Gambling (Licensing and Advertising) Bill

Helen Grant Excerpts

Tuesday 5th November 2013 Commons Chamber

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mrs Helen Grant)]

I beg to move, That the Bill be now read a Second time.

British remote gambling regulation is currently conducted on a point-of-supply basis. Only operators with at least one piece of their remote gambling equipment in Britain require a Gambling Commission licence and are subject to the required standards. This means that overseas operators offering gambling services to consumers in Britain are currently regulated not by the commission, but by the regulatory regimes in the countries in which they are based. In consequence, there are different regulatory standards and UK consumers might experience varying levels of protection, depending on the operator they are dealing with.

The Gambling Commission estimates that about 85% of remote gambling activity by UK consumers takes place with operators that the commission does not regulate. The Bill aims to regulate remote gambling on a point-of-consumption basis. With this change, all operators selling into the UK market, whether based in Britain or abroad, will be required to hold a UK Gambling Commission licence, making them subject to robust and consistent regulation, increasing protection for UK consumers, supporting action against illegal activity and establishing fairer competition for British-based operators.

[Philip Davies (Shipley) (Con)]

The Minister says that this is about regulation and stopping illegal activity. What proportion of people is currently estimated to bet illegally in the UK, and what will that estimate be after the Bill has been introduced?

[Mrs Grant]

At the end of the day, this is about establishing a level playing field. I hope that my hon. Friend will bear with me for a little while, because I shall go into that matter in greater detail.

The Bill aims to regulate remote gambling at the point of consumption. Under the new regime, overseas-based operators will be subject to the provisions of the Gambling Act 2005, its regulations and the Gambling Commission’s social responsibility and technical standards requirements. This will mean, among other things, that all licensed operators will be required to contribute to research, education and treatment in relation to British problem gambling, and to comply with licence conditions that protect children and vulnerable people.

[Mr Gerry Sutcliffe (Bradford South) (Lab)]

Just to help the hon. Member for Shipley (Philip Davies), may I point out that this is an important part of the licensing objectives of the Gambling Act, and that the Bill is consistent with those objectives?

[Mrs Grant]

The hon. Gentleman makes a good point.

The Bill will also level the playing field for the advertising of remote gambling. At present, operators based in the European economic area or in a country on the “white list” can advertise remote gambling to consumers in Great Britain. The 2005 Act allows the Secretary of State to designate non-EEA jurisdictions that have strong regulatory systems comparable to Britain, and to give them permission to advertise remote gambling services in Britain. Those jurisdictions form what is informally known as the “white list”, and they include Antigua and Barbuda, the Isle of Man, the States of Alderney and Tasmania.

The Bill will repeal section 331 of the 2005 Act, removing the offence of advertising foreign gambling and, consequently, the distinction between EEA and “white list” countries, and non-EAA jurisdictions. Instead, all operators who hold Gambling Commission remote licences will be able to advertise to British consumers, regardless of where the operators are based. As now, gambling operators who wish to advertise in Britain will need to comply with the advertising codes of practice. Overseas operators that are required to hold but fail to obtain a Gambling Commission licence will be committing the offence of providing facilities for gambling or the separate offence of advertising unlawful gambling. The Gambling Commission is empowered to pursue and bring appropriate action against the operator concerned.

The repeal of section 331 will also have an impact on Northern Ireland, where gambling is a devolved matter. New provisions creating an offence of unlicensed advertising of remote gambling have been included in the Bill to ensure that Northern Ireland continues to have the same protections for the advertising of remote gambling as we have in Great Britain. The Northern Ireland Assembly formally agreed these changes through a legislative consent motion on 17 June. Gambling is a reserved matter with regard to the devolved Administrations in Scotland and Wales. Scotland, England and Wales will all receive the same protection in relation to the advertising and regulation of remote gambling.

[Mr Nigel Dodds (Belfast North) (DUP)]

The Minister has kindly outlined the situation in Northern Ireland. Has she had discussions with the relevant Minister in the Northern Ireland Executive about the regulation of remote gambling in Northern Ireland? I know this is a devolved matter, but did the issue arise in the discussions on the legislative consent motion and, if so, what was the outcome?

[Mrs Grant]

I have not personally had any such discussions, but I am sure officials will have done so, and I know that the Gambling Commission and others will continue to liaise on this matter.

Clause 1(4) of the Bill confers a power on the Secretary of State to make provision, by statutory instrument, about

“the making, consideration and determination of advance applications”

for a remote operating licence. This will allow robust interim measures to be set up, permitting a smooth transition between the current regulatory regime on remote gambling and the proposed new regime. Similar powers were used as part of the 2005 Act.

I would like to thank the Culture, Media and Sport Committee for its thoughtful and thorough pre-legislative scrutiny of this small but important Bill, and for its support for the move to regulate remote gambling on a point-of-consumption basis.

[Guy Opperman (Hexham) (Con)]

I support the Bill, and I agree with its aim to ensure that there is a level playing field. Will my hon. Friend tell the House what financial benefits the Bill will bring to the Government and the taxpayer?

[Mrs Grant]

My hon. Friend makes a good point about the level playing field; that is certainly what the Bill sets out to achieve. However, this is about consumer protection, which is an important feature of the legislation. Taxation matters are ones for the Chancellor of the Exchequer.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Regrettably, a number of my friends have got into huge difficulties through gambling on smartphones, because the situation is so liberal. I appreciate that companies operating remote gambling will be brought onshore and regulated at UK level, but how will the Bill prevent individuals from getting into thousands of pounds-worth of debt and losing their homes, families and livelihoods?

[Mrs Grant]

This is exactly why we are seeking to regulate remote gambling. The process is quite circular in many ways. Unfortunately, according to the Gambling Commission, 85% of the remote gambling that takes place in Britain is unregulated. Many people are therefore not protected. The Bill will enable them to enjoy a more consistent and robust level of protection. That is exactly what the Bill is about.

[Mr John Leech (Manchester, Withington) (LD)]

The Bill will also ensure that remote gambling organisations are paying something towards dealing with the outcomes of problem gambling.

[Mrs Grant]

Absolutely. It is important that they should pay their fair share, just as the onshore companies offering remote gambling already do. Again, this is about achieving a level playing field.

[Mr Robert Syms (Poole) (Con)]

Regarding the level playing field for domestically based businesses, the Minister will know that casinos pay tax and employ local people, yet they cannot undertake remote gambling from their premises. Will the Government look at what the Culture, Media and Sport Committee has said on this matter, and consider whether there should be changes to allow them to do so?

[Mrs Grant]

We will look at all the relevant information, and I am certainly happy to take another good look at what the Committee has said. The important thing for casinos is that they maintain a proper balance between table play and machine play, because we do not want them to become machine sheds, as some have suggested they might. I can confirm today that I am happy generally to review the issue of gaming machine provision in casinos.

[Mr David Nuttall (Bury North) (Con)]

Will the Minister tell us how the measures in the Bill are to be enforced?

[Mrs Grant]

We will go into this matter in considerable detail in Committee. Enforcement will be a matter for the Gambling Commission, which has many tools at its disposal to ensure that everyone is properly regulated and that the rules are complied with.

[Mr Laurence Robertson (Tewkesbury) (Con)]

If a company set up in, say, China or America, and advertised only through the internet, would it be covered by the scope of the Bill? The Minister will correct me if I am wrong, but I do not think that it would.

[Mrs Grant]

Territorial restrictions have been removed, but if a company is advertising here and its facility is being used here—or if it ought to know that that is so—it will need a Gambling Commission licence and it will be bound by the regulations.

[Several hon. Members]

rose—

[Mrs Grant]

I must make some progress now.

I pay tribute to my hon. Friend the Member for Weston-super-Mare (John Penrose) for his sterling work on developing the Bill and getting it to where it is now. It is fitting that he should be sitting near to me, if not quite next to me, on the Front Bench today. I also want to pay tribute to the previous Administration’s review of the remote gambling regulatory framework, and I am pleased that the Bill has the support of hon. Members on both sides of the House.

The Bill is largely a prudential measure to prevent what is currently a risk from becoming a major issue in future, especially as accessing online gambling products is becoming much easier—as has already been mentioned this afternoon—with the growth of smartphones and other portable devices.

According to the latest Gambling Commission statistics, remote gambling is very much on the increase—year after year, all year round—and increased by 10% in the last year alone. We must therefore take this opportunity to ensure that the Gambling Commission has the power to intervene if problems occur now or at some point in the future. The Bill will do just that, providing public protection for consumers based in Great Britain by tightening current legislation to ensure that all remote gambling, whether provided by UK or overseas suppliers, is a licensed activity subject to Gambling Commission standards and controls. I commend the Bill to the House.

--- Later in debate ---

[Mrs Grant]

With the leave of the House, I thank all Members who have taken part in the debate. I shall try to remember everything that has been asked and to deal with as many of the questions as possible. I am glad to see that the Bill has support on both sides of the House and that most hon. Members are in favour of bringing in robust and consistent regulation of remote gambling.

Through the Bill, remote gambling will be regulated at the point of consumption. That will mean that all operators selling or advertising in the British market, whether from here or abroad, will be required to hold a Gambling Commission licence. The Bill will increase protection for Britain-based consumers and will level the regulatory playing field with all remote operators, allowing British-based operators to compete on an equal footing.

The shadow Minister, the hon. Member for Eltham (Clive Efford), raised a great number of issues in his opening speech, including the levy, fixed odds betting terminals, enforcement and compliance. I will touch on all those issues in my speech, subject to the time available. I can confirm that we continue to engage with and consult the industry, as does the Gambling Commission, to ensure that issues of detail are dealt with very carefully. Of course, in Committee we will have an evidence sitting followed by a scrutiny sitting, which should deal with any clarification that he needs.

We will not accept an amendment on spread betting. The current arrangements work well, with the FCA and the Gambling Commission working closely together. They are also working with operators that offer spread betting to ensure that suspicious betting behaviour is reported to regulators and that licence code 15.1 is adhered to.

The hon. Member for Bradford South (Mr Sutcliffe), the shadow Minister, my hon. Friends the Members for Shipley (Philip Davies) and for Tewkesbury (Mr Robertson) and many other hon. Members asked about horse race betting levy. I understand why the issue has been raised, but the Bill cannot be the vehicle for other measures that have been neither fully considered nor consulted on. I also want to consider the question of levy reform more broadly as there might be other options that should be considered and there should be proper consultation before any measures are put in place. I will consult on any options that are sustainable, enforceable and legally sound.

My hon. Friend the Member for Maldon (Mr Whittingdale), the hon. Member for Bradford South, my hon. Friend the Member for Poole (Mr Syms), the hon. Member for Manchester, Withington (Mr Leech) and my hon. Friend the Member for Rochford and Southend East (James Duddridge) all raised issues about online gambling, or the lack of it, in casinos. The suggested change in the Government’s position that has been mooted would undermine existing regulatory controls on gaming machine provisions. It would also allow casinos to offer an unlimited number of gaming machines with unlimited stakes and prizes within their premises. The Government see no reason why such machines should be offered on an unlimited basis in casinos, when all other categories of gaming machine remain subject to control. That would risk fundamentally changing the character of casinos and, very sadly, turning them into something that looks like a machine shed. There may be a case to consider greater flexibility in casino regulation, as I mentioned in my opening speech, but that would need to be subject to proper impact assessment and consultation, and the Bill is not, in my opinion, the appropriate vehicle at this stage to change casino policy.

The subject of problem gambling was rightly raised by numerous Members today, including the hon. Member for Bradford South, my hon. Friend the Member for Rochford and Southend East and the hon. Member for Strangford (Jim Shannon). I would say to them that despite the relatively low rates of problem gambling, there are obviously very high participation rates for gambling, at around 73%. The Gambling Commission 2010 prevalence survey showed that fewer than 1% of the adult population are problem gamblers, but the Government acknowledge that while only a very small fraction of gamblers develop problems, that can of course result in significant problems, not just for those people but for those close to them. That is why protecting children and vulnerable adults from harm is a key component of our remote gambling policy. The Bill would require operators to have effective policies and procedures in place in relation to socially responsible gambling, and to contribute to research, education and treatment in relation to problem gambling, as part of complying with the Gambling Commission licence conditions.

[Lady Hermon]

Will the Minister give way?

[Mrs Grant]

I am afraid I will not, because I have very limited time and still have an awful lot to say.

The level of taxation was discussed by many hon. Members, including my hon. Friends the Members for Maldon and for Shipley, the hon. Members for Newcastle-under-Lyme (Paul Farrelly) and for Islwyn (Chris Evans) and my hon. Friend the Member for Poole, to name but a few. The remote gambling Bill and the Treasury’s remote gambling taxation reforms are, while complementary, completely independent of each other and we absolutely reject the assertion that the licensing reforms are being pursued in order to generate tax income. The Bill includes, as Members know, no provision for the increasing of tax. Reform is entirely justified on its own merits for public participation and public protection reasons, regardless of the state of any tax plans.

On black and grey markets, I apologise to my hon. Friend the Member for Shipley if I did not answer his question fully earlier, but I can now say that I am confident that the Gambling Commission has the necessary tools to enforce the licence requirements and to deter illegality and black-market activity. It is not meaningful to try to speculate about the size of the black market, which by its nature is unknown. Whatever the size of any black market, the Gambling Commission will make risk-based decisions on when and where it may need to intervene.

Finally, on the extent of the tax, it will be no surprise to learn that I am telling the House that tax is a matter for the Treasury, which I know continually keeps these matters well under review.

On enforcement and compliance, I assure the shadow Minister and all the hon. Members who raised the issue that where illegal operators attempt to target British-based consumers, the Government and the Gambling Commission are confident that action can be taken through existing enforcement mechanisms to disrupt and stop unlawful gambling. Such action would include action on illegal advertising, player education and, ultimately and if necessary, prosecution. There will always, of course, be grey areas where judgments of risk and proportionality will need to be made in each individual case.

The hon. Member for Bradford South, the former Sports Minister, who knows a considerable amount about these matters, rightly mentioned sports betting integrity and cheating. Britain is proud to lead the way in approaches to sports betting and integrity. However, we do not believe that there is a need at this stage to introduce in this country a new criminal offence of match-fixing. We believe that existing law and sports rules are sufficient, but we will keep the matter carefully under review.

My hon. Friend the Member for Shipley asked whether software producers need to be licensed. The Gambling Commission is working with the industry on the issue. In the meantime overseas software suppliers will be able to continue to supply British licensees.

I thank the hon. Member for Islwyn for his kind comments and reassure him that I do sports other than tennis. He asked me for two assurances—first, that the Gambling Commission will take action and has capacity to stop illegal betting effectively, and secondly, that the tax rate is not set too high. On the first issue, the commission will fully implement its regulatory responsibilities in line with the requirements of the Bill, and I will continue to discuss with the commission its needs to ensure that it has the necessary capacity, resources and expertise. On the second issue, as I have already said, tax rates are a matter for the Treasury and I will not venture this afternoon on to its turf.

The hon. Member for Strangford queried whether the Bill would be enforced by ISP blocking or something similar. There is mixed evidence on the effectiveness of ISP blocking, but we do not rule anything out.

Finally, on the matter of fixed-odds betting terminals, which was mentioned by several hon. Members today, although we have decided not to reduce stakes and prizes on these machines at this stage, it is a priority for the Government that we develop a much better understanding of the impact of these machines, and further work is already under way. The research being conducted by the Responsible Gambling Trust into category B machines is very important and it would be wrong to pre-empt this work. Furthermore, we believe that the Bill is not the right legislative vehicle to deal with such difficult issues.

In conclusion, this is a small but important Bill that will increase protection for remote gambling consumers based in Britain. It is not empire-building by the Gambling Commission, as was suggested by my hon. Friend the Member for Shipley. It is about protection and proper oversight and it will ensure that all remote gambling, wherever the operator is based, is licensed by the Gambling Commission and subject to that body’s robust and consistent standards of controls. I look forward to debating these issues in Committee, and I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

gambling (licensing and advertising) bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Gambling (Licensing and Advertising) Bill:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall be completed on the first day on which it shall meet.

(3) The Public Bill Committee shall have leave to sit twice on that day.

Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of those proceedings.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on Consideration.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Karen Bradley.)

Question agreed to.

Gambling (licensing and advertising) bill (ways and means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Gambling (Licensing and Advertising) Bill, it is expedient to authorise an extension of the cases in which:

(1) a penalty may be imposed under section 121 of the Gambling Act 2005, and

(2) a levy may be imposed under section 123 of that Act.—(Karen Bradley.)

Question agreed to.