Gambling (Categorisation and Use of B2 Gaming Machines) Bill [HL]

Lord Foster of Bath Excerpts

Friday 11th March 2016 Lords Chamber

[Lord Foster of Bath (LD)]

My Lords, I rise to support my noble friend Lord Clement-Jones’s Bill, and I can assure the noble Lord, Lord Lipsey, that my party will continue to raise important issues such as this one. Unlike the noble Lord, until quite recently I had relatively little knowledge of gambling or gaming, but all that changed in 2004 when I had to the opportunity to serve on the Gambling Bill Committee in the other place. During our discussions there we learned a great deal. Although there was some discussion of fixed-odds betting terminals, the majority of the debate centred on the issue of super-casinos and, rather bizarrely, the maximum amount of money that could be charged for a teddy bear in an arcade grab machine. However, since the Bill was passed and became the Act, concerns about fixed-odds betting terminals have continued to be discussed and the concerns have increased.

I had the opportunity to work on some other related issues, internet gambling in particular, and the use of voided bets and unclaimed winnings in betting shops. However, the concerns about FOBTs grew and grew, and I had an opportunity to meet many of the individuals and organisations that were expressing concerns about them. I can say to the noble Lord, Lord Lipsey, that yes, I have indeed played on a FOBT machine and seen how easy it could be to lose a great deal of money. I had the opportunity to come forward with one or two proposals for how we could move forward. One particular concern was the growth in the number of betting shops and the way that they were clustering together on our high streets, particularly in areas of high unemployment. It is worth reflecting on the fact that in betting shops that are allowed up to four fixed-odds betting terminals, up to 50% of profits come from those terminals. In the past 10 years, because of the drive from those profits, there has been a 50% increase in the number of betting shops on our high streets. Indeed, there are twice as many betting shops per head in areas of high unemployment than in areas of low unemployment. They are also very closely linked to payday lending and often have such premises next door to them.

In the London Borough of Newham, for example, there are currently 82 betting shops—that is, six per square mile—and some high streets have more than a dozen betting shops in close proximity to each other, creating in effect casinos on the high street that are far less regulated and far less supervised than the official casinos. Local councils are almost powerless to stop it because betting shops used to fall into the same planning category as banks, so that when a bank or building society branch closed, it could be converted into a betting shop or gaming outlet without the need to apply for planning permission to change it. I and many others propose that there should be a separate use category for betting shops. I am delighted that in the last days of the previous coalition Government such a measure was introduced. Unfortunately, however, there was still a duty on licensing authorities to “aim to permit” betting shops. So despite the welcome change in the planning legislation, the problem remains. That is why my noble friend’s Bill is so important—it tackles the problem from a different direction.

The FOBTs that we are talking about, as noble Lords have said, allow bets of up to £100 on a single spin or game, and three games can be played in just a minute because of the very high spin rate. No other machine offers such high stakes or play speeds. The evidence is clear that they are addictive and linked to social vulnerability and payday lending. One FOBT player, who sadly later committed suicide, had said, “It’s quick and easy to win and lose money in a short space of time”. As the noble Lord, Lord Lipsey, has said, they have been described by some as the “crack cocaine of gambling”, while others have described them as “the scourge on the High Streets across Britain” and the “misery machines doing our society no good at all”. From these “misery machines” bookies are making record profits. Some suggest that Ladbrokes is now making £1,000 per week per machine. With the increased number of machines, overall profits are rising. As one insider put it, it is inescapable that FOBTs are the only reason many betting shops are still running. As the profits rise, so does the misery these machines cause. For instance, the Times recently ran a story with the headline:

“Violence, debt and devastation brought by the spin of a wheel”.

At the end of last year, the Metropolitan Police recorded a record number of violent incidents, including assaults, linked to these terminals running into hundreds, but across the UK police were called out no fewer than 11,200 times during the past year. As we have heard, concerns about the use of FOBTs for money laundering are widespread. Tragically, as newspaper after newspaper testifies, there are far too many stories of family breakdown, financial ruin and even suicide caused by these machines. Clare Foges, the Prime Minister’s former speechwriter, wrote recently:

“At the heart of these statistics are the fiendishly seductive fixed-odds machines that act like sirens on the rocks to the weak-willed and addicted”.

Most significantly, the Secretary of State then in charge of the Gambling Act 2005, now the noble Baroness, Lady Jowell, has acknowledged that FOBTs were “under probation” and should be removed if evidence were gathered that they were promoting harm. The noble Baroness has admitted that the 2005 Act, which gave power to the Gambling Commission to step in, had not worked. FOBTs are highly addictive, hence the sobriquet of “crack cocaine of gambling”. One study has shown that FOBTs have the strongest association with gambling-related problems, with 37%—more than a third—of FOBT users having experienced gambling-related harm.

Despite all this, the Government have failed to act—despite, indeed, the Prime Minister’s assertion in 2014 that something had to be done. When I had the opportunity as a Minister to try to do something, I was allowed by the then Government to take the weakest of all responses: to announce a review. Sadly, that review came to naught. It is also sad that the current Minister, Tracey Crouch, who has spoken out strongly against FOBTs, has also attempted to introduce a review, but, quietly and mysteriously, it was blocked by No.10 a few months ago.

As we have heard, the bookmakers have, understandably, carried out an impressive campaign to delay action while protecting their profits—codes of practice, so-called trial player self-regulation measures and always the call for more, long-running research projects, none of which has stopped a vulnerable person chasing their losses and bringing themselves and their families into further debt and ruin by playing these £100-a-spin machines. Questions are even being asked by the Charity Commission about the charity that commissioned the most recent key FOBT research and the influence that the bookmakers have had on that research. Even the gambling regulator, understandably daunted by the prospect of taking on the powerful bookmakers, has failed to recognise that the reduction of the £100 stake would be the one measure that ensured protection of the most vulnerable. Like the Government and so many others unwilling to take on the might of the bookmaking lobby, the regulator has said that it needs more evidence that there is a credible risk of harm before it would be prepared to recommend the precautionary approach and adopt a stake reduction.

Inaction is destroying lives, as newspapers and the rest of the media illustrate all too regularly with case after case. We do not need more research; we need action. It could be action to reduce the spin rate—that would help. It could be action to reduce the number of machines in each betting shop—that would help. It could be action further to strengthen the power of local councils to prevent the proliferation of betting shops by giving them, as they have for pubs, the ability to take into account the cumulative impact of a proliferation of gambling activities when considering planning applications—that, too, would help.

But the best action would be to accept and implement the proposal in my noble friend’s Bill: to reduce the stake to a maximum of £2 so that the FOBT is comparable to other categories of gaming machine. I recommended such a move several years ago and so did many others. As we have already heard, last summer, 93 councils of all political persuasions across England and Wales called for FOBT stakes to be reduced from £100 to £2. Yet, sadly, the Government said no, despite the fact that it would be easy to do: no primary legislation is required. Terminals could simply be recategorised in line with other betting machines.

The bookmakers and those who support them will, of course, argue that we need more evidence. They are protecting their profits while lives are being destroyed. However, the evidence is clear and anybody with a conscience should be willing to see it and not close their eyes to it. The Gambling Act 2005, arguably the source of all this misery, had as one of its overriding purposes the protection of the public from the harm that gambling can do. Ten years later, it is time to take the action needed to meet that purpose. It is time to reduce the stake on the FOBT to £2.