Gambling Harm (Social and Economic Impact of the Gambling Industry Committee Report)

Lord Grade of Yarmouth Excerpts

Wednesday 27th April 2022 Grand Committee

Moved by

[Lord Grade of Yarmouth]

That the Grand Committee takes note of the Report from the Select Committee on the Social and Economic Impact of the Gambling Industry Gambling Harm—Time for Action (Session 2019–21, HL Paper 79).

[Lord Grade of Yarmouth (Con)]

My Lords, it is now three years since, out of the blue, I was appointed chairman of the Select Committee on the Social and Economic Impact of the Gambling Industry. Being chairman of this committee taught me a number of things. The first was how Members of your Lordships’ House, of all parties and none, can come together as a committee to pool their diverse knowledge and experience and produce a unanimous report on such a complex, contentious and important subject—a matter of life and death. I am immensely grateful to all the most diligent members of the committee who worked with me on this inquiry. The second thing that I learned was the importance of the large volume of written and oral evidence that we received from all interested parties in the sector, which we were able to evaluate and on which our report is, I hope, securely based. The third thing that I discovered as our inquiry progressed was how urgent is the need for action—a matter to which I shall return.

I start by making clear what the committee did not do: we did not recommend preventing gambling. For those who enjoy it, we recommended nothing to make it less enjoyable. Everyone spends money on things that they enjoy, such as travel, sport, the arts and other things, and, if people wish to spend their money on gambling, that is their prerogative. But “affordability is absolutely key”—that was said to us in evidence by the then CEO of one of the largest gambling operators. The problems start the moment someone begins to spend on gambling more than they might otherwise happily and safely spend on any other leisure activity. As we heard time and time again in evidence, once the problems start they escalate until, in too many cases, they get out of hand and what was once an enjoyable leisure activity becomes an addiction.

As with so many addictions, things can deteriorate disastrously and quickly but with gambling, unlike other addictions, this can happen unknown to even the closest family and friends. The committee held an informal meeting with the families of gamblers who had taken their own lives and heard heart-rending stories of how they discovered only after the deaths of their loved ones that their husbands, sons or brothers had been gambling far beyond their means. We also took formal evidence on this, and I pay particular tribute to Charles and Liz Ritchie, whose son Jack took his own life at the age of 24. They have set up a charity, Gambling with Lives, so that other parents and relations in the same situation can join with them to promote reform of the law and regulations and improve the treatment available to problem gamblers.

What is the size of the problem? As I said, our inquiry was entirely evidence-based, as it should be. Although some of the evidence is conflicting, the best estimate is that some 0.7% of the adult population—about 340,000 people—are problem gamblers. Some 55,000 of those are schoolchildren aged 11 to 16. In excess of 2 million family and friends are affected by harm to physical and mental health, loss of savings and homes, loss of jobs, criminal activity, family breakdown and sometimes, tragically, ultimately death.

When we said in our report that, on average, one problem gambler committed suicide every day, a fact-checking organisation wrote to take issue with us. It said that the annual figure was only 250—as if that was acceptable. In fact, our evidence was that between 250 and 650 people commit suicide every year. Since we reported, a survey by Public Health England has estimated that there are 409 suicides associated with problem gambling each year in England alone. Since our committee was set up three years ago, not less than a thousand young men—it is almost invariably young men—will have taken their own lives, and this will continue for as long as nothing is done.

Who, then, should be taking action to ensure that no one gambles more than they can afford? All of us, of course, but principally the industry, the Gambling Commission and, ultimately, the Government. First, on the industry, it will take every opportunity to tell you that problem gamblers are only a small number compared to the many who enjoy an innocent flutter. It will not be so keen to tell you that although only a small proportion gamble excessively, the profit from those gamblers is out of all proportion to their number. The greater the problem, the higher the profit.

The industry’s story—in particular the story of the Betting and Gaming Council, the trade body—is that it recognises the problem but that much has already been done on a voluntary basis. The industry accepts that more needs to be done but says that it is making a major contribution to research and treatment, while working with the Gambling Commission and the Government to change law and practice so that problem gambling can be reduced. The industry welcomes the Government’s review of the Gambling Act, which will give it another opportunity to argue that a few small changes—preferably on a voluntary basis—are all that is needed. I call this approach “confess and avoid”.

Nobody, problem gambler or not, can place a bet unless an operator is prepared to accept that gamble. The operators are ultimately in control. They have an immense amount of data about their customers, especially those gambling online, which is where most gambling happens these days. They know how much their customers spend, their spending patterns and the time they spend gambling. They know who spends three hours gambling at night and who gambles heavily immediately after payday. They can access detailed information on a customer’s financial situation from bank statements, proof of income and credit checks. They know whether a customer has previously self-excluded or tried to do so, and whether a customer has more than one account with them or with other operators. They know the transaction history and risk indicators. They already have to do money-laundering checks. They could be using all their information to make sure that they accept bets only from those who can afford it. If in doubt, they should refuse the bet. Since they will not do this voluntarily, the rules must be changed to force them to do so.

One obstacle that the sector has repeatedly thrown up is the issue of data protection. It points out, correctly, that most problem gamblers have accounts with more than one operator; it says that no single operator can deal with affordability issues if it does not have the whole picture. Operators told us in evidence that they could not share the information they have with other operators. We put this to the Information Commissioner’s Office, and the ICO told us categorically that data protection legislation does not prevent gambling operators sharing the personal data of vulnerable users. That was two years ago.

Since then, there have been tripartite conversations between the industry, the ICO and the Gambling Commission to formulate ways in which data can be processed, exchanged and used. The ICO is there in an advisory capacity, and it is not for it to take the initiative. The industry has no incentive to advance matters. The Gambling Commission, which should be taking matters forward, seems to detect no great need for urgency. That is why the exchange of data is still very partial and very patchy.

I harbour a faint hope that, when my noble friend the Minister replies to this debate, he will tell us what the Government have in mind as a solution to this crucial issue. I fear, however, that your Lordships will be told in reply to this and many other questions that we will raise that we must wait even longer for the White Paper, when all will be revealed.

I can already confidently identify one major failing in the White Paper: its title. The whole exercise is labelled a review of the Gambling Act 2005. It is nice and catchy to say and a good soundbite that the Act is an analogue law in a digital age. That is true, but the full truth is much more nuanced. Although in 2005 the smartphone—in this context, a betting shop in every teenager’s pocket—was in its infancy, the Act had flexibility built into it. It is indeed a law passed in a largely analogue age, but it was already able to cope with most digital developments. It is not the Act itself that is at fault; the fault lies with those who have failed to use the powers already enshrined in it.

The Act gives the Gambling Commission almost total control of licensing conditions and codes of practice. The commission has always had the power needed to enforce them, with the ultimate sanction of suspension or removal of an operator’s licence. By amending the licence conditions as developments occurred, it could have kept pace with them. It could have dealt with most of the affordability issues that I have mentioned. To be fair, it has tightened the rules on the age and identity checks that operators must do before allowing someone to gamble online. It has also banned the use of credit cards for betting—at last. But so much more could have been done. So many lives might have been saved. The Government need to address the lack of accountability of the gambling regulator.

Among the many recommendations that the committee made, the Gambling Commission could have established a system for testing all new games against a series of harm indicators, including their addictiveness and whether they will appeal to children, and not approving a game that scores too highly on the harm indicators. It could have introduced equalisation of speed of play and spin, so that no game can be played quicker online than in a physical casino, betting shop or bingo hall. It could have required the licensing of affiliates. It could have prohibited bet-to-view and other inducements. It could have required every operator that has been notified of an individual’s self-exclusion not to send them any communications during the period of self-exclusion and thereafter to do so only if the individual removes the self-exclusion. All of this would have led to a significant reduction in problem gambling—and it still could, if action is taken now.

There are inevitably changes—just a handful—that need primary legislation. One of these is the setting up of a statutory gambling ombudsman service to settle disputes between gambling operators and gamblers. This is not a matter for the regulator. It is right that the Gambling Commission should adjudicate on breaches of licence conditions, such as when Sky Betting & Gaming distributed a promotional offer of “Bet £5, get 100 free spins” to 41,395 self-excluded customers and a quarter of a million customers who had unsubscribed from the operator’s marketing emails. However, where a punter has lost money or been otherwise affected by the failures of an industry giant, it is right that there should be an ombudsman to adjudicate, similar to the Financial Ombudsman Service.

It would also take primary legislation to create a duty of care owed by operators to their customers. To be clear, I am not just referring to operators being careful of the interests of their customers; I am talking about a duty, the breach of which could give rise to proceedings brought by a customer against an operator for breach of statutory duty. But, I repeat, the changes that need primary legislation are very few.

I conclude with a little history. It was in 1999 that Ministers of the Labour Government first considered reviewing and liberalising the law on gambling. The Budd review reported in 2001, a draft Bill was published in November 2003 and it was sent to a pre-legislative Joint Committee, which reported in April 2004. The Bill received Royal Assent in April 2005 but did not come into force until September 2007—eight years after reform was first proposed.

Fast forward 20 years: the Government promised a review of the Gambling Act in their manifesto before the 2019 election, as did the other major parties. The consultation paper was not issued until a year later. The consultation closed in March 2021, more than a year ago. A White Paper was promised by the end of that year; we are now promised it next month. If primary legislation is needed, it will be lucky to get a slot next Session but might be passed by the end of this Parliament in 2024. If, as in the case of the 2005 Act, we have to wait another two years before it is brought into force, that takes us to 2026—seven years after the first undertakings for reform. Given the gambling-related suicide rates, that cannot be acceptable.

If, in replying to this debate, the Minister tells the Grand Committee that reform of the Gambling Act itself needs to wait for an opportunity for primary legislation, that will of course be true, since the Act can be amended only by further primary legislation, but if my noble friend tells us that other gambling reform must also wait, I shall be deeply disappointed—as, I am sure, all the members of my committee will be. As I have tried to explain, so much could be done—indeed, could already have been done—by Ministers, but mostly by the Gambling Commission with the powers that it already has. The title of the committee’s report was Time for Action. That was two years ago. Meanwhile, today, like every other day, a young problem gambler may already have taken his own life. I beg to move.

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[Lord Grade of Yarmouth (Con)]

My Lords, I have no desire to impair those who are addicted to ping-pong by continuing their withdrawal this afternoon. At the risk of sounding like an Oscar winner, I have to thank my agent—no, I thank all those who have taken part, particularly the absolutely brilliant committee, and the brilliant team behind it, which produced this report. On the evidence of what my noble friend the Minister said, I do not think that this report is going to languish on the shelves of government departments like too many other Select Committee reports which leave this great House. I am encouraged by my noble friend’s response. To paraphrase the late, great Bernard Levin, a moron in a hurry would get the messages that have emanated from this debate today.

I thank everybody who has taken part. This is a difficult subject, and I am very grateful to the noble Baroness, Lady Fox, for addressing the balance and reminding us of civil liberties and so on in this debate. However, in trying to compare these activities with shopping and other things, we must not forget that gambling can have a toxic side-effect. That is proven over and again, and I do not think anybody in this Room or outside it would wish to deny that fact. We have a duty of care to do what we can to reduce the incidence of harm and addiction.

I am very proud of this report, and I hope that all my colleagues share that feeling. It was unanimous. The task of chairing the committee was not difficult because of the brain power and commitment of all its members. I thank my noble friend the Minister for his reply. I am encouraged, but your Lordships can rest assured that the noble Lord, Lord Foster, and the group that he has put together will be holding the Government’s and the Gambling Commission’s feet to the fire. We look for immediate action, and we look forward to the White Paper. Again, I thank everybody who has taken part.

Motion agreed.