Offshore Gambling Bill

Debate between George Freeman and James Duddridge

Friday 25th January 2013 Commons Chamber

[George Freeman]

Those operators are not required to comply with the regulation that applies to operators based in the UK. The Bill will simply create a level playing field by making offshore bookmakers subject to exactly the same regulation, which I do not think anyone would consider unduly onerous. Such a level playing field would also encourage new entrants into the betting market, a development of which Conservative Members in particular would approve.

I support the Bill principally because I think the amendments that it proposes to the 2005 Act will create that level playing field. It will

“regulate remote gambling on a point of consumption basis; to require all operators selling into the British market, whether in the United Kingdom or overseas, to hold a Gambling Commission licence to enable them to undertake transactions with British consumers and to advertise in the United Kingdom; to provide that all relevant operators contribute to the Horserace Betting Levy”.

That does not strike me as a radical package of anti-business measures. It does not strike me as a dramatic attack on the freedom of the market, or a contravention of any simple, basic business principles. It is simply common sense. We need a structure that supports our industry, is fair, and provides a level playing field for all operators.

I believe that the Bill will unlock three important benefits. It will provide better protection for consumers. If all operators are subject to Gambling Commission requirements, everyone who places a bet will know that wherever they are placing it, it will be subject to the same regulation. Operators will be mandated under the Gambling Commission’s licence condition 15.1 rather than being able to operate on a voluntary basis. The Bill will, as I have said, return a level playing field to the market, and in so doing will make it easier for small to medium-sized operators to enter the sector.

At the heart of the debate is an issue similar to the one that we face across the board. Industries are increasingly dominated by big players, while smaller placers are locked out at the bottom. The pyramid of racing, which at the top relies on the glamour and prestige of the Derby, the grand national and other big, celebrated events, has deep roots at the bottom. Unless we look after those roots and introduce a system that maintains their viability and sustainability, we will see them wither. I believe that the Bill does what the 2005 Act failed to do. It resolves a very simple and fundamental funding crisis at the heart of racing, and gives hope to the 60 race courses in the country—including Fakenham, which is on the edge of my constituency—by reassuring them that they have a sound basis on which to continue to thrive, and to support both racing and the local rural economy.

I understand that the Government intend to give effect to these measures with legislation of their own, and that they have published a draft Bill. I hope that the Minister will assure me that in pursuing their own legislation, the Government will seek to give effect to undertakings given previously. On 20 January 2011, at the end of the debate on the funding of British horse racing, my hon. Friend the Member for Weston-super-Mare (John Penrose)—who was then the Minister responsible for tourism and heritage—said:

“It has also been pretty much universally agreed in today's debate that the current levy system is old-fashioned and, if not broken, in the process of breaking.”

He also 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.]

Since May 2011, racing has been involved in a pre-consultation process and subsequent bilateral discussions with the betting industry, represented by the industry’s recognised trade body, the Association of British Bookmakers, and under the auspices of the Department for Culture, Media and Sport, to achieve a sustainable long-term replacement for the levy. Despite its best efforts, and notwithstanding the aims of the Bill, racing is continually told that the levy is incapable of the reform that would enable it to capture modern forms of betting. It is therefore vital for the work to establish a mechanism that is fair, enforceable, commercial and sustainable to be completed. Solutions, including a racing right and a Gambling Commission licence condition requiring bookmakers to have commercial terms agreed with racing, are available and the consultation is due to begin this year.

I understand the Government’s preference for legislation of their own. Having looked at the draft Bill and heard the views of the British Horseracing Authority, I should like to raise a number of issues which I hope the Minister will address in his closing remarks.

[James Duddridge]

My hon. Friend has referred repeatedly to the contribution of horse racing specifically, but the industry does not benefit the country equally. It is targeted on helping those in rural communities, some of which have suffered particularly badly over the last decade or so.

[George Freeman]

My hon. Friend has made an excellent point. While of course the industry has a general economic impact on the UK economy, certain pockets of the country are being hit particularly hard, including some of the areas that most need the economic growth that the Government are doing their best to unlock.

I move on to the areas that I wanted to ask the Minister to address. As I understand it, the clause in what might be called the “McIntosh/Hancock” Bill providing that once all operators selling into the British market have a Gambling Commission licence the legislation must provide that all operators contribute to the levy has been omitted from the Government Bill. Will the Minister provide reassurance that the Government Bill or some other measure will provide that all operators will contribute fairly to the levy?

Does the Minister agree that we need to tackle the basis on which we fund racing, and that voluntary arrangements for the funding of an industry and a sport as important as racing are unsatisfactory in the long term, unless they are enshrined in some sort of contract, with legal underpinning, on the basis of which the industry can plan and invest? Does he agree that we would do well to look at some of the overseas examples, as different countries have tackled this problem in different ways? Australia, in particular, has very effective legislation that ensures a commercial basis between the sport and the bookmakers, providing a sustainable basis for funding the industry.

On regulation, I note that the Government Bill says that the enforcement of licensing at the point of consumption will be light touch. We are all in favour of light-touch regulation, but will the Minister guarantee that the Government’s interpretation of “light touch” will still mean appropriate provision for enforcement is made to prevent many operators from escaping its provisions? Such a situation occurred as an unintended consequence—I am sure it was that—of the Gambling Act 2005.

I hope that the Minister will reassure the House that the ambitions of this Bill, the ambitions set out by the House in discussing its original presentation and the undertakings given by the former Minister will be dealt with in due course by the Government. I understand, as I am sure all hon. Members do, the pressures and complexities that the Minister faces in legislating in this field, but we have a duty to get this right. We have an historic opportunity to do so in this Bill, in the interests of our economy, at a time when we need to do everything we can to ensure growth in key industries in this country, and, in particular, in the interests of our rural economy and British leadership around the world in a great and growing business.

We are having this debate on the day the Prime Minister returns from Davos having given major undertakings about this generation of Conservatives’ commitment to fair tax and to ensuring that we believe in and will support responsible capitalism and moral markets. As Conservatives developing an agenda for growth, enterprise and entrepreneurship, we need a fair tax regime that ensures that those who benefit from the sector pay their fair share in supporting it. I very much look forward to hearing the Minister’s remarks.

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[James Duddridge]

My hon. Friend has done many things to deserve that, as he well knows. However, I think it best that I move on swiftly.

My hon. Friends have been a great double act in preparing and explaining the Bill and, whatever happens today, legislation should be introduced. Regardless of whether that happens through this Bill or another, there will be a great improvement.

[George Freeman]

Although attendance in the House and Public Gallery is relatively sparse today, as it is a Friday, does my hon. Friend acknowledge that the debate is being closely followed by the many thousands of people involved in the industry? The attendance today is not a sign of paucity of interest; a substantial degree of interest in the Government’s getting this right has been shown in the newspapers and online.

[James Duddridge]

I could not agree more. That is very important and I am sure that if there is a vote, if we reach that point in our proceedings, hon. Members who are working studiously in their offices and Committees will rush to the Chamber to express a view.

Although some might say that there is limited value in having the two Bills progressing through Parliament at the same time, it provides an excellent opportunity for Members of Parliament to undertake additional scrutiny that goes above and beyond the excellent work done by the Select Committee on Culture, Media and Sport.

Hon. Members will have two options, if they choose to legislate. The first is to pass the Bill today, to allow it to go to Committee and to make progress in that way. The other will be to receive reassurances from the Minister on clause 4 and allow amendment of the Government’s Bill. It is good to have that dual-track approach. I have listened to the debate carefully and would be minded to allow matters to be taken forward in the Government Bill.

In an intervention, I asked about the territorial extent of the Bill and I received some reassurances. I shall come to that later, although I managed to tease out from my hon. Friend the Member for Thirsk and Malton that there are no explanatory notes. They would have been useful and would have helped its case.

I intend to speak primarily about the parts of the Bill that are shared with the Government’s draft Gambling (Licensing & Advertising) Bill, although I wish to make some additional points on the levy.

[George Freeman]

My hon. Friend makes an interesting point about the lack of explanatory notes. Does he agree that the Bill is admirably short? It does not even cover the two sides of the page and has no more than five very short clauses? It is also incredibly simple, making provision for the three things that we have all described. Does he agree that it does not need substantial explanatory notes and that it is a wonderful example of proposed legislation? Perhaps we could take that up more generally in the House and encourage the Government to produce simple and short Bills for our consideration.

[James Duddridge]

I would certainly encourage the Government to produce simple and short legislation, and less of it. My hon. Friend mentioned that the Bill has only five clauses, and clause 5—entitled “Short title, commencement and extent”—is needed for every Bill, so it actually has only four clauses. We have already questioned whether another clause can be taken out or amended in Committee, further shortening the Bill. The hon. Member for Eltham (Clive Efford) talked about the Government’s draft Bill and said that there are many similarities. I am not sure who has copied whose Bill, but they both seem to be operating with equal brevity, which should be encouraged.

I want now to give some of the background to the Bill. My hon. Friend the Member for Mid Norfolk mentioned the Gambling Act 2005, and despite his criticisms I think that there is general consensus outside the House and among most Members of Parliament that that Act was a step in the right direction. It brought together other pieces of gambling legislation, particularly the Gaming Act 1968, and had an awful lot of good stuff in it that I would not want to see go. It might not have been not bold enough, and perhaps it did not have sufficient foresight about how the offshore industry might work and how internet gambling might fit alongside all other forms of gambling.

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[James Duddridge]

What my hon. Friend says is logical, but I challenge him. I have not seen examples of that. I notice that he has his iPad, so perhaps he can zip through a few websites to see whether there are any that are self-excluding. I know that the casinos and the operators were very proud of that facility.

[George Freeman]

My hon. Friend was developing an interesting argument about onshore and offshore taxation. Does he agree that there are strong parallels with the message that the Prime Minister has been giving at the Davos summit in preparation for the British leadership of the G8, that one of our central themes and ambitions will be to ensure an appropriate regime for tax accountability generally for companies offshore and to close the loopholes that have seen major corporations in other areas moving offshore and denying the Exchequer appropriate tax revenues? This is part of the much bigger debate about responsible capitalism.

[James Duddridge]

I entirely agree. The Prime Minister’s other speech this week will receive much more coverage in the coming weeks and months, but I think that his Davos speech was equally important because it sent a message to companies about how they should conduct their tax arrangements, whether they are banks, Starbucks or online casinos. They need to do the right thing and pay tax on their online business, as John Lewis does, or pay tax on the betting framework, as bet365 does.

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[James Duddridge]

I will illustrate the point I was trying to make by placing the bet. Initially, staff pretty much told me that they had never heard of me, but I pressed the issue, particularly when I saw some of the people who were listed. They gave me odds of 250:1. I was not trying to earn money, because I thought that the chances of my ever becoming Prime Minister, let alone the next one, were zero. Instead, I was looking at how the odds could be changed and at suspicious betting patterns, particularly given my comments about Liberal Democrat betting. Within the day they had suspended taking bets on me because I was so popular, based only on one or two bets that I had other people across the country make for only another few pence. That demonstrated how easy it is to manipulate the betting statistics and, in relation to the Bill, how important it is that betting is regulated, supervised and licensed locally, rather than simply offshore.

[George Freeman]

I apologise for interrupting my hon. Friend’s argument. He mentioned that the 1992 grand national included a horse called Party Politics, which he thought was a sign. I have just noticed that the Blue Square website claims that the favourite for the race to which I referred in my speech, the 1 o’clock at Lingfield, is a horse called Wind for Power. I wonder whether he thinks, particularly in the light of the business of the House, that that, too, is a sign.

[James Duddridge]

I am not sure whether I might not still be on my feet at 1 o’clock, but perhaps if I rush through my comments I will find time to place a bet on behalf of myself and my hon. Friend.

Although the majority of operators currently targeting British consumers are subject to established and effective regulatory regimes, not all of them are, so we are suffering from those problems now. For example, some online operators have begun to target British consumers and very little is known about the level of their regulation or, indeed, consumer protection. There is concern about that issue and others when it comes to European operators and, in particular, operators beyond Europe without sufficient regulatory oversight. There has been some debate about light-touch regulation and what is sufficient, but there needs to be a level playing field. I will not go into details of my particular view on the level of regulation—that would be wrong and I do not think that it applies to this Bill.

Even where operators are subject to appropriate levels of overseas regulation, there are different regulatory standards and approaches. This lack of parity inevitably leads to British consumers receiving different levels of protection depending on which operator they use. I recall discussing case work with another Member of Parliament in the Tea Room. A constituent of his had lost £25,000, by which I mean that their online betting account, which had been very successful and had a balance of more than £25,000, was hacked into, a losing bet was made and that money was lost. They maintain that it was not they who made the bet and I am not sure—I was not privileged to sit in on the relevant debate—whether that online gambler was subject to online regulations.

We wander around and make decisions in the United Kingdom under the security of British law. Although there are exceptions when there are problems, largely we are very well protected as UK citizens when making purchases. It is clear that that is not always the case in the gambling arena and that the 2005 Act has not allowed for it. I welcome the exploration of how we can solve some of those problems, whether through the Offshore Gambling Bill or the draft Gambling (Licensing & Advertising) Bill.

My hon. Friend the Member for Thirsk and Malton referred initially to the remote gambling Bill. Perhaps that was the working title of the Government Bill. My hon. Friend nods in assent, for which I am grateful. I was somewhat confused when preparing for this debate, because I thought there was a third Bill in play, so I am grateful to find that that is not the case. It is difficult enough to deal with two Bills at one time.

Without specific requirements imposed by overseas jurisdictions, operators may not be compelled to report certain information, such as suspicious betting activity, to the Gambling Commission or relevant sports bodies, even when such an activity may involve a British sportsperson and/or British consumers. As such, there is a potential risk of match fixing. The hon. Member for Newcastle-under-Lyme used the term “in-match betting”, I think, which I was not familiar with, but I suspect it covers things such as how many times a bowler will stray away from the wicket during the course of one over. I understand from press reports that that is an increasingly popular sign of betting.