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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.
