Online Gambling

Lord Ashton of Hyde Excerpts

Thursday 23rd November 2017 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)]

My Lords, I am grateful to all noble Lords who have taken part in this informed and very interesting, although somewhat alarming, debate. I particularly thank the noble Lord, Lord Browne, for securing it and for sharing his thoughts with me beforehand. I am also pleased that the A-team on the Data Protection Bill, which has already been mentioned by the noble Lord, Lord Griffiths, is in place.

The issue here—in a sense, the dilemma—is that for millions of people gambling is an enjoyable leisure activity with no harmful consequences. Sixty-three per cent of adults gambled in one form or another in the last year. However, the Gambling Act makes it clear that gambling is subject to the licensing objectives set out by the Gambling Commission, including the protection of young and vulnerable people from gambling-related harm. Headline rates of problem gambling have remained relatively low over time, at below 1% of the adult population. As noble Lords have mentioned, the latest statistics found that 0.8% of the adult population—some 430,000 people—were classified as problem gamblers in 2015, but a further 2 million people were identified as being at risk of problem gambling.

I do of course realise, and the noble Lord, Lord Morrow, reminded us, that, in addition to those headline numbers, there may be severe consequences for families. I generally agree with the many statistics that have been mentioned in this debate—too many to come back on. The basic fact is that online gambling is big and growing, and 5% of those online gamblers are problem gamblers. The Government are clear that more must be done to protect people from harm, and on 31 October we published a consultation on proposals for changes to gaming machines and social responsibility measures across the gambling industry. The consultation sets out a package of measures to improve player protection for the online sector, including strengthening existing protections and outlining further measures relating to gambling advertising to minimise the risk to the most vulnerable.

Although online gambling is widely accessible and available 24 hours a day, it also has unique characteristics that provide opportunities to protect players. For example, all online gambling is account based, unlike land-based gambling where customers can often gamble anonymously. That means that online operators can know exactly who their customers are, what they are spending their money on and their patterns of gambling behaviour. We have seen some progress in this area with a number of operators adopting the use of behavioural analytics and algorithms to detect problem gambling on their websites. Recent research has found—this might address some of the identity issues raised by the noble Lord, Lord Trevethin and Oaksey—that operators are able to detect problem gambling using the data they collect from customers today.

While that is encouraging, the Government have made it clear that industry must act on the findings of the research to date and trial a range of harm-minimisation measures to strengthen player protection. We want to see the industry evaluate the action it takes and share best practice. In addition, the industry must continue to engage in GambleAware’s research and commit to implement the findings of this ongoing work. The next phase of the research aims to provide a best-practice model that can be used by online gambling companies in their responsible gambling operations, including recommended interventions which have been evaluated for their effectiveness to reduce the risk of harm.

In the light of those issues, what is the Gambling Commission doing? The Gambling Commission is monitoring this area closely and is encouraging operators to increase action to identify harmful play, design and pilot better interventions and put in place measures that work. The commission has already concluded that it will need to consult on changes to the licence conditions and codes of practice next year in order to raise standards in this area. The commission will also issue guidance to the industry setting out expectations in relation to operator interactions with customers.

I turn now to the issue of self-exclusion—an important tool for those who recognise that they have a problem with gambling and a vital means of protecting consumers from harm. All operators must offer self-exclusion to customers on their request, and more than 800,000 online self-exclusions were reported last year. However, as the average player has more than one account, that does not necessarily translate to 800,000 people. The Government understand just how important it is for recovering problem gamblers to be able to self-exclude from all licensed online gambling platforms in one step. A new multi-operator self-exclusion scheme for online gambling, called GAMSTOP, will be launched in spring next year. A range of stakeholders, including GambleAware and GamCare, have provided advice during development of the scheme. I am aware that the proposals for such a scheme were debated by noble Lords during the passage of the Gambling (Licensing and Advertising) Act 2014 and I pay tribute to the noble Lord, Lord Browne, who was a vocal champion of such a scheme back then and has remained a leading advocate for it since.

The new scheme will allow customers to self-exclude from all online licensed operators in a single step. The website will also set out other measures that are available to help people manage their gambling and will signpost specialist advice and support services. It will significantly strengthen the self-exclusion arrangements available for online gamblers and provide improved protection for those customers who have previously self-excluded from individual gambling websites, only to open an account with other operators. As the noble Lord, Lord Browne, asked, we want to see the industry promote awareness of the scheme and do more to increase its take-up along with other responsible gambling tools such as time-outs and deposit limits which are available. These are in the consultation that we have just published.

The noble Lord, Lord Griffiths, asked why this has taken so long. I share the noble Lord’s frustration, and I would have liked to have seen the scheme in operation sooner. Indeed, we called for the gambling consultation and review for implementation of the scheme to be completed at the earliest opportunity. The truth of the matter is that there have been a number of complex issues to consider which I will not bore noble Lords with, but it is absolutely vital that when GAMSTOP is launched, it actually meets its objectives and can ensure that customers who register with it are prevented from gambling online with licensed operators. It is an industry scheme, but the Gambling Commission is working closely with the industry on its development to ensure that it is robust and effective, again a point made by the noble Lord, Lord Browne. Certain technical barriers have had to be overcome, not least in relation to data protection. The system must be capable of dealing with millions of checks being made by operators every day in real time. It must provide a service to consumers that is effective and easy to use, and therefore while the delay is frustrating, it is important that it is robust and will work across all licensed operators. However—in reply to the noble Lord, Lord Griffiths—we expect it to be up and running by March 2018.

While self-exclusion is a useful tool, it is often the case that an individual who chooses to self-exclude may do so as the result of having suffered harm in relation to their gambling. The Government are clear that operators must act quickly to improve approaches to identifying problem gambling on their platforms and interacting with their customers to protect vulnerable people before serious harm occurs.

I turn now to the points raised by my noble friend Lord Chadlington. Where gambling operators have used children’s characters to front games, the Gambling Commission and the Advertising Standards Authority have written to them to make it crystal clear that they are in breach of advertising rules that prohibit gambling marketing material aimed at children. My noble friend also raised the question of independent research and transparency, as did the noble Lord, Lord Foster. We agree that this is an essential tool in building an evidence base and enhancing our understanding of gambling-related harm. GambleAware is an independent charity with an independent chair, and the majority of its board members are from outside the betting industry. We want to see the industry continue to fund GambleAware and others in this important work, as they do research, education and treatment for problem gamblers. We welcome the additional funding of £5 million to £7 million a year for the next two years that the industry is to invest to support a responsible gambling advertising campaign. This is a large sum in advertising terms which compares well with major national health campaigns.

If the current arrangements fall short, the Government will consider alternative options, including the introduction of a mandatory levy. But it is worth reminding ourselves that the current funding target to meet the needs of research, education and treatment, set by the Responsible Gambling Strategy Board, has been suggested to be around £10 million by 2018-19. This target is being actively pursued by GambleAware, but as and when funding targets change, the voluntary system must gear up to meet that need. I repeat: the consultation made it clear that the Government will consider alternative options, including a mandatory levy, if current arrangements fall short.

Let me address some of the points made by noble Lords in their speeches. As far as the two-tiered approach to self-exclusion is concerned—mentioned by, among others, the noble Lords, Lord Browne and Lord Alton, and the noble Baroness, Lady Howe—we want to see the industry build on the existing protections. Some consumers may wish to self-exclude from certain individual products and not the entire online sector, but we want to encourage self-exclusion. Websites are required to set out clearly the gambling management tools available, including self-exclusion. The important thing to remember is that self-exclusion is only part of the problem. Lots of problem gamblers do not self-exclude, so we must deal with the harms caused to others with perhaps worse problems than those who are prepared and self-aware enough to self-exclude.

The noble Lord, Lord Foster, mentioned FOBTs in the consultation, as did others. I can confirm that we are considering potentially going down to as low as £2 for the stake, and are consulting on that specific issue. We have asked the Gambling Commission for more information about how better tracking and monitoring of play on FOBTs can help with interventions to protect players and whether spin speeds on games such as roulette should be looked at.

The noble Lord, Lord Griffiths, asked about how the consultation is going and whether clarity is emerging. The consultation is ongoing and clarity may well emerge from it but we will not be certain until January next year. He also asked when we will produce our results, and he will not be surprised to hear that we will do that in due course. The noble Lord, Lord Morrow, talked about the problem of gambling in Northern Ireland. It is a bit difficult for me to address the issue here as it is a devolved matter for Northern Ireland.

The noble Baroness, Lady Benjamin, talked about children and what we have done to protect them online, and, more importantly, the issue of what we might do to protect them online and whether we will legislate. Under the Gambling Act, the Gambling Commission has broad powers to place new licensing requirements on operators and respond to the pace of change in the online gambling market. In addition, the Gambling Commission has powers to suspend or revoke a licence, impose financial penalties or take criminal action where there is a failure to prevent underage gambling. However, we are not complacent, which is why the Gambling Commission and the Responsible Gambling Strategy Board are currently examining the relationship between children and gambling to determine whether further action is necessary. We expect the gambling industry to play its part in protecting children online, in line with the Government’s internet safety strategy. We will keep the issue firmly under review, acting accordingly where necessary. As for her questions on age verification, children and free games, all licensed operators must have robust policies to prevent underage gambling. Where age verification is not satisfactorily completed within 72 hours, the operator must return any money that the customer has paid into their account and not pay out any winnings.

The noble Lords, Lord Trevethin and Oaksey and Lord Foster of Bath, asked why operators cannot exclude for life. Data protection rules regarding data retention prevent GAMSTOP from technically offering an indefinite self-exclusion option. However, procedures will be in place to notify self-excluders in these circumstances and give them the opportunity to renew their self-exclusions. The noble Lords asked what would happen if there was non-compliance of operators. It will be a licence condition that all operators sign up to GAMSTOP and the normal penalties will therefore apply, including losing their licence.

The noble Lord, Lord Wigley, mentioned the academic paper on gambling-related harm. He was right to point out that harm goes beyond that of the problem gambler—a point which I made at the beginning and was made also in our consultation. In that regard, I welcome the work that the Gambling Commission, the Responsible Gambling Strategy Board and GambleAware are doing better to understand and measure the extent of this issue, which we agree is very important.

My noble friend Lord Smith of Hindhead asked why we are allowing operators to use affiliates and tipsters to harvest data and target the vulnerable. All gambling operators must have a licence from the Gambling Commission to operate and are held responsible for the actions and behaviours of their affiliates. The commission published advice earlier this year on ensuring that direct marketing is not sent to those who have self-excluded from gambling. Operators and affiliates must comply with the requirements of the privacy and electronic communications regulations and the Data Protection Act, and the ICO may take enforcement action if there is evidence of a breach. The Advertising Standards Authority also has the power to take action if it were to receive evidence of irresponsible targeting.

The noble Baroness, Lady Howe, asked about financial transaction blocking. The Gambling Commission has had great success working with payment providers to prevent unlicensed websites accessing the British market. Payment providers work proactively to stop payments to and from unlicensed websites, which means that the true number of websites effectively blocked may be higher than the figures held by the commission, but I would certainly be happy to write to the noble Baroness with the latest figures held by the Gambling Commission.

I am coming to the end of my time. I will certainly write to other noble Lords, because there are several questions that I have not answered—I think that about 48 questions were asked during the debate. I will read what the noble Lord, Lord Alton, said and write to him on it.

This has been an informative and interesting debate. I thank again the noble Lord, Lord Browne, for bringing it and allowing us to discuss these important issues. We have seen significant changes to the market since the implementation of the Gambling Act, as well as to public perceptions of gambling and to our understanding of harm across the gambling landscape. Our objective in engaging in the gambling review is to strike the right balance between socially responsible growth and the protection of consumers and the communities in which they live. We have listened to what has been said today. I will take noble Lords’ speeches back to the department. I encourage all noble Lords who have a view on these matters to respond to the consultation, which they have until January to do.

[Lord Browne of Belmont]

My Lords, I am extremely grateful to everyone, including the Minister, who has taken part in today’s debate. It has been an excellent debate, with support right across the House. I do not think that anyone could have failed to be moved by all the contributions. I find myself at the conclusion with a strong sense that, to coin a phrase, something must be done.

I am grateful to the Minister for setting out what has been done, but the Government should not underestimate the level of public concern and I hope they will mediate on the political significance of the recent evidence from the Gambling Commission. Public faith in gambling has fallen dramatically in the past nine years. While I certainly did not hear complacency in the Minister’s response, I am not totally convinced that the Government are fully seized of the importance of this issue.

There is a mismatch between the significant technological possibilities for enhancing online gambling and the current proposals in the DCMS consultation. I very much hope that the Minister and the Secretary of State will take away all the excellent proposals that have been made in today’s debate and use them in the current consultation process. I hope that they will accept that while the current consultation proposals for online gambling are good as far as they go, they need to go further. I hope that when they respond to the consultation they make clear their determination not to allow multiple individual self-exclusion mechanisms to continue to exist but mandate their replacement with GAMSTOP. I hope that they will prohibit the marketing of gambling games to children and, even more importantly, prevent children’s access to such games through age verification. I hope that they will introduce a statutory level of at least 0.8% and that they will end the lending of money for gambling through credit cards. I hope that they will look at prohibiting online betting between midnight and 6 am.

I have listened very carefully to the Minister, but I do not think he responded to my specific request for a meeting with himself, GAMSTOP, the Gambling Commission and problem gamblers.

[Lord Ashton of Hyde]

I am very happy to take that request back to the department and put it before the Minister responsible for gambling.

[Lord Browne of Belmont]

I welcome that. Finally, I think there is a lot more work to be done. As we do it, we should not forget Joshua Jones, Omair Abbas, Adam Billing and, back home, Lewis Keogh, and their families. We should seek to build a public policy framework that means that their suffering will not be repeated by others.