Draft Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2024 Draft Gambling Levy Regulations 2025

Louie French Excerpts

Wednesday 29th January 2025 General Committees

[Mr Louie French (Old Bexley and Sidcup) (Con)]

It is always a pleasure to serve under your chairmanship, Mr Twigg. Almost a year ago, the previous Conservative Government, having commissioned the Gambling Act review in 2020 and published the White Paper in 2023, announced the introduction of a new £2 maximum stake for under-25s playing online, as well as a £5 limit for those aged over 25. The previous Government took that decision following a specific 10-week consultation period in which most respondents agreed with the proposals in the gambling White Paper to introduce statutory limits for online slot games. That was, as Members know, to help counter the specific increased risk of harm and life-changing losses from online slot games that had developed since the introduction of the Gambling Act 2005. It was also to help level the playing field between land-based operators and those based online, as the Minister has acknowledged.

After more than a decade and a half, all parties recognised that the Gambling Act was analogue in a digital age and that reforms were needed. Unlike what the Labour Government are announcing today, the reforms proposed by the Conservative Government were relatively modest and sought to balance the need to better support those at risk of gambling harms with the safe enjoyment of gambling, as experienced by millions across the country in a sector that is a key contributor to our economy. That is the point in which I want to press the Minister with this first set of regulations.

It appears that the Government are continuing to miss the opportunity to promote growth in the sector and to engage in the modernisation of casinos more broadly. I have raised the issue previously, and, trying to be constructive in opposition, I do so again now. As the Minister knows, the White Paper set out a number of modest but important modernisation measures for land-based casinos to allow operators to continue to deliver a first-class leisure and entertainment experience offer to their customers. That included reforms to the formula of what type and quantity of machines venues could have, as well as allowing sports betting for all casinos, which I know from my own travels is common in other countries.

I have met a range of operators from across the across the country already and it is clear that there is still a desire to invest in those businesses, despite the significant headwinds and operational costs coming from the Chancellor’s Budget, which is pushing many into the red. Are the Government planning to reintroduce the draft instrument on casino modernisation, which I understand had already been drafted by the Department before the election? If so, when can we expect that, and if not, why not?

On the same theme of growth and investment, in light of the Chancellor’s rather strange comments that the Government will be reaching out to state regulators for ideas for growth, what discussion has the Minister’s Department had with the Gambling Commission on ideas for growth? Finally, what review mechanism will the Government put in place to ensure that these changes to online stakes do not further fuel the growth in the online black market? I know that many Members will share my concerns about this growth in the gambling black market, which I am afraid to say I did warn about both before and since taking up this brief.

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[Mr French]

It is still a pleasure to serve under your chairmanship today, Mr Twigg. Unfortunately, that pleasure does not extend to the regulations that we are now discussing. The Labour Government have spectacularly managed to take a set of draft regulations that were largely settled and agreed on, after significant engagement by the previous Department for Culture, Media and Sport ministerial team prior to the election, and got them to the position we are in today, where there are major concerns across the sector about their impact and unintended consequences.

Before I highlight some of those concerns to the House today, and in the spirit of trying to be constructive in opposition, I urge the Government and the Minister, who I have a lot of time and respect for—I know she is covering today—to address a clear structural problem with how they are approaching this important policy area. As has been highlighted in some of the responses already, having the Minister for Gambling in the other place working part-time on major gambling reforms is clearly not working. While most Governments will face criticism at times for not listening, it is remarkable that in almost every conversation that the shadow DCMS team has with people across the sector, we are being told consistently that the Government are not even engaging, let alone listening. That major concern keeps coming up and is a constant theme. The Government have successfully, and remarkably, managed to unite the anti-gambling and pro-gambling sides of the sector, and everyone in between, in their concerns about the lack of engagement. Separate to the regulations we are discussing today, I ask the Minister to take that away and feed it back, perhaps through the Whips, because it is quite a feat.

Sadly, that failure to engage properly is why I believe there are a number of issues with the redrafted regulations in front of us today. First, in the broader economic context, Members might have seen the recent “Sunday Times Tax List 2025”, which highlighted what many of us already knew: the gambling industry already pays a lot of tax. In fact, the Office for Budget Responsibility estimates that in the year 2024-25, betting and gaming duties alone will raise £3.6 billion. That represents roughly 0.3% of all receipts, and is equivalent to £124 per household and 0.1% of national income. The Betting and Gaming Council estimates that its members contribute £6.8 billion to the economy each year, as well as supporting more than 109,000 jobs across the country. Although I understand that some might wish to bash the bookies, we must have a sensible debate about the collective impact of Labour’s tax rises on the sector, the thousands of jobs across the country now being put at risk and the potential unintended consequences for charities, sports such as British horseracing and the growth of the black market, as I have referenced already.

Betting revenues from horseracing are evidently falling because of flawed affordability checks, and the economic backdrop today is fundamentally bleaker because of Labour’s Budget, which adds to the broader sector concerns as the Government seek to squeeze even more money out of firms. We all must be clear that the levies being discussed will further push up costs for businesses and, when taken with Labour’s tax rises as a whole, will severely restrict or even remove the viability of smaller gambling operators and important community assets such as bingo halls and racecourses across the country.

That brings me to my next point: the scope of the amended draft regulations, which has been expanded from the previous proposals. There are deep sector concerns about who this Labour Government are targeting by expanding the scope of the regulations. For example, regulation 2 brings into scope trackside betting at greyhound and horseracing racecourses, while regulation 3 sets the minimum levy payment threshold, which had previously been agreed at £500,000 a year. However, the Government have gone much further, reducing the minimum threshold to only £10 for small operators, after which point they would need to start paying the mandatory levy and doing the administration that goes alongside that.

Unsurprisingly, the move has caused great alarm among independent and smaller firms, which are being brought into the scope of liability for levy payments for the first time. Independent bingo hall operators have also been brought into scope. Under regulation 4, these businesses will be charged at 0.2%, which I understand is double what had been proposed previously. If I am interpreting the proposed regulations correctly, they will see small independent bookmakers at courses around the country charged double the rate of pooled betting operators, such as the Tote. Can the Minister confirm whether my understanding is correct on that point?

The Government’s new proposals have also lumped independent high street bookmakers with a land-based retail rate of 0.5%, which is also up from the previous proposal of 0.4%. That means that small independent betting shops will pay an additional £1,000 a shop and an additional £500,000 in total. The Betting and Gaming Council has said that it is a real “hammer blow” to the 500 small independent bookmakers in the UK, which employ more than 2,500 people, undoubtedly leading to closures and job losses.

As if it is not bad enough that important community assets such as bingo halls and racecourses are facing a Labour battering, community lotteries are also expressing concerns about the risk of being charged the levy twice, because of how it has been drafted. That would negatively affect distributions to good causes.

I understand that the Department considered charging the levy at 0% for society lottery operators but concluded that that would amount to an exemption and would carry significant legal risks. Has a new impact assessment been carried out to analyse in greater detail the risks and concerns that are being expressed? Even if some Members are comfortable with bashing the bookies, they surely cannot be comfortable with the unintended consequences and risks resulting from less funding for good causes and a loss of jobs and community assets.

My final concern is about the potential impact on the charities and organisations that are already doing fantastic work to support those suffering with gambling addiction. As Members should already know, through the existing voluntary scheme, although it is far from perfect, hundreds of millions of pounds of contributions from gambling firms have been invested to help to fund a network of specialist charities and organisations that support those who need help. I understand that that network currently cares for roughly 85% of all problem gamblers receiving treatment in Britain, but there are major concerns and great uncertainty about how and to what extent that care can continue as the Government seek to change the system from voluntary to statutory.

First, on short-term funding, our understanding is that the regulations will lead to some firms paying a double levy this year. Ministers have been clear that they expect the industry to pay voluntary contributions this financial year, and that if these regulations come into effect, the industry will also be required to make payments on profits backdated to 1 April last year. The Minister must know that, faced with being charged twice in the same calendar year, many firms in the industry will look to minimise their voluntary payments for this financial year.

Moreover, according to regulation 4(6), the levy due this October for the first period is 33% higher than usual, so the Government not only are asking firms to pay twice in a year, but have added up front, in the fine print, an extra third on to the statutory levy. That clearly risks removing millions of pounds in vital funding from the treatment network before October when the first statutory levy payment is due. In the Minister’s response, can she tell us what risk assessment her Department has carried out on that potential drop in voluntary contributions and funding in the short term, and how many people she thinks will lose out on treatment in that time?

The new statutory levy also raises many questions and great uncertainty about how the money will be spent and the process behind the decision making, which has again been fuelled by a lack of engagement by the Government. The Minister might want to get a pen out—I can see she has one now. Who in Government will be setting the strategic direction and who is ultimately accountable for any issues arising with the levy? Is it Ministers in the Department for Culture, Media and Sport, the Department of Health and Social Care or the Treasury?

Can the Minister please confirm what target percentage will be spent on prevention, treatment and support services, and what percentage the Government expect to be spent on research? How will the Government ensure that research is not duplicated at the cost of treatment and prevention? How will services be commissioned and value for money ensured? If commissioning will primarily be led by the NHS, what support will be provided to charities to ensure that any future tendering processes do not risk their expertise being lost? Who decides who sits on any advisory boards for the levy and will the Government ensure that all views are being heard rather than just those of vested interests?

Will the Government ensure that charities funded by the voluntary levy are not frozen out by the more anti-gambling parts of the sector? Are the Government looking to expand residential treatment, currently provided by excellent charities such as Gordon Moody? The Minister’s Department has announced that the Gambling Commission will not have carte blanche for its approach, which will be a relief to many in the sector, but what does that mean in practice? How will the Government hold the commission to account?

Those are all serious concerns. I could go on, which highlights the scale of uncertainty hanging over the sector and, sadly, the lack of engagement and clarity from the new Labour Government to date. They are a loose horse with bad form and no jockey to give them strategic direction. On many of these issues, the Government are now asking us to take a leap into the dark with them—comparable with jumping Becher’s Brook blindfolded knowing it is odds on that there will be a very painful landing.

I am afraid that without some meaningful answers today, without evidence that a thorough and up-to-date impact assessment has been carried out on all these issues, and without changes to the draft regulations, we cannot support these policies. We know that they will do further damage to jobs and the industry, put community assets such as bingo halls and racecourses at risk of closure, and risk harming the very people and charities that the statutory levy is supposed to support.

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[Stephanie Peacock]

This has been a useful debate. The statutory levy has previously had cross-party support. I will respond to some of the shadow Minister’s questions, and then I will respond to the right hon. Member for Chingford and Woodford Green. In response to the shadow Minister’s opening point about the Minister for Gambling sitting in the other place, I think it was unkind to refer to her as working part time; she merely sits in the other place, and I gently remind him that the previous Government’s Foreign Secretary did the same. Perhaps we could put the political point scoring to one side.

[Mr French]

I was the Parliamentary Private Secretary to the former Foreign Secretary, so I understand what the Minister is trying to say. I am not questioning the motives of the Minister for Gambling; the point is that she is tied up, as we all know, on the Football Governance Bill, because the Government have decided to put the Bill through the other place first. Hence, she can only work part time on the gambling reforms. That is the feedback we are getting consistently, and that is the challenge I am trying to make.

[Stephanie Peacock]

I do not recognise the logic of that argument. I do not believe the hon. Gentleman served as a Minister. He perhaps does not know that a Minister has to juggle a number of pieces of legislation, and a number of different issues. The Baroness is committed to being the Minister for Gambling, and she engages with a range of the sector, and as indeed did I when I was the shadow Minister, and I continue to speak to the sector when appropriate.

As for the economic picture, I will take no lessons from the official Opposition, given the state they left the economy in. Now I want to move on to discuss the actual statutory instrument.