Debate - Monday 26th February 2024
Show/HideFinancial Risk Checks for Gambling
(2 months ago)
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Christina Rees (Neath) (Lab/Co-op)
I beg to move,
That this House has considered e-petition 649894 relating to financial risk checks for gambling.
It is, as always, a pleasure to serve under your chairmanship, Sir Edward.
The petitioners ask the Government specifically to stop the implementation of affordability and financial risk checks, saying:
“We want the Government to abandon the planned implementation of affordability checks for some people who want to place a bet. We believe such checks—which could include assessing whether people are ‘at risk of harm’ based on their postcode or job title—are inappropriate and discriminatory.”
The Government have responded:
“We are committed to a proportionate, frictionless system of financial risk checks, to protect those at risk of harm without over regulating. The Gambling Commission will set out plans in due course.”
There are, however, a number of perspectives on the purpose and delivery of such checks. I will do my best to present those to the Chamber today.
For context, the Gambling Act 2005 regulates gambling in Britain. On 8 December 2020, the Government published a review whose purpose was to examine whether the Act provided the right balance of regulation in the digital age. The review had about 16,000 responses. The Government response, in the form of the White Paper, “High stakes: gambling reform for the digital age”, was published on 27 April 2023. The proposals for the reform of online gambling included new obligations on operators to perform financial risk checks
“if a customer’s gambling is likely to be unaffordable and harmful.”
The documented stated that three types of risk would be targeted: binge gambling, significant unaffordable losses over time, and financially vulnerable customers.
The arguments for and against the implementation of the checks can be categorised according to three stakeholder groups: industry, reformers and consumers. I will present the case of each in turn, following several extensive evidence sessions with a range of individuals and organisations including the petition creators, the Jockey Club, the Betting and Gaming Council, Charlie Ritchie from Gambling with Lives, Dr James Noyes and the Gambling Commission.
Taking the gambling industry first, I understand the concerns that operators might have about the impact of checks on profits, not least because the top 10% of gamblers deliver 80% of operator revenue. In horseracing, the numbers are even more stark, with 85% of operator income coming from about 5% of online betting accounts. Operators argue that affordability checks are inappropriate and discriminatory, that in theory punters would be prevented from betting more than £1.37 per day, and that such checks push vulnerable gamblers into the black market. It has been suggested that online turnover is down 20% since non-statutory checks have been in place.
The issue of affordability is not a new one, though. The industry itself pushed for measures back in 2019 and has continued to recognise the need for regulation and markers of harm. The Government flagged an affordability check as a priority long before the White Paper, and the Gambling Commission has already consulted on it and accommodated it within changes to regulation. What is new is that since the White Paper was published, the Government and the Gambling Commission have proposed actual figures for such checks. Affordability is no longer abstract; it is tied to precise thresholds.
What are those thresholds? The Gambling Commission has consulted on two forms of check: first, background checks for financial vulnerability at moderate levels of spend, with proposed thresholds of £125 net loss within a month or £500 net loss within a year; and secondly, checks for harmful binge gambling or sustained unaffordable losses at higher levels of spend, with proposed thresholds of £1,000 net loss within 24 hours or £2,000 net loss within 90 days. In other words, the checks are threefold: for financial vulnerability, for significant losses over a short time, and for significant losses over a long time.
Background checks for financial vulnerability will be frictionless, using publicly available information such as credit reference data and negative indicators such as county court judgments or insolvency notices, while higher risk accounts will have enhanced checks using open banking and other options, with increasing degrees of intrusion the further into the journey that someone goes. It is said that the enhanced checks will be narrowly targeted, with only around 3% of online gambling accounts being affected; the vast majority of these checks will be frictionless, with the Gambling Commission advocating light-touch assessment, applying the data minimisation principle and focusing on publicly available data. Only 0.3% of account holders would be expected to hand over additional financial information. Industry bodies and operators point to checks that are already happening and suggest that they are far from frictionless, but these checks were introduced voluntarily by individual operators, and tare not necessarily the frictionless procedures being developed by the Government.
The second group of stakeholders are reformers, and they include researchers, campaign groups and the Government themselves. They have long supported the call for affordability checks on the most vulnerable gamblers and harmful betting, saying they are needed. The reformers point to the research showing the disproportionate nature of gambling, whereby 80% of profits come from 10% of accounts, and highlight the well-accepted belief that disproportionate profits lead to harmful losses. In addition, campaign groups are keen to point out that different forms of gambling carry different risks. Activities such as playing bingo or the national lottery, or even the vast majority of horserace betting, are vastly different from activities such as gambling in online casinos in terms of the experience and potential for harm.
Philip Dunne (Ludlow) (Con)
I congratulate the hon. Member on securing this significant debate; she can tell from the number of Members here in Westminster Hall today that there is a great deal of interest in the subject from across the House.
The hon. Member just mentioned horseracing. Will she press the Minister to give what reassurances he can to the horseracing community—I speak for Ludlow racecourse, which is an important employer and source of entertainment in my constituency, well known to Opposition Members—that this industry will not inadvertently be threatened by measures to introduce the affordability checks for vulnerable gamblers that I think we all want?
Christina Rees
I thank the right hon. Member for making that very valid point. I am sure that the Minister is listening, as he always does.
Chris Grayling (Epsom and Ewell) (Con)
I am grateful to the hon. Member for giving way and allowing me to reinforce the point just made by my right hon. Friend the Member for Ludlow (Philip Dunne). I represent Epsom Downs racecourse and more particularly the training industry in Epsom. In a smaller centre, in which the owners are not wealthy Arabs but simply people who enjoy participating in racing, the impact on the trainers of measures that really damage the industry would be enormous. It is not just about the racecourse; it is about the livelihoods of the people who do the training and who operate the training stables. Will the hon. Member impress on the Minister that there are genuine problems around things like online casinos, but tackling those must not come at the expense of the racing industry, which is so important to so many communities across the country?
Christina Rees
I thank the right hon. Member for making another valid point. I am sure the Minister listened and will respond in due course. The number of hon. Members who have turned up to speak is an indication of how important this topic is to our constituents and constituencies.
As I was saying, activities like playing bingo or the national lottery, and even the vast majority of horseracing betting, are vastly different from online casinos and fruit machines in terms of the experience and potential for harm. Researchers understand the importance of carefully considering the figures around the threshold for checks. They need to be appropriate, but also meaningful and preventative. Campaigners rebut the claim that such checks are inappropriate by pointing out that checks that reduce harm are highly appropriate. An example often cited is that people would not want to produce documentation to purchase a gin and tonic; that is true, of course, but there are many examples where the family of a harmful drinker might ask their local shop not to sell alcohol to them or, indeed, where someone is refused another drink because they are drunk. Nor are the checks discriminatory: they are no different from the checks undertaken almost instantly when a consumer clicks to purchase a product online using the Klarna three-payments procedure.
Finally, we must consider the voice of the consumer—the punter. Most gambling is not harmful and most bets are small, proportionate and affordable, such as a lucky dip on the lotto, a lucky 15 on the horses or a flutter once a year on the grand national.
Kate Kniveton (Burton) (Con)
Many of my constituents enjoy the time-honoured tradition of having a bet at the races at the fantastic Uttoxeter racecourse in my patch. They are concerned that the proposals for an annual £500 net loss threshold, which, as the hon. Lady has already said, equates to just £1.37 a day, will lead to intrusive checks, limiting their freedom to spend their money on an activity of their choosing. Does she agree that if affordability checks are to be implemented, they should be carefully and deliberately targeted at those who are most at risk of harm?
Christina Rees
I thank the hon. Member for her intervention. I am getting a tour of constituency racecourses—this little woman from Wales is learning all about geography today. I agree that the proposals should be measured.
The proposed checks will not affect such customers at all. It is important not to conflate the views of industry with the views of consumers. Affordability checks are not about attacking consumer rights or curbing individual liberties, but about upholding consumer protections and curbing operator excess.
Sir Bill Wiggin (North Herefordshire) (Con)
The hon. Lady says it is not about anything other than protecting consumers, but can she think of any other activity where the Government check how much money someone has?
Christina Rees
Payday loan sharks might be an example, but I am sure the Minister will respond in due course—I think I slipped out of that one, or I tried to. The responsibility lies with industry and operators, not customers.
In summary, it is understandable that industry bodies, operators and the horseracing community have concerns about the introduction of financial risk checks, but the idea of introducing checks is not new, and the need for regulation against harmful betting is supported by industry and consumers alike. The issue seems to be that such checks need to be frictionless, without negative impact on punters or operator revenue, and without pushing vulnerable gamblers into the black market. It would be useful if the Minister took this opportunity to outline how frictionless checks will work and when pilot schemes will be introduced.
Sir Edward Leigh (in the Chair)
I remind Members that they should bob if they wish to be called. We have three hours, which is quite a long time, but I want to get everybody in and I do not want to impose a time limit at the moment. Perhaps, those who are called early can look around them, see that a lot of people are trying to take part in this debate, and keep their speeches brisk, which is always the best policy, and certainly not take more than 10 minutes. I am sure that I can rely on the first Member I call, Philip Davies, to give a brisk speech.
Philip Davies (Shipley) (Con)
It is a pleasure to see you in the Chair, Sir Edward. I am not renowned for brisk speeches, but I will try my best. I am sure the people of Market Rasen are delighted to see you taking such an interest in this debate.
I start by referring people to my entry in the Register of Member’s Financial Interests: I have occasionally accepted hospitality from the betting industry and the horseracing industry; I am an unpaid board member of the Racehorse Owners Association; and as I always mention on these occasions, I am the modest owner of racehorses and the owner of modest racehorses.
I thank the hon. Member for Neath (Christina Rees) for opening the debate and the Petitions Committee as a whole for allowing it to take place. I particularly thank Nevin Truesdale from the Jockey Club for launching this petition and everyone who signed it, enabling this debate to take place. I the Racing Post, which not only did a tremendous job getting behind the petition but has done sterling work in highlighting the damage that the proposed affordability checks could do to punters and the sport of horseracing. I also commend the Minister, my constituency neighbour, who inherited this policy and whose engagement with all stakeholders has been exemplary.
Let me make it clear at the outset that I am speaking up for two groups today: one is the horseracing industry, but first and foremost I am speaking up for punters—the people who have been largely ignored in this long-running debate and tug-of-war over affordability checks. They often get caught up in the crossfire of the arguments between the well-funded betting industry and the well-funded anti-gambling campaigners.
I have no intention of speaking up for bookmakers, partly because most of them in the industry are big enough to speak up for themselves, and partly because their position on stake restrictions is inconsistent—that is the kindest word I can use. On the one hand, bookmakers say it is wrong for the state to restrict how much people can gamble; on the other hand, though, they are the most guilty of all of restricting the stakes of punters who have the audacity to back too many winners, often to pennies rather than pounds. I have warned them time and again that trying to have their cake and eat it on punter restrictions would backfire. Until they abandon that anti-punter mentality, what they say on this issue will always be subject to some level of ridicule.
The principle that people should only bet what they can afford is not a controversial one. It is the first piece of advice that any of us would give to anyone who starts betting. However, what the Government and the Gambling Commission are proposing is completely unacceptable. They propose frictionless checks for people who have a net spend of just £125 over a rolling 30-day period, or £500 in a year, with enhanced checks taking place for anyone with a net loss of £1,000 in 24 hours or £2,000 over 90 days.
I have a number of concerns about that approach, both practically and in principle. I find it somewhat offensive that the Government and the Gambling Commission believe that there is something inherently distasteful about betting. If that is not the case, why are the Government proposing that type of affordability check just on gambling? Why do they not ask every retailer in the country to carry out similar checks on customers to ensure that they can afford to buy whatever they come to the counter with? Is the Minister really claiming that nobody spends more on alcohol than is good for them, more on shoes than they should, or more on holidays than they can actually afford?
Sir Julian Lewis (New Forest East) (Con)
My hon. Friend does not even need to talk about products that are that addictive. As one of my constituents has pointed out, no one checks on him if he spends £150 on a dinner for two people. Would he accept that, even if the principle is conceded that there should be some checks, the level at which this has been set is far too low?
Philip Davies
I very much agree with my right hon. Friend, as I happily do on most things. Of course people spend more than they should on all those other things, but the Government are snobbishly only treating punters as some kind of pariah, which I do not appreciate.
In Parliament, we should stand up for people’s freedoms. I was not elected to Parliament to stop everyone else doing all the things I do not happen to like myself, but some Members seem to think their job is to do nothing other than that. It is unacceptable that the Government, the Gambling Commission and the bookmakers will basically, between them, decide how much each individual punter can afford to spend on their betting, and the punter gets virtually no say whatsoever. It is completely outrageous. The Conservative party used to believe in individual freedom and individual responsibility, and some of us still do.
If we asked how much responsibility each group should take for determining how much somebody can afford to spend on betting, I doubt anyone would say that the individual concerned should have 0% responsibility, but that is the route down which we are in danger of going. It is absurd to think that bookmakers and regulators should be able to decide how much each individual person in the country should be allowed to spend on betting. When people open an online betting account or the next time they log in, perhaps they should be forced to enter how much they want to limit their spend over a fixed period. The responsibility for ensuring that they do not go over that should rest with the bookmaker, but not the decision as to how much they can afford in the first place.
Adam Afriyie (Windsor) (Con)
Does it not strike my hon. Friend that there is a degree of hypocrisy, when a large proportion of problem gamblers who really are in great difficulty are just using national lottery scratchcards? The figure is about four times higher than that for those who gamble on horseracing.
Philip Davies
I know that my hon. Friend is a big supporter of Windsor racecourse in his constituency. I will come on to that later. I hope you will think about the interventions I am taking, Sir Edward. I do not want to get in trouble.
Sir Edward Leigh (in the Chair)
You can have injury time if you want, Mr Davies.
Philip Davies
Thanks.
Thankfully, readers of the Racing Post and punters still believe in the timeless Conservative principle of individual responsibility. In a recent poll of punters carried out by the Racing Post, when asked who they thought was best placed to assess whether their betting is affordable, 96.6% said that they were, 1.8% said the Gambling Commission, 1% said bookmakers and 0.6% said the Government. If that is not a giant raspberry to the proposed affordability checks, I do not know what is.
Everyone knows that the problem gambling rates in the UK are extremely low, and certainly do not justify anything remotely close to what is being proposed. However, it is also pretty obvious to most people with common sense that the affordability checks are likely to make things worse for people with a gambling addiction, rather than better. Does anyone seriously think that anyone who has a serious gambling addiction, if and when they are told by online bookmakers that they are no longer allowed to bet with them, will just stop betting completely? It is pretty obvious that those people will do all they can to carry on with their addiction, and that will mean going to the black market where there are no controls on people’s behaviour.
Philip Davies
The hon. Gentleman will have the opportunity to have his say later, and I am anxious about Sir Edward’s strictures.
The Gambling Commission has always said that the threat from the black market is overstated, while at the same time, like most quangos, telling the Government that it needs more money to tackle it. I hope the Minister will make it clear that he does not underestimate the threat from the black market. Only today, the front page of the Racing Post shows the results of a special investigation into The Post Bookmakers—an unregulated firm with 1,300 customers—which said it was expecting a ridiculously busy Cheltenham and recommended that a customer deposited as much as they could. How on earth can making it more likely for people to go to firms like that possibly help to tackle problem gambling?
The wonderful sport of horseracing derives much of its income from the gambling industry, so the more people go to the black market, the less money there is for the sport of horseracing. British racing is the best and most prestigious in the world. It is the second biggest spectator sport in the UK after football, brings a huge amount of foreign investment into the country and is a huge part of the rural economy. It also provides a huge amount of pleasure to millions of people across the country. The Government cannot possibly allow themselves to introduce measures—however well meaning —that will have a devastating effect on this great sport.
Some 24,000 racehorse owners in the UK invest more than £500 million into the rural economy. They pay £32 million a month in training fees, employing over 350 racehorse trainers who employ some 80,000 people. The least they should be allowed is to have a bet on their own horses as well. We cannot allow decisions to be made that put that investment at risk.
However much I would like the Government and the Gambling Commission to abandon the affordability check policy, I have not been here so long without accepting that some battles are impossible to win. I therefore accept that the Government may feel that they have invested too much in the affordability check debate to be able to abandon it completely. I have suggestions for the Minister that might help make the policy less bad, and I hope he will consider them.
The Government have said that they want financial checks to be frictionless, but as envisaged the checks would be anything but. First of all, will the Minister pledge to ensure that any checks will be based on net deposits, not gross deposits? That would make a material difference. Secondly, it is envisaged that enhanced affordability checks will be based on current account turnover, or CATO, data. That is used primarily by loan industries to determine whether a customer can afford a loan. It focuses on money flowing in and money flowing out of an individual’s account. That is precisely the wrong kind of test, as it second-guesses in a subjective manner what someone can afford.
CATO does not consider financial vulnerability and is extremely unhelpful when it comes to people with irregular money flows such as the self-employed, entrepreneurs and individuals with high wealth but low income. Will the Minister pledge not to use CATO data for those reasons? If he insists on going ahead with affordability checks, will he use SCOR data instead, from the Steering Committee on Reciprocity? SCOR data is much more appropriate as it shows if someone is showing signs of financial vulnerability and distress. It flags people who are falling behind on the rent or those with missed mortgage payments, defaults on loans and so on. Crucially, the checks are entirely frictionless and do not discriminate against any group, such as the self-employed.
When the Government envisaged affordability checks, surely that is what they had in mind—checking that people were not resorting to gambling to try to win the mortgage payment that they had fallen behind on, rather than trying to second-guess what each individual could afford to spend on gambling. I look forward to the Minister’s response to that suggestion. Will he also make clear where anti-money laundering checks will fit in with the affordability check regime?
If the Government insist on affordability checks, I have another suggestion: to differentiate between games of skill and games of chance—that is, to separate sports betting from online slots and roulette. Horseracing is not a game of chance and in my view should not be treated as such. Incredibly, as my hon. Friend the Member for Windsor (Adam Afriyie) made clear, the Government envisage that some games of chance will be treated more favourably than games of skill. I do not think that the national lottery will be subject to affordability checks—it cannot possibly be right that people who bet on horseracing will but people who bet on the lottery will not. Will the Minister confirm that that will not be the case or give an explanation of why it will?
Not including the national lottery in such measures would indicate a disregard for the people losing money and an interest only in the people winning money. If the concern is about problem gamblers, why is it okay if they have lost all their money to the lottery, just because that money goes to good causes rather than bookmakers? The national lottery must be included in all the measures in the White Paper.
I end, Sir Edward, where I began: by urging the Minister to look after the interests of all punters to ensure that nothing is done to threaten the horseracing industry, which will never forgive the Government otherwise, and to stand up for the key Conservative principle of individual freedom and individual responsibility. It is not too late to snatch victory from the jaws of defeat.
Carolyn Harris (Swansea East) (Lab)
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Neath (Christina Rees) on leading this petition debate.
It is an honour to speak about a topic that I am truly passionate about: reducing gambling harm and protecting the most vulnerable. According to the Gambling Commission, 22.5 million people in this country gamble, which equates to about 44% of the adult population. The overwhelming majority do so without any issue, but not everyone. When it comes to those for whom gambling is an addiction, the Gambling Commission and the Government have a duty to act responsibly and protect them from harm. The publication of the long overdue gambling White Paper last April was therefore widely welcomed by the all-party parliamentary group on gambling related harm, which I chair, as well as by a growing community of organisations, charities, academics and clinicians, all intent on reducing gambling harm, protecting the vulnerable and saving lives.
While concerns remain about the consultation times on the proposals in the White Paper and how long it will subsequently take us to get where we need to be, what is important today is that we lay out why the changes are so critical—specifically, the positive impact that affordability checks will have in reducing harm and saving lives.
In its patterns of play research, the Gambling Commission identified that the most profitable 1% of accounts make up 70.4% of the gross gambling yield, echoing previous research from the University of Liverpool. The gambling industry relies on a hugely disproportionate percentage of its profits coming from those affected by gambling addiction, who are subsequently harmed by unaffordable losses.
Historically, the industry has recognised the need for responsible gambling and ensuring that customers spend within their means. In 2018—that seems a life-time ago—the Senet Group, the industry standards body that was later absorbed into the Betting and Gaming Council, set out three steps that responsible gamblers should adhere to: only gamble what you can afford, set limits and do not chase losses. Suggesting that someone gripped by addiction would be able to make rational decisions on what is affordable is naive. Nobody would even contemplate that for any other addiction. The logical way forward would be to proactively introduce affordability checks on anyone gambling larger sums.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
I thank my hon. Friend for giving way and congratulate her on the work that she does on this matter. Does she agree that primarily the focus should be on protecting the most vulnerable people in our communities? It is not about being anti-gambling per se. The industry has failed to act, which is why measures are needed to protect the most vulnerable in our communities. It is a small price to pay to protect those people.
Carolyn Harris
I totally agree. Anti-gambling is one thing that I am not. I am very fond of visiting the racetrack, as I am the bingo hall. My motive does not come from being anti-gambling. I want to protect vulnerable people.
The logical way forward would be to protect and proactively introduce affordability checks on anyone gambling larger sums. Those would not stop anyone who can afford it betting as much as they choose, but it would stop those who cannot. After carefully considering the evidence, the Government included a consultation on two forms of affordability checks in their proposals in the White Paper. The first would consist of background checks on those spending moderate levels, which would look at financial vulnerability. The proposed limits for the checks to be triggered would be a net loss of £125 within a month or £500 within a year.
The second would be a more enhanced check for those regularly spending higher levels, which might indicate a binge gambling problem. The proposed thresholds for them would be a £1,000 net loss within 24 hours and £2,000 within 90 days—halved for those aged between 18 and 24, given that that group has already been identified as being at greater risk of harm.
Although many have jumped to condemn the checks, it is important to be clear about who would be impacted by them. Recent research conducted by Dr Philip Newall from the University of Bristol and Dr David Zendle from the University of York using open banking data found that the unharmed gamblers have an average monthly spend of £16.41, compared with £208.91 for the highest risk group. That suggests that risk-free gamblers would very rarely trigger any affordability checks. If anything, the figures highlight the fact that the proposed thresholds are far too high and could be set at a lower level. To be clear, the initial background checks of financial vulnerability would be frictionless, using publicly available information such as credit reference data alongside negative indicators such as county court judgments and insolvency checks. The enhanced checks would initially use open banking, with more intrusive checks only being triggered further down the line.
It must also be put into perspective that the enhanced checks would be narrowly targeted to around 3% of the online gambling accounts affected. I can say at this point that it is the online accounts that are key. Online is where the most harm is taking place. It is where people—incredibly vulnerable people—can spend money they just do not have, with no intervention, with no contact with anyone that might notice a problem, and, until last week’s announcement, without limits. Online is causing harm at rates far in excess of any land-based venue, and it is important that we keep that in mind. The APPG’s focus has always been on that, and we have continually called for the likes of horseracing tracks and bingo halls to be considered separately in legislation.
For the 3% of affected online gambling accounts, the vast majority of checks would be frictionless. The Gambling Commission has already advocated for the focus of checks to be on publicly available data. Research suggests that only 0.3% of account holders would be subject to the level of checks that would require them to hand over any additional financial information. However, it seems that the smaller number of enhanced checks that would require consent on the part of the individual are being used as a scaremongering tactic to turn the debate on affordability into a controversial topic. Given that those checks have such a minimal impact, it is difficult to see why they have been contested so vehemently.
We know that the industry has stirred up the controversy by exaggerating the levels of intrusion and suggesting that the checks would drive gamblers to the black market. That loses sight of the whole point of the checks, which is to protect gamblers from harm by ensuring that they are spending within their means. Surely that is in the interest of the industry, which currently has a reputation for allowing those unable to control their gambling to gamble far in excess of what they can afford to spend.
Stephen Crabb (Preseli Pembrokeshire) (Con)
The hon. Lady is making some strong points, and she has done some excellent work on this issue. When one talks to people who have lived and are living with serious gambling addictions, what comes across very strongly is the way they alter their behaviours to avoid accountability and scrutiny, to the point of using multiple identities. That being the case, is the hon. Lady confident that these kinds of checks, some of which will be intrusive, as she said herself, will drive the better outcomes we all hope to see?
Carolyn Harris
While we do not have all the answers now, that does not mean we should not do anything to protect those who are vulnerable. It is our responsibility to make sure that the system works to protect vulnerable gamblers.
It is ironic that this is the same industry that just a few years ago set out the three steps for responsible gambling, which included only gambling what is affordable —the same industry that still spends big bucks on “Safer Gambling” logos and promoting safer gambling week. It seems to be a case of talking the talk, but being totally unwilling to walk the walk and actually implement the measures that could protect the most vulnerable customers.
As I said at the beginning, we know that the vast majority of the 22.5 million people gambling in this country enjoy doing so safely and within their own limits. Nobody, least of all me, wants to prevent them from being able to do that. We have already established that the number of people who could trigger a check as a result of their spending, even if it is money they can afford to spend, is negligible. The argument against affordability checks is therefore very difficult to grasp, when a slight inconvenience for a very small number of people will protect many more.
The argument for affordability checks is comprehensive. It will stop those gripped by addiction from gambling more than they can afford. It will reduce the levels of harm we are seeing. It will protect the industry’s most vulnerable customers. Most importantly—and I say this because there are people in this room today who have lost children because of this addiction—it will save lives.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
It is a privilege to speak in this debate under your chairmanship, Sir Edward. I apologise if I have to disappear briefly at 6 o’clock for a charity meeting, but I pledge to be back before the wind-ups.
The hon. Member—in this case, my hon. Friend—for Swansea East (Carolyn Harris) has made most of the strong case that exists, but I want to touch on a few particular points. It seems to me that this debate should not be for or against affordability checks, and I do not think it really is. In fact, my hon. Friend the Member for Shipley (Philip Davies) invariably ends up being in the right place on some of these points. He made the case, rightly, for a debate about what levels there should be, how this all works, and who should and should not be in. I thought that was quite interesting.
I want to come back to my hon. Friend’s point about the need for checks to be frictionless. I agree. If there are to be checks, they need to be as frictionless and as unobtrusive as possible, because they are about the early onset of issues and problems. They should act as flags and be the nudge that says, “Something isn’t right here”, rather than an absolute shutting down, as it were.
My hon. Friend the Member for Shipley made three points, including whether net deposits should be used or not, that CATO checks will not work—I completely agree—and that score data is an issue here; I also agree. All those points are really important, and I recommend them to the Minister.
It is important to understand that I was never really in favour of these checks originally, when I first started. However, having spent time with the charities and people who have lost members of their family, I think one point comes across time and again: if there had been an early moment in the process when either the people concerned had realised what they were up to or others had been able to say, “Stop, stop! Where are you going with this?”, many of those disasters would not have happened.
We need to look at the issue in the context of how we can stop the early onset of addiction and the process that takes place, as we would do with anything else. It is a human issue; it is not a principle of freedom versus non-freedom. During many hundreds of years in this place, we have dealt many times with issues where absolute freedoms have had to be constrained to some degree, but we limit that as much as we possibly can be. That is the case in this process, which is why I think we should be able to settle on that here.
First of all, I do not have a racecourse in my constituency, but I used to have a dog track. It was a very famous dog track, but it closed because the owners decided that they could make more money through online gambling rather than allowing people to come to the stadium and bet, which I had done in the past. I have to say, I, like anybody—well, perhaps not everybody—like to go to race meets, and I like to bet on horses because it makes it more exciting. I always try and go to the ring to do that. Racecourse owners have done no good to the ring, which is really proper betting; in many cases, they have pushed it further and further away from the smart stadiums. The people there were the ones who would occasionally say to someone, “You know you’ve already bet on this. Are you sure you want to put this bet?” I have had that happen—no, I haven’t, but I have seen others get it on a number of occasions, and I have stood up for them when they have had these problems.
This is not about being against gambling; it is about being against the untrammelled levels that affect those who are most vulnerable. That is the key. Let us make very clear what is not on the table. As things stand, there are no checks for on-course bookmakers, and none are planned. I would be against that should we decide to go down that road. This is important, and the same point exists for land gambling. We are not planning to check or stop that in the same way as online, which I will come back to in a second.
Danny Kruger (Devizes) (Con)
My right hon. Friend makes an important point about the need for balance in this policy. Having spoken to a lot of the breeders and trainers in my constituency in Wiltshire, I think there is a very strong argument against these proposals. We have also heard the case for them.
The fact that this debate is so well attended and that there is so much controversy about these proposals suggests to me there is a problem with the policy-making process. When I was a civil servant at the Department for Digital, Culture, Media and Sport—in fact when my right hon. Friend the Member for West Suffolk (Matt Hancock) was Secretary of State—I saw how policy making is done, and I think there is a problem with it.
The people who are the experts or are most likely to be affected by the policies that we make here are not properly involved in the deliberations that go into policy making. I wonder whether my right hon. Friend agrees. Could he make the point to the Minister that, given the degree of controversy over these proposals, we need to delay the implementation and involve a wider group of stakeholders and experts in the consultation, which should have happened before now?
Sir Iain Duncan Smith
My hon. Friend has made his point through me to the Minister, who I am sure will deal with it. I will say that the consultation did not happen overnight—it has been going on for some time—but I accept that others may think that they have not had enough time. In fact, the gambling industry could have made a bigger impact by taking full part, rather than not always wanting to be intruded on by questions. As has happened with the group on many occasions, many chose to stay away.
I also make the point that few people will be impacted by the checks. Many of the concerns set out by punters involve the checks that the industry is already carrying out. It intrudes like mad on behaviour—that is the biggest area. It wants to deal with the behaviour of punters because, as we have heard, the gambling industry makes the vast majority of its money from those who are losing money at a rate of knots.
In fact, my hon. Friend the Member for Shipley made an interesting point, which I agreed with: often, those gamblers who have been successful end up being blocked. That information travels across the gambling companies, so a gambler who happens to be moderately or very successful finds themselves taken off the list of all those companies. They are not about openness, freedom and choice; they are the last people to be interested in that. We may be debating this, but they are not, because they do not want to lose money themselves.
The important point is that the gambling industry itself has not shown a huge amount of respect for the horseracing industry. Many betting shops are encouraged to cross over to FOBTs, or fixed-odds betting terminals, which are now B3s, and to SSBTs, or self-service betting terminals, which allow cash remote betting inside shops. The remote sector has long looked to cross-sell away from horserace betting to betting on other sports.
One thing that I want to make absolutely clear is that the gambling companies are not that interested in the success or the future of horseracing per se, but just in how much money they can take out of it. I am desperately keen that the horseracing industry should thrive. I absolutely believe it offers huge prospects for those in rural areas. It is a hugely successful and now global industry, and no one supports it more than I do.
I will end this by saying simply that the debate should not be about the absolute purity of no checks. We are here to look at, first, what the levels are and, secondly, how intrusive they will be. If we could achieve that and the right decision is made finally by the Minister, that will mean that the situation will be much better and, at the end of the day, that fewer people will lose their lives or become so addicted because of the desperate nature of what they have been doing in darkened rooms and behind closed doors. We want to stop that and to save lives.
Wera Hobhouse (Bath) (LD)
It is a pleasure to serve under you in the Chair, Sir Edward.
I congratulate the hon. Member for Neath (Christina Rees) on introducing the debate, which has already shown that this is very much a question of balance. We recognise the problem of gambling and gambling addiction, but we also understand that there are many forms of gambling, and the majority of people speaking today are here because we support horseracing and racecourses. We must ensure that we try to stop harm, which we are all absolutely in favour of doing, but do not put the baby out with the bathwater by putting out of business the wonderful facilities in our communities that enjoy so much support.
If affordability checks are to be implemented, they should be carefully and deliberately targeted at those most at risk of harm. We have already heard that exact sentence this afternoon. We need to ensure that problem gambling does not ruin more lives. We all believe in the need to protect people from gambling harms, and reforms are overdue: the UK has 400,000 problem gamblers, including some 60,000 children aged 11 to 16. Those figures are stark.
My constituency, however, is lucky to enjoy an active and vibrant horseracing scene. Bath is Britain’s highest flat racecourse, with a distinguished history of racing going back to 1811. Racing was first recorded in Bath in 1728, which is a reminder that people did not go to Bath just to take the waters. Bath racecourse is an incredibly important venue for the city. It hosts more than 20 races each season but, much more, it is also a venue for family days, live music and many other large-scale events. It was also a vaccination hub during the pandemic. It is an important employer and welcomes thousands of visitors.
Not surprisingly, many of my constituents have signed the petition. British racing is particularly vulnerable to changes made to gambling regulations and, as we have already heard many times this afternoon, we must ensure that we get this right. The racecourse has expressed concerns to me about proposed affordability checks. It believes that a one-size-fits-all approach will not work, and I echo that. Proposed affordability checks currently will be the same for everyone, no matter how much they can earn or what their disposable betting income is.
Bath racecourse has welcomed Government assurances that most consumers will not actively notice checks taking place. It is right that checks will be frictionless, but Bath racecourse is concerned that intrusive checks could put off punters, as we have heard. I am not an expert—I do not own any moderately successful racehorses—but occasionally I go to a race, and it is absolutely true that it is fun to put a bet on a horse, because we are invested in that horse. That is fine for most people. We should absolutely ensure that that sort of betting is not intrusively checked; that if somebody wins, they can bet and try their luck again; and that we are not stopping all those types of betting or the fun that people have at racecourses—the majority of people have harmless fun.
The majority of gambling problems stem from people chasing their losses and spending more than they can afford; I think I have heard that about gambling addiction, although I am not an expert. Ultimately, people get most excited by betting more if they have lost something. In fact, we have also heard that when people are winning, they are sometimes excluded from betting more. That is absolutely not right.
We Liberal Democrats are adding something to this debate: we would adopt a public health approach to gambling legislation. We propose that there should be a soft cap on gambling losses set at £100 per month. That proposed cap is much higher than the vast majority of gamblers lose in a month, so occasional gamblers would not be affected in any way and would not appear on any database. As I have said, many gambling companies already require financial data for gamblers to be able to open an account, so for many who reach the £100 cap no additional information would be required. If someone wished to bet beyond that loss limit, they would be required to provide financial data to show that they can afford to do so.
The affordability checks would be run separately from any individual gambling company. There would be confidential sharing of data between different gambling companies so that an individual could not get close to the cap with several companies at the same time. We need a single, independently run system of affordability checks that treats people with dignity. Data collected for that purpose would be held securely and confidentially and solely for that purpose. The affordability checks would not apply to cash gambling, for example, at horseracing. Those are some proposals that the Minister might have a look at.
It is important that there should be reform, but it is also important that we get this right. It is particularly important to me that such a wonderful facility as Bath racecourse is not affected by a hammer approach to tackle the problem. That would have unintended consequences and put wonderful community facilities such as Bath racecourse out of business.
Matt Hancock (West Suffolk) (Ind)
It is a pleasure to be able to speak in this debate, and I am grateful to the hon. Member for Neath (Christina Rees) for introducing it. I am even more grateful to the more than 100,000 people who signed the petition; it reached 100,000 people calling for the debate in only 27 days. Some 1,200 of the signatures are from Newmarket in my constituency—my constituency is called West Suffolk, but the vast majority of the signatures are from Newmarket. Being here feels like the start of a horse race as I am surrounded by so many colleagues and it is so busy in here today. I have been contacted by other Members, including two Ministers, who wanted to speak in this debate but cannot, including my right hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), the former Chancellor. This issue is huge and I do not want to leave the Minister with the impression that affordability checks are a side issue; they are absolutely central to the future of horseracing. We are making a mistake, so we must stop and start again, and I will set out why.
I bow to no one in caring about and paying regard to the problems of gambling harms. I have seen them for myself; I have spoken to those who have lost children to gambling. As the Culture Secretary, I introduced the limits on fixed-odds betting terminals, or FOBTs, which were far below the recommended rate. I overruled the official advice to bring in the £2 limit, with the support of the hon. Member for Swansea East (Carolyn Harris) and my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith). We worked together on that.
I care deeply about gambling harms and as both a former Culture Secretary and a former Health Secretary, I understand them. However, these proposals, as they are being introduced, will make the gambling harms worse. The PwC report published recently showed that the amount staked by UK online gamblers on the unregulated market in 2020 had doubled to £2.8 billion in the previous one to two years. In December 2022, more than 250,000 people visited unregulated black market sites, compared with only 80,000 during the same month the previous year. That has a huge impact on horseracing, which I will come on to, but also on gambling-related harm. Online casinos—games of chance rather than games of skill—are a serious problem that need addressing. I would recommend that the limit of £5 being proposed by some is reduced to £2. We should be extremely tough on games of chance, which are programmed algorithmically to ensure that people lose money. I do not think anybody in this debate would oppose the introduction of measures to resist those types of addictions, for addictions they are.
As I say, I bow to nobody in my support for measures to tackle problem gambling, but I am afraid to say that, having examined the evidence, I am convinced that introducing these measures—not just as they are being proposed, but as they are actually being brought in—is increasing gambling harms and not decreasing them. We should not fall for the old adage of, “We have a problem, and we must do something; this is something, therefore we must do it.” I am afraid to say that the current proposals will make problems worse rather than reducing them.
Many of the offshore gambling firms explicitly target those signed up to the GAMSTOP service and there is a grim irony that the regulator and the Government are, unfortunately, making the problem worse.
A couple of Members have said that the checks have already been introduced by the industry; the hon. Member for Neath said that they had already been introduced “voluntarily”. I am afraid to say that I do not think that is true. The gambling industry, for which I have absolutely no regard, is introducing checks now in the shadow of expected future regulation, because it knows about the Gambling Commission—indeed, it is regulated by the Gambling Commission. These things are not being introduced “voluntarily”; they are being brought in because the gambling companies think that further regulation is coming down the track. We are already seeing the negative impact in the uptake of black market offshore gambling, as I have already said, and we are already seeing the impact on the horseracing industry.
I am incredibly lucky to represent Newmarket. Horseracing is the UK’s second largest sport, with 5 million racegoers annually, generating over £4 billion for the economy and untold soft power. In Newmarket, 7,000 people are employed in or around horseracing, which puts a quarter of a billion pounds into the local economy. In addition to all of that, it creates the joy that so many of us have spoken about.
We know that 26% of bettors have already experienced an affordability check, ahead of the proposals officially coming in. We have seen that the betting turnover on racing fell by £900 million in 2022-23. The financial impact on the horseracing industry is already happening. Prize money is going up in the rest of the world but is incredibly tight in the United Kingdom. The impact is biggest on the small racecourses, but there is even an impact on Newmarket, which hosts the two finest racecourses in the world.
Sir Bill Wiggin
The industry estimates that this will cost it £50 million. Does the right hon. Member agree that if we can separate the challenges of problem gambling from the joy and importance of horseracing, which employs 80,000 people, perhaps progress is possible? However, at the moment that is not clear.
Matt Hancock
Absolutely. Horseracing already has its own legislative framework; it has had it since Churchill introduced the Tote. There is already in law a definition of and a separation of horseracing. I recommend that the Government separate games of chance, in which there is no skill and there are guaranteed losses, from horseracing, which is one of this country’s finest achievements and brings joy to so many.
Let me turn to “frictionless”, which we have heard a lot about. I was thrilled when the Minister said at the Dispatch Box that checks would be frictionless; he has said it here and he said it in the White Paper. Here we come to something of a constitutional point, if I may say so. The Gambling Commission has interpreted the Minister saying checks will be frictionless as meaning “frictionless for the vast majority”, which is different. These checks, if they are to happen at all, should be frictionless. The Minister has committed to that and it is Government policy, yet we have a regulator wrongly misinterpreting “frictionless” as “frictionless for the vast majority”. It is a distinct problem. Also, if checks are frictionless, they have to be based on data that people have already consented to make publicly available. If somebody looks at one’s bank account details, there has to be friction, because they will need permission to look at those details, so there is already a problem with implementing frictionless checks.
The hon. Member for Swansea East made the point that it is difficult to see why people would worry about these checks or why they would go to unregulated online sites. There are two responses to that. The first is that people fear the Government looking into their financial affairs. The second is a practical point: it is happening. That is how people are responding to these proposals. I know it is happening among my constituents, because they tell me on the doorsteps. They are changing the way they place bets, because of fears about what the Government are going to look at. We need to recognise reality in this place. We cannot just wish away people’s behavioural response, which is making the tackling of problem gambling worse rather than better.
Any jockey knows when a race is going wrong. I surely do. With this one, I say to the Minister that it is time to return to the stalls and start again.
Paul Blomfield (Sheffield Central) (Lab)
I join others in congratulating my hon. Friend the Member for Neath (Christina Rees) on her thoughtful and balanced introduction to the debate. I find it fascinating that so many of the contributions to it have been about the horseracing industry. I had to check the petition again, because it mentions the horseracing industry only in the last sentence, as an afterthought. We would all want to defend and protect the horseracing industry, but I fear that in this debate it is being used as a wedge by a gambling industry that is using something for which there is great affection in order to prevent something that is doing much wider harm.
Sir Iain Duncan Smith
I apologise for intervening on the hon. Member, but this has been the case all along and in all the inquiries. The real damage lies in the slots, the fast gambling and the speed of all those chases, not in something that takes about four or five minutes to finish. This is all about the speed of gambling and the incentive to gamble quickly, quietly and in the darkness of one’s own room.
Paul Blomfield
I thank the right hon. Member, my friend in this context, for his intervention. He has done such good work on this issue, and on this point he is absolutely right.
I have become involved in gambling reform only in the past six years or so, following the death of one of my constituents, Jack Ritchie, as a result of gambling addiction. What I learned from the tragedy of Jack’s death was that often when people take their own lives it is because they are overwhelmed not by gambling debt, but by the addiction itself. When I talked to Jack’s parents, they were very clear—this echoes a point that the right hon. Member has made—that if there had been checks, balances and preventive measures in place at an early stage of Jack’s journey into addiction, it could have transformed the tragic outcome when he took his life.
Jack is not alone. According to Public Health England, over 400 people take their lives each year as a result of gambling. A recent Gambling Commission survey, which I think has been mentioned, found that 2.5% of the population—over 1.5 million people—score over eight on the problem gambling severity index.
Philip Davies
The hon. Gentleman has repeated this line that over 400 people a year die of suicide as a result of gambling—a figure that has been discredited many times and with which the Gambling Commission certainly would not align itself. Can he tell us how he has arrived at that figure? What methodology has he gone through? I think that when he does explain it, he will realise that it is a discredited figure.
Paul Blomfield
I was happy to take an intervention, in contrast with the hon. Member’s approach earlier, but I was simply citing the figures provided by Public Health England. I respect Public Health England, as I am sure—
Philip Davies
The figures have been discredited, and it does not accept them any more.
Paul Blomfield
I am prepared to accept the figures from an established, respectable national body.
Sir Edward Leigh (in the Chair)
Order. Let’s not have a private bit. Let’s get on with it.
Paul Blomfield
I am very happy to get on with it. The point I was seeking to make is that gambling addiction is a health issue. The NHS will very shortly be opening a gambling harms clinic in my constituency. It will join a network of 15 across the country that are tackling the serious problem of gambling addiction. Hon. Members have asked, “What requires an intervention? What is the difference between gambling and going out and spending £150 on a meal, shopping and other leisure activities?”, butI do not see the NHS treating those activities as a serious health issue, as it does with gambling addiction.
Matt Hancock
I was the Secretary of State who introduced those gambling clinics.
Matt Hancock
There was one beforehand. Will the hon. Gentleman address the question of the extent to which we know that those gambling harms are related to betting on horseracing—as opposed to these games of chance, which are so aggressive and have algorithms designed to promote addiction?
Paul Blomfield
I am happy to have taken that intervention, because I was not seeking to make that point. I was recognising the way in which horseracing is being used as a wedge issue to tackle a different problem, as has been echoed by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) and my hon. Friend the Member for Swansea East (Carolyn Harris). There is a distinction, and we should not let horseracing be used to undermine the affordability checks that are needed in a different context.
The point I was making is that if this is a health issue, we need to have a prevention strategy, just as we do with other health problems. I commend the Government for the prevention strategy that they have developed with the gambling White Paper. Affordability checks are an important part of that strategy, but it is regrettable that the debate around them is generating more heat than light, as it has done today.
I can understand why, beyond racing, the gambling industry is keen to avoid checks. As my hon. Friend the Member for Swansea East pointed out, Gambling Commission research using the “Patterns of Play” data confirms that the most profitable 1% of accounts make 70.4% of gross gambling yield. Those are disproportionate profits derived from small numbers of players, who in many cases are gambling much more than they can afford to lose. Those people need to be protected. We know that harm can happen at relatively low levels of spend, so it is important that affordability checks be set low enough to prevent harm.
I understand the fears behind the petition. It is important that we spend time, as other colleagues have done, underlining how unobtrusive checks can be and, I am confident, will be. Affordability checks are nothing new, and contrary to suggestions from the industry, background checks on financial vulnerability could be frictionless, making use of already available data—data that we should remember is already used by the industry itself to monitor accounts and, in some cases, withhold winnings from players to regulate their losses. The data is there, and the industry is willing to use it in one context. Why not in this context, too?
We know that in the case of enhanced checks, only 0.3% of account holders would be expected to provide additional information—I think that point was made earlier. That is a tiny number in relation to the benefit that could be achieved through introducing the checks. The vast majority of checks can be done passively, using information that is in the public domain or required for registering an account. My hon. Friend the Member for Neath made the same point in her speech. It is also important that checks be done by independent, reputable third parties regulated by the FCA. We should bear that in mind, too.
I want to make a brief comment on the black market argument that has started to come up. This is the last refuge of rogues, really. When the tobacco industry had run out of every other argument to stop regulation, it said, “But what about the black market? Don’t do anything to us: it will force people to turn into black market smokers”—and they did not. We saw a successful public health strategy on tobacco. Payday lenders made the same argument when affordability checks were introduced in their sector, and we have not seen a significant movement from payday lenders to black market loan sharks.
Claims about the potential growth of the black market following more stringent regulations have been successfully challenged, including by the Gambling Commission, whose powers to address the issue of illegal sites will be further strengthened by provisions in the Criminal Justice Bill. I understand the difficulties in regulating the online world. We face rogue operators across the online world, but if we are prepared to tackle them in other spheres, why not in online gambling?
Affordability checks will play an important role. They must be set independently rather than by the industry, and set at a level that will protect those who need them most. I recognise that many people enjoy betting safely and without harm, and we can and should ensure that affordability checks are frictionless except in the most extreme circumstances. We cannot lose sight of the fact that affordability checks are about protecting people from harm and ensuring that the gambling industry is regulated in the right way.
I note the points made about things that have already been happening. Those things are happening because the industry knows that change is coming. If the industry had been left to its own devices, we would never have seen those sorts of measures.
Mr Laurence Robertson (Tewkesbury) (Con)
It is a pleasure to serve under your chairmanship, Sir Edward. I refer hon. Members to my entry in the Register of Members’ Financial Interests; I am also proud to be the Member of Parliament for Cheltenham racecourse and—with the hon. Member for St Helens North (Conor McGinn)—the co-chair of the all-party parliamentary group on racing and bloodstock.
I am afraid that I will have to disappoint the hon. Member for Sheffield Central (Paul Blomfield), because I am going to speak mainly about horseracing. I think the most recent estimate is that Cheltenham racecourse brings in £278 million to the local economy in just four days. Those four days are coming up very soon, so I would be neglecting my duties if I did not speak from a horseracing point of view.
May I thank the Minister for being always available for a meeting to discuss the issue, and always willing to come to these debates? I do not think he particularly enjoys them any more, but he always turns up and listens. I thank him for everything he is doing. I recognise that this issue was dropped on him by previous Ministers; for that, he has my deepest sympathy.
I want to point out the relationship between betting and horseracing, which is not always obvious. The figure varies, but something like 40% of racing’s income comes from betting companies through the levy, media rights and sponsorship. I also want to explode the myth that horseracing is a rich sport; it is referred to as the sport of kings, and several monarchs have indeed taken a deep interest, but it is very poorly funded. If we look at the top 1%, there may be a lot of money there, but if we look at the whole pyramid, we find that it is not well funded at all. Racehorse owners—I am not one of them—are the unsung heroes of racing. They lose so much money that I am surprised that they continue at all, but they do.
Let me cite some figures from yesterday’s racing. At Hereford, the average prize money was £4,342. Not many miles away, at Naas in Ireland, the average was £12,479. Two races in France yesterday averaged £27,000. Hong Kong was almost off the scale: the average was £154,620. We can see from that how very poorly horseracing is funded in this country. That has a knock-on effect on stable staff, jockeys and trainers, who are all far from rich—quite the reverse, believe me. Although British racing is the best in the world, it is probably almost the most poorly funded.
Racing cannot take any more financial setbacks. Racing and betting have come together on this issue like never before, because they know that they face the greatest ever threat to their existence. I am not exaggerating when I say that. Imagine the UK without the Grand National, the Derby, Royal Ascot or the Cheltenham Gold Cup: they are magnificent, iconic races and the UK would not be the same without them. I have to say that the changes to the levy that are being discussed would not compensate for the losses that racing could face as a result of the affordability checks. Quite the reverse: to use an old political phrase, it would be a double whammy.
Ronnie Cowan
The hon. Gentleman is talking about industry funding, but what about the boat race, Wimbledon or—I have to mention it—the Calcutta Cup? None of them is funded by the gambling industry, yet they survive.
Mr Robertson
They are very different. Someone with more experience may correct me, but I think I am right in saying that across the world, horseracing is funded by gambling companies. I am not fully aware of how other sports are funded, so I will have to ask the hon. Gentleman to excuse me in that respect. I have always been in favour of racing expanding its income stream and getting more sponsorship. It does a lot of work on that, and I would be happy to see it going down that path, but it is nowhere near it yet—not by any means.
There is also the philosophical aspect to this, as we have heard. A Conservative Government should not be telling people how much money they should spend. I am keen to recognise that we need to help problem gamblers, but we should be targeting people who may be liable to become addicted to gambling, rather than people who spend too much on gambling. If we try to stop people who spend too much on gambling, we enter the philosophy of it. What about people who spend too much on alcohol? What about people who get addicted to shopping? It was said earlier that we do not see the health service dealing with those people, but perhaps it should, rather than just focusing on one aspect of society —in other words, gambling. Perhaps that is a criticism of the health service, because that is not something to be proud of. We should be looking at people who have other addictions. People with addictions often have other problems as well, and I speak with some knowledge on the matter. Saying, “You can spend £100 a month, but not £200 a month” does not help people with addictions. We should be creating systems that help those who are in real danger.
I am not going to speak for very long, and I will respect your 10-minute guidance, Sir Edward. I suggest that we should halt this process. My hon. Friend the Member for Shipley (Philip Davies) suggested that the Government have invested too much capital in it. Well, they have not invested as much capital as they did in High Speed 2, and they managed to pull that—eventually, but quite rightly. I suggest that we should take a step back, because we risk destroying not only the betting industry, but, far more importantly from my point of view, the second most popular sport in the United Kingdom.
Mr Louie French (Old Bexley and Sidcup) (Con)
My hon. Friend is making a fantastic speech. I am one of the few Members in the Chamber who does not have a horse track in their constituency, but my constituents are passionate about this issue. Like me, they believe in personal responsibility and freedom, and they like a day at the races. We should not apologise for those things. As my hon. Friend represents Cheltenham, does he agree that the checks, as they are designed and as they are being used voluntarily, are deeply flawed and that they could see people forced into the black market on the first day of weeks like Cheltenham if they have had a bad day’s betting?
Mr Robertson
My hon. Friend is absolutely right that the black market is a real threat. The tobacco industry may have made a lot of it, but it was because people were turning to the black market. That cannot be denied. A committee I chaired years ago looked into that in some detail. Of course, people did go to the black market, and they are likely to go to the black market because they want to have a frictionless bet that does not cause them a load of trouble. They are already doing it, and we are getting evidence of that regularly.
Philip Davies
As ever, my hon. Friend speaks up very well for the racing industry. Was he, like me, surprised to hear the SNP appear to argue that it does not want any income for racecourses from the gambling industry? Does he agree that people at Perth, Musselburgh, Hamilton, Ayr and Kelso will be very interested to hear that that seems to be the view of the SNP?
Mr Robertson
My hon. Friend tempts me to go down a road that I am not quite sure I want to go down. The SNP is capable of speaking for itself.
Ronnie Cowan
I was not saying that it should be stopped; I was saying that there has to be equitable funding for all other sports. It cannot focus just on horseracing as the only one to benefit. There are other sports enjoyed throughout the United Kingdom.
Mr Robertson
Okay. I think I answered that earlier.
Look, we all want to protect vulnerable people. The analogy I always use is that a pub makes its money from selling alcoholic drinks to people, but it does not want alcoholics or people who are drunk in there. It wants people who enjoy a drink without causing any problems to themselves or anybody else. The proposals are deeply unpopular in the racing and betting industries, and many colleagues in my party and other parties are concerned about them. We are not saying, “Let’s not take measures to help vulnerable people.” Of course we should, but this is not the way to do it.
I ask the Minister to have a word with the Gambling Commission and put a halt to the pressure it appears to be putting on companies, which are already taking steps, and we are already seeing the loss of income to horseracing. The Minister should say, “Hold it for a minute”—or perhaps, “Hold your horses”—“and let’s have a rethink.” Let us get interested parties around the table—I think that suggestion was made earlier. Let us not rush this; let us think about how we do it properly. As I say, the Minister is not to blame; he has had this dumped on him, but I ask him to please go back to the people who are pressing this policy, wherever in the Conservative party they are, and say, “This is a dangerous policy. It will not work. There is a lot of opposition within our own party to it.” Let us get people who know what they are talking about around a table, talk about it and see what progress we can make working together.
Conor McGinn (St Helens North) (Ind)
It is a pleasure to serve under your chairmanship, Sir Edward. I was worried that I was going to be declared a non-runner, but I am glad to get under starter’s orders, having listened to numerous colleagues.
Let me say at the outset that those of us with an interest in this topic, from whatever perspective—and, indeed, those of us with a wider interest in sport—are very fortunate that we have, in the Minister and the shadow Minister, two people who are engaged, open to discussion and involved in every aspect of their brief. In fact, I saw the Minister yesterday, and I thought to myself, “He is the great white hope for the Conservative party.” He appeared on our television screens and received rapturous applause, foot-stomping and acclamation on Merseyside. I am sure that it was coincidental that it was when he was at Wembley as a member of the presentation party presenting Jürgen Klopp and Virgil van Dijk with the league cup.
[Sir George Howarth in the Chair]
I draw attention to my declaration in the Register of Members’ Financial Interests. I always say at this point that, having owned horses and gambled on horses, I have given a lot more to racing and betting than it will ever give me, but I am happy to draw—
Matt Hancock
The hon. Gentleman reminds me to draw the House’s attention to my entry in the register. I am lucky to have been strongly supported by those in Newmarket.
Conor McGinn
I am delighted to have given the right hon. Gentleman that opportunity.
I want to be emphatic about this so that we are very clear: I am here to speak on behalf of Haydock Park racecourse in my constituency in St Helens; I am here to speak up for the 100,000 people who signed this petition—decent, honourable, good taxpayers in this country who have a concern about this issue and a love for horseracing; and I am here to say emphatically that the whole of the horseracing industry, which, if I might cheekily say so, is not widely known for its unanimity on issues, speaks with one voice about its concerns on this issue. I am co-chair of the all-party parliamentary group with the hon. Member for Tewkesbury (Mr Robertson), and this is an interest and an issue that unites people in all parties and across the House.
I want to step back a little and look at the bigger issues. Many of the points that I wish to make have been made already. I furiously agree with the hon. Member for Shipley (Philip Davies) on this—as I do, I fear, on too many issues—and he made a lot of the points that I wish to make.
Philip Davies
That admission is far more damaging to the hon. Gentleman’s reputation than it is to mine.
Conor McGinn
Indeed, I fear it was mutually assured destruction.
I want to say three things. First, this is bad policy, in terms of the concept and the philosophy behind it, its purpose, and indeed its efficacy in addressing that purported purpose. Secondly, it will have a detrimental, disproportionate and, frankly, existential impact on British horseracing. Thirdly, I will address what the Government, racing and betting can do to try to fix the situation, work together and address their respective challenges.
Having praised the Minister, I do not wish to bury him, but this is not racing’s fault, it is not betting’s fault, and it is not even the Gambling Commission’s fault. They have not led us to this situation; it is the Government that have led us to this situation. It is bad policy by any objective measure—and it is hard to find any objective measure, because it is not evidence based. It is incoherent, and on many levels it is a response to anecdote and emotion. I find it incredible that I say this as an old-fashioned, working-class Labour man, but this is massive Government overreach and an infringement on the right of the individual. On no other legal leisure activity in the UK have the Government set out spending limits in this fashion.
Net loss is a terrible barometer. It takes no account of the hugely different ranges of disposable income that individuals have. The floated £500 trigger per 365 rolling days a year is equivalent to £1.37 a day. I think the hon. Member for Burton (Kate Kniveton) mentioned that figure earlier. That is the equivalent of doing the English lotto, the Euromillions and a scratchcard a week. If the purpose is to tackle problem gambling, it is an odd solution. Tools that already exist, such as self-exclusion and deposit limits, are more effective. If necessary, a conversation can take place with betting about how those measures can be strengthened. I speak with experience of friends and family whose lives have been devastated by addiction, but ultimately it is about the individual and their behaviour, and it is about responsibility. If you want to gamble, you will find a way to gamble.
The point about the black market is, I respectfully say, an important one. If someone wants to gamble a lot, they will be able to gamble a lot. We are not talking about the old fella in the pub who takes a friendly bet on a Saturday; this is about organised crime and national security. It is about the use of technology through drones flying over our racecourses, manipulation of data and all those things that the sport has to work 24 hours a day, seven days a week to stop becoming out of control. We are warning about this issue. The front page of the Racing Post today made the potential consequences very clear. We are talking about a scale of thousands of people and millions of pounds.
That leads me to the point about racing having a specific problem. We do not have to imagine the impact of the policy, because de facto checks are having an impact now. Racing has a specific problem because of the unique, inextricable relationship that we have with betting through the levy, and it is creating a funding crisis for our sport. Like all sports, racing is facing difficult economic headwinds, but the decision to hurt betting revenue, as set out in black and white in the Government’s White Paper, was certainly careless, if not deliberate. The £900 million reduction in horseracing betting revenue will mean a direct hit of £50 million to racing. That is the genesis of the problem.
The right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), who is no longer in his place, pleaded in aid of the rail men—the course bookies. I have been a great defender of theirs, along with so many others. There is nothing better than being on a racecourse, having a bet in the ring, looking at the various odds and enjoying the fun spectacle. We do not have the tic-tac any more, but we certainly enjoy the theatre of on-course betting. It generated £120 million in turnover last year, and off-course betting generated £3 billion in revenue. We are talking about a £5 billion industry. If we are going to come to a debate like this and propose solutions, they have to be serious ones based on numbers and figures.
The reduction in the levy that will result from less betting on racing, and the resultant loss in the value of media rights, will have a consequential impact on prize money. Racecourses face a very difficult environment already, and participants, owners and trainers feel frustrated about the level of prize money. It risks the sustainability of our courses and racing yards. That will mean closures and job losses, and will very quickly put racing in a death spiral. We have already seen the impact on punters; I can attest to that. Racing has become a less attractive product. Bookies have removed best odds guaranteed and people can hardly get a bet on. Racing is part of a delicate ecosystem. We are not quite an endangered species, but this measure puts a motorway through our habitat.
It is funny how sometimes I hear, when I take part in these debates, that somehow one has a pro-bookie approach or is in the pocket of the gambling industry. The shadow Minister, my hon. Friend the Member for Barnsley East (Stephanie Peacock), represents a proud working-class constituency like mine. She is from the same bit of the Labour party as me—the sensible bit of it that is rooted in communities. My relationship with the bookies is adversarial. I want to beat the bookies—that is the whole point of gambling. I want to take money from them. As the hon. Member for Shipley says, I sometimes rail against the bookies, but that does not mean that I do not understand the vital contribution that they make to horseracing.
What is it that the Government, racing and gambling can do together? The Government should bin this idea, preferably permanently but certainly until the promised frictionless element is proven to be just that. Generally, the Government should ensure that racing and betting are well run, well regulated and fair, and that they continue providing jobs and contributing to the economy. On racing specifically, they should recognise its huge impact in communities and the wonderful enhancement that it is to the UK, at home and abroad. Other than that, they should butt out. The Minister should enjoy the odd day at the racing, but other than that, the Government should let the two industries get on with it.
I have heard some of the contributions and, well intentioned and from people with a genuine love of horseracing though they are, they need to be challenged. Racing and betting have to work together. They have on this issue, and they need to do so on others. Racing needs to recognise that it receives more now from betting than ever before through the levy, media rights, sponsorship and advertising.
I will add a note of caution. Seeking more from levy reform when turnover on betting on racing is reducing, even if one were to incorporate international racing, is arguably a short-term fix that is not sustainable in the long term. We do not want to be penny wise and pound foolish, taking money in the front door but losing it out the back. For its part, betting needs to continue to enhance and help promote racing. It needs to recognise and support the sport’s unique position and the skill, talent and people that make it a special and precious product. It needs to give the punter a fair price, give us a chance to beat them now and then, and pay us out when we do.
We talk a lot about the provider in terms of the bookies and about the recipient in terms of horseracing, but what about the benefactor? That is the punter—the men and women I consider myself very much a part of and a spokesperson for. Racing should never be afraid to say that gambling is a huge and enjoyable part of our sport. People like me love the mechanics of it, the breeding, the form, the going, the word that we get from Ireland on a big day, but others come for the name, the colours, the numbers, so we need to be careful about putting forward the argument about chance as well.
There is a reason we are the second biggest spectator sport. We need to be confident and clear about that. We need to be strategic and sensible. In this House, like in the country as a whole, we need to win friends and fans and exert influence. I do not think that is beyond us. As you know, Sir George, racing is simultaneously the sport of kings and the pursuit of the masses. Who else can claim that?
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
It is a great pleasure to follow the hon. Member for St Helens North (Conor McGinn), who is a much greater expert on this issue than I am. I make no apology for speaking up for horseracing and the equestrian industry more generally in this debate, because it is extremely important to the local economy in constituencies such as mine. I represent the largest rural constituency in the United Kingdom outside the highlands. It does not have a functioning racecourse, but it does border courses in Hexham, Carlisle, Hamilton, Kelso and Ayr. It therefore has many training yards, breeders, vets, farriers and jockeys—all the people connected with an equestrian sport.
Those people are extremely concerned about this proposal and the impact it will have on the industry. This debate is an opportunity to air those concerns. Like those fellow Members who have already set out some very important points, I think that is what we should be doing this evening.
The first of the two points that I want to focus on is the inappropriateness of any one-size-fits-all approach. I think there is a consensus, or at least a consensus is emerging, that the approach towards games of chance should be different from the approach towards games of skill. It is not appropriate to treat them the same. Going to a racecourse is not the same as playing a game of roulette on a phone. My second point is about the reality of frictionless checks and how possible they actually are.
It has already been said how helpful the Minister has been in meeting MPs with concerns. I have already drawn the Minister’s attention to a book—indeed, volume one of a series of books—written by my constituent William Morgan called “Strongholds of Satan”. It is from a series that sets out to detail every racecourse that has previously existed in the UK. The title, “Strongholds of Satan”, comes from how racecourses were previously described; before the rise of football, racing was a potent combination of national sport, fair, local holiday and gambling opportunity. Therefore, religious leaders were outraged and politicians were constantly trying to restrain all the shenanigans among the crowds, the gamblers and the horse-owners.
I particularly commended the Minister to the chapter that is called “The regulation of racing”. In that chapter, Mr Morgan sets out how, from 1654, Government have sought to regulate and interfere with racing. In fact, the first act by the Cromwellian Government was to ban racing completely, not because they had any moral concern or other concern, but because they did not want crowds of people to be brought together who could foment against the Government. The book goes on to describe other pieces of legislation. For example, in 1740, there was:
“An Act to restrain and prevent the excessive Increase of Horse-races; and…more effectual preventing of excessive and deceitful Gaming”.
And so it goes on, through the next three centuries.
I will not set it out in full, but that chapter shows that many of the measures that were introduced had completely unintended consequences. What happened, as we have speculated on already in this debate, is that the owners, the punters, the racecourse proprietors and the nefarious elements changed their practices to accommodate legislative proposals. That is a significant concern about what is being proposed now. The right hon. Member for West Suffolk (Matt Hancock), the former Culture Secretary, set out the concerns about illegal betting—black market betting—taking place. We should consider very clearly the possibility of such unintended consequences and in particular, as the British Horseracing Association has set out, the proportionality of what is being proposed.
It is also clear that many people, including the many constituents who have been in touch with me, do not have confidence in the concept of the frictionless check. I would be grateful if the Minister set out in closing how people can have confidence that these checks will not intrude into their affairs.
Mr French
One of the potential consequences of this is the impact on the elderly and on isolation in particular. When I was a student, I worked part-time for a bookmaker to help to pay for my fees and upkeep. It helped me to fall in love with horseracing. One of the things that I used to see day in, day out was elderly people who would bet very small stakes, who would very much fear the intrusiveness of the checks and of being caught up in the trap. That might fuel some kind of isolation in their day-to-day experiences.
David Mundell
I very much take that on board. To quote my constituent Alexander McLean:
“I bet on sport and I find it extremely offensive that someone should dictate how I should spend the money that I have already paid tax on. I am 71 years old. I have no dependants. My bills have been paid. I have enough money stashed away to pay for my funeral. Why are the Government subjecting me to this?”
He goes on to say that he agrees, of course, that there are people who find themselves in “tragic” situations with a gambling addiction, but as the hon. Member for Bath (Wera Hobhouse) also said, this is using
“a sledgehammer to crack a nut”.
I am sure that Mr McLean will have been pleased to hear my hon. Friend the Member for Shipley (Philip Davies) speak up for punters and my hon. Friend the Member for Old Bexley and Sidcup (Mr French) speak up in particular for older punters who take a responsible attitude.
That does not mean that the issues and concerns expressed so eloquently by the hon. Member for Swansea East (Carolyn Harris) and my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) should not be considered. Of course they should be, but clearly for the whole horseracing industry and the equestrian community the Government have got it wrong. They need to take a step back and review how they can continue to support the industry and the sector effectively, while at the same time taking on board the serious concerns about the regulation and operation of certain games of chance. That is my message to the Government.
Many people may think that this estate is a stronghold of Satan, but many people here clearly have genuine concern and support for the industry. They know how important it is to their local economies and communities. We should do everything to support it, not bring in measures that potentially completely and utterly undermine it.
Kenny MacAskill (East Lothian) (Alba)
It is a pleasure to serve under your chairmanship, Sir George.
As is clear from the speeches that have been made so far, there are two aspects to this debate: the question of the regulation of gambling, and the question of the protection of horseracing. The first, I think, requires action, because there is a significant social problem, which is a point that I will come on to and that others, especially the hon. Member for Neath (Christina Rees), made so eloquently.
The second question is that of a debate between the gambling industry and horseracing. We have to differentiate there. After all, the gambling industry, or much of it, is now online, and much of it is now based in Gibraltar, so it is not even paying taxes, whereas the horseracing industry is indigenous, although it is also partly—this inference was made about horseracing—funded by the gambling industry. Yes, that is to some extent a historical anachronism, but it was no doubt done deliberately so that people would not see gambling going to the black market, with other unregulated aspects, whether that was pitch and toss, dogfights or illegal boxing matches. That ensured that a revenue stream went from gambling into horseracing, and that is fundamental.
As the hon. Member for Tewkesbury (Mr Robertson) said correctly, people might think that horseracing is flush. It is not. I, along with others, declare an interest in having horseracing within my constituency, because I represent Musselburgh. Musselburgh has had its challenges, Musselburgh had to be sold and has now been bought by Chester.
At one stage, it even looked like there might not be a buyer, because it is not as if people are lining up as they are for English Premier League—or even Scottish Premiership—football teams. There were redundancies there—I had to intervene and speak to the management about them—but they were done reluctantly, and we have had to accord to that. There are challenges in that sector. Some of this—this is the subliminal aspect—is about the gambling industry reducing the amount of money that it puts into horseracing, because it does not have the same involvement in funding football or anything else, other than the money that it makes from it.
Returning to the primary issue, there is a problem with gambling. We must recognise that people suffer. I am not some libertarian who thinks it is all just free market, with people deciding according to their free will. It is a social problem, exactly the same as alcohol and drugs. We do not un-regulate them and say, “Consume what you like.” We ensure that we know what the product is, and supervise, tax and regulate it. We can argue—I certainly do—that we sometimes go too far on drugs and not far enough on alcohol, but we must ensure that we regulate.
We must recognise that gambling has transformed. I am a child of the ’60s, when gambling was basically done in a bookies. They were foreboding and intimidating places where working men—perhaps in a flat cap—went, where women would not be seen, and that respectable men would probably not wish to be seen going into. They kept very limited hours. When I was young, they always seemed quite intimidatory. I now have a flat in Dunbar, and I can look across the high street and see a bookies. It is open early in the morning until late at night. People of all ages, genders, ethnicities go in—far too many, I must say, much as I am not opposed to people enjoying a flutter.
The whole nature of the industry has changed. As Justice Secretary in Scotland, I remember being briefed by Dr Reith from Glasgow, a world expert in gambling and how gambling has changed. People can now literally lose not just their shirt, but their house overnight if they have multiple credit cards, so there must be regulation. The nature of who gambles has also changed, because ethnic minorities who might not have gone into the working-class, working man’s bookies are now going elsewhere. I remember hearing that in Scotland we had significant difficulties with Polish people and eastern Europeans who were working in the casinos. They socialised in the casinos and therefore developed a gambling problem, because that was where they hung about. Since women and other people who would not have otherwise have gone into a bookies are doing so, we must target and address gambling. We must address the demand, which is why we must look at regulating the sponsorship of football teams and some of the television advertisements that are basically pushed in our faces—we want to watch the football but are inconvenienced by being told to to cash in by betting on the number of corners, and all these things.
That is entirely separate from horseracing. Yes, gambling is an inextricable part of horseracing. If people go to a horserace, they wish to gamble. Some will probably gamble too much and regret it, but most will not. It is a day out in Musselburgh, much as it is in other constituencies. It is an event for people; the ladies day at all racecourses is very colourful, with all hats, dresses and whatever else. People come from far and wide, and it is part of the local economy. I said there had been redundancies, but it still provides employment there and for the hotels, guesthouses and hostelries on race days. People make money, and there is a supply chain of those who provide for the horseracing industry. If we cripple it, we face not only the risk that the likes of Musselburgh will close, but the risk that people will continue to watch and bet on races, albeit those in Ireland, France, Hong Kong or wherever else, as I think the hon. Member for Tewkesbury said. That is why we must protect it and get the balance right.
As Justice Secretary in Scotland, I remember bringing in quite firm legislation on the sale of alcohol. I think it was correctly done. Equally, I remember being criticised at some stage because I gave the licence back to Murrayfield stadium. People asked, “How can you be cracking down on alcohol and yet allow an alcohol licence in Murrayfield?” I answered that we are not against alcohol, in exactly the same way that we are not against gambling; we are about ensuring that it is carried out in a safe and secure manner, that it is regulated, and that people can be protected—sometimes even from themselves. That is why I believe action has to be taken on these social problems. We are our brother’s and our sister’s keeper.
The result on Saturday may not have gone the way most Members here, other than the two of us from Scotland, wanted, but the match will have been enjoyed. It was better that people went to the stadium and had a few drinks consumed safely and under supervision, rather than sitting in a park drinking cans or bottles and then rushing to the game late. That is why, in alcohol legislation in Scotland, when I was Justice Secretary we were always very supportive of the on-trade. We much preferred people to go to a public house where the alcohol industry wants to sell a premium product—at a premium price for them—in a manner that is safe and secure and from which they can benefit. That is much better than people being sold almost unlimited supplies of high-strength, low-price alcohol from supermarkets or elsewhere.
There are corollaries with gambling. What we have to do is stop people losing their shirt, never mind their home, through games of chance or puggy machines—or whatever sophisticated name they have now—sitting in betting shops. People can go online and, as I said, get a credit card and literally see their savings disappear. What we cannot do is undermine where people can go and have a flutter and enjoy themselves as part of a day out.
Philip Davies
The hon. Gentleman is making a very interesting speech. May I refer him to the comments made by the hon. Member for St Helens North (Conor McGinn)? He made it clear that without the levy income that horseracing generates from online betting, Musselburgh and other racecourses would not exist for having a nice day out and a bet at the ring. The income the horseracing industry gets from online gambling is absolutely critical for horseracing to continue in this country.
Kenny MacAskill
I said at the outset that I am conscious that Musselburgh and other racecourses have to get income from the gambling industry. If people now gamble more online as opposed to going to the betting shop, even the one opposite me in Dunbar, that has to be accepted. We have to separate the gambling that is being sold in every shape or form, as it is, and entertainment, because that is what horseracing is. Gambling is a legitimate part of it and sustains it. Obviously, the industry seeks to make more money out of encouraging people to bet and gamble on football; it does not put the same money in, except in terms of shirt advertising or whatever else, and it does not benefit the grassroots game or any club. The Government have to make sure they take the necessary action against gambling, not those who are at the turf in such places.
I fully accept the point made by the hon. Member for Shipley that people now place bets not by going into a betting shop, but on their phone—not even on their computer. However, we should provide protection for what is an industry. It may be an anachronism; one could argue that other sports should get the benefit, but we are where we are, and we have to recognise that as a society. On that basis, we have to differentiate horseracing, which needs to be protected and which we want to encourage people to participate in because their gambling will be supervised, moderated and part of a culture, and other gambling—as I said, it is like drinking in a pub as opposed to drinking in a public park.
Peter Aldous (Waveney) (Con)
It is a pleasure to serve with you in the Chair, Sir George.
I congratulate the hon. Member for Neath (Christina Rees) on leading this debate. She and I usually have discussions about squash, but I am here to talk about another of my hobbies: horseracing. I have a lifelong interest in and passion for racing. In the past, I have owned legs and hairs of racehorses—not very successfully. At the moment on the farm at home we have a brood mare and we have youngstock, and my ambition—as crazy as it may sound—is to get those horses on to the racecourse. At the moment, the greater problem than affordability checks is dealing with mud fever, but affordability checks are very important. Like everyone else, I know that problem gambling is a major problem, but there is concern that there will be a severe unintended impact on the funding of horseracing if the affordability checks go forward in their existing form.
Horseracing is largely funded through the levy. In recent years additional funding has come in through media rights and sponsorship, but largely it comes from the horserace betting levy, which came in in the early 1960s. I personally think that the Government went down the wrong road with horseracing. It would have been better if we had what is known as a parimutuel form of gambling. As we heard from my hon. Friend the Member for Tewkesbury (Mr Robertson), that is why the prize money is so much higher in places like Hong Kong and Japan, which have incredibly well-regulated industries too.
Horseracing depends to a dramatic extent on the levy. It is quite clear from what I see and the feedback I get that the affordability checks in their current form will have a serious impact on the takings from the levy. Looking at the prize money, horseracing and its funding is facing a real crisis in the UK. My hon. Friend the Member for Shipley (Philip Davies) said that we have the best horseracing in the world, and we do, but that is increasing in risk and becoming an anachronism. There is a real worry that if we let this go on horseracing, will wither on the vine in this country.
Look at the horses in training sales from Tattersalls at Newmarket last autumn. A lot of those horses would have traditionally come out of flat racing, gone into national hunt racing and remained in the UK for racing. They are now going all around the world, to the US or Australia, and there are emerging new industries—in Dubai with the Meydan, and in places such as Bahrain and Saudi Arabia, which are making a real impact. A lot of horses are going to those places and a lot of British owners are racing out there. Members may have watched the racing on Saturday afternoon. The very well-known racing figure Sir Alex Ferguson—where was he? He was at Meydan, not watching his horses run at Kempton. I am worried that that is where we may be heading.
We have heard great stories today; everyone has plugged the racecourses we have all around the UK, and we have heard how important they are for their local economies. That is very true, but there is one point I would highlight, which I picked up in the Racing Post over the weekend. An article said that the Grand National meeting every year puts more money into the Liverpool economy than the Eurovision song contest did last year. We see that repeated at Cheltenham, York and Goodwood and at the festivals that take place all around the country. That is at risk.
The racing supply chain extends far beyond that. It extends into the training centres and into the countryside and on to the studs. There are places where horses are pre-trained, and, importantly, there are places where horses are retrained. When horses have finished their racing lives, they are retrained for alternative uses and activities. The tentacles of racing extend a long way, not just into the countryside but into the towns and the licensed betting offices on the high street. I know that the hon. Member for Swansea East (Carolyn Harris) has a concern about those, but certainly in the town that I represent, there has not been a dramatic increase in LBOs. They are a very important part—
Peter Aldous
If I have misinterpreted the hon. Lady, I apologise profusely. LBOs are very important on the high streets. They also tend to have a family feel about them in that the staff, many of whom now are women, have a good family relationship with the punters. If people start getting out of control, they very quickly say, “Hang on, do you know where you are going on that?” There is a long supply chain.
We have also heard about unintrusive and frictionless checks. The feedback that I get is that they are very difficult to put into practice. We will either see the rise of the black market—the large article on the front of the Racing Post indicates that that is a reality—or a lot of small punters will say, “Well, I give up. I’m not going to do it.” That then impacts on the levy and it spirals down to the impact on racing.
Finally, there is an element of hypocrisy about this in that the lottery is not included. The lottery is great and it is probably one of the best legacies of the Major Government. Its impact has been profound and positive. When I was growing up, very rarely did we win Olympic gold medals. I remember listening to David Hemery when he won in 1968 in Mexico. We now win in so many different sports, and that is the direct result of the lottery. The lottery is a great thing, but it is a game of chance rather than a game of skill. It is random betting and it can take over people’s lives. I remember one statistic put to me that if I gambled on the national lottery every year since Moses was pulled out of the bulrushes, I still would not have won. We need to look at all forms of gambling and betting together.
In conclusion, I was reading the Racing Post a few months ago. One of its leading journalists, Chris Cook, son of the former Labour Foreign Secretary Robin Cook, made a comment that left me thinking. He said that you would not have expected a Conservative Government to do this to horseracing. I agree with him. On that point, I urge the Minister, who is listening very intently to the great speeches that we have had—
Wera Hobhouse
I have followed the whole of the debate, and I want to say quickly that this is not a party political issue. It is an issue for all those who feel that horseracing gives us so much across all communities. I sincerely hope that the Minister believes it is a cross-party issue that we all must address.
Peter Aldous
The hon. Lady is right that it is not party political, but it is a point that Chris Cook made. If we look back, we all remember seeing Robin Cook at the racecourse in his Barbour jacket, down by the final fence. Alex Salmond is actually a great punter as well. It is not party political but at the moment, we have a Conservative Government, so I urge the Minister to take on board what he is hearing this afternoon.
George Freeman (Mid Norfolk) (Con)
They say that all good things come to those who wait, so I hope the Minister will listen to my words and then reassure me that I have not waited in vain. I am grateful for the chance to speak in this debate. When more than 40 or 50 colleagues turn up to Westminster Hall—for those listening, and who are not aware—we clearly have a problem. Actually, I suggest we have two problems that the Minister present has the great honour of helping us to deal with.
The first is the very serious problem of the increasing number of people in this country who find themselves in the turmoil of addictive online gambling. That is a real problem. The second is the fragility of the finances of racing, a sport that we all love. We need to be clear about those two problems and not to conflate them too much, as has been done, and to work out how to deal with them both, because both problems are real.
I have no particular interest in racing, other than a long family history and connection. I have been to the races many times, both before my time here and as a Member of Parliament, and occasionally as a guest of the BHA, which supported the work I did to create the Bridge of Hope charity. I was, with pride, closely involved with the 2013 Offshore Gambling Bill, promoted by my right hon. Friend the Member for West Suffolk (Matt Hancock), who represents Newmarket, to bring offshore betting within the purview of the levy to give racing a serious boost. I do not have a racetrack in my constituency yet; I have waited for the Boundary Commission to put Fakenham in my patch for many years, but it has refused to do so. I enjoy the little tracks as much as the big—a point that my hon. Friend the Member for Waveney (Peter Aldous) has just made. It is a great pleasure to follow him. My brother trains in California, and I have spent many hours as an underpaid hot walker, walking his hots around the track in both California and, in rather cooler weather, at Woodbine in the winter. I am a happy and assiduous attendee at Fakenham races, one of the country’s great regional tracks
I think the House will be aware that I really stand this afternoon because of my own family experience. My father was a jump jockey who rode through the ’40s and ’50s. He rode for Sir Peter Cazalet and rode Her late Majesty the Queen Mother’s horses. In 1958, he won the grand national on Mr What and the King George on Lochroe. With my mother, he bred Specify, who went on to win the national in ’71. However, my father’s is a tragic story. After many head injuries, head injury-induced depression and psychosis, alcohol addiction, gambling and bankruptcy, his life—indeed, that of my family—collapsed in 1967. It is a familiar tale for many sporting heroes, but a story that, thanks to the great work of the racing industry, we do not see any more because we are better at looking after jockeys and better at detecting head injuries.
It is in that context that I want to make clear that I rise today because I take the unintended consequences very seriously—the damage of great sport when not properly regulated, and the damage of gambling and bankruptcy. I am not at all relaxed about those dangers. I hope it is, therefore, all the more powerful when I join colleagues who have spoken today in saying how seriously I worry that this well-intended measure, designed to tackle the curse of online gambling, is in danger of not solving that problem, but exacerbating another: the deeply fragile finances of a great sport that all Members present, across all parties, have expressed our love for.
I am fearful that we are in danger of making a mistake that, in 15 years in Parliament and 30 years of watching, I have seen all too often, which is the mistake of do-somethingery: “Something must be done. This is something—let’s do it.” It is using a sledgehammer to crack a nut, with the law of unintended consequences, punishing the innocent and doing very little to tackle the real problem, and seriously damaging the financial resilience of this great industry. I think it would be a huge mistake, and a great shame on us as a generation and on the Government who allowed it to happen. In that spirit, I am here to try to give the Minister some helpful tips on how we might find the right way through this.
I thank the petitioners who brought us here today, as well as the Racing Post and the British Horseracing Authority, which have done such good work to raise the issues. I will highlight three important pieces of data shared in the British Horseracing Authority brief. The first relates to the impact of these measures. More than 15,000 horserace bettors took part in the Right to Bet survey in the autumn. Of those, more than half said they will stop betting, or bet less, if new checks are introduced, while one in 10 bettors is already using a black market bookmaker. Some 40% are prepared to use the black market if clunky enforcement affordability checks are implemented, 90% oppose postcodes or job titles being used to determine their ability to bet, and 26% have already experienced an affordability check ahead of the passing of any legislation.
Secondly, the briefing makes clear the full impact of these reforms if introduced as they stand. There will potentially be a £50 million cost to this industry, which, as my hon. Friend the Member for Waveney has just made clear, is already struggling. That is not something that we should accept lightly.
Thirdly, the briefing points out that a £500 a year upper threshold for frictionless checks works out at a net spend of just £1.37 a day. Are we seriously intending to damage the viability of this great sport and this great industry in order to look busy in monitoring a £1.37 risk? This is a disproportionate measure and I fear that it will have major unintended consequences.
I will not repeat or rehearse the arguments that have been made very eloquently by many colleagues. I will just highlight the fact that there are many who are not able to speak here today, including many peers in the upper House, whom I will not name but who have taken a very strong interest in the issue, and my right hon. Friends the Members for Stratford-on-Avon (Nadhim Zahawi) and for Witham (Priti Patel), and my hon. Friend the Member for Hexham (Guy Opperman), who is a Minister. He is also a distinguished amateur jockey who would have spoken today had he been allowed to do so. Many people from across the House have not been able to speak in this debate but would have done so very forcefully.
I will make one or two points that perhaps have not been made as fully as they might have been. First, as has been said, racing is a vital mainstay of the decentralised rural economy all round this country, and it is absolutely key to the levelling-up mission that the Government have set out. Yes, it is the sport of kings, as others have said, but it is also the sport of stable lads and ladesses, and the sport of small businesses all around the country. It is the sport that provides the pyramid at the bottom of which are the point to point races, the pony clubs and all the grassroots equestrian activity that we love and rely on.
From Yarmouth to Chepstow, from Wincanton to Kelso and from Cartmel to Catterick, many tracks are integral to their local economy. Horseracing touches on and is instrumental in 60 marginal seats, which is not a small number in an election year, creates 80,000 jobs directly and 100,000 indirectly, and 8,000 small and medium-sized enterprises are involved with it. This is not a fringe activity; it is a very key activity at the heart of our decentralised economy.
I will just make another point. An earlier speaker suggested that we do not need betting to support the boat race or one-off events. Horses are not machines and we cannot have an industry based on one race a year. The reason we can have the Derby is that we have all the other races that build up to it, and it is the same with the grand national. Those two races are the pinnacles of great pyramids of activity that start at small, windy tracks all around the country. Also, horses cannot just be parked for 364 days a year and then asked to run; the training and the conditioning of horses requires activity all through the year.
Wera Hobhouse
Throughout this debate, we have not really mentioned these beautiful creatures, the joy we get from watching them race, or all those people who work with, train and look after them. That is really important to all of us who have spoken today.
George Freeman
I am grateful to the hon. Lady, who makes a good point. They are beautiful and what a joy it is to watch them exercising, whether in Malton in Yorkshire or wherever else around the country. The sight of horses exercising in preparation for racing is part of the rural economy.
Secondly, I want to make the point that horseracing, as an activity and an industry, is a jewel in the crown of our global soft power. The truth is that, having grown up in Newmarket as a child, I have watched as that town and its horseracing have become very reliant—over-reliant, I would suggest—on a few very wealthy families. Those families have done an amazing service to our sport, but we have to make sure that we are not reliant on a very small number of individuals to maintain the viability of an entire industry. That point puts this debate in a wider context.
Crucially, I also want to highlight that there is a very serious problem in our society of addiction to gambling, particularly online gambling, and there is a growing body of evidence—I say this as the former Minister for Life Sciences and as somebody who has had a career in medical research—that the causes of such addictive behaviour and cycles of addiction are not simply based on repeat activity. They are a symptom of much deeper underlying causes, which are often genetic and nearly always neurological. There are a whole series of conditions that drive that underlying cycle of addictive behaviour. It is not that someone has a bet on a horse, then a second bet and it is entirely addictive. Indeed, in my own experience, betting on horses is quite the opposite; I have very seldom made much money doing it and I very seldom carry on doing it with that in mind. No, that is not what drives the addictive behaviour; it is underpinning neuroscience and wider conditions. As a society we really need to take those factors very seriously.
Matt Hancock
Is there not the more specific distinction, which the hon. Gentleman almost drew out, that the placing of a bet and then waiting many minutes as a minimum for a result is neurologically distinct from a bet that gives an immediate hit? Where the repeat bet would be based on the physiological immediacy of the previous result, horseracing breaks that and therefore has a different neurological impact in relation to addiction. Would it therefore not be right in law and in policy to completely separate the proposals for online games of chance from the wonderful sport of horseracing? It would be easy to do in law—let’s just split the two.
George Freeman
The right hon. Gentleman anticipates the logic of the argument I was building towards—he is exactly right. That is why if we are seriously thinking of tackling this curse of addictive online gambling, surely we should be looking at a whole range of other behaviours and products. The proposal seems to be a disproportionate way of tackling a real problem, if indeed that is what it is. Others have mentioned the logical consistency of extending these checks on alcohol, tobacco, car hire purchases and—dare I say it—mortgages, and all sorts of things that we might say people cannot afford. I worry that this could be the thin end of a very big wedge in which the state decides that it is its job not to regulate properly, but to start asking whether people can afford to do something. That is an Orwellian dystopia that I do not want to live in.
The truth is we have to think properly about the sustainable resilience of racing. I absolutely echo the comments of my hon. Friend the Member for Tewkesbury (Mr Robertson): prize money is falling fast, costs have risen fast and are stubbornly high, and competition is eating our lunch. If we look to Irish and French racing, we see that we are haemorrhaging from a serious industry. This proposal would not make a small reform to a healthy industry—the industry is struggling and it needs our help, but I am worried that the law of unintended consequences will make the situation worse.
I want to make a point about technology. It has often been asserted that we do not have the technology to do these checks properly. That is right at the moment, but would it not be an amazing thing if we decided to use technology properly—we are already an AI powerhouse—to start to analyse addictive behaviour and look at the trades on digital betting that indicate such behaviour? Over 70 markers of harmful gambling have been identified in studies, 16 of which really drive this activity. I suggest there might be an opportunity for us to use technology better to tackle those behaviours online that drive the problem we are trying to solve.
I echo the comments of the right hon. Member for West Suffolk on track racing, which I would go so far as to say is one of the best ways to introduce people to responsible gambling. I remember taking my two children to the 2000 Guineas and giving them £5 each, and they decided to put it together on an each-way bet. It was a smart move; they are clever children. Even more clever, my son decided to take my daughter’s advice, because she knows about horses, and he looked at the odds, because he knows about numbers, and they put £5 each way on Galileo Gold, who stormed to victory. They learned a lot that day about gambling. They saw people who had drunk too much and who were losing too much. They didn’t. I took the money and gave it to them. They discovered a lot, and on-track gambling is a fabulous way of getting people to realise that most of the decisions we take in life are a gamble one way or another, and it is how we deal with them that really matters.
I am not here in any way for the health of the gambling industry. I am interested in the health of UK racing and the real identification of the at-risk addiction that we see cursing so much of our society, in particular those games of chance that have driven such addiction. I simply say to the Minister that I know he has a difficult job on his hands. I have sat at that Dispatch Box with a packed Westminster Hall calling for reform. The Prime Minister, in North Yorkshire, understands the importance of the industry. The Secretary of State’s constituency is next to Newmarket—in fact, she has the breeder of Galileo Gold in her constituency—and understands it. It is not too late to change tact and come back with a serious package of measures designed for the twin problems of the sustainability of racing’s finances and the genuine opportunity for this country to lead in harnessing technology and smart regulation for the tackling of gambling addiction. If not, I urge the Minister to look seriously at the net loss provisions, which are too low. When an industry warns that something will cost it £50 million, we have a duty to listen.
Ronnie Cowan (Inverclyde) (SNP)
I thank the hon. Member for Neath (Christina Rees) for leading this debate. Let me say briefly to the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) that if horseracing were even partially responsible for fomenting an uprising against the UK Government, I would be leading the charge—but it is not. It is a terrific sport, which people gamble on and enjoy. This petition is a tiny bit about horseracing and a lot about the black market and affordability checks, but we have spent nearly two and a half hours talking about the horseracing industry.
Before anyone puts me down, I am delighted that so many MPs here today have recognised the fact that online gambling and online casinos are a dangerous thing and that we have to be on top of that to help people away from the course of addiction. I have not seen many of those Members sitting in front of grieving parents whose child has been driven to complete suicide. I have, however, seen them on the racecourses. I have seen them back up their racecourses. It is understandable: if I had a racecourse in my constituency, I would think that it was a hugely important part of my constituency that generated money and had an important supply chain around it.
Ronnie Cowan
Not right now.
It is hugely important. If we look at the sort of money that the gambling industry feeds into the industry—
Conor McGinn
On a point of order, Sir George. The hon. Gentleman has asserted that Members who spoke in favour of racing or who have racecourses in their constituency have never sat in front of grieving parents, do not know anything about addiction and have never comforted those affected by addiction. The hon. Gentleman knows nothing about me, and he knows nothing about many other colleagues who have spoken. I ask him to be very careful about how he approaches what he says, and to have sensitivity before making assertions about any Member here or their motivations, their families or their experience of addiction.
Sir George Howarth (in the Chair)
That is not a point of order, but the hon. Gentleman has managed to get it off his chest.
Ronnie Cowan
I absolutely take on board what the hon. Gentleman says. I apologise if I worded that wrongly; I was talking about the sessions that we had at the APPG for gambling-related harm. I appreciate that, as was pointed out earlier, many people have been touched by the curse of gambling addiction.
The point is that it is understandable that so many people have raced to sign e-petition 649894, which calls on the UK Government not to implement the proposed financial risk checks for online gambling. The gambling industry has led and paid for this lobbying and has been hellbent on spreading disinformation that is designed to create uncertainty and raise concerns among people who enjoy the occasional gamble. I understand the punters’ point of view. They feel the fear behind this, because it is a message that they have been fed.
The truth about affordability checks is more complicated, however. I am not a prohibitionist. How many times have I had to say that? I am not trying to ban gambling, but I do want to create a safe environment for it. It may come as a surprise that affordability checks were not the invention of the APPG for gambling-related harm. This is not some mendacious ploy that the group is using; the idea was mooted in 2019 by Tom Watson, when I believe he was still the MP for West Bromwich East. Industry leader Richard Flint, who was at Sky Bet, supported Mr Watson by saying that too many people were losing money that they could not afford online. We need to work together with the industry and the Government to limit that harm.
I think that limits on spend, rather than on stakes, are the right way to go, and those limits should be based on affordability. Richard Flint acknowledged that such limits could lead to a drop in operator revenue. He clarified:
“There will be some online firms in the short term that…make less money as a consequence”.
Getting straight to the point, he added:
“but then…that spend shouldn’t happen anyway.”
That is a point that the Jockey Club should have considered when its chief executive officer launched this petition. It has cited a potential loss of £5 million on the horseracing betting levy, which according to its own board’s annual report was worth £100 million. But what price a life? What price the number of people who have been driven to complete suicide?
I return to the need for affordability checks. A year later, at the 2020 Lords Committee, the UK’s biggest operators—the chief executive officers of the big five—spoke enthusiastically about the need for affordability checks as a key mechanism to reduce harm. An industry CEO said that
“the way to go is affordability and to ensure that, when people come to our sites, they can only afford to lose or bet an amount that, quite frankly, they can afford and were comfortable with.”
So what is new? What is new is that, since the White Paper, the Government and the Gambling Commission have proposed threshold figures for the checks. Affordability is no longer an abstract concept; it is tied to precise thresholds.
The industry does not like the fact that the White Paper has called its bluff, so it is kicking up a storm. It is clear that those who might be categorised as the pro-gambling lobby and those such as myself, who could be described as the safer gambling lobby, agree that if we are to create a safe environment, affordability is an area that needs tightening up. I wonder whether that was explained to everyone who signed the petition.
The petition states:
“The proposed checks could see bettors having to prove they can afford their hobby if they sustain losses as low as £1.37 per day.”
That figure has been scoffed at a few times in this debate, but it is £500 a year. It may mean nothing to us as MPs on 86 grand a year, but that £500 a year could be the difference for some poor people who are trying to put money in the meter or food on the table. What we are trying to do is to stop them getting to the point at which they lose that money in the first place. Please do not belittle that. If the checks say people can afford it, they can afford it. We are trying to help those at risk. Surely all gamblers can see that, because they understand risk.
The UK Government have already said that
“the proposed checks are only on the very highest spending online customers”.
The Gambling Commission estimates that
“approximately 20% of customer accounts will meet the threshold required for a financial vulnerability check”.
The next line of the petition is about the black market. The Gambling Commission has already reported to us that the size of the online black market has been overstated by the industry and must be kept in proportion. It follows that if we want to prevent the growth of the black market, the solution is regulation to prevent harm that leads to addiction. It will eliminate demand for a black market, not cause it. Harm prevention will mean fewer addicts, fewer self-exclusions and fewer attempts to circumvent the regulated market in the first place.
The key is in the last line of the petition:
“We are concerned there will also be a negative impact on British horseracing’s finances due to a reduction in betting turnover and resulting fall in Levy yield.”
That is a Trojan horse if ever I have seen one.
Matt Hancock
I have been listening with increasing disappointment to the tone that the hon. Member has taken. Given the importance of tackling problem gambling, does he recognise, like the 7,000 people who live in my constituency, the importance of horseracing? Does he recognise that horseracing betting has an equally low rate of associated problem gambling as betting on the national lottery? The national lottery is carved out of this proposal. Should not horseracing betting also be carved out, so we can all concentrate on tackling gambling harms, exactly as the hon. Member would like us to?
Ronnie Cowan
I was bringing attention to the message that has clearly been given out by the UK Government. The Government are keen to ensure that the measures such as the proposed changes do not adversely affect racing or interrupt the customer journey. They also cannot push away high net worth individuals such as the owners and trainers who invest in the sport. I would suggest that it is not for me to say this; the Government are all over it. The Government understand the difference between online gambling, casino gambling and horseracing.
The key to the problem is that people are spending more than they can afford. As a result, some are dying. That is the human cost, and that cost is completely unacceptable.
Stephanie Peacock (Barnsley East) (Lab)
It is a pleasure to serve under your chairship, Sir George. I refer to my entry in the Register of Members’ Financial Interests.
The fact that over 100,000 people have signed the petition on financial risk checks in less than a month shows the strength of feeling on the topic. I pay tribute to my hon. Friend the Member for Neath (Christina Rees) for leading this important debate. This issue is important to everyone who offered their signature, as well as to the gambling and racing industries, which want to be sure that the checks are truly frictionless before they are rolled out. It is also crucial for organisations and families who are concerned about gambling harms and want confirmation that the updated regulation in the gambling White Paper will be going ahead. The Government must be able to strike that balance, as they have promised.
I would like to set out the context for introducing financial risk checks as part of the gambling White Paper more broadly. Half of adults across the UK gamble each month. The vast majority do so safely, moderately and in a way they enjoy. I remember my nan going to bingo every week when I was growing up, and I have always enjoyed going to the races—I was pleased to attend the St Leger last year. For some, however, gambling can become a more serious problem: 300,000 people across the country experience problem gambling, and 1.8 million are considered to be at elevated risk.
The last time gambling laws were updated was back in 2005. Since then, the landscape has changed dramatically. Thanks to our tablets, laptops and phones, most people now have the potential to carry a casino in their pocket, meaning that they can gamble anywhere and make huge losses in a very short time, as my hon. Friend the Member for Swansea East (Carolyn Harris) outlined; I really appreciate the work that she has done over many years in this area. Because of that rapid growth in technology and our growing awareness of the impact of gambling harms, changes to our gambling regulation are now long overdue.
In my time as shadow gambling Minister, I have met those who are recovering from addition, as well as family members who have suffered the unimaginable pain of losing a loved one. For those people, it is absolutely clear that gambling harm has the potential to be devastating, and that more must be done to ensure that families are protected, as my hon. Friend the Member for Sheffield Central (Paul Blomfield) spoke powerfully about.
Affordability checks form part of the new, modernised system of gambling regulation that is fit for the future. Accompanied by other measures such as online stake limits, data sharing between gambling firms and a crackdown through the regulator on black market activity, they will ensure that the law does more to protect children and adults who are vulnerable to harm.
The right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) spoke about how early intervention in the form of checks can make a difference and change the course of addiction. That may well be the case—it is important to make early interventions if we can—but it strikes me that there is a piece missing, because it is not clear what intervention will take place as a result of the checks. This is perhaps not an issue that we can solve here today, but it needs to be considered in the wider context of the White Paper.
As colleagues have outlined, it is also important that our regulation recognises that many people enjoy betting safely and without harm; the hon. Member for Shipley (Philip Davies) outlined that point robustly, as always. The Government must therefore be clear on how they will actually go about ensuring that affordability checks are accurate, frictionless and non-intrusive for consumers, as they have promised. I will conclude my speech with a number of specific questions for the Minister, but I will first speak briefly about why, in this context, the racing industry in particular is concerned about the nature of the checks.
Many Members have spoken about the impact that racecourses have in their constituencies, and I will try to list them. We had the hon. Member for Bath (Wera Hobhouse), the right hon. Member for West Suffolk (Matt Hancock) with Newmarket, the hon. Member for Windsor (Adam Afriyie) and the hon. Member for Tewkesbury (Mr Robertson) with Cheltenham. The hon. Member for St Helens North (Conor McGinn), who is a huge champion for the industry, spoke about his racecourse, Haydock. The hon. Member for East Lothian (Kenny MacAskill) spoke about Musselburgh, and the hon. Member for Waveney (Peter Aldous) spoke about the economic benefit of racecourses in such areas. Apologies if I missed anyone out.
Last week, I hosted a roundtable with representatives from the racing sector, including those who started today’s petition. They shared their thoughts on the potential unintended consequences of the checks, which the hon. Member for Mid Norfolk (George Freeman) spoke about very powerfully. Racing and gambling have a naturally symbiotic relationship, with the success of each industry somewhat dependent on the other. With more than 5 million spectators enjoying a trip to the races each year, it is clear that many people enjoy the combination too, making it the country’s second favourite sport. However, as a result of the partnership, the Government predict that the White Paper will cost the racing industry £14.9 million, with the British Horseracing Authority saying that that could rise to almost £50 million a year when considering the impact of the levy, media rights deals and overall funding.
In turn, as we have heard today, such losses could lead to lower prize money, decreasing participation, job losses in the rural economy and an overall decline in the sport. It is important for racing that the Government and the Gambling Commission work with the industry to ensure that financial risk checks are truly frictionless, targeted and accurate.
Philip Davies
The hon. Lady is being very generous, and I commend her on being knowledgeable on the subject. I have a lot of time for her, as she knows. Based on what she said, would she support the calls that we have heard from many hon. Members today that perhaps a distinction should be made between games of skill and games of chance? I took from what she said that that would probably deal with the two separate issues she referred to.
Stephanie Peacock
I understand that argument, and I have some sympathy for it. However, I do not think that we can carve out horseracing in particular as being free of harm; I simply do not think that is the case. Of course the harm for the horses is less than some, but it is greater than others. We need to strike a balance. I am sympathetic to the argument made by the hon. Gentleman, and I am sure that the Minister will pick it up when he speaks. That is also why it is right that we should work to find a future-proof settlement on the horseracing betting levy, which contributes about £80 million to £100 million to the sport. I hope therefore that the Minister can update us on how the review into that is progressing.
Let me move on to the specifics of how the checks will be conducted. The Minister must be clear on how friction will be removed from the system. Indeed, in those rarer cases where it is proposed that bank statements or payslips might be needed as part of an enhanced check, it is unclear just how frictionless the process could possibly be. Concerns have also been raised with me about the value of using net losses alone without combining them with other markers of harm to prompt an affordability check. As a result, it would be helpful if the Minister could set out in full the latest thinking on how the checks will be conducted, so that they are accurately targeted and have limited user input. In the absence of that, can he let us know when we might expect a full response to the consultation?
The Gambling Commission confirmed late last week that the lower-level checks will use only publicly available data and will run on higher thresholds to start with. It also said that for enhanced checks there will be a pilot to test the details of data sharing. Can the Minister confirm the pilot to the House today and outline how the Department will work with the commission, credit agencies and the gambling industry to ensure its smooth running? Further to that, it would be reassuring if the Minister could set out how the pilot and higher threshold period will be evaluated. For example, what issues will the commission look out for, and what criteria will define success? It is important that we get that right. If the checks are not frictionless or are more disruptive than genuinely useful to those who are at risk, there is a risk that customers will be driven from the regulated industry to the black market, where there are no safer gambling protections whatsoever. That is a real concern, as has been spoken about today.
There is consensus on the need to update our regulation so that vulnerable people are better protected from gambling harms in the modern age. However, at the same time the punters, racing and the gambling industry deserve some clarity about how the Government will ensure that affordability checks are carried out with accuracy and in a way that does not cause unnecessary friction for those gambling responsibly. I look forward to hearing from the Minister how the Department plans to strike that balance.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)
I thank the hon. Member for Neath (Christina Rees) for tabling this important debate, as well as everyone who signed the petition. My hon. Friend the Member for Tewkesbury (Mr Robertson) said that I always turn up to these events; I must confess I did not know that I had a choice. I may have made a different decision if I knew that, but there we are.
My right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) quite rightly mentioned the book that he showed me. It looked like a very extensive book. I have not had chance to read it all yet, but I am sure that “Strongholds of Satan” by William Morgan will be valuable as I further my education in this whole exciting field of policy. In her opening comments, the hon. Member for Barnsley East (Stephanie Peacock) outlined the varying points that came up in the debate and the various views from stakeholders, whichever side of the debate they might be on. I am grateful for all the comments. The debate has been interesting and thought-provoking, and it is good to hear those different perspectives. That is why I always try to take the time to meet and engage with people and, crucially, listen to the points put forward to me.
As some have mentioned, we are walking a fine line and need to get it right to help those who may be entering the risk of gambling harm while ensuring that those who want to continue to gamble safely can do so. I want to recognise the concerns that many have had with the proposed system of checks for the highest-spending online customers to help identify that harm. Those concerns have been raised by colleagues, in the media and certainly with me over the past few months. I believe that the proposals for financial risk checks will represent a significant improvement for both businesses and customers, compared with the current situation.
A recent GambleAware study showed that almost three in five adults support the introduction of the checks. None the less, we and the Gambling Commission have listened and we want to get it right. We are clear that the risk checks should not overregulate the gambling sector, should not unduly disrupt the millions of people who gamble without suffering harm, and should not cause unnecessary damage to sectors that rely on betting, particularly horseracing. We and the Gambling Commission both recognise that it is not our job to tell people how to spend their money. As outlined in the gambling White Paper, we want to balance that freedom with the necessary action to tackle the devastating consequences that harmful gambling can have on individuals and communities.
We know that operators are operating onerous, ad hoc and inconsistent so-called affordability checks on a number of customers, often without being clear on why the checks are happening and normally requiring customers to provide data manually. The proposed system will be a significant improvement by having clear and proportionate rules to which all operators are held, allowing for financial data to be shared seamlessly with operators instead of burdening customers with information requests. The Gambling Commission’s consultation on these checks closed in October. I know from our discussions that it has given careful consideration to the nearly 2,000 responses that it has received, and it has been working very closely with relevant stakeholders, including my Department, industry representatives, the Information Commissioner’s Office, the financial services sector and others, to refine the proposals.
Understanding consumer perspective is vital for the commission. That is why it has a programme of research on the consumer voice, which is an ongoing piece of research using qualitative and quantitative methods to gather consumer perspectives, including on the consultation proposals relating to financial risk. That research has helped inform its thinking and will be published by the commission alongside the consultation response. I am glad that the points raised today reflect that some of the issues facing punters are not down to just these checks—other issues have quite rightly been raised.
Following the publication of a blog by the commission on 22 February, I am pleased to be able to provide colleagues with an update on these checks. Firstly, the Gambling Commission has confirmed that it will be proceeding with the proposal for financial risk checks. That includes the frictionless, light-touch financial vulnerability checks and the enhanced ones. However, following feedback through the consultation, the commission has confirmed that it will not require gambling businesses to consider an individual’s personal details, such as their postcode or job title, as part of the checks. I know that was a key concern for those who signed the petition, and I hope that demonstrates that the commission is carefully listening to the concerns as it finalises how the checks will work.
To ease the introduction of those checks, as we have heard they will initially come into force at a higher threshold for a short period, before reverting to a lower threshold later in the year. We expect the lower threshold to be closely aligned with that proposed in the White Paper, which will enable a smoother implementation for the small number of affected consumers. The checks will not be intrusive, and will use publicly available data—as has already been said.
The commission will require the industry to introduce these frictionless, light-touch checks in two stages; that is intended to happen over the course of this summer. Enhanced financial risk assessments will also be implemented for the important protections they can offer consumers who may be at financial risk, and to ensure that assessing financial risk can be done in a more frictionless manner than is currently possible. The Gambling Commission will therefore conduct a pilot and data collection period. That will involve the commission working with the credit reference agencies and a selection of gambling businesses to ensure that the process of assessment is as effective and streamlined as possible. The pilot will run for a minimum of four months, during which time the commission will consider all issues that arise. The commission is clear that this process will help to refine the final requirements and models for data sharing, and help to ensure that the intentions and commitments in the White Paper are fulfilled.
I am sure everybody agrees it is important that we do not skip ahead to full implementation before getting the details right. Indeed, I know that many right hon. and hon. Members, including my hon. Friend the Member for Shipley (Philip Davies), have made suggestions to me and to the commission. All of us want to find a solution that actively protects those most at risk of harm. The commission is actively considering all the proposals—including my hon. Friend’s—and I can confirm that many of the ideas that have been raised will be explored during the pilot stage, including looking at whether CATO or SCOR data is being used. By doing so, the commission can ensure that all the decisions that will be made are based on the evidence of what is working.
Matt Hancock
Will that include carving out horseracing in the same way that the national lottery has been carved out? Both of those have the lowest impact in terms of gambling harm and it would be inappropriate to treat the two differently.
Stuart Andrew
I have heard the national lottery mentioned a few times. Yes, it is unique—it is under its own separate legislative framework—but under the fourth licence conditions, player protection requirements will be increased and there will be conditions on payments for support, research, education and treatment.
I have also heard arguments for a carve-out for horseracing. I acknowledge that greater gambling harm occurs in online casinos, but we know that those who experience gambling harm use multiple products, and some have been using horseracing products. I have heard harrowing stories of people who have made losses on horseracing products alone.
Stuart Andrew
I am going to crack on because I do not have much time left and I want to get through as much as I can. If I have time at the end I will happily take the hon. Gentleman’s intervention.
I hope it is clear that both the Government and the commission want this to be a genuine pilot of how data sharing would work. Throughout the pilot, gambling businesses will not be expected to act on the data they receive, although they will of course be expected to continue to protect consumers by implementing their own existing consumer safety controls and to remain compliant with our existing regulatory requirements.
The Government and I are supportive of the evidence-led and consumer-centred approach that has been proposed for the pilot period, and the Gambling Commission will publish its full consultation response very soon. I remind colleagues that this is about online betting; people who go to racecourses or betting shops will not be a part of this, and the “day out” experience will not be affected.
In the meantime, we have also challenged the industry to be more transparent with customers. Currently, requirements are in place for gambling operators to identify customers at risk of harm and to take action, but there are no specific safer gambling requirements on how or when gambling operators must consider the financial circumstances of their customers. Where there have been failures to identify and act on clear signs of harm, the Gambling Commission has not hesitated to take action, including with fines, but there has been inconsistency across the sector. That is why we and the commission are working closely with the industry with it, so that we have a much better system in this interim period.
In the light of that, and in my meetings with colleagues and with the Horseracing Bettors Forum, I have urged the members of the industry to work together to mitigate the impact of customers having to provide information and documentation while we develop the new, frictionless system of checks. We understand that they are working towards delivering an industry-led code that would apply in the interim period. I know that progress is being made and I hope that we will be able to report that an agreement has been reached soon, so that customers have more clarity about what is expected.
Let me address the concerns raised here today about the black market. I assure colleagues that I take the threats posed by illegal online marketing and markets very seriously indeed. We know that they can pose a variety of risks to consumers, including by allowing access to those who have self-excluded through GAMSTOP. That is unfair to those businesses that abide by the rules. As set out in the White Paper, we committed to giving the Gambling Commission more powers to block and disrupt illegal gambling websites. We are delivering on that commitment through the Criminal Justice Bill, which will allow the commission to suspend IP addresses and domain names if they are being used for the purposes of serious crime connected with unlicensed gambling. The commission has also been able to invest in work to combat illegal gambling and it has succeeded in disrupting and reducing illegal traffic into British gambling markets. That work should be enhanced by the new disruption powers that the commission will receive once the Criminal Justice Bill has passed through Parliament.
I will now address horseracing specifically, as it has been raised here today. The British Horseracing Authority and other stakeholders in the industry have voiced concerns about the impact of the checks on the sport. I assure everybody that we have heard the concerns and take them extremely seriously. I have already met with many colleagues here today, including members of the APPG on racing and bloodstock. I have also met the Horseracing Bettors Forum to hear a customer perspective. I will continue to engage with the sector and those affected by the reforms, because the Government are strong supporters of horseracing. I acknowledge the many points that have been made about the significant contribution that horseracing makes to our economy and the central role that it plays in the livelihoods of rural communities. The employment that it supports across racecourses, training yards, breeding operations and related sectors reflects a powerful industry that is respected at home and abroad. Many colleagues have spoken here today or written to me on this subject, and I saw at first hand the care that is given to racehorses on a recent visit to a training yard in Middleham. I am therefore clear that we must ensure that the checks do not adversely affect racing or those who work in the sector, or interrupt the customer journey. They also must not push away high-net-worth individuals such as owners and trainers that invest in the sport.
The Gambling Commission has worked very closely with operators to explore the practical aspects of implementing the checks, and colleagues have said that they have seen an improved relationship between the commission and the industry. The commission has also been carefully considering responses to the consultation, which have helped to shape the implementation plans. We want to protect those at risk—I make no apology for our doing that—with minimal disruption to the majority, who I recognise bet on horseracing with no ill effect.
We recognise the importance of horseracing, but we know also that the levy is an important piece of work. I am about to run out of time, but I will happily write to colleagues to update them. Discussions are ongoing—I know that the Betting and Gaming Council had discussions this morning about an offer that is on the table for the levy—and I hope to be able to update colleagues shortly. With that, given that my time has run out, I apologise for not covering all the points, but this was an extensive debate.
Christina Rees
Very briefly, and on behalf of the Petitions Committee, I thank all right hon. and hon. Members for their very valuable contributions.