Statutory Gambling Levy

Ronnie Cowan Excerpts

Tuesday 7th June 2022 Westminster Hall

[Scott Benton]

There is clearly more work that we can do in this area, but it would help if the NHS had a long-term strategy for dealing with the issue, which it lacks at present. I will say more on that point in a few moments.

Under current arrangements, all companies regulated by the Gambling Commission are expected to make a voluntary contribution of 0.1% of turnover. To put that in context, in 2019-20 that figure was £10 million. Most of the funding goes to GambleAware, which is a totally independent charity. The industry has no say whatever on how that money is spent. In its five-year strategy published last year, the charity says that it expects to see that income increase to £39 million by the year ending 2024. As the hon. Member for Swansea East alluded to, the four largest gaming companies—Entain, William Hill, Flutter and Bet365—have agreed to increase their contributions to 1% of turnover. That is an additional £100 million over a four-year period to tackle the issue, with all of that funding going towards tackling and preventing the causes of problem gambling.

As I said in response to the intervention from the hon. Member for Sheffield Central (Paul Blomfield), the NHS still does not have a long-term strategy to tackle problem gambling. It was only in 2019 that the Department of Health announced it would open 15 new NHS clinics for addicts. Despite that, only five are open so far, with three more supposedly coming online later this year. Meanwhile, it is the industry and charities that have spent the last two decades trying to tackle the issue. Currently, charities use about 160 locations for face-to-face counselling services—part of an already mature network of clinics, treatment centres and outreach programmes that are making a real difference right now.

A statutory levy would risk charities’ existing funding models by taking cash out of their coffers and putting it into the NHS, which, sadly, is not yet set up to delivering those services.

[Ronnie Cowan (Inverclyde) (SNP)]

Has it crossed the hon. Member’s mind that the difficulty for the NHS in rolling out its plan for 15 clinics is the lack of guaranteed funding, which is exactly the strategy that a smart statutory levy would cover?

[Scott Benton]

The issue has been around for decades. Obviously, the gambling review is long awaited. Hopefully, that will help to address the issue, but it is unmistakable that the industry has taken voluntary steps over the years to try to tackle the problem. What we need is a consensus on the most appropriate way forward. For the reasons outlined, I do not think that a statutory levy is the answer, but I am open to hearing all Members’ views, so I am attending the debate to hear both sides of the argument.

A clumsy one-size-fits-all approach would have a disproportionate effect on land-based operators, which are only just recovering from the pandemic. In truth, it would be catastrophic on those businesses, because, like the rest of the hospitality sector, they have many fixed costs to fund, including staff, business rates, tax and licences. A tiered system would take that into account and better protect jobs.

--- Later in debate ---

[Ronnie Cowan (Inverclyde) (SNP)]

Thank you very much, Mr Betts. It is a pleasure to be here this morning. I thank the hon. Member for Swansea East (Carolyn Harris) for bringing forward this debate.

Gambling legislation is reserved to Westminster. The UK Government must publish the gambling review White Paper and that must include a smart levy on the gambling industry. In December 2020, Westminster announced a review of the Gambling Act 2005, which generated some 16,000 responses to a call for evidence. Yet, in June 2022, we are still no further forward from where we were in December 2020.

I have been told that the White Paper is “imminent”, “very imminent” and even “very, very imminent”, but there is still no date. Once the paper is published, there is still quite a journey before it becomes law and no doubt there will be an implementation period, too. While we dither, gambling-related harms impact vulnerable people in an unabated manner, so we must act, and act now.

We are rapidly approaching the summer recess. Minister, we need the paper now, so that it can be scrutinised and debated. We need to make substantial progress before the summer recess. We are here today, of course, to debate a statutory levy. However, I confess to being slightly confused after reading the Library briefing on this issue. Excellent as such briefings always are, this one informed me that the Gambling Act 2005 regulates gambling in Great Britain. The Act has three licensing objectives: preventing gambling from being a source of crime or disorder; ensuring that gambling is conducted in a fair and open way; and protecting children and other vulnerable persons from being harmed or exploited by gambling.

The 2005 Act is overseen and enforced by the Gambling Commission and that is where I got confused. Under section 123 of the Act, the Secretary of State for Digital, Culture, Media and Sport can make regulations requiring gambling companies to pay an annual levy to the Gambling Commission. Section 123 clearly states:

“The regulations shall, in particular, make provision for—

(a) the amount of the levy;

(b) timing of payment of the levy.

(3) The regulations shall, in particular, make provision for—

(a) determining the amount of the levy by reference to a percentage of specified receipts of an operating licence holder,

(b) determining the amount of the levy by reference to a percentage of specified profits of an operating licence holder”.

And more points are set out. Reading this section, it looks to me and reads to me as a smart statutory levy. Minister, why has section 123 of the 2005 Act never been commenced? Why are the Government not implementing a statutory levy now?

Currently, the Gambling Commission requires all licensed operators to make a voluntary contribution of 0.1% of net revenue towards the research, prevention and treatment of gambling-related harm. Most operators donate to GambleAware, a charity that commissions support for problem gamblers as well as research and awareness-raising about gambling-related harm.

In July 2019, the right hon. and learned Member for Kenilworth and Southam (Sir Jeremy Wright), who was then the Secretary of State, announced that five of the largest operators would increase their donations from 0.1% to 1% over the following four years. However, the current funding arrangement does not generate enough money to prevent and treat gambling-related harm. In a September 2020 paper for the Gambling Commission, the Advisory Board for Safer Gambling said the current funding system was

“no longer fit for purpose”.

That is nearly two years ago now.

A statutory levy would address issues of transparency, independence, equity. sustainability and public confidence. It would also have the potential to raise

“significantly greater levels of funding”

and it would also guarantee funding, so that service providers can confidently plan to recruit and train into the future. And it is not just me who is saying this. In April 2022, GambleAware called on the Government to introduce a mandatory levy of 1% of gross gambling yield. According to GambleAware, this would raise £140 million annually and would

“enable better longer-term planning and commissioning for services to prevent gambling harms”.

Unfortunately, the Betting and Gaming Council is part of the problem. In a May 2022 blog, Brigid Simmonds, Chair of the Betting and Gaming Council, claimed that a statutory levy would not make a “tangible difference” to research, education and treatment or to problem gambling rates. She said that the current funding system was “making good progress” and warned that the “clumsy one-size-fits-all approach” of a statutory levy would have a “disproportionate effect” on land-based operators that were just recovering from the covid-19 pandemic.

“Making good progress”—where is the evidence for that? The clock is ticking, people are being harmed and people are dying. And nobody is talking about a “clumsy one-size-fits-all approach”. We have identified that we require a smart levy—the polluter pays. It is callous remarks like those from the Chair of the Betting and Gaming Council that clearly show that the funds raised by a levy must be ring-fenced and allocated to NHS-commissioned work. The expenditure should be identified and allocated by medical experts, and not by the gambling industry, their appointees or politicians.

More often than not, the debate about this issue has come down to money. How do we pay for the outcomes that we seek? Where does that money come from? However, we must acknowledge here today that behind the call for money, the reality is that people are being harmed and people are dying. We need appropriate, timely action and the time for it is now.

--- Later in debate ---

[Nigel Huddleston]

I can say no more than that we will be publishing in the coming weeks. I am afraid that my hon. Friend the Member for Croydon South is currently detained elsewhere, so the coming weeks is all I can say today.

[Ronnie Cowan]

I asked the Minister a question about section 123 of the Gambling Act. I do not understand why it has not been enacted.

[Nigel Huddleston]

The answer lies in the evidence given in the debate today. As I have said, we are looking at the Gambling Act review and considering the options and the arguments made today, but there is not 100% support for that at the moment. We committed to looking at that as part of the review, and I am afraid the hon. Gentleman will have to wait for the report to come out in the coming weeks.

I thank right hon. and hon. Members for their contributions. I will make sure that the Minister responsible gets a full report of today’s debate.