- Parliamentary Joint Select Committee On Gambling Reform Third Reports
- Parliamentary Joint Select Committee On Gambling Reform Third Report 2017
- Parliamentary Joint Select Committee On Gambling Reform Third Reporting
5th Report of the Joint Select Committee on National Security; The Trinidad and Tobago Revenue Authority Bill, 2018. 5th Session of the 11th Parliament The Gambling (Gaming and Betting) Control Bill, 2016. Third Session and then Fourth Session of the 11th Parliament after the work of the Joint Select Committee considering the matter was. Select Committee on Social Services, (National Council of Provinces), Final Mandates on the National Public Health Institute of South Africa Bill (NPHISA) B16B-2017 (sec 76), Committee Room M315, Third Floor, Marks Building, 10:00 Joint Meeting: Standing Committee on Finance, Select Committee on Finance, Standing.
1. Reform of the United Kingdom's gambling laws has been a long time in the planning. From the Rothschild Commission of 1978[1], through the Budd Report of 2001[2], and the Department for Culture, Media and Sport's response A Safe Bet for Success[3], the Government has sought to strike a balance between developing gambling as a legitimate leisure pursuit and mitigating its potential negative consequences. It recently summed up its belief in the following terms: 'gambling should be seen as part of the mainstream leisure industry, offering fun and attractive products in a regulated environment.' [4]
2. The motivation for a change in the law has come less from consumer demand than from developments in technology, and defects in the existing legislation.[5] The existing law is inflexible and requires primary legislation for amendments necessary to respond to technological and market changes. For this reason, the House of Lords Delegated Powers and Regulatory Reform Committee recently described it as being 'in a mess', having been amended to the point of confusion.[6] This is, therefore, a timely and important piece of legislation.
3. The Government announced in July 2003 that it planned to submit the draft Gambling Bill to pre-legislative scrutiny. Our Committee was duly established 'to consider and report on any clauses of a draft Gambling Bill presented to both Houses by a Minister of the Crown.'[7]
9. We also presented a case to the Leaders of both Houses of Parliament to amend our original orders of reference to permit overseas travel. Motions to this effect were subsequently agreed by both Houses in October 2003[8]. Following this, the Committee agreed to bid for funds from the Liaison Committee in the Commons and the relevant authorities in the House of Lords, to conduct two overseas visits.
10. A delegation of two members went to Australia for a week in February to see at first hand the implications of gambling deregulation there. The proliferation of video gaming machines ('pokies') in certain states has been highly controversial, and the delegation was able to meet prominent figures from both sides of the argument. This was also an opportunity to discuss remote gambling issues, and the process for the licensing of casinos. The Committee also travelled to France for two days, to Enghien les Bains and Le Touquet, to discuss the links between casino development and regeneration in seaside and semi-urban settings. Further details of both of these visits are, again, annexed to this Report (Annex 2).
11. In late 2003 and early 2004, the Commons Culture, Media and Sport Select Committee conducted an inquiry into National Lottery reform, which had some relevance to our work. That Committee's Report was published as our own inquiry was drawing to a close. We have drawn on evidence submitted to the inquiry where appropriate.[9]
13. 50 clauses of the draft Bill were published shortly before we were established, in July 2003. These chiefly concerned the new licensing regime, and we were warned that they were subject to change. The introduction to that paper, signed by the Secretary of State, referred to the 'whole Bill [being] presented for scrutiny in the autumn'.[10]
14. Further clauses and schedules, making 242 clauses and 9 schedules in all, were published in November 2003.[11] This has since risen to 268 clauses and 10 schedules following the publication of additional material in February 2004, on gambling in alcohol licensed-premises, gambling in members' clubs, commercial clubs and miners' welfare institutes, a new offence of cheating and the introduction of powers to void unfair bets.[12] Another three clauses, on chain-gift schemes, credit and inducements, and credit, were published on 12 March 2004.[13]
15. The delayed publication of the bulk of the draft Bill had a knock-on effect on the submission of written evidence both to ourselves and as part of the wider government consultation exercise. We are grateful to those who submitted written evidence to us for complying with a very tight timetable. The Government's own consultation period ended on 28 February 2004, in the same week we finished taking oral evidence and started considering our Report. It has not, therefore, been possible to incorporate the bulk of the comments made to the Department in this Report.
16. At the time of agreement of this Report, clauses had not yet been issued on the licensing and regulation of the National Lottery; advertising of gambling; travelling showmen's pleasure fairs; licensing of vessels and vehicles; the Commission's powers to initiate prosecutions and share information through statutory 'gateways'; transitional provisions; and provisions on the Scottish Executive's powers in relation to the licensing of premises in Scotland, and for other arrangements in Scotland.
17. We note that draft Bills are relatively low in the priority list for Parliamentary Counsel, the Government lawyers who are responsible for Bill drafting. We commend the Department's efforts to keep us informed about the progress of publication, and its efforts to make policy information available in advance of the draft Bill clauses. However, our work has been hampered by the lack of key clauses until late in our lifetime, and there are some areas in which we have not been able to conduct any scrutiny whatsoever. Many of those who submitted written and oral evidence to us noted that this was unsatisfactory.[14]
18. Given the points made above, and the deadlines we were working under, we have not been able to examine the draft Bill in as much detail as we would have liked. In particular, we did not examine the Government's proposals on chain-gift schemes, which were published on 12 March, too late for us to request specific submissions.
19. This situation was exacerbated by the extent to which the detail of the proposed regulatory regime is to be included in secondary legislation, Codes of Practice and licence conditions to be issued by the regulator, which we deal with later in this Report.
20. We recommend that, in future, the Government should ensure that the full text of draft Bills is available to pre-legislative scrutiny committees in good time before they are asked to report. We further recommend that the clauses of this draft Bill yet to be published are, at the very least, referred to an appropriate Select Committee for consideration, and that the proposals relating to other parts of the United Kingdom are considered either by the appropriate devolved parliamentary body or territorial affairs Committee in the House of Commons, depending on whether they cover devolved or reserved matters.
21. We believe that there are a number of key questions yet to be answered by the Government concerning the draft Bill. The most important of these, we would suggest, is the threshold at which casino developments are considered by Regional Planning Bodies and are obliged to contribute to regeneration. We gather that a decision on this matter is due to be made by the Department for Culture, Media and Sport (DCMS) and the Office of the Deputy Prime Minister (ODPM) before the summer of 2004.[15] In this context there is a strong case for putting motions before both Houses to renominate this Committee in order for us to make a further Report on those matters. We urge the Government to consider tabling motions to reappoint this Committee so that we can finish the task we have started.
23. The Financial Services and Markets draft Bill Joint Committee[16] set itself a particular remit, and concentrated its inquiry on six specific issues. Like us, they asked a Bill team member to be present at every session, and put together panels of witnesses on particular issues who could respond to points not just from the Committee, but also from other witnesses. Unlike us, they had the benefit of a number of consultation documents issued by the Financial Services Authority (which had already been established) regarding the content of codes of practice and delegated legislation.
24. The Joint Committee on the Food Standards draft Bill[17] decided that it would not debate or question the basic principles underlying the legislation but made the following comments about scope: 'we were also clear that we did not wish to examine the draft Bill clause by clause [...] We saw our role as examining as much what was not in the proposals as what was in them[…].'[18]
25. The Joint Committee on the draft Communications Bill[19] came to a similar conclusion, agreeing that its focus should mainly be on the proposed provisions of the draft Bill, 'from their wording to their likely practical effect'.[20]
26. We chose to look both at the policy behind the draft Bill, particularly those aspects which appeared to be confused and contradictory, and the wording of the draft clauses. Our aims were, first to test the clarity of DCMS's policy, second, to measure the draft Bill against it and, third, to assess the potential impact of the draft Bill in social and economic terms. Much of our questioning in evidence sessions concentrated on the broad themes of the draft Bill. However, we also recorded many of the specific comments we received on the clauses of the Bill in a table. This schedule was then put to the Department for its response to each comment raised.[21]
27. This Schedule of Detailed Comments on the draft Bill, including the Department's responses, is published in this volume as Annex 1. We refer to the points made in it throughout this Report. This proved to be an extremely useful exercise, and we are very grateful to the DCMS for responding to this substantial document so quickly and in such detail.
28. Two other factors influenced our approach: we were told by Lord McIntosh, Parliamentary Under-Secretary, DCMS, that it would be 'helpful' if we were to consider the potential contents of the various Codes of Practice mentioned in the draft Bill,[22] and we were specifically asked to look at the policy relating to betting exchanges.[23]
29. The Committee also sought to assess the effectiveness of the balance struck by the draft Bill in a number of areas - including the general issues and safeguards contained within it.[24] We were particularly minded, throughout the inquiry, to examine the social implications of the draft Bill, and its potential impact on problem gambling.
30. While we received a small number of submissions expressing strong concerns about deregulation in principle,[25] most of the evidence we received accepted gambling as a legitimate leisure pursuit, but one which needs to be subject to control because of its potential negative consequences.
31. The Committee therefore identified the key issues relating to the draft Bill and through a press release invited written evidence on the following:
- the proposed functions, duties and powers of the Gambling Commission;
- transitional arrangements;
- licensing - the potential increase in the number of licensed individuals and the role of local authorities in premises licensing;
- implications of the increase in size, functions (for example: social responsibility, powers of entry to Members' clubs) and cost of the Commission;
- whether the Commission should regulate the National Lottery and spread betting;
- the content of the various Codes of Practice referred to in the draft Bill and the associated consultation rights;
- future proofing - will the proposals in the draft Bill create a regulatory structure that is robust over time?
- protection of children and vulnerable persons;
- provisions of the draft Bill relating to social protection;
- Gambling Industry Charitable Trust (now the Responsibility in Gambling Trust) - its funding, role and independence; and the extent of existing research;
- the proposed sectoral framework for gambling regulation;
- casinos - the potential for US-style resort casinos, issues concerning their ability to regenerate rundown areas and their impact on other areas of the gambling industry;
- betting exchanges - the ability to regulate them effectively and their impact on the rest of the betting industry, particularly bookmakers;
- remote gambling - the ability to regulate this effectively, given the increased accessibility of gambling on the internet and its impact on consumers;
- gaming machines and amusement with prizes (AWP) machines - the impact of the changes in regulation on businesses providing ambient gambling facilities, the potential exposure of children to gambling, the appropriate licensing regime, maximum stakes and prize values;
- bingo clubs - the possible impact of deregulation on existing clubs;
- tax implications - how the proposed deregulation will fit with the existing tax regime for different aspects of gambling;
- society lotteries and prize competitions; and
- the regulatory framework and its context.
2 Department for Culture, Media and Sport (DCMS), Gambling Review Body Report, Cm. 5206, July 2001, referred to in this Report as 'the Gambling Review Body Report' or 'the Budd Report'. Back
3 Department for Culture, Media and Sport (DCMS), A safe bet for success - modernising Britain's gambling laws, Cm. 5397, March 2002 Back
4 Department for Culture, Media and Sport (DCMS), Draft Gambling Bill: Policy document, Cm. 6014 - IV, November 2003, para 2.10 Back
5 Q 1672 Back
6 House of Lords Delegated Powers and Regulatory Reform Committee, 24th report, HL Paper 81, Session 2000-01, reiterated in the Committee's 19th report, Session 2002-03, HL Paper 103, para 9, on the Regulatory Reform (Gaming Machines) Order 2003. Back
7 Minute, House of Lords 2 July 2003, Votes and Proceedings, House of Commons, 10 July 2003. Back
8 Votes and Proceedings, House of Commons, 20th October 2003, Minute, House of Lords, 23rd October 2003. Back
9 The Report was published on 25 March 2004 as the Fifth Report of the Commons Culture, Media and Sport Committee, Session 2003-04, Reform of the National Lottery, HC 196-I.We have also noted, where appropriate, that Committee's comments on the Government's proposals as they stood in July 2002, Seventh Report, The Government's proposals for gambling: nothing to lose? HC 827-I. Back
10 Department for Culture, Media and Sport (DCMS), Modernising Britain's gambling laws, Draft Gambling Bill, Cm. 5878, July 2003. The Secretary of State's introduction (page 4) stated 'Inevitably, the draft clauses published today are not necessarily in the form they will take when the whole Bill is presented for scrutiny in the autumn.' Back
11 DCMS, Draft Gambling Bill, Cm. 6014 -I, November 2003.Readers should note that all Clause references in this Report relate to the February 2004 edition of the draft Bill. Back
12 Available at www.culture.gov.uk/gambling_and_racing/gambling_bill.htm Back
13 Available at www.culture.gov.uk/gambling_and_racing/gambling_bill.htm Back
14 For example Caesar's Entertainment (formerly Park Place Entertainment) Ev 181, para 4, William Hill, Ev 648 Back
15 Memorandum by Secretary of State for Culture, Media and Sport, Ev 566 Back
16 Report of the Joint Committee on the draft Financial Services and Markets Bill, HL 66, HC 465, June 1999. Back
17 Report of the Joint Committee on the draft Food Standards Bill, HC 276, March 1999. Back
18 Report of the Joint Committee on the draft Food Standards Bill, HC 276, March 1999. Back
19 Report of the Joint Committee on the draft Communications Bill, HL 169-I, HC 876-I, July 2002. Back
20 Report of the Joint Committee on the draft Communications Bill, HL 169-I, HC 876-I, July 2002, para 392. Back
21 A similar schedule appears in the Report of the Joint Committee on the draft Corruption Bill, Session 2002-03, HL 157, HC 705. Back
22 Q 27 Back
23 Joint Press Release by the Minister for Sport and the Chairman of the British Horseracing Board, Ev 736 Back
24 The Secretary of State in oral evidence to us referred to 'getting the balance right between protecting the vulnerable and protecting the public interest and modernising what have become increasingly outdated laws' as the 'Quintessential nature of this legislation.' (Q 1672). Back
25 From, for example, the Network of Buddhist Organisations, Ev 689, Mr John Wainwright, Ev 722, Rev. Derrick Hill, Ev 591, the Mothers Union, Ev 729 and R. J. Fear, Ev 670. Back
- maximise the returns available for the good causes.[115]
100. Under the proposals there will no longer be a single Section 5 licence, nor any distinction between Section 5 and Section 6 licences. The Government believes the proposals will offer greater scope for new ideas and, by introducing licences of different duration, allow for increased opportunities to take advantage of technological change.[116] It is felt that changes to the licensing approach are needed to attract more competition.
101. The last licence competition took place in 2000 and was not a great success. Only two bidders entered the competition, which was fraught with legal controversy. Ultimately, the licence was awarded to the existing Section 5 licensee, Camelot. Fears have been expressed that the existing licensee may have such an incumbent advantage that other firms are deterred from bidding.[117] Those that have taken this view include the National Audit Office and the Public Accounts Committee of the House of Commons.[118]
102. The multi-licence approach is set out in the policy document accompanying the draft Bill, a decision document and a supplementary policy note by the Department for Culture, Media and Sport.[119] According to the Government, the approach would allow 'the NLC […] to offer for competition a range of licences to operate different parts of the Lottery. There could be, for example, not only a competition to operate the main Lotto game but also separate licence competitions for scratch cards and internet-based products […]. We will also allow the various licences to be of different duration, to take account of technological change and the different periods required for companies to make a return on their investment'.[120]
103. The NLC is in favour of these changes: 'We believe that the regulator should be able to decide when preparing for the next competition whether to offer one or more operating licences. It would take a strategic view on how the Lottery should develop, including the timing of major developments and the market position, before deciding on the shape and length of licences'.[121]
104. Serious doubts have, however, been expressed about whether the multi-licence approach is the best way of introducing competition. Michael Grade, Chairman of Camelot plc, told the Committee: 'I think there are two tests that have to be applied to any proposals that affect the future of the National Lottery […] that conditions are conducive to a proper competition for the next licence […] and the second condition is that no undue risk is taken with the returns to good causes. We believe that the multi-operator approach which is being proposed and advocated by the National Lottery Commission fails both these tests quite spectacularly. To hear the Chairman of the National Lottery Commission say that the multi-licence approach is just a bit different […] really explains that they do not fully appreciate the impact of the multi-operator approach.'[122]
105. Simon Burridge, former Chief Executive of the People's Lottery, an unsuccessful bidder for the Section 5 licence, expressed similar sentiments to the Commons Culture, Media and Sport Committee, stating that the Government 'is going down a cul-de-sac trying to change the rules in the way it proposes. Faced between the choice of Camelot in perpetuity and the Government's new proposals, with the greatest reluctance I think I would volunteer for Camelot in perpetuity as the lesser of two evils.'[123]
106. Camelot expressed concern that the multi-licence approach could be detrimental to the National Lottery if rival operators are forced to compete with each other for sales: 'Allowing a number of operators to run different parts of The National Lottery could result in lower net lottery sales revenue and higher costs, compared with those achieved by a single operator. This in turn would reduce the economic value of the Lottery, thereby reducing returns to Good Causes. By contrast, a single operator has both the incentive and the ability to develop the Lottery more efficiently than multiple operators'.[124] Again, Simon Burridge made the same point: 'It would provide more competition, but would it provide a greater return for good causes? I think the answer categorically is 'No'.'[125]
107. We received evidence on this issue from the National Lottery Commission, Camelot and others. We were sent copies of a report by Frontier Economics consultancy, commissioned by Camelot, and a response to that report by NERA, commissioned by the NLC. Given the time pressure we were working under, we could not examine these in detail, and note that the Commons Culture, Media and Sport Committee was in a position to scrutinise them in greater depth.
108. The proposed changes would significantly affect the role of the NLC, giving it a more pronounced proactive and strategic role in promoting the Lottery. Instead of having one large competition every seven years, the NLC would need to maintain a continuous review of the market. In oral evidence, Michael Grade said that the proposed changes would give the National Lottery Commission responsibilities that are not appropriate for a regulator. 'A multi-operator approach would leave the NLC, the regulator, in commercial day-to-day operation of the National Lottery - a role for which they were not recruited, they were not intended, and for which clearly no regulator is really suited'.[126] And, for a third time, Simon Burridge from the People's Lottery concurred.[127]
109. The Secretary of State in correspondence defended the proposals: 'I do not believe that the proposals are flawed as they offer flexibility for the future […]. We do not accept that the new arrangements would lead to less money for good causes.'[128]
110. We questioned the NLC about this in the following terms:[129]
'Chairman: I have to ask you this. The last licence round was not a spectacular success from the Commission's point of view, and that was just a straightforward two bids from two potential players for one licence. What you are saying is that you may well be granting several licences. How on earth is Parliament and the public to have any confidence in your ability to do that more complex licensing process when last time it was such a shambles? I am sorry to put it to you so bluntly, but there is a real issue of confidence in the ability of your Commission to do this task.
'Ms Black: The National Audit Office report clearly looked into this and concluded we had good reasons for the things that we had done. In terms of ability to run a competition which is more complex, we are not talking about lots of licences; two or three maybe.
'Chairman: Only to run one weekly draw. You do not intend to run more than one.
'Ms Black: We currently expect - but clearly we have not consulted - one licence for the main jackpot draw, yes. We would not expect more than that, but that is obviously a part of the National Lottery. But the other bit of the legislation that we are anticipating is changes to the Commission itself, certainly in terms of size and having an appointed chairman rather than a selected chairman.
'Chairman: So it would be bigger.
'Ms Black: We have the potential to make it bigger, and also to have our chief executive and another executive on the Commission, which we think is also important.'
111. Given that the NLC's annual budget of around £4 million[130] is around the same as that of the Gaming Board,[131] we are concerned about an increase of this nature in the context of the establishment of a single regulator for the rest of the gambling sector. We deal with this important issue in the next chapter of this Report.
112. We look forward to the Commons Culture, Media and Sport Committee's Report on this issue, which is to be published as we conclude consideration of this Report.[132] Having heard the arguments from various sources on the Government's proposals, we are not convinced of their practicality, and believe that the DCMS should reconsider its future policy in this area.
113. Bound up with the issue of multiple licensing is the question of how the National Lottery should be regulated. The Government believes that a separate regulator is necessary to protect the Lottery's special status and ensure that the returns to good causes are maximised. The evidence received from the National Lottery Commission stated that a separate regulator is needed to avoid conflicts of interest, which could arise within a single regulator for the gambling industry because of the duty to maximise returns to good causes. The submission also noted that a single regulator for the Lottery has the benefit of maintaining 'close links between the competition process and ongoing regulation' and the 'ownership of lottery assets'.[133]
114. The Secretary of State for Culture, Media and Sport, giving evidence on this point, stated the Department's position very clearly: 'it is our view that there are benefits in plural regulation rather than having a single regulator.'[134] Lord McIntosh of Haringey, Parliamentary Under-Secretary of State, DCMS, added that 'the principal reason why we did not have the National Lottery coming under the Gambling Commission was that the National Lottery Commission has an additional objective of maximising the return to good causes, whereas the Gambling Commission has the three objectives of excluding crime, [promoting] fairness, and protecting the vulnerable.'[135]
Parliamentary Joint Select Committee On Gambling Reform Third Reports
115. The Committee heard evidence from a wide range of sources that the National Lottery should fall within the remit of the Gambling Commission, including the Casino Operators' Association,[136] Littlewoods Gaming Limited,[137] the Royal College of Psychiatrists,[138] Gala Group,[139] Barcrest,[140] Gordon House,[141] Professor Griffiths, Professor Orford and Dr Emanuel Moran.[142]
116. A common argument for this is that the Gambling Commission should regulate the entire gambling industry to ensure a unified approach to regulation, and in particular social responsibility. The Royal College of Psychiatrists stated, for example that 'it is […] vital that the Gambling Commission should regulate all types of gambling, including spread betting and the National Lottery'.[143]
117. We note also that the NLC faces its own internal conflict of interest through its responsibilities to protect players, whilst also maximising returns to good causes.
118. It was put to us that having separate regulators for the National Lottery and the rest of the gambling industry raises the potential for conflicts between the two. While the Gambling Commission and the National Lottery Commission would have separate responsibilities, there are areas where a decision made by one could impact on the responsibilities of the other and lead to territorial conflict. For example, Camelot currently operates online scratchcard games. If the Gambling Commission received an application from an operator to provide a similar service there could be a conflict if the National Lottery Commission felt that the National Lottery's position should be protected. Leisure Link noted that, in such a case, it is not clear whose views would take priority.[144]
119. An answer by Mark Harris, Chief Executive of the National Lottery Commission, in response to a question on remote gambling products, demonstrated the potential complexity of the situation:[145]
'If the nature of the product was that it was an entirely lawful product, then I do not think there is any reason why the Gambling Commission should intervene. If it were a threat to the National Lottery and that threat were made out, and the Government decided to change policy on what the National Lottery could and could not do, that would be a matter for the Government, but I do not believe it would be a matter for the Gambling Commission. If however what was being offered was an illegal lottery, I think the Gambling Commission would have an interest, because it has the enforcement powers. If it were not, I do not believe that would be a matter for the Gambling Commission. Otherwise, it would be being drawn into the conflict of interest problem.'
120. Under Clause 20 of the draft Bill, the Gambling Commission would be required to consult the National Lottery Commission if it 'becomes aware of a matter about which the National Lottery Commission is likely to have an opinion'. In its written evidence to the Committee, Camelot suggested that 'the requirement [for the Gambling Commission] to consult with the National Lottery Commission ought to be mandatory and extensive […] [to avoid] inconsistency and omission'.[146] The Government clarified in the Schedule of Detailed Comments on the draft Bill (Annex 1) that 'in relation to matters arising under the Gambling Bill the Gambling Commission will make the ultimate decision'.
121. There is no easy solution to the issue of relative responsibilities. The Committee considered a number of different options, including transferring all the NLC's responsibilities to the Gambling Commission, and some form of hybrid solution. There are advantages and disadvantages of each.
122. Creating a single regulator for the gambling industry could create internal conflicts for the regulator, which will always be cognisant of the National Lottery's special status. The Gaming Board noted the conflict of interest that could arise by including the National Lottery within the Gambling Commission's remit, 'so long as the National Lottery has as one of its core objectives to increase the amount of money raised for good causes, that is something which would create a conflict of interest which the Gambling Commission could well do without'.[147]
123. On the other hand, this system would create economies of scale. Furthermore, the Gambling Commission could be better placed to protect the interests of the National Lottery if this were made one of its objectives, as it would have to consider the National Lottery when licensing other games. It would also ensure that a consistent approach is taken to social responsibility across the gambling sector, an area in which Camelot has been very active.[148]
124. One other option the Committee considered was a hybrid measure - to make the Gambling Commission responsible for player protection issues and ensuring the probity of the Lottery, while the National Lottery Commission would maintain its responsibility for maximising the returns to good causes and running the licence competitions. Separating the regulatory functions would allow each regulator to specialise in specific areas. Although specifically excluded in its remit from considering the National Lottery, the Budd Review nevertheless thought it significantly important to refer to the possibility of splitting 'the regulatory role of the NLC […] from its sponsoring and commercial roles'.[149]
125. Separating the regulatory functions would, however, mean that licensees would be subject to the rules of two different regulators. Michael Grade of Camelot commented, 'Anything that blurs the lines between competing regulators regulating one business could be a recipe for conflict'.[150] The NLC made a similar point.[151]
126. The Committee is attracted to the idea of a single regulator, and takes the view that there would be distinct advantages for the National Lottery if it were to be included within the remit of the Gambling Commission rather than excluded from it as proposed in Clause 222 of the draft Bill. We are not convinced that the proposed structure will ensure consistency of approach across the gambling sector, particularly on key issues such as problem gambling and player protection.
127. We were also not convinced that the National Lottery Commission has fully thought through the implications for its work of a multi-licensing system and the relative roles of itself and the new Gambling Commission. For example, in this context, we were told by Moira Black, Chair of the NLC:[152]'If I can just clarify what we think our proposals are, in a sense, we do not have them right now. We are still waiting to see what happens.'
128. Despite the apparent deficiencies of the National Lottery Commission, given the comments we have already made about the volume of the Gambling Commission's transitional responsibilities, we do not think that it would be feasible to transfer the regulation of the National Lottery to the Gambling Commission before the next licence competition for the Lottery, in 2007.[153]
129. We accept that the National Lottery Commission will continue to regulate the National Lottery after the Gambling Commission comes into existence. As soon as possible after the next licensing round is complete, this arrangement should be monitored with reference to the possibility of placing the Lottery under the Gambling Commission, and to the outcome of the value for money study referred to below.
130. In the meantime, we believe that DCMS should do all it can to ensure that there are close links between the Gambling Commission and the National Lottery Commission, and that the Clause 1 objectives are reflected in the NLC's work, particularly on problem gambling. For example, Michael Grade of Camelot suggested that one way of encouraging the two bodies [the National Lottery Commission and the Gambling Commission] to work together would be to have the 'Chairman of the NLC sitting ex officio on the new [Gambling] Commission just to be present and to argue the case where there is conflict between [the …] Lottery and the other gaming products'.[154] We so recommend.
131. In the light of the fact that there will be two regulatory structures, we recommend that there should be a detailed value for money study of the National Lottery Commission two years after the Bill receives Royal Assent.
116 DCMS, Draft Gambling Bill: Policy document, Cm. 6014 - IV, November 2003.See also National Lottery Licensing and Deregulation Decision Document, July 2003, DCMS, TSO and supplementary policy note 8, February 2004, DCMS. Back
117 Q 1202 [National Lottery Commission] Back
118 Committee of Public Accounts, Sixty-fifth Report of the Session 2001-02, Awarding the New Licence to Run the National Lottery, HC 881. Back
119 National Lottery Licensing and Deregulation Decision Document, July 2003, DCMS, TSO and supplementary policy note 8, February 2004, DCMS. Back
120 DCMS, Draft Gambling Bill: Policy document, Cm. 6014 - IV, November 2003, Annex, page 58 Back
121 Ev 424, para 25 Back
122 Qq 1245-46 [Camelot plc] Back
123 Commons Culture, Media and Sport Committee, Fifth Report of Session 2003-04, Reform of the National Lottery, HC 196-II, Q 147. Back
124 Ev 459 [Camelot plc supplementary memorandum] Back
125 Commons Culture, Media and Sport Committee, Fifth Report of Session 2003-04, Reform of the National Lottery, HC 196-II, Q 157 Back
126 Q 1246 [Camelot plc] Back
Parliamentary Joint Select Committee On Gambling Reform Third Report 2017
127 Commons Culture, Media and Sport Committee, Fifth Report of Session 2003-04, Reform of the National Lottery, HC 196-II, Q 157 Back
128 Ev 566 Back
129 Qq 1203-5 Back
130 Q 1228 Back
131 Q 126 Back
132 The Report was published on 25 March as the Fifth Report of the Commons Culture, Media and Sport Committee, Session 2003-04, Reform of the National Lottery, HC 196-I. Back
133 Ev 424, para 14 Back
134 Q 1679 Back
135 Q 1680 Back
136 Ev 140, para 11(a)(c) Back
137 Ev 655, para 3.2 Back
138 Ev 45, para 20 Back
139 Ev 598, para 3.1 Back
140 Ev 641, para 1.3 Back
141 Ev 477, para 2 Back
142 Q 266 and Q 267 Back
143 Ev 45, para 20 Back
144 Ev 600, para 5 Back
145 Q 1193 Back
146 Ev 447, para 1.2 Back
147 Q 166 [Mr Dean] Back
148 Q 1281 Back
149 DCMS, Gambling Review Body Report, Cm. 5206, July 2001, paras 2.2 and 35.5 Back
150 Q 1276 [Michael Grade] Back
151 Q 1171 Back
152 Q 1185 Back
153 The National Lottery Commission estimated the timetable for the next licence to be as follows: 'the regulator will need to start consultations several years before the expiry of the present Section 5 licence in January 2009. By way of illustration, the regulator might begin consultations in the second half of 2005 and publish a draft scheme early in 2006 for a competition the following year.' [Response by the NLC to the Review of Lottery Licensing and Regulation]. Back
Parliamentary Joint Select Committee On Gambling Reform Third Reporting
154 Q 1274 [Michael Grade] Back