Gaming Machine (Circumstances of Use) (Amendment) Regulations 2015

Lord Clement-Jones Excerpts

Monday 23rd March 2015 Lords Chamber

I close by saying that here we have two things that the Government could do that will cost the bookmakers money—and what is the priority? Doing something to FOBTs would no doubt at some stage cost jobs and shops, but it would stop the bookies from picking the pockets of hard-working people—and, as has been said in this debate already, very often those of poorer people—with all the social costs that are involved in that. But the racing right picks the same people’s pockets not to deal with a social evil but to subsidise some hugely rich owners of racehorses and some very rich trainers for their holidays in the Bahamas, as well as some very rich jockeys gallivanting about the country in their helicopters and some ludicrously rich breeders, who exist only because of the practice of banning artificial insemination in horseracing. Strangely enough, in this bonanza feast, the one lot of people who do not benefit by a penny, in my long experience, are stable staff, who are still exploited very badly. So that is it—deal with the FOBT problem or help all these very rich people at the expense of poor people. I know which I would put first.

[Lord Clement-Jones (LD)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Lipsey, although I agreed with only a fraction of what he had to say. Nevertheless, it was very thought-provoking.

The noble Lord, Lord Collins, reminded the House that a month ago I initiated a debate about the unsatisfactory nature of the Government's current policies towards FOBTs. Nothing has made me change my mind in the mean time. If today’s Motion goes to a vote, however, I shall not vote with the Opposition. After all, the Opposition have tabled a very half-hearted Motion. But I shall take the opportunity today once again to express the strong dissatisfaction of these Benches with these measures, and our intention, if we are in a position to do so, to go much further after the next election.

I am very pleased that my noble friend Lady Jolly is responding to the debate. Given that it is extremely likely, without giving away any confidences, that we will enshrine a much bolder pledge in our manifesto, I hope that she can square the policy circle as a government Whip and a Liberal Democrat Peer. Perhaps the Government are displaying their real embarrassment by using three separate spokesmen on the three recent occasions when we have debated or had a question on this subject. I see that the Mayor of London, Boris Johnson, has said that he believes that fixed-odds betting terminals can be dangerously addictive and allow bookmakers to prey on the vulnerable in our society—and he has called for the maximum stake to be cut to £2. This is rather at odds with the current position of the Conservative Front Bench.

The noble Lord has explained, as I did a month ago, what these machines are. FOBTs, technically known as B2 gaming machines, offer high stakes and fast play, allowing users to bet up to £100 every 20 seconds. Figures published this month by the Campaign for Fairer Gambling show that £1.5 billion was lost by gamblers on FOBTs in Britain during 2014. As the noble Lord pointed out, most of that money comes from some of the UK’s most deprived communities. That highlights the need for an urgent solution to this serious problem.

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 these machines is more than five times as fast as roulette in a casino, yet they are in lightly regulated high-street betting shops—more than 9,000 of them across the country.

We rehearsed all those points in the debate last month, and I highlighted the fact that the local authorities which see the problem on the ground and use the Sustainable Communities Act—93 councils from all three major parties—have called on central government to take this action because of the anti-social behaviour, crime and problem gambling that the machines are causing in their local areas. The Local Government Association has called for a reduction in the £100 stake on FOBTs to £2.

As we have heard, the Gaming Machine (Circumstances of Use) (Amendment) Regulations are designed to introduce a requirement which prevents individuals staking over £50 on a B2 gaming machine, or FOBT—whichever expression your Lordships prefer—unless they load cash via staff interaction, or use account- based play. In response to Parliamentary Questions the Minister, Helen Grant MP, has claimed that this will end unsupervised high-stake gambling on FOBTs. But that is not the case. The measures set out by the Government do not address the critical harmful element of the machines, which is the £100 per play maximum stake.

The measures are deficient for the following reasons. First, this is not a stake reduction. After the regulations are passed the £100 stake will still be available, so the machines will still be able to cause harm to problem gamblers and communities. The regulations are not the answer. Only a stake reduction to £2—the maximum stake offered in all other high-street adult premises—will prevent the machines causing harm.

Secondly, there is no evidence that bookmakers are serious about tackling problem gambling. The proposals are predicated on the notion that bookmakers want to prevent problem gambling—but Professor Jim Orford estimates that more than 40% of the profits from FOBTs come from problem gamblers, and there is evidence that bookmakers are actually targeting deprived areas. For example, one chain was recently accused of targeting ethnic minorities, who are more vulnerable to gambling addiction, after the Independent revealed that 61% of its shops were in the 40 boroughs with the highest ethnic-minority population.

Thirdly, the measures in the regulations will be extremely easy to circumvent. Reports from betting staff suggest that some operators are training staff to inform customers how they can play two FOBTs at the same time. This is particularly concerning for customers who have already identified themselves, and for those signed up to a loyalty card, as they will be accessing stakes of £200 a spin. Any rules around signing up for betting shop loyalty cards can be circumvented quite easily. In betting shops, customers are asked only for a name, a date of birth and an email address or mobile phone number. It is easy to fabricate the first two and create a bespoke email to receive the necessary code. That is all people need, and they can then carry on staking £100 a spin. As no checks are made, this is hardly a rigorous process that would deter likely problem gamblers, who may create many such accounts.

To stake more than £50, customers need to load cash remotely via staff intervention. For those who identify themselves at the counter, staff are suggesting that they are being trained to encourage debit card use. Bookmakers say that this will be more convenient for the customer—but it is also more dangerous, as debit card deposits can exceed a daily withdrawal limit from an ATM. This also allows gamblers to bypass the psychological check of actually putting cash into a machine, potentially making losses worse.

Fourthly, £50 is still far too high and unsafe. Fifty pounds per spin is still very large, allowing people to bet £150 per minute. It is significantly higher than the £2 maximum stake on all other UK machines and the roughly £2.20 EU average. Notably, the maximum permitted stake on gaming machines in Germany, Spain and Italy is less than £1. Fifty pounds per spin is not safe, and it is dangerous for the Government to imply this with their proposed measure. According to recent Responsible Gambling Trust research, 80% of those betting an average of £13.40 or more exhibited signs of problem gambling. Why are the Government not reducing the stake to at or below this level? So far, despite claiming they are taking a precautionary approach, the Government have failed to give a clear rationale.

Fifthly, requiring betting shop staff to police machine use will be dangerous and ineffective. The rise of single staffing in betting shops makes this measure all the more dangerous. The presence of automated FOBTs has led to staff cuts in betting shops, who are down from roughly 60,000 in 2009 to 52,000 in 2014, meaning that shops often have only one person working at a time. This fall in staff numbers comes despite the rise in the number of betting shops from 8,800 in 2010 to 9,000 in 2014. Asking staff to refuse to reload the cards of players who have just lost large sums has the potential to provoke already angry gamblers and lead to confrontation. There are also reports that staff are currently incentivised to increase machine use, with this often linked to pay. This situation creates a very clear conflict of interests, reducing the likelihood of staff intervening.

Sixthly and finally, the Government are introducing a policy that will benefit bookmakers. Signing up more players to online accounts means that the operators can encourage customers to gamble on their new online platforms as well. This will improve profitability for the bookmakers even further.

The RGT research described loyalty card customers as a “more engaged” sample, and loyalty cards encourage this engagement with offers of free bets. Player tracking is therefore not intrinsically a means for protecting players and can in fact promote addiction.

These regulations will make the situation worse by allowing the Government to refrain from substantive restrictions on the maximum stake, and FOBTs will continue to operate at £100 per play, causing harm to vulnerable people in the most socially deprived areas of Britain. There is clear evidence to show that the public support restrictions on FOBTs. The YouGov survey 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, including where evidence is mixed or inconclusive.

The noble Lord, Lord Bourne, said:

“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”.—[Official Report, 24/2/15; col. 1640.]

On the contrary, the stake should be reduced on a precautionary basis until there is evidence that it can be safely increased above the £2 level, and the onus should be put on the bookmakers to demonstrate that effective measures can be put in place before being allowed to offer games at above £2. After the general election, my party will do this if we are in a position to do so.

[Lord Donoughue (Lab)]

My Lords, like the noble Lord, Lord Clement-Jones, I enjoy speaking after the person who spoke before me. There is no greater pleasure in this House than watching a Liberal Democrat spokesman in conflict with his representatives on the Front Bench. Sadly, that pleasure will shortly cease.

I had proposed to make a rather tediously long speech this evening. Fortunately, I shall break with the normal tradition of this House of repeating everything that has been said previously and instead say briefly that I agree with everything that the noble Lord, Lord Lipsey, said. He has described the situation fairly, impressively and comprehensively.