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New Clause 3 - Remote gambling licensees and customer protection

Gambling (Licensing and Advertising) Bill – in a Public Bill Committee at 2:00 pm on 19th November 2013.

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‘Holders of licences for remote gambling operations shall be required to participate in a programme of research into and treatment of problem gambling in accordance with arrangements to be determined by the Secretary of State in regulations in the form of a statutory instrument approved by both Houses of Parliament, and a levy for that purpose may be imposed under section 123 of the Gambling Act 2005.’.—(Clive Efford.)

Brought up, and read the First time.

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

I beg to move, That the clause be read a Second time.

Photo of Hywel Williams Hywel Williams Shadow PC Spokesperson (Education), Shadow PC Spokesperson (International Development), Shadow PC Spokesperson (Work and Pensions), Shadow PC Spokesperson (Health)

With this it will be convenient to discuss the following:

New clause 5—Review of connection between non-paying social networking media gambling activities and use of licensed remote gambling operations—

‘The Secretary of State shall conduct a review into whether and how the existence of non-paid for gambling activities on social networking media interacts with use of licensed remote gambling operations, and whether such non-paid for activities can act as an inducement to participate in paying activities.’.

New clause 9—Consultation on self-exclusion—

‘Having regard to the significance of the remote gambling market in relation to potential problem gambling, the Secretary of State shall consult on a system of standardised self-exclusion for the gambling industry, to include means of addressing exclusion from remote gambling access in the context of other gambling media.’.

New clause 12—Gibraltar and Alderney—

The Secretary of State shall conduct a review comparing the effectiveness of UK licensing in comparison with the licensing regimes of EEA and white listed countries in relation to—

(a) suspicious betting, playing or sporting activity;

(b) under-age gambling; and

(c) protection measures in place for gambling customers; and lay before both Houses of Parliament a report containing the findings of such review.’.

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

It is a pleasure to be under your chairmanship again, Mr Williams. I hope we are through a large part of our considerations on this Bill and that we can make swift progress. However, there are still some important items to discuss.

New clause 3 refers to a levy for research and treatment. I will go into that in detail in a moment. New clause 5 concerns free gambling on social media websites—many people are concerned about the influence that has on young minds, and whether that is an area where we should consider further regulation.

New clause 9 covers an important area of concern. It is about creating an easy-to-understand one-stop shop across the whole of the gambling industry; but in particular, in relation to this Bill, for the remote gambling industry. New Clause 12 makes sure that any regulations adopted regarding licensing the advertising of remote gambling services to those within Great Britain meet the highest standards. There should be no lowering of standards as a result of those services being licensed here rather than in European economic area countries or, in particular, Gibraltar and Alderney, which have detailed requirements in their licensing codes on the protection of vulnerable adults.

Problem gambling is the subject of one of the key objectives of the Licensing Act 2003 in relation to the protection of vulnerable people. We have a duty to ensure that we protect children and those who may develop a gambling problem. While problem gambling prevalence is low, online gambling is a growing industry, and the isolation in which it is possible to play online means that we must set the highest standards when we regulate. The industry is changing. The UK online gambling industry is now worth over £2 billion a year. We are now seeing terminals in betting shops offering access to remote gambling. The ability to gamble without leaving the house and without face-to-face communication presents a number of challenges for controlling problem gambling—we cannot afford to be unprepared. The industry has known this is coming for many years, and we can safely assume that those who intend to flout the rules have been preparing for the moment when this regulation will take effect. We must ensure that the Gambling Commission is prepared and capable of setting the highest standards.

In her evidence to the Committee, Jenny Williams, chief executive of the Gambling Commission, disputed the claim that the licence conditions of the Commission are weaker for white listed jurisdictions. She said:

“I think there have been some misunderstandings: all the conditions that the gentleman from CARE”— who gave evidence to us last week—

“was referring to are in our codes and technical standards—he might not be aware of our technical standards.”––[Official Report, Gambling (Licensing and Advertising) Public Bill Committee, 12 November 2013; c. 54.]

I have been in touch with Mr Boucher, to whom Jenny Williams was referring, and he accepts that he was not aware of the technical code. That in itself is a bit alarming because these are people who are well informed about the gambling industry and certainly the dangers of the gambling industry. If we take legislation at the top, then the licensing code, and finally the technical code, we would have thought that those well-informed people who monitor the industry would be aware of that third tier. That in itself suggests a problem. Jenny Williams did accept that she was surprised and alarmed that somebody who knew the industry well was not aware of the technical codes.

However, even having looked at the technical codes Mr Boucher was not entirely satisfied with what we were told in Committee. He refers to the licence codes in  Alderney. Alderney is very prescriptive about what is required of licensees. He also refers to the Gibraltar code, which says:

“Licence holders should ensure that systems are in place to warn customers not to gamble beyond their means to pay, and should have systems in place to take into account information (such as communications and contact by the customer or advice/information from financial institutions) that indicates that the customer may be gambling beyond their means. Where this occurs the licence holder should initiate measures to assist the customer manage their gambling. This should include the generally available facility to set controlled, daily deposit, time or gambling limits, and self exclusion. The Commissioner will monitor local arrangements before considering whether specific standards for limits should be set.”

Mr Boucher goes on to say:

“While the wording of this code is clearly not as detailed as the provisions in Alderney, the wording also seems to us as more effective than the wording of the UK technical standards document.”

Those are the standards referred to by Jenny Williams. He continues:

“In the Gibraltar code the ‘generally available facility’ seems in our understanding to indicate much more than a simple duty to ensure that before a person makes their first deposit they are asked whether, if or how they would like to limit their gambling. It is after a person has already started gambling that they are likely going to want to limit their gambling.”

I would like to hear from the Minister whether her Department has considered this matter in the light of the evidence we took last week. Does she feel this is something worth looking at again? I know she will say that it can be dealt with in the code. That is the consistent line we hear: “It will be sorted out in the code; the Gambling Commission will sort it out.” We have a responsibility to be clear. We want to hear from the Minister what she is telling the Gambling Commission that her expectations are.

The Government have said that the Bill is about consumer protection, which I accept. However, we do not have a corresponding review of the Gambling Commission’s code. That would show the Committee what is being done alongside the legislation we are considering. That is a weakness in the process. The expanding responsibility of the Gambling Commission—in that we are now going to be licensing operators who currently cannot enter our market because they are not licensed by an EEA country or a white listed country—must include a review of the code. If we were able to look at the two alongside each other we would be able to satisfy ourselves more on that. In the absence of that, I am keen to hear from the Minister what is happening about the review of the code to address those issues. Otherwise, it is necessary for us to add a requirement to the Bill.

On research and treatment, we currently have a voluntary system of contribution. There are powers under the Gambling Act 2005 for the Secretary of State to introduce a levy to contribute towards investment in treatment and research. It is important to do that. I would like to hear from the Minister how she sees that developing. We have voluntary contributions to very good organisations that work for people who develop problems with gambling. However, we also have a hugely expanding market. We constantly hear that the speed at which technology is being developed in the field far outruns the resources that go in to catching up with those new forms of gaming and gambling, especially those on the internet.

We need to be sure at the outset that this is an opportunity for us, when we are legislating, to take a close look at what is being done in protection, research and treatment to ensure that we are armed in the future to identify and deal with problems when they arise.

Photo of James Duddridge James Duddridge Chair, Regulatory Reform Committee

The hon. Gentleman has talked eloquently about the problems of online remote gambling, where there are none of the checks and balances in place that one might see in a casino. Would he be minded to consider supporting on Report an amendment that would allow online gambling in casinos? That liberalisation could, paradoxically, provide additional protection, because it would put gamblers with potential problems into a much more studied, thoughtful and supportive environment, where the levy is being spent.

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

I am grateful to the hon. Gentleman. I think I might be ruled out of order if I go into too much detail in responding to him. That is the first time I have ever heard a casino described as a treatment centre, where people will be cared for lovingly while they are parted from their hard-earned cash.

If we are to allow online gambling on machines, we need to take a cold, hard look at whether to allow devices to be made to look like a machine but which are effectively a computer that allows gambling on the internet, with lowered restrictions on prizes. I do not think now is an opportunity to introduce that change.

The hon. Gentleman is tempting me away from the new clauses. We will no doubt have that debate on Report. We can look forward to considering the suggestion in more detail, because I am aware that there is support for that—

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

Particularly from influential Members on both sides of the House. I will be listening carefully, because some of the people who will be supporting that measure will be speaking from an extremely well-informed position.

Photo of James Duddridge James Duddridge Chair, Regulatory Reform Committee

I am aware that some senior people with a lot of experience of the sector—much more than me—would support such an amendment. Perhaps colleagues and I should have tabled an amendment in Committee. Perhaps we have not missed the boat, but left it a little later until Report. Will the shadow Minister consider imploring the Government to table a suitable and well-drafted amendment, rather than have us fall into the trap of drafting a flawed amendment that is then knocked down by Back Benchers on the Floor of the House?

Clive Efford rose—

Photo of Gerry Sutcliffe Gerry Sutcliffe Labour, Bradford South

Will my hon. Friend give way before he answers that question?

Photo of Gerry Sutcliffe Gerry Sutcliffe Labour, Bradford South

It is. Perhaps the hon. Member for Rochford and Southend East is right that an amendment should be forthcoming, but I hope the delay gives the Government time to meet the industry and go through the practicalities of what needs to be done before we consider the Bill on Report.

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

I am sure that the Minister has heard what both hon. Members have said and will consider whether she wants to table her own amendment, although somehow I doubt it. Given the attention to drafting of the hon. Member for Rochford and Southend East this morning, I am sure that whatever amendment he drafts will be perfect in every way.

New clause 5 is a probing measure about free playing on social media networks. We are dealing with the advertising of gambling, but there is a legitimate concern about how gambling is promoted on social media networks. As a parent, I can speak with a great deal of authority about the amount of time that children spend on these networks. The problem is not that they are losing money—if they were, they would be losing not their own money but that of their parents, which is probably even worse, certainly in my case—but the forming of the habit. They are not being coerced, but they are introduced to the habit of gambling at a very young age, without experiencing losses.

There is a danger that free online gambling is akin to what we have heard about the tobacco industry in the past, whereby young people have been encouraged to smoke tobacco in order to keep them as customers for a long time. I understand that gambling does not have the sort of addictive quality of nicotine, but we are right to be concerned about a similar introduction to gambling. There are elements of online gambling that allow someone to win money—albeit virtual money on the internet—so people can get the sensation of winning sometimes quite large sums.

Some of those who gave evidence last week expressed serious concerns about social media networks and gambling. Professor Jim Orford said:

“Free play sites and practice sites are a particular worry to us. A lot of those sites are not so well protected. In effect, they are providing gambling and almost certainly training the next generation of adult online gamblers.”

He went on to say:

“All our information is that parents are not well clued up about the dangers for their children. They know about drugs as well as a number of other worries, and they now know about internet pornography, but they do not yet know much about the dangers of gambling and internet gambling. I would like see protection for children against such dangers and information for parents and families made much more prominent in the Bill.”

Later in that sitting, he said:

“You may be betting on something that is not roulette or it may be a social game that enables you to earn the coinage of the game.”––[Official Report, Gambling (Licensing and Advertising) Public Bill Committee, 12 November 2013; c. 40-45, Q9 and 20.]

He was referring to the sorts of sums that people can imagine they might win, were they playing for real.

We should be taking this issue into consideration. We have an opportunity to hear from the Minister whether the Government are concerned about free gambling on social media networks and its impact on our younger generation. If there is none available, do the Government think that research into the impact of such gambling on young minds should be carried out?

New clause 9 relates to a one-stop shop for self-exclusion. The wide variety of gambling websites available makes the protection of vulnerable adults difficult. A problem gambler can self-exclude from all the shops in their high  street. However, although exclusion from the four or five high street names in their local area may have a limited impact on their ability to bet in a betting shop, that is no use whatsoever on the internet, because there are literally hundreds of sites that a problem gambler could use to get around their self-exclusion from a site. It is therefore nonsense to say that self-exclusion is going to be effective for people who have a problem with remote gambling. Somebody might want to self-exclude, but without a one-stop shop system covering the whole industry and administered by the Gambling Commission, it is simply not going to work.

Professor Orford said that

“many problem gamblers find self-exclusion very useful. I have spoken to a number of people who have said: ‘Yes, it has really been a saviour for me, being able to self-exclude from the place where I normally gamble’.”

Again, that highlights that self-exclusion can work if it applies across the whole system. If it works only where people normally gamble, the scope of the practice is inevitably limited. We are potentially allowing new operators into the market and should be looking to strengthen protections. Dan Boucher told us:

“I would have expected that, at the same time as effectively liberalising advertising, a step would have been taken to afford greater protections to vulnerable problem gamblers, with a recognition that self-exclusion does not work in an online context. It can logically work in an offline context. You can self-exclude from the four gambling shops in your local town, but it is...useless and meaningless”––[Official Report, Gambling (Licensing and Advertising) Public Bill Committee, 12 November 2013; c. 37-40, Q3 and 9.]

on the internet. If we are to strengthen self-exclusion, we should have a standardised list, or what I would call a one-stop shop.

CARE has indicated that there is strong support for a one-stop shop. It stated that it spoke to problem gamblers who said,

“a one stop shop self exclusion service for online gamblers would be very helpful to them and others like them.”

According to a survey conducted by the university of Salford, 72% of gamblers agreed that

“For self-exclusion to work all sites need to cooperate to have an industry wide self exclusion system”.

Academia also support the call for a one-stop shop. Dr Sally Gainsbury, author of “Internet Gambling: Current Research Findings and Implications”, states that “a significant limitation” of self-exclusion

“is the lack of collaboration between different online gambling sites and venues, so that excluded individuals may find it easy to gamble at another site or venue.”

CARE states that the Bill

“makes the current lack of one stop shop self-exclusion unsustainable for the simple reason that it will result in more advertising as companies in black listed countries gain licenses and the opportunity to advertise.”

People will therefore simply slip from one site to another, making self-exclusion totally ineffective.

The technology already exists to deal with the problem. Dr Sally Gainsbury mentions that a program called VeriPlay, developed by Bet Buddy, allows the secure exchange of anonymous data. It allows operators to check whether a player is on a centralised list of players who have self-excluded. We should wish to offer the greatest protections possible to people who might develop  a problem with gambling. If they want to self-exclude, we should ensure that that process is effective and that the whole industry is covered.

New clause 12 deals with Alderney and Gibraltar. It is probing—I shall not press it to a Division—but I would like the Minister to speak about it. There is a worry that the licensing arrangement that will come into force under the Gambling Commission as a result of the Bill might water down some of the requirements on operators regarding the protection of vulnerable adults and children. I urge the Minister to ensure that that is not the case.

We spoke earlier about the kitemark. We should be setting the highest standards, and the badge of the Gambling Commission should be proudly presented by operators to show that the industry is highly regulated with the highest standards of protections for people who might develop problems with gambling. Such a mark would show that a site represented a safe environment in which to gamble. The Government will not want standards to slip as a result of the Bill, so it is right that we ask whether there is any possibility that that might happen.

Let me ask the Minister one or two questions. Jenny Williams talked about technical code, but would the Government wish to see the code altered? Some important issues for protecting vulnerable adults are tucked away in the technical code. Even if the Government do not think we should regulate that in the Bill, should it not be reviewed? The people who gave evidence were extremely well informed, and if they did not know that that technical code existed, alarm bells should be sounding through the Government.

On self-exclusion, Mr Boucher has said:

“Our point was that neither the Bill nor the Gambling Commission Codes make provision for 'one stop shop self exclusion' for online gamblers. Self-exclusion is profoundly flawed in an on-line context because, whilst it is possible to self-exclude from the four betting shops in your town on a strong day, it is never possible to self-exclude from all the online gambling opportunities open to you in your own bedroom for the simple reason that after self-excluding from four there are still hundreds if not thousands of online gambling opportunities available to you. This is a problem that arguably should have been addressed already.”

Photo of James Duddridge James Duddridge Chair, Regulatory Reform Committee 2:15 pm, 19th November 2013

While it is laudable to extend the exclusion more widely, one can draw a comparison with alcohol. It would be almost impossible for an alcoholic to exclude themselves from buying alcohol at every single point and we would never attempt to do so—we would see it as unreasonable. Is the hon. Gentleman searching for a worthy but unachievable utopia?

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

I would accept that point were it not for the fact that the principle of self-exclusion has already been accepted and attempted by the industry. In many respects, the industry has used the principle to show what it is attempting to do to protect vulnerable people. We are saying that the existing process for self-exclusion is not viable online. If we are serious about having a self-exclusion process, we should have one that is effective for those who want help.

To put this in the context of alcohol, would we not want to exclude someone if they self-excluded? We are not talking about telling someone that they cannot gamble anymore; we are talking about someone who  has said, “I have a problem. Please stop me if I try to gamble.” If someone had an alcohol problem, especially to the point where drinking might cause them serious illness or worse, we would want a system that allowed them to self-exclude in that way. I accept that that is impractical given all the outlets available, but we know the gambling outlets and they are all licensed. The technology exists whereby the gambling industry could sign up to a self-exclusion process, but we need the will to drive the process forward.

The gambling industry is worth some £6 billion a year, yet a relatively tiny sum is spent on research into or the treatment of problem gamblers. The Responsibility in Gambling Trust plans to redistribute £5.3 million, with 10% of that going on research, 6% on education and 84% on treatment, to the year ending 31 March. I got that information from looking through its webshite—[Hon. Members: “Oh.”] Just checking whether you are awake. You passed with flying colours; well done. Perhaps I should drink some water. I will try to complete my speech while drinking this glass of water.

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

Let us hope that Hansard was not but, as hon. Members referred to it, it will probably be on the record. Anyhow, I said “website”.

I was surprised that, on the Responsible Gambling Trust’s website, many of its press releases are on fundraising. It struck me that, in such an enormously wealthy industry, perhaps the trust might be able to raise money from the industry that it monitors to treat those who need help as a result of that industry. The trust arranged a trek up Kilimanjaro to raise funds for research and treatment of people with gambling problems. I do not want to decry the efforts of the people who went up Kilimanjaro as that is a huge trek, which would have been rewarding, and they were doing a fantastic thing to raise money for such an important issue.

I also noticed that the Responsible Gambling Trust said goodbye to its director of fundraising; that group went up Kilimanjaro in October and she left in September. Her valedictory speech must have been interesting, in which she said, “By the way, you are all going up Kilimanjaro—I’m off.” Next year, the trust plans a trip across the Sahara desert to raise money. I commend it for that, but I question why so much of its efforts has to go into raising money when a levy could allow it to put more of its resources and effort into what it exists to do. I urge the Minister to consider using her powers under section 123 of the 2005 Act to formalise a levy.

One of the people who we invited to give evidence, but who, given the short time scale, was unable to do so was the director of the National Problem Gambling Clinic, based in London. She wrote to my office and gave permission for me to quote her e-mail. She said:

“I am writing to you as the Director of the National Problem Gambling Clinic not in my role as member of the Responsible Gambling Strategy Board.

I believe that any gambling company, including the ones based offshore, if making money out of British gamblers, should be accountable in terms of practice and governance to the Gambling  Commission. I also believe that they should comply with RGT’s requests for contributions towards treatment, education and prevention of problem gambling.

I think it is important for the offshore industry to still come under similar governance issues in relation to the well-being of gamblers by making sure that any significant problem gambling behaviour gets picked up by their software.

Chasing losses and significant hours of play or financial losses can all be tracked. This is particularly easy with remote gambling as patterns of play can be recorded over time for individual players and as a group average.”

I urge the Minister to listen to those words, because that lady is eminent and highly respected with regard to the treatment of problem gambling.

We can use technology to track the behaviour of problem gamblers: those who are chasing losses, for instance. Algorithms can be applied and those people can be identified. The contribution from the industry is not sufficient; more should be done to ensure that it contributes significantly towards the research and treatment of problem gamblers. We should look at free gambling websites and ensure that the standards we introduce under the new licensing regime do not in any way reduce the licensing requirements on licensed operators. I look forward to hearing the Minister’s response.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme 2:30 pm, 19th November 2013

I want to make some comments on new clause 12, in particular on the issue of the protection of the consumer. This new clause is probing, as my hon. Friend the shadow Minister made clear, but it is relevant to a consultation that is being conducted at the moment by the Gambling Commission, which closes imminently on 4 December. It would be interesting for the Committee to hear the Minister’s remarks on some of the key issues when she responds on this new clause.

Two consultations are being run at the moment by the Gambling Commission. One is on the general changes to the licensing conditions, in which the main outstanding issue is the key definition of a Great Britain consumer, or a UK consumer. The other is on consumer protection and the disclosure to customers of what happens to their money that is held on account—often winnings to be used in future bets—if something happens to the company. That is the centrepiece of this consultation.

To date, the Gambling Commission has adopted a caveat emptor approach, along with a minimum disclosure level. The terms and conditions make it clear to a person, before they sign up, what happens to their moneys that the company holds. As the Gambling Commission rightly identified, there is a gap between what customers think will happen to their money in the unfortunate event of something happening to the company and what is actually the case. That was rightly identified by the commission, and it would be interesting to hear the Minister’s remarks on the new clause.

To date, the remote gambling sector has not been a central issue for the Gambling Commission because most of the licensed operators are not registered with it because they are offshore. Of course, the new regime institutes a whole new ballgame in the UK. In the interim, there has been the 2011 case of Full Tilt Poker. I will not go into that case too much, but it was one of the world’s leading poker websites. It was regulated in Alderney, which adopted the same caveat emptor approach as our Gambling Commission. In April 2011 its website  was seized by the FBI, and after a review in September 2011 the Alderney commission withdrew its licence. We heard evidence in the Select Committee that Malta refused Full Tilt a licence because of its concerns about customer protection. New clause 12 urges the Minister to compare and evaluate different licensing regimes, particularly if we are to endorse at arm’s length the approach taken by regimes overseas.

What happened in the Full Tilt Poker case is that the company eventually came to a settlement with the US Department of Justice, and was taken over by PokerStars, another well known firm. A large amount of compensation was paid to settle a civil suit. What was key to that settlement was that $184 million held by non-US gamblers was made available to the customers, many of whom were in the UK.

In March last year, an old hand, Peter Dean, reviewed Alderney’s methods and what it had done—the processes that Alderney went through are relevant to new clause 12. Basically, the Dean report cleared Alderney of any substantial breaches and failures of procedure, but it said that lessons need to be learned. First, a regulator needs proper resourcing to fulfil its task. Secondly, a regulator needs direct contact with the management and the key figures in the organisations it regulates, rather than those relations being conducted at arm’s length through lawyers, for example. The third key point, which is relevant to new clause 12, is that Mr Dean did not reach any conclusions on the way forward for consumer protection. That is the hole that the Gambling Commission is trying to fill. No doubt, in due course, it will be followed by Alderney and some of the other states if it gets it right.

It would be great to hear the Minister’s thoughts on the options that the consultation is putting to the industry. The first option of no protection, just to go away and mingle funds, is clearly unacceptable. The second option is to segregate the accounts between customer and company. That sounds logical but does not protect against fraud or misuse. In that situation, as the Commission identifies, the term “ring fencing” can be abused to give customers a level of assurance to which they are not entitled on the basis of what is really going on.

The third option is very interesting; it is a mechanism called the quistclose trust. I would like to hear the Minister’s thoughts on customer protection in that regard. Many operators already have something like that mechanism—although I will not name any names—or arrangements tantamount to that. It arose from a legal case in English law, Barclays Bank Ltd v. Quistclose Investments Ltd. It is a concept recognised by law that when money is advanced by a client to a person or a company—the payee—to be used for a specific purpose, in this instance gambling, if that purpose cannot be fulfilled a trust is created in favour of the customer.

In the event of the business collapsing, money is refundable, and there is an obligation on banks holding the funds not to remit them to administrators, liquidators or receivers. It is seen in the industry as a low-cost solution. The operators do not still retain control of the money but when it comes to insolvency, customers are protected. In cases of fraud, we have to take care that we do not introduce a sledgehammer to crack a nut. As the Maxwell and countless other cases proved, all sorts of institutional arrangements can be put in place but a determined thief will steal the money.

On proposed new clause 12, I would like to ask the Minister whether she believes that as a minimum the industry operators licensed here should be required to set up a quistclose trust arrangement. My answer would be yes. I would also want to see enhanced disclosure, so that the terms are on the face of what people sign rather than in the small print.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Human Rights)

I want to put forward a few points on proposed new clause 9. I support the clause as far as it goes but I wish it went further. Problem gambling is a very real issue, a profoundly destructive process that can result in all manner of difficulties for those concerned.

I was interested in the exchange between the hon. Member for Rochford and Southend East and the shadow Minister on the subject of alcohol. Over the years I have found that the people who beat alcohol, if that is ever possible, are those who acknowledge they have a problem. If someone acknowledges they have a problem, they need help. The purpose of the new clause is to acknowledge the problem and give help to those who need it. Self-regulation is one way to do just that.

As the hon. Member for Bradford South said, the problem prevalence for the UK is 0.9%. That sounds small and the kind of thing we do not seem to worry about. In itself it might cause some concern but imply that that is not a worry and is okay. However, that 0.9% is 450,000 people.

Photo of Gerry Sutcliffe Gerry Sutcliffe Labour, Bradford South

I did not want to give the impression that nobody should care about the 0.9% because, as the hon. Gentleman says, that is quite a significant figure. The hon. Gentleman relates gambling to alcohol. Alcohol treatment is paid for by the NHS, while gambling addiction is not. Perhaps there is a need for the Government to look at what they can do to help the industry pay for treatment for people with gambling addiction.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Human Rights)

I thank the hon. Gentleman for his intervention. I never felt he disregarded the 0.9%; that was not at issue. His valuable intervention raised the good point that there is a sickness and illness and help is needed. That is something that we need to look at.

We must realise that, since no man or woman is an island, the families of those affected can be devastated. The figure for those negatively affected by gambling is even greater. I read a report in one of the papers the other week about a parliamentary answer that referred to an east London constituency in an area of high welfare dependency. In 2011, £243,270,300 was staked in that east London constituency’s 164 high-stakes machines. Such areas are home to problem gamblers and vulnerable people, and they are the very people who are greatly affected, and new clause 9 would address their needs. The article quoted the hon. Member for Chatham and Aylesford (Tracey Crouch), who is a very impressive MP, and Liverpool city council. The 559 sites across Liverpool took in £607 million,

“equivalent to £1,302 for every man, woman and child.”

That is part of the problem that we are trying to address for problem gamblers and vulnerable people.

I will try to put that in some kind of context for the Minister, who I know is deeply and profoundly concerned about the misery associated with human trafficking, which is a vile trade. Fewer than 2,000 people were referred through the national referral mechanism last year as victims of trafficking. I am not suggesting that the sufferings of people with problem gambling are the same as those of people who have been trafficked—the two situations are clearly very different. The sense in which the latter group has been deprived of its liberty by a third party differs significantly from the way in which the former group has suffered as a result of addiction. When we are rightly thinking about creating a modern slavery Bill to address one form of suffering, however, it is worth being aware of another form of suffering that appears to affect many more lives, especially as the Bill before us today is able to do something about it. We have the chance to make a change that addresses problem gamblers and the regulation of gambling.

My concern is that the difficulties of problem gamblers are greatly compounded by the lack of progress in their treatment in recent years. How long did the Gambling Commission, the industry and the bodies that it has set up take to commission and fund education, research and treatment for problem gambling? It has been eight years and only now can the head of the Gambling Commission say that research is gaining momentum. During oral evidence, Jenny Williams, while admitting that she is frustrated by the slow progress, seemed to take pride that the Responsible Gambling Trust has recently announced a big harm-minimisation conference for December 2013, which as we all know is long overdue. She conceded that she is frustrated, which is an appropriate and under-rated word, about the slow progress on research.

Since the passage of the Gambling Act 2005, it took the industry and the Gambling Commission more than eight years to announce a harm-minimisation conference of global import. In August 2012, seven years after the passage of the Act, the Gambling Commission, the Responsible Gambling Trust and the Responsible Gambling Strategy Board published a statement of intent titled “New arrangements for prioritising, commissioning, funding and evaluating research, education and treatment.” The previous arrangement had apparently been agreed in 2008, three years after the passage of the Act, but as the “new arrangements” document concedes, only in 2011 was it

“agreed by all parties that those arrangements were not working”.

What a waste of time and resources not to do anything.

In the meantime, we have seen an increase in problem gambling—admittedly it is a small increase, but it is an increase nevertheless. What have the Government done in response? They scrapped the national problem gambling survey. We have folded the national lottery into the responsibilities of the Gambling Commission and have seen that the industry can ask successive Governments to increase the stakes and prizes of gaming machines through the triennial review process and get what it wants.

The challenge of addressing problem gambling is even more pronounced because the 2010 problem prevalence figure for online gambling, the focus of the Bill before us today, is much higher than for gambling on average. The annual online slots problem prevalence figure is more than 9%, and the monthly figure is 17%.

That was the situation before the introduction of the Bill, the effect of which will be to make the people of the United Kingdom, including problem gamblers, more aware of online gambling opportunities because of the changes to advertising. One of the main tools to protect those who have a problem is self-exclusion. The logic is quite simple, and the Minister, in her correspondence and in her answers to questions, has indicated that she leans towards self-exclusion. As with other forms of addiction, people have good days and bad days—days when they are stronger to resist and days when they are not. Self-exclusion provides a mechanism whereby, on a strong day, problem gamblers can self-exclude from gambling providers. They acknowledge that there is a problem and do something about it. The current way that self-exclusion works provides a credible solution with respect to terrestrial gambling. It is not physically impossible to self-exclude from the four betting shops in your town and to have then self-excluded from all terrestrial gambling opportunities where you live. However, that cannot be said of online gambling, where you can self-exclude from four sites and still have access to hundreds, indeed if not thousands, of sites.

It simply is not possible to self-exclude from any more than a tiny, tiny fraction of those sites. Thus we have to confront the fact that we are not currently affording online gamblers the same kinds of protection afforded against terrestrial gambling. In this context is it any wonder that the problem-gambling prevalence figures are worse for those gambling online? Quite apart from anything else, to provide terrestrial gamblers a credible form of self-exclusion but to deny it to online gamblers seems to me to be rather discriminatory. I hope the Minister can respond to that.

Mindful of these concerns, I contend that even without the changes that this Bill proposes in relation to the advertising of online gambling, we urgently need to introduce an online gambling one-stop shop for self-exclusion. The shadow Minister made that point very clearly in his earlier presentation. Not to do so would be to ignore the findings of the prevalence survey and to discriminate against the needs of online gamblers.

The imperative for this change, however, is radically compounded by the Bill. Some would have us believe that this Bill is all about tax. The Government, however, have rightly made it clear that it is actually about consumer protection. I am delighted to hear of this commitment from Government. It is a step in the right direction. If this suggestion is to have any credibility, however, the fact that the Bill proposes to allow a new group of online gambling providers—namely those currently operating in what is now a blacklisted jurisdiction—to advertise under licence must be complemented by a provision to enable people to access a one-stop shop for self-exclusion. It simply is not credible to say on the one hand that this Bill is about consumer protection and then on the other to permit more gambling advertising, making problem gamblers in the UK more aware of online gambling opportunities and to do nothing new to help online gamblers. Indeed, I find it extraordinary that the Bill effectively liberalises gambling advertising but does nothing new to help online gamblers, whose needs are already overlooked compared to those of terrestrial problem gamblers. If there ever was a case of the king with no clothes, this is that story. The Government's problems are further  compounded by the fact that the Bill does nothing to prevent those who do not get a licence from continuing to access the UK market, but we will address that issue, Mr Williams, in new clause 6 and new clause 7.

The idea of a one-stop shop for self-exclusion is supported both by gamblers themselves and by academia. When we held our evidence sessions last week, it seemed that the industry was keen to see it happen and it seemed that Government were also keen to see it happen. There is an opportunity to do that.

In a survey conducted by the university of Salford, 69% agreed that

“self-exclusion is ineffective since players can simply choose to play at another site.”

Even stronger, 72% agreed:

“For self-exclusion to work all sites need to co-operate to have an industry-wide self-exclusion system.”

Dr Sally Gainsbury, to whom the shadow Minister referred, also gave her figures and comments on this. She argued that the technology is available and points to its feasibility, particularly in the UK, due to the current existing licensing conditions and the code of conduct upheld by the UK Gambling Commission. The shadow Minister also referred to Veriplay and Bet Buddy. Again, research presented to the Canadian-based Responsible Gambling Council in 2011, by the British-based GamCare, the university of Salford and Bet Buddy also endorses the proposal, as so eloquently put forward by the shadow Minister.

I support new clause 9 in as far as it goes but I would like to see a clear requirement placed on the face of this Bill requiring the Gambling Commission to introduce a one-stop shop mechanism to which all holders of UK licences must be subject. The shadow Minister has indicated that this is a probing proposal, I think that is what he said. [Interruption.]Sorry, that is not what he said. I am keen to support this new clause 9 and if he presses it to a vote, I support him on it, but I would be keen to hear comment from the Minister. Without this provision, and indeed without financial transaction blocking which we will discuss shortly, the notion that this Bill is about consumer protection will, I am afraid, seem incredible.

I implore the Minister to give us an undertaking today to review the fact that the Bill will make problem gamblers more aware of online gambling opportunities without affording them the key protection that they need: a credible self-exclusion mechanism. I also implore her to table an amendment to the Gambling Act 2005 on Report to require the Gambling Commission to make one-stop-shop self-exclusion for online gambling providers, as distinct from simple self-exclusion, a part of the licence agreement of any operator with a UK licence.

Photo of Gerry Sutcliffe Gerry Sutcliffe Labour, Bradford South 2:45 pm, 19th November 2013

The hon. Gentleman has prompted me to make a contribution on problem gambling and what to do about it. He quite rightly criticised the industry for being slow to bring forward its contributions to the voluntary levy that was eventually put in place to get them to react to the problems in the sector. I am pleased that many of the larger companies are now contributing, but there are still some that are not contributing.

I explained earlier that I am a trustee of the Responsibility in Gambling Trust. The problem is that some companies do not contribute towards that trust, or towards research,  education and treatment. Given the size of Camelot’s organisation and the amount of money that is gambled on the national lottery, its contribution could be greater.

I would like to understand something from the Minister. I do not understand why the Government cancelled the prevalence study, because it was a good measure of what was taking place in the sector. Will she also comment on what we need to do to raise gambling addiction as an issue in the health service? As I said earlier, there is no national health funding for gambling addiction, unlike other forms of addiction. Usually, people who have a gambling problem have other problems as well, for example alcoholism.

There is now an opportunity for the Government to work with the sector to remind it that everyone should contribute to the voluntary levy and to talk to the health service about what we can do about the evidence that is coming forward. Many problems in the past have been that people have associated things with gambling addiction when that was not the core issue. Hon. Members will see the Bill as an opportunity to try to get some positive reaction from the Government about gambling addiction and what needs to be done.

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

It is a pleasure to serve under your chairmanship, Mr Williams. I thank the hon. Gentleman for his suggestions on protecting players.

New clause 3 would end the voluntary approach to operator contributions for research, education and treatment into problem gambling and make them compulsory for all operators licensed by the Gambling Commission. Currently, Gambling Commission licensees are required to have effective policies and procedures in place in relation to socially responsible gambling, which must include a commitment to how they will contribute to the research, education and treatment of problem gambling. After the enactment of the Bill, all British-facing operators will have to demonstrate how they will meet those Gambling Commission requirements.

The current voluntary arrangements were only recently revised in 2012. The revised arrangements follow a review led by the Gambling Commission, which concluded that enhanced voluntary arrangements were likely to be effective in ensuring that industry funding is firmly committed, sufficient and sustainable. I am satisfied that the arrangements are working, and we have no plans to review them again at this stage. I will, of course, continue to monitor the effectiveness of the voluntary arrangements. I am aware of what the hon. Member for Bradford South has said about some contributors’ ability to pay considerably more.

On new clause 5, I fully understand and share the concern of the hon. Member for Eltham about the possible use of social media by gambling operators to attract new players to real gambling. I am also concerned, as he is, by the possible impact on under-age users of social media who may become habituated to gambling-like activities and may start to pay, in effect, for more time by buying more chips, spins or other credits, or be tempted to real-money gambling as soon as they are able. However, the new clause is not needed. Not only does the Secretary of State already have the power to conduct a review, but the Gambling Commission has  already started the process. It commissioned and published a review of what is known of the potential risks from social gambling on social media and has been working with the responsible gambling strategy board and providers of social gaming. That approach should help us to decide whether there are elements of social gaming that need to be addressed by either the Government or the regulator.

The shadow Minister referred to new clause 9 in some detail, as did the hon. Member for Strangford, who I know is interested in problem gambling. I believe he raised the issue on Second Reading and in the Committee’s evidence sessions. The new clause would enshrine in statute a one-off commitment to consult on a standardised system of self-exclusion. Self-exclusion is a priority area for the RGSB and it is working closely with the Gambling Commission to improve the effectiveness of self-exclusion as a harm minimisation tool.

Although we expect operators to take all reasonable steps to enforce exclusions, there is of course an onus on the individual to comply with their exclusion. I welcome recent commitments from the industry to explore and develop more comprehensive self-exclusion arrangements, and I expect the industry to make rapid progress in delivering on its commitments.

Photo of Clive Efford Clive Efford Shadow Minister (Culture, Media and Sport) 3:00 pm, 19th November 2013

I would like to hear from the Minister what she is saying to the Gambling Commission and others about self-exclusion and about what we expect as Parliament, the final arbiters of what regulation should and should not do. What is she saying to them about a one-stop shop for self-exclusion across the remote gambling industry? It is an important issue, because the current arrangements are just too easy for people to bypass. We heard from Mr Boucher, who said that on a good day, a problem gambler can self-exclude, but on a bad day when the demons are with them, they can get around the system too easily. It is those people who we need to protect with the one-stop shop. What is the Minister saying to people about how we address that problem?

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

It is a very serious area of concern. The industry is motivated to work closely on it, the Gambling Commission is working with the industry and I am working with the Gambling Commission. I will say a little more on self-exclusion in a moment, but I think we need to let processes take their course. It is not straightforward and it is not going to go away, but it is not off my radar. We will continue to monitor and check to see whether we can make further progress, but I do not want to act too hastily and make an error or mistake, or to make something worse than it currently is.

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

I fully accept that last comment, which is why the new clause is drafted so as to require the Secretary of State to go away and consult about an appropriate way forward. I accept that we cannot set the detail on this issue today. However, the question is whether the Minister is saying that there will be a self-exclusion system that covers the industry. Will there be a one-stop shop so that when people self-exclude, they will self-exclude as far and wide as the Gambling Commission can achieve, or is the Minister saying that  she will wait to see what is said, and then we will see what we can do? There is a big difference between those two positions.

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

No; I am saying that the industry is motivated and very much aware of the fact that it needs to do something about this issue. The Gambling Commission is aware that we need constantly to improve the current systems. As the Minister responsible I am of course watching everything carefully. I will do everything I can—in the right way, of course—to make the situation better than it currently is. I am going to say a little more about self-exclusion when I respond to detailed queries.

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

I hope that the Minister will permit me to intervene later.

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

Of course.

New clause 12 requires the Secretary of State to conduct a review comparing the UK regulatory regime with that of various other jurisdictions. I am confident that the British regulatory system is a model of best practice, which will be enhanced by the new Bill. Should the Secretary of State or I decide to conduct such a review, it will not require primary legislation.

I will now deal with some of the many matters raised by individual Members. First, the shadow Minister referred to Dan Boucher and also commented sincerely on the importance of ensuring that we have the highest possible standards. I recall what Mr Boucher said about that in his evidence, which was that

“we should review the protections provided by white list jurisdictions” and that

“our protections are not as good as theirs”.

––[Official Report, Gambling (Licensing and Advertising) Public Bill Committee, 12 November 2013; c. 37, Q90.]

It will probably not surprise the shadow Minister to hear that I disagree with Mr Boucher completely: other regulators are not the issue.

Together, the licensing conditions, the codes of practice and the remote gambling software technical standards, which have been referred to, ensure that the Gambling Commission regulates robustly and effectively.

That is what the Bill is all about: robust and consistent protection of British consumers. In fact, Gibraltar’s code of practice on remote gambling and software technical standards largely mirrors the technical standards of the Gambling Commission. The commission already disseminates best practice, and that includes engaging with overseas regulators. As I am sure the shadow Minister is aware, it hosts numerous visits every year from overseas regulators who are keen to learn from exactly what it is doing.

On the separate review of the Gambling Commission code, which the shadow Minister mentioned, the commission is consulting—this has come out of Committee —on the changes to its licence conditions and codes of practice in preparation for the new regulatory regime. The consultation closes on 4 December and changes will be implemented in 2014.

The shadow Minister also talked about social gaming in some detail. The Government are aware, of course, of the potential risks posed by gambling-style social gaming,  especially to children and young and vulnerable people. We have been working with the Gambling Commission to look at the related evidence around consumer protection and problem gambling. The commission is working with the International Social Games Association to develop a body of evidence to assess the potential impact and risks. In the meantime, the Office of Fair Trading is consulting on principles for consumer protection on online, app-based games. The principles are designed to enhance consumer protection across all online and app-based gaming, including gambling-style games. We continue to monitor developments in the area and I assure the shadow Minister and other members of the Committee that there is absolutely no complacency.

I hope that I have made my position on self-exclusion clear. [Interruption.] The shadow Minister is shaking his head, but the industry is committing to self-exclusion. Yes, of course there is more work to be done, but we want the industry to do it, to take the lead and to believe in what it is doing and why it is doing it. We would also like the industry to move very rapidly and as the Minister, perhaps I can encourage it to do so. I want the industry to monitor effectiveness, and I will encourage it to do that as well.

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

I am afraid that the Minister has not reassured me. She seems to be saying that we are waiting for the industry to tell us what it will do. [ Interruption. ] It is usual not to permit an intervention on an intervention, but we can make it up as we go along if she wants. I am free and easy, so I will give way.

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

I thank the shadow Minister. To clarify, we are not waiting for the industry to tell us what it will do; the industry has started acting and is doing things. My position is that I want it to move a little quicker, and I will encourage it do so. I want to monitor the effectiveness of what is done, but it is not a matter of waiting; it is a matter of allowing the industry to get on with what it has started.

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

What is the Minister expecting the industry to do? All we are asking for with the new clause is a commitment towards a single one-stop shop across the industry. Does the Minister not accept that, if that is not achieved, the measure on the internet and remote gambling will not be effective? We need a commitment that we expect whatever the industry comes back with to be a one-stop shop that ensures that when someone self-excludes, they self-exclude across all the licensed operators under the Gambling Commission.

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

No, it is not a no; if it was a no, I would say no. It is a complicated area. We want the best possible protection, but we need to let the Gambling Commission continue to work with the industry. If I am not satisfied that we are getting the result that we want, I will take appropriate action. I like to think that I could work with the shadow Minister and others in relation to that.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Human Rights)

I do not think we are all that far removed from agreement. The Minister is confirming that, if the gambling industry does not meet a satisfactory target, she will intervene and pursue better regulation. I think that that is the gist of what she has said. Can she confirm that?

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

Of course I want to see progress, and I believe we can make improvements from where we are now. I will be encouraging the changes and I will monitor carefully what the industry is doing and how effective its ideas are.

The hon. Member for Newcastle-under-Lyme referred to new clause 12. I hope he will agree that the British regulatory regime is a model of best practice. There are, however, emerging jurisdictions in EEA countries with less experience of regulation. The Bill will remove uncertainties about robustness of regulation and ensure the consistency that is certainly needed. We are happy to keep talking to other regulators and we will of course share best practice.

The Gambling Commission is internationally respected and its job is to ensure that the British regulatory system is the best that it can be. It is its job to advise me if changes need to be made. If so, I will endeavour to make those changes.

The hon. Member for Newcastle-under-Lyme also touched on the issue of disclosure of customer accounts. Again, that is a complicated matter. I will have to write to him on that.

Finally, the hon. Gentleman raised the issue of quistclose trusts. I do not want to pre-empt the Gambling Commission’s consultation, which he mentioned. The commission is looking at quistclose trusts. There are advantages in such a scheme, but also risks, so it is right that we wait for the consultation. I am sure he will have some input into the consultation, which does not close until early December.

I hope I have made it clear that I wholeheartedly support consumer protection, which is the object of the Bill. However, I do not believe that the Bill is the appropriate vehicle to take forward the additional proposals. The Bill is a sensible step to ensure that Britain maintains a well respected gambling environment to allow consumers to play safely and with confidence while allowing the industry to continue to grow.

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

It has been quite a long debate on this group of new clauses. I hear what the Minister says about the revised levy that was agreed in 2013. I will not press new clause 3 to a vote, but I think we might return to the issue. We want to probe how effective the scheme might be when new operators come under the system and whether they will be part of it and contributing to it. As we have heard in some of the evidence, people coming into our licensing regime should be contributing to research and treatment, even though they might be located offshore.

On new clause 5, I am delighted that the Gambling Commission is holding a review and a consultation. I look forward to seeing the results. On new clause 12, we will want to see how effective the commission’s new code is. It is being consulted on, which reassures me, but we want to ensure that high standards are set, as we have said consistently in our discussion of the Bill today. I am sure that that is supported by all Members.

On new clause 9, I am afraid that the Minister did not convince me. I pressed her several times for a commitment on whether she would be satisfied with an exclusion system that was not universal and covered the whole remote gambling industry. If people who are not capable of controlling their gambling addiction do not self-exclude, the opportunities in the privacy of their own home to go and gamble somewhere else are virtually limitless. What we were after from the Minister was a clear statement that if the industry does not come back with a universal, one-stop shop self-exclusion system, she would not be satisfied, but she did not say that. I have given her the opportunity to intervene, to use that exact phrase and to give that specific commitment, because we should not require anything less of the industry. The technology is available, as is the means to monitor people’s activities, and we should not miss this opportunity. I will therefore press new clause 9 to a Division at the appropriate point.

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.