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William Hill: Breaches of Player Protection

Volume 829: debated on Wednesday 29 March 2023

Private Notice Question

Asked by

To ask His Majesty’s Government what assessment they have made of the Gambling Commission’s finding against William Hill concerning breaches of player protection, and their imposition of a £19.2 million penalty.

My Lords, I beg leave to ask a Question of which I have given private notice. I declare my interest as a former chairman of the ad hoc Lords Select Committee which published Gambling Harm in July 2020.

My Lords, this action was taken by the independent regulator as part of its duty to uphold standards. The Government do not comment on individual enforcement cases; we have, however, continued to see too many cases of operators failing adequately to protect their customers. The Gambling Act review will include a range of policies to strengthen protections further, and we will publish a White Paper in the coming weeks.

I thank the Minister for that response. The Select Committee report on gambling harms made more than 60 recommendations to avoid the worst excesses at the toxic end of the gambling industry. Of those 60-odd recommendations, only five or six, from memory, required primary legislation. In that time, what have the Government done to implement some of the things that might have stopped William Hill, kept it honest and saved some lives in the process?

I had the pleasure of serving on that committee under my noble friend and, as I am sure he knows, all its recommendations are being considered as part of our review of the 2005 Act. Both the Government and the Gambling Commission have been taking action in the meantime, including in line with more than a dozen of the committee’s recommendations. That includes: tough new requirements about online VIP schemes; developing a new approach to collecting data on gambling participation and harm prevalence; reforming online slot games so that their speed of play is the same as land-based equivalents; introducing new rules on advertising, including banning the creation of undue urgency to bet and content with a strong appeal to children; raising the age to participate in the National Lottery to 18; and strengthening online self-exclusion, with robust requirements about stopping marketing to people who have excluded themselves from gambling. So we continue to take action while also reviewing the 2005 Act.

My Lords, I declare my interest as chairman of Peers for Gambling Reform. These and other egregious breaches of current player protection arrangements show all too clearly that these arrangements simply do not work. Given that, as the noble Lord, Lord Grade, pointed out, no new legislation is required, should we not be immediately introducing a single, independently overseen system of light-touch affordability checks to which all gambling companies must adhere?

I think the imposition of this record penalty shows that the Gambling Commission is taking all these issues seriously. Indeed, since the start of 2022, operators have been required to pay more than £76 million because of regulatory failures discovered by the commission. So the commission is doing its work and the Government are doing our work in reviewing an Act that is coming up to two decades old and certainly needs looking at again to make sure we have the regulation and laws in place to ensure that we have a proportionate regulation of this undertaking.

My Lords, as chairman of the Proof of Age Standards Scheme, I ask whether this is not a good argument for having proof of age verification in the online harms Bill.

I look forward to debating that and other matters with my noble friend in the course of our deliberations on the Online Safety Bill. Of course, in relation to gambling, we are looking at all sorts of matters as part of our review of the 2005 Act.

Do not the large fines imposed demonstrate the failure of the system? We do not want people to receive large fines; we want them to be stopped gambling when they cannot meet their debts. Do the Government not need to step up and introduce legislation to deal with this real problem?

As the Gambling Commission made clear, the failings it discovered were so widespread and alarming that it gave serious consideration to suspending the licence in this case. However, because the operator admitted its failings, the commission opted instead to impose the largest enforcement payment in its history. It is taking action, and the companies are taking action in light of the regulation undertaken by the commission. We look at the Acts to make sure that we have the regulation we need in place.

My Lords, given this further evidence of companies serially failing to take care of their customers, what steps are the Government taking to ensure that individuals can hold companies to account for gambling harms?

We have ensured that people who have excluded themselves from gambling are protected. Individuals are rightly taking action, and we want to ensure that they can do so. Individuals can draw their cases to the attention of the Gambling Commission, in addition to its work in monitoring the sector.

My Lords, does not the very small proportion that monetary fines constitute of gambling companies’ profits indicate that they are not working? Should the Gambling Commission not take more effective powers, which are already within its remit?

The fines and penalties imposed by the commission are increasing. In the 2016-17 financial year, it issued penalties of just £1.7 million. As I said a moment ago, since the start of 2022 operators have paid more than £76 million. The financial penalties are increasing, and the commission has revoked 14 operator licences and 66 personal licences since 2016. There are a range of sanctions which it can and does undertake.

My Lords, I declare an interest as a former Minister for the gambling industry. I have great concern as we approach the White Paper. Many of us regularly hear concerns from people about the way in which gambling has been allowed to extend itself through advertising, particularly to vulnerable groups and broadly through sporting industries. Although many gambling companies act entirely responsibly—the best ones certainly do—does my noble friend agree that we must now look carefully at the permissive situation that we have allowed to develop over the last few years?

As part of our review of the 2005 Act, we want to make sure that we get the right balance between respecting people’s freedom of choice, preventing harm and effective and proportionate protections. As part of that review, we have called for evidence on the impacts of advertising, including sports sponsorship. We will be led by the evidence and take appropriate and proportionate action where necessary.

My Lords, I remind the House of my interests in the register. Given the seriousness of the complaints that led to the imposition, it is not good enough just to recognise that the Gambling Commission has done its job, because individuals were seriously harmed. It shows that what the industry has said to the Government is simply not true; it allowed people to gamble outside what it had already committed to not allowing to happen. The Government need to think very carefully about the commitments the industry is making to them on the White Paper so that they understand the real harm done to some individuals.

We respect the independence of the Gambling Commission. As I have already quoted, its chief executive Andrew Rhodes said that in this case it found widespread and alarming failings. The Government are certainly not minimising its findings in this case. Separately, we are looking at the statutory framework under which it operates to make sure that our gambling laws are fit for an age in which people carry a super-casino on their smartphone in their pocket. It is right that we look at those laws again. We have been doing so, speaking to the industry and campaigners, and have been mindful of reports such as that of your Lordships’ committee.

My Lords, I heard the Minister say that the White Paper would be published in a few weeks. Every time your Lordships’ House has asked about the date, we have found it shelved repeatedly, leaving ever more people being sucked in without appropriate protections being in place. After a decade of broken promises and giving in to vested interests when things get tough, does the Minister accept that many people have been left unnecessarily exposed by the Government’s failure to act? And when the White Paper is published, will it have real teeth or will it be severely watered down, as is widely predicted?

It is the most significant examination of gambling law since the 2005 Act was brought into force, and a lot has changed in the intervening years. We have received over 16,000 responses to our call for evidence, and we are looking at these carefully. There is a new Secretary of State and a new Minister responsible, who obviously want to make sure they give it the attention it deserves. We want to get the balance right between protecting people’s freedom and giving protections that people need. In the meantime, we have been taking action, including banning gambling on credit cards, new rules to make online slot games safer by design, and changing advertising to make sure that content cannot be of strong appeal to children, so we are acting as well as looking at the law in a sensible way.

My Lords, can I ask what actions the Government are taking with regard to online gambling sites based in our overseas territories?

From memory, I think the operators that operate in the UK are covered by law, but I will clarify the point in writing to the noble Lord. It is certainly a point that we are cognisant of, as we look at the 2005 Act.

My Lords, listening to the progress of this Question, I wonder if the Minister would agree that a Government which have a general disposition to remove or weaken regulation wherever possible—I do not comment on whether that is right or wrong; I simply say that is, broadly speaking, the direction of travel of this Government and some of their predecessors—does he not think that any regulator faced with a very powerful industry, such as gambling and others, will feel itself to be somewhat at a disadvantage? Although these fines are very heavy, I refer him to the points made by my noble friend Lady Armstrong about the quite egregious failure of the industry to stand by the obligations to which it has already committed itself.

Nearly half of adults in this country choose to gamble. This is a legal activity which many people do without any harm, but we know that when people get into gambling-related harm, the consequences can be very serious. That is why successive Governments have tried to look at this in a balanced way. We are looking at laws which do not adequately reflect the way that people gamble online nowadays. We are grateful to the many people who have provided evidence, from the industry, campaign groups and people who gamble. We want to make sure that we get the right balance between protecting people’s freedom to carry out a legal activity and preventing them from falling into harm.

My Lords, the Minister has described the penalty for William Hill as a record penalty set at a very high level. It is four days’ revenue for the parent company, which last year won £1.8 billion from punters. Should not the fine be a percentage of its total revenue, and what does the Minister think a company like William Hill would have to do to get suspended, given that among the many horrendous cases, we have 331 gamblers who chose to use the self-exclusion mechanism and were then able to gamble on the site?

As the commission made clear, it looked at tougher sanctions. However, because the operator in this instance admitted its fault and has started to take steps to address it, the commission chose to impose the regulatory penalty that it did. It is making financial penalties available. In relation to this case, it is also requiring the company to undergo a third-party audit to assess how it is implementing its anti-money laundering and safer gambling policies, procedures and controls. The commission is using the powers that it has at its fingertips.

My Lords, one of the major concerns is about the effect this is having on children. Headmasters and heads of major schools I have spoken to of late have said that the impact this is having on children between the ages of 10 and 15 or 16, and on how their parents and others are gambling, is going to have a very adverse effect in the future, particularly because of the point made on advertising.

My noble friend is right to highlight the importance of ensuring that children are not encouraged to gamble or to do so in a problematic way. That is why we have raised the age for participating in the National Lottery to 18 and introduced new rules on advertising to make sure that adverts with a strong appeal to children are not allowed. We will look at the wider issues as we consider our review of the 2005 Act.