My Lords, this has been a most informative and interesting debate, and I thank my noble friend Lord Chadlington for bringing it and allowing us to discuss these important issues.
As the noble Lord, Lord Roberts, mentioned, for millions of people gambling is an enjoyable leisure activity. We all remember as children putting our pennies in the slot and those claws coming down. In a way, that was a good thing for me because I never won anything, so that put me off gambling from a very young age.
The Gambling Act 2005 allows licensed gambling to be offered and advertised. But the same Act makes it clear that this subject has essential objectives. Gambling must be kept free of crime, kept fair and open, and the vulnerable must, as mentioned by my noble friend Lord Chadlington and the noble Lord, Lord Berkeley, be protected. Protecting children from being harmed or exploited by gambling is one of the core objectives of the Act and a priority for the Government. As the right reverend Prelate mentioned, children are among the most vulnerable, and must be protected.
There are already strict controls on the content of gambling adverts, whether or not they are on television. Operators must comply with the advertising codes of practice, which are regulated by the Advertising Standards Authority. The ASA acts on complaints and proactively checks the media to take action against misleading, harmful or offensive advertisements. The codes include many provisions to protect children and vulnerable adults from harm. For example, gambling adverts must not appeal particularly to children or young people, especially by reflecting youth culture. They must not exploit the susceptibilities or inexperience of children, young people or other vulnerable people. It is also forbidden to show or encourage gambling behaviour that is socially irresponsible or could lead to financial, social or emotional harm. The rules apply to all forms of advertising, including social media.
The gambling industry also has its own code for socially responsible advertising. This bans gambling advertising on TV before 9 pm, except for bingo and lotteries, and advertising sports betting around televised sporting events. So it is forbidden to target adverts at children. It would also be a waste of money. Children are not allowed to participate in most forms of gambling, and it is an offence to invite a child to gamble. The noble Lord, Lord Roberts, mentioned betting shops being so prevalent. There are strict controls to prevent children from gambling both in premises and online, via the Gambling Commission’s licence conditions. Where there is a failure to prevent underage gambling, the commission will take regulatory or criminal action.
As my noble friend Lord Chadlington mentioned, the Gambling Commission published a survey of children’s gambling behaviour in November last year. While 16% had gambled in the previous week, most of the activities involved were legal—for example betting with friends. Children’s participation in gambling has remained relatively static in the last five years and has declined since 2007. No more than 1% of all 11 to 15 year-olds surveyed said that adverts for gambling companies had prompted them to start gambling for the first time. But this is no reason to be complacent. Importantly, as many noble Lords have said, we need to look at what happens when children become young adults and are able to gamble. Recent figures published by the Gambling Commission showed a problem gambling rate of 1.9% among young men aged 16 to 24, compared to 1.5% for men overall, and 0.8% for the general population. We take these issues seriously and the forthcoming review, which I will come to, is looking at social responsibility measures.
The right reverend Prelate mentioned the glamorisation of gambling. The advertising codes specifically prohibit a range of approaches which might exploit the susceptibilities of young men. For example, gambling adverts must not suggest that gambling is a rite of passage or offers escape from educational concerns. It must not be linked to toughness or resilience, and it must not show people who are, or appear to be, under 25.
There is certainly much more gambling advertising on television than there was a decade ago. Before the Gambling Act came into force in 2007, only bingo and lotteries could advertise on TV. Liberalisation led to rapid growth, especially as online gambling expanded. TV advertising is measured in impacts—one person seeing one advert. A major Ofcom report showed that gambling advertising impacts rose more than fivefold for adults between 2005 and 2012, and more than threefold for children.
To bring the picture up to date, the number of gambling adverts on TV seen by children and young people—16 to 24 year-olds—continued to rise until 2013. It has declined in every year since and, in 2016, the average child saw 25% fewer gambling adverts than they did in 2012. Those figures will be published with other gambling review evidence in the autumn. But why is there a decline? The reason, as the Ofcom research showed, is that children are spending more time online, as my noble friend Lord Chadlington said.
Of course, the use of social media, and advertising via social media sites, has also grown very significantly for all age groups since 2007. Importantly, the review asked for evidence on protection around gambling advertising in general, not just television. Online gambling advertising is also subject to the advertising codes and must not be targeted at children. The Committee of Advertising Practice published guidance this year on responsible targeting of age-restricted material. The Gambling (Licensing and Advertising) Act 2014 brought all online gambling sites under the remit of the Gambling Commission. Both land-based and online sectors are subject to the same robust standards of regulation; they must adhere to the licence conditions set, or risk losing their licence. They are equally held responsible for the actions of their affiliates on their behalf. The commission will continue to exercise its powers wherever necessary to protect vulnerable people.
I think that it was my noble friend Lord Smith who mentioned affiliates. The recent Advertising Standards Agency rulings were the result of work between the Gambling Commission and the ASA to address irresponsible adverts published by rogue affiliates. The commission works closely with other regulators, including the ASA, to raise standards in the gambling industry. Operators must take action to ensure that they have a clear view of what their affiliates are doing on their behalf. When they fail to do this, the commission will not hesitate to use its powers to hold them to account.
Through the digital charter, we are looking to create a framework for how businesses, individuals and wider society should act online. This will include how big tech companies can play their part in tackling emerging challenges, such as online harms. We will look across the full range of possible solutions, including working with industry and regulators where appropriate.
Despite the large rise in advertising over the decade, problem gambling has remained static, at less than 1% of the population. While the figures published last month show a rise from 0.6% to 0.8% between 2012 and 2015, this is not statistically significant, given the sample sizes. However, we take this issue seriously, as we are aware this may equate to around 600,000 people who face significant consequences as a result of their gambling—clearly, 600,000 too many.
Research, education and treatment are vital and, to that end, the Gambling Commission requires all operators to make an annual financial contribution to one or more organisations that carry out research, education and treatment for gambling-related harm. That is a licence condition. The industry currently contributes over £8 million per year. My noble friend Lord Chadlington, along with the noble Lords, Lord Berkeley and Lord Stevenson, mentioned GambleAware, which is seeking to increase that contribution to £10 million, in line with what the Responsible Gambling Strategy Board estimates is needed to deliver its responsible gambling strategy.
As noble Lords are aware, a review of gaming machine stakes and prizes was launched in October last year. That review is also looking at social responsibility measures to ensure that all possible means to help problem gamblers were considered. Evidence on advertising protections was sought as part of the review.
Noble Lords mentioned several other points, including logos on shirts from the right reverend Prelate and the noble Lord, Lord Stevenson. The FA has withdrawn its sponsorship with Ladbrokes on the grounds that it was not appropriate to take betting sponsorship, and is removing its logo—but that will very much be looked at in the review.
The noble Baroness, Lady Howe, mentioned several points, and I am afraid that several of the answers will need to wait until the review. However, she also asked about looking at underage gambling on e-sports. Betting on e-sports presents risks that need to be managed in a similar way to other forms of betting and gaming. The commission expects operators offering markets on e-sports to manage the risk, including the risk that children and young people may try to bet on such events, given their popularity. In August 2016, the Gambling Commission launched a discussion paper, setting out its thinking on virtual currencies, e-sports and social gaming, and seeking views on emerging issues that pose a risk to regulation and player protection.
The noble Lord, Lord Trevethin and Oaksey, talked about gambling online. Children are not allowed to gamble online, as we know, and all gambling operators in the British market must obtain a licence from the Gambling Commission and adhere to the licence conditions. These include requirements for age verification and ID checks within 72 hours of an account opening, or before any withdrawal of funds, whichever is first. Online betting is account-based and, where checks fail to verify the customer’s age, the operator cannot pay out any winnings.
I am sure that my noble friend Lord Chadlington and other noble Lords who have taken part in this debate will understand that I cannot discuss in detail many of the proposals raised. I do not want to pre-empt the findings of the review. We have listened to what has been said today, and I assure your Lordships that the Government take the issue seriously. I apologise if my responses have not been as full as I would wish and hope that the noble Lord, Lord Sugar, will not intervene and say, “You’re fired!”. I ask noble Lords to be patient until the review is published, when I am sure that we can debate these issues again.
We want to be sure we have the right balance—a gambling sector that can grow and contribute to the economy, but also one that is doing all it can to protect customers and communities from gambling-related harm. We have considered all the evidence and options open to us before publishing our proposals on the whole range of review topics, and the review will be published in the autumn. I expect that we will have another debate in this House then about how we go forward. I thank all noble Lords for taking part.