Gambling (Categorisation and Use of B2 Gaming Machines) Bill [HL]

Lord Smith of Hindhead Excerpts

Friday 11th March 2016 Lords Chamber

[Lord Smith of Hindhead (Con)]

My Lords, I declare an interest as the CEO of the Association of Conservative Clubs, the second largest private members’ club organisation in the UK, which operate in the region of 1,700 gaming machines, and as chairman of CORCA, a national clubs group encompassing the main political, social and ex-servicemen personnel clubs in the UK, which collectively operate some 12,000 gaming machines.

In referring to this interest, I should however point out that a private members’ club can operate only up to three category B4 gaming machines, with a maximum £2 stake and a £400 jackpot prize, which has only recently been increased, with the option of one of this allocation of three machines being a category B3A gaming machine, which has a maximum £2 stake and a £500 jackpot, but which does not attract machine games duty. In other words, I know a bit about gaming machines but have no specific interest in category B2 machines, which are being discussed today, since these machines cannot be operated in private members’ clubs. I also clarify for the purposes of my speech that I shall refer to these gaming machines by their legally accurate name of B2s, as opposed to fixed-odds betting terminals or FOBTs, for the simple reason that it is slightly easier to say.

I speak only to make a few points in relation to this Bill and, in so doing, I ask noble Lords to appreciate that I am, to a large extent, undecided on this issue. This indecision is caused partly by conflicting statistics and partly due to the fact that the gambling industry has moved on so much since the Gambling Act 2005 was introduced in 2007. The increase and development of online gambling is such that B2s and many of the anxieties surrounding them can very easily and rapidly be replaced by other forms of high-stake gambling that are both accessible and easily available, but which are also unlimited and unsupervised. Therefore, I have concerns relating to this Bill, specifically Clause 1(2).

While I understand the rationale behind some of the reasons of the noble Lord, Lord Clement-Jones, for introducing the Bill, which are, I believe, to help prevent people who have a problem with gambling furthering their addiction, or to protect those who may become problem gamblers by removing temptation, I am not yet convinced that the reduction in stakes being proposed is a “silver-bullet” solution to the problems which are of concern. Those opposed to B2 machines will often cite them as being a cause of a rise in crime and anti-social behaviour, and will say that they are located in betting shops with little or no proper supervision, that clustering of betting shops creates gambling hot spots and that, crucially, the speed at which this particular machine can be played means that significant sums can be lost—and, we must assume, won—very quickly. However, a great deal of information is available which sets out different views on these points. If I may, I will touch on a couple of these.

On 4 February this year in a Written Question, I asked Her Majesty’s Government,

“how many arrests were made in 2015 in (1) licensed betting shops, (2) adult gaming centres, (3) casino premises, and (4) licensed bingo premises”.

The Answer, given on 8 February, stated:

“The Home Office does not hold data centrally on the number of arrests made in licensed premises such as betting shops, adult gaming centres, casinos and bingo premises.

The Home Office collect data on the number of arrests broken down by offence group and police force area, but these do not include the specific location”.

Bearing this in mind, the claims being made by various sources of an increase in both crimes being committed in betting shops and of anti-social behaviour require further clarification and need to be properly established. I would be very happy to discuss any of those statistics with noble Lords taking part in this debate.

We should recognise that the ability to make B2 machines available is entirely contingent on obtaining a betting premises licence from the local licensing department. Local government already has the power to avoid clustering by not issuing betting licences, in the way it has done up to now. I accept that there is an aim to permit in the legislation, but an aim to permit does not mean to say that this must happen. At some point, local government must say, “Enough is enough, we are not going to do this”, and see whether a test case is brought. I am sure that a decision could be appealed. However, this is a matter for local government, not Parliament.

In relation to levels of supervision, the Gaming Act 1968 put in place a regulatory pyramid, with harder gambling such as casinos at the top, soft gambling such as seaside arcades at the bottom, and medium gambling in the middle, which includes high-street betting offices, bookmakers, bingo halls, pubs and clubs. One of the key characteristics that determine the level within the pyramid in which an establishment is situated is the existing level of supervision and of player protection. There are now, however, so many anomalies within the gambling industry that I wonder whether that pyramid can still be recognised. We have online, unlimited gambling that is completely unsupervised and unprotected, but has the highest stakes. A 16 year- old can walk into almost any newsagent and purchase as many scratchcards as he or she wants without anyone batting an eyelid. We have private members’ clubs, with strict rules of entry and conduct, with, as I have already mentioned, a maximum of three very low-level machines. We have betting shops, with easy access and at best average supervision, offering high-stake gambling; and casinos with the maximum amount of supervision and the maximum amount of player protection, but in this instance the ability to have the same four B2 machines as a high-street betting shop. In addition, noble Lords here in your Lordships’ House are able, should they choose to do so, to participate in unlimited gambling via their phones 24 hours a day.

This inverted pyramid has effectively created a situation whereby a provincial high street could have four betting shops with a total of 16 B2 machines, but a casino in central Manchester is able to operate only four. Indeed, one of the flaws in the noble Lord’s Bill is that it does not make a distinction between hard and soft gambling outlets and seeks to place a blanket restriction on all category B2 machines, instead of recognising that the high supervision and high player protection of a casino creates a very different player environment where stakes would not need to be reduced to the same level as the noble Lord is proposing.

Furthermore, I do not think that reducing the stakes on B2 machines will change the pattern of play. I say this since a report on patterns of play in 2014, published by the Responsible Gambling Trust, found that around 97% of gaming sessions on B2 machines did not reach the £100 stake, that only 1% of all gaming sessions started at the maximum stake and a further 2% reached the £100 stake before the end of the play session. Does this not demonstrate that the maximum level of stake may perhaps not be the sole issue of concern? I have other areas of concern that I shall come on to in a moment.

What is of slight concern, however, are the recent headlines stating that B2 machines can be responsible for a person losing up to £18,000 in one hour. According to the Gambling Commission, this figure is astronomically improbable. If those bodies and individuals who are opposed to certain forms of gambling are to make progress with their cause, more care needs to be taken over the accuracy of statistics. However, I believe that the gambling industry, and betting shops specifically, can do much more to help themselves in addressing some of the legitimate concerns which have been raised. I have to say that I am surprised that they have not already recognised this. Bearing in mind the very low level of people who are playing at the very highest level of stake, it seems strange that, with a growing weight of negative opinion on this issue, the industry itself has not yet collectively agreed simply to cap the maximum stake of B2s at £50 or less, which would go a long way to alleviating the criticisms being levied against it, and would make the Gaming Machine (Circumstances of Use) (Amendment) Regulations 2015 effectively redundant. The industry could also at the same time invest greater resources to ensure that staff are properly trained to spot problem gamblers and make sure that advice and help is given in the same way as occurs in a casino.

An additional measure the industry could undertake would be to ask the manufacturers of B2 machines to ensure that they do not resemble B3 machines, which have a £2 stake: in other words, a person who wishes to participate only in lower-level gambling could not then mistakenly play a machine that has higher-stake options.

No Member of this House wants to create an environment where we are in danger of driving people to unsupervised online gambling with unlimited stakes. Internet roulette, where one can place €500 per bet, is a danger zone for those who may be vulnerable, but let us not be anti-gambling. As a nation, we enjoy the fun of a flutter, whether it is a scratchcard, a lucky dip, the Grand National, a trip to the slot machines at the seaside or a night out in a casino. There is a responsibility deal with the brewing and alcohol industry, under which government agrees not to interfere unduly, in return for the industry dealing responsibly with areas of concern such as excessive or underage consumption. This deal has largely been a success: why should there not be a responsibility deal with all sections of the gambling industry to provide a similar, happy outcome? I would strongly advocate this, since the alternative for the industry in the longer term may well involve Parliament legislating on matters which are not properly dealt with. No business in the UK wants to be run by Parliament. I therefore submit that, before we have a Bill like the one being debated today, industry itself should recognise the legitimate concerns raised by noble Lords and consider opting for self-regulation.

Finally, I pass on some good advice which my grandfather gave me: the best way to double your money is to fold it once and keep it in your pocket.