Gambling (Licensing and Advertising) Bill

Lord Bishop of Chester Excerpts

Tuesday 4th March 2014 Lords Chamber

[Lord Browne of Belmont (DUP)]

My Lords, I am very pleased to speak in support of Amendment 1 because it is of fundamental importance. If this Bill is not endowed with a credible form of enforcement so that unlicensed operators are prevented from accessing the UK market then, as the noble Baroness, Lady Howe, has explained, the notion that this Bill is about consumer protection breaks down. Its primary impact will instead be a truly dramatic change to online gambling advertising in the UK.

I am particularly grateful to the noble Baroness for raising this issue throughout the passage of the Bill and particularly for the excellent seminar that she hosted for Peers last week, which was fascinating. It comprised two central presentations, one from the online gambling provider Paddy Power explaining why, from the perspective of online gambling providers, the provision of proper enforcement is absolutely key, and a second presentation from a charity, CARE, whose prime concern is the care of problem gamblers, which also argued passionately for the provision of credible enforcement.

In managing to create a coalition between the online gambling industry and problem gambler charities, the Government have really accomplished quite a feat. On a more serious note, it seems to me that if such disparate groups with such disparate aims and objectives are prepared to come together to present basically the same argument, the Government need to pause and take note. Paddy Power made it very clear that the online gambling industry is growing very quickly right across the world and that there are lots of small providers which will be tempted to access the United Kingdom market without getting a licence. The point was made very powerfully that the Government cannot possibly hope to chase these multiple small providers through the courts of multiple jurisdictions. It would cost far too much and take far too long. The small providers know that the chances of them being prosecuted, let alone convicted, are absolutely tiny and that it is a risk well worth taking.

In this context, the online gambling industry and the charity sector are very clear that financial transaction blocking is the best way forward. The Government, of course, have resisted this argument, claiming that the evidence for FTB is mixed. If by this they mean that it is not 100% successful, then I agree with them, but the notion that in order to be suitable an enforcement mechanism must be 100% effective is problematic for two reasons. First, in my experience, very few public policy solutions can make that claim. Secondly, the enforcement mechanism promoted by the Government—prosecution—is far less likely to be successful than FTB. Of course, I read with interest the letter from the Minister yesterday announcing that, despite earlier statements, the Government have now consented to a self-regulatory approach to prohibiting payments with three providers. That is a very welcome turnaround, but it is not a credible solution. The integrity of this Bill clearly requires a statutory solution that covers all providers.

This Bill has so far travelled from DCMS to the Commons and now through the Lords to Report stage without a single amendment. As a revising Chamber, we are here to detect problems and put them right. The noble Baroness, Lady Howe, has spotted a fundamental problem. I do not believe that we should allow this Bill to complete its passage through your Lordships’ House without the insertion of the clear enforcement mechanism presented by Amendment 1. I strongly urge noble Lords to support this very important, seminal amendment.

[The Lord Bishop of Chester]

My Lords, I want to associate myself fully with the remarks just made by the noble Lord, Lord Browne, and with the powerful and comprehensive speech made by the noble Baroness, Lady Howe, in introducing the amendment. I do not intend to repeat the points they made so powerfully, but I shall add a general consideration. With the introduction of the internet, we are living through a revolution that is probably more powerful than the invention of steam power or the internal combustion engine. One does not want to be critical of the many benefits that flow from the internet revolution but it brings with it, at every point, corresponding dangers of which the Government need to be very aware. If in doubt, I would say that the balance of the argument comes down on putting in place powers to regulate and prevent the abuses that the internet can open up. I hope that general consideration will support the specific points so powerfully made in the debate so far.

[Baroness Jolly (LD)]

My Lords, I thank noble Lords for a wide-ranging and constructive series of discussions as the Bill has progressed to this stage. As we said earlier, this is a small, five-clause Bill focusing on consumer protection. As a result of it, all overseas operators selling to British consumers—around 85% of the market—will be required to hold a British Gambling Commission licence. That will mean that those operators will be subject to robust and consistent regulation and that will increase protection for consumers.

Although it had been introduced with a distinct focus on new licensing and advertising arrangements for remote gambling activities, we have collectively explored a fuller set of related gambling considerations. Noble Lords will have seen some of them announced by the Secretary of State over the weekend. Work which had been ongoing has been catalysed by these debates, in which some very important matters arose, while ensuring that the core of the Bill, which I think I can say is widely supported, can pass into law.

One such issue is in relation to enforcement and I thank the noble Baroness, Lady Howe, for her amendment. It would enable the Gambling Commission to give direction to financial institutions to stop financial transactions with operators which do not hold a Gambling Commission licence. This is known as financial transaction blocking. The Government share the overall objective articulated so clearly by noble Lords, which is at the centre of this amendment, but the Bill must be enforceable. That is central to achieving the consumer protection purposes that lie at the heart of the Bill, which will extend the existing enforcement provisions to offshore operators selling or advertising into the GB market.

The Bill includes three important tools. First, the Gambling Commission can take action against illegal advertising. That is important as advertising is the lifeblood of so many operators. The Bill will make it easier for advertisers to identify what can and what cannot be advertised into the UK. Only lawful gambling may be advertised. Secondly, player education is another important tool. The current system makes it impossible for the Gambling Commission to advise consumers to buy from commission-licensed operators, as operators from anywhere in the world, subject to a range of different regulatory regimes, can transact with consumers in Great Britain. Thirdly, the Gambling Commission has powers to prosecute, so the commission will have the legal powers to pursue any unlicensed operators, wherever they are based. It is also worth noting that, although the collection of tax is a matter for HMRC, it has extensive powers of its own that may be deployed in the case of unlicensed operators, where this is appropriate.

However, alongside this, I can announce a further mechanism. I am pleased to confirm that the Gambling Commission has reached agreement with major payment systems organisations—notably MasterCard, PayPal and Visa Europe—to work together to block financial transactions with unlicensed operators which seek to use these payment systems for illegal purposes. What does this actually mean in practice? It means that when a consumer uses payment facilities for illegal gambling this may amount to a breach of the payment system’s terms and conditions. These require that all transactions must be legal in all applicable jurisdictions. Such a breach may result in the operator having its payment facilities withdrawn by the payment system. This process will disrupt revenue to unlicensed gambling operators selling into our British market.

We have heard the arguments in detail throughout the passage of the Bill as to the effectiveness of financial transaction blocking. We believe that the approach I have just outlined is a good way to test and evaluate this mechanism. The mechanism provides an efficient way of achieving blocking in a single case, which is mostly where we expect this approach will be used. The reason this approach is efficient is that the Gambling Commission has a direct route to the payment organisations and does not need to go through a potentially lengthy and expensive court process.

However, as we have all agreed in this debate, the landscape can change quickly. Technology moves faster than legislation. The nature of these arrangements is such that they will be adaptable and can respond to the very latest developments. That is why the Government believe this is the most appropriate way to proceed: working in partnership with these organisations that share our determination to tackle illegal activity. We want to ensure that the enforcement arrangements continue to be effective and have asked the commission to report on its enforcement activities in relation to remote gambling. The Gambling Commission will provide an assessment of the effectiveness of these arrangements in enforcing the Bill in its annual report to Parliament. The Government and the Gambling Commission will use this to assess the success of this approach and monitor the implementation of the new regime. This will enable the Government to ensure that the Gambling Commission continues to have all the enforcement tools it needs.

I thank the noble Baroness for bringing this issue forward and all noble Lords who took part in the debate. I hope that I have assured the House that the Government’s approach is the most appropriate way to achieve the objectives behind the amendment and does not require legislative change. I therefore ask the noble Baroness to withdraw her amendment.

--- Later in debate ---

[Baroness Howe of Idlicote]

My Lords, I also support the amendment in the name of the noble Lord, Lord Browne. He put the case so clearly, as did the noble Lord, Lord Phillips, that I find it very difficult to think of any further reasons at all for not accepting it. He and the noble Lord, Lord Phillips, were present at that gathering where we heard, as has been said, these incredible addicts talk extremely frankly about their own addiction and what situations it had caused for them and their families and about the total horror of all that. I therefore hope the Government will realise that there is a role for what is proposed in the amendment and take on board just how important it is to make certain that it is included in the Bill.

[The Lord Bishop of Chester]

My Lords, I associate myself very closely with the speech of the noble Lord, Lord Browne, and that of the noble Lord, Lord Phillips, so I will not repeat the points they made. Noble Lords will realise that it is quite rare for Members from this Bench to quote the scriptures. For understandable reasons we are a bit coy about doing that. However, I cannot avoid going to a verse from the First Epistle to Timothy, which says that,

“the love of money is the root of all evil”.

There is great truth in that. The lure and attraction of wealth so often lies behind the person who turns gambling from an innocent pastime into an obsession, an addiction or whatever. A responsible society has to do what it can to protect people against these false gods and false goals. When you get into the digital world, you simply raise the stakes, to use a gambling analogy. If I am a problem gambler and I have to walk down to the betting shop in Chester, there is a natural restraint—there may be only two or three people there and they will wonder what I am doing when I walk through the door. But if those restraints are taken away, you have to be cognisant of the potential dangers.

I often think that we are now, in the digital age, in a digital version of the wild west, where there was all the excitement and discovery and all the positive aspects in America when it opened up, but the reality of law and order had to come in later. We must provide proper protection to people in the online world.

I shall briefly refer to a completely different area that concerns me very greatly—the way in which the internet is used in relation to pornography. The noble Baroness, Lady Howe, has talked about this on previous occasions. I have had a particular problem with two or three clergy in my diocese who have innocently thought that accessing child pornography on the internet was somehow not as serious as interfering directly with an actual human being. Of course, the law quite properly says that accessing child pornography on the internet is to be complicit in the actual original abuse. People have that sort of innocent view of the internet so often. The more checks and balances that we can introduce, the better.

If the net effect of this Bill is that the advertising of online gambling is much more in our face and much more prevalent, it behoves us to put in place what protections we can. I warmly support the amendment.

[Lord Stevenson of Balmacara]

My Lords, I thank the noble Lord, Lord Browne, for introducing the amendment. We are also signed up to it. The noble Lord spoke at length about the issues that he wanted to raise, building on the meeting that he kindly organised, at which I was also present. I endorse what has been said by other noble Lords who were there, including the noble Lord, Lord Phillips.

The interesting thing about gambling, to me, coming to it relatively unskilled in this area, is that it is one of those areas about which we make a set of assumptions when we approach it, then we discover as we get closer to it that they do not stand up. For example, one thinks of addiction very much in terms of what substance people are taking that has a chemical effect on their body which makes them addicted. But with gambling, all the signs, evidence and research suggest that we are dealing with addictive activity, but there is no physical substance. Of course, it may well be, as the right reverend Prelate was saying, that something about the internet has a way of interacting with our neurons and has an effect that we do not yet fully understand. There is absolutely no doubt, from the reading that I have done for these debates, and from the evidence that we heard at that powerful meeting, that we are talking about something really rather serious and deep-seated worries should flow from that. It is not that the problem is extremely widespread—it is not—but the numbers are still significant. If we are talking about 450,000 people in our society, of course, we as a responsible society should take action to try to help them.

The situation, as I understand it, is that the regulatory position is very clear. There has to be a process for self-exclusion, because it is recognised that it is a helpful way to do it. It may not be the only way to get people away from gambling and it may not be sufficient on its own, but at least—as long as the evidence is there that it is helpful—we must make sure that the regulatory framework supports it. It is obviously right that, for those who obtain a licence to operate in current systems, and in future systems envisaged by this Bill, we need to see the self-exclusion procedures in place. I do not think any of us would be against that, but I have a problem in understanding why it is sufficient for the Government to argue that simply having a voluntary scheme operated by those who perpetrate the harm is sufficient in this case. The evidence that we have—and the very moving testimony that we have heard from the noble Lord, Lord Browne—suggests that those affected by this, those who are addicted and those who are trying to help, say that simply having the mechanism available on a case-by-case basis, on every website that they go to, as it may be regulated in future, and therefore having available the ability to self-exclude, is not sufficient.

If it is not sufficient, what system can we put in place to make sure that it works? Again, the evidence shows that the detailed proposal of the noble Lord, Lord Browne, seems to work for those with whom we have been in touch. Therefore, it seems to me a bit perverse for the Government to continue to say that they do not think that any further action is required in this regard. But what are they saying? I hope that when the noble Baroness responds, she will try to tease out the wording in the letter that we received yesterday from the Minister, which states:

“But this issue is not standing still: the Gambling Commission has indicated that it will be reviewing the self-exclusion provisions as part of a wider exercise to strengthen player protection, with the aim of significant progress within six months towards the establishment of a national remote gambling exclusion scheme”.

That text is not in capitals; I capitalised it as I said it.

That seems to suggest that there is at least the option of having something that will meet the criterion emerging from this evening’s debate—namely, that there must be something that will work for those people who are addicted. It must be something that does not mean they are constantly coming across additional websites which are not part of the scheme. It should, if possible, work with areas that are not yet regulated, although I understand that will be difficult. Certainly, if it were possible to keep open the proposal of the noble Lord, Lord Browne, until such time as the review is completed, that would help us a lot in dealing with the issue behind this amendment.

We are not saying that that is the only way in which this issue can be tackled. However, given what we have heard today and at meetings, I am certainly persuaded that this is something which works. Therefore, if it does the trick, we should keep it in play until such time as all the evidence is available.

It is becoming a theme of our discussions today that we are offering the Minister the chance to get this right at the next pass. My noble friend Lady Jones was a bit nervous about the issue of the watershed and I have my concerns about this big and important matter. As a responsible society, we should take action in this regard. The noble Baroness will say, when she responds, that there is a review and will ask why we should anticipate it. I understand that, but I hope she will recognise that we will want to come back to this issue if satisfactory progress is not made. I support the amendment of the noble Lord, Lord Browne, and the very powerful speeches made tonight on this matter. I hope to hear some good news from the noble Baroness when she responds.