Online Gambling

Lord Trevethin and Oaksey Excerpts

Thursday 23rd November 2017 Lords Chamber

[Lord Trevethin and Oaksey (CB)]

My Lords, I also pay tribute to the noble Lord, Lord Browne, for raising this important matter and for his powerful and moving speech. I want to declare an interest of a sort: I have been instructed in a number of cases involving addicted gamblers who have sought to self-exclude. While for obvious reasons I will not go into the detail of those cases, the pattern that recurs is as follows. The gambler, in what the Gambling Commission refers to as a moment of lucidity, decides to stop and presses the button on the screen marked “self-exclude”. That button has alongside it a period of time. It is normally not less than six months, for reasons that I do not understand, and at present it is normally not more than five years—I shall come back to that a little later.

The moment of lucidity passes and the gambler decides that he or she—it is almost always he—wants to go back to gambling. It is often possible to circumvent the self-exclusion simply by using some other operator. Sometimes, in cases where gamblers want to wager very substantial sums of money, there are a limited number of sites that will provide the necessary service. Then, the gambler has to use some sort of subterfuge to get back online; a different name is used, for example. Money inevitably is lost and, in the cases I am talking about, astonishing amounts of money are lost in a very short period. Then the gambler may try to recover that money from the bookmaker provider. Issues then arise as to the steps the bookmaker has taken to satisfy itself that the gambler has not self-excluded. Issues tend to arise as to whether the bookmaker actually knew that a self-excluded gambler was coming back to the tables, or at least turned a blind eye to that fact for commercial reasons that are not difficult to understand.

That sort of problem is arising in the courts. Until now, disappointed self-excluded gamblers who have brought such claims have found it difficult to make them good because they have run into a defence which is of some relevance to the policies under consideration in this debate. The defence that the bookmakers tend to run—not a particularly attractive one—is a causation defence. They say, “Yes, we probably should not have let you gamble all that money, but if we had not let you come on to our virtual tables and lose hundreds of thousands of pounds, you would have found another online provider who would have taken your money. Therefore, you have suffered no loss. Therefore, you have no claim”. There is a case involving a gambler called Calvert, who was suing William Hill, in which the claim failed for that reason.

That is the legal context. In working on those cases, I have had occasion to look at the change in the law that occurred in 2005. I went back to the White Paper, which the Government produced before the Gambling Act 2005 was enacted. I noted that the White Paper was entitled, rather troublingly, A Safe Bet for Success. Yes, perhaps, but the success in question would be that of the bookmakers. The paper characterises the existing legal framework as it then stood as being one of grudging toleration. Some of the powerful speeches that the House has heard this afternoon may indicate that that is precisely the attitude that the legislature should have to gambling.

The position taken by the Government before they enacted the Gambling Act 2005 was very different. It was expressed as follows. In the Government’s view,

“the law should no longer incorporate or reflect any assumption that gambling is an activity which is objectionable and which people should have no encouragement to pursue … It is an important industry in its own right, meeting the legitimate desires of many millions of people and providing many thousands of jobs”.

That passage appeared in a very short section headed “Dealing with the downside”. This debate is concerned with the downside and, in the time I have available, I shall make one or two practical observations about the reforms being discussed.

Before I do that, I want to say something about the profits that are being and will be generated by online gambling. Some of the figures have been mentioned. I was struck by this useful briefing paper to be found in the Library. The gross gambling yield, which is the return to the bookmaker, taking into account any winnings that have to be paid out to the punter, has risen year on year from £12.6 billion to £13.8 billion—the latter figure is for 2015-16. That is a rise of £1.2 billion in a year and, give or take, about a 10% increase. Those are good figures for the bookmakers. During the same period, the gross gambling yield from remote gambling—online gambling of the type we are discussing—rose from £3.6 billion to £4.5 billion, a rise of £0.9 billion. So one can see that a large part of the increase in the profitability of the industry that has occurred in that period is attributable to such online gambling.

A further consideration indicates the power of the commercial motivations that will affect bookmakers’ operations. The provision of online gambling is, relatively, very cheap. That is obvious, because you do not have to build and pay for a casino building or pay for the employees in a betting shop, and so on. This striking statistic caught my eye: just over 6,000 employees are employed in the remote sector—the online sector—whereas some 106,000 employees are employed in the entire gambling sector. That rather brings home just how profitable online gambling is for those who provide it.

Members of the House have spoken eloquently and movingly of all the moral problems and personal tragedies caused by online gambling. There are moral questions here. If one goes into a betting shop, as I do occasionally—for research purposes, obviously—and one looks around, one sees dead-eyed men, and they are almost always men, hunched over the FOBTs, occasionally exploding into impotent rage. First of all, you are reminded of similar scenes that must be taking place in the bedrooms of our children all around the country, which is disturbing. I am also reminded of a line in a piece by Rebecca West, which I adapt. She said that a visit to the casino is a foretaste of death, where the dominion of the will gives way to the dominion of the worm. That is a rather dramatic way of expressing what, in my view—and I think that of many noble Lords who have spoken in this debate—is a moral question.

In the time available, I make three or four short practical observations and points. First, will the new multi-operator self-exclusion scheme leave open the possibility for UK gamblers to access non-licensed foreign sites that do not subscribe to the scheme? If so, the new scheme will not do its job. I would be very interested to know what protection might be provided in that respect. Secondly, I echo the compelling arguments against a two-tier system and in favour of a one-tier system. Thirdly, I am most anxious to know whether it will be possible for addicted gamblers to exclude themselves for life—they should be able to do that. Fourthly, I would be very interested to know what sanctions are to be imposed for non-compliance by bookmakers with the new system. Their commercial interests lie elsewhere. For them, the bigger the problem, the bigger the profit.