Gambling Levy Regulations 2025
Debate between Lord Browne of Belmont and Lord Hay of Ballyore
Lord Browne of Belmont (DUP)
My Lords, while I welcome the Government’s intention to implement a statutory levy, as provided for in the 2005 Act, I am concerned that the levy set out in the draft regulations has not gone far enough, because it has been fixed at such a low level that it will make little difference to the lives of those who find themselves in gambling harm. The money raised will not allow adequate treatment or be sufficient to ensure that proper prevention and education measures are put in place.
Recent data from the Gambling Commission is concerning. For a number of years, it was suggested that gambling harm in the United Kingdom affected around 0.5% of the population. Now we have discovered that the problem is significantly greater than we previously thought. The latest data shows that gambling harm in the UK directly affects 2.5% of the adult population. This means that over 1.5 million adults in the UK struggle with the public health effects of gambling addiction.
The economic cost of gambling harm, according to the National Institute of Economic and Social Research, is approximately £1.4 billion annually, but this was based on the much lower figure of under 0.5% of the UK population and the costs are certainly much higher now when based on new data. Indeed, the costs may well be almost £5 billion. This figure encompasses increased healthcare expenditure, higher welfare support, criminal justice costs and homelessness services for those affected. Individuals experiencing problem gambling are nine times more likely to require hospital treatment and four times more likely to need homelessness support, which of course dramatically increases healthcare risks and the need for additional treatment. While the economic cost of gambling is significant, the cost to families and individuals caught in gambling harm is incalculable. Almost 500 people across the UK take their own lives each year due to gambling harm.
I believe that this levy is insufficient to deal with the costs of gambling harm. Clause 4 of the draft regulations sets out the level of the levy for each type of gambling operator. It is clearly right that those gambling licences, such as remote online gambling operators, which cause the most harm and pose the greatest risk are levied at the highest level. I welcome this graduated levy from low to high risk, but again underscore that the percentage rate or gross gambling yield set by the regulations is too low to have a meaningful impact.
The proposed tiered structure in Clause 4 aims to raise between £90 million and £100 million annually when fully implemented. Again, this falls way short of what is needed. Back in 2019, in evidence given to the Select Committee on the Social and Economic Impact of the Gambling Industry by Dr Anna van der Gaag, it was estimated that treating a person in gambling harm costs around £600 per annum. Uplifting that figure by a modest 10% over the last six years would give a figure of £660 per annum needed to treat every person in gambling harm. This means that we need about £1 billion every year just to treat every person currently in gambling harm, and this would require a levy of £1 billion just to stand still. The levy proposed by the draft regulations will raise a mere one-tenth of what is needed for treatment. That leaves no money in the pot for research and prevention and is likely to leave nine-tenths of those with gambling harm not helped at all.
The gambling industry generates over £15 billion in profits annually. These draft regulations will levy approximately 0.67% of industry profits. This seems disproportionately low relative to the scale of the issue. I urge the Minister to think again about the levels set in the draft regulations and at the very least consider raising the levy for the most harmful remote gambling licences to at least 5%.
Finally, while these regulations will apply only to Great Britain, I want to raise a very specific issue in respect of Northern Ireland. It is not right to say that gambling is fully devolved to the Northern Ireland Assembly. By virtue of Section 5 of the Gambling (Licensing and Advertising) Act 2014, it is an offence to advertise and thereby operate remote gambling in Northern Ireland without holding a GB remote gambling licence. People in Northern Ireland, which has a much more significant gambling harm problem than the rest of the United Kingdom, are targeted by companies holding GB remote gambling operator licences. Remote gambling, the most harmful type of gambling, is therefore not devolved.
Every remote gambling company that targets adverts to people in Northern Ireland and thereby causes harm in Northern Ireland, does so because of their GB licence issued by the Gambling Commission. While the Northern Ireland Assembly must move forward swiftly and introduce a levy for terrestrial gambling, it is certainly morally if not legally arguable that these regulations, in respect of the remote elements of the levy, should apply to Northern Ireland. I urge the Minister to consider how Northern Ireland could be included in these regulations as regards remote gambling, which is, at least in part, no longer devolved, as I have said.
In conclusion, the current funding uncertainty is detrimental to the treatment and support pathways for many hundreds of people who are registering each day with many different charities, such as GAMSTOP. I call for clarity on the levy and for the legislation to be tightened as soon as possible.
Lord Hay of Ballyore (DUP)
My Lords, I shall be very brief. I want to make a few comments regarding the stake limits set by the Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2024. I am unsure of the rationale set out in the regulations for setting a limit of £5 for over-25s. Given that terrestrial gambling is limited to an average of £2 across all gaming machines, and given the higher risk of gambling harm from online gaming, it seems difficult to understand what the Government’s rationale is in setting a limit of £5 for remote operators in these regulations.
It seems almost too obvious to point out, but most terrestrial gambling operators close, while online casinos are open 24 hours a day. How can a higher limit be appropriate for a more harmful product that cannot be switched off? A holder of a remote licence, given the continuous operation and the much lower level of fixed costs, such as premises and staffing costs, is much more profitable than its land-based equivalent. Remote licence holders have a gross gambling yield that is almost twice that of their terrestrial equivalent. Given that the harm is greater online and they accrue more revenue, it is difficult to understand why the limit has been set at such a high level.
The Gambling Commission, as part of its risks algorithms data study found that 52% of gamblers placing stakes of above £2 and up to £5 were most at risk of gambling harm. Given the increased risk, it seems difficult to understand why the limit has been set in such a way that those most at risk of gambling harm are not protected from that risk. It is my view that even a £2 limit on remote stakes is too high. Even when spinning at a very low stake size of between £1 and £2, evidence from the Gambling Commission survey in 2021 highlights that more than one in five gamblers suffer high or medium levels of harm. Additionally, online slots are associated with binge gambling and long gambling sessions, accounting for over 70% of single-product gambling sessions that last over three hours. Clearly, remote gambling is highly addictive and a sustained harm that people find difficult to escape from.
If £2 is too high a maximum for over-25s, it is clearly much too high a level for those aged 18 to 25. Given the difficulty faced by young people, the risk is much higher and the stake limits should be much lower. I am concerned that the evidence does not support a limit of £5 for over-25s and £2 for 18 to 25 year-olds. The clear evidence is that these limits should be lower. I urge the Government to think again and ensure that these regulations properly protect those who find themselves at risk of harm.
I am concerned that, if these draft regulations are passed, the risks of remote gambling will not be reduced and they will have a limited or no impact on reducing gambling harm and protecting those who are most vulnerable. Unlike other noble Lords, I am not convinced that these regulations go far enough and do what needs to be done. We all know that addictive gambling creates major problems not only for the individuals involved but for the families who suffer in all this. The Government could go much further and look again at the issue and the regulations before us.