Gambling: Fixed-odds Betting Machines

Lord Bourne of Aberystwyth Excerpts

Tuesday 24th February 2015 Lords Chamber

[Lord Bourne of Aberystwyth (Con)]

My Lords, this has been an extremely interesting and thought-provoking debate. I thank my noble friend Lord Clement-Jones for tabling this debate and presenting his case with such aplomb, not least because it offers the Government an opportunity to highlight existing measures in this area and to provide reassurances on what is, after all, a very important subject. Let me state categorically at the outset that the Government understand the public’s concerns and those of noble Lords around fixed-odds betting terminals. We have made it clear that we consider the future of their regulation to be unresolved.

I turn first to the submission supported by Newham Council and others. The Government understand the deep concerns held in this area of law in relation both to the perceived impact on the face of the high street of clustering—about which I will say something later—and to the claimed impact on problem gambling of the category B2 or the fixed-odds betting terminals that we are talking about. That is why, last April, we announced action in this area. I believe this was the first action announced under the Gambling Act, which, after all, came in in 2005, so there was ample opportunity for the previous Government to do things in the five-year period before the 2010 election. However, I accept that we all have concerns about this issue, so I am approaching it on that basis.

We announced a whole suite of new gambling controls, on track to come into force in April this year. I believe that my noble friend Lord Gardiner covered that in answer to a Question asked by my noble friend Lord Clement-Jones. The measures that we are seeking to introduce are to give more powers to local communities by requiring planning applications to be submitted to local authorities for new betting shops, and they will now be in a separate category. At the moment, they are in the same category as financial advisers and so on, so a change of use within that category would not require planning permission. After April, it will need separate planning permission unless it is within a now very limited category. I think that they share the same category as payday lenders and that they are the only two types of business that will find themselves in this new planning category. We have also brought in measures—which I will outline and expand on later—to restrict unsupervised high-stake play.

I do not claim to be able to predict what the precise impact of these measures will be—I do not think any of us can know that—but as the Secretary of State, Sajid Javid, said at the Culture, Media and Sport Committee on 20 January:

“These measures, particularly regarding FOBTs”—

[Lord Strasburger]

I thank my noble friend for giving way. He says that he cannot predict the effect of these changes. Let me help him. Changing the planning law will have no effect on the existing betting shops.

[Lord Bourne of Aberystwyth]

I actually said that I could not predict the precise impact of these measures. That comment was meant in a global sense; I was not referring to a particular instance. However, I am very grateful to my noble friend for that helpful intervention.

As I was saying, the Secretary of State said:

“These measures, particularly regarding FOBTs, will make a difference but I think, rather than for us to jump now and say, ‘We should move even further’, I would like to see these bed in and then look at the evidence and see if there is a need for any further action at all or if what we have done is enough”.

To my mind this is a sensible approach and balances the Government’s commitment to reduce problem gambling and protect the vulnerable while at the same time protecting what is an enjoyable leisure activity for the vast majority of customers who visit bookmakers’ premises. We will review the impact of these measures—or have committed to do so—in 2016 to see how effective they have been.

It is perhaps worth reminding ourselves what powers exist at the moment. Bookmakers have a responsibility to assist gamblers who display signs of problematic behaviour. The betting industry introduced new measures under its code of conduct from 1 March 2014—just a year ago. While this is a step in the right direction, we believe that measures should be toughened and made mandatory. That is why the Gambling Commission recently announced in its response to consultation on the social responsibility provisions in its licence conditions and codes of practice proposals for a mandatory code which will come in in May this year, with the sanction ultimately of taking a licence away if a bookmaker does not fulfil those conditions. I believe that that is a further step in the right direction.

We believe that the measures we are taking are sufficient to improve player protection. These moves, combined with the measures outlined in the Gambling Commission’s response to consultation on the social responsibility provisions in its licence conditions and codes of practice, are justified on a precautionary basis.

I should like to add that what is significant here is that the level of contact between customer and betting shop operator has increased, either via human or electronic interaction. Recent research has shown that interaction of this sort can give customers pause for thought, an opportunity to take stock of where they are and to assess their situation in a dispassionate manner. This is something that we have not seen before and it is part of the reason why other countries are looking to the UK as a pioneer in reducing gambling-related harm. I am not complacent about this because one would hope that we could have no problem gamblers but, to put this in context, research demonstrates that they represent under 1% of our adult population. The figure is higher in the US, Australia and South Africa, which have comparable systems. I am not suggesting that we can be complacent but we need to keep a sense of balance.

[Lord Clement-Jones]

I apologise for interrupting my noble friend while he is in full flow, but does he accept the Responsible Gambling Trust figure which indicates that 37% of customers at these properties are problem gamblers?

[Lord Bourne of Aberystwyth]

I do not recognise that figure. However, prior to this debate, I read that researchers had said that we should not seek to extrapolate any arguments from the figures that they had looked at as they came from a fairly limited survey. I will look at the research further but I do not recognise the figure the noble Lord has given.

[Lord Lipsey]

Perhaps the Minister will also point out that the survey was carried out among the 10% of users of properties who have loyalty cards. By definition, you are far more likely to have a loyalty card if you are putting a lot of money into a machine than if you are putting in the odd pound or two.

[Lord Bourne of Aberystwyth]

I am very grateful to the noble Lord. It is, indeed, somewhat self-selecting in that sense: that is absolutely clear. However, I should move on within the time allocated to me.

Although local authorities are bound by law to aim to permit gambling in so far as it is reasonably consistent with the licensing objectives of preventing crime and disorder, ensuring that it is fair and open and protecting children and vulnerable people, the licensing process at present gives authorities considerable scope to attach additional conditions to licences. At present, two licences are needed to open a betting shop: an operating licence from the Gambling Commission to show that the person operating the premises is a fit and proper person, and a premises licence from the local authority. Of course the local authority has to marshal the evidence, if it has a particular planning objection, but it can do that within the existing law. I think that Barking and Dagenham, for example, is looking at that process and seeking to use it. I am not sure exactly where it has got to, but I know that that local authority, at least, is looking into it. That is something that I would encourage, because there are existing powers, as well as those that we seek to introduce.

Now I shall return, as I promised I would, to the conditions that we seek to introduce in the code, via the Gambling Commission. As I have said, they will give powers to local communities, by requiring planning applications to be submitted to local authorities for new betting shops. Putting the change-of-use regulations on a different basis will make that a more powerful tool. It will require those accessing stakes over £50 to use account-based play or to load cash over the counter, putting an end to unsupervised high-stakes play, and it will require all players of FOBTs to be presented with the choice to set time and money at the machine itself. These measures are on track to start in April, and will, I think, make a real difference. The sensible thing to do now is to see how they bed in before thinking about further action. That is a fair and reasonable approach.

I shall now seek to answer some of the specific points raised in the debate. In case I miss any, I undertake that we will look at Hansard and write to all noble Lords who have participated in the debate. First, the noble Lord, Lord Clement-Jones, suggested that planning was not the answer. It is not the whole answer—I accept that—but it is part of the answer. Intervention is also important, and that is a key part of the code.

In response to the useful and valid points made by the noble Lord, Lord Lipsey, I say that the point is to achieve a balance. We need to protect the vulnerable—that is absolutely right—but we should not seek to stop people gambling. Like some other noble Lords, I have a very rare flutter: I went to Las Vegas and never placed a bet, so I imagine I am a bookmaker’s nightmare. I can see that the noble Lord, Lord Lipsey, shares that position, so we have that in common—although his contribution seemed to turn into “Fifty Shades of Betting Shops”, and some of the time I was not quite sure where we were going. I am all in favour of permissive elements, but there are limits. I shall be coming to the noble Lord, Lord Dubs, for tips for the Grand National when we reach that part of the year, which is very close now.

Several noble Lords, including the noble Lord, Lord Strasburger, rightly raised the issue of problem gamblers. To try to put this in context, FOBTs are in decline overall, according to our most recent figures: 4% of adults played them in 2010, and that dropped to 3.4% in 2011-12. Average stake size on a FOBT machine in a bookmaker’s was £5.13; on a B2 it was £14.08. That does not mean that this is not a serious problem, or potential problem, but we need to get it into context. Most people who use these machines do not have gambling problems. The idea that they do is not borne out by the research.

This has been a useful debate, and obviously the department will study it. In case I have not made this absolutely clear, I want to nail again the point that the Government remain very vigilant on this matter, and in reviewing evidence on the effects of fixed-odds betting terminals. We want to make sure that the betting industry is well aware of that. The Rubicon has not been crossed, nor will it ever be. Nothing is final, except that the Government will work in partnership with the Gambling Commission, which is neutral. In answer to the point made by the noble Lord, Lord Strasburger, about the questionable nature of the Responsible Gambling Trust’s independence, I should explain that it is the Gambling Commission that reviews the research. I know it has an industry element to it, but its research is reviewed by the Gambling Commission, which is a statutory body. We shall study this useful debate, and during 2016 we will also study closely the evidence and the research, to see how effective the reforms being introduced this spring have been.