Financial Risk Checks for Gambling

Stephanie Peacock Excerpts

Monday 26th February 2024 Westminster Hall

[Stephanie Peacock (Barnsley East) (Lab)]

It is a pleasure to serve under your chairship, Sir George. I refer to my entry in the Register of Members’ Financial Interests.

The fact that over 100,000 people have signed the petition on financial risk checks in less than a month shows the strength of feeling on the topic. I pay tribute to my hon. Friend the Member for Neath (Christina Rees) for leading this important debate. This issue is important to everyone who offered their signature, as well as to the gambling and racing industries, which want to be sure that the checks are truly frictionless before they are rolled out. It is also crucial for organisations and families who are concerned about gambling harms and want confirmation that the updated regulation in the gambling White Paper will be going ahead. The Government must be able to strike that balance, as they have promised.

I would like to set out the context for introducing financial risk checks as part of the gambling White Paper more broadly. Half of adults across the UK gamble each month. The vast majority do so safely, moderately and in a way they enjoy. I remember my nan going to bingo every week when I was growing up, and I have always enjoyed going to the races—I was pleased to attend the St Leger last year. For some, however, gambling can become a more serious problem: 300,000 people across the country experience problem gambling, and 1.8 million are considered to be at elevated risk.

The last time gambling laws were updated was back in 2005. Since then, the landscape has changed dramatically. Thanks to our tablets, laptops and phones, most people now have the potential to carry a casino in their pocket, meaning that they can gamble anywhere and make huge losses in a very short time, as my hon. Friend the Member for Swansea East (Carolyn Harris) outlined; I really appreciate the work that she has done over many years in this area. Because of that rapid growth in technology and our growing awareness of the impact of gambling harms, changes to our gambling regulation are now long overdue.

In my time as shadow gambling Minister, I have met those who are recovering from addition, as well as family members who have suffered the unimaginable pain of losing a loved one. For those people, it is absolutely clear that gambling harm has the potential to be devastating, and that more must be done to ensure that families are protected, as my hon. Friend the Member for Sheffield Central (Paul Blomfield) spoke powerfully about.

Affordability checks form part of the new, modernised system of gambling regulation that is fit for the future. Accompanied by other measures such as online stake limits, data sharing between gambling firms and a crackdown through the regulator on black market activity, they will ensure that the law does more to protect children and adults who are vulnerable to harm.

The right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) spoke about how early intervention in the form of checks can make a difference and change the course of addiction. That may well be the case—it is important to make early interventions if we can—but it strikes me that there is a piece missing, because it is not clear what intervention will take place as a result of the checks. This is perhaps not an issue that we can solve here today, but it needs to be considered in the wider context of the White Paper.

As colleagues have outlined, it is also important that our regulation recognises that many people enjoy betting safely and without harm; the hon. Member for Shipley (Philip Davies) outlined that point robustly, as always. The Government must therefore be clear on how they will actually go about ensuring that affordability checks are accurate, frictionless and non-intrusive for consumers, as they have promised. I will conclude my speech with a number of specific questions for the Minister, but I will first speak briefly about why, in this context, the racing industry in particular is concerned about the nature of the checks.

Many Members have spoken about the impact that racecourses have in their constituencies, and I will try to list them. We had the hon. Member for Bath (Wera Hobhouse), the right hon. Member for West Suffolk (Matt Hancock) with Newmarket, the hon. Member for Windsor (Adam Afriyie) and the hon. Member for Tewkesbury (Mr Robertson) with Cheltenham. The hon. Member for St Helens North (Conor McGinn), who is a huge champion for the industry, spoke about his racecourse, Haydock. The hon. Member for East Lothian (Kenny MacAskill) spoke about Musselburgh, and the hon. Member for Waveney (Peter Aldous) spoke about the economic benefit of racecourses in such areas. Apologies if I missed anyone out.

Last week, I hosted a roundtable with representatives from the racing sector, including those who started today’s petition. They shared their thoughts on the potential unintended consequences of the checks, which the hon. Member for Mid Norfolk (George Freeman) spoke about very powerfully. Racing and gambling have a naturally symbiotic relationship, with the success of each industry somewhat dependent on the other. With more than 5 million spectators enjoying a trip to the races each year, it is clear that many people enjoy the combination too, making it the country’s second favourite sport. However, as a result of the partnership, the Government predict that the White Paper will cost the racing industry £14.9 million, with the British Horseracing Authority saying that that could rise to almost £50 million a year when considering the impact of the levy, media rights deals and overall funding.

In turn, as we have heard today, such losses could lead to lower prize money, decreasing participation, job losses in the rural economy and an overall decline in the sport. It is important for racing that the Government and the Gambling Commission work with the industry to ensure that financial risk checks are truly frictionless, targeted and accurate.

[Philip Davies]

The hon. Lady is being very generous, and I commend her on being knowledgeable on the subject. I have a lot of time for her, as she knows. Based on what she said, would she support the calls that we have heard from many hon. Members today that perhaps a distinction should be made between games of skill and games of chance? I took from what she said that that would probably deal with the two separate issues she referred to.

[Stephanie Peacock]

I understand that argument, and I have some sympathy for it. However, I do not think that we can carve out horseracing in particular as being free of harm; I simply do not think that is the case. Of course the harm for the horses is less than some, but it is greater than others. We need to strike a balance. I am sympathetic to the argument made by the hon. Gentleman, and I am sure that the Minister will pick it up when he speaks. That is also why it is right that we should work to find a future-proof settlement on the horseracing betting levy, which contributes about £80 million to £100 million to the sport. I hope therefore that the Minister can update us on how the review into that is progressing.

Let me move on to the specifics of how the checks will be conducted. The Minister must be clear on how friction will be removed from the system. Indeed, in those rarer cases where it is proposed that bank statements or payslips might be needed as part of an enhanced check, it is unclear just how frictionless the process could possibly be. Concerns have also been raised with me about the value of using net losses alone without combining them with other markers of harm to prompt an affordability check. As a result, it would be helpful if the Minister could set out in full the latest thinking on how the checks will be conducted, so that they are accurately targeted and have limited user input. In the absence of that, can he let us know when we might expect a full response to the consultation?

The Gambling Commission confirmed late last week that the lower-level checks will use only publicly available data and will run on higher thresholds to start with. It also said that for enhanced checks there will be a pilot to test the details of data sharing. Can the Minister confirm the pilot to the House today and outline how the Department will work with the commission, credit agencies and the gambling industry to ensure its smooth running? Further to that, it would be reassuring if the Minister could set out how the pilot and higher threshold period will be evaluated. For example, what issues will the commission look out for, and what criteria will define success? It is important that we get that right. If the checks are not frictionless or are more disruptive than genuinely useful to those who are at risk, there is a risk that customers will be driven from the regulated industry to the black market, where there are no safer gambling protections whatsoever. That is a real concern, as has been spoken about today.

There is consensus on the need to update our regulation so that vulnerable people are better protected from gambling harms in the modern age. However, at the same time the punters, racing and the gambling industry deserve some clarity about how the Government will ensure that affordability checks are carried out with accuracy and in a way that does not cause unnecessary friction for those gambling responsibly. I look forward to hearing from the Minister how the Department plans to strike that balance.