Gambling (Licensing and Advertising) Bill

Viscount Falkland Excerpts

Tuesday 17th December 2013 Lords Chamber

[Viscount Falkland (CB)]

My Lords, this is quite a simple Bill, as other noble Lords have pointed out. I do not know whether other noble Lords have read the Second Reading proceedings in another place. In the past I did not normally have the habit of reading Second Readings, but I read that through twice and very interesting it was, too. It was really a kind of double act between Mrs Grant for the coalition and the department, and the Member for Shipley, Mr Philip Davies, who is a rising star in another place. I agree with the drift of Mr Davies’s speech that this is entirely a Treasury matter. A lot of the things that have been spoken about in another place and even tonight obviously have connections with what we are discussing, but not very close connections.

If it was foreseeable and acceptable, I would not oppose at all the idea of the Treasury to seek further contributions by introducing this point-of-consumption tax in Europe—provided that the licences are in order and so on—but the mistake that it made, if I may make this comment early, is the one that was made during the discussions we had on the pre-legislative scrutiny committee. The noble Lord, Lord Faulkner, who was in his place and is now elsewhere, was with me on that committee and will remember what killed the whole idea of casinos. When the Budd report came out, the idea that we could restore the magnificence of the seaside resorts by gambling and possibly by resuscitating entertainment and so on seemed rather improbable and fanciful. That appealed to the Government on one basis, which is where they fell down badly. That was that to address the danger of gambling by vulnerable gamblers, those people would have to decide to take money in their pockets and make sure that they had an adequate amount to spend over a weekend when they went up to, say, Blackpool—that was the most discussed place. But it was killed absolutely stone dead as was explained to me by experts from America because there is no way that you could get investment to produce the right project when the Treasury was putting such a high tax rate on it.

As I understand it, the guide is that a tax rate of 15% will be required. It is very interesting that the Treasury should do this. It is short-term thinking but it is also quite dangerous, because if you start putting a tax of 15% on licensed companies, it is going to make it very difficult for them to operate in a way that satisfies their customers. A large number of their customers will leave the well-regulated, satisfactory operators. The online companies that are licensed are extremely satisfactory. It will encourage people to go to places where they will be less secure as consumers, where there will be ability for people who are in danger, with their addiction going and so on. That has not been thought through by the Treasury, although I can see nothing wrong with the basic idea of the Treasury getting its hands on some more income.

Various other things have already been mentioned this evening that spring to mind. The Gambling Commission, for example, will have a great deal of responsibility as a result of this. I do not particularly like quangos of any kind, and I have not been too impressed by this quango so far. It is a poor replacement in terms of performance compared to its predecessor, on which it was based, which controlled casinos from the 1960s. The Gaming Board was extremely successful in that it did not grow unsatisfactorily into a kind of an empire. It seems to me that the possibility of empire-building as a result of this Bill is considerable. They will be flying around Europe inspecting places and so forth.

Certainly in the run up to the 2005 Act, we did not discuss online gaming at any length in the pre-legislative scrutiny committee. One afternoon I went to one of the leading online gaming companies. I have always been interested in gambling, unlike the noble Baroness, Lady Pitkeathley. I was particularly interested in this visit, because I was expecting something quite worrying. But I came away fully persuaded by the way in which that operation was run, how it took into account dealing with vulnerable gamblers, and the excellence of the staff—in particular, as regards protecting themselves from dangerous and vulnerable gamblers. For companies that work online, the last thing they want is those kinds of people. They would rather spend money on weeding them out before having to deal with them. They want regular players who have got the money to do what they do. They act responsibly and check them out thoroughly. They had three or four highly educated young women in that company who had psychology degrees. Their entire job was to follow and trace their customers’ betting patterns so that they could detect at any moment if they thought such and such a person ought to be watched closely. They would then report that to their employers.

I was convinced that these younger operators, these new people in the bookmaking firmament if you will, were extremely dedicated and extremely careful to run proper businesses, because they realised that integrity was what was going to bring them customers, so it was important that that integrity was maintained, even if it cost them a lot to do so. I have no doubt that the same thing will happen under the new conditions that are now being brought in.

I do not think adverts have anything whatever to do with anything. Adverts are just boring. People who are compulsive gamblers will not be watching adverts at any time. Any restriction that you place on gambling, rather like any restriction that you place on an alcoholic, a gambler will find his way around. So the companies that have the screening process that I have just described are doing a great service, really, to the respectable people who play on online sites. I do not know why we should be talking about advertisements, but I do not think that they do any harm—they are just ridiculous. I do not think that they will encourage even children to gamble, the advertisements that I have seen, and I have watched them quite carefully.

When I was a problem gambler in my early 20s—I would call myself a problem gambler, not a compulsive gambler—I got myself in some trouble, and I went along to see my bank manager to ask for an extension of my overdraft. It was a Scottish bank, with a formidable bank manager. After our discussion he looked at me very steadily and said, “We will grant you the extension of your overdraft that you asked for, but if you will forgive me I should like to make this remark. You have been paying one or two large amounts to a particular company. I would just like you to know that the managing director of that company is an important customer of this bank. He is a very rich man, and I would advise you not to follow the path of expenditure that you have been following in this regard”. It absolutely froze me dead, and I closed all my credit accounts. What my story tells you is that the old-fashioned bank manager was probably one of the best guards against improper expenditure.

Perhaps the Minister can tell me—I ought to know, if it has been published—what percentage of public indebtedness is calculated to be down to gambling. It is an interesting figure, and I reckon that it is a very large figure.

I do not want to go on about any of the other things. I think that this proposal will produce some problems later on, as I have described. As for racing, I hope that the noble Baroness, Lady Pitkeathley, has paid a visit to the racecourse, where her daughter may have ridden, which is so wonderfully run by the noble Lord, Lord Cavendish. He may even speak to us a bit about Cartmel, which is really one of the nicest and most jolly racecourses in England, with the kind of atmosphere that she so graphically described.

Gambling is really something that gets worse when you do not indulge in it with groups of other people. As children, we all played penny poker and things of that kind. The problem with racing is that, if you become too interested in it, you burn the midnight oil and become solitary—and when you become solitary as a gambler, your problem increases. There is no doubt about that. I am thinking about online betting, and fixed-odds betting terminals in betting shops, where people play poker and roulette. In a normal roulette situation on the table, your action takes place within about eight or 10 minutes, but it takes 20 seconds on a machine. For people who are in danger with gambling, that is a very strong factor that ought to be taken into consideration.

Racing really does need to have more than the Government reckon that it needs. They seem to have thought that about £75 million is about right, but it needs about double that to do what they do with the tote monopoly in France. I am glad that the noble Baroness, Lady Pitkeathley, told us about the state aid relief, which might well make a big impact; we could get more money—and it is not just prize money but the work conditions and raising the general standard and class of the less financially able racecourses to provide their entertainment.

Racing is historically very important in this country, which is important in the world—British racing is a global brand, if you like, and we have some extraordinary racecourses. People love it and will continue to love it and I think that it needs to be backed. I hope that the Government will seriously look at racing and the problems that it faces. I raised the issue once when I said, I think, in front of the noble Lord, Lord Mandelson, that racing was in a parlous state and he said that he did not know anything about that. I am quite sure that the noble Lord, Lord Gardiner, knows about it and he might be able to give us some encouragement.