Gambling Bill

Public Bill Committee, 30 November 2004.

Standing Committee B

Gambling Bill

Roger Gale (Conservative, North Thanet)

Good morning, ladies and gentlemen. Welcome to the first sitting of the new Session. Housekeeping arrangements and the usual rules will apply, but before we resume I wish to point out that the Bill has been reprinted, as amended by our discussions in Committee in the previous Session. Some page and line numbers have been changed, so it might be convenient for hon. Members to avail themselves of copies of the reprint, otherwise there might be a little confusion.Clause 33 Territorial application

Clause 33 - Territorial application

Malcolm Moss (Conservative, North East Cambridgeshire)

The clause relates to the territorial application of remote gambling. At the 11th hour, those involved in offshore remote gambling are saying that there are problems with the clause and that things depend on our definition of equipment. At present, many offshore remote gambling institutions have their remote servers offshore, although they run the business from this country, as a result of which their management teams, offices, administration and banking facilities are here. If the clause catches all the operations—an all-in or all-out situation—the institutions say that they will probably move their whole operation offshore, in which case jobs and facilities will be lost here.

In the uncertain period before the Bill kicks in as an Act, there is a big question mark, especially in relation to the taxation regime, over whether the institutions should come in or stay out. Until the institutions know that, they are not willing to make firm decisions and, to avoid a remote gambling licence kicking in during the intervening period, they might move everything offshore.

We must consider what the Government mean by subsection (4)(a) to (d). Paragraph (d), for example, says:

''to accept payment in respect of gambling''.

Most internet gambling is carried out through banking systems onshore in this country, and the Government seem to be suggesting that everything related to the businesses would trigger the need for a licence. It would be helpful to have on the record what the Government intend by the provision and to know whether they have had discussions with the organisations involved, such as Sporting Bet and

others. We want matters dealt with in a sensible and pragmatic way to ensure that we retain at least some facilities and jobs, whether or not the final decision is to operate onshore or offshore.

I understand that, in other countries, the location of the remote server—the computer—is the key, and not the ancillary activities that may be part of the overall operation. Will the Minister explain the Government's thinking? Have they had discussions about the matter and are they aware of the concerns that have been expressed by that section of the industry? Do they intend to put such matters right in the Bill or leave them to be dealt with under the guidelines of the gambling commission at a later date?

Richard Page (Conservative, South West Hertfordshire)

In view of the fallout of my remarks during a previous sitting, I shall be more circumspect today.

The Minister will remember that one reason why I firmly support the general principle of the Bill is that technology has moved on. Life has become much more exciting and, if we do not have proper gambling legislation to regulate the new technologies, we will not only be in several difficulties in respect of the moral and financial aspects of gambling, but drive the operators and their businesses offshore. So, I support my hon. Friend. This clause should be read in conjunction with clause 84(2).

We must understand that, because of the way in which the technology has developed, the legislation that we produce will almost inevitably always be behind the curve; the technology will be there, and we shall have to try to license and regulate it. Unless we get it right, there is a danger that people will take their business elsewhere. My hon. Friend mentioned the location of banking facilities, and if they are not in one place, there is no reason why the management systems will not follow them.

The mobility of interactive and internet activities is an aspect of internationality that is not, I think, fully understood. Australia is desperately trying to keep out a certain internet betting exchange, but as night follows days, it will not succeed. Those in Australia who want to use such betting exchanges will inevitably achieve their aim in some shape of form. The Australian authorities must simply try to ensure that exchanges are run as well as possible under their control and their regulations, and that they are not located in some other country.

I would be grateful if the Minister fleshed out as far as possible what the clause will mean. My hon. Friend mentioned the regulatory and tax regimes, which must be set at an appropriate level so that companies—obviously, this includes British companies—will be interested in locating their offshore activities in the UK. That would bring with it the advantages that we discussed, such as inward investment, job creation and new revenue for the Treasury. Indeed, I understand that given the way things are going, the Treasury desperately needs more money to fund its programme for the future.

I therefore look forward to the Minister's comments and particularly to his assuring the companies that will be looking at banking regimes and at where to locate their headquarters.

Nick Hawkins (Conservative, Surrey Heath)

I want to add briefly to the comments by my hon. Friends the Members for North-East Cambridgeshire (Mr. Moss) and for South-West Hertfordshire (Mr. Page). My concern is that companies should be able to rely on whatever the Minister says on behalf of Her Majesty's Government about the views of Her Majesty's Treasury. I always suspect—as I did throughout the process that led up to the Bill and to this Committee—that the Treasury is working the Department for Culture, Media and Sport by remote control. We all know that the Treasury is the most powerful Department, whichever party is in power. The Government originally wanted a free-for-all for these casinos because the Treasury's eyes had lit up at the prospect of lots of extra tax, but they were forced into their humiliating retreat part way through this Committee's deliberations.

Although that is history, we still need to be sure that companies will be able to rely on the Minister's words today as an absolutely cast-iron guarantee that the Chancellor will not come along later to change the rules and change the territorial basis on which companies' tax treatment and operations are treated. I therefore make it absolutely clear that what the Minister is about to say must be written in stone, so that the Chancellor, in his pre-Budget statement in a few days' time, or in the next Budget, will not suddenly change the basis of what we are debating today.

Richard Caborn (Labour, Sheffield Central)

I say to the hon. Member for Surrey Heath (Mr. Hawkins) that the standard line of the Treasury, whatever Government are in power, is that tax and other matters are always kept under review. The hon. Gentleman will get that standard answer from any Treasury of any Government.

Clause 33 establishes the territorial scope of clause 30, and draws a distinction between facilities for remote gambling and facilities for non-remote gambling, which is sometimes better known as ''bricks and mortar'' gambling. As far as the latter is concerned, the clause establishes that if every action a person took in providing a facility for gambling were taken outside Great Britain, no offence could be committed. However, if any such thing were done here, the system of regulation set out in the Bill would apply.

The position will be similar on remote gambling. We do not seek to regulate gambling operations that are run wholly offshore, but if any part of the remote gambling equipment were located here, the full system of regulation would apply. We do not want a company to establish some aspects of its operation here, and some abroad, and to succeed in falling between the two regulatory stools.

The clause provides a definition of remote gambling equipment for those purposes. That definition makes it clear that genuine internet cafes, for example, would not need a gambling commission operating licence just because their customers used their terminals to gamble on offshore websites. We would rather that customers who decided to gamble remotely used well regulated British websites, but if they decided to do otherwise, there should be no penalty.

The hon. Member for North-East Cambridgeshire inquired whether we are keeping the issue under review; the answer is yes. We are aware of the issues that he raised and are considering whether further changes are needed. However, we need to make sure that the key gambling equipment is properly regulated.

Malcolm Moss (Conservative, North East Cambridgeshire)

That is very helpful. I am sure that those involved in the industry will be heartened by the Minister's comment that the issue is under review and that changes may be needed in the future. He has mentioned the word ''equipment'' two or three times; what does he mean by equipment? What is the Government's definition of the word in relation to remote gambling? Would such equipment be just a server, or the computer equipment used to register people online or process their payments? That is the key: what does ''equipment'' really stand for?

Richard Caborn (Labour, Sheffield Central)

To complete what I was saying, we are in discussions with the trade associations and, if there are to be changes, we hope to bring them back. Because it is important also to ensure that users are properly paid if they win, and that the customer register is sound and ensures that children are prevented from playing, limiting regulations to one piece of computer equipment may not be good enough.

To be absolutely clear, I shall write to the hon. Gentleman with our exact definition of equipment. That is important, and we shall try to get it on the record in a better form than I have just presented.

Malcolm Moss (Conservative, North East Cambridgeshire)

The Minister's remarks are extremely helpful.

It would be helpful to establish the Government's intention on remote gambling. Is it to encourage as many of those businesses as possible to register onshore in the United Kingdom so that we have some control—albeit immeasurable, because it depends on how many develop over the next few years—and so that such businesses can be regulated? Do the Government intend to encourage many businesses to locate here to encourage jobs, establish resources and regulate as much of the market as possible? In light of that, is it not in the Government's interest to make sure that they find a pragmatic and practical solution to the problems, so that not all equipment used in the business is subject to the provisions and that the key components only—particularly the gaming server—are caught in the net?

Richard Caborn (Labour, Sheffield Central)

As I said, I shall come back with a precise definition of ''equipment''.

As to whether we are trying to encourage people to operate out of the UK, the answer is yes, but not at the price of poor regulation. As I have said on a number of occasions, we are taking what was in the Gaming Act 1968, which gave our industry an integrity second to none, and trying to bring that into a modern setting via the gambling commission.

We want to make sure that people who gamble in the UK know that gambling will be fair and transparent, and that casinos will pay out. We expect people to come for a product that is well regulated, fair and transparent. We hope that we can attract as many people as possible to operate under those conditions in the UK. To a large extent, Budd's review was aimed at achieving that objective, and that is still our aim. We would encourage as many people as possible to adhere to those conditions but, as I say, not at the price of poor regulation. Good regulation will stand the industry in good stead for the future, both nationally and internationally.

Question put and agreed to.

Clause 33 ordered to stand part of the Bill.

Richard Page (Conservative, South West Hertfordshire)

On a point of order, Mr. Gale. I have a slight difficulty, and I suspect that one or two of my colleagues do too. You mentioned that the Bill has been reprinted. We went to the Table just now and collected what we thought was the up-to-date Gambling Bill, but it was that of 18 October. I have just examined amendment No. 21 and, regretfully, it does not tie up with the old Bill. I do not see how we can proceed unless we have the up-to-date Bill. Where do we go from here?

Roger Gale (Conservative, North Thanet)

I am grateful to the hon. Gentleman. I will suspend the Committee for a few minutes to ensure that all Members have the reprinted version of the Bill. Clearly, it is important that what is on the amendment paper matches what hon. Members are working from. The Committee will resume at 9.55 am.

Sitting suspended.

On resuming—

Roger Gale (Conservative, North Thanet)

Before we proceed, I should say that I am advised that there is also a reprint of the explanatory notes, although the variations are so minimal as to make virtually no difference. However, if any hon. Member wants a reprinted version of the explanatory notes, they will be available.Clause 34 Use of premises

Clause 34 - Use of premises

Richard Caborn (Labour, Sheffield Central)

I beg to move amendment No. 21, in clause 34, page 15, line 31, after 'who', insert

'— (a) are acting in the course of a business, or (b) '.

This is a drafting amendment to provide further clarity about the premises excluded from the offence in the clause. Subsection (6) already exempts premises that provide facilities for gambling to persons who are not on the premises. That was intended to cover premises that house remote gambling equipment such as computer servers. There is no need for those premises to be licensed.

The amendment is intended to give further reassurance to businesses that provide opportunities for people to gamble remotely. One example is telephone call centres that accept bets by telephone. Although there are clearly people on the premises providing facilities for gambling, the premises are never used by the public to gamble. The amendment makes it clear that such premises do not need to be licensed either.

Amendment agreed to.

Amendment proposed: No. 154, in clause 34, page 16, line 5, at end add—

'(10) for the purposes of this section ''use'' shall have its normal and natural meaning.'.—[Mr. Moss.]

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss amendment No. 213, in clause 61, page 25, line 38, at end add—

'(6)''use'' in this section shall be given its normal and natural meaning'.

Richard Caborn (Labour, Sheffield Central)

The amendments are unnecessary and would remove a non-existent doubt. When a word is used in a statute, it has its ordinary and natural meaning unless the statute provides otherwise. The Bill does not provide that the word ''use'' in clauses 34 and 61 has some special meaning. It has its normal meaning, so there is no need to make express provision to that effect.

Malcolm Moss (Conservative, North East Cambridgeshire)

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 34, as amended, ordered to stand part of the Bill.

Clause 35 - Power to amend section 34

Malcolm Moss (Conservative, North East Cambridgeshire)

I beg to move amendment No. 155, in clause 35, page 16, line 7, after 'may', insert

', only after consultation with those parties set out in section 22(5) and acting reasonably,'.

This is a simple amendment, designed to constrain the powers of the Secretary of State so that he must act reasonably in relation to consultation with the various parties involved. It is a probing amendment; if the Minister assures me on record that the Secretary of State will act reasonably in all situations, that will help.

Richard Caborn (Labour, Sheffield Central)

I welcome the principle behind the amendment. I firmly agree that consultation is a fundamental part of the law-making process. Indeed, a requirement to consult features throughout the Bill.

As the Committee will know, the clause gives the Secretary of State the power to add or remove particular forms of gambling from the offence of using premises for gambling. In doing so, the clause future-proofs the Bill. It allows the Secretary of State to bring new gambling technologies into the regulatory regime as they emerge, thus providing immediate protection to the public—something that hon. Members agree is not in the 1968 Act.

It is precisely because the purpose of the clause is to allow the Secretary of State to consider any future gambling technologies that a list of specified consultees is not appropriate. That is not to say that consultation is not appropriate—quite the reverse—but we are concerned that a specific list of consultees would not allow the flexibility that is required when dealing with an industry as imaginative and innovatory as gambling.

A list in the Bill will focus attention on particular consultees at the risk of detracting attention from others. For example, the Government are committed to consulting the Treasury, the Financial Services Authority and the spread-betting operators in the application of the clause to spread betting. None of those would appear on the list proposed by the hon. Gentleman. Flexibility is key to the proper application of the clause, and I for one would not like to guess who should appear on the list with regard to gambling technologies that do not yet exist.

I can reassure the hon. Gentleman that the Secretary of State will act well within the context of that explanation, and will act reasonably. I urge him to withdraw the amendment.

Malcolm Moss (Conservative, North East Cambridgeshire)

I am grateful to the Minister for clarifying the issue, and for his assurances that the Secretary of State will act reasonably and that consultation has a definite meaning in this context. It is important that all those involved are consulted, and the Minister makes a valid point that there may be entities and arrangements that do not exist at the moment but may in the future, and to prescribe a list at this juncture would be inflexible. I take that point, and bearing in mind his assurances I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Richard Caborn (Labour, Sheffield Central)

I beg to move amendment No. 22, in clause 35, page 16, line 15, after '10(1)', insert

'subject to any specified exceptions.'.

This amendment seeks to allow for specified exceptions should the Secretary of State make an order extending the use of premises for gambling offences to include using premises to provide facilities for spread betting. As hon. Members will be aware, spread betting is excluded from regulation under the Bill. That is because spread betting is properly regulated under the Financial Services and Markets Act 2000.

However, we are concerned about the effect that future developments in spread betting products may have on the number and types of places where spread

betting is offered to members of the public. That is why a reserved power is written into the Bill to allow the Secretary of State to make it an offence to use premises to offer spread betting to members of the public, should it become necessary for public protection reasons.

The amendment to the reserve power permits the Secretary of State to make exceptions where the premises' offence is applied to spread betting. For example, a bank or other financial institution may, in the future, want to offer their customer a financial product that constitutes spread betting within the meaning of the Bill. There may be very good policy reasons why the bank should be allowed to do so, and therefore should be exempt from regulation under the Bill. The amendment would serve to future-proof the Bill and to ensure that legitimate commercial enterprises are not subject to undue regulation.

Amendment agreed to.

Clause 35, as amended, ordered to stand part of the Bill.

Clauses 36 and 37 ordered to stand part of the Bill.

Clause 38 - Gambling Software

Richard Caborn (Labour, Sheffield Central)

I beg to move amendment No. 157, in clause 38, page 17, line 32, at end add—

'( ) In the application of subsection (3) to Scotland the reference to 51 weeks shall have effect as a reference to six months.'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to take Government amendments Nos. 158, 159, 167 to 170, 292, 160 to 165, 171 to 186 and 166.

Richard Caborn (Labour, Sheffield Central)

The Committee will note that the Bill makes comprehensive provision for Scottish Ministers to exercise powers in place of the Secretary of State for premises in Scotland. With that in mind, it may be helpful if I set out the Government's approach to the role of the Scottish Executive under the Bill, which has been agreed with them.

Gambling is a reserved matter for the UK Government under the Scotland Act 1998, but before devolution the Scottish Administration always played a significant role in the regulation of gambling, and they will continue to do so. Local licensing boards and local authorities operate the licensing of gambling premises in Scotland, and the Scottish Executive set fees and conditions on some gambling licences. Those arrangements have worked well over some years.

The Government propose to standardise their approach. We believe that it is right for the Scottish Executive to take the lead in deciding the secondary legislation and conditions that are appropriate for premises and permits in Scotland. Premises licence fees will remain with local authorities in Scotland, so it seems fair for the Scottish Executive to set fees for their local authorities. In many cases, the Executive wish to align their regime for gambling with their proposals

for a new alcohol licensing regime. That seems entirely reasonable to the Government, and the Bill will enable that to happen.

It also seems fair that the Scottish Executive should take the lead in setting conditions on premises licenses. The impact of gambling premises in a particular locality will be for the local authority to consider. If there is to be a power to set mandatory or standard conditions, it seems more suitable for it to be exercised by the Scottish Executive, because it relates to functions undertaken by local authorities in Scotland. I am sorry that I have strayed a little in my remarks, but I thought that it would be helpful to the Committee if I set out the Government's approach to the issue at the first opportunity.

All the amendments in this group are drafting amendments. A number of the offences created by the Bill—for example, the use of premises offence under clause 34—provide that the maximum period of imprisonment that can be imposed on summary conviction in Scotland is six months. Amendments Nos. 157 to 159 and 166 ensure that the main offences created by the Bill are consistent with that. In England and Wales, section 281(5) of the Criminal Justice Act 2003 increased the maximum sentence for all summary offences triable by magistrates from six months to 51 weeks. In Scotland, the maximum period of imprisonment that can be imposed on summary conviction for virtually all statutory offences is six months, and the Bill aims to achieve consistency with existing Scottish sentencing practice. That approach has been agreed with the Scottish Executive. Criminal justice is devolved to the Scottish Parliament, so it will be up to the Scottish Executive to introduce legislation to increase the maximum period of imprisonment that can be imposed on a summary conviction for statutory offences.

Schedule 6 specifies a number of relevant offences that can be taken into account when considering an application for an operating licence. Amendments Nos. 167 to 170 insert into Scots law offences equivalent to those already included for England and Wales. Amendment No. 292 adds to the schedule:

''An inchoate offence relating to an offence listed elsewhere in this Schedule.''

As a result, if a person is convicted of inciting, assisting or conspiring in an offence listed in schedule 6, that counts as a relevant offence. The Government consider it important for the purpose of preventing gambling being a source of crime and for protecting the public to ensure that the Bill covers persons convicted of all such offences.

Amendment No. 160 refers to clause 148, which specifies responsible bodies for premises licence applications. In England and Wales, the licensing authority is the local authority, and it may want to make representations to a licensing committee considering the details of an application in the exercise of its functions. However, in Scotland a local licensing board is the licensing authority with responsibility for considering applications and taking decisions. The only function that licensing boards have is to consider and determine applications for licences. It would

therefore be nonsense for the licensing board to have power to make a representation to itself, and amendment No. 160 removes that possibility.

Amendments Nos. 161, 165, 171, 173 and 176 to 178 insert powers for Scottish Ministers to set fees for copies of premises licences, gaming machine permits, lottery registration, club gaming permits and prize gaming permits for applications in Scotland. The powers follow the general policy of the Bill that licence fees paid to licence authorities in Scotland should be set by Scottish Ministers. That carries on the practice set under existing legislation. Amendments Nos. 162 and 163 give Scottish Ministers the power to specify the forms of notices in clauses 183 and 186. Amendment No. 164 excludes Scotland from the effects of clause 197. That is necessary because the clause works partly with reference to the local government best value regime south of the border. The Scottish Executive decided that they wish to set central fees for premises licensed in Scotland.

Amendments Nos. 186 and 172 to 175 insert provisions for appeals to Scotland in schedules 9, 10 and 11. Amendment No. 174 excludes Scotland from the effects of paragraph 10 of schedule 10, which provides a procedure for clubs licensed under the Licensing Act 2003 to gain a club gaming licence. The 2003 Act does not apply in Scotland. My officials are working with their colleagues in the Scottish Executive to settle on arrangements for clubs in Scotland, which will be the subject of further amendments. Amendments Nos. 177 and 178 also insert correct terminology for police in Scotland.

Finally, amendments Nos. 179 to 185 insert the correct reference to sequestration—the Scottish equivalent of bankruptcy—in paragraph 14 of schedule 14.

Roger Gale (Conservative, North Thanet)

Before we proceed with the debate, I say to the Committee that hon. Members will have noticed that all the amendments relating to Scottish business have been grouped together. They will be moved formally by the Minister as they arise later in the Bill, so they will not be debated later. Therefore, this is the opportunity for hon. Members to debate any matters relating to gaming in Scotland that they wish to raise, but it is not an opportunity for an Adjournment debate on the merits or otherwise of devolution.

Malcolm Moss (Conservative, North East Cambridgeshire)

I have no wish to debate all the amendments relating to Scotland. I am more than happy for Scotland to get on with it and discuss them in its devolved Government.

I have one question for the Minister: why have we got all these amendments at the eleventh hour? The Bill has been in gestation for months, if not years, and here we are in Committee with all these amendments that refer to Scotland. How did the Minister and his team overlook Scotland in the first place?

Richard Caborn (Labour, Sheffield Central)

I do not think that we overlooked Scotland.

Ann McKechin (Labour, Glasgow Maryhill)

Will my right hon. Friend confirm whether he has had any discussions with his colleagues in the Scottish Executive regarding the application of planning law to casinos? As he will be aware, the Secretary of State has announced that as far as the law applies in England, casinos and bingo halls need a different use class order. I have checked the town and country planning legislation for Scotland: at the moment use class orders for Scotland are very similar, but casinos and bingo clubs are in the same category. Has the Minister had any discussions with his colleagues in the Scottish Executive about whether they propose to make a similar amendment to Scottish planning legislation?

Richard Caborn (Labour, Sheffield Central)

We are working with the Scottish Executive. My hon. Friend will appreciate that detailed discussions are taking place to ensure that we can dovetail the measures and ensure that they operate in the best way. That is why we have tabled the amendments. I do not think that they change the policy. As I said, the amendments are broadly technical and aim to ensure that things work smoothly in Scotland. Planning is a devolved matter, so we had to table the amendments to ensure that the measures dovetail properly with devolved arrangements. As planning is devolved, the decision that we are discussing is one for the Scottish Executive.

Amendment agreed to.

Clause 38, as amended, ordered to stand part of the Bill.

Clause 39 - Cheating

Malcolm Moss (Conservative, North East Cambridgeshire)

I beg to move amendment No. 142, in clause 39, page 17, line 37, at end insert

'or

(c) commits directly or indirectly any act which permits or effects advantage or benefits not intended by the manufacturer or operator of the game.'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss amendment No. 310, in clause 39, page 17, line 41, at end insert

'(2A)A person commits an offence if, without reasonable excuse (the burden of proof of which shall lie upon him), he has with him in a casino any article that is capable of, or is intended for recording, analysing or predicting—

(a) the outcome of a game;

(b) any cards played or to be played in a game;

(c) the probability of the occurrence of an event relating to a game; or

(d) the strategy for playing a game.

(2B) The provisions of subsection (2A) shall not apply to any article which is used for making a handwritten record in respect of a game.'.

Malcolm Moss (Conservative, North East Cambridgeshire)

The clause deals with cheating but it does not define exactly what we mean by that; there is no definition of it in the Bill. Instead, the clause refers to the committing of an offence if one ''cheats at gambling'' or enables or assists another person to do the same. Of course, cheating can take the form of obtaining an advantage in the playing of a game, but it

should also capture those aspects of illegally acquiring moneys from games which are not currently captured, for example, by legislation on theft. For instance, I am informed that the selling of picklocks or other devices that can be used to remove moneys from gaming machines is not currently caught by UK legislation. The amendment seeks to address that defect.

Don Foster (Liberal Democrat, Bath)

As you will see, Mr. Gale, I have also tabled an amendment that deals with cheating.

The Committee will be well aware that the clause provides for a criminal offence of cheating at gambling and repeals the old offence of cheating in section 17 of the Gaming Act 1845. As the hon. Gentleman pointed out, the Bill provides no definition of ''cheating'', but it is assumed, and the explanatory notes tell us, that it

''has its normal, everyday meaning.''

I think that the Committee will be grateful that, for once, the Bill refers to an everyday meaning.

As the Committee will be well aware, however, the Bill is based on the examination by the Government, the Joint Committee and others of what has happened in other countries. The Minister has told us on a number of occasions that lessons have been learned, for example, from what has happened in Australia. The reason for moving the amendment is that one lesson has not been learned from some states in Australia and, indeed, from South Africa, whose legislation includes provision similar to that incorporated in the amendment.

Clause 39 already provides for an offence of cheating. The amendment would make it a criminal offence for a person to have in their possession in a casino a computer, camera or similar device that would enable them to predict the outcome of a game or otherwise obtain an unfair advantage. The Minister may say that such a situation is already covered in the clause, but some states in Australia and South Africa have found it necessary to incorporate that issue relating to cheating as part of their legislation. They have not thought it appropriate to leave it to be dealt with by the type of wording to which the Minister refers. I look forward to what he has to say and I shall listen carefully. If I do not receive an absolute assurance that these issues are covered, I may wish to press the amendment to a vote.

Roger Gale (Conservative, North Thanet)

The hon. Gentleman, if I may gently remind him, referred to moving the amendment. He will appreciate that the amendment is grouped. I am sure that if he wishes to press it to a vote, he will find a way to let the Chairman know.

Nick Hawkins (Conservative, Surrey Heath)

I want to comment briefly on what the hon. Member for Bath (Mr. Foster) has said, because I can certainly understand the importance of his point about a gap that may have been left in the Bill, in the light of experience in Australia and South Africa. I see a certain merit in proposing something along the lines of amendment No. 310, but I am concerned about the precise way in which it has been drafted. It would be unwise, in an amendment to such a Bill, to introduce

the concept of putting the burden of proof on to the defendant. I see that the hon. Gentleman nodding. It is far better to leave issues about the burden of proof to fall as they usually do in the criminal law. If the amendment just said ''without reasonable excuse'' and did not contain the words in brackets about reversing the burden of proof, I would be a great deal happier.

Let me explain what I think is the other weakness in the hon. Gentleman's drafting. We might all regard the recording, analysing or predicting of cards or the outcome of a game as cheating, but I am not so sure whether that applies to analysing the strategy for playing a game. I realise that he is talking about articles taken into a casino, such as computers and so on, but it seems to me that there is a big difference between cheating by way of analysing what cards other players hold and trying in some way to control the outcome of a game, and analysing probabilities and strategies. That might be regarded as something that intelligent people would want to do.

Whether people should be allowed to have technological help is the point that the amendment deals with specifically, but I think that there is a difference between having things that enable someone to look at another player's cards, and things that are purely about probability and strategy. I make that point gently to the hon. Gentleman. My main concern is that we should not try to introduce by way of an amendment to this Bill something as crucially significant to the criminal law as reversing the burden of proof.

I have one further point—about words having their normal and natural meaning. I am not convinced that it is wise in this Bill to leave ''cheating'' undefined. That will lead to a lot of open questions in the courts. It is said that juries are good at deciding whether a person is honest or dishonest, but if the types of cheating that the Government have in mind were to be defined in the Bill, that might be helpful at criminal trials of the kind in which I used to prosecute and defend. I do not entirely agree with the hon. Member for Bath that it is wise to leave words to their normal and natural meaning. That will make it difficult for judges to give directions to juries so that they are clear about what they are supposed to be deciding in any trial based on this legislation, if it stays in its current form.

Richard Caborn (Labour, Sheffield Central)

Picklocks that are supplied for the purpose of stealing are covered in clause 39(1)(b). I am pleased that the hon. Member for North-East Cambridgeshire has raised the matter. The case earlier in the year at the Ritz was among those that highlighted legitimate concerns about the effectiveness of the proposed new offence of cheating. It would be wrong for me to go into that case, but we did think carefully about the use of electronic equipment to narrow the odds in casino games, and whether we needed to strengthen the offence in the Bill. We concluded that the cheating clause covered everything that we would want to stop: a gambler who does anything that unfairly increases his chances of winning is cheating and is therefore covered.

To be more specific about what is cheating and what is not would make the clause too complicated. There is also a danger in trying to draw too rigid a line, as circumstances can vary so much. There is an art to playing many games, and we should not do anything that puts at risk a person who properly tries to use his skills to maximise his chances of winning. A person who goes beyond that, and acts in an underhand or unfair way, will be cheating and will be covered by the offence.

There is an important role in that area for the commission in that it can impose conditions on the operating licence that deal with the detail of regulation—here we differ from Australia in the way in which we deal with particular risks. One objective of licensing is fairness. Therefore, the commission might reasonably prevent licensees from allowing customers to use electronic prediction devices in casinos and on other premises. In matters as detailed and complex as this, I would ask the hon. Member for Bath to leave it to the good sense of the commission to decide when to interfere and when to leave well alone.

Don Foster (Liberal Democrat, Bath)

I am grateful to the Minister, and I am listening to him carefully. Will he acknowledge that there is a significant difference between the gambling commission's using the licensing process to require casinos not to allow people in with cameras, recording devices or whatever, and the casino operators themselves wanting such a prohibition and to be sure that they will not find themselves in difficulties if they impose such a ban or bring charges against an individual, even if the gambling commission has not placed a requirement on them to ban such pieces of equipment?

Richard Caborn (Labour, Sheffield Central)

The case would have to be made that something was unfairly increasing the chances of winning, and could therefore be defined as cheating. We considered the matter in the context of the Ritz case and others, and we believe that the measures in the Bill adequately protect both customers and operators and make it possible to identify cheats. Licensing is part of that protection, but the gambling commission will also have wider powers that will enable it to intervene in cases of cheating. The powers are there, and the definition in the Bill gives the commission scope to deal with present circumstances and any that might occur in future in relation to electronic gadgetry. The Bill is as safe as it can be.

Malcolm Moss (Conservative, North East Cambridgeshire)

I am not sure what the hon. Member for Bath thinks about the Minister's response, but I still have some doubts as to whether the Government are that confident about their definition of cheating. The Minister did not address the issue that I raised about picklocks, which are devices that can be fixed to gaming machines.

Richard Caborn (Labour, Sheffield Central)

The first thing that I said was that picklocks used for the purpose of stealing are covered by clause 39(1)(b), which applies to

''anything for the purpose of enabling or assisting another person to cheat at gambling.''

Malcolm Moss (Conservative, North East Cambridgeshire)

The Minister must forgive me; I was distracted by my hon. Friend the Member for South-West Hertfordshire and missed his comment. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 28, in clause 39, page 18, line 7, leave out subsection (4). —[Mr. Caborn.]

Clause 39, as amended, ordered to stand part of the Bill.

Clause 40 - Chain-gift schemes

Richard Page (Conservative, South West Hertfordshire)

As background, because the then relevant Minister was indisposed, I had to move the Third Reading of the Bill that became the Trading Schemes Act 1996, which included proposals on the chain-gift scheme. I seek clarification on how the clause interrelates with that Act, and on whether legislation already covers any proposed offence. We must leave aside the fact that the drafting that covers the chain-gift scheme seems to be open to abuse. For example, it seems that one could avoid prosecution—under clause 3(a), which refers to section 6—if one were to offer a small gift in return for payment.

Obviously, the avowed intent of the 1996 Act was to deduce a widening of the definition of goods to

''property of any description and a right to, or interest in, property''.

Guidance on that Act on the Department of Trade and Industry website states:

''Goods include the rights to property of any kind. This means that schemes which do little more than circulate money between the members of the scheme are subject to the controls.''

The guidance goes on to say:

''In a legitimate trading scheme, payments are linked essentially to genuine selling of goods or services to end users.''

I assume that the reasoning behind the clause is driven by the various scams that have taken place, such as the ''Women Empowering Women'' scam. The DTI eventually got around to putting out advice that the original ''Women Empowering Women'' scam

''does not appear to contravene current UK legislation on pyramid schemes or multi level marketing because it does not involve any trading of products or services nor any form of company structure or control.''

That seems directly to contravene the paragraph that I have just quoted about the amended definition of goods. May I persuade the Minister simply to compare the clause with the 1996 Act and to conclude whether the proposed offences are already offences under the Act? I am sure that he has the answer at his fingertips,

but in order to speed things up, and as he is a reasonable person, perhaps he will consider the matter and, if appropriate, table some amendments later.

Richard Caborn (Labour, Sheffield Central)

We do not believe that there is any overlap. We would not need the clause if the current laws were adequate. Its purpose is to put it beyond any doubt that the type of pyramid selling that the hon. Gentleman describes is banned. We hope that we will see an end to chain gifting. We gave clear assurances on the Floor of the House about that. The clause is drafted in a way that covers all eventualities. I hear what the hon. Gentleman says, and if we need to reinforce the wording I will return with further amendments. There is no disagreement between us on the end objective, and we believe that we have achieved that, but we will review it in light of what has been said in Committee.

Question put and agreed to.

Clause 40, as amended, ordered to stand part of the Bill.

Clause 41 - Provision of unlawful facilities abroad

Malcolm Moss (Conservative, North East Cambridgeshire)

I beg to move amendment No. 151, in clause 41, page 19, line 3, leave out 'a' and insert

'— (a) the United States of America, and (b) any other'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to consider amendment No. 143,

in clause 41, page 19, line 6, at end add—

'(4) The Secretary of State shall publish and lay before Parliament a statement setting out the criteria by which a country or place will be designated a prohibited territory.'.

Malcolm Moss (Conservative, North East Cambridgeshire)

The clause provides that a person commits an offence if he does anything in Great Britain, including using remote gambling equipment, to enable a person in a prohibited territory to participate in remote gambling. There is currently no restriction regarding the way in which the Secretary of State can use this power or how she can distinguish between different prohibited territories. Given that an order can also prescribe maximum penalties, including possible imprisonment, the means of making such an order should be as transparent as possible. It is important that concessions are not granted to territories that could have the potential to circumvent other aspects of UK policy, particularly in relation to casinos. Amendment Nos. 143 and 151 seek to ensure that a clear policy statement is laid before Parliament and that, at a minimum, a person in the USA is prohibited from participating in remote gambling at this time. Clearly other countries that could result in market distortion could be added in accordance with agreed policy.

Richard Caborn (Labour, Sheffield Central)

I sympathise with the principle behind amendment No. 143. I agree that we must be transparent in our decision making, and that other states must be clear about the framework within which

the British gambling industry operates. However, the amendment risks restricting the Government's flexibility in meeting the demands of the rapidly evolving gambling environment. The criteria for prohibiting a particular territory must be able to evolve as quickly as that environment. The Secretary of State may need to consider matters as diverse as the global market, international agreements and religious and cultural issues. She must be able to move quickly to meet new concerns not set out in the existing criteria. It may not be possible to anticipate every circumstance in which a decision has to be made, so it may not be possible to give an exhaustive description of the criteria.

Amendment No. 151 is less easy to sympathise with. The Government believe in the principles of free trade, and those principles apply equally to a properly regulated gambling industry as to any other. The United States Government have sought to limit their citizens' access to non-US gambling sites. That is a matter for that Government. I see no reason for this Government to legislate on the issue. We have maintained that it is for gambling operators to decide whether they accept customers from countries where particular forms of gambling are prohibited. Some operators have decided not to accept customers from the United States; others continue to do so. This is a commercial decision for operators. I therefore urge the hon. Gentleman to withdraw the amendment.

Malcolm Moss (Conservative, North East Cambridgeshire)

I am grateful to the Minister for his explanation. He rightly pointed out that remote gambling is an offence in the US. However, its jurisdiction would not apply to businesses located in our country which run remote gambling, so why cannot the Bill state that it is an offence to trade with punters from the US?

Richard Caborn (Labour, Sheffield Central)

That has confused me a little, but I think I understand what the hon. Gentleman is saying. It is not an offence. We believe in the free market; it is not us but the US that is restricting it. It is up to operators here to decide whether to accept bets from the US; that is a commercial decision for them.

We have a free and well regulated environment, so we do not believe that we need to include that type of restriction in the Bill. We believe in a free market in this area, as we do in any other industry. The US has decided to impose restrictions, and operators here have to make a commercial decision whether to accept bets from US punters.

Malcolm Moss (Conservative, North East Cambridgeshire)

That underlines the difficulty of controlling internet gambling. There are different jurisdictions with different laws on it, and it will be hard to exercise the kinds of control that we would like.

We agree that the Government are going down the right road in encouraging businesses to operate here and be regulated, and that is the true test. In view of the Minister's comments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 41 ordered to stand part of the Bill.

Clause 42 ordered to stand part of the Bill.

Clause 43 - Invitation to gamble

Malcolm Moss (Conservative, North East Cambridgeshire)

I beg to move amendment No. 144, in clause 43, page 19, line 16, after 'he', insert 'intentionally'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following amendments: No. 306, in clause 43, page 19, line 16, leave out first 'or'.

No. 307, in clause 43, page 19, line 16, after 'permits', insert 'or enables'.

No. 308, in clause 43, page 19, line 17, after 'gamble', insert

'or colludes with a person conducting such activities'.

No. 145, in clause 43, page 19, line 37, leave out 'with a view to' and insert 'for the purpose of'.

No. 146, in clause 44, page 20, line 22, after 'he', insert 'intentionally'.

Malcolm Moss (Conservative, North East Cambridgeshire)

Amendment No. 144, and the consequential amendment No. 146 to clause 44, seek to strengthen the Bill's wording. The offence in clause 43 seems to be an absolute offence except to the extent that it is limited in subsection (3), which refers to ''intentionally'' bringing to the attention of a child information regarding gambling.

We want to provide an offence that protects those innocent members of the gambling industry who have no intention of inviting a child or young person to gamble. There should be a defence where the inviter uses due care or was unaware, and was not reckless about whether the information had gone to a child or young person. The meaning of ''intentionally'' could be explained further in the code of practice, if necessary.

Amendment No. 145 would make the wording more specific and clear. The clause leaves open to interpretation the phrase ''with a view to''. That could mean allowing for the possibility of, or even specifically encouraging. The amendment's purpose is to avoid any unnecessary ambiguity by specifying that the purpose of bringing information to the attention of a child or young person must have been to encourage them to gamble.

Liam Byrne (Labour, Birmingham, Hodge Hill)

I shall speak only briefly because my amendments Nos. 306 to 308 are simply probing amendments, and I am as anxious as everyone else to speed the Bill out of the Committee stage as it is well drafted and has been well scrutinised.

I hate to be the first to point out that there are now only 24 shopping days until Christmas. 3G phones may well be one of the most popular products put under the Christmas tree this year. Given the success with which my right hon. Friend the Chancellor of the Exchequer auctioned off 3G licences a few years ago, it is not unreasonable to expect the mobile industry to seek to recover some of its costs, and to make a profit in the not-too-distant future. It is almost certain that online gambling will be one of the most important services that the industry will seek to offer.

This summer, Ladbrokes and 3G offered the first gambling products over a mobile phone platform, offering 38 different ways to make or lose a bit of money. That concerns us because it is already clear how powerful online gambling has become: if one types the words ''online gambling'' into an internet search engine, one gets some 4.3 million pages, and clicking on a few of those links results in every possible enticement and very little support. The support seems to extend only to psychic casino gambling hotlines and online horoscopes. When we consider the child protection measures, the concerns really grow.

The hon. Member for Bath pointed out on Second Reading a survey by NCH earlier this year which showed that only seven out of 37 online gambling systems stopped children under the age of 16 registering. Indeed, children as young as 11 were able to register with online gambling services. The advent of 3G phones puts those risks into every playground and every classroom. Mobile online gambling is itself going to be extremely powerful: analysts project that it will be worth some £4 billion by 2006. When we consider that one in 20 children aged 12 to 15 is already estimated to have a problem with gambling, we must ensure that there is adequate protection against such risks in the Bill.

It is no surprise that 73 per cent. of parents are already concerned about 3G phones; they are right to be concerned about the services that their children will be able to access. These are simple probing amendments designed to check that the mobile phone industry will play its part in protecting children against the risks of online gambling. Amendment No. 303 suggests that the definition of the offence be extended so that those who enable children to gamble online or who collude with an online advertiser are committing an offence. Today, 3G phone operators operate their services in a walled garden; the amendments are designed to ensure that those walls are sufficiently strong to prevent the advent of a casino in every cloakroom.

Nick Hawkins (Conservative, Surrey Heath)

I congratulate the hon. Gentleman on the good sense of what he has just said: a lot of parents would be horrified if they had heard it. I hope that it will be widely reported because most parents buying 3G phones for their children may be completely unaware that they provide a way into online gambling. Parents should be aware of that. I was going to raise a

slightly different point, but having heard the hon. Gentleman, I wanted to refer with approval to what he said.

I very much agree with the amendment No. 144, to which I added my name. There should be some requirement of intention to ensure that those who legitimately operate businesses such as seaside arcades will not be unfairly persecuted by prosecuting authorities or police. Many members of the British Amusement and Catering Trades Association have operated their arcades responsibly for many years, with their tough codes of practice, but if the clause is not amended, they would be caught by the Bill without doing anything that we would consider wrong. There should be some sort of defence that means that an arcade proprietor will be guilty of an offence only if they have been intentional or reckless in encouraging children. I am always worried when legislation introduces or modifies offences in such a way that they are left sufficiently open-ended that those who operate businesses legitimately can inadvertently be caught.

The amendment is important because I do not want the Bill to lead to a raft of prosecutions of people who are legitimately operating businesses exactly as they have done for years, and who are doing nothing to encourage children to gamble. They are not being reckless about that at all. Unless we build in some protection, there is a great danger of such prosecutions.

Richard Caborn (Labour, Sheffield Central)

I thank the hon. Member for North-East Cambridgeshire for tabling the amendments; they allow me to put on the record what we are all trying to achieve in the Bill. The amendment would give more protection to operators. However difficult it is for operators to keep children away from their services, particularly on the internet, we should not lessen the burden on them.

Amendments Nos. 144 and 146 would require a court to prove that the defendant intended to invite a child to gamble or enter their premises. That would be a difficult test, because operators might not have been sufficiently observant or careful in their age checks. If that were so, they would not have intended to let children gamble; they just would not have done anything to stop it. That is too risky.

Let me give an example. Of a group of teenagers hanging around outside a betting office, some may be 18 years old and others may be 16 or 17. If they enter the premises and use a slot machine, the staff should feel that they have a duty to check their ages. We should not offer an operator a defence of unintentional invitation. Of course, the police will have discretion not to prosecute someone who has been caught out once, or on a few occasions.

The provisions proposed by amendments Nos. 306 to 308 are already covered in the clause. Although there is no specific reference to collusion or enabling in the clause, I assure my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Byrne) that such activities would be caught by the words ''invites,

causes or permits''. Liability as an accessory applies to all offences unless they are expressly excluded by statute, which is not the case here.

Amendment No. 145 focuses on advertising and tries to strengthen the defences for operators, but it would not give any better protection. The hon. Member for North-East Cambridgeshire seeks to changes the wording in relation to adverts that find their way to children. However, if we made that change, it would not alter the fact that the operator has to be seen to be ''encouraging'' the child or young person to gamble. That is the test. The key point is whether a poster on the underground, for example, encourages children to gamble, with pictures of cartoon characters and the like. The test would operate no less stringently if the hon. Gentleman's amendment were accepted.

A gambling operator commits the offence, but if the platform knows what is going on and colludes, it too is committing an offence. That crossed my mind when we were talking about youngsters with mobile phones. Therefore, if the operator and the platform knowingly put out such an advert, they would both be committing an offence.

Nick Hawkins (Conservative, Surrey Heath)

I am still not happy with the response that the Minister gave to my hon. Friend the Member for North-East Cambridgeshire and to me. He is saying that there will be an all-embracing, blanket offence, but that it will be left to the police to turn a blind eye if they think that the arcade operator is not actively encouraging children to enter the premises.

I am concerned because subsection (1) says that the offence is committed if a person

''permits a child or young person to gamble''.

That is no defence and it is no requirement of intention, or even recklessness, as my hon. Friend said. That is not good law. It is wrong for Parliament to introduce a law that says, ''This is all-embracing, but we'll leave it to the police to turn a blind eye if they wish.'' That is not the kind of thing that we parliamentarians ought to be doing. A defence ought to be built in. I am very unhappy about the Minister's response.

Richard Caborn (Labour, Sheffield Central)

If one accepted the hon. Gentleman's argument, we would have a narrow offence, and then we would run the risk of not protecting some children. The balance that we have struck will catch the offences. Again, we will be working through the gambling commission. There will also be conditions of licensing and other measures. My explanation was about the actions of the police.

The hon. Gentleman is saying that we should narrow down the offence, but if we do that, we could well allow some offences to get through. The Bill gives adequate protection to children and puts the onus on the operator, which is where it should lie. That is what the House asked for, and the type of protection that we said we would give; that is one of the main parts of the Bill.

Malcolm Moss (Conservative, North East Cambridgeshire)

I am still a little puzzled. I am following the line of argument of my hon. Friend the Member for Surrey Heath. Subsection (3) says:

''In subsection (1) a reference to inviting a child or young person to gamble includes, in particular, a reference to intentionally—

(a) sending to a child . . . any document . . .

(b) bringing to the attention of a child or young person information''.

The word ''intentionally'' is in the Bill; we simply sought to place the same word in subsection (1), so that it would read: ''A person commits an offence if he intentionally invites, causes or permits a child or young person to gamble.'' I am at a loss to understand why ''intentionally'' in subsection (1) would be any weaker or less acceptable than it is in subsection (3). I would like the Minister to say why ''intentionally'' is so wrong in subsection (1), but fine in subsection (3).

Richard Caborn (Labour, Sheffield Central)

If one takes the totality of clause 43, one sees that it gives widening powers to ensure that we protect young people and children. Specifically, ''intentionally'' is in subsection (3) because one can send an advert to a whole host of people, but there is a need to separate out those adverts sent to children. I go back to the point that I was making to the hon. Member for Surrey Heath: the argument has been made that we should narrow down the provision, but we say that we should not. We believe that the provision is proportionate for what is required to catch those offences relating to young people.

Mr. Moss rose—

Richard Caborn (Labour, Sheffield Central)

That was a very good explanation, was it not?

Malcolm Moss (Conservative, North East Cambridgeshire)

If the Minister thinks that, he is not based in reality. I am not convinced by the argument, and we will press amendment No. 144 to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 6, Noes 11.

Richard Caborn (Labour, Sheffield Central)

I beg to move amendment No. 226, in clause 43, page 19, line 19, leave out 'and' and insert 'or'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to consider the following: Government amendments Nos. 227, 229 to 234 and 238.

Government new clause 6—Non-commercial betting.

Richard Caborn (Labour, Sheffield Central)

I was just wondering whether we could get the clock to work. It says a quarter to 12, and I keep thinking that we have gone 15 or 20 minutes over our time; it is a bit disconcerting.

In the draft Bill of November 2003, private and non-commercial gaming and private and non-commercial betting were specifically defined. The terminology has evolved, and, instead, we now have the terms ''private betting'' and ''private gaming'', which are expressly defined in schedule 12, and ''non-commercial gaming'', which is defined in clause 280. Hence the need for drafting amendments Nos. 226, 227 and 229 to 234, which update the relevant terminology in clauses 43, 45, 47 and 48 so that it refers to private and non-commercial gaming and betting.

The definition of private betting in schedule 12 does not cover all types of non-commercial betting. New clause 6 will further clarify the term ''non-commercial betting'', as used in part 4, to ensure that an offence is not committed where neither party to a bet is acting in the course of a business. Government amendment No. 238 will add the term ''non-commercial betting'' to the list of general definitions in the Bill.

Amendment agreed to.

Amendment made: No 227, in clause 43, page 19, line 20, leave out 'and' and insert 'or'.—[Mr. Caborn.]

Clause 43, as amended, ordered to stand part of the Bill.

Clause 44 - Invitation to enter premises

Malcolm Moss (Conservative, North East Cambridgeshire)

I beg to move amendment No. 297, in clause 44, page 20, line 27, leave out subsection (2).

Roger Gale (Conservative, North Thanet)

With this it will be convenient to consider the following: Government amendment No. 228.

Amendment No. 298, in clause 44, page 20, line 32, leave out subsection (3).

Government amendments Nos. 235 and 236.

Malcolm Moss (Conservative, North East Cambridgeshire)

Clause 44 centres quite rightly on the importance of protecting children from invitations to enter premises. Under the Bill, most premises are prohibited from giving access to children, and the only exception is in clause 44(2). Amendments Nos. 297 and 298 are probing amendments, which deal with regional casinos and suggest removing subsections (2) and (3).

In light of the Bill or of guidance to the gambling commission, a proportion of the floor area in large regional casinos will be set aside for non-gaming activities. In fact, as things stand, the largest proportion will be devoted to such activities, and we are very much in favour of that. However, casinos, of themselves, are not family entertainment centres, and even those areas in which gambling does not take place

might, depending on the design of a particular regional casino, retain a gambling focus. Do we want to create the impression that the sort of hard gambling that can be found in certain casinos is an everyday social activity?

Why will the Government protect children from the gambling environment in a large casino, which will also have non-gambling areas, but apparently allow them to witness gambling on an even grander scale elsewhere? That includes category A machines, which will not be in large and small casinos but only in regional casinos. Why will we allow children to see such activity there from the sidelines? Do we want children to associate casinos and gambling with glamour?

These probing amendments are designed to elicit an assurance that the Government are clear in their own mind about how they will erect Chinese walls between the casino activity in big regional casinos and the other leisure activities that are part of the operation, whether those activities involve theatres, bar areas, swimming pools, ice rinks or whatever. You name it—all sorts of combinations have been proposed. If the Government are serious about protecting children, it is important that, either in the Bill or in an assurance from the Government in the guidance, proper barriers should be in place between the gaming area and the other leisure activities. We would like the Minister to clarify what those barriers will be, but certainly we would not be in favour of children being able to see through in any way to a gaming area or to be in cool-out areas, where people go to rest and think about their losses before going back in.

Richard Page (Conservative, South West Hertfordshire)

They are called ''chill-out areas''.

Malcolm Moss (Conservative, North East Cambridgeshire)

I thought that ''cool'' was the word, but ''chill-out'' is fine. Presumably people sit in such areas feeling depressed about their losses before deciding to go back in and lose even more money. We want the Government to inform the Committee of how importantly they view the protection of children, particularly in respect of regional casinos.

Richard Page (Conservative, South West Hertfordshire)

I support my hon. Friend. He is obviously suffering as a result of some sort of age gap at the moment, but I agree with everything that he said. The clause is well drafted as far as it goes. It is right that families should be encouraged to take part in certain activities. I think of race courses, where families can go to watch horses racing and to experience all the excitement of that, and the situation is the same with greyhounds. However, although youngsters will be able to go to a resort casino and take part in activities in non-gaming areas, it would be completely wrong for them to be able to see into gaming areas. All of us can remember going to a casino. People see the machines and the flashing lights. I think that that would have an enormous attraction for youngsters, who would want to wander among them or to be gaming. We should not encourage them in that in any way.

I endorse what my hon. Friend said. There should not just be a barrier that youngsters cannot cross; it must prevent them from seeing what is going on in gaming areas. I hope that that will be reflected in the appropriate drafting of the licences, when they are granted, for casinos to be constructed.

Richard Caborn (Labour, Sheffield Central)

Amendments Nos. 297 and 298 would prevent children from entering non-gaming areas of regional casinos. The Government and the Joint Committee considered that carefully, and the Committee recommended that children should not be allowed into non-gambling areas of small and large casinos. It thought that such areas would be too small to offer a suitable range of non-gambling facilities and ensure that a suitable distance was maintained from the gambling area. The hon. Member for North-East Cambridgeshire raised that question.

Bob Russell (Liberal Democrat, Colchester)

I do not mean to be awkward, but will the Minister explain his references to the ban on children applying in small casinos operating as casinos and the 24 hours when they are not operating as casinos?

Richard Caborn (Labour, Sheffield Central)

As I understand it, the ban on children will apply. The licence will be granted with the condition to exclude children from the areas in question in large and small casinos per se. That is my understanding, although I will seek guidance and let the hon. Gentleman know if the situation is different.

Richard Page (Conservative, South West Hertfordshire)

I endorse what the Minister said. The Joint Committee made the powerful point that it did not believe that children should be permitted into the non-gambling areas of small and large casinos because they would be too small. All Committee members agreed on that. The Committee also mentioned appropriate barriers and there being a suitable distance between the gambling and non-gambling areas of a regional and leisure destination casino. It is the definitions of what we all understand by barriers that we interested in finding out about.

Richard Caborn (Labour, Sheffield Central)

If the hon. Gentleman had let me complete my explanation, I would, I hope, have covered that adequately.

As I was saying, the Committee recommended that children should not be allowed in non-gambling areas of small and large casinos, as such areas would be too small to offer a suitable range of non-gambling facilities and to ensure that a suitable distance was maintained from the gambling area. The Government accepted that recommendation. However, the Joint Committee endorsed our view that children should be permitted into non-gambling areas of regional casinos, as it agreed that it would be possible to ensure a suitable distance from the gambling area and to put effective barriers in place. We believe that the gambling commission will want to give guidance to licensing authorities on that important point and about best practice in separating gambling from non-gambling areas.

Bob Russell (Liberal Democrat, Colchester)

Is there currently a restriction on children using the non-casino part of smaller casinos?

Richard Caborn (Labour, Sheffield Central)

The answer, I think, is yes—there are nods all round, so the answer is yes.

The Government will also want to ensure careful control over the placing and nature of advertisements in non-gambling areas. We will do that using conditions on premises licences and will consider international examples. The non-gambling areas of regional casinos are likely to be large—perhaps even larger than the gaming area—including restaurants, theatres and other leisure activities.

Don Foster (Liberal Democrat, Bath)

May I be clear about what the Minister is saying? Is he saying that if a regional casino had a bank of category D machines in its overall complex, they would have to be within the defined area, meaning that a child or young person could not gamble at all in such a casino?

Richard Caborn (Labour, Sheffield Central)

It hangs on the definition of gambling. The definition does not cover category D machines—they are defined differently. [Interruption.] In fact, category D machines must be in the gambling area as well, so I must admit that what I said was wrong. I will have to have a word with my officials later.

The point about effective barriers is the concern. As long as they are effective and in place, we see no reason why children should not be allowed in the non-gambling areas with their parents. I therefore ask the Committee to reject those amendments.

Government amendments Nos. 228 and 235 are designed to make clear when the offence in clauses 44 and 52 does not apply in regional casinos. Amendment No. 236 to clause 79 ensures consistency of language with clauses 44 and 52.

The offences in clauses 44 and 52 do not apply where children or young persons enter the non-gambling area of regional casinos. That is clearly the intent of the existing wording, but that current wording could be misconstrued if the facilities provided in the non-gambling area of a regional casino were specified in the regional casino premises licence. In those circumstances the part of the casino where there were non-gambling facilities could also be said to be

''being used in reliance of the casino premises licence''.

The revised wording is designed to ensure that there is no doubt that the offences do not apply where children or young persons enter the non-gambling area of regional casinos or are employed in the non-gambling area of a regional casino.

Malcolm Moss (Conservative, North East Cambridgeshire)

I am grateful to the Minister for clarifying certain issues. I am not quite sure about category D machines. A casino might be separate from a leisure activity but there could be a family entertainment centre in the leisure part. If there were, it presumably could contain category D machines.

Don Foster (Liberal Democrat, Bath)

Between us, the hon. Gentleman and I are pushing the Minister for greater clarity. I suspect that a large number of organisations that are contemplating whether to come to this country to open regional casinos will be fascinated. I hope that the hon. Gentleman will press the Minister to find out whether it would be possible to have a regional casino next to a family entertainment centre, which would be allowed

to have category D machines. Would that be part of the same complex? Many people would be interested to hear the Minister's answer.

Mr. Caborn rose—

The Chairman: Order.

Malcolm Moss (Conservative, North East Cambridgeshire)

That was an intervention, but the hon. Gentleman put the question so well that I will let the words carry over to the Minister and ask him to reply.

Richard Caborn (Labour, Sheffield Central)

I am grateful as that gave me time to get the brief.

I am sure that inward investors in America are not waiting to see whether they will have to invest in category D machines. It will not hang on that. The answer to the question is no. A different premises licence would be required for category D machines.

Mr. Moss rose—

Mr. Caborn: I know what the next question will be.

Don Foster (Liberal Democrat, Bath)

I think he can work it out.

Malcolm Moss (Conservative, North East Cambridgeshire)

We have all got there. If a premises licence was applied for and granted there would be no reason why a family entertainment centre should not be part of a regional casino development. That would mean that the children could play their category Ds in the family entertainment centre while the parents went to the casino to play the category As. Why does the Minister not simply admit that that is feasible?

Richard Caborn (Labour, Sheffield Central)

They are separate areas, and all casinos are covered by one licence.

Malcolm Moss (Conservative, North East Cambridgeshire)

That is an interesting point. That is a delaying tactic if ever I saw one. A regional casino licence covers not just the casino part but the whole of the enterprise.

Nick Hawkins (Conservative, Surrey Heath)

To give my hon. Friend time to think, let me say that it occurs to me that a family entertainment centre that was under completely different ownership could apply under normal planning law for the site next door to a regional casino. I see that there is some agreement to that from the people we are not allowed to mention who are following our proceedings. If that is the case, my hon. Friend the Member for North-East Cambridgeshire, supported by the hon. Member for Bath and my hon. Friend the Member for South-West Hertfordshire, is quite correct. If there were two completely different ownerships, and two completely different planning applications, the parents could leave the children in the family entertainment centre next door while they went to the casino to play the category A machines. If that is the case, there seems to be no logic in what the Minister says the law will be on casinos.

Roger Gale (Conservative, North Thanet)

Order. I remind the hon. Gentleman that interventions should be brief.

Malcolm Moss (Conservative, North East Cambridgeshire)

I am grateful to my hon. Friend for his long and helpful intervention.

Don Foster (Liberal Democrat, Bath)

Does the hon. Gentleman see that if two institutions under separate ownership were established adjacent to each other, it would be perfectly possible for the owners of the regional casino to purchase the family entertainment centre? Will he ask the Minister whether it would then be possible to demolish the wall between the two enterprises? Would that constitute a difficulty for the Minister?

Malcolm Moss (Conservative, North East Cambridgeshire)

I am sure that it would constitute such a difficulty.

Richard Page (Conservative, South West Hertfordshire)

Will my hon. Friend give way?

Malcolm Moss (Conservative, North East Cambridgeshire)

I shall in a moment. I want to get my mind around what was just said. The Government have not thought this through. They do not have a clue what they are on about. They suddenly decide that with a regional casino licence, ipso facto, only category A machines will be involved. No one would invest in the 7,500 sq m of space of a regional casino unless they had 1,250 category A machines. They would not put category D machines in the casino—who is the Minister kidding? The Government have not thought the issue through. As part of the overall leisure complex, there could be a family entertainment centre with category D machines that the children could play. I do not see how the Government can say that they are protecting children from one part of the edifice but not from the other. If there is a regional casino licence for category A machines, why would that not also cover category D machines in another part of the building? I hope that we can get clarification at a later stage.

Richard Page (Conservative, South West Hertfordshire)

I am not here to help the Minister, but I believe that to get the regional licence the operator would have to provide a minimum balance of non-gambling areas large enough to accommodate suitable leisure, sport, arts and cultural facilities. Unless those were provided, the operators would not get the overall licence and would not be able to operate the category A machines that they would regard as necessary to make their enterprise pay. A nice edifice has been created, but I do not think that it has firm foundations. I hope that the Minister will give a reassurance that we are not going to give temptation to youngsters and lead them into gambling at a young age.

Malcolm Moss (Conservative, North East Cambridgeshire)

I am grateful to my hon. Friend, but I was not unaware of the points that he has made. We understand that the leisure complexes will have a casino as part of their structure—something like 1,500 sq m would be put to casino use—and that the balance of the 7,500 sq m would be taken up by hotels, restaurants, ice rinks, facilities for sport and other leisure activities, theatres and so on. We have all seen the models used abroad, particularly in the USA. That is not the problem.

We have stumbled across the question whether it is possible to have a family entertainment centre with category D machines for the children to play within the overall complex. To date, the message from the Minister is that that is probably not possible because a

regional casino licence would allow gaming activity only within the casino part of the complex. I am not sure that the Government really understand the situation. Perhaps we can revisit the issue at a later date for further clarification.

We have had a reasonable debate on this issue—

Don Foster (Liberal Democrat, Bath)

I sense that the hon. Gentleman is about to say that he will, with some assurances, beg to ask leave to withdraw the amendment. I hope that he will not, at least until we have given the Minister an opportunity to faff around and answer the issues. The Minister obviously has a briefing that he is keen to share with us.

Malcolm Moss (Conservative, North East Cambridgeshire)

It is not my prerogative to allow the Minister to continue to faff around. We are pressed for time and we have faffed around enough. However, if the Minister has something to say, I will happily give way.

Roger Gale (Conservative, North Thanet)

The Minister does not appear to have anything to say.

Malcolm Moss (Conservative, North East Cambridgeshire)

Even the Minister has had enough faffing around.

We have had a good debate, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 228, in clause 44, page 20, line 30, leave out

''in reliance on the casino premises licence''

and insert

''for the provision of facilities for gambling''.—[Mr. Caborn.]

Malcolm Moss (Conservative, North East Cambridgeshire)

I beg to move amendment No. 209, in clause 44, page 21, line 5, at end insert

''the premises are a licensed family entertainment centre and''.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss amendment No. 210, in clause 44, page 21, line 6, leave out paragraph (a).

Malcolm Moss (Conservative, North East Cambridgeshire)

These are probing amendments. I am told by those involved in pub and club businesses that subsection (7) might include them. I do not think that that is the intention, and we suggest that in order to clarify matters paragraph (a)—

''the premises are a licensed family entertainment centre''—

should be moved up into the first part of the subsection so that it relates specifically to licensed family entertainment centres and not to pubs and clubs that have category C gaming machines.

Richard Caborn (Labour, Sheffield Central)

I am not absolutely clear about the hon. Gentleman's intention. The amendment does not change the effect of the clause. Perhaps that reassures him. The three paragraphs in subsection (7) explain the circumstances of the offence. All must apply for the offence to be committed. The position will be the same if the amendment is agreed to, and I therefore ask the hon. Gentleman to withdraw it.

Don Foster (Liberal Democrat, Bath)

The amendment relates to family entertainment centres, which brings us back to an issue we were debating a few minutes ago.

I want the Minister to explain some things in a little more detail. I can envisage there being a regional casino that has a range of offerings other than the main gaming part. That part is where the category A machines will be—probably along with category B machines and other things such as the gaming tables—but elsewhere there will be many other offerings. The casino might decide that it wants to put in a family entertainment centre. It would be able to do that in normal circumstances; it would be able to apply for a separate licence as a family entertainment centre within the overall complex. Similarly, I assume that it could apply to put in a pub—Ye Olde Worlde Pub or an Irish pub—as part of the attraction. I think that in the past it would have been able to apply for a separate licence for that facility, which could include category C machines in it.

I am unclear whether the Minister is giving us a categorical answer that it is not possible under the overarching umbrella of the regional casino to apply separately for a pub licence which might have category C machines, or for a family entertainment centre, which could have category D machines. I think the Minister has told us that that is not possible, but it would be helpful if he were to say that very clearly before we move on.

Richard Caborn (Labour, Sheffield Central)

I hope that this will answer the question that has been raised, which was also raised in another debate. The licensee cannot apply for a second licence for the non-gaming area, and the whole area is covered by the regional casino licence. If we then consider children, clause 44(2) states:

''But subsection (1) does not apply where . . . a child or young person is permitted to enter a part of a premises which are being used for a regional casino''

on one licence has been applied for—

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

Standing Committee B

Clause 44 - Invitation to enter premises

Peter Pike (Labour, Burnley)

I remind the Committee that with this we are taking amendment No. 210, in clause 44, page 21, line 6, leave out paragraph (a).

Richard Caborn (Labour, Sheffield Central)

At the end of our morning sitting, I quoted clause 44(2)(b), which states that subsection (1) does not apply where

''that part is not being used in reliance on the casino premises licence when the child or young person is invited or permitted to enter.''

In the light of my explanation, I hope that the hon. Member for North-East Cambridgeshire (Mr. Moss) will withdraw the amendment.

Malcolm Moss (Conservative, North East Cambridgeshire)

Given the Minister's recollection of what he said before we adjourned for lunch, I am more than happy to do so. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 44, as amended, ordered to stand part of the Bill.

Clause 45 - Gambling

Malcolm Moss (Conservative, North East Cambridgeshire)

I beg to move amendment No. 147, in clause 45, page 21, line 27, at end add

''or

(j) participation in any gaming which is excluded by the Secretary of State from the provisions of this Act.''.

The amendment would add another provision to subsection (2). Subsection (1) does not apply to the use of category D gaming machines under subsection (2)(e), a point that has been well received in the industry. The amendment would strengthen that

provision. It is believed that the Secretary of State should have the power to exclude a game that she determines should not be regulated because of its relatively harmless nature. The amendment would give the Secretary of State the opportunity to reinforce category D machines and others deemed harmless to children.

Richard Caborn (Labour, Sheffield Central)

I am grateful to the hon. Gentleman for explaining why he believes that the amendment is necessary. However, we have achieved the right balance in respect of when young people or children should be allowed to gamble. Clause 45 makes it an offence for a 16 to 18-year-old to take part in unlawful gambling. It will not prevent young people from playing the lottery or the football pools or participating in prize gaming. It will ensure that young people are old enough to know what they are doing and to take responsibility for their actions. If 16 to 18-year-olds take part in gambling when they are not allowed to do so, they will be committing an offence.

I appreciate the hon. Gentleman's good intentions to allow latitude for young people to undertake more gambling than the Bill allows when it gives rise to no harm, but I have not yet heard an argument that convinces me that the amendment is warranted. We believe that we have identified the gambling in which it is safe and sensible for young people to participate, and the amendment would not take us any further towards achieving that end. I ask the hon. Gentleman not to push the amendment.

Malcolm Moss (Conservative, North East Cambridgeshire)

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 45, as amended, ordered to stand part of the Bill.

Clause 46 - Entering premises

Don Foster (Liberal Democrat, Bath)

I apologise for detaining the Committee; I know that we want to make progress. This morning, however, we had an interesting debate about the licensing arrangements for regional casinos and what part or parts of a regional casino are covered. The Minister explained clearly that the entirety of a regional casino—all parts of the premises, including the entertainment and shopping areas and any activities taking place under that one roof—are covered by the regional casino licence. Clause 46 refers to offences that would be created by a young person entering such premises in respect of clause 44.

During the lunch break, I had an opportunity to reflect on the answers that the Minister gave earlier. Clause 44 is referred to in clause 46, and I note that clause 44(2) clearly mentions a disapplication when

''a child or young person is permitted to enter a part of premises which are being used for a regional casino, and . . . that part is not being used in reliance on the casino premises licence when the child or young person is invited or permitted to enter.''

The implication—as I read it, using common sense—is that a regional casino can be built so that parts of it do not have to rely on a regional casino licence, contrary to what the Minister told us this morning. I would be grateful for clarification, because the matter has a significant impact on clause 46.

Richard Caborn (Labour, Sheffield Central)

I do not think that I can explain that in any more detail than I did this morning. The regional casino in its totality, including the gambling area, is licensed. The discussion this morning was about whether one could get a sub-licence to operate category D machines.

Don Foster (Liberal Democrat, Bath)

The Minister has just repeated that the entirety of the premises is covered by the casino premises licence, yet clause 44(2)(b) says

''that part is not being used in reliance on the casino premises licence''.

What part of a regional casino could be not reliant on a casino premises licence?

Richard Caborn (Labour, Sheffield Central)

If the hon. Gentleman refers back to amendment No. 228, which we discussed this morning, he will find that it makes it clear that the exclusion of children applies to areas where facilities for gambling are provided. That should clear that up. The explanation on clause 46—I hope that it reassures the hon. Gentleman—is that a young person would commit an offence if he or she entered a casino, betting office, adult gaming centre or adult area of a licensed family entertainment centre. I hope that that is sufficient explanation, and that the clause will stand part of the Bill.

Question put and agreed to.

Clause 46 ordered to stand part of the Bill.

Clause 47 - Provision of facilities for gambling

Clause 48 - Employment to provide facilities for gambling

Malcolm Moss (Conservative, North East Cambridgeshire)

I beg to move amendment No. 148, in clause 48, page 22, line 11, at end add

'or

(f) category D machines only.'.

Peter Pike (Labour, Burnley)

With this we may consider the following: Amendment No. 8, in clause 56, page 24, line 4, at end insert

''with intent to deprave or corrupt that child or young person.''.

Amendment No. 9, in clause 56, page 24, line 4, at end insert

'', provided that no offence of this kind may in any event be committed by a parent of the child or young person or by anyone in the role in loco parentis to any child or young person.''.

Clause 56 stand part.

New clause 10—Use of Category D gaming machines by children and young persons—

''(1) A person commits an offence if he invites, causes or allows a child or young person to use a Category D gaming machine. (2) A young person commits an offence if he gambles on a Category D gaming machine. (3) An exception is made to subsections (1) and (2) where— (a) the value of the prize falls within the limits for Category D gaming machines as defined by regulations under section 220, and (b) the nature of the prize is non-monetary or non-redeemable for prizes.''.

Malcolm Moss (Conservative, North East Cambridgeshire)

Amendment No. 148 simply adds an extra paragraph to subsection (2). Clause 45 deals with offences of young people gambling, and it disapplies the use of category D gaming machines. Clause 48 deals with offences of the employment of young people to provide facilities for gambling, and a reference to ''category D machines only'' in subsection (2) would make it clear that there is no offence in the provision of facilities in connection with category D machines. That would make it consistent with the earlier clause, which allows children to gamble on category D machines. Our amendment would make it clear that there is not an offence where a child or young person is employed and there are category D machines.

We have the opportunity to discuss whether clause 56 should stand part of the Bill. I tabled an amendment to delete the entire clause, but it was not accepted.

Peter Pike (Labour, Burnley)

Order. Amendments that delete clauses are never accepted because that question is always put in the stand part debate. We are debating whether clause 56 should stand part of the Bill.

Malcolm Moss (Conservative, North East Cambridgeshire)

Thank you, Mr. Pike.

The issue on category D machines is very simple. The Government propose to remove them from a whole swathe of premises. I am told that there are currently permits for 6,000 premises such as cafes and fish and chip shops. Although the Government will remove category D machines from them, it will still allow them in motorway service stations. It is difficult to understand why that is the case.

The argument is about supervision, but there is as little supervision in motorway service stations as in the local cafe or fish and chip shop. The Government should explain why they have seen fit to go down that road, given that there does not seem to be much evidence to support the idea that category D machines are in any way damaging to young people. Recently, the Secretary of State wrote a letter to the hon. Member for somewhere.

Don Foster (Liberal Democrat, Bath)

Cannock Chase.

Malcolm Moss (Conservative, North East Cambridgeshire)

Thank you. The letter was to the hon. Member for Cannock Chase (Tony Wright). That letter stated:

''The Government is committed to taking an evidence-based approach to all gambling issues. As you know, low-value gaming machines have been available in amusement arcades for many years, and there has never been any compelling evidence that it is harmful (either immediately or in later life) for children to be able to play low-value gaming machines''.

We understand that the Department for Culture, Media and Sport will publish a review by independent academics that supports the view that there is no evidence of harm. If there is no such evidence, why is a ban warranted in the locations that I have mentioned?

After a thorough analysis of 170 submissions and 17 oral evidence sessions, the Joint Committee found that there was no evidence of a causal link between category D machines and problem gambling. There is a lack of clarity and consistency on the Government's part. They are allowing the machines to continue in family entertainment centres, but they are proposing some changes in the value of both the cash and non-cash prizes.

One key area relates to difference. At the moment, a non-cash prize can be up to the value of £8 and a person can use a crane machine to pick up a cuddly toy that is worth about that sum. In future, though, that will be banned; the maximum value of such a cuddly toy will be reduced to £5. I ask a simple question: do children know the value of the toy that they are trying to grab with the crane? I suspect not. They are drawn to the toy and its attractiveness—be it a teddy bear or something else.

The reasoning behind dropping the figure from £8 to £5 is lost on the industry and, I suspect, most of the Committee. Again, the Minister must explain to the Committee why the difference of £3 in the value of an article—be it a cuddly toy or something else—will make all the difference between producing a whole generation of problem gamblers who are hooked on this sort of thing at an early age and the status quo. Both the Secretary of State and the Department seem to indicate that they do not have an issue with that in terms of problem gambling.

Clause 56 allows the Secretary of State, at some future date, to re-examine the issue and, potentially, introduce a ban on category D machines in family entertainment centres. That is the sword that is hanging over the industry, and a clause that gives the Secretary of State immense powers to make future changes that will decimate its businesses is no comfort to it.

Family entertainment centres spend about £100 million a year employing some 8,600 people and they support many more people indirectly in their local economies. They are critical to many of our seaside towns, particularly the smaller ones. They operate on tight margins; the operating profit is about 6.4 per cent. on average. More than 70 per cent. of the 104,000 machines in family entertainment centres are category D. The combination of the reserve power hanging over family entertainment centres and the proposed

reduction in stakes and prizes will have a serious impact on the viability of many of them. The Henley Centre's economic and social impact study of the Gambling Bill, published in February, found that a third of the centres were likely to close.

The adverse impacts would be two-fold. A blight would be put on any significant new long-term investment in family entertainment centres and the proposed reduction in non-cash prizes would degrade their marketability and customer value. The industry believes that there is a double pincer movement to attack their viability and their future. No one will invest and businesses will decrease in value. No one will be able to sell a business at what was the going rate a little while ago because of the uncertainty of clause 56 and the potential for the Secretary of State to make sweeping changes to the availability of category D machines in such centres.

It is important that the Minister explains to the Committee where the consistency lies in the Government's thinking. We know that they are spinning the Bill as a protection Bill: it is to protect children and the vulnerable. As I have pointed out in earlier debates, that is at variance with their opening up the top end of the pyramid, through regional casinos, and allowing something like 20 to 40 mega-casinos each with 1,250 category A machines, exclusive to them. There is potential for more than 50,000 of those new machines, which, in places such as Australia, have been proven to lead to problem gambling. At that end of the scale there will be problems, but to date there is no evidence of problems with category D machines, which are at the children's end of the scale.

It is illogical for the Government to argue that the main thrust of the Bill is about protection when on the one hand those new machines are coming in—and there is no evidence from this country on what will result from that introduction—and on the other the Government are bearing down on businesses that have been around for many years and are an integral part of the entertainment and leisure facilities in our seaside towns. Perversely, there is no evidence of any damage to our young people as a result of their playing machines in family entertainment centres.

Common sense ought to prevail on this issue. The Government have to accept—as they have, at the top end of the pyramid, with regional casinos—that common sense indicates that if there is no problem there is no need to legislate to change things. It would be helpful to the industry, which employs an awful lot of people throughout the country, to have a clear steer from the Government at this point. Let us not wait until the Bill goes to the other place for consideration, or even later, for such things to be sorted out. Let us make it clear to the industry now that the Government recognise their problems; that the uncertainty derives from the wording in the Bill, particularly in clause 56; that that is damaging to the industry; and that today the Minister will make a clear statement that he recognises those concerns and is prepared to do something about them.

Don Foster (Liberal Democrat, Bath)

I have a little difficulty with the lead amendment; it seems somewhat superfluous. Clause 51 already prevents under-18s from performing any functions on premises with category D machines. One has to assume that the hon. Member for North-East Cambridgeshire is using the amendment to probe the Minister and to lead to other discussions as he did, quite correctly, in relation to category D machines.

I put on record my apology to the hon. Gentleman for misleading him because I am reliably informed that I gave him the wrong name of the Member who received the letter from the Secretary of State. It was the hon. Member for Great Yarmouth (Mr. Wright), rather than the hon. Member for Cannock Chase.

We are aware that clause 48 creates an offence of employing children and young persons, with some exceptions, to provide facilities for gambling. Clause 56 gives the Secretary of State powers by order to

''create an offence of inviting, causing or permitting a child or young person below a specified age to use a Category D gaming machine.''

Category D machines will continue to haunt us during the passage of the Bill.

The hon. Member for North-East Cambridgeshire drew our attention to his concerns, which my colleagues and I share, about the Government's proposals to remove category D machines from various premises, including fish and chip shops and taxi cab offices. We know, even from the Government's own regulatory impact assessment, that if that action is taken, it could lead to the loss of some 600 of those premises. All hon. Members may wish to think about how happy they would be to see some of those important facilities lost to their local communities as a result of this measure. If there were clear, convincing evidence that that would protect young people, that might be another matter. I shall return to the issue of evidence in a minute.

The hon. Member for North-East Cambridgeshire rightly mentioned his astonishment—which, again, I share—that the Government are saying that category D machines will be removed from premises such as fish and chip shops and taxi cab offices, but will continue to be used in motorway service stations and bowling alleys. That is slightly odd, bearing it in mind that there would, one suspects, be greater supervision in the first category of premises than in the second. Nevertheless, we will have an opportunity to return to that matter and discuss it in more detail during debates on later clauses to which I have tabled amendments.

Peter Pike (Labour, Burnley)

We will not be getting there today.

Don Foster (Liberal Democrat, Bath)

At the rate we are going, I doubt it very much.

The hon. Member for North-East Cambridgeshire also mentioned the Government's plans to change the prizes and stake money for category D machines. That is surprising and I find little evidence to back up the measures that the Government intend to introduce. It is particularly surprising when we hear that the triennial review, which would have been a more appropriate time to consider the evidence and make

decisions on this matter, is to be postponed for at least several years. Again, we have an opportunity to return to those issues a little later.

I have two concerns about this group of amendments. First, clause 56 is a huge sword of Damocles hanging over many machine operators, family entertainment centres, seaside resorts and the type of facilities provided by organisations such as Butlins. Secondly, I am concerned about the categorisation of category D machines. We need to consider whether there ought to be a sub-category.

Clause 56—the sword of Damocles—is important for many organisations in this country. The Government are right to say that it is vital to protect young children. That is clearly enshrined in the licensing objectives in clause 1. However, where we reserve powers like those in clause 56, we must be certain of the likely impact of exercising them. The sector that I am describing is important: it employs 82,000 people, generates £1.76 billion in tax revenues and owns approximately 1,000 family entertainment centres, 850 adult gaming centres and many businesses that supply, operate, manufacture and distribute gaming machines, and it has already been hard hit by foreign competition. We know, for example, that some of the British gaming machine manufacturers have lost their business to America. There are real concerns in that sector.

The Secretary of State must have powerful arguments to justify why she should hold on to the reserve powers described in clause 56. As the hon. Member for North-East Cambridgeshire rightly said, it is odd that the Secretary of State is retaining powers in respect of category D machines, but does not have similar reserve powers for category A machines. Category D machines are well tried and tested in this country. There is a fairly wide body of research evidence on those machines—although it has produced rather mixed results—whereas category A machines are totally untried and untested in this country, and many Committee members have serious concerns about the impact that they will have on the increased number of people affected by problem gambling.

The Secretary of State's reserve powers would have made much more sense to me if they applied to category A, rather than category D, machines. We already know from that letter to the hon. Member for Great Yarmouth that the Secretary of State is clear that the Government are committed to taking an evidence-based approach to all gambling issues. She went on to say that low-value gaming machines have been available in amusement arcades for many years, and there has never been any compelling evidence that it is harmful, either immediately or in later life, for children to play them.

That said, I accept that we must look carefully at the evidence as to whether there could be any harm from category D machines. Unless that is convincingly demonstrated, I see no reason for the Secretary of State to hold on to the reserve powers. If she does, she will place in serious jeopardy many of the businesses

that I referred to earlier. If they are not certain that they will be allowed to carry on, because the Secretary of State might use the reserve powers at some point, they will have difficulty in asking their banks for money for the additional investment that they wish to make. That will make it extremely difficult for them to continue.

The evidence is mixed. I am sure that all Committee members have looked with considerable interest at the wide range of evidence that was made available to the Joint Committee and at that in the Budd report, and at research including that by Sue Fisher in 1998 and Professor Jim Orford in 2003. Some will even have done as I have, and gone back to the 1987 Home Office research, which suggested that there was ambivalence about the amount of harm that category D machines would do.

The hon. Member for North-East Cambridgeshire said that he was waiting with anticipation for the Government to publish their detailed review of all the research. I am pleased to tell him that they have already done so, and it makes fascinating reading. The hon. Member for West Ham (Mr. Banks), who accuses me of spending my time sitting up reading Coin Slot International night after night, will be delighted to know that last night I found even that not quite as riveting as ''Young People and Gambling in Britain: A systematic and critical review of the research literature relating to gaming machine, lottery and pools coupons practice by children and young people under 18''. I know that he will have read it as well—it is fascinating.

That document tells us that there is a lack of substantial data on the prevalence of gambling and problem gambling among the under-18s in the United Kingdom. It goes on to say that it is not possible to give reliable prevalence figures on problem gambling in childhood, but that studies with the most rigorous design, using large national random samples and recent coverage, find the lowest rates. Some, it says, believe that the younger the onset of play, the more serious gambling problems are likely to become, although there is insufficient evidence to make definitive judgments about that hypothesis. It suggests that a detailed longitudinal study is required.

The evidence is mixed, but it is increasingly clear that there are differences between the category D machines from which people get money and those from which they win prizes. The evidence, limited though it is, seems to suggest that those on which people gamble for pocket money are more addictive than the grabbers and the amusements with prizes. If that is the case, and if the Government are most concerned about those that give money, it might be sensible for any sword of Damocles that there is likely to be to hang over the category D machines about which there is the greater concern—those that give cash prizes. In that category, I refer particularly to the machines that emulate the fruit machines that are played by adults—''fruities'', as they are sometimes called. It is on those that there is the greatest evidence. Our amendment in this string gives the Government an opportunity to consider whether they will retain some

form of sword of Damocles, as covered by clause 56. That should relate only to category D machines, about which there is greater concern than the others.

Kevan Jones (Labour, North Durham)

In his extensive research—he has obviously done much night-time reading, to the displeasure of Mrs. Foster—has the hon. Gentleman come across anyone who has actually won a prize on a grabber machine?

Don Foster (Liberal Democrat, Bath)

Forgive me if I stray briefly, Mr. Pike, but the hon. Gentleman was clearly not present a few days ago at the annual general meeting of the British Amusement Catering Trades Association, whe, he will he delighted to know, the Minister, Lord McIntosh, was awarded not one but two such prizes. He received two cuddly teddy bears, one allegedly valued at £5 and a larger one valued at £8.

Richard Page (Conservative, South West Hertfordshire)

Is the hon. Gentleman absolutely certain that they were standard machines that are available at other arcades around the country?

Don Foster (Liberal Democrat, Bath)

The hon. Gentleman tempts me. I merely refer to the fact that the Minister in another place was the recipient of two cuddly teddy bears. I assure hon. Members that in the photographs that appeared in the press he looked delighted to receive them.

Tony Banks (Labour, West Ham)

This is a fascinating subject. May I suggest to the hon. Gentleman that perhaps Mrs. Foster could use a grabber machine? She might get his attention, and he obviously knows a lot about them. Is there a particular number of toys that such machines have to pay out?

Peter Pike (Labour, Burnley)

I am sure Mrs. Foster did very well when she grabbed Mr. Foster.

Don Foster (Liberal Democrat, Bath)

The hon. Gentleman tempts me, and you, Mr. Pike, would have been tempted by a sedentary intervention from my hon. Friend the Member for Colchester (Bob Russell), who wanted to know which clause—spelled ''claws''—related to the teddy bears. I wanted to get that on the record. He tempts me to move away from the detail, but one of the differences between the machines—or at least some of them; not all of them, I entirely accept—is that the grabbers require an element of skill, whereas the ''fruities'' certainly do not. One could argue that there is a difference, but rather than separating category D machines into two types and having a sword of Damocles hanging over at least one type—if that is the only way we can win, that should be the route that we follow—I should prefer it by far if the Committee voted against clause 56 to take away that sword of Damocles, which is hanging over a very large number of businesses in the country. There is little or no evidence to justify the clause.

Peter Pike (Labour, Burnley)

Just before we move on, and so that everyone is absolutely clear, what Mr. Foster said at the end was very helpful. I shall put the question on clause 56 when we reach it, but there will be no debate then; the debate will take place now.

Nick Hawkins (Conservative, Surrey Heath)

That is a particularly helpful introduction, Mr. Pike, because I was among those who put their signature to the amendment seeking to delete clause 56 altogether. I also tabled a group of amendments that were not selected for debate, so it would be wrong of me to talk about them. However, the Committee must consider carefully whether it is appropriate that clause 56 should stay in the Bill. I considered whether we could amend clause 56 to make it more acceptable. In the end—despite the fact that I tabled a couple of amendments to it, which were not selected—I concluded that the best way of dealing with the issues would be to delete clause 56. However, I agree with some of the serious points made by the hon. Member for Bath (Mr. Foster).

I should draw attention to the fact that the hon. Member for West Ham has just made his first contribution to the debate since we heard the sad news—I mean that genuinely—that he will not be in the House after the next election. I pay tribute to the hon. Gentleman, who has always been a good cross-party Friend: he may be retiring, but he has never been shy. His intervention on the hon. Member for Bath is typical of the wit that he has shown throughout his parliamentary career.

Julie Kirkbride (Conservative, Bromsgrove)

I, too, ask the Government to reconsider clause 56 because of the damage that it will do many legitimate businesses that operate in areas of the country in which it is difficult to do so, such as the holiday industry in many of our coastal resorts. Gaming arcades, which attract children, are often the lifeblood of such resorts, and they feel threatened by this legislation.

It is hard to understand why the Government want to be so draconian. I have asked on several occasions—once of the Secretary of State on the Floor of the House—what evidence the Government have to suggest that category D machines have had a deleterious effect on young people, or that people have been encouraged to pursue a life of gambling after being seduced by such machines in their youth. The Government have offered no evidence whatever that such light gaming is dangerous to the nation's youth. I used to enjoy playing seaside machines and was utterly fascinated by drop the tuppenny. Since then, apart from the occasional flutter at the races—even then, the minimum amount that the Tote will allow—I have had no desire to gamble, yet I found playing those machines an enjoyable pastime, especially when it was raining outside.

The Government have given no justification for the measure, nor have they shown a cause and effect between category D gaming machines and any impact on young people. In the absence of clear evidence of such damage, it is hard for the Government to justify this outrageous attack on legitimate businesses that operate across the nation, particularly in seaside resorts.

Does the Minister realise the great distress that his provision—

Richard Caborn (Labour, Sheffield Central)

Oh, come on.

Julie Kirkbride (Conservative, Bromsgrove)

The Minister says, ''Oh, come on''—[Interruption.] Forgive me, I must not have a conversation with the Minister because we must address the Chair.

I, certainly, have been written to by people from several gaming arcades across the country and been asked to plead with the Government to reconsider this matter. Those operating arcades, particularly seaside arcades, are worried that because of a Government whim, or because of a story that has nothing to do with gambling by children, but which may be a result of the Government's legislation in a wider context, problem gaming will become the big issue about which the nation's newspapers, and therefore the Government, are truly exercised and that a whipping boy will then be found to try to allay public concern. The most obvious use of this clause is to provide a whipping boy.

The Minister is more than happy to have casinos proliferate across the country, although we have made some progress on that, but they will undoubtedly cause problem gambling. We are likely to end up in a situation—like that in Australia—in which the cry goes up, ''Britain faces a problem gambling issue; what are we going to do about it?'' I know what we will do about it: the Government will say, ''Ah, well, there is this little provision somewhere in the Gambling Act that we enacted some time ago, which says that we will stop children doing category D gaming altogether. That is what we will do to solve the nation's gambling crisis.'' We can see that happening, because it is symptomatic of the sort of thing that has happened all along, given the Government's desire to show that they are listening and their tendency to do something completely counter-productive and unfair to other people's interests but which gives them a headline in the newspapers of the day to say that they are tackling a problem.

The industry fears that the clause will be used in that way as and when we have a bigger problem with gaming across the nation. That is extremely unfair on legitimate businesses, which currently operate with no problems and have done so over the 25 years or so since I was last in one of their establishments. There is no reason why this Damocletian sword should hang over the heads of those operating them. It will be a disincentive to investment in providing new facilities in seaside areas and is a great worry—whatever the Minister says and however much he likes to mock—for businesses that are working hard in difficult circumstances in seaside resorts across the nation. Creating successful businesses that keep those resorts afloat is difficult anyway, without the Government presenting an additional hazard. I very much hope that, despite the mockery, the Minister will think again.

Peter Pike (Labour, Burnley)

Order. For clarification, let me say to Mr. Hawkins that alongside clause 56 stand part, we are debating amendments Nos. 8 and 9; those amendments have been selected. If he indicates that he wants to vote on them, we can have a vote at the

appropriate stage. All I am saying is that when we reach clause 56, there will not be a further debate. I want to be certain that that is clear.

Nick Hawkins (Conservative, Surrey Heath)

I am grateful for that clarification, Mr. Pike.

Peter Pike (Labour, Burnley)

Thank you.

Richard Page (Conservative, South West Hertfordshire)

I want to speak briefly on clause 56, which states:

''The Secretary of State may by order create an offence of inviting''

and so on. It would be most helpful if there were some guidance on the triggers that might cause the Secretary of State to say that he or she wanted to create an offence of permitting a child to operate a gaming machine. When we took evidence in the scrutiny Committee, Lord McIntosh of Haringey was asked whether he felt that more steps should be taken to educate children about the dangers of gambling. He replied with an unequivocal yes. He felt that there should be guidance in schools and waxed lyrical about the gambler's fallacy. He said that we would be astonished by how many people think that the outcome of the last event has an influence on the outcome of the current or next event and do not understand the independence of events. That is absolutely true. I know that the Minister knows all about it, being intimately connected and knowledgeable on these matters.

I would like to quote the words of one or two witnesses whom we examined on this matter. These are people who have spent time looking into the problems of gambling and how they might be negated. Professor Orford makes a point about the rate for adolescents and cites various surveys that have taken place here and in the United States showing that

''there is a negative correlation between age and problem or pathological gambling. The 16-24 year olds had the highest rate in our group, and if you take that down to the group we did not look at (because they were under 16s), adolescents, all the evidence is that the prevalence rate there is the highest.''

Professor Orford then refers to other evidence, produced by a lady called Susan Fisher, which shows that among 10,000 pupils aged between 12 and 15 in 100 schools across England and Wales, there is a prevalence rate of more than 5 per cent. A number of factors lie behind clause 56.

We all want to protect the children of this nation, but we want to see that the Minister has a clearly defined pathway whereby, should any offence be created of permitting a child or young person below a specified age to operate a category D machine, we should know what it is. It should not happen to be a knee-jerk action by a Secretary of State who wishes to grab a few headlines because the Government may be unpopular in the polls, or something like that. We are now seeing a powerful law and order campaign, for example, and one wonders why we are suddenly having that? We have to be careful that we do not start to introduce measures without a proper route to understanding why and how a measure might be introduced.

Professor Griffiths said that he did

''a study way back in 1990 showing that those kids who started playing slot-machines at the age of nine years of age or below were significantly more likely to have problems than those who started at the age of 12 or above.''

He went on to say:

''The interesting thing and, I suppose, the good news for adolescents is we know that with all, what I would call, risky but rewarding behaviours, the peak use, whether for drugs, alcohol or gambling, does peak in adolescence and young adulthood. You will find a lot of adolescents will mature out and spontaneously remit, and when they take on other things in their life, job, first baby, marriage . . . problem gambling will often disappear.''

We have to be clear that we are not going to introduce any offence that is of a transitory nature and that we will cause no long-term damage.

Bob Russell (Liberal Democrat, Colchester)

We have heard a fair amount about seaside family amusement arcades and so on. However, small cafes, taxi booking offices and so on in inland areas are also affected. If the legislation were to pass, I suggest to the Minister, some companies would go out of business in the fine city of Sheffield because they rely on the amusement machines to make the difference between loss and profit.

I hope that support and protection can be found in the other place for the indigenous low-key family entertainment gambling areas, which are predominately at the seaside. I am sorry that the Minister is yawning, but it has been suggested that for each major casino, the equivalent number of machines—1,250—will wipe out 600 small local businesses, with everything that goes with that. I wonder whether the Minister is complacent about businesses in Sheffield and elsewhere going under because of an ill-thought-out, ill-judged measure.

Don Foster (Liberal Democrat, Bath)

Is my hon. Friend aware that the Government, who pride themselves on consultation, have not consulted with the overarching organisation that represents all those bodies, the British Amusement Catering Trades Association, and have, so far as I am aware, refused to meet its representatives? They have not even met representatives of fish and chip shops.

Bob Russell (Liberal Democrat, Colchester)

I was not aware of that, but I am not really surprised. I think that provisions have been made up as the Bill has gone along. This one is a tiny aspect of a major Bill, but it is of vital importance to small firms and seaside arcades. Small neighbourhood businesses will be affected: fish and chip shops and so on—although I have heard it said that in Sheffield the pie is more of a gamble than the slot machine in the corner of the shop. If the clause goes through, many companies will go out of business. That is a serious matter. I regret the Minister's complacency and the fact that he finds the issue amusing. I suspect that many businesses will not share that view, and I sincerely hope that common sense will prevail in the other place.

Joan Humble (Labour, Blackpool North and Fleetwood)

A week ago, I had an interesting meeting with amusement arcade operators in Fleetwood, who had understandable concerns about the clause. However, they did not share the

apocalyptic vision of the hon. Member for Bromsgrove (Miss Kirkbride). In fact, their concern was less about the clause than about the proliferation of small and large casinos. They thought that their amusement arcades really would close down if there were casinos on every street corner.

The concerns of those operators seemed to predate Second Reading and to arise from the publicity that preceded it. However, operators were reassured by the Secretary of State's statement on Second Reading that the Government were committed to the future of family amusement arcades. I was pleased about that, and I urge my right hon. Friend the Minister to reconfirm that that is the Government's position.

The representations that we have received contain clear advice from people who have real concerns about the impact of gambling on children. On the other hand, we are all aware that gambling provides jobs and adult entertainment. In my opinion, it can also provide fairly harmless pastimes for children. Like everyone else who has taken part in the debate, I have tried to win a teddy bear, but I have never won one. Perhaps I should challenge all the amusement arcades along the Fylde coast, because I feel sorely tempted to try every single one of them to win a teddy.

Nick Hawkins (Conservative, Surrey Heath)

Was the hon. Lady lucky enough to attend Blackpool pleasure beach when she was the distinguished Chairman of the social services committee of Lancashire county council? At the time, I had the honour of representing the constituency that contained the pleasure beach and its amusement arcades. On one occasion, all the machines were rearranged for charity, and that was the only time I succeeded in working one of the grabber machines and winning a soft toy.

Joan Humble (Labour, Blackpool North and Fleetwood)

I am not sure how I can follow that. If I go round saying I will play the machines, but only if they are rearranged so I can win, operators will not be very pleased with me. Nevertheless, there is a serious point, because we need to achieve a balance in the Bill. On the one hand, we have to reassure people with genuine concerns about the impact of the measures on gambling and especially on children. On the other hand, we have to recognise the role that category D machines and amusement arcades play, especially in a seaside economy. The Government probably have the balance right, but I hope that the Minister will reassure my constituents again.

Malcolm Moss (Conservative, North East Cambridgeshire)

The hon. Lady thinks that the Government have got it right. Perhaps she can explain the difference between an £8 cuddly toy and a £5 cuddly toy.

Richard Caborn (Labour, Sheffield Central)

It's £3!

Joan Humble (Labour, Blackpool North and Fleetwood)

I think that my right hon. Friend has answered the hon. Gentleman, although the Government should perhaps look at the matter. If I were ever to win one of these things, would I really notice the difference between a £5 one and an £8 one? Would I want the £8 one more? Actually, I probably

would want the £8 one or one worth even more than that, but that is a dangerous route to go down so I will not.

Malcolm Moss (Conservative, North East Cambridgeshire)

I am grateful to the hon. Lady for agreeing with our proposition that all is not well with family entertainment centres or with the Government's proposals to attack the value of the prize rather than the cash payout. BACTA agrees that a 10p stake with a £5 payout is acceptable, but it takes issue with the Government over the value of the prize being reduced from £8 to £5. When she was talking to her constituents in Fleetwood, did they make that point to her?

Joan Humble (Labour, Blackpool North and Fleetwood)

They did not labour that point. As the hon. Gentleman will recall, when Sir Alan Budd produced his report, we had a long debate on the appropriate value of prizes and stakes for amusement arcades that admit children. The key issue with this clause is not that but the residual power that the Secretary of State has taken on this matter. I seek reassurance that it is residual and that the Secretary of State is including it in the Bill because there may be a moment in the future when she or her successor will want to readdress the issue. I want an assurance that the Government are fully committed to the continuance of family amusement arcades, which have a vital role in our seaside economy.

Don Foster (Liberal Democrat, Bath)

I am delighted that the hon. Lady, like many Opposition Members, is expressing genuine concern for family entertainment centres and similar organisations. Given that she is merely seeking assurances from the Minister that the powers are reserved and will be used only in extreme circumstances—those were not her words but she implied them—does she not accept that even if she got that assurance, the clause would still put a huge blight on family entertainment centres and the firms that operate them? Therefore, there is a continuing danger that closures are likely. Would it not be better to persuade the Minister to delete the entire clause?

Joan Humble (Labour, Blackpool North and Fleetwood)

I am certainly looking forward to hearing the Minister's response, but I repeat that the concern of those who contacted me directly was much more to do with the general proliferation of gaming machines if there was an unlimited number of small and large casinos on every high street. The hon. Gentleman will recall that the Minister, during his announcement on regional casinos, said that the Government were examining ways of restricting small and large casinos. That was a key point raised with me.

When people are concerned about their livelihood, it is difficult to offer them reassurance. That is why I am asking the Minister to do exactly that, and I look forward to his response.

Richard Caborn (Labour, Sheffield Central)

I shall answer one or two of the questions asked before I give the reasoning for the amendments and for clause 56.

We met representatives of BACTA on a number of occasions before and after the policy was announced, and that consultation continues. We have never been approached by representatives of fish and chip shops, but if they want to come along, I am more than willing to meet them—perhaps not all of them.

Don Foster (Liberal Democrat, Bath)

As the Minister is offering the open door of consultation to fish and chip shop operators, will he offer to meet representatives of BACTA?

Richard Caborn (Labour, Sheffield Central)

BACTA representatives know that we have an open door because they have been coming in and out of it for the past two years; there is no problem with BACTA. More importantly, as fish and chip shops were raised and as the open door of consultation is the hallmark of this Government, I invite their representatives to come and see us.

I am sure that Mrs. Foster will be pleased to know that grabber machines are random. That is why they are gaming machines. As for the doomsday scenario painted by the hon. Member for Bromsgrove, I think that her previous profession took over there. I was probably more factual than she was in some of her descriptions of what might happen if the Bill is implemented in full. As Minister for Sport and Tourism, I can assure the Committee that seaside resorts commend the Government for the increase in tourism that is taking place. It is important to encourage more tourism with the greater disposable income that it brings. I was in Whitby a couple of weekends ago and I went into one of these arcades with my grandchildren. A ride on a Bambi machine cost 50p. I put in a few 2p coins which I found quite entertaining.

Tony Banks (Labour, West Ham)

To save me wasting my pension in these arcades when I have time to spare, will my hon. Friend clarify whether grabber machines are random? If so, how is the grabber randomised? That is the important point. We need to know that. If the machines are random they should pay out a certain percentage of soft cuddly toys. I need to know that for my future.

Richard Caborn (Labour, Sheffield Central)

My hon. Friend's future hangs on a grabber. I will try to elicit that information from those who do all the research into grabber machines. I am told that they are programmed to drop.

Tony Banks (Labour, West Ham)

A bit like my balls.

Richard Caborn (Labour, Sheffield Central)

That may have to be left off the record.

Richard Page (Conservative, South West Hertfordshire)

I shall complain if it is.

Richard Caborn (Labour, Sheffield Central)

On the question of £5 or £8 prizes, we are also reducing the maximum prizes for redemption machines. We are bringing the whole lot into line.

Kevan Jones (Labour, North Durham)

My hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble) referred to the skill involved in playing a grabber machine. In fact there is no skill in it at all; it is a completely random process. Should not she stop trying to perfect her technique of grabbing a teddy?

Richard Caborn (Labour, Sheffield Central)

My hon. Friend might have a point. If my hon. Friend the Member for Blackpool, North and Fleetwood wants a teddy, the best thing to do is probably to go to a shop and buy one. I am sure that she will take that sound advice.

I appreciate the sentiment behind amendment No. 148. We agree that children should be able to get jobs in family entertainment centres, race courses and motorway service stations where there will be gaming machines—no doubt lots of children have weekend or summer jobs in such places—and we make that possible in clause 51. However, I do not think it right that children should be involved in the supply, maintenance or operation of any kind of gaming machine. Although they have low prizes, category D machines still offer gambling to children and adults. Employment that is connected to a gaming machine is an adult responsibility, not one for children.

Nick Hawkins (Conservative, Surrey Heath)

If I heard correctly, the Minister just said that the Government make the employment of young people for holiday or other jobs possible in clause 51. That clause simply says that it creates two offences. It does not create any exception to those offences by allowing children to be employed on holiday jobs. One of my sons had a holiday job working for Blackpool Pleasure Beach in my old constituency and I cannot see how the clause, by creating two new offences, would allow that.

Richard Caborn (Labour, Sheffield Central)

Under clause 51 children can be employed in premises with gaming machines as long as they do not interfere with the machines, which is the point that I am explaining. That should clarify the provisions in clauses 50 and 51.

Although low prize category D machines offer gambling to children and adults, employment connected to gaming machines is an adult responsibility, not one for children. Children should be able to man a change desk, for example, in an arcade or family entertainment centre, but if there is a need to interfere with a machine, the under-18 employee should call an adult supervisor.

Malcolm Moss (Conservative, North East Cambridgeshire)

What the Minister is saying is helpful. Reading clause 51(1), I believe that the connecting word ''and'' is so important. There is an offence if the child is employed where there are category A, B, C or D machines and he is required

''in the course of his employment to perform a function in connection with the gaming machine''.

Will the Minister be a little clearer about what performing a function in connection with the machine actually means? Does it mean that the child is not allowed to clean it or take it apart to mend it? Does he have to stay completely clear of it?

Peter Pike (Labour, Burnley)

Order. We are not actually debating clause 51. I call the Minister.

Richard Caborn (Labour, Sheffield Central)

I reiterate what I said earlier: I do not think it right that a child should be involved in the supply, maintenance or operation of any kind of gaming machine. I am sure that that is the situation in

all well run arcades now, and the Bill allows that to continue. I therefore ask the hon. Gentleman to withdraw amendment No. 148.

Amendment No. 8 misunderstands what the Government are seeking to achieve with the reserve powers in clause 56. That clause exists to give the Government the power to act if there is compelling evidence of harm from children's use of category D machines. Some academics, such as Professor Mark Griffiths of Nottingham Trent university, believe that children are harmed by using these low prize machines. We do not think that there is good enough evidence to suggest that we should stop children using them, but we remain cautious, and that is why we have clause 56.

If there is evidence of harm, we can introduce an age limit. We do not plan to use the power now or in the foreseeable future, but we think it right to keep it in reserve for the protection of our children. If the power were used, the amendment would not make sense. Our judgment will be based on evidence of harm from using the machines, not on the intentions of persons making the machines available—of course machine providers do not try to deprave or corrupt children.

Julie Kirkbride (Conservative, Bromsgrove)

I am sorry that the Minister does not recognise the damage that will be done to gaming centres if the Government insist on keeping the clause in the Bill. Will he promise to offer compensation if irrefutable evidence arises and the Government ban arcades from allowing children to use category D machines?

Richard Caborn (Labour, Sheffield Central)

The answer is no, at this stage. If the case is proven, the conditions of how it is proven and how the change is implemented would be open for discussion. I would be foolish to make a statement on that at this stage.

Julie Kirkbride (Conservative, Bromsgrove)

As the provision is provisional, would it not be more appropriate to have fresh legislation in light of compelling evidence in future? We could then assess the situation and treat fairly those businesses who had operated in good faith, investing only to find that the Government were pulling the rug from under their feet.

Richard Caborn (Labour, Sheffield Central)

That is one part of the argument, but there is another part. As I said, some academics and others have concerns. We are the only country in the world that allows its young people to play gaming machines. To date, the evidence, although it is thin and anecdotal in places, shows that it does not harm our young people in the long term. However, some believe that it does, so we believe in acting prudently and being able to use those powers. Let me make it absolutely clear, however, that to trigger the use of the powers, we would need evidence of harm from prevalence studies and other research. We would also take advice from the gambling commission before any change was made, so there would be a wide-ranging debate.

The views of those with genuine concerns are not being taken on board, and we want to make sure that there is further research into the subject. The hon. Member for Bath acknowledges that the research available to date is pretty sketchy. We have come out firmly on the side of the arcade. We believe that the evidence is not there, but it is prudent to put the power to act in the Bill in case the issue comes up.

Amendment No. 9 is about the role of parents. The Government cannot accept it, and I shall give an example of why we believe that it is wrong. For the sake of argument, let us say that an age limit of 12 was in place for the use of category D machines. Before the hon. Member for Bath runs off to Coin Slot International magazine, let me emphasise that this is merely an example, an hypothesis for the sake of argument. If a nine-year-old then played a machine in an arcade with a parent or responsible adult at their side, and the adult did not stop the child from playing the machine, despite seeing the information in the arcade about the age limit, it should be the parent who commits the offence. I do not see how we can let parents off their responsibility in the way that the amendment would.

If I take my teenage son into a betting office, I am straight away committing an offence. Why should the same rule not apply to gaming machines? Of course, there are defences in the Bill for those who might not be expected to know that a child was of a certain age. Clause 60 provides a defence of reasonable belief about a person's age, but that defence is obviously for the operator, not parents. We want parents to play their role in protecting children from harmful gambling, particularly in relation to children's use of the internet, but also in relation to gaming machines. There are responsibilities on parents under the Bill, and we think that that is right. I therefore ask the hon. Member for Surrey Heath (Mr. Hawkins) not to press his amendment.

I am grateful to the hon. Member for Bath for tabling new clause 10 because it allows me the opportunity to explain why the Government think it right for children to continue to be allowed to play on all category D machines. We considered carefully the many representations received from groups of people concerned about children using gaming machines at all. We are unique in the world in allowing young people to play gaming machines of the type of category D. For many years, children have been using low-price gaming machines, which, under the present law, are described as amusement with prizes.

I acknowledge, of course, that children using slot machines at all is unusual in comparison with most other regimes, but to date we have not received a sufficiently compelling body of evidence suggesting that the use of those machines by under-18-year-olds causes significant persistent harm or has any effect on the overall level of problem gambling. The Joint Committee considered the matter very carefully, and it reached exactly the same conclusion. However, we remain vigilant, and we are reflecting that in the Bill. We have looked at the industry and we trust it to

sponsor more research. We will look carefully at the results of the prevalence studies that we intend to sponsor every three years. We need to be careful, but the new clause is an overreaction, and I ask the hon. Member for Bath not to press it.

Don Foster (Liberal Democrat, Bath)

The Minister said that the Government intend to continue with prevalence studies. I have already referred to the document, produced by the Government earlier this month, that summarises all the research evidence. The Minister will be well aware that it makes a series of recommendations about studies that are needed in addition to the existing prevalence study arrangements. Do the Government intend to adopt the variety of recommendations in the document?

Richard Caborn (Labour, Sheffield Central)

Yes, and the role of the gambling commission will be important in that respect, as will the ongoing regulation and government of the industry. There has been an element of scaremongering in the debate this afternoon. However—I underline this, particularly for my hon. Friend the Member for Blackpool, North and Fleetwood—we are saying clearly that we believe that arcades with category D machines are an important part of the economy, particularly in seaside resorts. Indeed, they are a part of our history and culture at the seaside. We want to maintain them as part of that structure.

It is important that we respond to those who have concerns by conducting objective, transparent studies that will contribute to public debate. We are putting in place a regulator—the gambling commission. There will be ongoing regulation of the industry; there will be no sharp shocks in the system. Decisions will be taken after consultation; they will evolve.

I hope that the amendment will be withdrawn. I will not deal with clause 56 until we come to it.

Peter Pike (Labour, Burnley)

Order. There will not be any further debate on clause 56 stand part.

Malcolm Moss (Conservative, North East Cambridgeshire)

No one is disagreeing with some of the fundamentals of the Minister's case. We accept that the Government have to be vigilant, and we have no problem with tri-annual reviews and research; that is in everyone's interests.

However, how can the Secretary of State justify clause 56 on the basis of regulatory completeness? That clause focuses on category D and age limits. There are just under 1,000 family entertainment centres, and 70 per cent. of the machines in them are category D machines. If at some future date a Secretary of State were to alter the age limits of people who could play those machines, that would at a stroke attack the heart of those businesses. I heard what the Minister said; he is very keen that they should be retained in our seaside resorts, such as Blackpool. We all want that. However, he is missing the point. Because the clause deals explicitly with age limits for category D machines, there can be no ambiguity; this is a direct attack on the raison d'etre of a huge number of businesses.

We could go along with the Government. If the case were made that we need an enabling clause to revisit much of this subject at a future date, we would happily agree. There would need to be a review of such matters as the impact of category A machines in casinos and the impact of the fixed-odds betting terminals. Taking a holistic view, we have no argument against periodic reviews and careful research into such areas.

There might be less impact on the businesses we are talking about if there were a clause that covered all the machines—all category A, B, C and D machines—and all the institutions, and which enabled the Secretary of State to revisit the matter in the future. It would also be helpful if a clause set out the compelling evidence and the true independence of the research to be done so that there was no question about the Government's intention.

Julie Kirkbride (Conservative, Bromsgrove)

I agree with my hon. Friend's point about applying all that to all the provisions of the Bill. However, we know how this place works. Is it not likely that, with the Government encouraging problem gambling with its wider casino provisions, they will find a scapegoat by attacking those businesses that allow gambling among young people, saying, ''Well, we are dealing with problem gambling among adults by stopping them doing it as children?'' That is where this Bill is heading, and it will get there in the not-too-distant future.

Malcolm Moss (Conservative, North East Cambridgeshire)

My hon. Friend makes a telling point. She made it in her opening speech, too. The problem is that people can interpret the clause in exactly that way.

Richard Caborn (Labour, Sheffield Central)

The reason for the clause is that category D machines are the only machines to which no age limit applies. All the other categories are covered by an age limit. I am not saying that there is a valid argument for an age limit, but there might be one in future because of people's concerns, so we want to take reserve powers to introduce an age limit. Category D is the only category that does not have an age limit. Those powers do not apply to all machines, because the other categories of machine already have an age limit of 18. Category D machines do not have an age limit and therefore there is a concern. We can examine the evidence.

I want to ensure that the following is on the record. The trigger for using the power in clause 56 is better evidence of harm, available prevalence studies and other research, and advice from the gambling commission. There will be a lot of opportunity for people to put forward their evidence. This afternoon, we have heard a great defence of the archaic owners and not a balanced argument about harm to children. We are trying to put forward a balanced argument that involves transparency, consultation and the evidence base. That is why we have put these measures in the Bill. I am sure that nobody in the Committee would deny that where there is evidence to show that harm is being done, Governments should act.

Bob Russell (LD) rose-

Peter Pike (Labour, Burnley)

Order. The Minister cannot give way.

Malcolm Moss (Conservative, North East Cambridgeshire)

That was a fairly long intervention from him.

We have not said that we are not concerned about harm to children; we have said that there is no evidence about that. The Minister quoted only one individual as producing evidence that there was any harm. Let us get this straight: we are not against measures to prevent harm to children, whether category D machines or any other machines are involved.

Bob Russell (Liberal Democrat, Colchester)

Does the hon. Gentleman agree that it is rare that young children are seen in taxi booking offices late at night and that an age restriction on the use of machines in fish and chip shops would answer the concerns that the Minister has just expressed?

Malcolm Moss (Conservative, North East Cambridgeshire)

The key is supervision. I am not going down that road because I can see that there is an argument in terms of protecting children from harm; in places where there is some supervision we at least have some control over what is going on. That is not a problem. I was trying to suggest to the Minister that we are not arguing against the Government's motives, but we are saying clearly that the clause, because it is specific to age limits and category D machines, strikes at the heart of 960 business in this country, which employ 8,500 people. If the age limit on category Ds is changed, they are wiped out at a stroke, and there should not be that focus in a clause. Anyone buying or selling a business might see that, and it would raise massive uncertainty. For a considerable time, nobody will buy one of those businesses while the clause is still in place.

The Minister and the Government have, at a stroke, devalued the balance sheets of 960 businesses. That is the point that we are trying to get across. There is no problem about having reviews or about research. However, the matter should be couched in a different way—one that does not focus everyone's attention on something simmering under the surface in terms of harm and category D machines. The evidence is not there. By all means reserve the power, but do not focus it in the way that is currently being done.

Don Foster (Liberal Democrat, Bath)

The hon. Gentleman is right to chide the Minister for seeking to suggest that Opposition Committee members are not interested in protection—of course, all Opposition Committee members are, just as Government Committee members are.

The Minister is keen on evidence. Can the hon. Gentleman help me and tell me where there are comparable powers for the Secretary of State to intervene and prevent any further category A machines or to remove category A machines from regional casinos where the evidence demonstrates that they are causing harm? Surely, there ought to be a comparable power.

Malcolm Moss (Conservative, North East Cambridgeshire)

That is the point that I was making. We ought to take a holistic view, and there should be a clause that says that the Government will revisit the issues about all of these machines and their operation in all circumstances.

Julie Kirkbride (Conservative, Bromsgrove)

Is it not a simple fact that the Government will not re-examine the number of category A machines in the big regional casinos because they are the Government's great white hope for all this investment? They have been bedazzled by the idea of all these new casinos. What they seek would not be forthcoming because they would create among the regional casinos the same uncertainty that they are creating for the smaller arcade by this provision.

Malcolm Moss (Conservative, North East Cambridgeshire)

That is a valid point. However, uncertainty has certainly been created in those markets that deal with regional casinos. People thought that they would have two, three, four, 10—somebody told me yesterday that they were in the market for 12 casinos. However, now there will be only eight in total. A massive amount of uncertainty has been created. So be it; the Government have decided to go down that road. We were arguing for a trial—a pilot scheme—to test out the impact of category A machines.

Richard Caborn (Labour, Sheffield Central)

For the sake of completeness and to allow the debate to go ahead with the facts, I should say that the power to change category, in terms of restrictions on machines, comes under clauses 163 and 220.

Malcolm Moss (Conservative, North East Cambridgeshire)

In that case, why do we need clause 56 as well? I rest my case. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 48, as amended, ordered to stand part of the Bill.

Peter Pike (Labour, Burnley)

Order. I want to give a little guidance to the Committee. I recognise that an important issue of principle has been debated, but I have to focus Committee members' minds on the fact that we need to reach clause 218 by 5.30 pm on Thursday this week. The Chair does not have the power to determine on relative merits or importance what issues should be before the Committee. That is for the Committee and Members taking part in the debate. However, I have to have mind to the stage of the proceedings agreed to in the programme order.

As I do not know what time the Committee is to finish this evening, I should say that if we go beyond 5.30 pm I shall take a comfort break at some stage. I give that guidance in the hope that we will not need to take such a break. However, the power of deciding when we have a break is in my hands if I do not know when we are going to finish. I hope that that is helpful to the Committee, and focuses minds.

Clause 49 - Employment for lottery or football pools

Clause 52 - Employment in casino, &c. Amendment made: No. 235, in clause 52, page 23, line 4, leave out—

Clause 53

Clause 56 - Age limit for Category D gaming machines

Clause 59 - Penalty

Clause 61 - Nature of licence

Don Foster (Liberal Democrat, Bath)

I beg to move amendment No. 5, in clause 61, page 25, line 26, leave out third 'A' and insert 'B'.

The amendment is very simple. It is one of a string of amendments and its argument is that, as we have no research evidence to convince us that category A machines will either provide enormous regenerative benefits or lead to a significant increase in gambling problems, we do not bother to introduce them into the country.

In earlier exchanges, particularly our rather abortive discussion about clause 7 and the proliferation of regional casinos, the Minister gave a clear assurance that he would table amendments that would stop a proliferation in the pilot period. I assume that we will receive confirmation before too long, but we understand that there will be a limit of only eight regional casinos. During the discussions, I asked the Minister whether he would put a similar cap on the proportion of category A machines in the regional casinos.

Bearing in mind that the Government have already said that the industry has advised them that only 10 per cent. of category A machines are likely to be in a regional casino out of a maximum of 1,250, it is not unreasonable to ask the Minister to put a cap of 10 per cent. on them. I would prefer none at all, but given that I have not received an assurance about a proposed cap, I ask the Committee to listen to the hon. Member for North-East Cambridgeshire.

Malcolm Moss (Conservative, North East Cambridgeshire)

Perhaps the hon. Gentleman will tell us where the figure of 10 per cent. came from. Was it in the debate on Second Reading? From my contact with those involved, I think that 10 per cent., or whatever, would constitute unlimited pay-outs and the rest would still be category A machines.

Don Foster (Liberal Democrat, Bath)

The hon. Gentleman asked me where that information comes from, but I cannot tell him. However, the Government say that they have it. My conversations with a wide range of organisations lead me to believe that nobody really knows the answer—but the Government do.

My point is simple. These are highly addictive machines that will undoubtedly lead to a significant increase in problem gambling in this country as people

seek to chase their losses. The current chairman of the Gaming Board has referred to such machines as having

''special dangers . . . because of their potentially addictive characteristics.''

The Government discussed the introduction of fixed-odds betting terminals with the bookmakers, which were initially going to be similar, but decided not to do so because of real concerns, and clear limits were placed on them with a maximum pay-out of £500 for a single transaction.

The Government recognised the dangers of unlimited pay-out machines in discussions with the bookmakers, but they do not seem to accept the problems in relation to regional casinos. I should like to see whether the Minister has something interesting to tell us about a planned limit, the rejection of any category A machines, a limit on the maximum pay-outs, or anything like that.

Richard Caborn (Labour, Sheffield Central)

The hon. Gentleman is right about category A machines, which have the high pay-outs. The operators run around 10 per cent. and they determine what the pay-outs will be and whether they want more, or fewer, pay-outs from their machine. They must have the input before the output. If the output were one big prize, they would want a lot more input. That is proven not just for category A machines, but for category B machines—with the £2,000 prize—because the pay-out is limited and therefore there are more pay-outs. That is just part of the marketplace. It is not a Government statistic; it is a reality of operation. However, the hon. Gentleman will probably know that from speaking to some of the operators.

On amendment No. 5, the Bill states that category A machines will be permitted in regional casinos only, which will offer a mixture of gambling and other leisure activities. Of course we need to make sure that category A machines are carefully regulated in the public interest. This category will be subject to controls over things such as speed of play and on-screen information and to stringent standards of supply, maintenance and, for the first time in British law, manufacture. However, not permitting category A machines would undermine the modernising principles of the Bill and deny customer choice. There is a market for machine gambling, subject to the tight controls that we are placing on the machines.

If category A machines could not be offered as part of the British gambling package and experience, it is likely that casino operators—be they British or from overseas—would be far less inclined to make the substantial investment necessary to set up regional casinos. In turn, that would mean that the potentially significant benefits from regeneration, to which several hon. Members referred, and job creation would be lost. I therefore ask the hon. Gentleman to withdraw his amendment.

Don Foster (Liberal Democrat, Bath)

I am staggered by the Minister's response. He tells us that people want customer choice, and therefore we have the unlimited-prize category A machines, but makes no reference at all to his thoughts about what impact that might have on problem gambling. When he talks about customer choice and says that if there were not unlimited-prize machines, investors would be unlikely to come in and generate regional casinos, there is no thought given to the existing British industry, which is desperately concerned about the uneven playing field that is being created.

I am surprised and disappointed. However, Mr. Pike, you will have noted that we have had a relatively brief debate at this stage and no doubt there will be an opportunity to return to this issue at a later stage, because amendments have been tabled. Bearing in mind that I wish to return to this matter, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 61 ordered to stand part of the Bill.

Clauses 62 to 64 ordered to stand part of the Bill.

Clause 65 - Application

Malcolm Moss (Conservative, North East Cambridgeshire)

I beg to move amendment No. 214, in page 27, line 31, after 'activity', insert

'according to criteria set forth in a statement to be issued by the Secretary of State in relation to the criteria for prescribing different conditions to different classes of activity, but procuring that such regulations shall not unfairly discriminate between operators of such different classes of activity or consumers of such activities'.

This is a probing amendment, asking the Minister to make different provisions for applications to authorise different classes of activity. It should be clear that the Bill is not intended to discriminate between different types of activity.

Richard Caborn (Labour, Sheffield Central)

There is a lot of sense in the reasoning behind the amendment. A regulation about procedure that discriminated unfairly would be wrong. However, the amendment is unnecessary because the Secretary of State is already obliged to ensure that any regulation that she makes under the clause is fair to operators and consumers alike. In making regulations under this clause, which concerns the procedure for licensing applications, we must be able to set different procedures for different licences. That is the only way in which we can deliver tailored regulations for different parts of the industry. Nobody would want us to do otherwise. We would take a different approach only where one was warranted. We must always act reasonably and rationally in exercising statutory powers. Any regulation should be subject to proper criticism and would be defective if we departed from those principles. I hope that the hon. Gentleman will accept my assurance that what he fears will not result from regulations made under the clause and that he will withdraw the amendment.

The rest of the debate is in Hansard.