Gambling (Licensing and Advertising) Bill

Lord Flight Excerpts

Tuesday 14th January 2014 Grand Committee

[Lord Clement-Jones]

My Lords, under existing regulations, onshore casino operators can and do hold remote licences, which permit them to advertise their online products in their casinos. However, those licences do not allow operators to indicate that the product is available from any internet-linked computer within their casino or advertise their online site on or around a computer with internet access supplied by the operator. In other words, it is currently illegal for a casino to offer a customer access to its own legitimate online business if the customer is inside its bricks-and-mortar business.

Therefore, there is the anomalous situation that a customer is currently able to bring their own internet access device—iPad or smartphone—into a casino and play online, perhaps even on the casino’s own online site, but the operator is not able to offer that facility. It is totally illogical that the most rigorously controlled premises, intended by statute to be at the top of the regulatory pyramid, are not permitted the most up-to-date technological products.

The industry asserts that the opportunity to undertake research and player protection would be lost if the product were not to be available in terrestrial casinos, which are required by law to have the most rigorous control measures. It points out that all casino gaming staff are licensed by the Gambling Commission; that all staff, including all food and beverage and administration personnel, are trained annually in responsible gambling practices; and that effective policies are in place to protect the young and the vulnerable.

A UK terrestrial casino provides the only environment where online play could be monitored, observed and researched. During pre-legislative scrutiny, the Culture Media and Sport Select Committee made a cross-party recommendation to the Government to amend the Bill to allow British bricks-and-mortar casinos to offer their online gaming products within their own premises. The committee said, at paragraph 68:

“We see no reason why online gambling should be illegal in highly-regulated and inspected casinos. We recommend that a clause be added to the Bill to remove this anomaly”.

From the proceedings in the Commons and the responses of the Minister, Helen Grant, it appears that the Government have it in mind to allow this but only by means of secondary legislation. This route seeks to categorise an internet access device as a gaming machine, perhaps a category A machine, if it is offered for use in a casino. That would mean that someone playing in the bar on their own iPad was not playing a gaming machine but someone playing a device offered by the casino was.

If an internet access device is categorised as a gaming machine in these circumstances, it would become subject to machine technical standards regulations. These detailed regulations would overlay conditions as to how the device could be played in the casino that might be entirely different from those applied elsewhere. The outcome could be that a player accessing his or her online account from different devices with different IP addresses—one provided by the operator on the gaming floor in the casino, and their own device—might face different conditions of play. Customers would be able to use their own devices without restriction. This would be confusing for the consumer and unnecessarily bureaucratic, and does not meet either the industry’s aspirations or any measure of common sense.

The Minister in the Commons told both the CMS Committee and the House that she was confident that secondary legislation would give the industry what it wanted. But as can be seen, that is far from the case. By contrast, Amendment 2 clarifies that a remote gambling terminal provided in a casino is not a gaming machine, and provides for the Secretary of State to be able to make regulations setting the maximum number of such terminals which may be made available in a casino. This would allow the UK onshore casino sector to provide its customers with the same online gambling experience as the online sector. The devices would not be one-armed bandits; there would be no means of putting money into them; and a player would simply log on to an existing account or create a new one. That is a simple and transparent solution. The products that the casinos seek to offer through this amendment are not slot machines; the look or feel of British casinos would not fundamentally change.

Before the proposed new clause came into effect, the Government could consult on the desired maximum number of devices and appropriate measures to protect the public. These could include ensuring that players were over 18 years of age and ensuring that players were not “vulnerable” within the meaning of Section 1 of the 2005 Act. Players would benefit from the industry’s commitment to player protection, outlined in the playing safe statement of principles. The area concerned would be supervised by trained and licensed casino staff and be subject to casino surveillance measures. Social responsibility information would be available in accordance with guidelines. The terminals would be under the supervision of trained and licensed staff and covered by casino surveillance. A whole series of conditions could be applied for the operation of these terminals. A full audit trail for all transactions would apply in accordance with AML requirements.

This amendment received considerable support from MPs across party during the passage of the Bill through the Commons. It is clear that these proposals can be realistically achieved only through primary legislation. Seeking to introduce them via secondary legislation would add an unnecessary layer of complexity to the Bill. The amendment would give a clear definition to the changes. I hope that the Government will reconsider their position during the passage of the Bill through this House and introduce or support an amendment in support of this principle. I beg to move.

[Lord Flight (Con)]

My Lords, I support the amendment. I have not added my name to it, but it seems to me straightforward common sense. It is nonsense for it to be legal to play on one’s own personal device in the middle of a casino building but not to play on a device provided by that casino. I know that it is a somewhat shallow example, but you can imagine people coming in, one of whom has got their machine and the other who has not; the two want to play and one cannot. I just do not see the logic of that.

The amendment is before us largely because, when the Bill was passing through the Commons, there was the expectation that government was going to sort out the issue—indeed, that was what the Minister there implied—and to do it via secondary legislation rather than by primary legislation. However, it seems to me that the primary route is much simpler. The problem really arises because the Government still categorise internet terminals as gaming machines. The amendment clarifies that a remote gambling terminal provided in a casino is not a gaming machine, and provides for the Secretary of State to be able to make regulations setting the maximum number of such terminals which may be made available. The industry has added a whole list of what I will call morally correct undertakings in relation to this.

This is a silly anomaly which it is time to sort out. I hope that the Minister will be able to tell us either that the Government are willing to sort it out this way or that they have some better route.

[Lord Stevenson of Balmacara (Lab)]

My Lords, I start at a considerable disadvantage in that, having been nurtured in the far north-west of Scotland and led a very sheltered life, I have never been in a casino, although I have seen them on television or in films, which I suppose equips me to comment on matters as much as I am able to today. The Gambling Act 2005, which, as our founding document, has formed part of a lot of the discussion that we have had today, was very good and well respected for being what it is, but unfortunately technology has moved on and one therefore needs to think again about some of the regulatory arrangements.

I say that because it seemed to me that my good friend the noble Lord who moved the amendment was trying to lay a somewhat philosophical conundrum before us about whether or not, if you were in a place such as a casino but playing online on your own iPad, you would be in some way susceptible to the same sort of regulatory environment as you would be had you been playing on a machine, probably with the same internal workings and connections, supplied by a third party—presumably a casino. When the Minister comes to reply, I wonder whether he can be clear about where he thinks that we have got to in this process. I can think of many bad things we could do in reviewing the Bill, but the one thing we should try to do in this area is not to anticipate where technology might be taking us on this matter. We are at a point where things may change considerably.