Gambling (Licensing and Advertising) Bill

Lord Stevenson of Balmacara Excerpts

Tuesday 14th January 2014 Grand Committee

[Lord Flight (Con)]

My Lords, I support the amendment. I have not added my name to it, but it seems to me straightforward common sense. It is nonsense for it to be legal to play on one’s own personal device in the middle of a casino building but not to play on a device provided by that casino. I know that it is a somewhat shallow example, but you can imagine people coming in, one of whom has got their machine and the other who has not; the two want to play and one cannot. I just do not see the logic of that.

The amendment is before us largely because, when the Bill was passing through the Commons, there was the expectation that government was going to sort out the issue—indeed, that was what the Minister there implied—and to do it via secondary legislation rather than by primary legislation. However, it seems to me that the primary route is much simpler. The problem really arises because the Government still categorise internet terminals as gaming machines. The amendment clarifies that a remote gambling terminal provided in a casino is not a gaming machine, and provides for the Secretary of State to be able to make regulations setting the maximum number of such terminals which may be made available. The industry has added a whole list of what I will call morally correct undertakings in relation to this.

This is a silly anomaly which it is time to sort out. I hope that the Minister will be able to tell us either that the Government are willing to sort it out this way or that they have some better route.

[Lord Stevenson of Balmacara (Lab)]

My Lords, I start at a considerable disadvantage in that, having been nurtured in the far north-west of Scotland and led a very sheltered life, I have never been in a casino, although I have seen them on television or in films, which I suppose equips me to comment on matters as much as I am able to today. The Gambling Act 2005, which, as our founding document, has formed part of a lot of the discussion that we have had today, was very good and well respected for being what it is, but unfortunately technology has moved on and one therefore needs to think again about some of the regulatory arrangements.

I say that because it seemed to me that my good friend the noble Lord who moved the amendment was trying to lay a somewhat philosophical conundrum before us about whether or not, if you were in a place such as a casino but playing online on your own iPad, you would be in some way susceptible to the same sort of regulatory environment as you would be had you been playing on a machine, probably with the same internal workings and connections, supplied by a third party—presumably a casino. When the Minister comes to reply, I wonder whether he can be clear about where he thinks that we have got to in this process. I can think of many bad things we could do in reviewing the Bill, but the one thing we should try to do in this area is not to anticipate where technology might be taking us on this matter. We are at a point where things may change considerably.

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[Lord Stevenson of Balmacara]

My noble friend Lord Lipsey has been strong in keeping us off the statistics, but whatever the figure actually is, there is no doubt about the testimony of the noble Viscount, Lord Falkland, for which I thank him very much. It brought a measure of realism into our debate. There is a problem here, and I am sure that what has been said in this Room will be picked up by the Minister and we will hear how he intends to take that forward.

It is interesting that some of the territories which are currently hosting a number of the operators who offer gambling services within the UK from without our territorial borders—the so-called whitelist—have procedures and systems in place which at least permit what is being suggested by the noble Lord, Lord Browne. There are some sensible things in that. It is therefore, by deduction, a bit strange that the Bill does not refer to it at all. When the Minister comes to respond, can he tell us the reason for that? Is it a general sense of hopelessness, as expressed by the noble Viscount, Lord Falkland? Is it more a general feeling that the nanny state should not be taking on these burdens through its appointed agency, the Gambling Commission? If either of those two is correct, I do not think that it meets the challenge laid down by those who have said that this is an addiction which needs some sort of approach, and we need as a sensible and responsible society to take into account those who are calling for help and must not let them down.

[Lord Gardiner of Kimble]

My Lords, I am grateful to the noble Lord for his amendment.

As your Lordships have reflected, problem gambling does serious harm, not only to an individual, but also to their friends and family, as the noble Lord, Lord Browne of Belmont, highlighted so strongly. As I said at Second Reading, GamCare has calculated that every problem gambler costs the state £8,000 every year, and we must never forget the distress and upset this causes to wider family members. That is why the Gambling Commission’s licensing conditions require operators to make a commitment to the identification and treatment of problem gamblers, and set out how operators will contribute to this. The Gambling Commission’s licence conditions and codes of practice already include the requirement for each remote licensee to have, and to put into effect, procedures for self-exclusion, which must include a register of those excluded with appropriate records, and the removal of access from those self-excluded persons found to have gambled or to have attempted to gamble on the facilities. This recognises that self-exclusion is an important tool for those individuals who have already recognised that they have an issue with their gambling and wish to address it.

As the noble Baroness, Lady Howe, noted at Second Reading, in principle the software exists to set up a central self-exclusion scheme, but there are wide ranges of practical and legal issues to be resolved. Those complexities include issues such as the compatibility of different operator systems for registering players; the range of self-exclusion options offered by different operators, which may vary in the length of time and range of activities covered; and how to ensure the wrong people are not prevented from gambling or “self-excluded” by third parties, not by themselves. Any comprehensive centralised system would require a trusted third party to run the central list and oversee the scheme.

The first step to resolving these complexities and achieving a system for self-exclusion is the enactment of this Bill, which will bring operators within the remit of the Gambling Commission. It will give the Gambling Commission direct access to information from operators to assess the most effective way of achieving a system for self-exclusion.

The noble Lord, Lord Stevenson, rightly wanted to know the Government’s view. Work is under way on reviewing the effectiveness of self-exclusion as a tool for managing problem gambling. The Gambling Commission asked its expert advisory body, the Responsible Gambling Strategy Board, to look at the effectiveness of self-exclusion as a tool and how it could be improved. Self-exclusion also forms part of the Responsible Gambling Trust’s work programme, and they are due to report their findings in March. Further steps will be developed once these findings have been considered and the remote operators are brought within the regulatory oversight of the Gambling Commission. The Remote Gambling Association also convened an industry meeting in November 2013, and this will be contributing to the process. What is more—and this is crucial to the amendment—under the Gambling Act 2005 a centralised self-exclusion system can be achieved in licensing conditions and does not require further primary legislation. For that reason, although I entirely understand the force of arguments about problem gambling and our mutual desire to assist as much as possible, I ask the noble Lord to withdraw his amendment.

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[Baroness Grey-Thompson (CB)]

My Lords, I must apologise for not being present at Second Reading but I am not an expert in gambling, although I visited a casino once. As ever, it is a joy to be here today in your Lordships’ House; it truly is an education. I congratulate the noble Baroness on tabling the amendment because of how it refers to sport. She has put forward a very strong case for what needs to be done in this area so I will not repeat it, and of course I defer to the extensive experience of the noble Lord, Lord Moynihan, in this area.

The area that I would like to pick up on is around the sharing of information, which is vital. Every time we see a story in the press about match fixing or dishonourable behaviour, it affects the wider public perception of sport and raises further doubts and gossip. Ultimately, it affects how parents think about that sport and how they encourage their children to be involved in it, and how people engage in that sport. It does a great disservice to the wonderful parts of sport that we all know. I think that national governing bodies and international bodies would welcome all the support and help that they can receive, not just to tackle ongoing cases but to put measures in place for the future. Governing bodies cannot always be two steps behind, as they are now. With drug-testing in sport, much more information is shared and we are able to look at it intelligently, to track patterns and see how we tackle it. This is such an important issue that I hope that the noble Baroness continues to press it at further stages of the Bill.

[Lord Stevenson of Balmacara]

My Lords, this is one of the most important of the amendments that we are discussing today, and it has been good, but short, debate. At the heart of it is the concept of what sport is and how we regard it. It is clear that it has to be fair competition; it has to be between participants who are playing under the same and agreed rules; and it is vital that all participants are competing to win and not following some agenda and that the officials are honest and are seen to be so. Therefore, there are a number of very important moving parts in any event like this. Sport is important also, as has been said, because it seems to be part of our culture, particularly in Britain. It is important for how we stand in the world and how we operate that our sports should be run effectively and are above reproach and suspicion.

If that is to be the case, it falls to the governing bodies—the international bodies, as we heard from the noble Lord, Lord Moynihan—to police what is happening and to make sure that conduct is appropriate. This Bill is remote from that, because those governing bodies have an unavoidable duty and should be held to task for it. However, the growth in the number of betting services has meant that there is a surrogate way of checking out what is happening on the ground. Where strange events in betting are happening, which are often seen, and when there are strange outcomes that can perhaps be looked at in retrospect, it is important that they are properly investigated and any criminality or other bad behaviour taken account of.

We need to make sure—and this is the point of the amendments—that the structures of regulation match the aspirations that we have for our sport and for those who operate within it. It may well be true that match fixing is not the most important threat facing sport—it was suggested that it is drugs—but the points made by Jacques Rogge and the International Olympic Committee are important in this context. In response to that, the DCMS set up its own review, the Rick Parry review of sports betting integrity, which suggested that a specific risk was posed to sports integrity as a result of the current licensing regime. If that is the case—and the Minister must speak his feelings about it—surely the present situation does not match up to the aspirations that we have for our sport. To split responsibilities for spread betting from those of the Gambling Commission is clearly going to lead to trouble. It is interesting that the three amendments in this group give a range of options, a pick-and-mix, as to how to do it. One could leave things as they are, with two bodies responsible, but it would then be necessary for the Government to ensure that arrangements for reporting—as picked up by the noble Baroness—were exactly the same, so that both the Gambling Commission and the FCA could ensure that irregular patterns were reported to the authorities as quickly as possible. That would be one approach.

The second approach would be to make the Gambling Commission fully responsible for all aspects of gambling activity, which would have a clarity that is lacking in the present arrangements. In that way, licence condition 15.1, which is generally accepted to be very good, could be applied to all areas. In that situation—and this is the third option—you could keep the general responsibilities for spread betting within the FCA, but licence condition 15.1 in relation to gambling operations would have effect within that. There are therefore three options for the Minister to consider. It is important that we get some clarity on this. If we cannot get some movement, we will need to come back to the matter on Report and at later stages.

Could the Minister respond also on the question of whether we have sufficient legal power to deal with match fixing? There is some concern that the UK does not have a specific law to deal with the offence of cheating or match fixing in sport. The current arrangements, set out in the Gambling Act 2005, were deficient in relation to the recent case of the Pakistani bowlers; I defer to the noble Baroness, who is nodding vigorously, so it seems I am correct on this. It seems perverse to have had this piece of legislation in place and yet to have discovered that the way in which they were eventually prosecuted was through the Fraud Act, not the Gambling Act. This was clearly an offence in terms of match fixing. If we do not have sufficiency in legislation, could we not take this opportunity to bring ourselves up to date?

There has been a core reaction here by the European Parliament, with its action plan on organised crime, corruption and money-laundering, which recommends that member states should make sports rigging a criminal offence in order to strengthen the fight against illegal sports betting. I hope that the Minister will consider that.

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[Lord Stevenson of Balmacara]

My Lords, the case that has been made is very powerful. We need consumer measures to make a reality of some of the aspirations in this Bill, and it is wrong for government to will the ends of policy without also willing the means.

If the Government’s intention is to rely on a prosecutorial approach to this, they are bound to be frustrated. We are talking about a black market emerging which will be located offshore—very much offshore in some cases—in territories that will not recognise British prosecutorial intentions and in which the possibility of bringing people to justice will be very remote indeed. What will provide the stick to ensure that these measures are effective and to root out those who would operate in a way that is counterproductive to UK interests?

The two suggestions in our amendments, which shadow closely those put down by the noble Baroness, Lady Howe, reflect the two possibilities that are realistic. They are to try to find a financial way of squeezing out those who are operating out there—if they cannot make money out of it, they certainly will not continue; it is also possible to think in terms of IP.

There is a sense in which the fact that these powers exist will probably be more effective than the use of them. I say this in full understanding of the wider context—that shutting down people’s access to operating in an open economy is generally a bad thing—but there will be cases where it is necessary to do that, and we would support that if it were required.

These proposals have wide agreement. There is obviously going to be a considerable issue here, which needs to be addressed by the Government. It is up to the Government, via the Minister, to respond to the powerful case made by the noble Baroness, Lady Howe.

[Lord Clement-Jones]

My Lords, a strong case has been made by the noble Baroness, Lady Howe. It is rather nice to see the rebirth of Section 17 of the Digital Economy Act, which I had the honour of being instrumental in inserting into that Act during its passage through this House. As a result, I was nominated as the “internet villain of the year”.

As it happens, I need to correct the noble Lord, Lord Lipsey: it is not that particular section that is used in order to block ISPs where copyright infringement is being demonstrated; it is actually Section 97A of the Copyright, Designs and Patents Act, which has proved extremely effective. In a way, it demonstrates that you do not need such a complicated clause. That is neither here nor there, but it does show that site-blocking is perfectly effective. Indeed, as the noble Lord, Lord Lipsey, demonstrated, the BPI has been very successful in defending copyright owners in that respect, contrary to the views of Ofcom, which were expressed in 2010 and are the reason why Section 17 of the Digital Economy Act has not been brought into effect.

When I read the evidence of the Gambling Commission to the DCMS Select Committee, I really do not know what kind of universe it is living in. Its conclusions seem rather extraordinary. It is worth reading out the paragraph that deals with its rationale for why it did not recommend to the Government the introduction of site-blocking or financial measures of the kind the amendments in the name of the noble Baroness, Lady Howe, deal with. It says:

“We have also followed carefully the experience of gambling regulators in other parts of the world with site and payment blocking, which suggests in the gambling market such measures have achieved only limited disruption and deterrent effects”.

Actually, a lot of jurisdictions have adopted those, as we have heard today. The commission goes on to say:

“However this may be because they were tried primarily in markets where the legal offering was severely constrained and the tax rates high”.

I am not sure about that. It continues:

“In the case of UK gambling there is no equivalent to the copyright owners to seek injunctions nor any statutory power for the Commission at the moment to seek such injunctions. We came to the conclusion that, given all the other measures at our disposal and the very open and attractive legal opportunities for those licensed by the Commission, seeking additional powers in the Bill to enable the Commission to seek injunctions blocking illegal operators’ sites or use of payment processors would not be proportionate to the likely risks and would, if obtained, risk consuming disproportionate Commission resources to achieve limited disruption and deterrent effect”.

That argument seems to me to be saying, “The carrots are absolutely fantastic and that will mean that there will not be too much of an illegal market”. There are going to be illegal markets; there are going to be unlicensed operators; and the commission is more or less saying that the only stick of some kind at its disposal, and we have heard about the flaws in that, are on the advertising front.

The commission did say, however, that,

“we did not rule out the option of seeking such powers at a later date if our assessment of the small size of the illegal market proved wrong and of course there are continuing discussions on the wider government front and in the European Commission in relation to combating misuse of the internet and illegal remote gambling provision”.

It is very odd for a regulator of this kind not to be looking at the precautionary aspects of all this. At the very least, taking reserve powers for site blocking in these circumstances would make great sense. I hope that, even if the Government cannot bring themselves to say that they will introduce and implement this kind of measure, they will at least take a reasonably pessimistic view that a number of unlicensed operators will still be knocking around who need a considerable amount of stick to make them comply with the new regime after the passing of this Act.