Online Gambling

Lord Foster of Bath Excerpts

Thursday 23rd November 2017 Lords Chamber

[Lord Foster of Bath (LD)]

My Lords, I congratulate the noble Lord, Lord Browne, on securing this important debate and on the work that he has done in ensuring at least progress towards the establishment of the multi-operator self-exclusion scheme for online gambling.

Listening to the debate, I have been struck by four things. First, I was struck by the call by the noble Lord, Lord Chadlington, for more independent, transparent, quality research on which to base public policy on this issue. Secondly, we have heard far too many horrific examples of the problems caused by problem gambling—from, among others, the noble Lord, Lord Browne, himself, the noble Lord, Lord Morrow, who drew attention to the impact on families, and the noble Lord, Lord Alton, who reminded us, as did the noble Lord, Lord Wigley, of the impact that can be had on entire communities. Of course, we had that very powerful description by the noble Baroness, Lady Richardson, of the circumstances that can lead to such misery. Thirdly, I have been struck by the unanimity in your Lordships’ House on the very many ways forward that have been talked about that could help to improve the situation, from preventing a two-tier MOSES to moving towards a statutory levy. Fourthly, I have been struck by the concern in your Lordships’ House about children and young people. The noble Baroness, Lady Masham, gave a description of the young person mesmerised by online gambling, and the noble Lord, Lord Chadlington, talked about the need for protection of children and young people—an issue that has been so powerfully raised by my noble friend Lady Benjamin, who pointed out that it is completely unacceptable that online gambling apps are made available to children with pretend currencies. Since the Gambling Commission cannot act because its remit pertains only to gambling that involves real money, I hope that the Minister will see if there are ways in which the Government can take action on this.

I served on the committee in the other place that considered the 2005 gambling legislation. We spent much time on super-casinos, which thankfully never materialised, and on the maximum allowable value of teddy-bear prizes in amusement arcades. We did not spend enough time on online gambling or on category B2 machines—or FOBTs, as they are more commonly known. For many years, I have argued that the maximum stake for FOBTs should be £2. Like the noble Lords, Lord Browne, Lord Morrow and Lord Alton, the noble Baroness, Lady Richardson, and others, I hope that a £2 maximum stake will be the outcome of the current review. The stories of the misery caused by FOBTs are numerous and so I hope that we will also be able to reduce the spin rates, so that fewer games can be played per hour, reduce the number of machines in each betting shop, require increased staffing levels, and strengthen local council powers to tackle the blight of clusters of betting shops on our high streets. I hope that the Minister will be able to tell us that such measures are being seriously considered.

If FOBTs are the crack cocaine of gambling, it is online where we see the wild west of gambling. Online, there are no limits, no time when sites are closed, no supervision, easy access and constant availability. It is no wonder that the highest prevalence of gambling problems comes from the online sector, with its 44% share of the gambling market, 21 million active accounts and huge growth in associated advertising and marketing strategies, such as the so-called “free bets”. I hope that the Minister will take note and consider acting on the concerns of the noble Lord, Lord Wigley, about gambling advertising, not least that linked to sport.

The 2005 gambling regulations are, frankly, wholly inadequate to deal with the current situation caused by the technological explosion since then. I acknowledge that some improvements have been made in respect of advertising and the regulation of offshore gambling sites, but more certainly needs to be done by policymakers and, as the chairman of the Gambling Commission said on Tuesday, by the industry itself. There are a number of measures that have been raised in your Lordships’ House that I entirely support: the rapid introduction of the too-long delayed online multi-operator self-exclusion scheme—to be called GAMSTOP and run by the Remote Gambling Association. As many others in your Lordships’ House have said, I hope that the Minister will assure the House that the scheme will be carefully monitored, that there will be a review within three years and that it will be backed by a major ongoing advertising campaign. There would be little point in introducing such a scheme if online gamblers are unaware of its existence.

Crucially, I hope that the Minister can tell us what sanctions will be applied to any licensed operator who does not offer GAMSTOP. Does the Minister also agree with the point made by so many people that, once the online MOSES is in operation, the single-site exclusion schemes that currently exist should all be dropped so that we do not have a two-tier system? I also hope that he will agree with the need to work towards a single MOSES scheme that covers all forms of gambling.

I welcome the other measures that have been raised. The noble Baroness, Lady Howe, talked very passionately about the need to have effective monitoring of transaction blocking mechanisms, and she is absolutely right. Others have talked about the importance of behavioural change prompts, loss limits and bank transfer time limits. I know that if my bank manager agreed to loan me money to go gambling, I suspect that it would rightly be frowned upon, so can the Minister explain why we let people generate huge online debts by allowing financial services to lend them money to gamble through credit cards? Will he at least agree to look into this?

Like others, I do not believe that the current level of funding for research, education and treatment to help problem gamblers and to limit problem gambling in the first place is adequate—£8 million is simply not enough. The 2005 Act gave the Secretary of State the power to introduce a statutory levy for such purposes, but effective industry lobbying persuaded the Government to accept a voluntary approach. However, it is simply not delivering anywhere near the level of funding required to meet the demands placed on GambleAware—demands that all the evidence suggests will increase. The industry fell 20% short of the target last year. Seven months into the current financial year, the industry was 60% short. Such were GambleAware’s concerns about cash flow that in August it notified the Gambling Commission that the services it funds were at risk. No wonder the trustees of GambleAware have criticised the industry’s willingness to address the problem. I am pleased that they intend to name and shame those parts of the industry that do not contribute their share, but I am particularly pleased that they are also lobbying for a ring-fenced statutory levy. It is worth noting that the chair of the Gambling Commission believes that a statutory levy would be a fair way to address the weaknesses of the current system.

After all, a statutory levy is not a new concept for the gambling industry. We have had one for horseracing since 1961, and next year it is estimated that it will generate £90 million. This means that the gambling industry will statutorily donate 10 times more to look after horses than it voluntarily gives to look after people. Staggeringly, the voluntary levy for greyhounds raises almost as much—at £7.5 million—as the voluntary levy to support people, so far more is raised for horses and greyhounds than for people. It is tempting to think that the industry believes in the maxim, “four legs good, two legs bad”.

The time has come for us to take decisive action to ensure, as the noble Baroness put it, that the polluter pays equitably and fully for the cost of gambling-related harm by introducing a statutory levy, and at a higher level than the current 0.1% of gross yield. Requiring no primary legislation, it is an easy win for the Government. It should have been included in yesterday’s Budget. Done quickly, it could still be their own early Christmas present but also one for all those afflicted by problem gambling and their families, who may not have much to look forward to this Christmas because the budget for presents is now sitting in the profits of the gambling industry.

This has been a wide-ranging, well-informed and interesting debate, and I look forward to the Minister’s response.