am sure, effective body of inspectors, who will have equal rights of entry into the clubs as the police and will be available to assist the police with their knowledge and experience in any aspect of their enforcement duties.
These in themselves are highly important functions. But the Board will discharge other and even graver responsibilities. They are charged with the duty of vetting the character and antecedents of all applicants for gaming licences before they can present themselves to the justices, with a view also to the controlling interests, financial or other, behind them. No one will be able to act as a gaming manager or operative in a licensed club, or as a retailer of gaming machines, without the Board's approval; and in no case will the Board's decisions be subject to appeal. These are, as the Government recognise, arbitrary powers of an extreme and indeed unprecedented kind. They have not been conferred upon the Board without a great deal of 857 anxious thought. They are needed because of the paramount importance of excluding criminals from the field of commercial gaming, which may often have to be done on the grounds of reasonable suspicion rather than absolute proof, or on the basis of information which could not be presented in open court. And they are justified powers because nobody can claim a right to make a living from commercial gaming; it is a privilege, if a doubtful one, to be conferred only on the absolutely trustworthy.
There are some who may say that by these arrangements we have eroded the proper responsibility of the justices. The Government do not believe this. On all major issues of local concern—the demand for gaming facilities, the suitability of the premises, or their location, the conduct of the gaming, and so on—it is the justices or the local courts who will have the final say, though the Board will be ready to assist and advise them, as will the police. There are others, notably the Churches' Council on Gambling, who will claim that we should have given the entire work of licensing to the Board. Eight years ago when the 1960 Act was passed something of the kind might indeed have been possible; but not now. We are not in a position of trying to control and guide a new development, but of striving to restore order from chaos and if the number of clubs is to be reduced in a way which really conforms to the needs, and not merely to some a priori plan, it can only be done by a thorough sifting of demand and the application of general principles to a multiplicity of local circumstances. This is work for which the justices are uniquely equipped, and a proper answer can in the end only emerge from a whole succession of local hearings patiently undertaken.
If the Board—or any other central authority—were to attempt a task of this magnitude there would be three results. First, there would be an inevitable, and in the circumstances quite unacceptable, delay; second, there would be a danger of a rigid pattern being imposed on theoretical principles, but based on a necessarily imperfect or partial knowledge of the true facts; and third—since those who will be refused licences will be put out of business altogether and 858 those who receive them be left in the enjoyment of a local monopoly—there would be a most dangerous concentration of patronage. The number of commercial clubs cannot be reduced on Any artificial system but only through the application of general principles; and if these principles can be defined—as we believe they can— they should be judicially applied in open court so that the justice of the result may be apparent. For this reason the Bill restricts the absolute discretion of the Board to a single consideration only; the trustworthiness of the applicant and his sponsors.
My Lords, I have stated the problem and the methods we propose for dealing with it. Some would argue that this measure is paternalistic; protecting society from itself. If so I make no apology. Necessity makes the law. It made it on drink a long time ago. It is making it increasingly now with drugs. In some respects the drug of gaming is as great a menace.
I turn now to the structure of the measure itself. It is, I think, a logical and consistent one. Part I of the Bill deals with the general law as it applies to gaming of a casual kind, as within a family or between friends. It imposes no restrictions on the magnitude of slaking, but is designed, in Clauses 2 to 4, to prevent all possibility of gaining being promoted for profit outside the main control system instituted by Part II. It thus prohibits not simply charging or levying on stages but the playing of bankers' games or games of unequal chance—under whatever conditions which may be supposed to have the effect of equalising the chances—except in conditions of a strictly domestic character. Clause 5 perpetuates the existing ban on gaming in streets and public places, subject in Clause 6 to some enlargement of the present concession allowing equal chance games to be played without charge or levy of any kind in public-houses. The penalty provisions in Clause 8 place the onus for offences, not on the individual players but on those who have organised or promoted illegal gaming, or knowingly allowed their premises to be used for it, and who so stand to profit from the infringements. It follows that, while it is technically an offence for an unequal chance game such as pontoon to be 859 played, say, in a factory canteen, in practice when the play is purely casual and unorganised there will be nobody to whom the liability can attach. This, for common-sense reasons, has been deliberately contrived.
If Part I is as watertight as we believe it to be, the result will be that any gaming which is for profit, or which is in the least danger of becoming commercialised, will be safely shepherded into the control system established by Part II which—with its associated Schedules, 1 to 5—establishes the Gaming Board, lays down the procedures and conditions of licensing and registration, and so forms the very kernel of the whole Bill. The principles of the licensing system I have already described. The registration system as distinct from the licensing system is intended for members' clubs and miners' welfare institutes which want to provide unequal chance gaming for their members, or to make some small charge to recover the costs of the gaming facilities they provide, and no more. It is, therefore, essentially precautionary. The qualifications for obtaining registration—laid down in Schedules 3 and 4—are not in themselves onerous and the conditions attaching to registered clubs are designed chiefly to prevent any significant profits being made. The procedures to be followed in obtaining registration, in the way of advertising, the invitation of objections, and hearings before the justices are, however, almost as thorough as where a licence is being sought; because the credentials of the clubs must be fully examined to make sure that commercial interests are not attempting to operate through them. That is a matter of particular importance since these, unlike the licensed clubs, will not be subject to rights of entry by the police or gaming inspectors, except on warrant.
For the commercial or licensed clubs Part II of the Bill provides, as I have explained, chiefly a framework to be completed by detailed regulations of all kinds made on the advice of the Gaming Board. There are, however, certain important statutory conditions to which I should draw attention. Clause 12 of the Bill not only makes a reality of the club conception by requiring forty-eight hours' notice between application for, and 860 participation in, gaming, but it also imposes certain other checks.
Clause 16 places an absolute prohibition on credit being given for gaming in any form, but allows cheques to be accepted to obtain means for gaming, in money or chips, and the proprietors to sue on them if they are dishonoured. This is, we believe, an important reform, since it not only removes temptations to excess, but also all those incentives to intimidation and blackmail which exist where credit is allowed without the legal means for the recovery of debts.
Clause 17 prohibits absolutely not only play by young people in licensed clubs but their very presence in the gaming rooms—although this restriction is lifted for the bingo clubs, so that mothers can bring their children with them if they wish. And finally—since it has a more general application than to licensed and registered clubs—I should mention here the restrictions on advertisement imposed by Clause 42. This again is not quite absolute, since it allows advertisement on or in the premises themselves and for a fortnight after the licence has first been granted, but it is intended—and we believe it will be effective—to prevent stimulation of demand.
The requirements for gaming managers and operatives to obtain certificates of approval from the Board are contained in Clause 19, but the prior vetting by the Board of applicants for licences and their financial sponsors is dealt with in Schedule 2, since it forms an essential part of the whole licensing procedure there set I out. These—and the corresponding procedures for members' clubs and institutes in Schedules 3 and 4—are largely based on those now applying under the 1963 Act to the licensing of betting offices, except that for the licensed clubs the qualifications required are far more strict, there are wide powers for the justices to attach restrictive conditions, and the influence of the Gaming Board on the proceedings will be more direct and pervasive. There is one other significant difference. After the first, transitional, period all licences and certificates of registration will be granted and renewed at one period of the year only—in May—the better to allow the Gaming Board to plan their interventions, and to prevent the applications escaping the attention of potential objectors.
861 Finally, the sanctions will be strict and, I believe, effective. Behind the criminal penalties laid down in Clause 23 there will be the power of a court or the licensing justices to cancel a licence and disqualify the premises, and for the Gaming Board to reinforce this, if they wish, by revoking all certificates of consent. It is this, rather than any fines or penalties, that should be the chief deterrent. There is nothing in the least comparable in the present law.
My Lords, I now turn to the control over the use of machines, which is the subject of Part III. These are complicated provisions, but their general import is this. First, all those who retail or maintain gaming or amusement machines must, under Clause 27, obtain certification by the Board; and the terms of contract are, or may be, regulated under Clause 28. The strict control over retailers, and prohibition of forms of contract which allow pressures to be put on their customers, are the very essence of this matter; and we make no distinction here between the gaming and amusement machines.
Second, the use of gaming machines is confined under Clause 31 to clubs licensed or registered for general gaming, or to genuine members' clubs specially registered, so the use of the machines will in all cases depend upon some definite authority which can be withdrawn if the conditions are infringed. No more than two gaming machines will be allowed in any club—except in the special circumstances of Clause 32. No limit is placed by the Statute on the size of the "jackpots ", but power is taken to do this if abuses develop. The prizes offered, and the percentage payout, must be clearly indicated on every machine, and in respect of the licensed clubs there will be power to regulate them so as to put an end to the present, often extortionate, practices.
Much the same principles apply to the use of amusement machines, which are the subject of Clauses 33 and 34, and of Schedule 9. Many of your Lordships, when you think of these machines, will have in mind those installed on piers or on fair grounds, which are often truly just amusement machines. The law, however, is not concerned with a machine's design, but simply with whether it offers large or unlimited prizes 862 —in which case it is a gaming machine—or small and limited prizes, which makes it an amusement machine. And the majority of amusement machines now—especially those in pubs and cafes—are nothing more than the familiar "one-armed bandits" or fruit machines, adapted to give reduced prizes. They are gaming machines. Except in the case of travelling fairs, these machines can be installed only on permit issued by the local authority or, in respect of public houses, by the local licensing justices. And because the local authorities have complained that their wish to restrict the number of these machines has often been frustrated through appeals to quarter sessions, they are now empowered in Schedule 9 to pass policy resolutions declaring that they will issue no more permits.
Part IV of the Bill and the remaining Schedules are concerned with miscellaneous and supplementary matters. I do not think it necessary for me to deal with them now. There are in this Part of the Bill a number of general enforcement provisions, of which the most important are contained in Clause 43, which gives the police and gaming inspectors absolute rights of entry at any time into licensed (but not registered) clubs, and wide powers to inspect the equipment, records and accounts or 10 call for their production.
My Lords, this is not, in the nature of things, a comprehensive account of the Bill, which we shall have an opportunity of examining in greater depth in Committee which it is intended, I understand, to hold upstairs—using that word in a figurative sense. It will be subsequently recommitted to a Committee of the Whole House. I do not think it necessary at this stage to go into any further detail about this as I understand that my noble friend the Leader of the House will shortly be putting down a Motion for the commitment of the Bill "upstairs", and that he will take the opportunity to explain to the House the procedure that will be followed in the Committee.
I hope that I have indicated the Bill's main features, and given your Lordships a clear idea both of our goals and of how we are hoping—indeed expecting—to achieve them. But there is one warning that I must give. A control system 863 as detailed and as elaborate as this cannot be erected overnight. When this Bill has become law there will still be a long period of transition—it may be as long as two years—before the provisions can be brought into full operation. Clause 54 of the Bill allows for this; and all I can undertake is that we —and, I am sure, the Gaming Board, when it is set up, which is the very first thing that will be done—will do everything in our power to see that the delays are no greater than the facts of the situation, and the great burden of work to be undertaken, necessarily require. I beg to move.
§ Moved, That the Bill be now read 2a.—(Lord Stonham.)