Policing and Crime Bill

Lord James of Blackheath Excerpts

Committee: 4th sitting (Hansard - part two): House of Lords
Wednesday 9th November 2016 Lords Chamber

[Baroness Howe of Idlicote (CB)]

My Lords, I support Amendment 214, in the name of the right reverend Prelate the Bishop of St Albans, who sadly, as we know, is not able to be with us today. Noble Lords will no doubt be aware that I have spoken in previous debates outlining my concerns about category B2 gaming machines—or FOBTs, as they are more commonly known. The right reverend Prelate’s amendment is a good step in the right direction and I hope the Government will feel moved to support it.

There are clear associations between problem gambling and FOBTs that cannot be ignored. A study conducted by Orford et al showed that 26% of the days spent playing on FOBTs were attributable to problem gamblers and 23% of all time spent on FOBT machines was attributable to problem gamblers. Likewise, according to GamCare’s 2014-15 statistics, 26% of the calls to GamCare in 2014-15 were made for help with issues associated with FOBTs. Problem gambling and FOBTs go together hand-in-hand, and we have a duty to do more to help those who are struggling and the communities blighted by to the proliferation of betting shops.

On top of this, betting shops with FOBTs have also been associated with anti-social and criminal activity on local high streets, which has also been mentioned. A 68% increase in violent criminal offences at betting shops between 2011-12 and 2015-16, identified in an FoI request made by the right reverend Prelate to the Metropolitan Police is simply not good enough. We must do more both to protect employees, as the noble Lord, Lord Beecham, seeks to do with Amendment 214CA, and to safeguard communities. Those stories which make national headlines—punters smashing up machines in betting shops after losing significant amounts of money—only scratch the surface of what is experienced by employees and communities on a daily basis.

In approaching this amendment, which is about the licensing regime for FOBTs, it is important to say a word about the history of the licensing of betting shops. In 2001, the then Government’s Gambling Review Report concluded that the system at the time—of considering likely demand for gambling provision when issuing premises licences—had the effect of stifling competition and allowing larger firms to monopolise control of the gambling market. The subsequent Gambling Act 2005, which came into effect on 1 September 2007, abolished the so-called demand test, replacing it with an “aim to permit” clause. This effectively placed local authorities in a situation where, on receipt of an application, their starting point had to be to look for a reason not to grant it, rather than to consider a reason to grant the application. The burden shifted to consideration of commercial interest first, rather than consideration of the impact on the consumer and the community.

Indeed, in evidence supplied to the Commons Culture, Media and Sport Select Committee for its 2012 report, The Gambling Act 2005: A Bet Worth Taking?, the London Borough of Haringey said there now seemed to be,

“almost no restriction on how many gambling premises”,

could operate in an area. Local authorities need help, therefore I particularly welcome Amendment 214, which would add a new Section 172A to the Gambling Act 2005. Proposed new subsection (5) would allow licensing authorities to take account of factors beyond simple commercial interest, such as proximity to schools, addiction centres or even existing betting shops.

With betting shops allowed four FOBT machines in one shop, there is clearly an advantage to opening several shops in an area to maximise revenue. Bookmakers made £1.7 billon on gaming machines between October 2014 and September 2015, of which category B2 machines —FOBTs—accounted for 99.7%. I reference page 1 of Ladbrokes’ own 2014 annual report, which has been mentioned. In Ladbrokes’ own words:

“Gaming machines and self service betting terminals drive growth”.

Proposed new Sections 172A(1) and 172A(2) provide sensible solutions by allowing licensing authorities to impose conditions on gambling premises, permitting them to have as few as zero FOBTs. They also allow licensing authorities to impose conditions requiring customer identification prior to play in an effort to address FOBT-related crime. The situation with FOBTs has been allowed to get out of hand and it is time the Government took a firmer grasp of it. Reducing the prevalence of harmful machines is a good thing and will make an important difference, but we can and should do even more, and I welcome the recent call for evidence issued by the Government on aspects of the gambling industry, including FOBTs.

I am also encouraged by the focus on reviewing stakes, which for B2 machines are far too high. Making machines less dangerous by reducing the B2 stake from £100 to £2, as the Bill of the noble Lord, Lord Clement-Jones, sought to do, should be our priority. I certainly will continue to advocate for such a change.

I strongly endorse Amendment 214, which represents a tangible opportunity for positive change which can be implemented now to help problem gamblers and their families, as well as communities and employees. I very much hope the Minister will support the amendment, as I, and clearly many Members in this Chamber, do.

[Lord James of Blackheath (Con)]

My Lords, in speaking to Amendment 214 I should declare two interests. First, I ran a chain of casinos in the Mediterranean at an earlier stage of my life, and I am therefore very familiar with the function of a roulette wheel. Secondly, I was chairman of the Jockey Club’s racing interests in the UK, so I was heavily dependent upon the profits coming from the bookmakers’ levy.

The Bill of the noble Lord, Lord Clement-Jones, was tabled several months ago and I am sorry that it has not gone further. In many ways, it is, as an entity, better than this amendment, and the Minister should give serious consideration to incorporating it into the Bill.

The points I need to make relate to the deep suspicions I raised at Second Reading about the honesty of the electronic roulette wheel in the FOBTs in reflecting the function of a roulette wheel, as I know it to be. I have probably done more analysis on this than anyone alive today, and I would like to do a lot more. I suspect two things are wrong with the wheels at present. First, they do not fulfil either of the two functions which I require as a standard for any honest roulette wheel. An honest wheel should result in 28 different numbers occurring in any sequence of 40 spins—that statistic is astonishingly accurate—and every number on the wheel should come up within a maximum of 121 spins. I have tested these theories over thousands and thousands of spins. For example, I tested the latter over sequences as high as 4,400 and found that there were 44 occasions on which each number came up a minimum of once, which confirms that theory.

As for the former theory, I cannot remember the name but I think it was the Gambling Commission that set up the original licensing arrangements for casinos years ago. It was an extraordinary commission because it went to the extent of installing a roulette wheel in its meeting room and having two croupiers spinning it all day long to observe what happened. As a result, it laid down very strict rules for roulette wheels. I can see no reason whatever why bookmakers should not accept the validity of the same rules for their electronic machines as for the metal and wood wheels in casinos. As things are, they produce very different results.

As a result of my criticisms, two days after our last debate I got a very angry letter from the bookmakers’ association. It said that I was a liar telling an untruth, was wholly wrong and was being offensive. I said, “I may be offensive but can you prove that I am wrong on the matters of fact? I want you to prove to me that you have a 28-number cycle in every 40 spins and that your whole wheel comes up in 121 spins. If you can’t prove that, then you are in fact dishonest in what you present as a functioning electronic roulette wheel”.

I do not believe they can do that but I would like the support of Parliament for this: I want them to give me a 5,000-number sequence for every electronic computer programme that they are running—and they have lots of them, as we have heard. They have so many different terminals that they cannot allow one programme to run so as to establish a pattern, because you could adapt the pattern from one and go and bet on it. You might be able to switch it down to your advantage and they will not do that. If they have six different betting shops, they will have six different programmes and I want those programmes to be subject to audit. I would like to audit them by matching with my own matrix, which I have developed. If they can give me 5,000-spin sequences certified by an accountant or a lawyer, it will take me six hours to say whether they have an honest wheel or not. I will do that for free for the whole industry, if it wants. If your Lordships think it sounds as though I need to get a life, you are probably right but I am obsessed with these numbers and I would love to do it.

In this case, I am so certain that it is wrong that after the previous debate I went on a betting shop crawl in Chichester, my nearest local town. I went round each of the main betting shops in it and sat down to watch what was happening on the electronic wheel. The first one that I watched was simply frightening. The man who had switched the machine on appeared to have £100 in folding money, well concealed in his pocket. He was pulling it out one £20 note at a time and feeding it in to charge it up. He had decided to bet on five numbers: 32, 15, 19, four and 21. These are the five numbers adjacent and to the immediate right of zero on the wheel. Effectively he should have had a six to one chance, as it is five numbers out of 37, but of course he was having to put a £1 chip on each of the five numbers. If he won, he got only £1 back for it and lost £4, so he was actually betting at 5.2 to one against in real odds. He would have had to have six successive win spins in a row just to break even on his £100—an impossible characteristic—yet the man was sitting down to give away £100, without any possible benefit coming to him.

The betting shop quickly moved in and asked me what I was doing. I said that I was doing social studies and I was told, “You don’t do them here—get out”. So I went off to the next betting shop and lasted about five minutes there as well. Eventually I went to six shops. What I found was a horrendous change that has occurred since the noble Lord, Lord Clement-Jones, brought his excellent Bill in. The spin cycle we were worrying about then was running at, I think, two minutes; it has now gone to 10 seconds. This is so fast that you cannot even think what your name is, let alone what you are betting on. At 10 seconds a spin, it is simply draining a man of money without any way of him knowing what he is doing. My great proposal to your Lordships today is: whatever we do with this clause or with the Bill of the noble Lord, Lord Clement-Jones, we should write in a demand to go back to a minimum of two or three minutes, or whatever it was to be. Any betting shop which does not do that should be summarily closed and will not be allowed to open until they have demonstrated the accuracy of their data in the form that I have dictated. They would be closed until further notice.

However, what I think is happening is that the bookmakers read our Hansard and decided to make a firm commitment to a betting cycle which would be better than the figure they were allowing. They have therefore decided to cut it to 10 seconds now, so that they will have more to negotiate and give away when the crunch comes. Let us put it in now and start closing them. We should get some authority in to stop this nonsense. Wherever there is a 10-second cycle going on in a betting shop, close it down now. We should do it urgently and make an example of them. I rest my case.