HL Deb 23 January 1986 vol 470 cc390-8

7.28 p.m.

Lord Harris of Greenwich

My Lords, I beg to move that this Bill be now read a Second time.

I am particularly glad that the noble Lord. Lord Allen of Abbeydale, will be participating in the debate. I am glad for two reasons. The noble Lord is a former chairman of the Gaming Board and has immense knowledge and experience of this industry. He was also a notably successful chairman of that board. We all owe an enormous debt of gratitude to the noble Lord for the fact that, because of his high competence in that office, we in this country have avoided many of the problems that have arisen in other countries where casinos have not been properly regulated. I have another reason for being glad that the noble Lord is speaking. He is supporting the Bill, which makes it even more attractive that he is following me in this debate.

I am glad that the noble Lord, Lord Harding, is speaking, because he too has substantial knowledge of the industry. I think it is right to say that the noble Lord is approaching his 90th birthday, and in case he is not in the House again before that occasion perhaps I may say that we all wish the noble Lord the happiest of birthdays and hope that he will long be in our midst.

Noble Lords

Hear, hear!

Lord Harris of Greenwich

My Lords, this Bill is designed to implement two of the recommendations made by the Royal Commission on Gambling under the chairmanship of the noble Lord, Lord Rothschild. It would amend Section 16 of the Gaming Act 1968, which relates to the provision of credit and the use of cheques. I shall set out the central purposes of this Bill fairly briefly.

As the House is aware, the Gaming Act, among other things, governs the operation of commercial casinos in England, Wales and Scotland. One of its most important provisions is the strict control which it imposes on the operators of licensed casinos over the prohibition of credit. For this reason, the use of cheques is subject to conditions which do not apply in any other part of our commercial system in this country. When a licensed casino operator accepts a cheque in exchange for chips to enable someone to take part in gaming he is required to accept two conditions. First, it must not be a postdated cheque. Secondly, the cheque must be delivered to a bank for payment or collection within two banking days. The purpose of those requirements is fairly obvious. It is to ensure that cheques cannot be used as they might otherwise be: for the player to obtain credit or to incur debt.

After the Gaming Act came into operation in 1970 it soon became clear that the requirement for all cheques to be lodged at a bank within 48 hours produced one inequitable and, in my view, entirely unnecessary side effect. When a player cashes in his chips at the end of the gaming the casino cannot allow him to redeem any cheque that he has given to purchase them at the outset or during the course of paly. Not only does the casino have to carry the risk of that cheque being dishonoured—indeed, there have been many cases where cheques have been dishonoured—but it must also pay cash or issue its own cheque for the value of returned chips even when the player has lost part of his original stake.

The risks involved in this procedure are fairly obvious. The casino can suffer a compounded loss if the player dishonours his cheque and cashes that of the casino. At the same time, many players dislike not being able to redeem the cheques they have issued or to recover them by giving a single consolidating cheque at the end of play.

The Royal Commission when it considered this matter after visiting 40 casinos up and down the country in the course of an inquiry which took somewhere in the region of two years, came to the following conclusion. I apologise that the quotation is slightly lengthy but is is absolutely fundamental so far as the central purposes of the Bill are concerned. It said: At present players are prevented from redeeming cheques they have written in the course of a gaming session, either with their winnings or with a single consolidating cheque. From our visits to casinos we have found that this aspect of the gaming laws causes more irritation than any other, both for the casino proprietors and for their customers. Casinos can also be exposed to considerable risk when they have to give cash or a cheque of their own to winning players whose cheques given in exchange for chips might subsequently be dishonoured. This risk could often be avoided if casinos could return a winning player's own cheques to him in full or part payment of his winnings. We therefore recommend that Section 16 of the Gaming Act should be amended to enable a casino to return a player's cheque to him in exchange either for the player's winnings or for a consolidating cheque. Having made that recommendation, the Royal Commission introduced one rather important qualification; namely, that the prohibition of the giving of credit for gaming should not be eroded in any way, and for this reason the redemption of a cheque should be allowed only during or immediately after the playing session in which it was tendered.

The Bill implements those recommendations, providing no more and no less. I know that the Bill has the support of the Gaming Board, and I very much hope that of the Government as well. Indeed, it should do so, because on 29th October 1979–15 months after the Royal Commission's Report was published—the present Leader of this House (who was the then Home Secretary) the noble Viscount, Lord Whitelaw, when speaking in another place during a debate which was then taking place on the report of the Royal Commission, said at col. 853 of the Official Report: I can say that the Commission's recommendations for changes in the law relating to cheques and the provision of credit for gaming in casinos are acceptable and we shall be prepared to implement them when there is an opportunity for legislation". More than six years have elapsed since that speech was made, and no such opportunity has arisen. In that situation we came to the conclusion that it was right to come forward with this Bill in order to end what I think is generally recognised to be a highly unsatisfactory situation. In those circumstances, I very much hope that the Bill will obtain the support of the House. I beg to move.

Moved, That the Bill be now read a second time.—(Lord Harris of Greenwich.)

7.33 p.m.

Lord Allen of Abbeydale

My Lords, I should like to add just a few words, and I can confirm that those few words will be in support of the Bill. As chairman of the Gaming Board for eight long years, I suppose I can claim some acquaintance with the subject, but the views I shall express this evening in the next few minutes are my own and I am in no sense speaking for the board.

This is not the occasion to discuss the rights and wrongs of providing facilities for gambling, but it could hardly be disputed that, if there are to be casinos, it is important that they should be well run and that the risk of irregularities should be reduced to a minimum.

When casino gaming was legalised in this country in 1960, no adequate enforcement machinery was provided and things became very badly out of hand. When the Gaming Act 1968 was passed to clear up the mess, one of its most important provisions was Section 16, dealing with credit—the section which Clause 1 of the Bill seeks to amend. The aim of that section—and I was somewhat involved in this legislation even in those days—was to provide limits tighter than perhaps are to be found anywhere else in the world. However, there were obvious objections to gamblers being expected to wander around with large amounts of cash, and it was thought right, and inevitable, to allow the use of cheques, but subject to the very strict controls which the noble Lord has just explained.

I can confirm that experience in the very early years after the Act came into force suggested that in the one respect dealt with in the present Bill the section had probably gone a little too far. As has been explained, the Gaming Board itself—and this is now nearly 10 years ago—recommended to the Royal Commission on Gambling that this was one area for possible relaxation. We knew that it was a problem primarily affecting the London casinos, but in money terms the London casinos account for far more than all the provincial casinos put together. As we know and have been told, the Royal Commission, in its report published in 1978, accepted the board's recommendation.

However, it is worth bearing in mind that in that report the Royal Commission also said, in effect, that the board had completed its initial assignment of cleaning up the casinos and could now turn to other things. Characteristically, the board almost at once became involved in coping with irregularities in a number of casinos which led to what is sometimes referred to in the industry as the holocaust. Suffice it to say that a series of court cases resulted in a number of operators relinquishing their interest in running casinos, not always voluntarily.

One of the main areas of trouble in those exciting years involved the operation of the statutory provisions about cheques, and the problems of interpreting just what Section 16 meant. Although there was nothing to cause the board to resile from the recommendation which it had put to the Royal Commission about the consolidation of cheques, that was not the only recommendation which the board had put to the Commission. The others were for a tightening up in various respects, particularly in regard to accepting cheques from players who had previously defaulted. The experiences in the years immediately after the Royal Commission Report heavily underlined the need for some further provision on those lines.

In the end, after a wide-ranging judgment from the Court of Appeal, it proved possible to achieve a solution to these problems by administrative means. The report of the Gaming Board for 1984 sets out guidelines dealing with the acceptance of cheques, including those presented by defaulting players, which had by then been agreed between the board and the British Casino Association under the benevolent chairmanship of my noble and gallant friend Lord Harding.

Therefore, the relaxation sought in this Bill is not to be looked at in isolation. It so happens that the relaxation requires an Act of Parliament, whereas the tightening up did not. The present proposal is therefore acceptable to me when seen in this wider context.

On a point of detail, I should like to ask whether the Bill will apply to third party cheques and to bankers' drafts. I take it that it could not in practice apply to travellers' cheques, notwithstanding that they are, slightly misleadingly, designated as cheques?

I should like to make just one further comment before I sit down. The present proposal is not without its risks. To take a very simple example, at present a punter betting on a modest scale might in the course of an evening present five cheques each for £20,000 and it might then turn out that the first three are honoured and the last two are not. Under the Bill, he could recover all his five cheques and substitute one cheque for £100,000, which would then be dishonoured in toto. I know that the operators would do their best to avoid such a contingency, but—alas!—experience suggests that these things happen.

It seems to me to be quite essential therefore that detailed records should be kept of all these transactions so that the Gaming Board's inspectors, and if need be the police, can see just what has happened; and it is equally essential that these records, like other casino records, should be kept in writing and not simply kept on a computer from which, in the event of trouble, they can be removed at the touch of a button. I take it that Clause 2 is designed to cover this state of affairs, and I look on it as a very welcome and necessary part of the Bill.

I have one incentive for supporting this Bill which has nothing whatever to do with gaming. As a member of two Royal Commissions whose reports have been almost totally ignored by the Government, I cannot but derive some satisfaction from legislation which, even years after the event, seeks to implement a Royal Commission recommendation. Who knows, perhaps the habit will be catching.

7.43 p.m.

Lord Harding of Petherton

My Lords, I intend to speak briefly in support of this Bill. However, first I must declare an interest as, for the past 12 years. I have been chairman of the British Casino Association, which is the trade association of the gaming industry in Great Britain and therefore responsible for watching over the interests of licensed casino gaming. There are at present some 120 licensed casinos in England, Scotland and Wales, and 117 of those—that is all but three—are members of the British Casino Association. Therefore, I think we can claim that the association is fully representative of the gaming industry in this country as a whole.

I also want to thank the noble Lord, Lord Harris of Greenwich, for his kind and generous remarks about my approaching 90th birthday. Although I am of a great age, I hope that I am still of fairly sound mind and can speak intelligibly. The noble Lord. Lord Harris, has explained in detail the objects of this amending Bill and the importance of it for casino clubs in regard to financial management, the prevention of loss and the convenience of club members. I do not propose to go into all that detail again; but as regards the point which the noble Lord, Lord Allen, made towards the end of his remarks, I am quite confident that the casino association and the governing council body would be only too happy to reach agreement with the Gaming Board on the way in which records of transactions—that is, the redemption of cheques under the amendment in the Bill—should be recorded so that they are readily accessible to the Gaming Board's inspectors during their visits to casinos. I am quite sure that we can reach agreement on that point just as we reached agreement on the handling of cheques of members of clubs who are already indebted to their club, to which reference has been made by the noble Lord, Lord Allen.

With that reservation about records and knowing that the Gaming Board is in favour of this Bill and that the noble Lord, Lord Harris, has explained in detail the importance to the industry of the amendments in the Bill, I should like to confine myself to emphasising a few points which I think are of importance and which I think are relevant. The first, as has already been made clear, is that the amendments in this Bill are strictly in line with the recommendations of the Royal Commission. Secondly, the amendments in the Bill in no way damage the social, commercial and financial provisions of the Gaming Act 1968. I should like to emphasise the word "social" because, as we in the industry see it, the social objectives of that Act are far and away the most important, although of course the others are important. However, the first ones are of particular importance.

Thirdly, the Gaming Board has been fully consulted throughout the preparation of this Bill and has made valuable comments which have been considered in the final drafting of the Bill. In conclusion, I think that the House will be pleased to know that, thanks to the way in which the noble Lord, Lord Allen of Abbeydale, has conducted the business of the Gaming Board over the past eight or nine years during which time he was chairman, relationships between the industry and the Gaming Board are, in my opinion, now on a sound and workmanlike basis. Matters of common concern —for example, future regulations that will need to be published regarding records of redemption of cheques, and so on—are regularly discussed by the council of the association with the Gaming Board in an objective, realistic and constructive manner. As one with some personal experience and knowledge of the gaming industry and of the factual problems which face it, and particularly knowing the present standard of management throughout the industry and the relationships between the industry and the Gaming Board, I strongly support this Bill.

7.49 p.m.

Lord Kilbracken

My Lords, I should like to intervene for a few moments as one of the survivors of the Standing Committee of your Lordships' House which considered the 1968 Bill in immense detail. All those years ago we gave a great deal of thought to Section 16. At that time it did not occur to us that the redemption of cheques would, as a result of Section 16, become illegal. I remember being surprised and annoyed—and I most warmly support the Bill, because it is very wrong that one should not be allowed, if one has a good evening, to pay in what one has got for the cheque and pay your cheque out—when I first visited a gaming club after the Act came into force and happened to win, to find that I could not get my cheque back. That is completely wrong, and there is absolutely no reason for it.

The main point I want to make is that when I asked the cashier on that occasion why I could not redeem my cheque he replied, "Under the new Act any cheque that you give us must be paid into our bank within 48 hours", and indeed that is what the noble Lord said in his opening remarks. It was because such cheques had to be paid into the bank that they could not be redeemed.

My main purpose in rising is to suggest that in tackling this problem the noble Lord has perhaps tackled the wrong subsection. It is quite clear from the Bill that he is taking the view that if cheques are redeemed there is some contravention of Section 16(1) of the Gaming Act. Indeed, it says that if certain conditions are fulfilled, the return of a redeemed cheque … shall not be taken to contravene subsection (1) of this section". I do not think that this is a Committee point. It is more than a Committee point, because what needs to be tackled is not subsection (1) but subsection (3). What we need to say is not that redemption of a cheque is a contravention of subsection (1) because it involves having given credit for the short period between the time when the cheque was written and the time when it was redeemed, but that it is wrong because that cheque must, under the existing Act, have to be presented to a bank within 48 hours.

Therefore, I feel that the way to do it is to leave out subsection (3) of the proposed Clause 1 and instead simply add words after the section about the bank to make it clear that redeemed cheques do not have to be paid into the bank.

May I comment for a moment on what the noble Lord, Lord Allen, said about the player who comes in and writes three or four cheques for £10,000 or for £1,000, or whatever it may be. It seems to me that that is not the worry in this case because it is a matter for the casino whether they agree that the cheques should be redeemed or not, and if the cheques have been given and they do not want to redeem them they do not have to. Clearly the Bill is a good one. I feel it may not be correctly drafted, but in any case I support it.

7.54 p.m.

Baroness Ewart-Biggs

My Lords, all speakers in this debate have shown their gratitude to the noble Lord, Lord Harris, for producing this amendment to the Gaming Act. It has produced an interesting debate, as I am sure the Minister will agree—almost as interesting as the telephone bingo debate last night in which he and I shared. There is no doubt that the noble Lord, Lord Allen, with all his authority and experience, as well as the noble and gallant Lord, Lord Harding, gave their support to the Bill. Although the noble Lord, Lord Kilbracken, agreed that there was a flaw in the present law, he suggested another remedy to it, and I shall be interested to hear what the Minister has to say to that.

The noble Lord, Lord Harris, has based his Bill entirely on two of the recommendations made by the Royal Commission chaired by Lord Rothschild. Indeed, he quoted the relevant part. Without wishing in any way to repeat what he said, when I looked up these recommendations made by the Royal Commission it struck me that the most relevant point was that, following the visit of the members of the commission to the casinos, they said: We have found that this aspect of the gaming laws causes more irritation than any other both for casino proprietors and for their own customers". I felt that just those two lines in the recommendations were powerful and gave force to what they then recommended.

However, the noble Lord, Lord Allen, pointed out that he preferred to see this change in the law set in a wider context. This was of great interest. He pointed out that, although this remedied one thing, it introduced another risk when punters offered a whole series of separate cheques. The point struck me with great force that the casino proprietor still was endangered.

The point that he made, reinforced by the noble and gallant Lord, Lord Harding, was that the way out of this was that there should be a detailed record of all the transactions, and that these detailed records should be in writing. Therefore, they would be forthcoming and would be kept so that the authorities, the police and the inspectorate would have full access to them. This was his way of ensuring that the recommendations made by the Royal Commission and contained in Lord Harris's Bill would serve the purpose intended.

If I went on any longer I should simply be repeating what has been said before, and I do not think that that would serve any purpose. Therefore, may I conclude by saying that from my reading of the recommendations, and from listening to what previous speakers with all their authority and experience have said, I would agree with what the noble Lord, Lord Harris, offers to us in his Bill. What he is trying to achieve seems clear and straightforward and entirely logical. Perhaps the only criticism could be that so many years have elapsed between the recommendations being made and the noble Lord, Lord Harris, bringing forward his Bill.

7.59 p.m.

Viscount Davidson

My Lords, the noble Lord, Lord Harris of Greenwich, has explained his Bill to us so capably and so fully that I hope I shall be forgiven for putting the Government's views briefly. I agree with the noble Baroness, Lady Ewart-Biggs, that it has been a most interesting debate, and I also should like to add my congratulations to the noble and gallant Lord, Lord Harding, and thank him for his extremely useful contribution to this debate.

As the noble Lord, Lord Harris, has explained, Section 16 of the Gaming Act 1968 was very tightly drawn. It does not permit a player to redeem his own cheque. This can lead to risks for the casinos who may find that the original cheque is dishonoured, and it causes irritation among players. The Government support the recommendation by the Royal Commission on Gambling which reported in July 1978 that there should be a change in the law in order to allow cheques drawn by players in casinos to be redeemed, subject to necessary safeguards. This had been suggested by both the Gaming Board and the British Casino Association.

The Bill which is now before the House seeks to amend the 1968 Act so that in clubs licensed under the Act a player's cheque may be returned to him for its full value either during or within 30 minutes of the end of the playing session in which it was tendered. In order that records may be kept of these transactions the Bill also makes provision for my right honourable friend to make regulations governing the records to be kept of returned (or "redeemed") cheques. We propose to make regulations along these lines. The details will be worked out with the Gaming Board in consultation with the industry. The Bill will be welcomed by the casino industry and by players. It is a modest measure but a useful one, and the Government support its principle.

I should also like to congratulate the noble Lord, Lord Harris, on the drafting of the Bill, which seems to be very much on the right lines. There will be an opportunity to examine it in greater detail at Committee stage and to correct any minor defects there may be. In conclusion, I should like to reaffirm the Government's support for the principle of the Bill and to wish the noble Lord, Lord Harris of Greenwich, every success with it.

Lord Harris of Greenwich

My Lords, I am much obliged to all who have spoken, not least the noble Viscount. All concerned have supported the central purpose of the Bill, and I have to detain the House for only a few minutes in order to deal with one or two questions which have been asked, primarily by the noble Lord, Lord Allen of Abbeydale, and also by the noble Lord, Lord Kilbracken.

Taking the questions of the noble Lord, Lord Allen, first, he raised the matter of third party cheques, bank drafts and travellers' cheques. As I understand it, a third party cheque can be redeemed like any other that has been properly accepted in fulfilment of the conditions specified by Clause 16(2). Bank drafts and travellers' cheques are regarded as tantamount to cash, and their usage would remain unchanged from present use.

I congratulate the noble Lord, Lord Kilbracken, on being one of the survivors of those who considered this matter some substantial time ago. I shall consider the point he made, as it is extremely interesting. However, I suspect that the approach of the Bill is probably right. There have been substantial discussions in which the Gaming Board has been involved, as has the Home Office, and the Gaming Board has been in touch with the Home Office over a period of time. I repeat that I shall gladly consider the point that he has made, but I suspect that were we now to try to start redrafting the Bill fundamentally it would die pretty swiftly and the next time we discussed it we should be complaining that an even longer period had elapsed between the publication of the Royal Commission's Report and action by Parliament.

I repeat that I am deeply grateful to all who have spoken. I look forward to meeting noble Lords again when this Bill goes into Committee.

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

Baroness Hooper

My Lords, I beg to move that the House do now adjourn during pleasure until ten minutes past eight o'clock.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.4 until 8.10 p.m.]