Review of Gaming Machines

Tuesday 31st October 2017 Lords Chamber

Statement

15:10

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)]

My Lords, with the leave of the House, I will repeat in the form of a Statement an Answer to an Urgent Question made by my honourable friend the Minister in the other place responsible for gambling. The Statement is as follows:

“I am pleased to inform the House that I published a consultation on proposals for changes to gaming machines and social responsibility requirements across the gambling industry today. The consultation will run for 12 weeks, during which the general public, industry and all other interested parties will be able to voice their views on the questions raised. I appreciate some may not understand why we have to run a consultation, but this is the right process by which to proceed if we are to address this issue thoroughly and properly.

As you know, the Government announced a review of gaming machines and social responsibility measures in October 2016 and I am grateful to all those who responded, including individual former addicts, faith groups, local authorities and the bookmakers. The objective of the review was to ensure we have the right balance between a sector that can grow and contribute to the economy, and one that is socially responsible and doing all it should to protect consumers and communities.

While our consultation sets out a package of measures to protect vulnerable people from harm, the main area of interest has been the stake of B2 gaming machines, known as fixed-odds betting terminals or FOBTs for short. We believe that the current regulation of FOBTs is inappropriate to achieve our stated objective of protecting consumers and wider communities. We are therefore consulting on regulatory changes to the maximum stake, looking at options between £50 and £2 to reduce the potential for large losses and therefore the potentially harmful impact on the player, their families and the wider community.

We are aware that the factors which influence the extent of harm to the player are wider than one product or a limited set of parameters such as stakes and prizes, and include factors around the player, the environment and the product. We are therefore also consulting on corresponding social responsibility measures, on player protections in the online sector and on a package of measures on gambling advertising. Within this package we want to see industry, the regulator and charities continue to drive a social responsibility agenda to ensure all is being done to protect players and that those in trouble can access the treatment and support they need.

The consultation will close on 23 January 2018, following which government will consider their final proposals”.

15:13

[Lord Griffiths of Burry Port (Lab)]

My Lords, while I am grateful to the Minister for repeating that Statement, I confess it leaves me perplexed. The recent review and other sources have yielded facts enough: 430,000 gamblers with an addiction, up by a third in three years; a further 2 million problem gamblers at risk of developing an addiction; £1.8 billion lost on these machines each year, an increase of 79% in the last eight years; and a gambling industry whose yield, or the amounts it wins in bets, has increased to £13.8 billion from £8.36 billion in 2009, having spent a mere £10 million towards a voluntary levy last year on education and treatment. Some 450,000 children gamble at least once a week.

My question is simple: granted that we are armed already with factual and proven information, what is to be gained by having this consultation? Will the Government let us know clearly what they are probing for by holding this further consultation, and can they assure me that, with the grass-cutting season nearly over, it is not an exercise for lobbing things into the long grass?

[Lord Ashton of Hyde]

My Lords, that is not an unexpected question. I can assure the noble Lord that we are not putting this into the long grass. He is absolutely right that there was a six-week evidence-gathering session. The evidence gathered has convinced us of the need to take action and reduce the maximum FOBT stakes. However, it is a complex issue and not about stakes alone. We are therefore publishing today a package of measures to address the concerns. We must strike the right balance between the socially responsible growth of the industry and the protection of consumers and the communities they live in. Our position is that the maximum stake should be between £50 and £2. We are consulting on that specific issue. This has to be done with due process to avoid any further problems which may come in the future with doing it in too rushed a manner.

[Lord Clement-Jones (LD)]

My Lords, Liberal Democrats have been calling for a £2 stake on these highly addictive machines, which have been a catalyst of problem gambling, social breakdown and serious crime in communities, for nearly a decade. We therefore give a qualified welcome to the review, but, rather like the noble Lord, Lord Griffiths, we are disappointed that a range of options rather than a firm recommendation is being given, and that we now have a 12-week consultation rather than action. Reducing the maximum stake to £50 would still mean that you could lose £750 in five minutes, or £300 if the stake was reduced to £20. I urge the Minister and his colleagues to resist Treasury pressure and move to take effective action by focusing on stake reduction to £2, which would put a clear and sensible limit on all high street machines. Can the Minister tell us what the role of the Gambling Commission has been and will be in the consultation? It has a duty to minimise gambling-related harm and protect children and the vulnerable. Will the Government act on that advice? Will the review examine the proliferation of betting shops on the high street and the self-referral or exclusion system, which is so ineffective? As well as reducing the maximum stake, will it look at limiting the spin rate? Finally, will the consultation address stakes in online equivalents to these games, such as blackjack?

[Lord Ashton of Hyde]

My Lords, the noble Lord makes a predictable comment about Treasury pressure, of which there was none. The decision on stakes will come from DCMS and not from the Treasury—although it will take into account fiscal implications, as it does for any government policy. The Gambling Commission is involved in the consultation because it is involved also in the other package of measures covered by it. The consultation is not just on the stakes but on other matters such as tougher licence conditions. The noble Lord referred to spin rates. What one can lose where higher stakes are concerned depends on the spin rate. I can confirm that that will be included in the consultation. I urge the noble Lord and the noble Lord, Lord Griffiths, to contribute to the consultation and make their views known.

[The Lord Bishop of St Albans]

My Lords, last year, there were more than 200,000 occasions when gamblers on FOBTs lost more than £1,000 at a single sitting. All other forms of gambling with stakes of more than £2 are restricted to premises such as casinos, which do not have open access and are not on the high street. Does the Minister agree that the only way to rectify the mistake of the 2005 Act and restore logic and order to the gambling regime is to support a £2 stake?

[Lord Ashton of Hyde]

As I just said, the stake is not the only thing that matters. That is why we are introducing a package of measures. The level of stake is important, obviously, and that is why we are committed to reducing it. But there are economic impacts that must be taken into account, depending on the level of stake that is chosen. The spin rates are important, as are the other measures which may deter people from gambling. I hope the right reverend Prelate will contribute to the consultation.

[Lord Cormack (Con)]

My Lords, does my noble friend accept that it is not just the noble Lord, Lord Griffiths—whom we are delighted to see on the Front Bench—the noble Lord, Lord Clement-Jones, and the right reverend Prelate who have misgivings about this? This is a very disappointing Statement. This is a social issue where we look to the Government to give firm guidance and leadership and not to pussyfoot around. It really is important that the moment this—what I consider unnecessary—period of consultation is over, we have firm action.

[Lord Ashton of Hyde]

I agree with the noble Lord that the Government should provide guidance and leadership. That is why we have said we believe that the stakes should be reduced. But we have also said—sensibly, I think—that these things have to be done in a proper way and if they are not done in a responsible and thoughtful way, according to the evidence, problems may ensue from that. This 12-week consultation is necessary.

[Lord Richard (Lab)]

My Lords, I confess I have almost totally lost the Government’s position on this. At one and the same time they say, “Yes, there is a problem. Yes, we have gathered the evidence. Yes, we know what the evidence is. Yes, it points unmistakably in the direction of doing something about this issue. Yes, we are convinced”—to use the Minister’s own word—“of the need to do something about it”, and what do we get? We get another consultation period. With great respect to the Minister, and indeed to the Government, merely saying something is appropriate does not make it appropriate. It does not make it right to have a consultation period just because the Government say it is. As far as I can see, there is absolutely no need for it. The Government have the evidence, they have the proposals—why on earth do they not do it?

[Lord Ashton of Hyde]

Because there is more to it than just the stake. As I said, there is an impact from the different levels of stake, and we have published an economic impact assessment today. The issue is the right balance between continuing a perfectly legal industry and social protection for consumers. That is why we have decided that the stake should be lowered. The 12-week consultation on this and the package of measures that goes with it will ensure that the decisions are made with due process.

[Lord Porter of Spalding (Con)]

Does the Minister agree that noble Lords are quite right to see this as being not FOBT but fobbed off? The stake is considerably too high, even if it is halved. It should not be possible for somebody to lose more than a week’s wages in a matter of moments. That money is lost to the local economy—it is being wasted—and we need to do something as quickly as possible to make sure that all the benefits of that money are spread across the whole community and not just into the bank accounts of a few businesses.

[Lord Ashton of Hyde]

My Lords, if you do it without the proper consideration and it is judicially reviewed, the result may be that you wait longer.

[Lord Morrow (DUP)]

My Lords, will the Minister give an assurance today that the review and report will include the areas where betting outlets are located? Many of them are located in areas of deprivation and cause great social harm, particularly among families.

[Lord Ashton of Hyde]

My Lords, I agree with the noble Lord. These outlets tend to be in areas of social deprivation. That was included in the review. It is not my area of expertise but I believe that local authorities have been given powers to restrict these outlets, especially new ones.