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

Stephanie Peacock Excerpts

Wednesday 29th January 2025 General Committees

[Hon. Members]

No.

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)]

I beg to move,

That the Committee has considered the draft Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2024.

It is a pleasure to serve under your chairmanship, Mr Twigg. I begin by referring to my entry in the Register of Members’ Financial Interests, having taken part in a charity bet in April 2024.

Two decades have passed since the Gambling Act 2005 was introduced. Leading gambling firms operating in this country are now some of the world’s most successful companies, with cutting-edge technological capabilities and deep insight into customer behaviour. The gambling industry and gambling behaviour have since undergone monumental change, from the smartphone to the huge increases in online gambling.

The 2023 gambling White Paper laid the foundations for what is before us today, as we introduce draft regulations on stake limits on online slots. We will later discuss the statutory gambling levy, which will fund research, prevention and treatment. The Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2024 will introduce statutory maximum stake limits on online slot games of £5 per game cycle for adults aged 25 and over, and £2 per game cycle for young adults aged 18 to 24. Online slots are the highest-risk gambling product. They have the highest rate of binge play and the highest average losses of any online product. They are associated with long playing sessions and high levels of use by people experiencing gambling harm. Online slots are also the fastest growing gambling product. The online gambling market is worth around £6.9 billion in gross gambling yield, £3.6 billion of which comes from slots.

In the past five years, that yield has grown by 61% and growth is not slowing down. However, there are currently no statutory stake limits for online slot games, unlike their land-based counterparts. As slots’ popularity grows, so does the risk for vulnerable people. Now is the time to act and stem the growing tide of unaffordable losses for people most at risk of gambling harm. We have designed these stake limits to target those most at risk of harm, while ensuring that the impact on operators is proportionate.

The lower stake limit for younger adults is an important intervention, as our research has shown that younger people may be at elevated risk of gambling harm. Young adults aged 18 to 24 have the highest problem gambling rates of any age group. This elevated risk of harm is compounded by the lower average disposable income of that group.

The industry trade body, the Betting and Gaming Council, welcomed the decision to introduce stake limits. If the regulations are agreed, there will be a transitional period to ensure that gambling operators have sufficient time to implement the changes. Operators will have six weeks from the day that the instrument is made to implement a £5 stake limit. They will then have a further six weeks to implement the £2 stake limit for younger adults. During that time, the £5 limit will apply to all adults.

These stake limits build on other rules introduced by the Gambling Commission in 2021 that make online slots safer to play. These requirements slowed the speed of play to a minimum of 2.5 seconds per spin. A raft of rules will reduce play intensity. These include a ban on autoplay features and features that speed up the display of results or that can give the illusion of control, such as turbo or slam stops. The evidence shows that such features increase the risk of harm to customers. That concludes my comments on the first set of regulations.

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[Stephanie Peacock]

I am grateful to all Members who have contributed to the debate, and of course I began by acknowledging that the 2023 White Paper, introduced under the previous Government, lays the foundations for what we are discussing.

I will briefly respond to the points that have been made. The shadow Minister raised some questions about casinos and I am very aware of the relatively modest changes being asked for by the casino sector. The Government support the measures outlined in the White Paper, and we will provide an update as soon as possible. I am grateful to the shadow Minister for his questions.

I thank the right hon. Member for Chingford and Woodford Green, who has been a doughty campaigner and done a lot of work on this issue. I appreciate his points, and he obviously believes that £5 is too high. It is worth considering that the average stake is 60p and that very few people actually bet £5. However, we know that those who do reach that higher limit are at higher risk. This statutory instrument, and indeed the White Paper as a whole, aim to balance tackling gambling harms with supporting industry. That is why we have gone for £2 and £5.

I acknowledge the comments from the Liberal Democrat spokesperson, the hon. Member for Tewkesbury (Cameron Thomas), about advertising. We have voluntary sports codes on advertising, which we can perhaps touch on in discussing the second set of regulations, when we can talk about prevention and research. With everything in gambling, there is the risk that people will go to the black market, and we do not want that to happen. That is why this is a proportionate and balanced SI.

I am familiar with loot boxes. I believe it was Sky News that did an investigation back in December, and I stand to be corrected if I have got my media organisation wrong. However, I am aware of the concerns around loot boxes. Some research has been commissioned, and we will provide an update in due course. We are aware of these new novel products and we take them into consideration.

I thank the hon. and learned Member for North Antrim for his questions and comments. We recognise our shared interest in and commitment to reducing gambling harm across the whole United Kingdom and we engage with the Northern Ireland Executive where necessary. If it would be helpful, I will ask the Minister for Gambling to write to him on his specific points. That might be useful on some of the points that he raised.

As I outlined in my opening remarks, we believe that online slot stake limits are an important and proportionate intervention aimed at the people most at risk of gambling-related harm. We think this is timely regulation, as online slot games continue to grow in popularity and gross gambling yield. The limits will bolster safer gaming design requirements to ensure that online slot games are safer to play than ever. Online slot stakes limits should serve as a maximum stake that customers can choose to stake up to, rather than as a new default that operators can drive customers towards. Operators currently offer stakes from as little as 1p a spin, and we would expect a range of staking options far below the maximum to remain available.

Finally, a number of questions were asked about when the limits will be reviewed. The Secretary of State will review these limits within five years.

Question put and agreed to.

Draft Gambling Levy Regulations 2025

[Stephanie Peacock]

I beg to move,

That the Committee has considered the draft Gambling Levy Regulations 2025.

It is a pleasure to serve under your chairship again, Mr Twigg. We move on to discuss the proposed draft regulations for a statutory gambling levy. From April this year, all licensed operators will be required to pay an annual levy to the Gambling Commission. The rates at which licensed operators pay the levy are set down in legislation, and licensees are at risk of losing their licence if they do not pay. We are clear that the statutory levy is a key part of our agenda for change. It is crucial to making our vision for the future of research, prevention and treatment of gambling harm a reality.

I recognise that the statutory instrument is narrowly focused on the payment of the levy, and that is why our response to the statutory levy consultation, published last November, presented a fuller picture of the future system and a sense of our ambition. The levy represents a watershed moment as well as a significant uplift in the investment dedicated to this area, greater Government oversight and a renewed commitment to further understanding, tackling and treating gambling harm.

The levy is not about change for change’s sake, and we want to build on the successes of the current system. The significant contribution that the gambling industry has made to supporting research, prevention and treatment since the introduction of the Gambling Act 2005 has been crucial and has allowed an expansion of the support and treatment options available for those in need. However, we now need a sustainable and equitable funding system so that all licensed gambling operators pay a fair share.

The levy provides us with an opportunity and the resources to put in place the right projects and services, with clear objectives and robust governance. We want a world-leading funding and commissioning system to reduce gambling-related harm. For that, we are mobilising existing expertise and infrastructure to move at pace, working with UK Research and Innovation, NHS England, appropriate bodies for Scotland and Wales, the Gambling Commission and the third sector. We are transforming the current system to deliver better access, outcomes and services for people across our country.

As Members will know, the Government’s next steps on prevention were not included in our recent publication. Prevention is crucial for future efforts to reduce gambling harm, but it is also a complex area and it is right we have taken the time to get the decision right. Developing a comprehensive approach to prevention with the right mix of projects and services is, as I have said, complex, but we expect to publish our decision soon, and I am confident that the Government will confirm their decision ahead of the debate on these regulations in the other House.

For the first time, sustainable ringfenced funding will be used across Great Britain for vital treatment, as well as to better understand the causes of harm and early intervention to support greater awareness and reduce stigma. Robust Government oversight will also ensure that the levy funding has an impact on the ground. The regulations represent the beginning of a new phase for gambling harm reduction, where people in our country are better protected and aware of the risks of harmful gambling. The levy is a crucial first step to delivering that, and I look forward to discussing this further. I commend the draft regulations to the Committee.

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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.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

In her first sentence the Minister says we should move on from these political points, then in the second sentence says she will take no lessons from us on how we managed to wreck the economy. I would like it if she could reflect on those two sentences, to see whether they are mutually compatible.

[Stephanie Peacock]

I will certainly do that.

I would now like to move on to discuss the matter before us, and to deal with some of the points that the hon. Member for Old Bexley and Sidcup made. He mentioned more than once the desire to bash the sector. I certainly do not want to do that. I enjoy a trip to the races as much as anyone. I recognise the contribution that the betting and gambling industry makes to my constituency in Barnsley South, and I have visited a number of those outlets. The regulations are about getting that balance and acknowledging that millions of people like to gamble regularly but that there is a significant issue and challenge in this country with gambling-related harm. As the right hon. Member for Chingford and Woodford Green pointed out, this has been a long-standing, cross-party piece of work and a number of hon. Members have done a huge amount of work on it—more than I have—to bring it together over a number of years. Obviously, we had the 2023 White Paper and we now have the statutory instrument that will introduce the levy.

I will now turn to the questions asked by the hon. Member for Old Bexley and Sidcup. We have listened carefully to the arguments made by the land-based sector, and we understand its higher operating costs. We are keen to work with it, and we are confident that this is evidence-led and that it gets the balance right. It is not our intention for there to be double payments, and I believe officials are working to clarify that. I will certainly write to hon. Gentleman. He asked for the breakdown: 20% will go to research, 30% to prevention and 50% to treatment. We of course recognise the role that the third sector has played over many years.

The hon. Gentleman mentioned society lotteries. We had a debate in this place on Friday last week. I only had four minutes left to speak, but I briefly outlined the Government’s position. We have committed to come back to this place on that by the summer. We have commissioned independent research on society lotteries, which is due to report by next month, and we will be reporting to the House on that.

I will now move on to the points made by the right hon. Member for Chingford and Woodford Green. I once again acknowledge his contribution to the debate and to the work in front of us. We want to make sure that this is the most effective and efficient levy, so he is absolutely right that, if there are questions, we want to work with the sector and with relevant charities to get it right. As with anything new, that may take some time. We do not believe that those challenges are a reason to oppose these regulations. I appreciate his support, and I acknowledge the contribution he has made. On his specific questions about GambleAware, we acknowledge the role that industry funding has played in raising awareness previously. We are aiming to build a comprehensive approach to prevention for the first time, and it is a priority to ensure that funding is directed to where it is needed most. I will write to the right hon. Gentleman with a more specific answer, and I appreciate his contribution.

Question put.