Gambling (Licensing and Advertising) Bill
Debate between Clive Efford and James Duddridge
Clive Efford (Eltham) (Lab)
I start by welcoming the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Maidstone and The Weald (Mrs Grant), to her new post, which I neglected to do under pressure of time at questions last week. I look forward to debating with her over the coming years. [Interruption.] Well, she may well keep her position in opposition.
The Bill has been a long time coming. The need for changes in the licensing of remote gambling operators was first identified by my hon. Friend the Member for Bradford South (Mr Sutcliffe) when he was Minister for Sport. Online gambling was first regulated in the UK in 2007. Since that time, in order to avoid taxation, all but one of our major online betting companies has moved offshore and they justified that by claiming that that is necessary to remain competitive. The consequence has been that these operators are outside UK regulation, which is one of the reasons why we are here debating this Bill today.
In 2009, my hon. Friend ordered a review of overseas gambling operators who advertised in the UK. In 2010, we began the consultation on extending Gambling Commission licensing to include online gambling operators offering services in the UK. Consultation responses were published after the general election in July of that year by the then Minister with responsibility for gambling, the hon. Member for Weston-super-Mare (John Penrose), whom I see in his place. It was then a full year before he issued a written statement on the Government’s plans to legislate. The draft Bill was published in December 2012, and the Select Committee published its report on the draft Bill in May 2013. Four years and four Ministers later, we have finally got the Bill, so what was all the waiting about?
James Duddridge (Rochford and Southend East) (Con)
I agree that there have been too many delays, but if the Labour party had not messed around with large-scale casinos and the accompanying shenanigans, could this not have been achieved under the last Government?
Clive Efford
As I said, the regulations on online gambling were introduced in 2007 and the issues relating to online gambling were identified in 2009 by my hon. Friend the Member for Bradford South, who then began the process of dealing with the situation, and nothing was held up at all by casino gambling. We now have before us a five-clause Bill that deals with the licensing of remote gambling operators at the point of consumption. That is not contentious. Virtually everyone, including large parts of the gambling industry, is in favour of that.
The delay in bringing the Bill forward could be understood if it addressed many of the issues that have come to light since 2007. For instance, does the Bill include clauses to introduce financial penalties for companies that breach licensing codes? Does it set out detailed methods for enforcing compliance with new powers for the Gambling Commission? Does it require all licensed operators to display a kitemark to inform consumers that they are using a UK licensed online operator? Does it introduce a whole new set of penalties for operators who fail to report suspicious activities? Does it deal with betting advertising before the 9 pm watershed? Does it include requirements on operators to contribute to research on, and treatment of, gambling behaviour and problem gambling?
Does the Bill define what a betting shop should provide before it can advertise as such? Does it deal with unmanned betting shops providing self-service betting terminals? Does it create the framework for a single form of self-exclusion across the industry for those who need help with their gambling addiction? Does it deal with the anomaly of spread betting being regulated by the Financial Conduct Authority? Does it require every operator taking bets on horse racing from UK-based customers to contribute to a horse race betting levy? Does it require the betting industry to make some contribution to all sports from which it profits yet to which it makes no contribution? Does it deal with the issue of dormant accounts, on which the Government promised to legislate? This Bill deals with matters that have been under consideration for four years and on which there is pretty much unanimous agreement, so it is difficult to understand why we have had to wait so long, when the Bill is so limited in what it seeks to achieve.
James Duddridge
What the hon. Gentleman says is completely incoherent. He started by arguing that things should have happened faster, but then raised a whole series of issues that would have delayed the Bill even further. Which of those two things does he believe?
Clive Efford
My point is that if the Bill addressed those issues, we could understand the delay, but it does not. It deals only with something we all agreed with nearly four years ago. I am highlighting a number of issues about which people who monitor the gambling industry are concerned. It is perfectly legitimate for the House to raise and debate those issues, particularly when we are intending to legislate in a very important area of gambling activity.
Clive Efford
It is my understanding that because spread betting is seen as a financial transaction and commitment, rather than straightforward betting, it was felt it was better regulated by the FCA. However, there are requirements on those companies that are licensed to report any suspicious betting activity they identify—that is covered by licence code 15.1—and the anomaly created by this current situation is that every online gambling operator who wishes to advertise for custom within the UK will be licensed by the Gambling Commission, except for spread betting companies. The intention of this Bill is that everybody will be brought under one regime, thereby creating a system that is easily understood by the public. That intention is undermined by the lack of action in bringing spread betting into line in the same way.
James Duddridge
In terms of introducing amendments on spread betting, should we not distinguish between sports betting and, for example, foreign exchange spread bets, which may be covering an underlying financial transaction? That is materially different from betting on Southampton to win against Portsmouth.
Clive Efford
It can be difficult to draw a distinction between such transactions, and the hon. Gentleman has identified one of the reasons why spread betting is treated differently from straightforward betting. Some spread betting is provided by companies that also provide betting services, however, and therefore people might be confused about how this form of betting is regulated. We should consider how to deal with that. If the FCA is going to continue to be the regulator for spread betting, we must consider how it will comply with licence condition 15.1.
As I have said, there is a great deal of concern about problem gambling. Is the FCA able to deal with this issue? Is this a form of activity that would normally concern it? Does it have the power to require operators to have appropriate systems in place to identify individuals with problems? How will it monitor how the operators apply that?
If a scheme were introduced for people with gambling problems to self-exclude, how would it be implemented across two different enforcement regimes? If the Minister cannot satisfy herself that we can safeguard vulnerable people through the FCA, she must take steps to ensure that spread betting is regulated in the same way as all other forms of betting. In the meantime, however, will she give an assurance that spread betting operators who have a betting licence will be monitored by the commission for compliance with licence code 15.1? Should they be found to have failed to notify the FCA of suspicious activity, that must call into question whether they are fit and proper to hold a UK gambling licence, and the commission should have the power to take away their betting licence.
The European Parliament has recently passed a resolution calling on Governments to make match fixing a criminal offence. That has been taken up by Michel Platini, UEFA president, who has called for all European Governments to legislate. The request of Mr Platini is also supported by the Sports Rights Owners Coalition and David Collier, chief executive of the England and Wales Cricket Board, who, through his sport, is at the forefront of trying to ensure that every country across the world has as effective a regime as possible. So what is the response to Michel Platini’s request?
Is it possible to introduce a new clause into this Bill to amend section 42 of the Gambling Act 2005 on cheating? The Minister may be aware that the report of the Sports Betting Integrity Panel in 2010 chaired by Rick Parry recommended that the definition of cheating in the 2005 Act be reviewed. The power in that Act to tackle match fixing is too loosely defined and is not used. Indeed, it was not used in the case of the Pakistani bowlers. They were prosecuted under fraud laws, because the definition of cheating did not cover that form of match fixing sufficiently for it to be used in that case.
The Parry report also had recommendations for sports governing bodies to improve their act. The sports have done what was asked of them. We are all now waiting for the Government to act, and we have to ask why this is: why, when we are attempting to create the most robust system for regulating the gambling industry here in the UK, would we fail to introduce this specific form of sanction? Will the Government consult the sports governing bodies to address the problem of match fixing?
Given the international nature of the remote gambling industry, it is not possible to monitor how operators act in other jurisdictions when reporting suspicious activities. If they fail to notify the relevant licensing authority in any jurisdiction in which they operate of suspicious gambling activities, not just those related to UK-based sports, the commission should have the power to consider whether to revoke their licence to operate here in the UK.
The Bill proposes to amend section 33 of the 2005 Act so that a person providing facilities for remote gambling without a licence in the UK is guilty of committing an offence only
“if the person knows or should know that the facilities are being used, or are likely to be used, in Great Britain.”
Similar assumptions should apply to the reporting of suspicious activities. If an operator has been found knowingly to be providing facilities for unlicensed remote gambling in another jurisdiction, the Gambling Commission must have the power to consider that and remove a licence. Similarly, if the operator is found to have failed to notify the appropriate licensing authority in another jurisdiction of suspicious activity, in the interests of protecting the consumer, the Gambling Commission should be able to revoke the licence of such an operator.
The Minister will know that the issue of overseas betting operators paying the horse racing levy has been a cause of frustration for Government over many years. In answer to a debate on this issue on 20 January 2011, the Minister’s predecessor but one, the hon. Member for Weston-super-Mare, said:
“It is absolutely right for the House to urge the Government to come up with concrete proposals before the end of the year, and I am happy to accept that challenge, in line with the mood of the House.”—[Official Report, 20 January 2011; Vol. 521, c. 1067.]
It is now November 2013, and no Government solution to this issue is in sight.
At last Thursday’s Department for Culture, Media and Sport questions, the Minister said in answer to a question from me about whether she will review the Government’s legal advice in the light of the European Commission’s ruling on the French betting levy:
“I agree with the hon. Gentleman to a certain extent”—
so there is progress there—
“because the levy was created 50 years ago and does not completely deal with modern betting and racing practices, so, as I have previously said, I will consult. We will take evidence and look at the situation very carefully indeed, and try to find a modern, sustainable and enforceable legal solution.”—[Official Report, 31 October 2013; Vol. 569, c. 1062.]
The Bill, in effect, brings online gambling under the Betting, Gaming and Lotteries Act 1963 in exactly the same way as bricks and mortar betting shops are covered. I ask her again to review the advice on this, because a simple solution may be available. The Government rejected previous attempts to regulate for a betting levy that includes online betting, which has had the support of those from all parts of the House, on the basis that it would not satisfy European state aid rules. I believe that all parties would like betting operators to pay a levy on all bets, as the 1963 Act says they should.
We now have a rare legislative slot and we cannot afford not to get this Bill right. I am talking about a policy that the Minister’s colleagues, the hon. Member for Thirsk and Malton (Miss McIntosh) and the hon. Member for West Suffolk (Matthew Hancock), who is no longer in his place, have recently tried to pass into law, and I hope she will listen to them. There is a considerable legal view that the Bill will require levy payments automatically, as it will bring betting operators back into the regulatory environment and, de facto, within the scope of the 1963 Act. There is much concern in the industry that this should not be left to the courts to judge, as it inevitably will be.