Financial Risk Checks for Gambling

Debate between George Howarth and Ronnie Cowan

Monday 26th February 2024 Westminster Hall

[Sir George Howarth (in the Chair)]

That is not a point of order, but the hon. Gentleman has managed to get it off his chest.

[Ronnie Cowan]

I absolutely take on board what the hon. Gentleman says. I apologise if I worded that wrongly; I was talking about the sessions that we had at the APPG for gambling-related harm. I appreciate that, as was pointed out earlier, many people have been touched by the curse of gambling addiction.

The point is that it is understandable that so many people have raced to sign e-petition 649894, which calls on the UK Government not to implement the proposed financial risk checks for online gambling. The gambling industry has led and paid for this lobbying and has been hellbent on spreading disinformation that is designed to create uncertainty and raise concerns among people who enjoy the occasional gamble. I understand the punters’ point of view. They feel the fear behind this, because it is a message that they have been fed.

The truth about affordability checks is more complicated, however. I am not a prohibitionist. How many times have I had to say that? I am not trying to ban gambling, but I do want to create a safe environment for it. It may come as a surprise that affordability checks were not the invention of the APPG for gambling-related harm. This is not some mendacious ploy that the group is using; the idea was mooted in 2019 by Tom Watson, when I believe he was still the MP for West Bromwich East. Industry leader Richard Flint, who was at Sky Bet, supported Mr Watson by saying that too many people were losing money that they could not afford online. We need to work together with the industry and the Government to limit that harm.

I think that limits on spend, rather than on stakes, are the right way to go, and those limits should be based on affordability. Richard Flint acknowledged that such limits could lead to a drop in operator revenue. He clarified:

“There will be some online firms in the short term that…make less money as a consequence”.

Getting straight to the point, he added:

“but then…that spend shouldn’t happen anyway.”

That is a point that the Jockey Club should have considered when its chief executive officer launched this petition. It has cited a potential loss of £5 million on the horseracing betting levy, which according to its own board’s annual report was worth £100 million. But what price a life? What price the number of people who have been driven to complete suicide?

I return to the need for affordability checks. A year later, at the 2020 Lords Committee, the UK’s biggest operators—the chief executive officers of the big five—spoke enthusiastically about the need for affordability checks as a key mechanism to reduce harm. An industry CEO said that

“the way to go is affordability and to ensure that, when people come to our sites, they can only afford to lose or bet an amount that, quite frankly, they can afford and were comfortable with.”

So what is new? What is new is that, since the White Paper, the Government and the Gambling Commission have proposed threshold figures for the checks. Affordability is no longer an abstract concept; it is tied to precise thresholds.

The industry does not like the fact that the White Paper has called its bluff, so it is kicking up a storm. It is clear that those who might be categorised as the pro-gambling lobby and those such as myself, who could be described as the safer gambling lobby, agree that if we are to create a safe environment, affordability is an area that needs tightening up. I wonder whether that was explained to everyone who signed the petition.

The petition states:

“The proposed checks could see bettors having to prove they can afford their hobby if they sustain losses as low as £1.37 per day.”

That figure has been scoffed at a few times in this debate, but it is £500 a year. It may mean nothing to us as MPs on 86 grand a year, but that £500 a year could be the difference for some poor people who are trying to put money in the meter or food on the table. What we are trying to do is to stop them getting to the point at which they lose that money in the first place. Please do not belittle that. If the checks say people can afford it, they can afford it. We are trying to help those at risk. Surely all gamblers can see that, because they understand risk.

The UK Government have already said that

“the proposed checks are only on the very highest spending online customers”.

The Gambling Commission estimates that

“approximately 20% of customer accounts will meet the threshold required for a financial vulnerability check”.

The next line of the petition is about the black market. The Gambling Commission has already reported to us that the size of the online black market has been overstated by the industry and must be kept in proportion. It follows that if we want to prevent the growth of the black market, the solution is regulation to prevent harm that leads to addiction. It will eliminate demand for a black market, not cause it. Harm prevention will mean fewer addicts, fewer self-exclusions and fewer attempts to circumvent the regulated market in the first place.

The key is in the last line of the petition:

“We are concerned there will also be a negative impact on British horseracing’s finances due to a reduction in betting turnover and resulting fall in Levy yield.”

That is a Trojan horse if ever I have seen one.