Financial Risk Checks for Gambling

Gerald Jones Excerpts

Monday 26th February 2024 Westminster Hall

[Carolyn Harris (Swansea East) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Neath (Christina Rees) on leading this petition debate.

It is an honour to speak about a topic that I am truly passionate about: reducing gambling harm and protecting the most vulnerable. According to the Gambling Commission, 22.5 million people in this country gamble, which equates to about 44% of the adult population. The overwhelming majority do so without any issue, but not everyone. When it comes to those for whom gambling is an addiction, the Gambling Commission and the Government have a duty to act responsibly and protect them from harm. The publication of the long overdue gambling White Paper last April was therefore widely welcomed by the all-party parliamentary group on gambling related harm, which I chair, as well as by a growing community of organisations, charities, academics and clinicians, all intent on reducing gambling harm, protecting the vulnerable and saving lives.

While concerns remain about the consultation times on the proposals in the White Paper and how long it will subsequently take us to get where we need to be, what is important today is that we lay out why the changes are so critical—specifically, the positive impact that affordability checks will have in reducing harm and saving lives.

In its patterns of play research, the Gambling Commission identified that the most profitable 1% of accounts make up 70.4% of the gross gambling yield, echoing previous research from the University of Liverpool. The gambling industry relies on a hugely disproportionate percentage of its profits coming from those affected by gambling addiction, who are subsequently harmed by unaffordable losses.

Historically, the industry has recognised the need for responsible gambling and ensuring that customers spend within their means. In 2018—that seems a life-time ago—the Senet Group, the industry standards body that was later absorbed into the Betting and Gaming Council, set out three steps that responsible gamblers should adhere to: only gamble what you can afford, set limits and do not chase losses. Suggesting that someone gripped by addiction would be able to make rational decisions on what is affordable is naive. Nobody would even contemplate that for any other addiction. The logical way forward would be to proactively introduce affordability checks on anyone gambling larger sums.

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

I thank my hon. Friend for giving way and congratulate her on the work that she does on this matter. Does she agree that primarily the focus should be on protecting the most vulnerable people in our communities? It is not about being anti-gambling per se. The industry has failed to act, which is why measures are needed to protect the most vulnerable in our communities. It is a small price to pay to protect those people.

[Carolyn Harris]

I totally agree. Anti-gambling is one thing that I am not. I am very fond of visiting the racetrack, as I am the bingo hall. My motive does not come from being anti-gambling. I want to protect vulnerable people.

The logical way forward would be to protect and proactively introduce affordability checks on anyone gambling larger sums. Those would not stop anyone who can afford it betting as much as they choose, but it would stop those who cannot. After carefully considering the evidence, the Government included a consultation on two forms of affordability checks in their proposals in the White Paper. The first would consist of background checks on those spending moderate levels, which would look at financial vulnerability. The proposed limits for the checks to be triggered would be a net loss of £125 within a month or £500 within a year.

The second would be a more enhanced check for those regularly spending higher levels, which might indicate a binge gambling problem. The proposed thresholds for them would be a £1,000 net loss within 24 hours and £2,000 within 90 days—halved for those aged between 18 and 24, given that that group has already been identified as being at greater risk of harm.

Although many have jumped to condemn the checks, it is important to be clear about who would be impacted by them. Recent research conducted by Dr Philip Newall from the University of Bristol and Dr David Zendle from the University of York using open banking data found that the unharmed gamblers have an average monthly spend of £16.41, compared with £208.91 for the highest risk group. That suggests that risk-free gamblers would very rarely trigger any affordability checks. If anything, the figures highlight the fact that the proposed thresholds are far too high and could be set at a lower level. To be clear, the initial background checks of financial vulnerability would be frictionless, using publicly available information such as credit reference data alongside negative indicators such as county court judgments and insolvency checks. The enhanced checks would initially use open banking, with more intrusive checks only being triggered further down the line.

It must also be put into perspective that the enhanced checks would be narrowly targeted to around 3% of the online gambling accounts affected. I can say at this point that it is the online accounts that are key. Online is where the most harm is taking place. It is where people—incredibly vulnerable people—can spend money they just do not have, with no intervention, with no contact with anyone that might notice a problem, and, until last week’s announcement, without limits. Online is causing harm at rates far in excess of any land-based venue, and it is important that we keep that in mind. The APPG’s focus has always been on that, and we have continually called for the likes of horseracing tracks and bingo halls to be considered separately in legislation.

For the 3% of affected online gambling accounts, the vast majority of checks would be frictionless. The Gambling Commission has already advocated for the focus of checks to be on publicly available data. Research suggests that only 0.3% of account holders would be subject to the level of checks that would require them to hand over any additional financial information. However, it seems that the smaller number of enhanced checks that would require consent on the part of the individual are being used as a scaremongering tactic to turn the debate on affordability into a controversial topic. Given that those checks have such a minimal impact, it is difficult to see why they have been contested so vehemently.

We know that the industry has stirred up the controversy by exaggerating the levels of intrusion and suggesting that the checks would drive gamblers to the black market. That loses sight of the whole point of the checks, which is to protect gamblers from harm by ensuring that they are spending within their means. Surely that is in the interest of the industry, which currently has a reputation for allowing those unable to control their gambling to gamble far in excess of what they can afford to spend.