Baroness Howe of Idlicote
Main Page: Baroness Howe of Idlicote (Crossbench - Life peer)Gambling (Licensing and Advertising) Bill
Baroness Howe of Idlicote Excerpts(10 years, 11 months ago)
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Viscount Falkland
My Lords, I recognise the sincerity with which the noble Lord has introduced his amendment. Unlike the noble Lord, Lord Stevenson of Balmacara, who told us that he had led a sheltered life and had not seen a casino in his part of north-west Scotland and so on, I, unfortunately, did not have such a sheltered life and spent quite a lot of time in casinos, backing horses and so on. In fact, I had what I consider to be a gambling problem.
What I mean by a gambling problem is that it distracted me from my work. It made me have an overdraft which I should not have had. It caused family problems at home. It did not, so far as I know, do anything to destroy my health, but it nevertheless made me nervous and erratic from time to time. I am telling the Committee this because I think that the statistics are nonsense. The statistics are given to us by the Government, and they were given to us by the previous Government. I spoke to the Minister in charge and told him—which he agreed with; I was quite persuasive on that occasion—“What you are giving us is a figure which represents the number of people who are in treatment for a gambling problem”. That is just the tip of the iceberg because there are people like me who are on exactly the same drift towards a serious addiction.
I quite honestly do not think that self-exclusion, whether it is online or terrestrial, is generally the answer. Self-exclusion is rather like dieting. You can tell your wife not to buy any more ginger biscuits for six months and to stop you when you go to take double portions of a rather fattening dinner, but when she stops doing that you just go back. That is a characteristic of dieting. It is characteristic of heavy social drinking. You can stop it during Lent or make up your mind to stop drinking for a while but inevitably you go back. That is self-exclusion.
A self-exclusion agreement with an online company, a casino or anywhere else is the same. When the pre-legislative scrutiny committee went to France, it discussed this. France has tried self-exclusion in casinos and there is the same problem. A gambler, drinker or eater with a serious addiction can have a sincere wish one day to change their life but, unless they get proper treatment and get to grips with the problem, they will just go back to it. As I have said, a huge number of young men go to betting shops, for example. I have rather condemned the fixed-odds betting terminals to which these young men get addicted, as well as to all other kinds of betting. Often, they are young married men with small children. We got evidence of that on the pre-legislative scrutiny committee when we spoke to GamCare. Some young men have exactly the same characteristics in their addiction to gambling as people have with drugs or drink.
In a way, it happened to me, although it was not serious. I would say to my wife that I was going somewhere I was not going and I was going to a casino. That is what happens. You deceive yourself and other people. Self-exclusion may well play a useful part for some of the gambling population. However, the Government have to accept that the statistic they brandish and boast about as regards having one of the lowest levels of incidence of gambling in Europe—I think that that is the way in which it is phrased—is not true because they do not know about the vast bottom of the iceberg and the vulnerability of people. Fundamentally, before you get to the business of self-exclusion and other things, you have to recognise that some people have problems. They need to find a way of stopping their denial of their problems. It is not easy and I do not expect the Minister to give us much encouragement on this issue.
However, it is a recognised problem. Every day in every newspaper we read about people who have cheated their companies of vast sums of money. We read about accountants and all kinds of businesses, and about people who turn to shoplifting to feed their habit. I am very sympathetic to the concern of the noble Lord, Lord Browne, about gambling and he is quite right to be concerned about it, as should we all. However, we have to be able to detect it sooner. Families should be able to detect it from behaviour, as do the online companies. At Second Reading, I said that I am quite encouraged by online companies. They take great efforts to detect the behaviour of people, as now do, I think, casinos. They step in and say, “Look, you’ve got a problem and you should get it dealt with”.
Fundamentally, it is a deep problem. If you want to stop it or to reduce it, you cannot mess about with it. You must be prepared to spend money and resources on it, as we do with any other addiction, and take strong measures. There is nothing much that you can do about the real addicts except to get them into GamCare or Gamblers Anonymous. I know someone in treatment at the moment. I think I said at Second Reading that he told me that all the young men coming into his branch in Slough had become addicted to the machines, which used to be called slot machines. They are now very sophisticated and attractive pieces of technology.
The noble Lord, Lord Browne, is quite right that gambling online is more dangerous in a way because you are on your own. When you are on your own and there is no sociability attached to it, you are much more vulnerable. At least if you are playing roulette every week and people see you are losing a lot of money, they will come up and tell you to take it steady, but if you are online in your bedroom, no one is going to do that. Much more serious measures than self-exclusion have to be taken, and I will be interested to hear what the Minister has to say.
Baroness Howe of Idlicote (CB)
My Lords, I am very pleased to support the amendment moved by the noble Lord, Lord Browne. I am not certain whether the noble Viscount, Lord Falkland, is in favour of it or against it. I was rather confused by what he was saying because he was almost indicating that we should do our best in these areas, yet doubting that that would have any effect for the better.
Viscount Falkland
I am not in favour of it generally, no. It may well be a tool for some people, but a very small minority.
Baroness Howe of Idlicote
Okay, that gives a somewhat clearer impression that part of you thinks there might be some savings for life and family. Without doubt, the social problems we have heard about, including family breakdown, prison and suicide, are not only terrible personal tragedies for those involved but quite a considerable challenge for the state in terms of the cost of dealing with people with these sorts of addictions. If you can help them out of the scene earlier, I would have thought the sooner the better.
I am not going to repeat a lot of what has been said. But as we have been told, the academic Dr Sally Gainsbury has pointed out that Britain will be particularly well placed to introduce such a system through its Gambling Commission licence. Rather than having to register self-exclusion with each online gambling website, which is an impossible task, the problem gambler would simply have to register self-exclusion once to the Gambling Commission and all Gambling Commission licence holders would then be required to respect this as a condition of their licence.
If this is a possibility, let us get on with it. Let us try it. Can we be bothered to provide online problem gamblers with a credible form of self-exclusion? Are the Government and the Gambling Commission prepared to take action? Of course it will not be easy—no one is suggesting that it will—but surely now is the time to take some action and, where there are loopholes, to see if we can ensure that they are effectively closed.
“Credit and financial institutions must not accept payments to and from unlicensed remote gambling organisation
In Schedule 7 to the Counter-Terrorism Act 2008 (terrorist financing and money laundering)—(a) at the end of paragraph 1(4) insert—“(4A) The fourth condition is that the Treasury reasonably believe that one or more people or organisations who do not hold a remote gambling licence are advertising unlawful gambling.”
(b) at the end of paragraph 2(6) insert—“(7) “Remote gambling licence” means a licence under section 67 of the Gambling Act 2005.””
Baroness Howe of Idlicote
My Lords, I am pleased to speak to my Amendments 5, 6 and 7, each of which highlights the lack of a proper enforcement mechanism in the Bill, and proposes a remedy.
As I said at Second Reading, on any view of it, the Bill is all carrot and no stick. In providing the offer of advertising to UK Gambling Commission licence holders, the Bill certainly provides a carrot, but what of a stick to protect UK consumers from accessing unregulated websites? On that the Bill makes no provisions. When pressed about this at Second Reading, the Minister said that,
“the Government and the Gambling Commission are confident that action can be taken through existing enforcement mechanisms to disrupt and stop unlawful gambling. These include action on illegal advertising, player education and, ultimately, prosecution”.—[Official Report, 17/12/13; col. 1252.]
I will take each of those provisions in turn.
First, taking action against illegal advertising will not prevent unregulated providers accessing the UK market but will just prevent them from advertising. Moreover, while the Department for Culture, Media and Sport says that advertising is enough of an incentive for companies outside the current whitelisted and EEA jurisdictions to apply for a UK licence, that is an untested assumption. The current experience is that providers located beyond whitelisted and EEA jurisdictions happily access the UK market even though they cannot advertise. Our current law has not prevented them from accessing our market. Is that not the principal consumer safety argument for the Bill before us today?
As if this was not enough, in a conversation I had with the industry last week I heard that remote gambling customers are incredibly price-sensitive and, in a very rapidly changing market, increasingly find online comparisons of the odds available from providers much more useful than advertising. Those customers do not rely on traditional advertising to find the best odds but rather use price comparison websites and odds-checkers. This development makes the Bill’s dependence on advertising even more problematic.
Secondly, while better player education is obviously fine, it is no substitute for the state preventing unregulated online gambling providers getting to UK consumers. We do not find the state relying on better education in other areas to compensate for the lack of enforcement. Finally, we come to the only mechanism of the three that really pertains to preventing unlicensed operators accessing the UK market: enforcement—namely, prosecution. However, by the Government’s own admission, this is a deeply problematic mechanism when having regard for a multiplicity of small providers spread across the world.
In its 2010 remote gambling consultation DCMS says:
“In the event of detecting an unlicensed operator believed to be actively targeting British consumers, a straightforward test purchase exercise would assist the Commission in determining whether an offence was being committed. Though we recognise that without extra-territorial extent, it will be difficult to actually pursue the offence through the Courts if the operator is located outside Britain”.
How right the department is. The truth is that large numbers of relatively small online providers located beyond the UK make prosecution a woefully inadequate mechanism for addressing the problem of unlicensed operators accessing the UK market. The operators in question know that the UK Government cannot possibly devote the necessary resources to chasing them through the courts of foreign jurisdictions. They know that the chances of them ever getting convicted are absolutely tiny, and many will be quite happy to take any risk.
Lord Gardiner of Kimble
My Lords, I thank the noble Baroness for raising through her amendments the subject of enforcement and for initiating this interesting debate. Enforcement is central to the achievement of the consumer protection purposes of the Bill.
The Bill will mean that overseas operators which are required, but fail, to obtain a required Gambling Commission licence will be committing an offence. The full set of regulatory powers available to the Gambling Commission under the 2005 Act will be at its disposal to take appropriate action against illegal overseas operators. The commission also has powers under the Regulation of Investigatory Powers Act 2000.
The amendments assume that the existing powers will be insufficient to enforce the Bill. This is not a view shared by the Government: we and the Gambling Commission are confident that the Bill can credibly be enforced. We are therefore not convinced that there is evidence of a problem which requires a legislative solution.
Amendment 5 would make an offence of accepting payments to or from unlicensed operators. If adopted, the amendment would have far-reaching and uncertain implications for banks and across the financial sector. Therefore, very careful consideration and consultation should occur.
Amendments 6, 7, 13 and 15 relate to financial transaction and ISP blocking. The evidence of the effectiveness and proportionality in respect of both ISP blocking and financial transaction blocking is mixed—I of course take the point made on this by the noble Lord, Lord Morrow. A European Commission report in 2012 stated:
“The implementation of payment blocking systems entails substantial costs for the payment service provider and other financial institutions”.
The Norwegian Gaming Authority’s evaluation report found that,
“the prohibition against processing payments to foreign gaming companies was less effective than intended”.
On ISP blocking, a comprehensive 2010 Ofcom report found that:
“All techniques can be circumvented to some degree”.
I raise these comments to mark the card that there are a number of issues that we need to consider and resolve. Further, however, there are wider factors which would need proper consideration and assessment, such as the impact on financial institutions and internet service providers.
I assure your Lordships that we are not, and will not be, complacent about the issue of enforcement. We will keep this under continuing review. The Gambling Commission is working with a range of organisations that have a shared interest in not knowingly facilitating illegal activity.
Amendment 14 would require a consultation on the existing use of IP and financial transaction blocking. Should Ministers consider a consultation necessary, they already have the powers to undertake that. The Gambling Commission continues to build links and share information with regulatory bodies across the world. The Gambling Commission and the FCA are working together to tackle the issue of British financial transactions with illegal operators.
The Government do not want to rule out the use of blocking tools in future; should they become appropriate, necessary and demonstrably effective, that may well be a route. Until such a time, we do not consider that it would be appropriate to seek those powers. I can assure your Lordships that we are keeping these important matters under review. However, the Government remain rightly cautious when it comes to taking reserved powers. Should we consider such powers to be appropriate, necessary and demonstrably effective, it is right, as I said, that Parliament has time to scrutinise those fully as part of the primary legislation process. However, for the reasons I have outlined, I very much hope that the noble Baroness will withdraw her amendment.
Baroness Howe of Idlicote
My Lords, I am very grateful indeed to all noble Lords who have participated in this debate: to the noble Lord, Lord Morrow, and perhaps particularly to the noble Lord, Lord Clement-Jones, who made some very interesting points and produced some additional evidence. However, of course I am particularly grateful to the Minister, who very kindly met some of us earlier last week to discuss these issues. He will of course realise that I am still very disappointed by what he had to say. Referring to my rather hard talk about half a Bill rather than a whole Bill, I sadly feel that if only he could have moved quite a long way in the direction we were proposing, it would have been very much a relevant and full Bill. However, I am reassured to some extent by his assurances that genuine enforcement mechanisms will be considered very carefully when rather more evidence has been gathered together on that issue. However, as we know, it is far too much carrot, and we are lacking on the stick side of the argument.
Again, I thank everyone, and I hope that we will continue to look hard at this area. I wish only that the Government could have delayed, done a bit more research and then come to the conclusion that would have satisfied us all rather more than we have been by what he has said. However, in the mean time I beg leave to withdraw my amendment.
“Review of social responsibility provisions of codes of practice
(1) The Gambling Commission shall review the social responsibility provisions of the codes of practice and technical standards of—
(a) EEA states, and(b) the places to which section 331(2) of the Gambling Act 2005 has applied,insofar as they relate to remote gambling.(2) The Commission shall amend the codes of practice and technical standards issued in pursuance of section 24(2) of the Gambling Act 2005 so that the code and technical standards reflects the strongest social responsibility provisions identified in subsection (1).
(3) In this section, “social responsibility provisions” means a provision of the code identified as—
(a) ensuring that gambling is conducted in a fair and open way,(b) protecting children and other vulnerable persons from being harmed or exploited by gambling, and(c) making assistance available to persons who are or may be affected by problems related to gambling.”
Baroness Howe of Idlicote
My Lords, the Bill proposes widening the scope for advertising online gambling in the United Kingdom. Henceforth, not just operators based in the European Economic Area or whitelisted jurisdictions will be able to advertise. Any provider anywhere in the world will be able to advertise in the UK, so long as they get a UK Gambling Commission licence. As such, the Bill will make problem gamblers more aware of opportunities to gamble and of opportunities to gamble associated with a higher problem gambling prevalence figure.
It would be quite wrong for us to sanction such a Bill without at the same time comparing our own codes and technical standards with those of other whitelisted and EEA jurisdictions to identify where ours fall short and to make good the difference. We should not countenance exposing British consumers to yet more gambling advertising without first making sure that the protections we offer problem gamblers are second to none. This is the purpose of the proposed new clause, which I introduce today for two principal reasons.
First, the proposed new clause would prevent the Bill having the effect of eroding protections that some UK consumers have come to enjoy since 2005. To understand the possibility of an erosion of protections flowing from the Bill one must first recognise that it is part and parcel of a Treasury initiative to correct a perverse tax incentive created through the Gambling Act 2005, which resulted in all but one online gambling provider leaving the UK for a whitelisted or EEA jurisdiction, from which they could continue to access and advertise in the UK market without paying UK tax. The Treasury very understandably wants to correct this by requiring all companies accessing the UK market to pay tax. The Bill provides them with a basis for doing so by stipulating that all holders of UK Gambling Commission licences must pay UK taxes.
In this context, there is a real possibility that companies that were previously based in the UK and relocated for tax purposes to EEA or whitelisted jurisdictions will now return to the UK. In any event, they will definitely be subject, as far as their UK consumers are concerned, to a UK regulatory framework. This will result in erosion of protections for those UK consumers who have depended on the regulatory frameworks of whitelisted and EEA jurisdictions where those frameworks are better than those offered by the UK, unless of course the UK protections are brought into line with the best whitelisted and EEA protections.
Secondly, the proposed new clause is important because the UK, especially since the 2005 Act, has rightly aspired to have the very best regulatory framework in the world, one which other countries would desire to emulate. In this context, there is every reason to review our codes and technical standards internationally to check that our regulatory framework, especially as it relates to the vulnerable and the care of problem gamblers, is as good as the very best framework of any whitelisted or EEA jurisdiction.
In the other place, the fact that regulatory frameworks with respect to problem gambling are weaker than those of the best whitelisted and EEA jurisdiction was called into question, but such questioning simply does not stand up to scrutiny. Let us consider the evidence.
I want to begin by considering a whitelisted jurisdiction, Alderney. People who gamble on websites licensed in Alderney can request that any number of limits be put on their accounts. Crucially, this is currently not the case in the UK, where the technical standards specify that software operated by a licensee should allow players to set some limits, but the technical codes do not specify, as the law does in Alderney, that a player may choose how, when and in what way those limits should be set. The UK technical standards documents set out examples of financial pre-commitment such as deposit limits, spend limits or loss limits, but it does not require all these examples to be part of the financial pre-commitment of the software.
The Gambling Commission told the Committee in the other place that the UK technical standards require giving players the opportunity to pre-commit to the amount of time spent gambling. They may have meant the amount of money spent in a given period, but that is not the same as pre-committing to an amount of time spent gambling. The amount of time that a person gambles can also be part of the problem. We need to arm problem gamblers or at-risk gamblers with real solutions.
There is a very real risk that British consumers buying access to online gambling from Alderney will experience an erosion of consumer protection when Alderney providers are subject to the weaker UK regulatory framework. Surely it is not acceptable that this Bill should contain such a potentially retrograde step. We need to plug this loophole through the new clause proposed in Amendment 19.
Next, I want to consider an EEA jurisdiction, Sweden. In so doing, I want to make it clear that, since no online providers accessing the UK market are located in Sweden, there can be no question of British consumers experiencing an erosion of the protections that they have come to enjoy, as in relation to operators based in Alderney.
The point I am making here is that those jurisdictions provide us with regulatory frameworks which exhibit better care for problem gamblers than our own. Considering them thus provides us with an opportunity to raise our game such that we can sustain the claim that we provide a regulatory framework that is among the best in the world, which is incumbent upon us at a time when we are introducing legislation that proposes making problem gamblers more aware of gambling opportunities with a higher problem-prevalence figure than gambling on average.
In Sweden, players are given the option of using technology called play scan. Play scan is a programme that uses behavioural analytics which, when implemented, will prompt a player about behavioural change indicating that a problem might be developing. The prompts give them information about how to limit their gambling or where to find help, but this is not the only social responsibility measure in place in Sweden. If the gambler wants to play online poker, they need to apply for a membership card, which has a specific number associated with it and is linked to the player’s bank account. The gambler authorises the transfer of funds from a linked account to a card and any winnings are paid automatically into the gambler’s account. To play, customers are required to set time and money limits. The setting of limits is the main function of the card but it also offers play management features, including a summary of player history for the previous 12 months; allows for time-out periods; and offers risk assessment features on an opt-in basis.
I am not trying to argue that the UK’s code and technical standards are worse than all whitelisted or EEA jurisdictions—far from it. My point is simply that the Bill should not have the result of effectively eroding protections on which some British consumers have come to depend, nor should it miss the opportunity of enhancing our protections so that they are as good as the best whitelisted or EEA jurisdictions. I submit that this is vital if we are with integrity to propose widening the scope to advertising, a form of gambling with a significantly higher problem prevalence than average. I beg to move.
Lord Gardiner of Kimble
My Lords, I thank the noble Baroness for her amendment. The Government are confident that the British regulatory system is a model of international best practice and that the Gambling Commission’s requirements are robust and of the highest standard. It is the commission’s job to ensure that the British regulatory system is the best that it can be, and to that extent always has its licensing conditions and technical standards under review. As the noble Baroness will be aware, the commission has just concluded its consultation into its licensing conditions and codes of practice, and we await its response. It is fair to say that the commission is internationally respected and continues to disseminate best practice, extensively engaging with overseas regulators. I am most grateful to the noble Lord, Lord Browne of Belmont, for illustrating what is happening in Finland and Denmark.
In preparation for the new licensing regime, the commission has had a series of meetings with regulators in Gibraltar, the Isle of Man and the States of Alderney to establish ways to minimise duplication. It will be using the recently developed multijurisdictional business form for those applying for remote operating licences, which enables operators to provide and update information, once in a form, that can be provided to multiple jurisdictions without duplication.
The commission continues to explore the scope for expanded collaboration. It also has memorandums of understanding in place with several regulators, including Alderney, for the sharing of information between regulators. This will enable the commission to use any licensing, compliance and enforcement information to determine the suitability of an operator to hold, and continue to hold, a British licence. Neither the Government nor the Gambling Commission is complacent about these matters, and should either feel that such a review would be appropriate, sufficient power already exists under the 2005 Act to enable that to take place. For that reason I ask the noble Baroness to withdraw her amendment.
Baroness Howe of Idlicote
My Lords, I am grateful to the noble Lord, Lord Browne, for his comments and of course to the Minister for what he has said and his assurance about the effectiveness of the powers that both the Government and the Gambling Commission already have.
I would like to know whether the Minister has a date for when the report that is under way will be published. That would give us a clearer idea of whether we will have further information by Report and so on. If that is not available at the moment, perhaps he could write to all of us in the Room and bring us up to date. It is quite important, because it will clearly help to inform whatever stance we take on Report. In the mean time, I thank noble Lords for having taken part and beg leave to withdraw the amendment.