Clause 1 - Licensing of remote gambling

Gambling (Licensing and Advertising) bill – in a Public Bill Committee at 9:25 am on 19th November 2013.

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Question proposed, That the clause stand part of the Bill.

Photo of Peter Bone Peter Bone Conservative, Wellingborough

I remind the Committee that with this it will be convenient to discuss new clause 2—Kite mark —

‘(1) The Gambling Commission shall require all licensed online gambling operators to display a standard kite mark on all their promotional materials, websites and webpages, to indicate that such operators are licensed by the United Kingdom Gambling Commission.

(2) The Gambling Commission shall design and determine the form of the kite mark, which will provide a link to information and advice on its website for customers.’.

Photo of Helen Grant Helen Grant The Parliamentary Under-Secretary of State for Culture, Media and Sport

It is a great pleasure, as always, to serve under your chairmanship, Mr Bone. Clause 1 does not impose any new obligations, but it signposts the change made by subsection (2). Subsection (2) creates the new licensing requirement. It changes the regulation of remote gambling from regulation at the point of supply to regulation at the point of consumption.

At present, a remote gambling operator needs a Gambling Commission licence only if at least one piece of equipment used in the provision of the remote gambling facilities is located in Britain. A remote gambling operator will now need a remote gambling licence from the Gambling Commission if its remote gambling facilities are used by someone who is in Britain and it knows, or should know, that its facilities are being used or are likely to be used in Britain. That addresses the fundamental purpose of the Bill, which is to enhance consumer protection by ensuring that all operators offering remote gambling in Britain are regulated by the Gambling Commission, whether they are based in Britain or overseas.

The new licensing requirement will level the regulatory playing field and overseas-based operators will be subject to the Gambling Commission’s licence conditions and codes of practice, including social responsibility and technical standards requirements, licence conditions and statutory safeguards for the protection of children and vulnerable adults. For the first time, overseas operators will have to inform the Gambling Commission about suspicious betting patterns to help fight illegal betting activity and corruption in sport. That will also ensure that overseas operators contribute fairly to regulatory cost.

Clause 1(3) repeals section 26B(a) of the Betting and Gaming Duties Act 1981, which makes provision for remote gaming duty. That repeal will ensure that only existing operators are liable for remote gaming duty under the Bill. The Government do not intend to use the Bill to extend the remote gaming duty to a new category of operators requiring a licence from the Gambling Commission.

Clause 1(4) to (7) provide the Secretary of State with wide powers to create an advance application process, through which remote operators apply for a new or upgraded remote operating licence from the Gambling Commission before the commencement of the new licensing requirements. That will ensure that operators entitled to operate in Britain under a European Economic Area jurisdiction licence or a white list jurisdiction licence can make the transition to the new licensing regime with minimal disruption to their existing business in Britain. For those reasons, I commend the clause to the Committee.

Photo of Clive Efford Clive Efford Shadow Minister (Culture, Media and Sport)

It is a pleasure to be here this morning, Mr Bone. It is a bright and sunny morning, so let us hope that we can have a bright and sunny debate and cheer people along on a dry but none the less important subject. We support clause 1, although we have one or two questions about it. New clause 2, which is on kitemarking and which we are debating with clause 1, is important. Kitemarking is key to consistency across the industry, and we need to get it right from the start.

In evidence last week, Mr Wallace from the Salvation Army, which monitors what goes on in the gambling industry and speaks up on behalf of people who may suffer from problems with gambling, said that he

“would certainly welcome a kitemark. Echoing Helena’s point, there should be larger, more prominent links to GambleAware to improve people’s knowledge of the treatment provided by, for example, GamCare. There should be a simpler, more obvious way to find the excellent information on the Gambling Commission website as people are playing, so they do not have to search the Gambling Commission website separately for it.”––[Official Report, Gambling (Licensing and Advertising) Public Bill Committee, 12 November 2013; c. 39, Q95.]

The Culture, Media and Sport Committee referred to that in its 2005 report “The Gambling Act 2005: A bet worth taking?” which recommended

“that the Gambling Commission should consider, as a part of efforts to communicate to online gamblers the potential risks to their funds, introducing a kite-marking system for gambling websites”.

That was referred to in the Government’s response to that report, which said that

“the Government notes the Committee’s recommendation that further emphasis is placed on the information made available to the consumer” on sites licensed by the Gambling Commission. The Committee was informed that kitemarking would happen if the draft Bill was passed.

Photo of Gerry Sutcliffe Gerry Sutcliffe Labour, Bradford South

This comes to the essence of the Bill’s whole purpose, which is consumer protection. Requiring a kitemark would separate the approved sites from the non-approved sites.

Photo of Clive Efford Clive Efford Shadow Minister (Culture, Media and Sport)

I pay tribute to the work that my hon. Friend has done in this area, both as a Minister and since we have been in opposition. He has continued to show a considerable amount of commitment to the care of those who suffer, perhaps more than they should, from problems as a result of a gambling habit.

The kitemark, as my hon. Friend said, is extremely important. There should be a set standard for displaying a kitemark and clear links to responsible gambling sites. Operators should clearly display it and we should set  the regulatory standard for others to follow. The Gambling Commission recognises that. When Jenny Williams from the commission gave evidence last week, she said,

“We think that it is quite right that this could be a lot clearer…If you go on to any of the websites at the moment and compare the overseas websites…you will see that there is an absolute mess down at the bottom.”––[Official Report, Gambling (Licensing and Advertising) Public Bill Committee, 12 November 2013; c. 68, Q191.]

I have trawled around a couple of these websites in preparation for this morning. I must say that I did not gamble, but I had a look at what they were offering by way of links to advice and information, and it is poor. What is offered tends to be in a very small font, based at the bottom of the page—not in any prominent location—and there is some inconsistency in approach. All the websites have these links, but on Sporting Index, for instance, one must click on several links before reaching the sort of information that should be readily available. This issue clearly needs sorting out, and as legislators we must give clear direction about the standards we expect for the protection of our constituents. If we are serious about advising people about the dangers of gambling and the problems that can occur, we must ensure that the kitemark is in a prominent position. A Gambling Commission logo should be clearly displayed to demonstrate that a site is licensed by UK gambling regulations.

If the Gambling Commission has a logo or kitemark, we do not want to see it tagged on at the bottom of pages; we want to see it in a prominent position. We want it to become a mark of excellence, showing that operators have the highest regard for concerns about gambling. It would be to their credit that they are part of the system set up by the UK Gambling Commission and that they want to promote that. There should be simple links to sites such as GamCare, but customers should also be able to click on a Gambling Commission link to access a wide range of information advising them about the dangers of gambling with unlicensed operators, the details of complaints procedures and where to seek advice and assistance if they have any problems.

Support for kitemarking information has come from a number of those who gave evidence to the Committee. Helena Chambers of Quaker Action on Alcohol and Drugs said:

“On some of the sites, the link is tiny; it is in small writing at the bottom of the page in the terms and conditions…People need to have their attention drawn to it.”––[Official Report, Gambling (Licensing and Advertising) Public Bill Committee, 12 November 2013; c. 39, Q6.]

Gareth Wallace of the Salvation Army said,

“we would certainly welcome a kitemark. Echoing Helena’s point, there should be larger, more prominent links to GambleAware to improve people’s knowledge of the treatment provided”.––[Official Report, Gambling (Licensing and Advertising) Public Bill Committee, 12 November 2013; c. 39, Q7.]

Dan Boucher of Care also welcomed kitemarks, but raised concerns about enforcement. He made the point that a kitemark

“would be a good thing, but we should not be tempted to think that a kitemark was an excuse for not including proper enforcement provisions in the Bill.”––[Official Report, Gambling (Licensing and Advertising) Public Bill Committee, 12 November 2013; c. 39, Q8.]

The kitemark and enforcement are two sides of the same coin. The kitemark is not a replacement for enforcement, but nor is enforcement a reason for not having a kitemark on sites to demonstrate that they are properly regulated and provide proper information to customers.

A kitemark can be effective if customers are made aware of it. The British Standards Institution kitemark has been shown to have a considerable impact. A survey of customers found that 49% of consumers look for it when buying goods and services, so kitemarks can be effective. To achieve that, there must be a campaign by the Gambling Commission promoting the kitemark, the regulated sites and the means by which they are regulated.

We are left to wonder why what I have described is not happening now. There are sites run by organisations with which the Gambling Commission already has a relationship because they offer other forms of licensed betting. Although it does not regulate what those organisations do online, it is possible that, through its existing relationship with them, the Gambling Commission could have been urging them to standardise the form of information provided to customers. It is imperative that we ensure that the Gambling Commission sets a benchmark in regulation to maintain a high standard for consumer protection on that issue, paired with strong consumer recognition. We should set a standard that makes operators want to show that they are licensed by the UK.

New clause 1 would ensure that the Gambling Commission required operators to display a kitemark. We must insist that kitemarks are clearly and prominently displayed, and that they are uniform across sites, providing direct and easy links for information, advice and help. That should not be open to interpretation. Although we welcome the clause, I urge the Minister to consider our arguments on new clause 1.

I have a couple of questions for the Minister. Although we welcome the Bill, on the advance applications referred to in clause 1, is there an end time for the transitional arrangements? I fully understand the reasons for the transitional arrangements, but it seems a little open-ended at this time. Could we end up with a dual process?

Overseas operators not licensed by the Gambling Commission will be committing an offence if they advertise services here in the UK. The clause obliges them to block their sites. How does the Minister envisage that that will take place? How will the Gambling Commission require such sites to carry out blocking? It may be unintentional on their part. In its initial approach, how proactive will the Gambling Commission be in ensuring that such activity is monitored and stopped?

I hope that the Minister will take on board the arguments that we have made on new clause 1 and consider the questions that we have posed about clause 1. Our proposals provide a simple but important step to consumer protection, and we urge the Government to take them on board.

Photo of Gerry Sutcliffe Gerry Sutcliffe Labour, Bradford South

It is a great pleasure to serve under your chairmanship, Mr Bone. I declare an interest, although it is not declarable in the Register of Members’ Financial Interests: I am a trustee of the Responsible Gambling  Trust, an organisation set up to help with research, education and treatment for people with problem gambling. The good news is that the last prevalence study showed that only 0.7% of people have a problem with gambling, and that those people usually have other problems as well.

The Bill’s genesis lies in consumer protection, which is why I support new clause 1. We want to give UK consumers assurance that when they gamble online, they are protected. The difficulty is that if they bet with somebody who does not offer the same terms and conditions and support for betting as authorised and licensed operators, their problems can increase.

Much to my surprise, the industry agreed to a voluntary code in terms of contributions to research on gambling. We considered a Government-supported levy on the industry in the event that it was not prepared to consider research, education and treatment. The good news was that there is now a voluntary levy, more than £5 million of which goes to fund investigations into research, education and treatment. The key point is consumer protection.

In her opening remarks, the Minister rightly mentioned the objectives of gambling legislation, which include protecting the vulnerable, preventing crime and ensuring transparency. The kitemark is an excellent idea. The drinks industry has Drinkaware to help people get support for potential problems, and Gambleaware and GamCare are great opportunities to provide a signpost. My hon. Friend the Member for Eltham made the point that if we had a kitemark, there would be no doubt about the existence of a standard and support.

I know that it is always difficult—gambling legislation is not the flavour of the month for any Government—but I hope that the Minister will hear what my hon. Friend said, support the idea in principle and perhaps come back on Report to say that she has looked into it in great detail.

Photo of Helen Grant Helen Grant The Parliamentary Under-Secretary of State for Culture, Media and Sport 9:45 am, 19th November 2013

In relation to new clause 2, I thank the hon. Member for Eltham for his suggestion that all Gambling Commission-licensed operators should be required to display a kitemark on their websites to indicate that they are subject to UK regulation. As the commission said in an evidence session, it has already taken forward work to ensure that consumers can establish quickly what an operator is licensed for. It does not require primary legislation to achieve that; the commission can do it easily via licence conditions and existing powers.

The Government of course support the steps that the commission is taking to ensure that consumers can establish quickly whether they are transacting with a Gambling Commission-licensed operator. I am grateful to the Select Committee for its recommendations on that point, which were made by the shadow Minister. I am also grateful for the good work that I know has been done on consumer protection generally by the hon. Member for Bradford South, but given that primary legislation is not required, I do not intend to accept the new clause.

However, I reassure the shadow Minister and Committee members of my absolute intention that the Gambling Commission should pursue the matter. In that respect, I  remind the shadow Minister and other Committee members that Ministers have powers under section 78 of the Gambling Act 2005 to require a licence condition to be added. I anticipate that the Gambling Commission will deliver on its commitment, but we still hold powers to follow up if necessary. On that basis, I ask him not to press new clause 2.

Photo of Clive Efford Clive Efford Shadow Minister (Culture, Media and Sport)

It is all well and good that the Gambling Commission has those powers, but what does that mean? What will the Minister require of the Gambling Commission in terms of standards? At the moment, it could be said that everything she has said is satisfied by the current situation. Websites provide links to advice and information, but it is tiny and hidden among other information at the bottom of the page, not in a prominent location. Further—if you will permit me, Mr Bone, before this intervention turns into a speech; I think it already has—the kitemark would be prominent at the top and would set a standard for the industry. Others would look to it and want to achieve that standard. Will the Minister be looking for that?

Photo of Helen Grant Helen Grant The Parliamentary Under-Secretary of State for Culture, Media and Sport

Of course. The shadow Minister makes a good point. We are all batting in the same direction. We want consumers to be protected, and we want the situation to be clear to them. The Gambling Commission made its intentions clear in the Select Committee. I am satisfied that it will pursue them, and I will keep a careful eye on the situation. It is a highly respected international institution, and we must allow it to get on with what it has said it will do. I reassure him that I will be watching the situation carefully to ensure that the Gambling Commission goes to the full extent needed.

The shadow Minister also raised a couple of other related issues. He asked about the transitional arrangements. Yes, there is an end time. Advance applications made before the date of commencement will be entitled to a continuation licence if the operator has an existing right to operate in Great Britain. He also asked about unintentional blocking. There is no need to block the site if they make applications in time for the continuation licence. The aim, of course, is that there is no disruption to existing business in Great Britain. On that basis I again ask him not to press new clause 2.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.