Gambling Harms

Louie French Excerpts

Wednesday 5th February 2025 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Turner. I thank the hon. Member for Halesowen (Alex Ballinger) for securing a debate on this important and sensitive issue.

As we have heard, betting and gaming are key economic contributors. Last year Ernst & Young reported that the industry supported more than 100,000 jobs, generated over £4 billion in tax revenue and contributed close to £7 billion to the wider economy. Across all forms of gambling, more than 22.5 million adults in Britain enjoy a flutter every single month and generate almost £11 billion in gross gambling yield every year. The vast majority of this is done safely, supported by measures enacted by regulated operators and enforced by the Gambling Commission.

However, there are a number of people who have suffered harm because of gambling, whether that is financial harm or, in tragic cases, suicide, which we have heard about today. My heart goes out to all the families impacted. We must continue to take this seriously and provide the best support we can. For example, the current voluntary system funds a vital network of charities to support problem gamblers.

We are fortunate in the United Kingdom that rates of problem gambling are relatively low compared with European countries. Greece has a problem gambling rate of 2.7%. France has a rate of 2.9%, and the Czech Republic has a rate of 4.5%. The United Kingdom’s problem gambling rate almost halved from 2016 to 2023 and now sits at 0.4%, according to the gold-standard NHS health survey. We would all like to see the rate become 0%, which is why the sector already contributes and why we must get the balance right in this area of legislation.

Over the last four years, the sector has contributed more than £170 million to the research, prevention and treatment of gambling harm, with more than £50 million volunteered in the last year alone. That money funds a vital network of charities to support problem gamblers, which cares for approximately 85% of all problem gamblers receiving treatment in Britain. However, that work is now being put into doubt by the Government. The Gambling Levy Regulations 2025, which the Minister and I debated, among other colleagues, in a delegated legislation Committee last week, risk the much-needed funding stopping in the short term, as the transition to a new statutory levy takes place. The new regulations will lead to a double levy this year, with the voluntary levy still in place and the statutory levy taxing gross gambling yield backdated to April last year. Not only that, but this first levy period is being charged at 133% of the rate for subsequent years.

Even those with the purest intentions, including those providing the current prevention and treatment programmes, are aware of the enormous damage that could do. There are clear risks of a gap in funding from the ending of the voluntary levy in April to the first collection of the statutory levy in October. As businesses, the sector will have to take decisions to survive Labour’s tax rises, which could include minimising voluntary payments to the current minimum of just £1 for this year.

I raised that issue in our debate last week, but the Minister did not give me or the sector an answer, and I wonder whether she will answer this vital question today. How will prevention and treatment programmes be funded when the voluntary funding is minimised but the statutory levy is yet to be collected or distributed? The sector was broadly supportive of the statutory levy proposed under the previous Government, but the way in which it has been introduced, with higher rates than those the Department previously discussed with the sector, means that both gambling businesses and treatment charities are deeply concerned about the outcomes and unintended consequences. Will the Minister tell us today how many people she thinks will lose out on vital treatment in that time? I know she is not the Minister for Gambling, but she is accountable for gambling to us in the Commons.

As I set out last week, there are many there are many concerns across the sector about the lack of engagement coming forward. Over the several months in which I have asked questions, I have yet to receive any response from either the Minister or the Minister for Gambling in the other place. Why are the Government leaving the betting and gaming sector in the dark? Will the Minister finally give us the answers that we have been waiting so patiently for? What about GambleAware, which has stated that it needs the confirmation of its funding for the period to April 2026, when the new system will be fully in place? I am sure that it has also told the Department about this, but it is becoming increasingly urgent as it is uncertain about how it commissions services going forward, including commissioning via the crucial national gambling support network, which helps fund many of those charities that I have already highlighted across the sector. GambleAware needs clarity.

Not only are the Government consciously leaving the prevention and treatment of gambling harm in a state of uncertainty, but the higher rates of the levy now to be charged will also have further implications. The higher costs on companies will lead to business closures and job losses, particularly among smaller firms, as well as a reduction in tax revenue for His Majesty’s Treasury, and they will have a knock-on effect of up to £60 million in business rates that are currently flowing to local authorities. That, in turn, will have a dual impact.

First, it will likely increase participation rates in the black market, where no regulations or safeguards apply, and no levy revenue will be generated. As Members will know, black markets are created when gambling customers cannot access products or, more pertinently, find those products highly restricted in their domestically regulated market. No amount of anti-black market measures will prevent a black market from forming if customers cannot gamble enjoyably with limited frictions. Here in the United Kingdom, we have historically enjoyed a relatively low level of black market participation, but there is clear evidence that this is a growing risk and there are clear reasons why, including price frictions in bonuses and free bets, as well as other financial limits, such as affordability checks, not being enforced properly.

We are reaching a tipping point of the Government’s own making—a point at which those most at risk from gambling harm will be unable to wean themselves off gambling in a responsible and monitored way. Instead, they will turn to illicit bookies and international websites to meet their needs. A report by Regulus Partners confirms this, stating:

“On the current pattern of increasing consumer friction in the domestically regulated market… international experience shows Britain’s illegal gambling leakage could more than double.”

If that happens, the most at risk will be furthest from the help that they desperately need. It will also continue to damage British horseracing, as mentioned by other Members.

There is a middle ground in allowing players to engage with betting and gaming safely, with plenty of warnings and signposting to the help they can receive. If we push the cost of safe and legal betting to such a height that participants choose to exit the market in favour of cheaper prices and better odds in the unregulated market, it would undermine efforts to make gambling safer and would force more players and more money into unregulated providers who do not need to comply with regulations around safer play.

I asked the Minister several questions last week, and I will ask them again to see whether she has had time to confer with her colleagues. First, 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 her Department, the Department of Health and Social Care or the Treasury?

Secondly, 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 how will the Government ensure all views are heard rather than just those of vested interests? Will the Government ensure that charities currently being 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 be given a carte blanche, which I know 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?

I want to place on the record my thanks to the many amazing charities, such as Gordon Moody, Deal Me Out and others, representative of which are in the Gallery. They continue to do fantastic work to help people turn their lives around, and they are at the forefront of helping those who suffer the harmful effects of gambling. They should be the ones we keep in our minds throughout these discussions, as we try to strike an appropriate balance that ensures safe gambling across the country. Will the Minister reassure those watching from the Gallery and from afar that she will make sure that her ministerial colleagues meet them, listen to them and put in practice their expertise in this field? They know what they are talking about. Do the Government?

[Karl Turner (in the Chair)]

Before I call the Minister, I remind her that I would like very much to allow Alex Ballinger two minutes to wind up at the end.

--- Later in debate ---

[Mr French]

The Minister will be well aware that the reason that we voted against the levy was not the principle of it—as she just acknowledged, it was designed by the previous Government—but how it has been changed by the new Government and the risks that I outlined in both my questions today.

[Stephanie Peacock]

I will come on to answer some of those points, but in the interests of time, I will endeavour to get the Minister for Gambling to write to the hon. Member with a full response.

The shadow Minister also asked about operators paying more in the first year. That is simply not correct. The levy is charged at a flat rate based on previous years’ profits. We believe that is the fairest and most sustainable way forward. Operators’ first levy payment will be based on profits reported to the Gambling Commission via regulatory returns. The commission changed the returns process for non-lottery licences last July. As such, operators’ first levy payment is based on three quarters’ worth of data multiplied by 1.33 to get the full year.

On the assessment the Government have made about anyone losing out on treatment in the transition period, we are clear that operators must maintain the level of contributions to the National Gambling Support Network to ensure that it has the funding it needs. We have received reassurances from the industry that that will happen. As I have just said, I or the Minister for Gambling will write to the shadow Minister. In the interests of time, I will move on to make some progress on the question before us.

We know that the vast majority of people who gamble do so safely—indeed, half of adults gamble each month. The shadow Minister and my hon. Friend the Member for Easington (Grahame Morris) spoke about the contribution the industry makes economically and in terms of jobs, and I will not repeat those comments. However, 300,000 people in Great Britain are estimated to be experiencing problem gambling. It is clear from today’s debate that many of us share the commitment to do more to protect people who are suffering that harm, especially given the significant changes that we have seen in the sector in recent years.

In that context, the Government are committed to taking forward White Paper measures such as new protections on marketing and bonuses, financial risk checks to prevent unaffordable gambling, and allowing consumers to seek redress from gambling operators via an ombudsman, which has been discussed today. We will continue to work with the industry, the third sector and the Gambling Commission to ensure that the reforms are proportionate, targeted and effective.