1. Following recent reports in the media some of you here today will think that we living in parallel worlds, but you and I know how casinos operate in the real world.   

 

Under the present law, of course, casinos have to operate as members' clubs, so that only members and their guests can enter.  And casinos are not allowed to undertake any meaningful advertising. So unless people have been able to visit a casino on holiday abroad, the chances are that they will have an image of casinos which somehow combines James Bond and Al Capone.
 
2 The reality is of course different. British casinos are highly regulated; and we can have a high degree of confidence that those running them have no links to organised crime. And while a few of the London clubs at the top end of the market cater for an international clientele of high rollers, most of the 130 casinos in Britain form part of the local scene.

3.  I should like to say a little about the overall policy aims and objectives of the Bill; and to try to answer one key question, which is: why are we seeking to change the law regulating casinos rather than leaving things as they are? My speech today will be a bit defensive as I try to address a number of myths about our casino policy

 

 

4. The Bill has its origins in the review of gambling law carried out 3 years ago by an independent committee, chaired by Sir Alan Budd. The Government set up this review for two reasons. First, it was already becoming apparent that the law on gambling was being overtaken by changes in technology. When Parliament passed the present laws on betting and gaming, the internet did not exist. Those laws are not good enough to regulate gambling activities which use modern IT, such as internet gaming or betting exchanges; and not good enough to regulate developments in machine gambling.

 

5.    Second, it seemed to us that some of the restrictions on gambling in the present law were outmoded and out of kilter with current social attitudes. There had been a number of deregulation orders relating to gambling. But Parliament had started to say, very reasonably: look, we cannot really carry on considering deregulation proposals in a piecemeal way - what we need is a coherent overall policy context.

 

6. That was the challenge laid down for Sir Alan Budd and his colleagues. The Budd review was a wholly independent review. The committee took evidence from many sources, here and abroad, reflecting all shades of opinion. The Government did not give it any steer, and indeed did not give evidence on its own account at all.

 

 

7. The outcome was a report which was measured and balanced. The report devoted an introductory chapter to what it called the central dilemma: the dilemma between the desire to provide free choice and the fear that such choice may lead to harm either to an individual or to society more widely. With a view to resolving that dilemma Budd recommended a package of changes. Some of those changes were moves in the direction of allowing greater freedom to gamble, in ways and at times and in places which are not currently allowed. But other changes recommended involved strengthening the system of regulation, and providing better safeguards, especially safeguards for children and vulnerable adults.

 

8. The Government then undertook an extensive public consultation on the Budd report, before announcing its conclusions. We broadly accepted the framework of modern regulation for a modern industry which Budd had proposed. There followed a draft Bill, and thorough scrutiny by a joint Parliamentary Committee, with a parallel public consultation. Both exercises proved very valuable, and the Bill now before Parliament incorporates a number of important new safeguards and protections. We have been determined to put protection at the top of our agenda.

 

9. I have rehearsed this history to underline the following key points. First, this is not some ill-considered or hasty measure. The Bill is based on thorough research and consultation. Commentators in other countries on gambling matters have praised the thoughtful and systematic way in which we in Britain have dealt with a complex area of social policy.

 

 

10. Second, while there may be differences of view about whether the balance of regulation is tilted too far in one direction or another, the overall system of regulation proposed by Budd and reflected in the Bill has been widely endorsed. It provides a coherent but flexible policy framework, which should serve us well.

 

11. Third, we have from the outset had the protection of children and the vulnerable at the forefront. We have made it clear that we shall insist on limiting the supply of gambling where there are significant risks to the public. But it is necessary to strike a balance. There is only one way of ensuring that gambling harms nobody, and that is to ban it completely; and of course even that would not work, because people would then gamble illegally, at greater risk. We therefore have to allow reasonable opportunities for gambling, while doing all – and I emphasize all - we reasonably can to minimise the risks of harm. The Bill encapsulates this regulatory balance by setting out the three objectives of regulation - protecting children and the vulnerable, keeping crime out and ensuring fairness. And that will govern the work of the Gambling Commission, but then charges the Commission to allow gambling to the extent that it is consistent with those objectives

 

12. So the key question about casinos which I promised to answer: why not leave well alone? The answer is that the changes which we propose are designed to remove restrictions which are not necessary to achieve the licensing objectives. We do not, as a Government, take the view that gambling is a disreputable or unworthy activity. We do not think that the law should reflect a particular moral bias about gambling. Casino gambling is no different in this respect from other forms of gambling, even though it needs the highest forms of regulation because it presents the highest forms of risk. We are therefore proposing to proceed very cautiously, and to make sure that the situation remains under control.

 

 

13.  But we also have to bear in mind that casinos are legitimate parts of the leisure and tourism industries. They provide entertainment for customers and jobs for those serving them. Under the present law casinos are restricted in what they can and cannot do. Some restrictions are needed. But the situation at present is like allowing cinemas to show only black and white films if you have a policy of keeping pornography out of cinemas. The means and the ends do not match up. We are in particular proposing to allow certain numbers of Category A slot machines in a limited number of casinos because there are people who want to play them. We know that from around the world. But these machines will be new to Britain, even if not to British people who have played them abroad, and they – like FOBTs -  will be on probation. Rightly so, but the casino market, like every market, has to be able to adapt and develop. We cannot freeze it in time.

 

 Some myths

 

14.  I want now to mention some of the myths that have got around about our proposals for casinos, and put the record straight.

 

 

15.  The Bill provides that any local authority which does not want casinos in its area can pass a resolution not to issue casino licences. That resolution can last for up to three years, but can be renewed. It can be passed whether or not there are already casinos in the area. If there are casinos already, the resolution will have no effect on their ability to carry on trading, but it means that new casinos cannot be set up. A resolution does not have to relate to the Bill's licensing objectives. The local authority can, to quote the Bill, have regard to any principle or matter.

 

 

16. So every local authority will have the right to say no to casino developments. This right is entirely separate from the planning system. Even if a developer already has planning permission for a casino, or does not need planning permission, no casino can operate without a Gambling Bill premises licence, and the effect of a resolution is to make sure that no such licences are issued.

 

17.  In considering the use of this power local authorities will of course have to act within the usual constraints of administrative law. They will have to act rationally. But it is clear that the Bill will ensure that local communities can have their say. There will be a new element of democratic accountability.

 

18. We do not propose to give local authorities guidance about what if any use they make of this power. Some authorities may decide to pass resolutions. Others may take the view that casinos can make a real and positive contribution to the local economy, and add to the local leisure scene. For their part I am sure that casinos will want to demonstrate that they are good corporate citizens, and will recognise that it is in their own long-term commercial interest to maintain high standards of social responsibility.

 

19. I ought to make the point that the power to pass resolutions will not enable local authorities to pick and choose arbitrarily between casino developments. If an authority decides that it does not want casinos in its area, that will be its choice. But it will not be able to pass a resolution that it will allow only a small casino but not a large one, or vice versa. That would be inappropriate interference in a commercial market. If an authority is willing to entertain at least one kind of casino, then it will have to consider applications from any prospective operators on their individual merits, using the criteria set out in the Bill. It will have to consider the suitability of premises by reference to the three overarching licensing objectives, and taking account of guidance to be issued by the Gambling Commission when it is established. Fairness demands no less. And of course local authorities will also have to deal with any planning matters on their merits under planning law and guidance.

 

 

 

20.  As I have already explained, we do not want to see an undue or over-rapid proliferation of casinos. Our proposals  have been carefully designed to avoid this. All casinos will have to pass a minimum size threshold, based on their table gaming area. This threshold will be much higher than Budd originally proposed. They will also have to include an area in which no gambling of any kind at all takes place. Regional casinos will of course have the highest thresholds, and will have to have at least 40 gaming tables available for use. To develop a regional casino will require a very substantial investment: indeed this is why some authorities have made clear their view that regional casinos could play a useful part in the regeneration of their areas

 

21. The location of regional casinos will be subject not just to the requirements in the Bill, but will also – so far as England is concerned – have to take account of the guidance issued by regional planning bodies. This will give regional planning bodies the opportunity to identify areas which are most suitable for these developments, having regard to their overall impact for the region. We would like regional planning bodies to make good progress with preparing that guidance, which will need to reflect consultations with all relevant interests. But it does not yet exist.

 

22. So it is hard to see what basis there is in reality for some of the stories about regional casinos that have been flying around recently. It will ultimately be a matter for the market how many regional casinos open for business, and how they do. I cannot tell you today what that number will be. But it is my understanding that, taking account of the requirements which the Bill, for good regulatory reasons, will lay down for regional casinos, most informed opinion within the industry is that the number will be a lot lower than 96.

 

 

23. And while developers may well have earmarked possible sites, and started to talk to local authorities, regional development agencies and others, the location of regional casinos cannot have been the subject of some kind of stitch-up. Regional planning bodies have yet to prepare their guidance. And local authorities have yet to consider the powers which the Gambling Bill will give them

 

 

24.  Of course I and my officials have had a number of discussions, in the course of preparing the Bill, with casino companies, to make sure that we understand their concerns and aspirations. It would be unthinkable to come forward with a major regulatory Bill without doing so. We have met overseas casino operators who have expressed an interest in the British market. We have met British casino companies. We have met companies involved in the betting, bingo and machines markets. We have met local authorities. We have met unions. We have met faith groups. We have met problem gambling charities. We have met academics. We have met groups with an interest in the welfare of children. All this is as it should be.

 

25. We have given foreign casino companies no preferential treatment or inside track. We have made it clear that, while inward investment is always welcome, we are not prepared to compromise in any way on the safeguards and protections in the Bill in order to secure that investment.  If at the end of the day the overseas operators were to decide that Britain was not after all the place for them, then so be it.

 

 

26.  The idea that our definition of regional casinos has been crafted in such a way as to exclude British companies from involvement seems to me wholly mistaken. British companies have years of experience and a detailed knowledge of the business environment. They have as good access to capital markets as any. If they believe that they need to take on additional expertise then they can buy it. The option of partnerships with overseas companies is there. The regulatory playing field is level.

 

 

27.  The Government collectively support the Bill for what it is: an evidence-based attempt to modernise and streamline the regulatory system which will remove unnecessary barriers to competition, productivity and consumer choice, while ensuring that there are effective safeguards against problem gambling and the social and public health costs which that brings.

 

28. It will be for the Chancellor of the Exchequer in due course to decide in the normal way what the tax regime for casinos and other forms of gambling will be. I cannot say anything about that now.

 

29. If we are doing what the commentators say rather than working to have the best possible system of regulation in the public interest, the Bill would look very different from what was published on 19 October.

 

 

 

30.  There might be some foundation for this myth if all we were doing in the Bill was allowing casinos to take customers off the street and allow them to play unlimited stake or prize gaming machines without more ado. The body of research evidence on gambling is far less good than it ought to be, that – it is fair to say other things being equal – an expansion of opportunities to gamble will increase the total amount of gambling and hence increase the amount of problem gambling.

 

31. But other things are not equal. This conclusion completely ignores the vital new safeguards which the Bill will provide. It is very disappointing, to me as a social researcher, that bodies such as the Henley Centre and NERA have fallen into this trap when issuing forecasts of a huge rise in the number of British problem gamblers; and I have to tell you that I have made my views clear to them. The Department also intends to publish a review of the Henley forecast by an independent academic.

 

32. These safeguards are extensive. The Gambling Commission will have a statutory duty to protect the vulnerable, and will be able to give effect to that duty through its codes of practice and the conditions which it imposes on licensed operators. Quite apart from the powers to vary stakes and prizes, and the numbers and kinds of gaming machines allowed in gambling premises, there will be power to regulate the way in which machines work: their speed of play; whether there are automatic breaks in play; what information about time and winnings or losses is shown on-screen; what inducements are built into games as features to encourage repeat play; what limits on losses players can set for themselves if they wish. And so on: these are simply examples; and it will be for the Gambling Commission, in due course, in consultation with the industry and all relevant interest groups, to draw up codes and conditions.

 

 

33 The test for these requirements will be their effectiveness in controlling problem gambling. There is no point in imposing requirements which are burdensome for operators, annoy players, but do no good. In tackling this task the Commission will have to have regard to the best research evidence available. We are determined that a full programme of research is pursued; and I welcome the steps taken by the Responsibility in Gambling Trust to prepare a long-term strategy. We shall work closely with them on this. As time goes on our understanding of the risks and effective countermeasures can only grow. It is likely that the development of technology will offer new solutions as well as presenting new challenges. But we can already be confident that machines here will not be allowed to operate as they do in some parts of the world, where players participate in loyalty schemes which offer more rewards for putting more money into machines.

 

 

34.  I have seen press suggestions that our casino proposals provide a gateway into the industry for the underworld. It is hard to see how anyone could take such a suggestion seriously. Of course a high level of vigilance will continue to be needed. But the only gateways in the Bill are information gateways between the Gambling Commission and other regulatory bodies, allowing the Commission to obtain information about operators and prospective operators which the Gaming Board now cannot. The Commission will have more powers than the Gaming Board, not just to vet operators but to investigate and prosecute offences. It will have more resources. It will be able to cover the whole gambling industry, and not just a segment of it. Two members of the Gaming Board, and hence prospective members of the Commission, are very senior ex-police officers; and we can be confident that it will stay on the case.

 

 

35. Some of the press stories have also cast quite unfounded slurs on gambling regulators abroad. Las Vegas today is not what it was under Mob rule.

 

 

36. We have learnt lessons from abroad; and it is quite wrong to put it about that we will end up in the same boat as Australia.

 

37. Australia has a total of just 13 casinos. The explosion in gambling and gambling addition that happened there is a result of the widespread availability of high value gaming machines.

 

38. They may have allowed high-value slot machines in ordinary pubs and bars: we are not.

 

39. The Australians also lacked a national gambling regulator with tough powers of exactly the kind that we will put in place

 

 

40.  I make no apologies for having spent some time in dealing with these myths. It is important that Parliamentary and public consideration of our proposals is based on fact and not on fancy. We are totally committed to the protection of children, the vulnerable and the wider public. We are confident that intelligent and coherent regulation can achieve these aims while at the same time allowing a modern and responsible casino industry to meet its customers' wishes and compete effectively in the leisure marketplace.