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Gambling and Lotteries

Volume 808: debated on Monday 14 December 2020


The following Statement was made in the House of Commons on Tuesday 8 December.

“Mr Speaker, I hope you will accept my apologies for any offence caused by some of the information already being out there. I can assure you that the full details and the call for evidence document are only just now being released and made available on the GOV.UK website, precisely to coincide with this Statement, but I understand and accept what you said.

The Gambling Act has been the basis of virtually all gambling regulation in the UK since 2005, but a huge amount has changed since then. The internet and the prevalence of smartphones have transformed the way we work, play, shop and gamble. We can now gamble anywhere at any time. It is time to take stock of the significant changes of the last 15 years and to pull our legal and regulatory framework into the digital age, so today, we are launching the first part of our comprehensive review of the Gambling Act. It will be a wide-ranging and evidence-led look at the industry, and it will consider the many issues that have been raised by parliamentarians and many other stakeholders. We want to listen, gather the evidence and think deeply about what we need for the next decade and beyond.

Nearly half the adult population gambles each month and, for the majority of people, gambling is a fun and carefree leisure activity. It is also a sector that supports 100,000 jobs and pays nearly £3 billion a year in taxes. However, we know that, in some cases, gambling can cause significant damage to people’s lives, including mental health problems, relationship breakdown, debt and, in extreme cases, suicide. We must ensure that our regulatory and legislative framework delivers on a core aim of the 2005 Act: the protection of children and vulnerable people in a fair, open and crime-free gambling economy.

This review will seek to strike a careful balance between giving individuals the freedom to choose how they spend their own money, while protecting vulnerable people and their families from gambling-related harm. We will look at whether we should introduce new protections on online products and consumer accounts, including stake and prize limits, and how we can ensure that children and young people are protected. We will also consider gambling advertising, including sports sponsorship, while taking into account the extremely difficult financial situation that many sports organisations and broadcasters find themselves in as a result of Covid. We will look at redress arrangements for consumers where, for example, an operator has failed to step in to help a problem gambler. We will consider barriers to effective research on the causes and impact of problem gambling, and we will consider whether the Gambling Commission is keeping pace with the licensed sector and can effectively deal with unlicensed operators. We will also ensure that we have a fair playing field for online and offline gambling.

Many of those areas were highlighted in a thought-provoking report by the House of Lords Select Committee. That report and others have helped to inform our thinking and our desire to ensure that the review is wide in scope, and we are publishing our response to the Lords report alongside the review. I also know that Members across the House have seen evidence from their constituents about the harm that gambling can do to individuals and their families. We want to hear from the people whose lives have been affected by gambling, as well as from academics and the gambling industry, so that we have the evidence to deliver real and lasting change. We are therefore starting the review with a call for evidence, which will run for 16 weeks and is now available on the GOV.UK website.

While this review is an opportunity to consider changes for the future, we are also taking action now to protect people from gambling harm. The Gambling Commission will continue to build on recent progress to strengthen protections as the industry regulator. Our ban on gambling with credit cards came into force in April, and new tighter rules on VIP schemes were implemented at the end of October. Further work is also in progress on the design of online slot games, as well as on how operators identify and intervene to protect customers who may be at risk, including through affordability checks. We have also just closed a call for evidence on loot boxes, and the Department of Health and Social Care will keep working to improve and expand treatment for problem gambling.

A key priority is ensuring that we have the right protections for children and young people and, again, that cannot wait. To that end, we are also today publishing a response to the consultation on the minimum age to play National Lottery games. Since its launch in 1994, the National Lottery has been a tremendous success, raising more than £42 billion for good causes. Since 1994, its games portfolio has evolved significantly, while consumers have shifted towards online play and instant win games such as scratchcards. While evidence shows that most 16 and 17 year-olds do not experience gambling-related harm from playing the National Lottery, some recent studies point to a possible correlation between National Lottery play at 16 and 17 and problem gambling in later life. Moreover, few other countries allow 16 and 17 year-olds to purchase their national lottery products.

Protecting young people from the risk of gambling-related harm is of paramount importance. We have therefore decided to increase the minimum age of the sale of all National Lottery games to the age of 18. We are keen to make this change at pace while being acutely aware of the need to give retailers and the operator time to ensure a smooth transition. The legislative change will therefore come into force in October 2021, but we have asked that, where it can be done sooner, it is—for example, online. So under current plans, National Lottery sales to 16 and 17 year-olds will stop online in April 2021.

The review we are starting today will be an opportunity to look at the wider rules on children and gambling, and to make sure they are suitably protected across all forms of gambling. I know many colleagues will welcome the launch of this review today and will be pleased to see us living up to our commitments in the 2019 manifesto. We intend to be broad, thorough and evidence led, so that we can ensure our gambling laws are fit for purpose in the 2020s and beyond. I commend this Statement to the House.”

My Lords, I am grateful to the Minister for repeating this important Statement. Before turning to the detail, I note that it is becoming increasingly common for there to be a significant gap between the Commons Statements and our repeat of them. This is regrettable; I hope it will be addressed as we move into the new year.

The launch of this call for evidence on the effectiveness of gambling legislation is a welcome step, even if it has come much later than we on the Opposition Benches would have liked. As the Secretary of State said, advances in technology and shifts in how we live on a day-to-day basis mean that current regulation reflects a very different reality to the one we now live in. This consultation exercise represents a significant first step in recognising and responding to this challenge.

While high street betting shops must abide by a variety of rules, the regulatory picture for digital platforms is very different. In recent months we have seen some companies reducing their presence on the high street, but we know that online gambling is growing. Government initiatives in this area, while welcome, have been piecemeal. Industry bodies have taken steps to promote responsible gambling, including through November’s Safer Gambling Week, but we know that loopholes exist and are causing considerable damage.

With digital services there is the added challenge of jurisdiction, with some service providers registered outside the UK and therefore not currently within our regulatory orbit. We have discussed this very challenge recently in the context of audio-visual service providers and potential regulatory gaps arising from EU exit. Without prejudging the outcomes of the consultation and the next steps in the process, I hope the Minister can at least confirm that the department is cognisant of the issue. As I alluded to previously, we have been awaiting this project for some time. As with other policy areas such as online harms, we know that delays can result in genuine social costs. Can the Minister shed light on why it has taken so long to get to this point and outline the anticipated timescale beyond the consultation end date, which I believe is 31 March? While the technicalities involved in gambling regulation clearly necessitate a dedicated consultation and future legislation, it is nevertheless important not to look at these issues in isolation. For example, we know that adopting a public health-focused approach to gambling addiction could bring significant benefits to sufferers and their families.

The Statement cites work being undertaken by the Department of Health and Social Care to improve the support and treatment available to problem gamblers. We welcome this, but can the Minister confirm that the Department of Health and Social Care will be part of the broader regulatory discussions to ensure that future legislation supports, rather than undermines, its work on treatment?

There is a clear overlap between this gambling review and the Government’s wider online harms agenda, which, I am afraid to say, seems to have ground to a halt. By any conceivable measure, the DCMS is failing to protect people online. There is no draft online harms legislation to scrutinise and few indications of when it will arrive, or in what form. Can the Minister outline the state of play in relation to this? Can we expect to see concrete legislative proposals by Easter, for example?

We know that the department recently missed a statutory deadline under the Data Protection Act to provide provision relating to victims, including child victims, of data breaches. This news was broken to a select few noble Lords in correspondence on the day of the deadline. Can the Minister confirm why this milestone was missed and when the review is expected finally to take place?

While she is gazing into her crystal ball, perhaps the Minister might also provide news on the fan-led review of football governance. Given the close and important relationship between sports clubs and the gambling industry, it is crucial that these workstreams happen simultaneously, rather than sequentially. The Commons Minister said that work is under way on an informed basis, with the formal review to come as soon as possible. However, one Minister at the department told the Commons Select Committee to expect a consultation on the Electronic Communications Code this side of Christmas, whereas the noble Baroness told my noble friend Lord Stevenson of Balmacara on 10 December that timings were “still to be finalised”.

I apologise for failing to spread any festive cheer with this contribution, but all these issues are incredibly important. I appreciate that this has been a challenging year in many respects for government and for all, and I hope very much that 2021 will see us making meaningful progress on all fronts.

My Lords, I too thank the Minister for providing the opportunity to debate this Statement.

Since serving on the Commons committee that considered the Gambling Act 2005, I have seen the huge growth in gambling in this country brought about by that Act and by technological change, not least with the advent of the smartphone, enabling anyone to have 24/7 access to a mini-casino in their pocket, with high-speed games designed to keep people playing. With its spread throughout sport and television, children are seeing gambling as part of everyday life. The gambling industry and its profits have grown exponentially but, most worryingly, 60% of those profits are coming from just 5% of gamblers—those likely to be experiencing harm.

More recently, serving on the Lords committee on gambling, I received very clear evidence of the urgent need for action—not least that described in the committee’s 66 recommendations—from a statutory smart levy on the industry and a statutory duty of care to much stronger regulation of advertising and controls on affordability. Those recommendations, many of which do not need primary legislation, have widespread support in your Lordships’ House, as demonstrated by the nearly 150 Peers who have joined Peers for Gambling Reform, which I have the honour to chair and which seeks early implementation of those recommendations, so that those who wish to gamble can do so safely.

The urgency is illustrated by the figures. There are nearly half a million problem gamblers—probably more—including over 60,000 11 to 16 year-olds, with each problem gambler impacting the lives of family, friends and local communities, and, most tragically, on average, one gambling-related suicide every day.

So although I welcome the review, will the Minister assure me that in those areas where overwhelming evidence for change exists, the Government will take action immediately? Sadly, I was not confident about this last week. I asked the Minister what further evidence the Government need to establish a gambling ombudsman. Despite the overwhelming evidence in the Lords report, she replied:

“The Government continue to have an open mind about the role of an ombudsman.”—[Official Report, 9/12/20; col. 1234.]

I hope that she will she reconsider. However, I welcome the work that has been done on VIP schemes and banning credit card gambling, as well as the work in relation to loot boxes and affordability. Can the Minister update us on progress and assure us that, where action can be taken quickly without waiting for the conclusion of the review, it will happen?

Gambling harm is a public health issue, and like the noble Lord, Lord Bassam, I was disappointed to see no formal role for the Department of Health and Social Care in this review. Will the Minister assure me that the review will take a public health approach and that mechanisms are in place to ensure that DHSC participates fully? The threat of major reform has led the industry to make some welcome, albeit limited, changes, but we are dealing with a vast, multinational industry that is obliged to protect its profits. Does the Minister agree that this review must be evidenced-based and avoid undue influence by industry lobbyists—lobbyists arguing, for example, that reform should be muted for fear of seepage to the black market? Of course we should look to measures to tackle the black market through payment processors and domain blocking, but does she agree with the Gambling Commission that the black market is not a significant issue and should not be used to drive down standards locally? Is she aware that some operators in this country are themselves operating in black or grey markets abroad? Will the Minister ask the regulator to look into this matter urgently?

Last week, I met the mother and the fiancée of Chris Bruney, who tragically took his own life because of a gambling addiction at the age of just 25. Chris was a bright and vibrant young man with his whole life ahead of him. To my mind, there can be no more powerful illustration of the need to reform our outdated gambling laws. I urge the Government not to delay.

I thank both noble Lords for their welcome of the Statement and our call for evidence. I would like to pick up where the noble Lord, Lord Foster, finished, on the all-too-often tragic impact gambling can have on people’s lives and the lives of their friends, families and, in particular, children. That is where our greatest priority in this review lies.

The noble Lord, Lord Bassam, talked about the Government’s response being both piecemeal and slow. I am a bit puzzled about how both can be true. We have aimed to be responsive and have made significant decisions in the last year to improve the safety of, and reduce the risk of harm for, gamblers, but we have now announced an extensive and broad call for evidence, which we hope will address some of the issues several of your Lordships have raised in recent months in this House.

The noble Lord, Lord Bassam, also raised the point about offshore gambling. I am happy to write to the noble Lord if I have misunderstood, but this was a point also raised by the noble Lord, Lord Stevenson, last week. In 2014, Great Britain introduced one of the first point-of-consumption regimes for regulating gambling, which means that any gambling company, based anywhere in the world, that provides services to GB customers, must comply with the Gambling Commission licence conditions and pay remote gambling duties to the Exchequer.

I am afraid the connection broke up at one point in the comments from the noble Lord, Lord Bassam, so I think I missed one of his questions. I know both noble Lords were concerned about the Department of Health’s role. The noble Lord, Lord Foster, talked about the importance of a public health approach. Treatment is not directly in scope of the Act review; the focus is predominantly the regulation of gambling, particularly the powers of the Gambling Commission. However, the Department of Health remains absolutely committed to working on and improving treatment and integrating both NHS and third-sector provision in this field.

The noble Lord, Lord Bassam, apologised for a lack of festive cheer. I hope I can bring a little festive cheer, in that tomorrow my right honourable friend the Secretary of State will make a Statement in the other place about the online harms consultation. He will be able to address some of the other points on the timing of legislation. I hope we will take that Statement speedily after it is made in the other place.

The noble Lord, Lord Foster, talked about the risk to children and the number of children who have a gambling addiction or are problem gambling. As I said, the safety of children is our first priority in this review. I thank him and other noble Lords who sat on the committee for their 66 recommendations. He will have seen that the vast majority of these are in scope of the call for evidence. I assure him that we will not wait, as we have not waited already, to implement them.

The noble Lord, Lord Foster, said that there was overwhelming evidence for the appointment or creation of an ombudsman. Our starting point is that operators must be held accountable for their failings, and the review will look at the current system for redress. We will look at the pros and cons of different approaches and take a decision based on the evidence put forward. Again, I encourage all noble Lords and those in their networks to submit evidence.

Finally, I hope I can reassure the noble Lord that the review and the decisions taken from it will be based on evidence. He raised concerns about the power of lobbyists. Obviously, we have to look at all evidence fairly, but much evidence in this space is contested. We hope we will be able to resolve some of those contested areas and move forward with a gambling regime fit for the digital age.

My Lords, we now come to the 20 minutes allocated for Back-Bench questions. I call the noble Lord, Lord Grade of Yarmouth.

I thank my noble friend the Minister for answering questions on this very important Statement. I associate myself immediately with everything the noble Lord, Lord Foster, said. My great fear about the gambling review the Government are undertaking is that they are pinning it to a review of the 2005 Act. Of the House of Lords committee recommendations, which numbered more than 60, probably only three or four required legislation. I would like to hear from my noble friend the Minister that changes that can be made immediately will not have to await the lengthy passage through the legislative process in both Houses—consultation, White Paper, et cetera—before the Government act.

Neglect by previous members of the Gambling Commission and previous Governments has led us to a situation in which gambling is having toxic side-effects, resulting in suicides and misery, although a lot of us will have a flutter and enjoy it. My great fear is that the speed of action will not be met by the Government and that attaching it to the legislative review will slow things down. There is not a day to lose in fixing a sector in very serious disarray, causing untold misery.

I thank my noble friend for his remarks and his leadership of the committee in your Lordships’ House. He is, of course, absolutely right that legislation is not required to change a number of things and to make gambling safer, particularly for those people, including children, who may be vulnerable.

I hope that he takes some comfort from the speed and energy with which we have acted, including during this most difficult of years, when every department, including my own, has been under tremendous pressure. He will be aware that in the last 12 months we have banned gambling on credit cards and mandated participation in the national self-exclusion scheme, GAMSTOP. We have tightened restrictions on VIP schemes, banned reverse withdrawals and mandated increased monitoring and intervention during Covid. We have no intention of slowing down with that energy.

My Lords, I am glad that the Government are tackling this head on, and I have seen evidence of it. I watch a lot of sport, so I end up watching a vast amount of advertising for gambling. That is a very worrying statement because, as we have just heard, it also applies to children. I am sure that the Government want children to watch cricket, rugby or football—whatever it is—rather than spending hours glued to gaming. I have also noticed that these ads are beginning to be much more vociferous about the dangers of gambling, and it would be churlish not to acknowledge that, but it is also a sign that gambling companies are worried.

Gambling may be fun at a minor level, as the noble Lord, Lord Grade, said, but it is very big business, with huge profits engendered for gambling companies. Surely it is impossible—and I know that the Minister would agree with this—to put into financial terms the damage done to families through addiction and suicide. Should we not be restricting the amount of advertising? Will the Government try to quantify the value of advertising to sport, television and the Exchequer and attempt to set it against the damage done by addiction? As I say once again, especially when families are reduced to absolute misery and sometimes to suicide, there is no way of putting a financial price on that.

The noble Lord is right that there is no way to put a financial price on the pain that some families have suffered. We have a responsibility to listen to those families, take their evidence incredibly seriously and give them a real voice. We are absolutely committed to doing that. As I mentioned in your Lordships’ House last week, the first meeting that my right honourable friend the Secretary of State had in preparing for this review was with a group of people with lived experience of gambling harm of different types. So we take that incredibly seriously.

Progress is being made on advertising gambling in relation to sport. The industry has introduced measures in the last 18 months, including the whistle-to-whistle ban, which has significantly reduced children’s exposure to sports betting advertising. We are taking, and will take, a very thorough look at this review and try to establish—and I mentioned areas that were contested—to what extent advertising is linked to problem and harmful gambling.

My Lords, it is true that we cannot cost the human hurt and pain, but the Statement praised the tax receipts and employment benefits that come from the gambling industry but did not mention any of the financial costs of gambling-related harms. Will the Minister assure the House that, as part of the evidence-based approach, the review will include research into the cost of gambling-related harms—for example, for the 14 clinics dealing with gambling addictions, the cost of trials and imprisonment, the cost of JSA claims and the terrible cost of suicides—to ascertain whether the gambling industry is really a net contributor to the Treasury, as the Government claim?

The right reverend Prelate raises an important point. He will be aware that, next year, Public Health England will report on its evidence review into gambling-related harm. That will look at both financial and human aspects. The review being led by DCMS is looking specifically at ways of recouping the societal costs of gambling. Again, I urge the right reverend Prelate to share the evidence that he has on those costs in the broadest terms.

My Lords, I thank the Government for their response to the Select Committee and for announcing the review. It is particularly important that the review looks at the impact of online gambling. We know that, far too often, the industry is at least one step ahead of the regulatory framework in devising temptation for gamblers. Those who are in deeper than they can afford are particularly vulnerable to such temptations. Can the Minister assure the House that the Government will bear down on this in the review and understand how the regulatory framework needs to interact with a constantly changing market on the internet? Will they pay attention to the increased activity of the many women who would not have dreamed of going into a betting shop but who now—in their misery, often—gamble online on their own and get into serious trouble? Will the Government make sure that they develop protections for the most vulnerable?

The noble Baroness raises important points about online gambling, which is one of the fastest-growing areas of gambling. We are looking at the case for increased protections online, including in relation to stake limits. However, as I said in response to my noble friend Lord Grade, we are not waiting for the review to make online games safer, so the Gambling Commission will shortly publish its response to a consultation on a number of tighter controls on online product design which will aim to protect exactly those vulnerable groups to which the noble Baroness referred. She was also right to raise the issue of women gamblers, where we have much less evidence. We look forward to building a much more comprehensive picture and will aim to use that evidence to get the regulatory balance right.

My Lords, I declare an interest as a vice-chair of Peers for Gambling Reform. We tread a fine line between allowing people to spend their money freely and preventing them from the extremes of their actions on their health and well-being. We ban the advertising of smoking and smoking in public places to prevent health deterioration. We encourage healthy eating and exercise to curb obesity levels and diabetes, but we have a reluctance to ban advertising for gambling, despite the misery that the addiction can bring. Italy, Belgium and Spain have introduced bans, while Australia has introduced a ban on gambling advertising during live sporting events between 5 am and 8.30 pm. Would the Minister consider following this lead on banning advertising to protect the young and vulnerable from falling into addiction?

The noble Baroness has raised serious issues and has made some interesting suggestions. To be fair, I think that the noble Baroness would agree that gambling advertising is already subject to very strict controls. It cannot be targeted at children and it cannot appear during TV programmes or on websites that are aimed primarily at children. In fact, the ASA is currently consulting on further tightening these rules to limit gambling ads that appeal to children and vulnerable people. Gambling advertisers online have to obey the same rules as offline, but as I have said, the point of this review is to get the most convincing evidence possible from which we can move forward.

My Lords, sadly, the prevalence figures for problem gambling in Northern Ireland are significantly worse than those for England. In this context, the exposure of people to gambling advertising raises significant additional concerns in the Province. Although aspects of responsibility for gambling are devolved, the subject of gambling advertising is addressed on a UK basis. Will the Minister confirm that the needs of Northern Ireland, and indeed all parts of the United Kingdom, will be taken fully taken into regard as part of the gambling review as it relates to non-devolved matters like gambling advertising? Also, what steps will the Government take to engage with the people of Northern Ireland on this matter?

The Advertising Standards Authority has strict rules on gambling advertising that apply across the UK—so not just GB but also Northern Ireland. They make it clear that the advertisements must be socially responsible and must never target vulnerable people. As I mentioned in an earlier answer, the ASA is currently in the process of consulting on these rules to further minimise the potential for harm from advertising being accessed by vulnerable people.

My Lords, so that others can get in, I shall be brief. Can my noble friend point to any evidence on whether, following the action taken by the Government in October on the VIP schemes, there has been a material impact?

I thank my noble friend for his brief question, and I will try to give an equally brief answer. We understand that the number of customers in VIP schemes has fallen by 70% since the commission challenged the industry back in October 2019 and the formal Gambling Commission rules for these schemes came into force at the end of October this year.

My Lords, I thank the noble Baroness, Lady Barran, for her obvious personal commitment to tackling the corrosive effects of gambling addiction. Last week during Question Time, in answer to a question that I put about unlicensed and illegal sites, she was good enough to say that these would be within the scope of the review. On the basis of the estimates from the Gambling Commission, can she say now how many websites that are accessed in the UK are operating without a licence and how many have ceased doing so as the result of financial transaction blocking? If she does not have this information immediately at her fingertips, would she be willing to commit to placing the relevant information in the Library of the House in the coming weeks?

I thank the noble Lord for his comments. Unfortunately, we are not in a position to assess the size of the black market as accurately as he would like, perhaps because of its very nature. However, I can say that the number of complaints to the Gambling Commission about black market operators remains unchanged, and that thanks to enforcement action by the commission, in partnership with financial payment providers, 59 unlicensed operators have been removed.

I next call the noble Lord, Lord Smith of Hindhead. He is not present, so I call the noble Baroness, Lady Bennett of Manor Castle.

My Lords, I am sure the Minister is aware that Google this morning announced a new feature to allow users to block gambling and alcohol adverts. Given that this would allow potentially vulnerable people to protect themselves—reference has been made to the urgency of this with the online harms Bill coming—would the Government consider making it mandatory for companies to provide that feature on websites?

I thank the noble Baroness for raising that point. I am afraid we will have to look at what the evidence says in relation to the last part of her question about making it mandatory, but the principle that she raises is important. We very much welcome moves by the major platforms that give individuals greater control over what they see.

Will the review look at the mental health benefits to working-class pensioners who follow racing and repeatedly lay bets—that is, the benefits of getting them out of the house—as well as the disbenefits to the minority who are addicted? Will it look at the perverse incentives that legislation could lead to in greatly expanding the illicit black market of online gambling, as people shift from what they are stopped from doing by the state to what they can find through Google and other software outlets?

The purpose of the review is to keep the balance. Of course we acknowledge that the vast majority of people who go out and place a bet—whether once a week, twice a year, or however often it might be—may get great fun and pleasure from it, and it can be a form of social contact. However, we also know that there are people who pay a great price and suffer as a result. We are seeking to find a balance, so the evidence in relation to mental health in both directions will be taken seriously.

My Lords, gambling companies such as 888, Bet365, Betfair, Flutter, Ladbrokes, Paddy Power, Sky Bet and William Hill have used complex corporate structures in Guernsey, Alderney, Gibraltar, the Isle of Man, Ireland and Bulgaria to avoid UK corporate taxes. Indeed, in 2018, HMRC finally defeated Ladbrokes on its £71 million tax-avoidance scheme. Does the Minister agree that gambling companies avoiding UK corporate taxes should automatically lose their licence to operate here?

Companies that avoid taxation illegally, whether they are gambling companies or any other companies, should be held to account for that. However, as the noble Lord is aware, gambling companies contribute about £3 billion to the Exchequer through the levy.