Gambling (Licensing and Advertising) Bill

Ian Lavery Excerpts

Tuesday 5th November 2013 Commons Chamber

[Clive Efford]

I am grateful for the benefit of my hon. Friend’s knowledge of this issue. As he says, the Bill has been a long time coming. The Department has few opportunities to find time on the legislative calendar, and we should not waste this opportunity to explore all the aspects of online gambling that may need to be addressed.

Gambling is enjoyed by more than 56% of the population, and the figure rises to more than 70% if the purchase of lottery tickets is included. Obviously we welcome the move to create a level playing field between operators who have remained onshore and those who have moved offshore, have based themselves offshore, or have recently entered the market and wish to trade with United Kingdom customers.

However, when we consider legislation on matters of this kind, we tread a difficult path between our wish to promote an industry from which people gain a great deal of pleasure and our responsibility to protect the vulnerable. Online gambling is of particular concern because of its very nature. It is possible for vulnerable adults to indulge their addiction without leaving their homes, and hence to suffer alone while running up debts that they cannot hope to pay. It is our duty as legislators to create a safe and well-regulated environment in which people can enjoy the pleasure that they experience from gambling.

The online industry has grown to be worth more than £2 billion a year in a relatively short time, and with that has come a relative increase in the capacity of online gamblers with an addiction to lose money before anyone becomes aware of their problem. Unlike codes of conduct in other jurisdictions, the Bill contains no requirement for licensed operators to monitor the behaviour of their customers and intervene if they think there is a problem.

[Ian Lavery (Wansbeck) (Lab)]

Is there not a potential for illegal sites to crop up all over the internet, left, right and centre, because of the lack of consumer protection in the Bill?

[Clive Efford]

I think that we shall be seeking assurances from the Government on the issue of consumer protection. We shall want to see exactly where the lines will be drawn, and where the Government feel that action should be taken if any form of illegal activity is taking place or there is no protection for vulnerable people.

Online gambling is an important issue of public concern, and we are entitled to know how the Government intend to monitor it. The Bill does not specify a point at which operators would be required to intervene, and to discuss directly with their customers whether there is a problem. Some people have expressed concern about the fact that we have a weaker regulatory framework than that which operates under the regulators in white-listed countries such as Alderney and Gibraltar. There is new technology designed to identify people who may have problems, but there has been no indication from the Government that they intend to use it to protect vulnerable consumers.

--- Later in debate ---

[Clive Efford]

There is a great deal of concern about the details of the Bill. It is easy to understand why it is desirable, and, as I have said, we support it, but its application may present problems. As my hon. Friend says, during its further consideration we need to look into exactly how it will be enforced.

Any company that is paying the licence fee and doing its best to operate according to the highest standards has a right to expect the integrity of the licensing system to be rigorously enforced. There should be a kitemark on the website of every UK licensed operator to indicate clearly to the public that the company is a registered, licensed operator that is overseen by the Gambling Commission. We need to see some evidence that the Government have thought that through. Does the commission have enough scope within its powers to take action to protect consumers? What does it mean when it says that the provision of a kitemark will effectively happen? What form will the kitemark take, will it be easy to recognise, and will it provide links to information and advice from the commission, particularly information about the dangers of using unlicensed sites?

According to the Select Committee’s report, when asked why the Bill did not include measures on enforcement, such as provision for financial blocking or the blocking of specific internet protocol sites, the Government assured the Committee that “most were already available”. What does that mean? Will the commission have the power to request financial blocking? Will it be able to request an internet service provider to block an IP address? We should be expecting matters to move on considerably as a consequence of the Bill. Why should we miss this opportunity to give the commission the full range of powers? Why should we risk being behind the game and having to wait again for time in which to legislate?

It is surprising that the Bill contains no measures to ensure that spread betting is licensed in the same way as other forms of betting. It rightly requires all betting operators, wherever they are based, to comply with Gambling Commission licence condition 15.1, which means that betting operators will have to share irregular betting patterns with the commission and with sports bodies. The licence condition will then be integrated across the industry, with one notable exception. Spread betting is regulated by the Financial Conduct Authority, but it currently has no licence condition 15.1, although compliance with that code is cited—rightly—as one of the main justifications for the Bill. Just today I looked at the Sporting Index site. It offers a range of sporting spread bets, including on shirt supremacy. The specific example I looked at involved the Tonga versus Cook Islands match in the rugby league world cup. For anyone who is unclear, I should explain that shirt supremacy bets are about the difference between the totals of the numbers on the shirts of the try scorers of each team. Unlike traditional bets where people can win or lose a set amount, spread betting allows potentially unlimited losses. If I place a bet on Tonga and it loses on shirt supremacy by 23 points, I will be liable for 23 times my stake money.

Action on spread betting is strongly urged by sports bodies including the English cricket board, the Football Association, the Premier League and the Rugby Football League. They are experts in this field and work together on sports betting. Will the Minister accept an amendment to the Bill to require those who offer spread betting and who advertise to comply with licence condition 15.1, or will she give a commitment to work with her ministerial colleagues at the Treasury, who have responsibility for the FCA, to get it to introduce its own version of licence condition 15.1 as soon as possible?

[Ian Lavery]

Is there any reason whatever why spread betting, which is very complex and is different from any other form of betting, is regulated by the FCA rather than the Gambling Commission, and if so, should that prevent an amendment from being introduced to bring the regulation of all the gambling companies together?

[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.