Gambling: Fixed-odds Betting Machines
Lord Clement-Jones
To ask Her Majesty’s Government what actions are being taken to address the concerns expressed by a number of local authorities in England and Wales about the growth in the number of high stakes fixed odds betting machines available on the high street.
Lord Clement-Jones (LD)
My Lords, I am today pursuing a matter of considerable concern to many noble Lords which has been discussed before on a number of occasions in this House. Most recently, on 9 February, my noble friend Lord Strasburger asked about the Government’s plans to mitigate the effects of FOBTs. We also discussed the regulation of FOBTs in Committee during the passage of the Gambling (Licensing and Advertising) Act in January 2014.
Fixed-odds betting terminals—popularly referred to as FOBTs, and technically known as B2 gaming machines—are for high-stake fast play, allowing users to bet up to £100 every 20 seconds. During 2013, £1.6 billion was lost by gamblers on FOBTs in Britain, with most of the money coming from some of the UK’s most deprived communities. There are now some 34,500 FOBTs across the UK. The £100 stake on FOBTs is more than 40 times the EU average; combined with the fast pace of play, this makes them particularly dangerous, leading to high levels of problem gambling. The speed of roulette on the machines is more than five times as fast as roulette in a casino, yet the machines are in lightly regulated, high street betting shops—more than 9,000 of them across the country. The reality on the ground is that these machines are highly dangerous products that are catalysts for problem gambling, social breakdown and serious crime in communities.
Research published last year by the Scottish Parliament Information Centre found that problem gambling is seven times higher in deprived areas, seven times higher among harmful drinkers and six times higher among the mentally ill. Responsible Gambling Trust research—although flawed—shows the worrying impact of the machines. A person who has been gambling at higher stakes is more likely to make poorer judgments than after gambling at lower stakes. The number of people betting the maximum £100 stake doubles between 10 pm and midnight; 37% of FOBT gamblers are problem gamblers. We have all noted the clarification of the misquotation of the noble Lord, Lord Gardiner, in his Answer on 9 February by the chairman of the RGT.
Proliferation is happening around the country—not just in the cities. One street in the London Borough of Newham has 18 betting shops. However, betting shops are also spreading in towns across the country. Colchester has 14 bookies, including seven branches of Ladbrokes. Ireland has banned the machines altogether, following both public concern and parliamentary pressure. The Smith commission on devolution has recommended that powers be devolved to the Scottish Parliament to prevent the proliferation of fixed-odds betting terminals.
The Government have brought forward two proposals aimed at ameliorating the worst effect of FOBTs. First, there are the changes to the planning regime. In 2014, the Government consulted on a change to planning processes which would place betting shops in a separate use class order and require express planning application for new betting shops. However, a new use class would impact only on future shops; it would do nothing to tackle existing clusters of betting shops, which have been strongly opposed by local communities. It will do nothing about the 34,500 FOBTs already on our high streets. In fact, it will simply provide a competitive advantage to those betting shops already in place by keeping out the competition. So those planning reforms are not the answer to the FOBT problem, they are merely shutting the stable door after the horse has bolted.
Secondly, we have the new Gaming Machine (Circumstances of Use) (Amendment) Regulations 2015, shortly to be debated in this House. They will require account-based play via a loyalty card or similar system, or talking to a staff member if a customer wants to bet more than £50 per play. That does not amount to a stake reduction. Punters can still stake £100 every 20 seconds. Vulnerable players chase their losses, and neither measure will prevent a player betting £100 per game: the root cause of the addictive nature of FOBTs.
Asking betting shop staff to restrict further betting by customers who may have just incurred large losses is likely to lead to conflict and dangerous situations, especially where shops, as they increasingly are, are staffed by only one person. There is no basis for the £50 proposal. No research has considered the impact of a £50 stake. Therefore there is no evidence that the proposal will help to protect problem gamblers.
The essential point that I am making today is that neither of the Government’s proposals will be effective. By giving the impression of taking action, they may make the situation worse by delaying the only truly effective answer: reducing the maximum stake to £2, which is the maximum stake offered in all other similarly regulated adult premises on the high street, such as adult gaming centres.
Local authorities, who see the problem on the ground, clearly do not believe that the proposals go far enough. Last November, 93 councils, led by the London Borough of Newham but from across England and controlled by all three major political parties, including colleagues of my noble friend Lord Tope in the London Borough of Sutton, called for action under the Sustainable Communities Act 2007 to cut the maximum stake to £2. Under the Act, councils from all those parties have called on central government to take that action due to the anti-social behaviour, crime and problem gambling that the machines are causing in their local areas. That unprecedented step represents the widest support that any Sustainable Communities Act proposal has ever received.
The Local Government Association has backed this call. It has demanded a range of measures to strengthen the role of local councils in protecting their high streets, including calling for a reduction in the £100 stake on FOBTs to £2. Under the Act, councils are given the power to make proposals to the Secretary of State as to how the Government can assist them in promoting the sustainability of local communities. The Secretary of State is then under a duty to reach agreement with councils, either via their representative body, the LGA, or directly, on which proposals will be given priority. The department is formally required to respond by June 2015. I hope that the Government will respond before then. There is clear evidence that the public supports restrictions on FOBTs. YouGov showed that only 4% of the public would oppose a ban on FOBTs, with 58% of those who gamble more than once a month in favour of an all-out ban. The Gambling Commission has stated that in interpreting the available evidence it will take a precautionary approach where that evidence is mixed or inconclusive.
It is clear that the stake should be reduced until there is evidence that it can be safely increased above the £2 level. The onus should be on the bookmakers to demonstrate that effective measures can be put in place before they are allowed to offer games at more than £2. I hope that the Government will go well beyond the actions that they have already taken, and I look forward to the Minister’s reply.
Lord Dubs (Lab)
My Lords, I very much agree with the noble Lord’s arguments. Indeed, he has put them so well that I am reminded of the advice I was given many years ago that, when all the arguments have been well put, not everyone else has to put the same arguments. I can therefore be much briefer than I would otherwise have been.
As regards the planning side of this, the Government are trying to bolt the stable door after the horse has gone, because we have such a plethora of betting shops with these machines in them that it is very hard to believe that the changes in planning will go any way towards remedying the situation. They might prevent it getting worse but that is all. I am impressed by the overwhelming number of organisations and local authorities—people who know what they are about—that are opposed to the present situation and do not believe that the Government’s proposals go far enough.
Let us take a problem gambler, a person who is pretty well addicted: we know that quite a number of people are. This person goes into a shop and he is told that there is a limit. He responds, “Oh, that’s all right, I understand about the limit. I want to bet £100 every 20 seconds”. That is not going to stop anybody. It might stop a timid soul but not a gambler of that sort. The difficulty is that because of the speed with which it happens there is hardly time for anybody to pause and say, “This is ridiculous. I shouldn’t go on backing the loss of money”. Psychologically, at least if one is somewhere where one can gamble only at intervals, one can reflect on the likelihood of losing or winning and on the need to be cautious. People get caught up psychologically. They lose money and say, “I must go on betting in the hope of getting my money back”. Surely that is the cause. It is a social evil to encourage people to bet in this way and lose money. A lot of the criticism is about how this happens in very deprived areas.
The borough of Newham has put forward some very interesting proposals and briefings on this. It says clearly, “We are a deprived area. We have all these betting shops and machines. Please, we cannot sustain a decent community if this goes on happening”. I do not for the life of me know why the Government are trying to pussyfoot around and make minor changes—and I regard them as minor changes—to placate somebody.
There is an argument that there might be a loss of employment in some bookmakers. Well, there might be, though they are not so well staffed that they have enough people to persuade problem gamblers to ease off. Even if there is a loss of turnover in the bookmakers—and I do not want anyone to lose their job—that money will go somewhere else. People are poor: they will spend it on what everyone else would spend it on in the high street. There will, therefore, be no loss of economic activity because of this. Perhaps there will be a transfer from one type of activity to another, but there will not be an overall loss of economic activity. I cannot see, therefore, that there will be an economic disadvantage. In any case, it is surely not very edifying if our high streets have one betting shop after another. Is that the sort of high street or community that we want? High streets can be positive. They can be useful for people and provide shopping facilities. We do not want these other things when there can be an excess of them—and there is. It is said that a single street in Newham has 18 betting shops. For heaven’s sake, what sort of society are we supposed to be?
There is an enormous weight of opinion against these terminals—or, to put it this way, an enormous weight of opinion saying that the maximum limit should be £2. To me, that seems a lot of money because you can spend £2 every 20 seconds. That is still a lot of money and adequate for one’s gambling instincts, but then I am not a gambler so perhaps I do not understand these things all that well. It just seems that £2 would be a sensible limit. After all, it is right that the people who are vulnerable and who have become addicted to gambling should be given some measure of ability to keep their gambling urges under some form of control. This is not asking for a great deal. We are not asking to nanny people.
Some of the figures we have been given say that over a third of fixed-odds betting terminal gamblers are problem gamblers. It is one in three—a large proportion. People do not just go in there and spend a little money, then go away again. It seems that they stay there and that it is easy for this to become compulsive. As the noble Lord, Lord Clement-Jones, said, the numbers of people betting the maximum £100 stake doubles between 10 pm and midnight. That is hardly a time when one’s judgment is going to be calm and sensible.
The weight of evidence is so much against these terminals with the stakes as they are, and so much in favour of having a significantly reduced stake. I believe that the Government’s proposals, which will come out in orders, frankly do nothing significant to help. I urge the Government to think again. We are talking about what is for some people a social evil. It is harm that we are doing to our fellow citizens; surely we have to stop that.
Lord Lipsey (Lab)
My Lords, I was for many years a happy constituent of the noble Lord, Lord Dubs, in Battersea South but in my many perambulations around the betting shops of the area I very rarely bumped into him, although he was a most assiduous MP. I suspect that like many of the participants in this debate, he probably does not go into them very much.
Lord Dubs
Just so that everything should be above board, I go into a betting shop once a year when we have a small bet on the Grand National. The year when I won the most was during an election campaign, when a horse called “Party Politics” won and the odds were good. Beyond that, I do not go into betting shops and never did in Battersea.
Lord Lipsey
I will give the noble Lord a tip for next year’s Grand National and tell him which shop to place it in.
We have had a slightly testing afternoon, so I may risk a rather racy analogy which gives my view of FOBTs. I am not very fond of them. If betting on a horse race is the full sexual intercourse of betting and gambling, with foreplay when you select your horse and mounting excitement as the race goes on—we know what happens after that, when the result comes—then FOBTs are a form of onanism. You see sad-eyed blokes—it is always blokes—in front of porn-like machines, made very glittery and unrealistic, shoving in pounds for momentary pleasure. If FOBTs evaporated into the air tomorrow, I for one should be delighted but that does not mean that I would ban them. There are a lot of pastimes that I do not much like: fox hunting, shooting and, although the noble Baroness, Lady Golding, is beside me, I have to say also fishing. However, if others wish to practise them within the law—and of course on fox hunting there is a strict law—that is their affair. Perhaps more importantly, there is the matter of unforeseen consequences.
You do not have to go into a betting shop to place a bet. The online alternative is increasingly attractive, and I cannot see much advantage in forcing determined punters to do what they do in private rather than doing it in a betting shop, where at least there is some element of sociable atmosphere. I can also see some disadvantages. I quite take the point of the noble Lord, Lord Dubs, on this: there would be a threat to the jobs of the hard-working staff—some 45,276 of them nationwide—who work in these shops. There would be a loss of tax and the loss of betting levy revenues. Those have to be weighed against the arguments we hear. Having said that—which favours the bookmakers’ arguments—I cannot believe the hash that the bookmakers have made of arguing their case on this. I cannot believe it. They were legendary lobbyists once upon a time. If William Hill or Ladbrokes came through your door, you shivered with fear and slavered to do their will. But now their approach has been that of the tobacco industry at its very worst. First, they denied that there was a problem. Then they said more research was needed—an echo of the speech of the noble Lord, Lord Deben, in the debate we have just had; there is always more research needed—at the same time doing everything they could to obstruct that research by not making FOBTs available to researchers. Now, finally, their answer is to do more about problem gambling.
Of course, I welcome everything that is done about problem gambling. I applaud the work of the new Senet Group, including on gambling advertising in the windows of shops, but also more widely. I also tremendously welcome the appointment of Martin Cruddace as interim chief executive of the Association of British Bookmakers. Martin is a 21st-century man who has some possibility of helping us find a way through this difficult problem without catastrophic damage either to the betting industry or to the people of this country.
I said that the present answer of the bookmakers is to say, “We are going to fight problem gambling”. Of course I favour that very much, but I do not think it is any more likely to wash than the bookmakers’ previous defensive strategies. There is a lively academic debate about problem gambling. I will not go into it here: “Is there such a thing?”; “Is there a clear distinction between problem gambling and non-problem gambling?”; “How prevalent is it?”. I greatly applaud the noble Lord, Lord Clement-Jones, for getting this debate tonight, but the notion that one-third of those who play FOBTs are problem gamblers is not in line with the evidence.
We must do everything we can to stop the terrible affliction that genuine addictive problem gambling can do to people and their families. As far as I am concerned, it is not those who shove every penny they can get hold of into these damned machines who are the only people with a gambling problem. Anyone—anyone—who stuffs a hard-earned £100 into a slot has a gambling problem. You therefore have to tackle it across the board.
What should be done? The title of this debate refers to the growing number of FOBTs. Again, I am afraid that I have to disagree with the noble Lord, Lord Clement- Jones, who I much respect. The number of machines is not rising very much. It is nearly 40,000, actually—not the 9,000 he suggested—but it is rising at only about 2% a year. Indeed, I suspect, as we speak, that it has fallen because bookmakers are closing betting shops on quite a large scale now and there will be fewer machines. I give way to the noble Lord.
Lord Strasburger (LD)
I think the noble Lord will find that although the total numbers are not changing very much, they are migrating towards the poorest areas.
Lord Lipsey
Yes, but that does not relate to the point I was making that just controlling numbers is not enough. There may be a case for local controls in some areas. I will come back to that at the end of my speech, but I think that the numbers are probably falling now. However, if you really want to put money into an FOBT, you are not going to have much trouble finding a machine; there are plenty about.
It is also true that there might be fewer betting shops on our high streets if there were a crackdown on the numbers of FOBTs. Again, with regard to unintended consequences, anyone who thinks that that would mean all the great shops and chains moving back on to the high street are deluding themselves; the only reason why there are so many betting shops on the high street is that no one else wants the premises, and they are therefore available. I would rather that our high streets consisted of well maintained betting shops than ill maintained, ramshackle, empty shops that are falling down.
So if we are not going to try to control numbers, what should we try? I think that the alternative, as has been referred to by the noble Lord, Lord Dubs, is the tool we already have: a limit on the amount that you can put into the machine at once. A hundred pounds is a very high limit, is it not? It means—in theory, at least—that the punter can lose a hell of a lot of money in no time at all. It is, incidentally, the bookmakers’ adamant refusal to take the counsel of their wiser friends and reduce that amount, a refusal that I think is motivated by sheer greed and the need to feed the maws of their shareholders, that has persuaded me that they simply do not get it or, at best, that their judgment has taken second place to the size of their bonuses. Had they voluntarily reduced the top stake by one-quarter, one-half or three-quarters when problems started to emerge, I suspect that we would not be here having this debate today.
Outside bookmaking, a consensus is emerging for reducing the maximum stake substantially; the figure of £2 seems to have emerged among campaigners at the right sort of level. Going back to sex, that would turn the porn machines into a sort of page 3—if that still exists; I get confused from day to day as to whether it does—that is, mild titillation rather than hardcore, and FOBTs into something more akin to entertainment-with-prizes machines, a bit of fun rather than a serious gambling product. In my view, it is a matter for serious further consideration whether such a limit should be imposed at the national level or decided by local decision by local government.
Lord Strasburger
My Lords, since confessions seem to be the fashion, I will admit to liking a little flutter myself. In this matter, there are many knowns and a few unknowns. We know that FOBTs are different from all other gambling machines on the high street because their maximum stake is 50 times higher, £100 as opposed to £2. This makes them suitable for addictive casino games, mainly roulette, and they turn betting shops into de facto casinos where a punter can lose £300 a minute but without the close supervision that casinos deploy.
We know that 70% of betting shop revenue now comes from FOBTs. We know that the big bookmakers target the poor and the financially vulnerable because the density of FOBTs in the most deprived areas is double that in the most well-off parts of the country. We know that the predictable income that FOBTs generate, not being dependent on the results of sporting events, is very attractive to the plc boards of the big gambling businesses. We know that betting shops employ fewer staff for FOBTs than if they had over-the-counter betting only, so the costs are reduced.
So we know that FOBTs are goldmines for the betting industry and that it will do all it can to keep them and their £100 maximum bet three times a minute, come what may. We also know that the Responsible Gambling Trust is funded by the gambling industry and its trustees and management are stuffed with betting industry figures, so the trust’s independence and impartiality are, at best, suspect.
Yet we also know that the Government rely on the Responsible Gambling Trust for its research on FOBTs. So it is hardly surprising that, despite indications given previously by the Government, the recent Responsible Gambling Trust research did not examine whether the special characteristics of FOBTs—namely very high stakes, casino games and very high-speed play—contribute to problem gambling and addiction, although we do know that research by Sydney University in 2005 found a link between high staking and problem gambling.
These omissions in the Responsible Gambling Trust’s research suit the gambling industry very nicely. Once again, action will be deferred on greatly reducing maximum stakes and game speed, and the big bookmakers can continue to profit handsomely from the poor and the addicted. We also know that fixed-odds betting terminals present a convenient route for small and large-scale money-laundering.
There are two things that we do not know. The first is very simple. Why on earth did anyone, apart from the bookmakers, think that it was a good idea to allow one category of gambling machine, freely accessible on high streets, to have a maximum stake 50 times higher than all the others? Perhaps my noble friend the Minister can tell the House why the Government still think that huge anomaly should persist. The other unknown is why the Government appear to be complicit in protecting the big bookmakers and their super-profits from FOBTs, at the expense of the most economically vulnerable and those addicted to gambling, their families and those in their community who suffer from the consequential crime. Could my noble friend the Minister explain why that is the case?
Lord Collins of Highbury (Lab)
My Lords, I welcome this debate. If we are to have a sort of coming-out session, I have used casinos and have even had the delight of Las Vegas, where I certainly enjoyed myself. The most frightening experience I have had was taking an elderly neighbour to the local bingo hall and watching people play bingo. I found it incredibly stressful; I could not keep up while she, in her 80s, was able to point out all the numbers that I had missed. There is skill in some of these games.
Despite a two-year research programme, and after 15 years of FOBTs on high streets at £100 a spin, we are still no nearer a conclusive answer to whether they are safe to operate in high street betting shops.
My noble friend Lord Dubs has pointed out that the betting industry has argued that jobs are at risk if FOBTs are not allowed. If this is the case, why has the number of employees in betting shops been decreasing while the net takings from FOBTs have increased?
Local authorities have a statutory duty to uphold the licensing objectives, which are to ensure that gambling is fair and open, is not associated with crime and does not harm the young and vulnerable. As we have heard from noble Lords, 93 councils believe that FOBTs are in breach of all these objectives and so have joined Newham in calling for the maximum stake to be capped at £2 a spin.
Labour has always been clear that FOBTs should be kept under review. My right honourable friend Tessa Jowell, the then Secretary of State, said during the passage of the 2005 Act that FOBTs were “on probation”. They have certainly had a very long period of probation. She was concerned about unintended consequences relating to the machines, about the gambling industry becoming “overly dependent” on growth driven by the machines and about FOBTs’ role in problem gambling. At the time when four was settled on as the number of machines to be permitted in betting shops, she said that there was no certainty that these machines would remain, because we were absolutely clear that we could not know at that stage what their effect was likely to be.
In response to the cap, bookmakers have opened multiple premises in clusters to facilitate more machines. They get round the limit of four by simply having four more shops in the same area. Extending those clusters has been a very big issue for lots of local authorities. By clustering in that way, they facilitate more machines, as a fixed-margin product guarantees bookmakers a return. As a result, FOBTs have become a significant part of their business operations, which has led to betting shops proliferating on high streets and licences being moved from tertiary locations to clusters.
The Minister, in response to a recent question from the noble Lord, Lord Strasburger, in the Chamber referred to new regulations which,
“come into force on 6 April this year that will end unsupervised high-stake gambling on fixed-odds betting terminals. All players using FOBTs are now presented with a choice to set time and money upfront”.
The Minister assured the House that the Government would be,
“keeping this issue under review and remain focused on identifying gambling-related harm, wherever it is found, and devising effective measures to bear down on it hard”.—[Official Report, 9/2/15; col. 1021.]
Tonight, however, can the Minister explain how the Government came to decide that £50 would deal with problem gambling? I fear that if he cannot, many will see this as a bit of a sham rather than firm action. It is a fact that the limit relies on the betting industry to apply it, and customers will be able to bet above £50 on a single play with permission from betting shop staff.
We have heard a lot about the research of the Responsible Gambling Trust, which has identified that 73% of all bets were on B2 games and that roulette was the most popular type of B2 game. In effect, as we have heard, we now have casinos on every high street, but not with the same sort of controls and supervisions you would have in casinos. In London, stake sizes were higher and session lengths longer.
A link between social deprivation and use of the machines was found. In England, two-fifths of all bets were placed in venues in the most deprived areas. However, that reflected the distribution of bookies, as 38% of branches are in the most deprived areas of the country. Those with lower incomes were more likely to start to play machines in a bookmaker’s than those with higher incomes.
We share concerns that betting shops are clustering in areas with high levels of deprivation, but appreciate that not all areas are affected. However, as the noble Lord, Lord Clement-Jones, said, the new regulations on planning apply to new premises. They are not tackling the issue of existing premises, or the clustering I referred to. The Secretary of State for Communities and Local Government has told us:
“This government is committed to localism and greater local decision-making in planning”.
Perhaps the Minister can explain why that does not apply to betting shops. Local authorities should have the ability to ration and manage the number and location of these shops in their area. The Labour Party would also modify the Gambling Act to give councils powers to review betting shop licences in their area and retrospectively reduce the number of machines in existing betting shops—that is, from four through to zero—in response to local concerns.
Critics of FOBTs have argued that these machines are addictive because of the immersive nature of the games, which lulls people into losing more money than they intend. We have heard what the research has shown about the periods of time for which these are being played. I support measures to mitigate the harm of these machines, such as increasing the time between plays, introducing pop-ups that warn players how long they have played, and how much they have gambled and lost, or requiring them to go to the cash desk to limit the amount they can insert into the machine. However, none of those measures will be effective without sufficient trained staff. Betting shop staff are on the front line when it comes to consumer protection, but single staffing is commonplace in betting shops, especially in these clusters. Does the Minister agree that staff would be in a better position to intervene and help problem gamblers if they were not made to work alone?
Labour will expect operators who have FOBTs to have at least two members of staff present at all times. If they fail to comply with this, we will make it a licensing condition for betting shops that have FOBTs. By demanding that betting shops with FOBTs stop single staffing and requiring them to provide adequate training for staff, we can increase employee safety and empower staff to help potential problem gamblers.
As my noble friend Lord Lipsey said, one of the key issues cited for inaction on FOBTs is a lack of evidence; we have heard that through tonight’s debate. Does the Minister agree that betting shop operators should be required to collect and provide standardised data on the use of FOBTs, to allow independent—I stress the word—researchers to analyse their impact so as to help inform all future decision-making on these machines?
Lord Bourne of Aberystwyth (Con)
My Lords, this has been an extremely interesting and thought-provoking debate. I thank my noble friend Lord Clement-Jones for tabling this debate and presenting his case with such aplomb, not least because it offers the Government an opportunity to highlight existing measures in this area and to provide reassurances on what is, after all, a very important subject. Let me state categorically at the outset that the Government understand the public’s concerns and those of noble Lords around fixed-odds betting terminals. We have made it clear that we consider the future of their regulation to be unresolved.
I turn first to the submission supported by Newham Council and others. The Government understand the deep concerns held in this area of law in relation both to the perceived impact on the face of the high street of clustering—about which I will say something later—and to the claimed impact on problem gambling of the category B2 or the fixed-odds betting terminals that we are talking about. That is why, last April, we announced action in this area. I believe this was the first action announced under the Gambling Act, which, after all, came in in 2005, so there was ample opportunity for the previous Government to do things in the five-year period before the 2010 election. However, I accept that we all have concerns about this issue, so I am approaching it on that basis.
We announced a whole suite of new gambling controls, on track to come into force in April this year. I believe that my noble friend Lord Gardiner covered that in answer to a Question asked by my noble friend Lord Clement-Jones. The measures that we are seeking to introduce are to give more powers to local communities by requiring planning applications to be submitted to local authorities for new betting shops, and they will now be in a separate category. At the moment, they are in the same category as financial advisers and so on, so a change of use within that category would not require planning permission. After April, it will need separate planning permission unless it is within a now very limited category. I think that they share the same category as payday lenders and that they are the only two types of business that will find themselves in this new planning category. We have also brought in measures—which I will outline and expand on later—to restrict unsupervised high-stake play.
I do not claim to be able to predict what the precise impact of these measures will be—I do not think any of us can know that—but as the Secretary of State, Sajid Javid, said at the Culture, Media and Sport Committee on 20 January:
“These measures, particularly regarding FOBTs”—
Lord Strasburger
I thank my noble friend for giving way. He says that he cannot predict the effect of these changes. Let me help him. Changing the planning law will have no effect on the existing betting shops.
Lord Bourne of Aberystwyth
I actually said that I could not predict the precise impact of these measures. That comment was meant in a global sense; I was not referring to a particular instance. However, I am very grateful to my noble friend for that helpful intervention.
As I was saying, the Secretary of State said:
“These measures, particularly regarding FOBTs, will make a difference but I think, rather than for us to jump now and say, ‘We should move even further’, I would like to see these bed in and then look at the evidence and see if there is a need for any further action at all or if what we have done is enough”.
To my mind this is a sensible approach and balances the Government’s commitment to reduce problem gambling and protect the vulnerable while at the same time protecting what is an enjoyable leisure activity for the vast majority of customers who visit bookmakers’ premises. We will review the impact of these measures—or have committed to do so—in 2016 to see how effective they have been.
It is perhaps worth reminding ourselves what powers exist at the moment. Bookmakers have a responsibility to assist gamblers who display signs of problematic behaviour. The betting industry introduced new measures under its code of conduct from 1 March 2014—just a year ago. While this is a step in the right direction, we believe that measures should be toughened and made mandatory. That is why the Gambling Commission recently announced in its response to consultation on the social responsibility provisions in its licence conditions and codes of practice proposals for a mandatory code which will come in in May this year, with the sanction ultimately of taking a licence away if a bookmaker does not fulfil those conditions. I believe that that is a further step in the right direction.
We believe that the measures we are taking are sufficient to improve player protection. These moves, combined with the measures outlined in the Gambling Commission’s response to consultation on the social responsibility provisions in its licence conditions and codes of practice, are justified on a precautionary basis.
I should like to add that what is significant here is that the level of contact between customer and betting shop operator has increased, either via human or electronic interaction. Recent research has shown that interaction of this sort can give customers pause for thought, an opportunity to take stock of where they are and to assess their situation in a dispassionate manner. This is something that we have not seen before and it is part of the reason why other countries are looking to the UK as a pioneer in reducing gambling-related harm. I am not complacent about this because one would hope that we could have no problem gamblers but, to put this in context, research demonstrates that they represent under 1% of our adult population. The figure is higher in the US, Australia and South Africa, which have comparable systems. I am not suggesting that we can be complacent but we need to keep a sense of balance.
Lord Clement-Jones
I apologise for interrupting my noble friend while he is in full flow, but does he accept the Responsible Gambling Trust figure which indicates that 37% of customers at these properties are problem gamblers?
Lord Bourne of Aberystwyth
I do not recognise that figure. However, prior to this debate, I read that researchers had said that we should not seek to extrapolate any arguments from the figures that they had looked at as they came from a fairly limited survey. I will look at the research further but I do not recognise the figure the noble Lord has given.
Lord Lipsey
Perhaps the Minister will also point out that the survey was carried out among the 10% of users of properties who have loyalty cards. By definition, you are far more likely to have a loyalty card if you are putting a lot of money into a machine than if you are putting in the odd pound or two.
Lord Bourne of Aberystwyth
I am very grateful to the noble Lord. It is, indeed, somewhat self-selecting in that sense: that is absolutely clear. However, I should move on within the time allocated to me.
Although local authorities are bound by law to aim to permit gambling in so far as it is reasonably consistent with the licensing objectives of preventing crime and disorder, ensuring that it is fair and open and protecting children and vulnerable people, the licensing process at present gives authorities considerable scope to attach additional conditions to licences. At present, two licences are needed to open a betting shop: an operating licence from the Gambling Commission to show that the person operating the premises is a fit and proper person, and a premises licence from the local authority. Of course the local authority has to marshal the evidence, if it has a particular planning objection, but it can do that within the existing law. I think that Barking and Dagenham, for example, is looking at that process and seeking to use it. I am not sure exactly where it has got to, but I know that that local authority, at least, is looking into it. That is something that I would encourage, because there are existing powers, as well as those that we seek to introduce.
Now I shall return, as I promised I would, to the conditions that we seek to introduce in the code, via the Gambling Commission. As I have said, they will give powers to local communities, by requiring planning applications to be submitted to local authorities for new betting shops. Putting the change-of-use regulations on a different basis will make that a more powerful tool. It will require those accessing stakes over £50 to use account-based play or to load cash over the counter, putting an end to unsupervised high-stakes play, and it will require all players of FOBTs to be presented with the choice to set time and money at the machine itself. These measures are on track to start in April, and will, I think, make a real difference. The sensible thing to do now is to see how they bed in before thinking about further action. That is a fair and reasonable approach.
I shall now seek to answer some of the specific points raised in the debate. In case I miss any, I undertake that we will look at Hansard and write to all noble Lords who have participated in the debate. First, the noble Lord, Lord Clement-Jones, suggested that planning was not the answer. It is not the whole answer—I accept that—but it is part of the answer. Intervention is also important, and that is a key part of the code.
In response to the useful and valid points made by the noble Lord, Lord Lipsey, I say that the point is to achieve a balance. We need to protect the vulnerable—that is absolutely right—but we should not seek to stop people gambling. Like some other noble Lords, I have a very rare flutter: I went to Las Vegas and never placed a bet, so I imagine I am a bookmaker’s nightmare. I can see that the noble Lord, Lord Lipsey, shares that position, so we have that in common—although his contribution seemed to turn into “Fifty Shades of Betting Shops”, and some of the time I was not quite sure where we were going. I am all in favour of permissive elements, but there are limits. I shall be coming to the noble Lord, Lord Dubs, for tips for the Grand National when we reach that part of the year, which is very close now.
Several noble Lords, including the noble Lord, Lord Strasburger, rightly raised the issue of problem gamblers. To try to put this in context, FOBTs are in decline overall, according to our most recent figures: 4% of adults played them in 2010, and that dropped to 3.4% in 2011-12. Average stake size on a FOBT machine in a bookmaker’s was £5.13; on a B2 it was £14.08. That does not mean that this is not a serious problem, or potential problem, but we need to get it into context. Most people who use these machines do not have gambling problems. The idea that they do is not borne out by the research.
This has been a useful debate, and obviously the department will study it. In case I have not made this absolutely clear, I want to nail again the point that the Government remain very vigilant on this matter, and in reviewing evidence on the effects of fixed-odds betting terminals. We want to make sure that the betting industry is well aware of that. The Rubicon has not been crossed, nor will it ever be. Nothing is final, except that the Government will work in partnership with the Gambling Commission, which is neutral. In answer to the point made by the noble Lord, Lord Strasburger, about the questionable nature of the Responsible Gambling Trust’s independence, I should explain that it is the Gambling Commission that reviews the research. I know it has an industry element to it, but its research is reviewed by the Gambling Commission, which is a statutory body. We shall study this useful debate, and during 2016 we will also study closely the evidence and the research, to see how effective the reforms being introduced this spring have been.