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Review of the Gambling Act 2005

Volume 699: debated on Thursday 22 July 2021

Motion made, and Question proposed, That this House do now adjourn.—(David Duguid.)

It is a pleasure to lead this Adjournment debate on the review of the Gambling Act 2005. I refer Members to my entry in the Register of Members’ Financial Interests and to my position as chair of the all-party parliamentary group on betting and gaming. I thank the Minister for Media and Data, my right hon. Friend the Member for Maldon (Mr Whittingdale), for his engagement with the industry and the APPG on this issue. It would be remiss of me not to mention the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), as I know that he did the same when gambling fell under his ministerial remit.

Betting and gaming is a key part of the UK’s dynamic and diverse leisure and entertainment industry. Betting and Gaming Council companies alone support 119,000 jobs. The figure is even higher if we include wider bingo, adult gaming centres and arcades on seaside piers. The online sector in particular is responsible for a growing number of well-paid tech jobs. The Government desperately need those jobs and the tax revenue they bring as we rightly build back better from the pandemic.

I refer to my entry in the Register of Members’ Financial Interests.

Is there not also a very big supply chain for these outlets, and is the not the fact that the industry adds to the life of this country, and is one factor that makes us an attractive venue for visitor attractions, greatly to be encouraged?

The right hon. Member makes a brilliant point. It is not just about the jobs, directly and indirectly, and the taxation to the Exchequer; it is also about the contribution of the industry to the cultural fabric of our society. I appreciate that point and will refer to it later.

The industry’s contribution to the national economy and local economies such as mine in Blackpool must be taken into account during the upcoming gambling review, which provides a golden opportunity to upgrade much of the legislation in an area that is increasingly becoming analogue in a digital age.

There have been concerns that the Gambling Act is not fit for the digital age, as the hon. Member is saying. Does he agree that there is an issue with offshore gambling organisations, which are not illegal, and that a review of this legislation should look at the loopholes that prevent control of offshore gambling, which is equally dangerous to gamblers who have addictions?

The hon. Member makes a valid point about the so-called black market or offshore gambling. Billions of pounds of UK customers’ money is spent on black market websites every single year. Of course, the problem is that, unlike UK online gaming operators, those offshore operators are not regulated and the propensity for online harm for people who have a problem is much higher. I thank him for raising that important point.

The key decisions in this review need to be taken by Ministers and Parliament. It is vital that the Government hear the views of both the industry and those who have concerns about problem gambling. I stress that the review has to be grounded in the evidence rather than blind ideology. We must not lose sight of the enjoyment that millions of people get from gambling, with recent polling suggesting that seven in 10 people in the UK gamble every single year and that 73% of people see betting as a leisure activity. This approach cannot be compromised by what some perceive to be the perspective advocated by the Gambling Commission.

Questions have to be asked about whether the Gambling Commission has extended its role beyond that expected of a regulator. Over the years, it has been said that the commission has taken a stance similar to the personal feelings of its chief executive at any particular time. Although the commission is there to support businesses and enable them to operate within the guidelines, it has on occasion unnecessarily made negative comments, been overly critical of the industry as a whole and faced criticism for being obstructive to firms trying to engage with it.

There is a real risk that over-regulation and intrusive precautions could push people towards the black market. Indeed, a PwC study has estimated that the size of the active black market in the UK has doubled in the last couple of years, and over 400,000 customers were predicted to have used an unlicensed operator in the past year, with an estimated spend of around £2.8 billion. The existence and potential growth of the black market poses a significant threat in terms of lost tax revenue, lost jobs, limited player protections and fewer money laundering protections.

When appraising the opportunities for necessary changes in regulation, we must take proportionate steps to continue to protect the small number of people who do have problems with gambling. The estimated rate of those with a gambling problem is around 0.5% of the adult population and has been stable for the past 20 years—a very small number in comparison with rates reported in other nations around the world, which is testament to the safeguards already put in place by the sector here in the UK. However, we must ensure that the necessary support is offered to those people. Those I have spoken to in the industry have acknowledged the need for such protections and appreciate the importance of protecting problem gamblers and young people. Over the last couple of years, the industry has voluntarily taken steps to increase safeguards for vulnerable people, including increasing funding for GambleAware, reducing TV advertising and educating children on the risks of gambling, as well as investing heavily in technologies that better identify and interact with customers who might start to have problems.

Above what the industry has voluntarily committed for funding for research, education and treatment for problem gambling, a blanket levy across the industry has been mooted. The evidence would suggest that this is simply not necessary. The Gambling Commission’s report reviewing the research, education and treatment arrangements states that a plausible sum for annual requirements would be in the range of £21 million to £67 million. I understand that, in 2019, the largest members of the Betting and Gaming Council agreed to increase funding for RET by up to £100 million over the next four years and committed to giving 1% of gross gambling yield to RET by 2023, bringing the total funding within that required range. A blanket levy would therefore be unnecessary and not be of any additional benefit to consumers. It is worth bearing in mind that these funds are already given voluntarily by the industry over and above the billions of pounds paid in taxes and duties to the Exchequer.

I understand that the Gambling Commission is looking into a system that aims to restrict a customer’s gambling spend to a limit based on a person’s discretionary income —known as affordability—to try to protect gamblers. Inherently, without an incredibly invasive and cross-industry system in place, this is a deeply flawed concept. All it would require to circumnavigate the limit would be for the player to open an account with another operator. Without the individual’s spend with all operators being tracked, their affordability limit would thus instantly be doubled. Most regular gamblers already have multiple accounts. Instead, this would create an off-putting and burdensome process for customers who wish to place a few bets simply for fun. There is no evidence to suggest that this reduces problem gambling, only that it reduces gambling overall. It is also morally questionable—where would all this end? Should we place affordability criteria on other areas of peoples’ lives, perhaps limiting spending on fast food, alcohol or anything else that people deem to be potentially addictive?

Further questions would also need answering if this were to be implemented. It would be near impossible to ask all the land-based gambling sector, including betting shops and casinos, to manage this directive. Would they even fall under the same regulations imposed on online operators? If not, that clearly creates an unlevel playing field for businesses while undermining the whole affordability strategy. How would all this actually work in practice?

Understandably, the whole industry, from bingo operators to casinos to sports betting companies, believes this to be an ill-conceived, blunt instrument that targets all gamblers. Its only real consequence is to reduce gambling overall, rather than focusing on protecting those vulnerable people with a genuine gambling problem. It is right that operators intervene where harms are identified, and support must always be made available, but this completely ignores the demand for gambling and, if we are not careful, will turn people instead to the black market if they are asked to provide intrusive documentation such as pay slips.

Flutter, a leading operator in the industry, has developed its own “affordability triple step”, three layers of protection as part of a flexible risk-based approach, while Entain has developed the ARC—advanced responsibility and care—platform, which uses cutting-edge behavioural science to spot whenever someone’s play becomes problematic, so that an intervention can immediately take place. Such schemes are just a couple of examples of the industry proactively taking steps to protect customers without the need for an over-reactive and invasive approach that targets all customers. Market research suggests that 40% of customers would not comply with affordability checks, and three quarters of them would look to evade restrictions by opening other accounts, playing in various physical locations and turning to unregulated online gambling sites, as alluded to by the hon. Member for Strangford (Jim Shannon).

Also of concern, for many of the same reasons, is the so-called single view of the customer, a proposal for a national database that will contain the betting information of every single gambler, as well as any personal information on their betting behaviour and information gathered about their financial position. The industry has been looking at more appropriate options whereby it shares information about those who are most at risk and have been flagged as having problems. It is far less intrusive to focus on those who need support rather than on every single person who likes a bet. Although the legal case is uncertain under general data protection regulation legislation, the Gambling Commission is looking to implement the proposal unilaterally. As previously mentioned, such policy proposals must be considered only within the context of the Gambling Act review.

Advertising and sponsorship provide valuable support for sports throughout this country. Betting sponsorship of sports such as horse racing, football, rugby league, darts, and snooker amounts to more than £70 million per year. Many clubs in the English football league are adamant that they could not survive without the income that they gain from gambling operators, which would not easily be replaced.

Importantly, advertising plays a role in keeping consumers safe, allowing operators to distinguish their offers from unregulated websites and communicating safer gambling messages to drive awareness and usage. Sky Bet’s Three Simple Tools campaign resulted in a 69% increase in the use of cool-off periods; a 10% rise in customers setting deposit limits; and 83% of Sky Bet customers using the profit-and-loss tool. There is little evidence to suggest that gambling advertising leads to problem gambling. In any case, the industry has voluntarily introduced a whistle-to-whistle advertising ban during live sport; support for safer gambling campaigns; and the newly released code on Adtech to minimise under-25-year-olds’ exposure to gambling advertising. The cumulative effect of these measures should be considered when we look to place any further restrictions on this already tightly regulated area.

Although the number of reported issues is incredibly small, when problems arise the Gambling Commission does not deal with individual complaints from consumers. That helps to build a case for an independent consumer-redress system, such as an ombudsman, for regulatory complaints. That would improve the process and make it more consistent for those who raise concerns.

Finally, with regard to the main commercial operators in the gambling industry, there are several needs for land-based casinos in the gambling review, but I do not want to give my right hon. Friend the Minister a sense of déjà vu, so I shall just reiterate my thanks to him for his thoughtful and engaging response to the recent Westminster Hall debate on some of the asks from the sector, the review of a super-casino and the opportunities that one could bring to a town such as Blackpool.

Quite distinct from the industry’s commercial operators sits the successful charity lottery sector. Charity lotteries exist purely to generate funds for good causes across Britain, with advertising fundamental to their ability to deliver this funding. It is vital that Ministers recognise, as the gambling review progresses, the distinct contribution of charity lotteries and the positive role that advertising plays in helping them to support good causes. In Blackpool, for example, the People’s Postcode Lottery has funded small grants totalling over £100,000, supporting local organisations such as Donna’s Dream House and the Blackpool football club community trust. Given that lotteries are widely seen as being low-risk for any problem gambling, changes to policy must allow them to thrive so that they can continue to do more for the good causes they support throughout this country.

In conclusion, I welcome the Minister’s further engagement with this important review, and I look forward to his response to many of the key issues alluded to in this speech, both in this debate and before the review finally comes back to Parliament in the autumn.

To finish on a political note, my constituency and many more like it with significant working-class communities were hard-won by supporters of this Government. Betting, and the sports that depend on betting, are part of our national culture. What is more, many of these people are sick and tired of being told what they can and cannot do, so the Government must tread very carefully here. Completing the review will not be an easy task. I am fully aware that the Minister will have to weigh up competing viewpoints, but I hope he can progress with a rational and evidence-based assessment that takes into account the need to protect the small number of people who have a gambling problem with the huge economic and cultural benefits that the industry has across the UK. The voters will not thank us if we get the balance wrong.

I begin by congratulating my hon. Friend the Member for Blackpool South (Scott Benton) on obtaining this debate, which comes hard on the heels of the debate we had last week in Westminster Hall about casinos. I also thank him for his work as chair of the all-party parliamentary group on betting and gaming and all the members of the group for their engagement with us over the gambling review and the assessment of what further measures are necessary.

Let me start by making clear that the Government have a very simple vision for the gambling sector. We want the millions of people who choose to gamble in Britain to be able to do so in a safe way. The sector needs to have up-to-date legislation and protections, with a strong regulator with the powers and resources needed to oversee a responsible industry that offers customer choice while protecting players. As the Minister for sport, heritage and tourism, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) set out last December, the aim of our gambling review is to ensure that those objectives can be delivered in the digital age and that we have the balance right between protecting people from harm and maintaining freedom of choice in how they spend their money and leisure time.

Gambling is a legitimate leisure activity, and there are millions of gamblers in this country. In the year to March, 40% of all adults surveyed had taken part in at least one form of gambling in the previous four weeks, which is down from 47% in the pre-pandemic year to March 2020. As my hon. Friend the Member for Blackpool South has mentioned—indeed, it was endorsed by the right hon. Member for Warley (John Spellar)—businesses such as casinos and the bingo provide jobs and opportunities for social engagement in towns and cities right across the country. In some areas, online gambling is also an important source of skilled technology jobs.

While every single type of gambling comes with an element of risk, some forms are undoubtedly associated with higher risks than others. When I first took on responsibility for this brief, one of the first meetings I had was with the lived experience advisory group set up by the Gambling Commission to hear from those who have suffered from gambling addiction, members of their families and those affected by it. We know that something like 300,000 people are classified as problem gamblers in this country, and we are very much aware that it can devastate not just their lives but those around them. This morning I had a meeting with the Gambling with Lives charity, in which it described some of the most tragic cases where gambling addiction had certainly contributed to someone’s decision to take their own life.

We already have a public health approach to gambling regulation, with preventive rules designed to minimise the risk of harm to all consumers, and the provision of treatment to help those who suffer harm. However, in this review, we are taking a very close look at whether further measures are needed to deliver the Government’s objectives and to protect people in proportionate but robust ways.

Of course, that has to be based on evidence, which is why we started with the call for evidence. That closed at the end of March and received around 16,000 responses. I am grateful to the huge range of individuals and organisations that made submissions, including representatives of the industry, academics, researchers, charities, campaign groups and, as I said earlier, Members of this House and the other place. It is our intention to publish a White Paper later this year, which will set out the Government’s vision for change and allow all those with an interest to continue to shape policy. Ahead of that, I can give some indication of one or two of the areas in which we are thinking of making further change.

It has become clear that we need to take a holistic approach to gambling reform, recognising where parallels apply across sectors and issues that have traditionally been thought of as entirely distinct. We need to design a coherent package that is flexible enough to respond to future changes and innovation.

I was the Opposition spokesman during the passage of the Gambling Act 2005. Online gambling was hardly mentioned during the entire course of the debate on that Bill. Then, it was in its infancy, yet now it has become one of the major forms of gambling, and in some ways it has created greater risks. It has transformed the industry, and certain safeguards have come with it. Operators can and must use customers’ data to identify where they may be at risk of harm and to intervene accordingly. It is also now possible to self-exclude from all forms of online gambling through one single request. Since April last year, membership of GAMSTOP has been a requirement for all licensed operators.

On the other hand, online gambling has given rise to new products, which are available 24 hours a day, seven days a week. That challenges the assumption in the 2005 Act that controlling availability is a way of controlling risk. As I said, online gambling now accounts for more revenue than gambling in person, and the shift in how people gamble has become even clearer over the last 18 months as a result of the pandemic.

The right hon. Gentleman is quite right to draw attention to the threat posed by the black market, as the hon. Member for Strangford (Jim Shannon) did in his intervention. That is certainly something we need to bear in mind. It is very important that we create a safe space where people are given protection if they are gambling online, but we do not want to drive them away from the regulated sector and into the black market. That is certainly something that we will bear in mind during our consideration of these things.

We are looking at whether further controls for play online would be effective in preventing gambling harm, including whether greater controls are needed at account or product level. We are also working closely with the Gambling Commission on its parallel work to improve how operators interact with customers, and we will ensure that any new checks that it introduces to increase protections for those who are financially vulnerable, binge gambling or losing significant amounts over time harmonise with the aims of our own review.

While it is the case that more people are now gambling online, the land-based sector is still very important in our gambling landscape, and of course it accounts for more than four fifths of the jobs in gambling. I absolutely recognise the important social role that some gambling clubs play in communities. We know in particular that bingo clubs attract a wide demographic of players who rely on those places as spaces to socialise and see friends. I am looking forward to my visit to Buzz Bingo in Clacton-on-Sea on Monday.

We recognise the importance both of a well regulated sector that keeps people safe wherever they choose to gamble and of a strong gambling industry that supports jobs. I will not repeat what I said last week about the casino sector, but as my hon. Friend the Member for Blackpool South knows, there is a need to look at the existing restrictions within that sector. In some cases, they have become steadily more anomalous, and they clearly need to be updated.

Another matter that we are considering is consumer redress, which has featured in a lot of the submissions to our call for evidence and in the public discourse. It is a condition of their licence that gambling operators must provide customers with free access to alternative dispute resolution services to handle complaints. That applies where customers are unhappy with an operator’s service or its response to a complaint, for example about paying out on a bet.

I recognise, however, that the current arrangements deal only with contractual disputes and do not allow for individual resolution if a complaint is about whether the operator has breached its social responsibility obligations, for example by failing to step in when someone shows signs that their gambling is getting out of control. That means that consumers may end up having to pursue action through the courts. Understandably, concerns have been raised that the current system makes it difficult for individuals to seek compensation or support. We are looking carefully at the evidence in that area.

My hon. Friend talked about the Gambling Commission. The commission has broad powers under the Gambling Act that enable it to tackle new and emerging risk through licence conditions without the Government having to take legislation through Parliament. In the past 18 months, for example, the commission has banned gambling on credit cards, tightened rules on VIP schemes and introduced new rules to limit the intensity of online slots, as well as permanently banning reverse withdrawals. We are consulting on and have now approved proposals for a fees uplift for the commission, which will take effect from 1 October for remote operators and from April next year for the land-based sector. This will allow the commission to continue to cover its costs. As my hon. Friend will know, a new chief executive, Mr Andrew Rhodes, has just been appointed to the commission and we are in the process of selecting a new chair. The commission is undergoing a reboot and we are looking at its powers and performance as part of the review.

My hon. Friend mentioned advertising. It is too early, I think, to say where we will end up on the issues around it, but we are looking at the evidence very closely indeed. It is worth emphasising that there are already many rules that govern gambling advertising in this country. The UK advertising codes make it clear that all gambling advertising must be socially responsible, that it must not be targeted at under-18s and that its content must not encourage irresponsible gambling behaviour. Gambling adverts are not permitted to be shown in or around children’s programmes. Compliance with the codes is a licence condition, so breaches can and do result in enforcement action by the Gambling Commission. Licence conditions also set out additional controls on gambling advertising, and the gambling industry code for socially responsible advertising includes rules such as the 9 pm watershed on most television advertising and the whistle-to-whistle advertising ban around live sports.

I am grateful to my hon. Friend for allowing us an opportunity to debate the issues. As I say, work is ongoing, particularly on scrutinising the 16,000 submissions that we have received as part of the review. I look forward to coming back to the House later this year with a White Paper that sets out our conclusions and recommendations.

Madam Deputy Speaker, may I end by wishing you, my hon. Friends, all hon. Members and all those who work for us so well in this House a very happy recess?

I echo what has been said many times today: we are all extremely grateful for the amazing service given by everybody who works in this amazing building during these very difficult times in order to keep our precious democracy working, and working well. Let us hope that when we return it will be back to normal and working even better. I wish everybody a happy recess.

Question put and agreed to.

House adjourned.