Select Committee on Delegated Powers and Deregulation Twentieth Report



TWENTIETH REPORT

23 JUNE 1999

By the Select Committee appointed to report whether the provisions of any bill inappropriately delegate legislative power, or whether they subject the exercise of legislative power to an inappropriate degree of parliamentary scrutiny; to report on documents laid before Parliament under section 3(3) of the Deregulation and Contracting Out Act 1994 and on draft orders laid under section 1(4) of that Act; and to perform, in respect of such documents and orders, the functions performed in respect of other instruments by the Joint Committee on Statutory Instruments.

PROPOSAL FOR THE DRAFT DEREGULATION (CASINOS) ORDER 1999

INTRODUCTION

1. Casino gaming is at the "hard" end of the gambling spectrum.[1] Until recently there had been very little change to the strict regime to control casinos introduced by the Gaming Act 1968. "Recommendations for relaxations made by the Royal Commission on Gambling in 1978 were never implemented. The first relaxations to the controls were introduced in April 1997, namely the extension of permitted alcohol licensing hours in casinos in England and Wales to 3.00 am in London and 2.00 am elsewhere (Scotland already had extended hours); the reduction of the waiting period before new members may take part in gaming from 48 hours to 24 hours; the acceptance of debit card payments (but not credit cards) in casinos; and the extension of permitted Sunday opening hours in Scotland to bring them into line with the arrangements in England and Wales."[2]

2. The proposed Order[3] deals with three distinct changes to the law regulating casinos:-

    (1) to remove the requirement to apply in person at the casino at least 24 hours before taking part in gaming;

    (2) to allow further limited advertising for casinos; and

    (3) to increase from six to 10 the maximum number of gaming machines allowed in a casino.

3. The proposals cover casinos in England, Wales and Scotland. They do not extend to Northern Ireland which has its own gambling legislation. There are no casinos in Northern Ireland.

BURDEN

4. Each of the proposed changes in the law would reduce a burden on the businesses which run casinos.

5. The Committee is satisfied that the proposal reduces a burden.

CONSULTATION

6. Those consulted are listed at Annex A to the Explanatory Memorandum where there is also a helpful summary of responses. The consultation began on 5 August 1998 and replies were requested by 21 October. Between these dates responses were received on behalf of 37 organisations and individuals and two responses were received subsequently.

7. The Committee considers that the Government's consultation exercise was adequate.

NECESSARY PROTECTION

8. What is "necessary protection" in relation to the regulation of casinos? The Home Office answered this question in a previous consultation document. "Commercial gaming is a cash generating business and as such can be vulnerable to criminal involvement and its participants can be exploited. Also, some people are susceptible to gambling excessively. It is for these reasons that gaming must be carefully regulated. The quality of regulation in Great Britain is widely respected in what is increasingly an international scene, and is an asset to the industry." In February 1996 the Government considered "that the following principles should continue to form the basis for gambling controls:

    (i)  Controls are necessary to prevent the incursion of crime, public disorder and nuisance into gambling and to ensure that it is at all times properly and honestly conducted;

    (ii)  In the interests of consumer protection, punters should get a fair deal and be made fully aware of what they are letting themselves in for when they gamble;

    (iii)  Restrictions are desirable to discourage socially damaging excesses and to protect the vulnerable."

The Government concluded then that "the concept of 'unstimulated demand' - that gambling facilities should be provided only to meet the unstimulated demand for them - should continue to play an important role in the regulation of casinos."[4]

9. It was in the light of these general principles that we considered the present proposals.

10. The first proposed change alters the requirements which must be satisfied before a person can take part in gaming at a casino. At present there are two routes to the gaming tables:-

    (a) as a member who applied for membership at the casino at least 24 hours before he starts gaming; and (b) as a member who has attended the casino on an earlier occasion (at least 24 hours before he starts gaming) and on that visit has given written notice that he intends to take part in the gaming.[5]

11. The purpose of these restrictions is to impose a 24 hour delay between the expressed desire to gamble and the opportunity to do so. In our 9th Report of the 1996-97 session the Committee commented that the delay "is intended to provide would-be gamblers with a period of reflection, to consider the risks; and to stop casinos from attracting passing trade". There would still be a 24 hour "period of reflection" if the change were to be made but the would-be gambler would not have to make a preliminary visit to the casino and could send to it his application for membership (or, as a member, his notice of intention to take part in gaming there.)

12. In written evidence to the Committee GamCare[6] was concerned at the loss of necessary protection to those under 18, and did not consider signing a declaration on the application form that the applicant is over 18 a sufficient safeguard. In order to prevent an increase in the incidence of underage casino gamblers, GamCare suggested that applicants should be asked to state their age on the application form, and then on their first visit all applicants with a stated age close to 18 could be asked for verification.

13. The Committee does not consider the additional safeguards recommended by GamCare necessary. In an earlier report we rehearsed this Committee's belief that the existing law is incoherent and unsatisfactory in its attempts to protect young people[7] from gambling in general and all-cash machines in particular.[8] We do not need to rehearse our arguments again, since they have not changed, but note that the law already prohibits casinos from admitting under-18s. In the Committee's opinion this element of the proposal does not involve any loss of necessary protection.

14. The proposed change in the restrictions on advertising casinos would allow an advertisement of a casino if (a) it "is contained in a publication which is not published wholly or mainly for the purposes of promoting" gaming premises and (b) the advertisement contains no more than the name, logo, address, and phone and fax numbers and "factual written information about the facilities provided on the premises, the ownership of the premises, the persons who may be admitted to the premises and the method by which such person may become eligible to take part in gaming on the premises". This covers a very wide range of advertisements from a three line entry under the heading "casinos" in, for example, Yellow Pages (there is no such heading at present as casino advertising is prohibited) to a large advertisement in a daily paper. However, paragraph 33 of the Explanatory Memorandum states that "the Minister has agreed with the Gaming Board, the British Casino Association, the Advertising Association and the Advertising Standards Association that the Gaming Board should issue a Code of Practice requiring advertisements to be confined to the classified sections of newspapers and advising on such matters as content and size of permitted advertisements". The Committee considers that it is not unreasonable for the Department to contend that no necessary protection will be lost by this part of the proposal.

15. The third change would increase from six to 10 the number of jackpot machines allowed in a casino. Again, the Committee considers that there is no loss of necessary protection here.

16. The Committee considers that necessary protection would be maintained under the proposal.

SALAMI SLICING

17. This is the latest of a series of deregulation proposals affecting casinos. The first led to the increase from two to six of the number of gaming machines allowed in a casino (see the Committee's 13th Report for session 1995-96). The second led to the reduction from 48 hours to 24 hours in the waiting period for casino membership (see the Committee's 9th Report for session 1996-97). In both cases the Committee saw no objection to the proposal. The Committee has also considered a proposal to amend the controls on advertising betting and gaming (15th report 1996-97) but that proposal did not apply to casinos.

18. In the case of each of these earlier deregulation proposals, the Committee took the view that necessary protection would be maintained. We are glad to note that "in its Annual Report for 1997/98 … the Gaming Board reports that it is not aware of any problems or difficulties arising from … [the earlier] changes. It understands that the measures have proved generally helpful to the industry, with the introduction of debit cards[9] being particularly successful."[10]

19. Will this be the last of the series of deregulation proposals affecting casinos? There is every indication from the Government that it will not. Moreover in its response to the Government's latest consultation paper on this subject London Clubs International urged the government to "move quickly to allowing the introduction of at least twenty machines and a proper casino slot machine regime."

20. As Lord Allen of Abbeydale said in his evidence to us "it can obviously be argued that the principle has already been conceded by the decision to increase the number from two to six and now it is just another four. But the Home Office memorandum makes it clear that this is not the end. It is just one more step; and although further moves will be taken with caution, there is a clear prospect of allowing 'very large numbers of machines'." Lord Allen concluded by wondering "if the powers of the 1994 Act[11] are so extensive as to permit the introduction by the back door, as it were, of what would in effect become a new form of hard gaming in a way which is so remote from the plain intentions of the 1968 Act;[12] and whether this might be an occasion for a reminder that there are limits to what can be done in this context by way of deregulation."

21. The Government's August 1998 consultation paper stated that "The Government acknowledges the comments made by the previous Deregulation Committees to the effect that the gambling law is complex and that some previous deregulation orders have increased that complexity. They called for a general overhaul and consolidation of the gambling legislation. General gambling reform would be a large undertaking, involving three main Acts of Parliament - the Betting, Gaming and Lotteries Act 1963, the Gaming Act 1968 and the Lotteries and Amusements Act 1976. The Government recognises the case for such an exercise but is not able to take it forward in the short term, and proposes meanwhile to continue to use the deregulation process to make appropriate, selective changes."[13]

22. One problem in relaxing any sector of the law by "salami slicing" is that it becomes unclear as to when the principles governing the legislation are being fundamentally undermined. In our assessment of the present proposal, we do not think that this point has been reached. But the piecemeal relaxation of the gaming laws by means of the deregulation procedure is clearly unsatisfactory, and, in the strong view of this Committee, the legislation is now due for review.

RECOMMENDATION

23. The Committee is satisfied that the proposal for the Draft Deregulation (Casinos) Order 1999 meets the requirements of the Deregulation and Contracting Out Act 1994 and is appropriate to be made under it, without amendment.[14]


1  Casinos and Bingo Clubs: A Consultation Paper (Home Office, February 1996), para 1.4.1. Back
2  Casino Deregulation Consultation Paper, August 1998, Annex C, paragraph 1. Back
3  The proposal was laid before Parliament on 19 April 1999 in the form of a draft of the Order and an explanatory memorandum from the Home Office. Back
4  Casinos and Bingo Clubs: A Consultation Paper (Home Office, February 1996), paras 1.2.1 and 1.2.2. Back
5  Apparently one company owns a chain of casinos and someone who applies for membership of one obtains membership of all. To use the tables in the first he has to apply there at least 24 hours before he plays and to use another in the chain he has to visit it twice. On the first visit he cannot play but gives written notice of his intention, then, at least 24 hours later, he can take part in the gaming. Back
6  National Association for Gambling Care Educational Resources and Training. Back
7  Ironically, the evidence to the Committee from London Clubs International cited as a reason for supporting the deregulation proposal the fact that that the industry was "a labour intensive business offering employment and training to the young and unskilled". Back
8  13th report 1995-96, HL Paper 45, pp 4-5. Back
9  We have referred to this change in the first paragraph of this report. Back
10  Casino Deregulation Consultation Paper, August 1998, Annex C, paragraph 2. Back
11  The Deregulation and Contracting Out Act 1994. Back
12  The Gaming Act 1968. Back
13  Consultation document, paragraph 1.6. Back
14  This report is also published on the Internet at the House of Lords Select Committee Home Page (http://www.parliament.uk), where further information about the work of the Committee is also available. Back

 
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