What kind of country provides a pay packet of £217 million to its highest paid woman – for running a gambling firm? What kind of country produces five billionaires and 15 multimillionaires from the proceeds of gambling – increasing their wealth last year by nearly 20% to £19 billion? – and then turns a blind eye to the 2 million people in the UK who are either problem gamblers or at risk of gambling addiction – including young people driven to suicide?
Today’s debate on Online Gambling: November 24th 2017
Lord Alton of Liverpool (CB)
My Lords, I too warmly welcome this debate and congratulate the noble Lord, Lord Browne of Belmont, on his speech and on initiating the debate. I wholeheartedly agree with and endorse his remarks, along with those of the other preceding speakers.
In preparing for the debate I have been struck by the fact that the problem gamblers I have spoken to are also passionately against the two-tier system referred to by the noble Lord. One of them, Justyn Larcombe, emailed me this morning, giving me permission to quote him. He said:
“I am at a loss to understand why the Gambling Commission would have settled for this approach. Given that some companies own multiple sites, it doesn’t take a genius to work out why the industry might have pressured the commission into this bizarre arrangement … When you want to self-exclude, you are desperate and, by definition, you want to cut yourself off from all gambling opportunities. The idea that anyone reaches that point and wants to cut themselves off from bet365, but not Paddy Power, is farcical”.
Endorsing a point that we have heard in preceding speeches, he adds:
“It is in the middle of the night that the most destructive online gambling takes place. If it could be shut down overnight in the UK, as in Finland, that would really help increase protections for problem gamblers”.
I will return to each of Mr Larcombe’s points in my remarks.
For 25 years, as a city councillor or Member of the House of Commons, I represented inner-city neighbourhoods in Liverpool. Time and again, I saw the destructive effects of various forms of addiction. Addictive gambling had a corrosive and pernicious effect, with men in particular gambling wages or benefits that their wives and families desperately needed to keep hearth and home together.
Fast forward to today and into the world of anti-social media; and as the Gambling Commission reminds us, the overall prevalence of at-risk gambling is at its worst among those who are enticed into online gambling. That tears lives, families and communities apart—and we should all reflect on the sometimes tragic consequences, which include suicide and other well-documented mental, physical, and emotional consequences, as we have heard. We have been reminded of tragic cases: the 23 year-old trainee accountant, Joshua Jones, who in the summer of 2015 leapt from the ninth storey of a London skyscraper to his death because his gambling debts had risen to £30,000; the 18 year-old, Omair Abbas, who committed suicide in 2016, having accumulated just over £5,000 of online gambling debts; and the noble Lord, Lord Morrow, reminded us of the death of a young man in Fermanagh who had accumulated staggering debts. This waste of life, full of promise, is desperately unnecessary. Gambling addiction destroys lives, but it can also destroy communities.
Fast forward again to 2017 and visit our hollowed-out high streets, where the dominating prevalence of charity shops and betting shops tell their own story of modern Britain. In a telling and sharp contrast, as local communities are disfigured and struggle for resources, the Local Government Association is right to remind us that the gross gambling yield from fixed-odds betting terminals rose from £1.05 billion in April 2008 to £1.73 billion in March 2016—an increase of 65%. Those figures hardly suggest that the Gambling Act has struck the right balance between the needs of local communities and the rights of multimillion-pound businesses. I particularly agree with the remarks of the noble Lord, Lord Chadlington, who told us that we ought to enforce many more restrictions on gambling advertising.
The fact that our laws lack balance is also illustrated by the findings of the Gambling Commission, which tells us that the UK now has the largest regulated online gambling market in the world. In one recent year, the remote gambling sector generated a gross gambling yield—defined as the amount retained by operators after the payment of winnings but before the deduction of costs—of a staggering £4.5 billion. That is a 32% market share of an even more staggering £13.8 billion generated over the same period by the gambling industry as a whole. Again, it was the noble Lord, Lord Chadlington, who reminded us of the obscene levels of remuneration by some of the captains of this industry.
Problem gamblers in Great Britain—defined as those who gamble to a degree that compromises, disrupts or damages family, personal or recreational pursuits—are estimated to comprise some 430,000 people, mainly men, with a further 2 million deemed “at risk” of problem gambling. To combat that, the commission says that we can harness technology to provide some degree of protection; in particular, it points to the online multi-operator self-exclusion scheme, mentioned by noble Lords in the debate, scheduled to be in place by 2018. However, again, as Justyn Larcombe told me:
“I am at a loss to understand why the commission would have settled for this approach”.
The Gambling Commission licence conditions and codes of practice, in paragraphs 3.5.4 and 3.5.5, appear to suggest that individual sites should continue to run their own self-exclusion system in addition to MOSES. I am underlining the point of the noble Lord, Lord Browne, which is extremely important. I can see that the Minister may be tempted to suggest that having two systems is better than one; in some situations there can be wisdom in a belt-and-braces approach, but not here. The existence of two systems is likely to generate confusion, whereas problem gamblers, such as Mr Larcombe, want to be able to self-exclude from all legal sites at the same time. I very much hope that we are misreading paragraphs 3.5.4 and 3.5.5 and that GAMSTOP will replace all individual online self-exclusion provisions. However, if it does not, I must ask what evidence the Gambling Commission and the Government have from genuine problem gamblers that there is a desire for a two-tier system. I hope the Minister will reflect on that.
As others have done, let me say something about the statutory levy. I particularly endorse what my noble friend Lady Howe said to the House a little while ago. I raised the issue of the Government’s Internet Safety Strategy Green Paper in another context with the Minister who will reply to the debate. I find it quite extraordinary that, without a hint of irony, at the conclusion of page 16 and beginning of page 17, the paper states:
“While the Secretary of State has the power in legislation to bring forward a gambling levy, in practice the sector provides voluntary contributions and support. The majority of these voluntary payments go to GambleAware, a leading charity in Britain committed to minimising gambling-related harm”.
Reading that, it sounds as if the Government are relaying a good-news story of successful self-regulation. Nothing could be further from the truth.
The industry is supposed generously to contribute 0.1% of gross gambling yield, £14 million, and yet it cannot manage even that. Last year, it managed only £8 million, sufficient to enable GambleAware to fund treatment for 8,000 people. Yet there are 430,000 problem gamblers in Great Britain. The Secretary of State should use the regulation-making powers afforded to her by Section 123 of the Gambling Act to give effect to the statutory levy. In my judgment, it should be at least at the level of the problem prevalence figure: 0.8% of gross gambling yield.
Justyn Larcombe also told me:
“It is in the middle of the night that the most destructive online gambling takes place”.
He referred to the situation in Finland. To deal with this challenge will necessitate legislation requiring gambling sites not to accept bets between midnight and 6 am, and financial transaction providers not to process gambling transactions between those hours. As well as reducing the hours during which people can gamble, I hope the Minister will consider reducing maximum stakes on fixed-odds betting terminals—B2 gaming machines—to just £2. The current maximum stake of £100 is significantly out of line with the maximum amounts that can be staked on other types of gaming machines. There is also credible evidence that these machines may be addictive particularly to problem gamblers and therefore pose a greater risk to them, as well as being linked to anti-social behaviour and crime in betting shops.
Then there is the role of the commission. The commission notes, as others have observed, that in 2008 public confidence and trust in gambling stood at 49%. Today, it stands at just 34%. The commission needs to ask why there has been that decline in public confidence. Along with others in your Lordships’ House, I think that we are all indebted to the noble Lord, Lord Browne, for giving us the chance to raise these points and ask these questions today.
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