Select Committee on Delegated Powers and Regulatory Reform Twenty-Fifth Report


DRAFT REGULATORY REFORM (GAMING MACHINES) ORDER 2003

INTRODUCTION

12.  On 13 March 2003, the Government laid before Parliament a proposal for a draft Regulatory Reform (Gaming Machines) Order 2003, together with a Statement by the Department for Culture, Media and Sport ("the Department"). We reported on the Government's proposal on 7 May 2003.[4] On 17 September, the Government laid a draft order for "second-stage" scrutiny, together with a second Statement ("the second Statement").

13.  The principal purpose of the order is to amend the Gaming Act 1968 ("the 1968 Act") to change the way in which value can be paid into and out of two types of gaming machine, the 'jackpot' machine and the 'higher-value AWP' machine.[5] Under current legislation, only coins may be used to play the 'jackpot' machine (section 31(3) of the 1968 Act) and prizes can only be paid out in coins (section 31(4)). The same is, in effect, true of 'higher-value AWP' machines (sections 34(2), (5B) and (5C)): although the 1968 Act permits payments in to be made in tokens (as well as coins), because prizes can only be paid out in coins, only coins can in practice be used for payments in. The order will allow 'jackpot' machines to accept banknotes and payments by means other than cash (such as smartcards, but not debit or credit cards) (as well as coins), and to give out prizes in banknotes and in non-cash forms (as well as in coins); it will allow 'higher-value AWP' machines to accept payments and to give out prizes in banknotes (as well as in coins). In addition, in respect of both types of machine, the order will make clear that they are not required to accept payment for a single game. It will also allow players of 'jackpot' machines to store winnings for use in further play without the player having to reinsert money into the machine.

AMENDMENTS TO THE DRAFT ORDER

"The £2 cut-off"

14.  In our earlier report, we concluded that the proposal was appropriate to be made under the Regulatory Reform Act 2001 ("the 2001 Act") save in one respect concerning the "necessary protection" afforded by the "£2 cut-off". Under the current legislation, players must play in coin and, since the highest vale coin is £2, a player has to make a fresh decision to commit each new sum of £2 (or less) to play. Under the original proposal, the Department proposed to continue this protection by requiring that machines accepting banknotes and non-cash media should be programmed so that players would have to make a fresh decision to commit each separate tranche of £2 (or less) from their note, card or winnings. The Department proposed that this requirement should be included in Gaming Board guidelines for suppliers of gaming machines. The guidelines are non-statutory and non-binding although observance is taken into account in the decision to issue a certificate of fitness (to sell or supply machines) under section 27 of the 1968 Act. At "first-stage" scrutiny, we took the view that although the Gaming Board should be able effectively to enforce its guidelines, because there would be no Parliamentary scrutiny of the content of the guidelines the "necessary protection" of the £2 cut-off would be provided for more effectively by including it in the order. The Department has accepted this point and the order has been amended accordingly (Articles 2(4) and 2(11)).

Regulatory Reform Committee of the House of Commons

15.  The House of Commons Regulatory Reform Committee also recommended an amendment to the proposal to the effect that the order should stipulate that the 'higher-value AWP' machines may accept only coins and banknotes as payment for play. The Department has accepted this recommendation and the order has been amended accordingly. In addition, the Department has accepted a number of points raised by the Commons Committee concerning the content of the guidelines. Finally, the Commons Committee expressed concern that there should be some research on the effect of the provisions under the order on player behaviour, especially with regard to problem gambling behaviour. The Department has indicated that the effect of the new machines will be monitored through the Gambling Industry Charitable Trust and GamCare.

CONCLUSION

16.  In our first Report on this proposal, we expressed concern about the provision relating to the "£2 cut-off". The amendments which have been made to the proposal satisfy our concern and we conclude that the order is appropriate to be made under the Regulatory Reform Act 2001. We therefore recommend that the order, as it now stands, is in a form satisfactory to be submitted to the House for affirmative resolution.


4   19th Report, HL Paper 103, Session 2002-03. Back

5   AWP means amusement-with-prizes. Back


 
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