Gambling: Fixed-odds Betting Machines

Lord Clement-Jones Excerpts

Tuesday 24th February 2015 Lords Chamber

Asked by

[Lord Clement-Jones]

To ask Her Majesty’s Government what actions are being taken to address the concerns expressed by a number of local authorities in England and Wales about the growth in the number of high stakes fixed odds betting machines available on the high street.

[Lord Clement-Jones (LD)]

My Lords, I am today pursuing a matter of considerable concern to many noble Lords which has been discussed before on a number of occasions in this House. Most recently, on 9 February, my noble friend Lord Strasburger asked about the Government’s plans to mitigate the effects of FOBTs. We also discussed the regulation of FOBTs in Committee during the passage of the Gambling (Licensing and Advertising) Act in January 2014.

Fixed-odds betting terminals—popularly referred to as FOBTs, and technically known as B2 gaming machines—are for high-stake fast play, allowing users to bet up to £100 every 20 seconds. During 2013, £1.6 billion was lost by gamblers on FOBTs in Britain, with most of the money coming from some of the UK’s most deprived communities. There are now some 34,500 FOBTs across the UK. The £100 stake on FOBTs is more than 40 times the EU average; combined with the fast pace of play, this makes them particularly dangerous, leading to high levels of problem gambling. The speed of roulette on the machines is more than five times as fast as roulette in a casino, yet the machines are in lightly regulated, high street betting shops—more than 9,000 of them across the country. The reality on the ground is that these machines are highly dangerous products that are catalysts for problem gambling, social breakdown and serious crime in communities.

Research published last year by the Scottish Parliament Information Centre found that problem gambling is seven times higher in deprived areas, seven times higher among harmful drinkers and six times higher among the mentally ill. Responsible Gambling Trust research—although flawed—shows the worrying impact of the machines. A person who has been gambling at higher stakes is more likely to make poorer judgments than after gambling at lower stakes. The number of people betting the maximum £100 stake doubles between 10 pm and midnight; 37% of FOBT gamblers are problem gamblers. We have all noted the clarification of the misquotation of the noble Lord, Lord Gardiner, in his Answer on 9 February by the chairman of the RGT.

Proliferation is happening around the country—not just in the cities. One street in the London Borough of Newham has 18 betting shops. However, betting shops are also spreading in towns across the country. Colchester has 14 bookies, including seven branches of Ladbrokes. Ireland has banned the machines altogether, following both public concern and parliamentary pressure. The Smith commission on devolution has recommended that powers be devolved to the Scottish Parliament to prevent the proliferation of fixed-odds betting terminals.

The Government have brought forward two proposals aimed at ameliorating the worst effect of FOBTs. First, there are the changes to the planning regime. In 2014, the Government consulted on a change to planning processes which would place betting shops in a separate use class order and require express planning application for new betting shops. However, a new use class would impact only on future shops; it would do nothing to tackle existing clusters of betting shops, which have been strongly opposed by local communities. It will do nothing about the 34,500 FOBTs already on our high streets. In fact, it will simply provide a competitive advantage to those betting shops already in place by keeping out the competition. So those planning reforms are not the answer to the FOBT problem, they are merely shutting the stable door after the horse has bolted.

Secondly, we have the new Gaming Machine (Circumstances of Use) (Amendment) Regulations 2015, shortly to be debated in this House. They will require account-based play via a loyalty card or similar system, or talking to a staff member if a customer wants to bet more than £50 per play. That does not amount to a stake reduction. Punters can still stake £100 every 20 seconds. Vulnerable players chase their losses, and neither measure will prevent a player betting £100 per game: the root cause of the addictive nature of FOBTs.

Asking betting shop staff to restrict further betting by customers who may have just incurred large losses is likely to lead to conflict and dangerous situations, especially where shops, as they increasingly are, are staffed by only one person. There is no basis for the £50 proposal. No research has considered the impact of a £50 stake. Therefore there is no evidence that the proposal will help to protect problem gamblers.

The essential point that I am making today is that neither of the Government’s proposals will be effective. By giving the impression of taking action, they may make the situation worse by delaying the only truly effective answer: reducing the maximum stake to £2, which is the maximum stake offered in all other similarly regulated adult premises on the high street, such as adult gaming centres.

Local authorities, who see the problem on the ground, clearly do not believe that the proposals go far enough. Last November, 93 councils, led by the London Borough of Newham but from across England and controlled by all three major political parties, including colleagues of my noble friend Lord Tope in the London Borough of Sutton, called for action under the Sustainable Communities Act 2007 to cut the maximum stake to £2. Under the Act, councils from all those parties have called on central government to take that action due to the anti-social behaviour, crime and problem gambling that the machines are causing in their local areas. That unprecedented step represents the widest support that any Sustainable Communities Act proposal has ever received.

The Local Government Association has backed this call. It has demanded a range of measures to strengthen the role of local councils in protecting their high streets, including calling for a reduction in the £100 stake on FOBTs to £2. Under the Act, councils are given the power to make proposals to the Secretary of State as to how the Government can assist them in promoting the sustainability of local communities. The Secretary of State is then under a duty to reach agreement with councils, either via their representative body, the LGA, or directly, on which proposals will be given priority. The department is formally required to respond by June 2015. I hope that the Government will respond before then. There is clear evidence that the public supports restrictions on FOBTs. YouGov showed that only 4% of the public would oppose a ban on FOBTs, with 58% of those who gamble more than once a month in favour of an all-out ban. The Gambling Commission has stated that in interpreting the available evidence it will take a precautionary approach where that evidence is mixed or inconclusive.

It is clear that the stake should be reduced until there is evidence that it can be safely increased above the £2 level. The onus should be on the bookmakers to demonstrate that effective measures can be put in place before they are allowed to offer games at more than £2. I hope that the Government will go well beyond the actions that they have already taken, and I look forward to the Minister’s reply.

--- Later in debate ---

[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.