Gambling Levy Regulations 2025

Baroness Twycross Excerpts

Wednesday 12th February 2025 Grand Committee

Moved by

[Baroness Twycross]

That the Grand Committee do consider the Gambling Levy Regulations 2025.

Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)]

My Lords, I shall speak also to the Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2024. Both sets of regulations were laid before the House in draft on 12 and 10 December 2024 respectively.

Two decades have passed since the Gambling Act 2005 was introduced. Leading gambling firms operating in this country are now some of the world’s most successful companies. With cutting-edge technological capabilities and deep insight into customer behaviour, the gambling industry and gambling behaviours have undergone monumental change, from the smartphone to the huge increase in online gambling. Our manifesto set out a commitment to

“reducing gambling-related harm … strengthening protections”

for those at risk. We know that harmful gambling can have massive financial, emotional and mental health impacts on individuals, families and communities across our country.

The 2023 gambling White Paper laid the foundations for what is before us today as we introduce draft regulations for stake limits on online slots and a statutory gambling levy to fund research, prevention and treatment. The Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2024 introduce statutory maximum stake limits on online slots games of £5 per game cycle for adults aged 25 and over, and £2 per game cycle for young adults aged 18 to 24.

Online slots are the highest-risk gambling product. They have the highest rate of binge play and the highest average losses of any online product, and are associated with long playing sessions and high levels of use by people experiencing gambling harm. Online slots are also the fastest-growing gambling product. In the past five years, this yield has grown by 61% and growth is not slowing down. However, there are currently no statutory stake limits for online slot games, unlike their land-based counterparts. As the popularity of slots grows, so does the risk for vulnerable people. Now is the time to act and stem the growing tide of unaffordable losses for people most at risk of gambling harm.

We have designed these stake limits to target those most at risk of harm while ensuring that the impact on operators is proportionate. The lower staking limit for younger adults is an important intervention, as our research showed that younger people may be at an elevated risk of gambling harm. The industry’s trade body, the Betting and Gaming Council, welcomed the decision to introduce stake limits. If these regulations are agreed, there will be a transitional period to ensure that gambling operators have sufficient time to implement the changes.

Today, we are also proposing draft regulations for a statutory gambling levy. From April, all licensed operators will be required to pay an annual levy to the Gambling Commission. The rates at which licensed operators pay the levy are set down in the legislation and licensees are at risk of losing their licence if they do not pay. The levy represents a watershed moment: a significant uplift in the investment dedicated to this area; greater government oversight; and a renewed commitment to further understanding, tackling and treating gambling harms.

The significant contributions that the gambling industry has made to support research, prevention and treatment since the introduction of the Gambling Act 2005 have been crucial. This has allowed an expansion of the support and treatment options available for those in need. I am clear that the third sector will continue to play a key role in the future of research, prevention and treatment, but we now need a sustainable and equitable funding system so that all licensed gambling operators are paying their fair share. The levy provides us with an opportunity and the resources to put in place the right projects and services, clear objectives and robust governance.

To create a world-leading funding and commissioning system, we are mobilising existing expertise and infra- structure. Working with UK Research and Innovation, NHS England, appropriate bodies in Scotland and Wales, the Gambling Commission and the third sector, we are transforming the current system to deliver better access, outcomes and services for people across our country. To ensure that there is sufficient trust, expertise and authority in the use of the levy funding for prevention, I confirmed to the House this morning that we will appoint the Office for Health Improvement and Disparities in the Department of Health and Social Care to take on the role as lead commissioning body in this area for England, alongside appropriate bodies in Scotland and Wales.

Prevention remains a crucial part of the government’s efforts to tackle gambling-related harm. An effective prevention plan seeks to identify the right mix of interventions to be applied at both the population and individual level. That is why the Government are increasing dedicated investment, allocating 30% of levy funding to the prevention stream, alongside the significant funding allocated for research and treatment. Ring-fenced investment in this area will help to encourage innovation and support a strengthened, integrated and co-ordinated approach to prevention in Britain. Working closely with appropriate bodies in Scotland and Wales, OHID will develop a comprehensive approach to prevention and early intervention, supporting improvement across the respective nations.

I want to recognise the leading role that GambleAware has played. Its work to raise awareness of gambling harm and provide support for those in need has been invaluable. We want to build on the successes of the current system while improving and expanding the system to better serve those at risk. Until now, financial contributions from operators have been the only source of funding for the sector. This funding has established the National Gambling Support Network, overseen by GambleAware, which has helped people in need across the country. However, the levy will mean that there is sustainable, ring-fenced and trusted funding for the first time. This will be used across Great Britain for vital treatment, better understanding of the causes of harm and early intervention to support greater awareness and reduce stigma.

My decision on prevention is about building the future system on the strongest foundations. Through the levy, we are investing £100 million of public money to tackle gambling harm and it is right that key commissioning decisions on research, prevention and treatment are made by statutory bodies to ensure that funding is spent appropriately. This is why we are appointing OHID alongside UKRI and NHS England.

Robust government oversight will ensure that levy funding is getting to where it is needed most. The Government will set clear objectives for the system to maximise value for money. We will establish a levy board as the mechanism for the Government to closely monitor spending and the overall effectiveness of the levy. We want to be led by the evidence of what works across the system and so, alongside the levy board, we will organise an advisory group.

We are confident that we have designed the levy in an effective and proportionate way. It has been a priority to strike the right balance between managing impacts on licensees and ensuring that operators are paying their fair share. I recognise that some gambling businesses are facing a tough fiscal environment. These regulations reduce levy rates for a number of licensees compared with the rates proposed in the previous Government’s consultation. Both the Tote and on-course bookmakers will also pay the levy at rates much lower than other land-based operators such as casinos and bookmakers. Online operators will be required to pay significantly more.

These regulations represent the beginning of a new phase for gambling harm reduction, one where people in our country are better protected and aware of the risks of harmful gambling. The levy is a crucial first step to delivering this and I look forward to discussing it further in the debate today. I beg to move.

[Lord Kirkhope of Harrogate (Con)]

My Lords, first, I confirm that I have not been promoted and nor am I even a Whip who is able to take over in certain circumstances. I am not sure whether a colleague of mine will be here to answer this debate from the opposition point of view.

I would just like to say a few words because I know others wish to speak who are far more up to date in many ways than I am. I was the Minister in the Home Office responsible for gambling—or controlling gambling, I should say, perhaps—back in the mid-1990s. I welcome in general anything that improves the services available to those who have addiction or who are likely to be vulnerable to gambling, but I always took the view when I was Minister that we could develop these matters in a simple, one-by-one regulation way rather than in a great way. I was therefore very disappointed when the Labour Government came in in 1997 to see that they took a very strong and comprehensive approach towards gambling, which I never thought was appropriate.

I have worried ever since about its effect. I spoke in the House on an Oral Question earlier this week and said how disturbed I was at the level of gambling in front of all of us, particularly young people, today, both in television advertising, which I would not accept was sensible or proper, and, as we all know, in the burgeoning amount of advertising in sport, such as at sports grounds and in sponsorship. There has been a dramatic increase in the amount of gambling in this country, which has been deleterious and unacceptable. Therefore, I welcome anything that is going to help. I want to ask a couple of questions, if I may, on this.

First, the use of the levy—directional and focused—seems to be correct, but we need a little more flesh on the bones regarding the delivery of support. We have talked about organisations. A number of organisations, some known to the Government and some in the charity sector and so on, are there to look after people who have fallen for gambling in the wrong way and are looking after their addictions and so on. Will the dispensation of the money raised on this levy be wide enough and comprehensive enough to cover all the areas in which people are vulnerable and suffering? I am not sure that that is the case, so I hope that the Minister will give us some reassurances. I must say that I am not happy with that element.

Secondly, is the administering of the levy sufficiently watertight, or are there ways in which it can be avoided? The list of specifics where the levy will be applicable is fairly comprehensive, but I still feel that we need to be clear that this is an obligatory levy that cannot be avoided by various means that might be used.

Finally, am I wrong to assume that the Government will not be doing much else about gambling advertising? I would like to know because, as I have pointed out and as other people have raised with me on many occasions, this level of advertising is unacceptable, but we never seem to deal with it—indeed, it burgeons even more.

--- Later in debate ---

[Lord Foster of Bath (LD)]

No, I do not accept that basic premise. Indeed, I suspect that the Minister supports these statutory instruments. The instrument concerning the levy makes clear that there are different levels of contribution for various parts of the gambling sector, which is based on an assessment of the risk. The noble Lord and I would both accept that bingo, for example, does not create a great deal of harm, but the research clearly indicates that it creates harm, nevertheless, and that is why it is included in the levy. I entirely accept that the size of the harm varies.

The noble Lord asked me whether I was prepared to accept that the vast majority of gambling does not create harm. The answer is no, I will not accept that —I shall not accept it when 2.5 million people in this country are suffering from gambling harm. I will not accept it when more than one gambling-related suicide per day takes place in this country. I will not accept it when the evidence shows that anybody, regardless of age or background, can suffer gambling harm. So, no, I will not accept the noble Lord’s premise.

I was trying to explain that the £5 limit is due to the bizarre desire on the part of the Government in believing that they can reduce gambling harm yet increase the size of the sector. The fact that they want to do that, and the complication that it causes, was made very clear when this instrument was debated in the other place. The Minister, Stephanie Peacock, said—and it is so revealing—that

“we know that those who do reach that higher limit are at higher risk. This statutory instrument”

aims

“to balance tackling gambling harms with supporting industry”.—[Official Report, Commons, First Delegated Legislation Committee, 29/1/25; col. 7.]

Those are the Minister’s very words; she admits that the £5 limit means that there will be a greater amount of harm, yet she is prepared to tolerate it because the Government want to expand the industry. That is despite the Gambling Commission data from 2023 showing that 52% of gamblers staking over £2 and up to £5 are flagged by the commission as at risk. Despite that, the Government have bowed to the industry in the way that I have just described.

That is in marked contrast to what the previous Conservative Government did when they introduced a £2 stake for fixed-odds betting terminals. They came under exactly the same pressure from the industry, which did not want that stake limit. The then Secretary of State, Matt Hancock, said:

“When faced with the choice of halfway measures or doing everything we can to protect vulnerable people, we have chosen to take a stand. These machines are a social blight and prey on some of the most vulnerable in society, and we are determined to put a stop to it and build a fairer society for all”.


They took a stand against the pressure from the gambling industry and, while I welcome the £2 limit, I am disappointed that we have the £5 limit going forward. I hope that the Minister will at least assure us that the SI provides sufficient flexibility for the Government to change that limit if they realise and accept the error of their ways.

I turn to the other statutory instrument and the introduction of the statutory levy to fund research, prevention and treatment. The Minister knows full well how delighted I am that this is now being introduced. I am absolutely delighted, as others have said, that the announcement has been made, even today, about the introduction of OHID and similar bodies in Scotland and Wales to be the prevention commissioner. I am well aware of the enormous amount of work that has gone on to get us to this position, and I pay tribute to the Minister, her predecessors and the very large number of civil servants who have worked so hard to get us where we are today.

However, the Minister knows that the work is not over; a great deal has to be done. For example, we have heard already from the noble Lord, Lord Kirkhope, the right reverend Prelate and others that there is real concern that the amount of money that will come in will be insufficient. After all, the £100 million that will come in from the levy, approximately, is more or less comparable with the amount of money that we are already getting in through current voluntary contributions. As others have said, all the research evidence clearly shows that the cost to the country of gambling harm is at least £1 billion, and some estimates are very much higher.

As my friend the right reverend Prelate pointed out, on the polluter pays principle, many would argue—and I would be one of them—that the level should be very much higher than in the current instrument, but it is a welcome start. I hope that the Minister can confirm that nothing will prevent the Government, should they come to a different view about the appropriate level, being able to change it, even, if necessary, on an annual basis, since the levy is an annual one—although there is a nine-month period for the first one.

In a recent letter, for which I thank her, the Minister said:

“We are pursuing this landmark reform to put the independence of the future system beyond absolute doubt”.


I welcome that, but does she acknowledge that some gambling companies may still choose to make voluntary contributions? If we want to ensure that independence, we need transparency about that. Does she accept that it will be important that those voluntary donations are clearly identified and recorded, and we know to whom the payments are made? She will be aware that the Gambling Commission has just announced that it is no longer going to require that evidence to be collected. I hope she might be willing to persuade the commission that, for the sake of the transparency that she talks about and for the clarity of independence, it might think again about it.

The noble Baroness, Lady Armstrong, is 100% right to say that the key issue now, having got to where we are, is how we deal with the interim period between where we are now and the full introduction of the levy. A safe transition is vital to ensuring that there is no system degradation, prevention work continues and people at risk or experiencing gambling harm can access the support they need. That means two things: continuity of income to pay for the services and urgent decisions on the allocation of such funds. On the first, even though we may disagree about what level it should be at, can the Minister confirm that the Government have received categorical assurances that the industry will continue to make appropriate voluntary payments until the first statutory payments kick in? Can she also tell us to whom those payments are to be made? On the second, the fund allocation, the Government have consistently and rightly said that the role of the third sector will continue to be vital in this new research, prevention and treatment system. I fully support that. I accept that over time, the new commissioners may choose to commission different things and from different providers. But assurances are needed that, albeit over time in a modified form, the vital third sector experience and expertise, and the important contribution from the wider lived-experience community, will be sustained in the new system. Will the Minister confirm that?

In the immediate term, urgent decisions are needed. Many organisations need to know, in some cases within just a few weeks, whether their service is expected to continue at least over the next couple of years. Gordon Moody, for example, provides a range of gambling treatment services, including residential therapy, which means that it has significant fixed costs, but the reserves are sufficient to support it for only three months. Clearly, that service and others involved in the National Gambling Support Network need urgently to know what funding, if any, they will receive.

I am sure that the Minister and her officials are well aware of this challenge, but it would be reassuring to have her confirmation of that and some indication of how the Government plan to proceed. While there is still much to be done, these two statutory instruments are important and welcome landmarks on the road to tackling gambling harm. I welcome them.

[Baroness Twycross (Lab)]

My Lords, this has been an important and interesting debate and I am grateful to all noble Lords for their insightful contributions and for their work over many years. It is clear from today’s discussion that we all share the commitment to protecting the British public from gambling-related harm. The Government want to do that while ensuring that those who want to gamble can continue to do so as safely as possible.

I am determined to get this regime right. As outlined, the online slots stake limits are an important and proportionate intervention aimed at people most at risk of gambling-related harm. This is a timely regulation, as online slots games continue, as mentioned earlier, to grow in popularity and gross gambling yield. These limits will bolster existing safer game design requirements to ensure that online slots games are safer to play. Online slots stake limits should serve as a maximum stake that customers should choose to stake up to, rather than as a new default that operators drive customers towards. Operators currently offer stakes from as little as one penny per spin, and we would expect a range of staking options far below the maximum available.

To reassure noble Lords, the Secretary of State will review the limits within five years. The statutory levy will be charged to all licensed gambling operators, replacing and building on the current system based on voluntary donations.

[Lord Foster of Bath (LD)]

Regarding the other part of my question, can the Minister confirm that it would, however, be possible to make a change within a one-year period?

[Baroness Twycross (Lab)]

I can confirm that. I have lots of inserts in my brief, so I will get to other points later in my response.

The levy will be charged in a way that recognises the higher levels of harm associated with some online products, which a number of noble Lords noted, and the higher operating costs in the land-based sector. This will guarantee that all operators pay their fair share, while ensuring that any impacts are proportionate.

Working in partnership with the appropriate bodies in Scotland and Wales, and the third sector, we are entering a new phase in the Government’s efforts to tackle and treat gambling harms. We will closely monitor the impact our approach is having on the ground, with a DCMS-led levy board maintaining clear oversight of the system. We will also conduct a formal review within five years and take action as needed. I am happy to set up a briefing meeting with interested noble Lords to go through the more technical aspects of the levy process and how the Government’s oversight of it will work in practice.

I turn now to the wide range of questions and points raised in what was an interesting debate, starting with the point made by the noble Lord, Lord Browne of Belmont, that the £100 million that will be raised by the new statutory levy will not be enough. I note that we are nearly doubling the level of funding in the system. We will monitor the impacts of the levy and formally review the system within five years, including levy rates. Any change would be subject to full consultation, and we would need to be led by the evidence.

Although it has been welcome that operators have voluntarily contributed to the current levy, it is no longer fit for purpose and the Government’s priority is to ensure sufficient long-term funding for research, prevention and treatment to tackle gambling harm, in line with our manifesto commitment. This is part of a suite of protections that we and the Gambling Commission are introducing to prevent harm before it occurs.

On the Government’s timing of the levy, the noble Lord, Lord Foster, mentioned the need for charities to have some certainty over funding. I am grateful for the significant uplift in funding of research, prevention and treatment that the industry has provided in recent years. Without this support, it is unlikely that the expansion of treatment services would have been possible up to the point of getting the statutory levy. We have received a commitment from the Betting and Gaming Council that its financial contributions will continue until the levy is in force. Operators should make their final contributions to charities as soon as possible to maximise the time ahead of their first levy payments. We have received reassurances on that point.

I strongly agree with my noble friend Lady Armstrong that the work carried out by GambleAware, not least on stigma, is hugely valuable. My officials and I met GambleAware yesterday, and we will support it through a safe and smooth transition. It is a real priority for me that the right services in the current system are maintained for the future; we do not want to see a cliff edge where, with good intentions, we cause unintended harm. I will write to Minister Dalton, as she starts her new role, to set out my priorities to see a smooth transition for OHID and to engage with all key stakeholders. We are keen to make sure that operators maintain their level of contributions to networks such as the National Gambling Support Network to ensure that they have the funding they need. As I mentioned, we have received reassurances from the industry that funding for services will be maintained in the transition.

Points on stake limits were raised by the noble Lords, Lord Hay of Ballyore and Lord Foster, among others. I appreciate that there are concerns that the £5 stake limit is higher than the £2 fixed-odds betting terminal limit, but a £5 limit brings online slot machines in line with their closest land-based machine counterparts. We believe that a higher limit is justified online by the extra protections afforded by account-based online play, such as monitoring data for signs of harm, safer game design and checks for financial risk.

The right reverend Prelate and the noble Lords, Lord Hay and Lord Foster, asked how we decided where the stake limit should be set—why £5? In our view, a £5 stake limit will protect those most vulnerable to serious harm while balancing the impact that this measure will have on the industry. Primarily, we considered consultation responses, expert evidence and harms data related to each of the staking levels and determined that the £5 limit targets those customers most at risk of harm. I note that the average stake on online slots is 60p.

The noble Lord, Lord Foster, quoted Minister Peacock in the debate in the other place. The evidence shows that people staking high amounts are more likely to experience gambling harm. The £5 stake limit is a targeted intervention to protect those most at risk. These stake limits build on other rules introduced by the Gambling Commission in 2021 that make online slots safer to play. Those requirements slowed the speed of play to a minimum of 2.5 seconds per spin. A raft of rules will reduce play intensity, including a ban on autoplay features, as well as features which speed up the display of results or which can give the illusion of control, such as turbo or slam stops. The evidence shows that these features increase the risk of harm to customers.

The noble Lord, Lord Kirkhope, asked about R&D funding from the levy. Research, prevention and treatment are the key areas where we think investment is most needed to reduce gambling harms. We will monitor the impact that levy funding is having on the ground and will step in as needed. As I mentioned previously, we will formally review the levy within five years.

The right reverend Prelate the Bishop of St Albans and the noble Lord, Lord Browne of Belmont, mentioned gambling-related suicide. I am aware of the truly devastating impact that harmful gambling can have, including contributing to suicide. I have visited the National Gambling Clinic and seen at first hand the excellent work the service provides for those in acute need. We are committed to working cross-government on this issue, including with the Department of Health and Social Care on its suicide prevention strategy. Statistics around things as complex as suicide should be used carefully, and we will continue to work with the Gambling Commission to develop the evidence base on gambling-related suicide, which will be important going forward.

The noble Lord, Lord Browne, referenced the statistics in the Gambling Survey for Great Britain. Although the harm statistics seen in the gambling survey are higher than previous statistics from health surveys, this does not necessarily represent an increase in problem gambling, as the two surveys have different methodologies and the results cannot be compared like for like. The Government are committed to ensuring that the potential harm that can ensue from gambling is limited, and we are strengthening protections for those at risk. However, we need to make sure that when we are comparing statistics, we use them carefully, and I am keen that as part of the investment in research, we have a really strong evidence base going forward.

On advertising, which the noble Lords, Lord Kirkhope and Lord Foster, and the right reverend Prelate raised, the Gambling Commission is introducing new requirements for operators to allow customers to have greater control over the direct marketing they receive and has consulted on measures to ensure that incentives such as free bets are constructed in a safety-responsible manner. There is work ongoing with the DHSE and the Gambling Commission to develop a new evidence-based model for independently developed messages to increase awareness of gambling harms, replacing industry ownership of safer gambling messaging.

However, I am clear that standards can be raised and, as I set out at the GambleAware conference on 4 December last year, more needs to be done to improve the protections. We have set the gambling industry a clear task to further raise standards to ensure that the levels of gambling advertising and sponsorship do not exacerbate harm, and that work will be monitored closely.

My noble friend Lord Watts asked about offshore or illegal gambling. The Gambling Commission is committed to preventing illegal gambling in all its forms. Its latest corporate strategy commits to increasing investment and resources to tackle illegal gambling.

The noble Lord, Lord Browne, asked about Northern Ireland. We recognise our shared interest in a commitment to the reduction of gambling harm. Gambling regulation is, as the noble Lord noted, devolved in Northern Ireland, where it falls under separate legislation. Unlike Great Britain, Northern Ireland does not have an independent gambling regulator, and we stand ready to support the Northern Ireland Executive in plans to reform regulation in this space.

The right reverend Prelate the Bishop of St Albans and a number of other noble Lords asked when we would review the levy. We recognise that the levy represents a significant change for the sector. We will monitor the levy system closely to ensure its effectiveness and to ensure that it delivers on our objectives. Although we will formally review the levy within five years, we will closely consider any necessary changes earlier, including revised regulations to change levy rates.

The noble Lord, Lord Foster, queried how the Government can see this as part of growth alongside the commitment to tackle gambling harm. I appreciate that the noble Lord is unlikely to agree with me on this point but I believe it is possible to have an industry that is both growing and becoming safer for consumers. I want to see a safer, more responsible gambling industry and a sector we can be proud of—which offers good jobs, brings social value and which people enjoy—alongside making sure that we do whatever we can to reduce gambling harm in all its forms, both for people experiencing gambling harm themselves and their families and the wider community.

In conclusion, I am really grateful to all noble Lords who have contributed today. I am always happy to meet—I know that I owe the right reverend Prelate the Bishop of St Albans a meeting—but I have spoken to a number of noble Lords present today about this issue. I am grateful to noble Lords for everything they are doing to raise issues in this area, and I beg to move.

Motion agreed.