Fixed Odds Betting Terminals

Debate between Jim Shannon and David Nuttall

Tuesday 26th April 2016 Westminster Hall

[Jim Shannon]

The hon. Lady is absolutely right. There is evidence of that, and I will give examples shortly. I am sure others will, too. Whenever there is misuse and a dirty laundering system, that has to be addressed.

More than half the UK population plays the national lottery, and they lost £7.2 billion last year. That compares with the less than 4% of the population who play FOBTs, who lost £1.6 billion. The unemployed are twice as likely to play the machines as someone in work. The demographic that bookmakers target with FOBTs are also the least likely to have access to bank accounts, debit cards and credit, and thus have restricted access to remote gambling sites. Bookmakers and the gambling associations are clearly targeting those who are vulnerable to start with, but who are perhaps in some difficulties with money, too.

Bookmakers are using the cover of account-based play, which was instigated by the Government, to provide cash top-up cards that facilitate access to their online sites; the hon. Member for Alyn and Deeside (Mark Tami) mentioned such sites in his intervention. The gambling lobby says that we need more evidence, but it is clear that the evidence is out there. It is comprehensive, and it consistently lines up on the right side of the argument: we need to protect the vulnerable and enact regulation. I hope that, arising from this debate, we will have a chance to enact regulation that will filter out from this House to the whole United Kingdom, including Scotland and Northern Ireland.

FOBTs are useful for money laundering, as the hon. Member for North Down (Lady Hermon) said. The machines have a few filters, but the money launderers know them and work within the limits. Supervision is low and closed circuit television is poor, so it is a safe way to money launder. Low-level drug dealers clean cash in case they are pulled over by the police. Generally, they are younger lads with smaller amounts of cash. In one West Yorkshire case, the police uncovered £18,000 of FOBT tickets being held by one drug dealer. The machines are used for underworld criminal activities by those whose thoughts are nothing but criminal and outside the law.

Using the proceeds of crime to fund a gambling addiction, or cleaning the cash obtained from a crime, is common. The most common use of FOBTs since they landed on the high street is for getting rid of dyed notes obtained during robberies on armoured vans, cash machines and so on. The notes are sprayed with an irremovable dye that is an immediate alert as to their origins. They are therefore not exchangeable. However, they are still identified as legitimate currency by note accepters on gaming machines. The machine with the highest cash transaction capability and ticket pay-out facility would be the preferred option for laundering, and that is the fixed odds betting terminal.

The bookies and the suppliers adapted the software controlling ticket pay-outs to identify where less than 40% of the cash put in is wagered—that is where people either put cash in a FOBT and then print a ticket straight out, or stake a minimal amount of the total cash inserted—so that staff are alerted when people cash those tickets. Launderers have adapted to that by using minimal-risk wagering. The bookies are now making it easier for criminals by allowing them to put cash winnings on to a pre-paid credit card. They are not just hiding the cash, but making it electronic. Never ever think that the criminals and evildoers have not got ideas as to how to get around the law, how to work it to their advantage and how to launder some of that dirty money.

Following on from weaknesses in money laundering policies at Ladbrokes in 2013, Paddy Power was recently the subject of a high-profile money laundering investigation. That investigation resulted in the Gambling Commission reprimanding Paddy Power and imposing a £280,000 penalty; there were also serious failures in social responsibility. The Government are considering including betting shops in the European Union’s fourth money laundering directive. That would require the identification of customers transacting over £1,500 in a 24-hour period. The bookmakers are lobbying to be excluded from that, despite recommendations that they should be included first being made in 2001 in the Budd report.

The lack of FOBT regulation is a huge issue that cannot be ignored, and I am keen to ensure that the debate highlights it. Gambling the world over has evolved into a consistent structure, with the hardest gambling reserved to highly regulated venues such as casinos, where customers go with the knowledge and expectation of experiencing a harder gambling environment. Casinos have very high levels of player supervision and therefore protection. Players tend to be occasional visitors, and the casinos tend to be viewed as a destination leisure venue with more than just gambling on offer.

The Gambling Act 1968 put in place a regulatory permit for gambling. This set out that high-stakes gambling should take place in highly regulated and highly supervised environments such as casinos, and low-supervision environments should have lower stakes and require lower levels of supervision. Those principles were reaffirmed in the Gambling Act 2005 by Sir Alan Budd. Other countries follow this model. The UK is alone in offering very-high-stakes gambling of £100 on Britain’s high streets in the low-supervision, easily accessible environment of a bookmaker. Little or no monitoring and little or no supervision means vulnerable people can be taken advantage of. The regulation of fixed odds betting terminals is out of kilter with the principles of gambling regulation. They offer very-high-stakes gambling in an unregulated environment.

The only material restriction is that bookmakers are allowed four fixed odds betting terminal machines per shop. The result of this is that bookmakers have opened multiple betting shop branches in close proximity. That is a concern. When we look at the streets of the United Kingdom of Great Britain and Northern Ireland, we sometimes wonder whether we are in a gambler’s paradise—if there is such a place—because betting shops seem to be prevalent everywhere.

The bookmaker Paddy Power has focused its branches in areas with high immigrant populations. We have seen a 43% increase nationally in the number of betting shops located in town centres.

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

On the number of machines allowed in each shop, is the hon. Gentleman arguing for fewer in each shop, or for more in a smaller number of shops?

[Jim Shannon]

I seek a lesser number in the shops, and fewer shops as well. We agree on many things, but we do not agree on this topic. The opinion that I express will win: ComRes did a survey of MPs seeking their opinion, and of the MPs who responded, seven out of 10 want FOBTs regulated. They want a reduction in the number of machines and shops. It was quite clear. If a private Member’s Bill is brought before the House—some in this Chamber are of a mind to do that—we can tackle the problem.

European Union (Croatian Accession and Irish Protocol) Bill

Debate between Jim Shannon and David Nuttall

Tuesday 27th November 2012 Commons Chamber

[Mr Nuttall]

I am sure you would not wish me to be drawn off the subject of Croatia, Madam Deputy Speaker. My hon. Friend may well be right about that, although none of my constituents have expressed to me a desire to go to look for work in Croatia. They may all have a secret desire to do that, but I am not aware of a great number of my constituents seeking that opportunity at the moment.

We know what happened when Romania and Bulgaria joined the European Union in 2007. According to the Home Office’s impact assessment, the number of national insurance numbers issued to Bulgarians and Romanians increased by 560% and 710% respectively two years after accession. We do not have the precise figures, but it is likely that a number of those will have been Romanians and Bulgarians working in the UK under the seasonal agricultural worker scheme and the sector-based scheme, which the current Government have stated will not be open to Croatians.

Moving for work is likely to be the reason why most Croatians will want to emigrate to the UK, and this amendment focuses on worker immigration. Let us be clear that after the seven-year period has elapsed the UK will have to apply full EU law on the free movement of workers. So a Croatian could move to the UK and compete with a British national for any job, and a Croatian so employed would have the right to reside in the UK. Of course, it is not purely the number of Croatians seeking work that would boost the number of people living within our shores, because the worker could bring their spouse, their children under the age of 21, together with any other dependent children, and their dependent parents and grandparents. While all those parents have the right to reside in the UK under EU law, they would all be entitled to equal treatment with British citizens, unless EU law stated otherwise. Of course that would include access to state welfare.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Gentleman agree—perhaps he does not—that Croatia has the potential to be a tourist destination similar to Spain 20 or 30 years ago? If so, there is every possibility that more people will want to go from the United Kingdom to Croatia because of job opportunities and because the countries around it have stable economies.

[Mr Nuttall]

The hon. Gentleman may well be right that lots of UK nationals will want to visit Croatia. All the evidence suggests that its desirability as a destination is increasing for UK holidaymakers, but that strays from my concern about the need to protect workers in this country. Once full EU law applies, a Croatian national, together with their family members, could move to and stay in the UK if they were looking for work. The Government already grant EU immigrants in the UK looking for work access to income-related jobseeker’s allowance. If a Croatian had been employed in the UK for 12 months continuously but had then lost their job, they would retain their right to reside in the UK indefinitely, provided they registered as a jobseeker. A Croatian would acquire the same right to reside if, having been in work, they then decided to take up vocational training. It would be fair to ask how many Croatians are likely to arrive on this basis. Unfortunately, even the Home Office’s impact assessment states that it has no “robust estimates” of the likely number of Croatian immigrants after accession, so no realistic estimate can be made—in other words, we simply do not know.

It has been suggested, including by the hon. Member for Moray (Angus Robertson), that the evidence points to the fact that most Croatian migrant workers will be attracted to Germany. However, as the Home Office impact assessment points out, the most widely spoken second language in Croatia is not German, but English.