Categories of Casino Regulations 2008

rose to move, That the draft regulations laid before the House on 26 February be approved. The noble Lord said: My Lords, I shall also speak to the Gambling (Geographical Distribution of Large and Small Casinos Premises Licences) Order. The Categories of Casino Regulations define the large and small categories of casinos by reference to the minimum and maximum gambling area each type of casino must offer. A casino will be a large casino if the combined floor area of those parts of the casino used for providing gambling is not less than 1,500 square metres but does not exceed 3,500 square metres. A casino will be a small casino if the combined floor area of those parts of the casino used for providing gambling is not less than 500 square metres but does not exceed 1,500 square metres. The principal purpose behind establishing new minimum and maximum size criteria for the new casinos is ultimately to prevent a proliferation of small casinos. Separately, the new casinos are required by mandatory premises licence conditions, approved by the House last year, to set aside minimum non-gambling areas where customers can take a break from gambling. These regulations will not apply to casinos previously licensed under the Gaming Act 1968. Many existing casinos will be below the minimum size for a large or small casino under the Gambling Act 2005. Existing casinos licensed under the 1968 Act, regardless of their size, are subject to special transitional arrangements under which they have been granted a converted casino premises licence. This will enable existing casinos to continue to trade with their current gaming entitlements. The operators of existing casinos will, of course, be free to bid for the new casino licences permitted by the Act. The geographical distribution of casinos order specifies the 16 authority areas where the eight large and eight small casinos permitted by the Gambling Act are to be located. The 16 licensing authority areas are those that were originally recommended by the independent Casino Advisory Panel, chaired by the late Professor Stephen Crow. They were included in the first geographical distribution order, which this House rejected in March 2007. Despite that rejection, which, as the House will recall, centred on the location of the single regional casino, there was, nevertheless, a broad consensus across all parties in both Houses in last year’s debates that the eight large and eight small casino licences should be awarded to the 16 licensing authorities identified by the panel. In the rejection of the order last year, the amendment of the noble Lord, Lord Clement-Jones, adopted by this House called on the Government to incorporate the 16 areas in a fresh order, which is precisely what we are doing today. We continue to believe that the Casino Advisory Panel did a good job and that, in recommending the 16 areas, the panel exactly met its remit. The areas represented provide a good spread and different types of location, from large urban areas to town centres and seaside resorts. That is what we set out to achieve in our December 2004 national policy statement on casinos. When the time comes to carry out an assessment of the social and economic impact of the 16 new casinos, the areas will provide a good test in a broad range of different locations. Of course, I regret that my noble friend Lord Filkin’s Merits Committee, which I hold in the highest regard, came to the conclusion that the order may imperfectly achieve its policy objectives. My right honourable friend the Secretary of State for Culture, Media and Sport wrote to my noble friend to explain why we did not agree with the committee’s conclusion. The committee was kind enough to publish a copy of the Secretary of State’s letter in its 15th report of the current Session. It may be helpful if I deal with the two principal concerns that the committee raised. I reiterate that we take the committee’s view seriously and recognise the serious work that it does under my noble friend Lord Filkin’s distinguished chairmanship. First, the committee argued that the Casino Advisory Panel gave insufficient emphasis in its work to the minimisation of harm from gambling. The Government maintain that this is to confuse the overarching objectives of the Gambling Act with the rather narrower objectives of this order. The main objectives of the Gambling Act are to prevent crime and to protect children and vulnerable people from harm. We are proud that the Act placed these protections at the heart of the system of regulation of gambling in this country for the first time. We are in no way abdicating our responsibility to prioritise the minimisation of harm. Those protections are being put in place under the Gambling Act, but that is not the purpose of this order. It fulfils the narrower purpose of identifying the areas that will best facilitate a proper assessment of the social impact of the new casinos, so that the Government and, of course, Parliament can make future decisions about casino policy on a fully informed basis. Secondly, the committee was concerned about the traceability of the impact of the new casinos in different areas. It cites in particular the difficulty of tracing impacts in seaside resorts, ports, areas with existing casinos or areas with pre-existing regeneration plans. We recognise that this process will be challenging, but these descriptions could apply to many, or perhaps all, local authorities in the country. We are currently drawing up the research specification for the first stage of the assessment of the impact of the new casinos and we will certainly wish to take into account the points that the committee raised in this context. However, we maintain that, although assessing the impacts of the casino and disaggregating these from other effects will certainly be challenging, that does not mean that the 16 areas identified in the order will not prove a good and extensive test. I know that the House places great importance on the question of public consultation in the casino licensing process and on the primacy of local decision-making and local consultation. I reassure the House that those principles are central to our policy. In the Gambling Act we have for the first time given local authorities the power to resolve not to license a new casino in their area. That, of course, includes the authorities included in this order. Where an authority wishes to license a casino, local people will be consulted at every stage of the licensing process. Authorities must issue a three-year licensing policy, which, among other things, will set out the principles that the authority intends to apply in determining to whom to issue a casino licence. In settling that policy, licensing authorities are required to consult local people. That applies to those local authorities that, thus far, have obviously achieved local support for making their applications. On receipt of applications for a casino licence, the licensing authorities must consider representations from interested parties, including local people and local businesses, about the applications. Unless local people agree otherwise, they must hold a hearing. Where licensing authorities receive more than one application for a licence, we have required them, through a statutory code of practice, to take account of local views in deciding which benefits they want a casino to provide in their area. This order, then, does not represent a top-down, one-size-fits-all model. Licensing authorities have the flexibility to decide what is best for their area after consulting local people. That may include specific measures, funded by the casino, to support local efforts to combat problem gambling or crime. Through the Act, we have also provided for authorities to hold operators to commitments that they make during the licensing process. Even after a casino has been licensed, local people may complain to their licensing authority, asking it to review the licence. All those measures are in addition to local people’s input into the planning process. I hope, therefore, that the House will agree that the consultation measures that we have provided are substantial and appropriate. The order before the House does not, of course, provide for a regional casino. On 26 February this year, I repeated a Statement made in another place by my right honourable friend the Secretary of State for Culture, Media and Sport, which explained his reasoning for not proceeding with that regional casino. I will not delay the House, or even risk boring your Lordships, by repeating what the Secretary of State said on that occasion, although I was privileged to repeat his Statement. Central to his decision were the concerns expressed in both Houses of Parliament about the potential negative impact of a regional casino. The large and small casinos that are the subject of the order will pose a lower risk, but they are still new to the British market. They will be able to offer a larger number of £4,000 jackpot gaming machines than existing casinos and they will be permitted to offer new combinations of gambling. We therefore continue to believe that it is right to take a cautious approach to their introduction and have limited the number of new casinos. We will not consider any further casinos under the Gambling Act until the assessment of the new casinos’ impact on problem gambling, to which I have referred, has been completed. We expect that to be no earlier than 2014. Even then, it will ultimately be for Parliament to approve any increase in the number of casinos permitted by the Act. I know that there is concern about the possible proliferation of existing casinos. I would like to assure the House that that is highly unlikely to happen. When Parliament passed the Gambling Act in April 2005, there were 138 casinos operating. Now, three years on, that figure has increased marginally to 144. That, of course, does not include any of the 16 new casinos that are subject to the instruments that we are discussing. A number of casino applications are still being processed under the now repealed legislation in the Gaming Act 1968. Those were submitted to the Gambling Commission before the end of April 2006, the date at which we stopped any further applications coming forward. If all those applications were granted and resulted in new casinos opening, that would bring the theoretical maximum of 1968 Act casinos to 216. However, that is most unlikely to happen. Indeed, some of the late applications made under the old legislation have already been rejected and within that 216 are 19 rejected applications with outstanding appeals; that is, they have been rejected but have gone to appeal. The theoretical maximum of 216 is restricted by law to the 54 permitted areas established under the 1968 Act and it is unlikely that the market in those areas will be able to support a significant increase in the number of casinos. As I said, protecting both the public interest and the vulnerable from harm through gambling is central to the Act. That approach is reflected in the manner of our proceeding with the new casinos in these instruments and, accordingly, I commend them to the House. I beg to move. Moved, That the draft regulations laid before the House on 26 February be approved. 12th Report from the Joint Committee on Statutory Instruments.