[Mr. David Wilshire in the Chair] — Online Gambling

– in Westminster Hall at 12:00 am on 18th March 2009.

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Motion made, and Question proposed, That the sitting be now adjourned.—(Mr. Blizzard.)

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party 9:30 am, 18th March 2009

It is a pleasure to serve under your chairmanship this morning, Mr. Wilshire. I am grateful for the opportunity to raise the issue of online gambling and the ramifications that stem from it. I have read some of the House's previous debates on the topic, and I am grateful for the remarkable amount of material that various interested groups have sent me. When I entered the ballot for this debate, I thought that it might make a change from my normal activities relating to local government finance and unitary councils, and it certainly has. It is obviously an issue that generates strong considerations, and I hope that those who have contacted me will forgive me if I am unable to pursue all the points that they have raised.

I am also conscious that, on online gambling, there is a need to avoid special pleading, because a number of conflicting interests must be reconciled when dealing with the issue. Perhaps I had better get, as I used to say as a lawyer, my mitigation in first and say that I shall not pretend any great expertise in the field; I, like many people, am an occasional gambler who loses a bit of money on the grand national and might rashly be tempted into risking £20 on West Ham United winning the premiership—a guaranteed write-off and the triumph of optimism over experience. I admit that, wearing my professional hat as a barrister before I entered the House, I had to learn to play roulette, because I was instructed in a casino fraud, and we had to understand how to play the game before we could understand the fiddle, but that is the extent of my involvement in gambling.

For the record—it is a matter of record—I am a member of the all-party Channel Islands and Gibraltar groups. Online gambling is an industry in both areas, but neither authority in those two places has approached me and sought to initiate the debate. What caused me to initiate it, in fact, is the work that I have recently done in my constituency with several organisations that are concerned about problem gambling, and I pay tribute to those local and national organisations that deal with it. That, and some of the related regulatory issues, struck a chord with my past experience as a lawyer before I entered the House. There are concerns about ensuring that inappropriate people do not become involved in gambling, and about the social consequences, which are often not picked up as readily as other issues such as alcohol abuse. That is why I am particularly interested in the issue.

We must be realistic about certain things, however. Gambling has always existed and I have no moral objection to it, having set out my limited experience of it. It would be bizarre in the modern world if we did not recognise that the internet will play a role, and it would be foolish to pretend that the online gambling market is not substantial. Back in February, during a Delegated Legislation Committee debate about amendments to regulations on Antigua, Mr. Foster, whom I am glad to see present today, set out in some detail the economic substance of the industry, which I shall not repeat because I doubt whether the figures have changed very much since then.

Online gambling is big business, and it creates not only opportunities but challenges. I accept that the Gambling Act 2005 was a well-intentioned attempt to strike a balance. Like a number of people, I have some criticisms of how it has worked out in practice, but we must take on board the fact that the enormous growth of the internet has almost outpaced the regulatory regimes. There are about 7,000 gambling sites, although that figure is very rough. Some are regulated and regulated very well by our regime, but the vast majority—about 6,000—are not effectively regulated, and that causes real concern. A number of constituents raised that issue with me.

Photo of David Taylor David Taylor Labour, North West Leicestershire

The hon. Gentleman talked earlier about having an annual bet on West Ham winning the premiership, which would generate about the same odds as Philip Davies making a speech or asking a question that did not include "political correctness". The serious point is whether Robert Neill has assessed the debate held in Europe in the past few days, whereby MEPs want to push European-wide controls and regulation back to nation states, where they say that the power and responsibility lies. Many of the gambling facets that he describes are global, regional and continental, so is there not some scope for co-operation between nations on gambling—particularly online gambling?

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

I very much agree. I was tempted to say that I phoned up William Hill to get odds on an intervention by my hon. Friend Philip Davies.

The irony is that, if there is one area in which Europe could do more to achieve a level playing field, it is online gambling, but that is the area in which Europe has lamentably failed. The European Parliament's debate on the Schaldemose report represents a missed opportunity, and I shall be interested to hear the Government's response to it. While I yield to no one in my defence of subsidiarity, there may be merit in looking at the proposal, which the British MEP Malcolm Harbour floated, for a European code of conduct that, at least voluntarily, could set in train the common approach that most of us would like.

Photo of John Greenway John Greenway Conservative, Ryedale

That is the nub of the problem. In essence, there are a number of jurisdictions in Europe where it is impossible legally for the United Kingdom to ban their UK-facing operations. We do not have common standards, and that is what we need.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

I pay tribute to my hon. Friend and his experience of those matters, which is very much greater than mine. That is why I was grateful for his intervention, and he is absolutely right. If we are to make sense of the single market, something to which I am committed, we have to create a genuine level playing field, but that simply does not exist at the moment. The difference between Germany, where online gambling is virtually outlawed, and the monopolistic approach in France and other European jurisdictions makes a level playing field impossible, and responsible British operators are often disadvantaged by that climate. It is very difficult for the various bodies trying to ensure that gambling is dealt with responsibly in the UK to counteract the inevitable penetration of the British market by unregulated bodies and the EU's broad approach. If we cannot get right the approach in the EU, it will be very difficult for us to have any great authority when we try to argue with jurisdictions outside the EU about adopting the same common and responsible approach.

I hope that the Government will respond favourably to the approach of Mr. Harbour MEP, because it seems to be a balanced and sensible route towards standardisation, which in turn appears to be both the only way that is consistent with single-market principles and social responsibility, to which I think all parts of the House are committed. That is important not only because of the growth of unregulated sites and the variety of regulation, but because of the downside of gambling.

Gambling can be a legitimate form of enjoyment, and it produces a good deal of money for the UK, but it is a matter of concern. It is certainly a matter of concern for the constituents who have contacted me, because problem gambling appears to be growing faster online than in other areas of gambling, which is demonstrated by the Gambling Commission's prevalence study. The figures on page 95 of the study demonstrate that internet gambling is the area where, by the commission's two measures, the growth of problem gambling seems to be the greatest, and clearly that needs to be tackled. I am interested to see what proposals the Government have, on the back of those figures, to deal with the growth in problem gambling.

I pay tribute to the good work done by the Gambling Trust, as do the other organisations that I have had dealings with. I am interested to know what plans the Government have to strengthen support given to that trust, and to organisations like it, which are dealing with the issues that I have mentioned.

Given that we are not yet able to get common standards within the EU, we ought at least to be making sure that the maximum effort is made to ensure that there are proper standards in the white-listed jurisdictions. Can the Minister help? Do any of the white-listed or EU jurisdictions contribute towards the work of the Gambling Trust? I know that the trust receives financial contributions on a voluntary basis, but I am interested to know whether any of the EU or white-listed jurisdictions currently make such voluntary contributions and, if so, which ones. That may provide an interesting picture of the attitudes of the people with whom we are dealing.

Photo of John Greenway John Greenway Conservative, Ryedale

I can help my hon. Friend immediately, as chairman of the Gambling Trust. Operators in Alderney, which is a white-listed jurisdiction, are now contributing substantially to the Gambling Trust. Those contributions would be less likely had we gone down the road of introducing a statutory levy on operators. I congratulate the operators in Alderney on the support that they have given, which helps us support one of the organisations in my hon. Friend's constituency.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

I am grateful to my hon. Friend for that information. I endorse his observations. That is the right approach. We ought to be seeking to use such authority as we can to encourage other operators in white-listed, and similar, jurisdictions to adopt the same approach. I should be interested to hear from the Minister about what more the Government can do to try to achieve that, about what can be said to the other white-listed jurisdictions on that topic and whether there is any scope for work with our EU colleagues on a similar approach there.

Photo of Philip Davies Philip Davies Conservative, Shipley

For the benefit of David Taylor, I certainly will not mention the words "political correctness".

Does my hon. Friend agree that there is an anomaly with regard to the funding for the Gambling Trust, because many organisations might be considered to contribute to problem gambling, including the Government themselves through the national lottery, which allows people to gamble from the age of 16? Scratch cards, for example, strike me as highly addictive. Does he agree that if we want to tackle organisations that promote inappropriate gambling, the Government might want to contribute to that fund?

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

That is a tempting and interesting argument. I shall not follow it, but I suspect that my hon. Friend Philip Davies will want to pursue it in due course. His point that there ought to be consistency of approach is important. The Government have a role to play in encouraging the work of organisations such as the Gambling Trust, whether by direct contribution or using their leverage to ensure that there are contributions from the industry on a voluntary basis. I agree with my hon. Friend Mr. Greenway that that would be preferable. I agree with my hon. Friend the Member for Shipley that it is important that the Government get involved and play a role.

Photo of David Taylor David Taylor Labour, North West Leicestershire

I agree with the hon. Member for Shipley about organisations that may assist the work of the Gambling Trust. It is well known that online gambling heightens fraud, crime, gambling addiction, risk to children and so on. A relatively new occurrence is interference with the integrity of sporting events. Does the hon. Member for Bromley and Chislehurst believe that there is a role for the sports control bodies in cricket, rugby and so on and that the Minister is in a good position to respond to that matter when winding up this debate? That is a serious issue, is it not?

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

The issue is very serious, and the Minister will have taken those concerns on board. It has clearly spread well beyond the occasional fringe scandal in the past. Now one finds it in mainstream sporting activities, with household names sometimes being implicated. That is damaging for the concept of sport, when in the run-up to the Olympics we are trying to encourage participation—it is scarcely a good role model for young people—and it calls in question the regulatory ability of some of those bodies. I hope that the Government will tell us what plans they have to take that issue on board, because it is topical at the moment. All these issues link together. It is a question of how we encourage greater harmonisation in the UK, support the work of the Gambling Trust and other jurisdictions and encourage a robust approach to the integrity of sport by the various regulatory bodies concerned.

I turn now to the consistency and robustness of the regulatory regimes that we allow legitimately to have access to the UK market. I am grateful to the hon. Member for Bath for his detailed exposition in the February debate on the piece of delegated legislation that I mentioned earlier. He got to the nub of the issue, when referring to the statutory instruments, when he said that, although we do not regard an identical regulatory regime as being necessary, the white-listed jurisdictions

"must operate a regime with 'similar intention and effect'" and must

"'have embedded within their licensing regimes the values which underpin our licensing regime'".—[Official Report, Third Delegated Legislation Committee, 4 February 2009; c. 4-5.]

That includes, among other things, the protection of the vulnerable, which I mentioned earlier, fairness and compliance, which are topical at the moment, and ensuring that crime is kept out. I am not convinced that we have the necessary assurance that that is so in respect of such jurisdictions. In some cases, that is probably fairly easy to achieve. For example, it is well known that some established white-listed jurisdictions have a good track record and one should not denigrate the work that they do. But there are concerns that, if we are not transparent about the criteria that we apply to white-listing, the value of the white-listing process—often involving jurisdictions with important connections with the United Kingdom—can be undermined in terms of the rest of the world. I hope that the Minister can assist me, following the issues raised in the February debate and subsequent developments.

What are the current arrangements by which the Government test the robustness of the regulatory regime in white-listed jurisdictions? The hon. Member for Bath mentioned how difficult it is to get information on the submissions for white-listing. I understand that those submissions are not available for scrutiny, which the hon. Gentleman mentioned in respect of the difficulty that he faced on freedom of information applications. I would like to know the justification for that, as the Minister understands it. It has been suggested that commercial confidentiality is an issue—in my experience, it is usually the one that is raised most often. We would like to know whether that is so. Is that the sole reason?

Are there any other reasons that might be advanced, or have been advanced, by way of exceptions to the Freedom of Information Act 2000, as to why those submissions should not be available? I should have thought that it was in the interests of jurisdictions seeking white-listing for their submissions to achieve maximum transparency, because that would inspire confidence in the strength of their regimes. But it is also important for us, in respect of the due diligence that we owe to the British population, to be assured that there is a means by which the authorities in the UK can clearly and objectively compare the regulatory regimes of the various jurisdictions that apply for white-listing. We do not have that transparency or that assurance at the moment.

The mystery shopper pilots were mentioned in February's delegated legislation debate. That is a well-established means of testing the system's robustness in respect of under-age people and so on. There was an indication that the mystery shopper pilots were to be extended beyond the UK, but it was apparent that none of the pilots had taken place outside the UK. Can the Minister tell us what the position is now? When will those pilots be rolled out to jurisdictions outside the UK? Has that happened yet? If not, when is it going to start and on what basis?

In that debate, reference was made to the Ascot conference and the minimum international standards document, which, as far as I am aware, is still not in the public domain. Is it proposed that it should be? It is difficult to understand why a document setting out minimum international standards should not be publicly available. That should be part of the process of robustness that we want to be available and that the House should be able to see as a measure of scrutiny of the regulatory regime's strength. If the document is not available, why not? Is it because of commercial considerations, or are there objections from certain jurisdictions—if so, which? We are entitled to know. In the absence of overwhelming reasons to the contrary, it should be placed in the public domain as soon as possible.

Another aspect of white listing that was referred to in the debate is the situation in Antigua and Barbuda, which goes to the heart of ensuring faith in the robustness of the white-listing system. When I worked as a lawyer, I dealt with several commercial fraud and money laundering cases, and it was apparent that some jurisdictions throughout the world are susceptible to pressure from organised crime in several ways. Gambling and related activities have always been vulnerable and require particularly high standards to protect honest and legitimate operators—the majority—from such infiltration.

The position in Antigua was a matter of concern to hon. Members during the debate in February. We have not had any information to assuage those concerns, which have since been heightened by what has happened since, particularly among cricket fans as the Allen Stanford scandal hit the headlines. It is worth remembering that Stanford's operations were based in Antigua and Barbuda. A particular concern to me is that unlike the UK, where the regulatory organisation for financial services is separate from that for gambling—that also applies is some other white-listed jurisdictions—the Antigua and Barbuda Financial Services Regulatory Commission is extraordinary in that it regulates not only financial services but online gambling. Its capacity and capability have inevitably been called seriously into question by what has come to light over the Stanford affair. If its capacity is subject to grave doubt—I say that as moderately as I can—on such an issue, we are entitled to be concerned about its ability to regulate online gambling to the standards that we expect of a white-listed country.

In fairness to UK citizens, whose market the commission could be involved in, and the whole white-listing system, it is important for the Minister to make it clear what discussions the Government or the British regulatory authorities have had since February with those in Antigua and Barbuda, as well as what they are doing to satisfy themselves of the robustness of the regulatory regime in that jurisdiction and its ability to meet the appropriate regulatory standards. In February's debate, the response was that it was capable of meeting those standards, but that is not the same as an assurance that it does. Any risk management—that is partly what we are engaged in—needs a robust, embedded process, not an aspiration for the future. Nothing that I have seen or read suggests that we have that, and the Government owe us maximum clarity as regards the situation in that white-listed jurisdiction.

I hope that those who are interested in related issues such as spread betting, betting exchanges and so on will forgive me if I do not trespass down that line. I have tried to limit myself specifically to the regulation of online gambling, although I suspect that other hon. Members will want to raise additional points. I hope that I have clarified which two areas particularly concern me. These concerns are cross-party, and they are not driven by ideological considerations. I hope that we can approach the matter with a sensible and balanced view. I also hope that the Minister will respond to the debate constructively. My hon. Friends and I have been critical of the Government on some issues, but we want to help them to improve the situation because responsible gamblers and businesses in the industry—the vast majority—are entitled to clarity and equity of standards, which we do not seem to have at the moment.

Several hon. Members rose—

Photo of David Wilshire David Wilshire Conservative, Spelthorne

Order. I always work on the assumption that all hon. Members who turn up to these debates want to speak, and 35 minutes remain before I want to call Mr. Foster. I do not know what the odds are on calling eight hon. Members in 35 minutes.

Photo of Ian Gibson Ian Gibson Labour, Norwich North 9:55 am, 18th March 2009

I congratulate Robert Neill on raising this issue.

My interest stems from being contacted by the press following a football match between Norwich City and Derby where strange betting irregularities had been described at half time. Norman Lamb and I raised the matter in Parliament, and we have tried to find out what went on. During the game, nothing peculiar seemed to be happening. A goalkeeper was sent off early in the second half, but that is not irregular, as the Minister will know, having been a goalkeeper for the parliamentary team. I have defended his goal area many times as a centre-back. The hon. Gentleman and I had meetings with the Gambling Commission and the Football Association, and we are due to have a meeting with the Central Council of Physical Recreation, which has helped me with this debate, to discuss the matter further. We have not got far in finding out what went on. We were told that at half time a lot of money was put on in the Asian-Chinese market, and that it was put on Norwich City, which eventually lost the game.

People can now bet online on single events such as who will get the first yellow card or put the ball into touch during the first five minutes of the second half. People can bet on any event. Someone told me that bets can be made on whether the referee wears spectacles. Odds are available on almost anything these days, which opens up betting to the possibility of seducing, inducing or tempting people to fix an event without losing it. Someone could lose the first set in a tennis match but win the match, and make a tidy sum of money. I must declare that, having been a professional footballer, I know some of the iniquities that went on in dressing rooms at half time when £5 notes might change hands—that was a lot of money for a football player in my day. Such things happen, but are they isolated events or the tip of an iceberg? The CCPR confirms that there is a real threat of corruption. It says:

"There have been 47 suspicious bets investigated by the Gambling Commission since 1 September 2007."

It told me that a big scandal involving a football match in this country is about to blow, and that the police have been involved.

Photo of David Taylor David Taylor Labour, North West Leicestershire

Will my hon. Friend commend the attitude of Betfair, the online gambling organisation, which is very quick to report to the Gambling Commission any unusual pattern of bets, whether in timing or nature, particularly during sporting events? That has led to several investigations into possible fraud, which can only be good for sport and gambling.

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I thank my hon. Friend for that comment, which is true. The case to which I referred, which will be a sensational one, has involved some clever investigative work on identifying betting patterns by Betfair and others. Bets were made in a small, precise area of England, and that was tied up through intelligence. However, when it happens in the Asian markets, it is very difficult to deal with. It is difficult to know, for example, how much money was put down in the game that I mentioned. What event during the game was the money put on? Who won the money? How many individuals were involved? These bets are just a blip on a chart, but they look strange. If they happen in this country, we can tie them down and investigate, but there are all sorts of problems when they happen abroad. That is a problem caused by the internet.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

The hon. Gentleman said that there are 47 ongoing investigations, and City of London police are involved in a long-standing investigation of more general betting scandals in the football industry. Is he as concerned as I am that none of those investigations seems to lead to successful prosecutions? The public feel that much of this regulation and many of these high-profile investigations are pretty toothless when it comes to getting results and tackling the concerns that he mentioned.

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I thank the hon. Gentleman for that. I agree, although I also think that there is some conservatism—with a small "c", of course—in the organisations involved. They do not want to raise the issue or to see it on the front pages of the newspapers, because that would break down the integrity of the sport and make the public suspicious. There is plenty of evidence in Europe that crowds have flocked away from matches where they believe that corruption is taking place. The organisations involved are on the back foot and do not want to take things too far in case that destroys the whole sport. It is a difficult balance to strike.

Photo of Bob Spink Bob Spink Independent, Castle Point

The Gambling Commission is responsible for keeping crime out of betting on sport. Does the hon. Gentleman feel that the information that it publishes for punters is good enough? Is it accessible enough, and does it use the right language to reach the people that it should be targeting? I have looked at it, and it does not seem very punchy.

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I thank the hon. Gentleman for that. The Gambling Commission has been in operation for only a year. I have met the people who run it, and they are gingerly feeling their way forward on how far to take things in a sensitive situation. They will have to interact with the police eventually if criminal charges are to be laid. However, he is right to suggest that things will reach a breaking point.

From the 18th century onwards, sport and betting have been linked, and many laws developed because betting was taking place on games. I will not go back to the Romans in their chariots, although I bet that a few bets were put on such things as well. I cannot mention all the classic cases of problems with betting, but the case of Hansie Cronje was the big one in cricket. He induced some of his mates not to perform at the high level that they might have done because there were big bets behind the scenes. There have been other big cases like that.

Somebody mentioned all the different tricks that can be played. Betting during a match is an interesting example. The hon. Member for North Norfolk and I were told about what can go on. Somebody can be sitting in the stand at a football match talking to somebody else in Hong Kong, and because of the time delays involved, they can say, "The Derby County goalkeeper got a red card five minutes ago and was sent off. Get a bet on that." I am not saying that that is what happened in the case that I mentioned—although I could, because we can say anything in this place. However, I am alleging that that could be the event that lots of money was put on, although it is hard to prove. Making such bets is seductive, because fixing an event in a game is an easy way out for individuals with a money problem. There is also spread betting, which goes across the board. At Betfair, people can bet on a horse winning or they can lay their money, as they say, on a horse losing—they can bet any way they want. Betting is open, which is fine, but it will be difficult to trace corruption and fixing, although organisations are on their way to trying to find out.

What can we do and say to make something happen in the meantime? Organisations such as the CCPR and the Sports Rights Owners Coalition, which works with the CCPR, are trying hard to make the point that sport is like intellectual property. All Governments struggle with intellectual property rights. Each sport has the right and integrity to govern itself. People want to see the abilities, talents and skills of those involved, as well as real competition, and sports provide that, but some people are making big money off the back of such activities. We should set up a structure to deal with these issues, just as we should for writers, film writers and so on. Protecting the rights of creative people in sport and elsewhere is a live issue at the moment. How do we reward ability given the huge sums that betting organisations make? The sport itself should get a payback to allow it to develop grass-roots activity, which is essential.

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I can see that I have stirred hon. Members up.

Photo of Philip Davies Philip Davies Conservative, Shipley

The idea of giving sport the proceeds from a levy on the gambling industry is a hoary old chestnut that comes up every now and then, although the Government are trying to get rid of the horse racing levy, so I cannot see them being very enthusiastic about introducing a sports levy. Has the hon. Gentleman not argued against his own case? He argues that bookmakers and gambling organisations should contribute to a levy to protect integrity in sport, but he said that many of these events take place in the Asian market and the far east, so targeting British gambling operators would do nothing to protect the integrity of sport.

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I thank the hon. Gentleman for that, but I have a great confidence in people, and I think that they want sport to be preserved. If people have a part to play and see new talent being created at grass-roots level for the future, we will build a different attitude—they will not just milk organisations, but be real stakeholders in it. We have to try that. The Australians and the French are doing so, and it seems to be paying off.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

Much as I share the hon. Gentleman's optimism about the public being properly served, is not the nub of the problem, which he mentioned implicitly, that governing bodies in too many of our sports are far too weak? Their concern is to keep the integrity of the game from being criticised by the press and to maintain the position of the big players, which are often the big financial interests in the sport concerned. During the football scandals of the 1960s, it was generally minor players in third and fourth division clubs who went down, although Peter Swan and Tony Kay were involved as well. Broadly speaking, the problem was seen as one involving small scandals at clubs such as Mansfield Town, not something that happened at premier clubs. In many ways, the general public are poorly served by the inadequate governing bodies of these sports. There has to be a different way forward.

Photo of Ian Gibson Ian Gibson Labour, Norwich North

I thank the hon. Gentleman. Yes, there has to be a way forward, but people must contribute. These sports organisations stay in the shadows, and I understand why. They have real problems in getting intelligence systems, research, monitoring of betting activity, legal and compliance functions, disciplinary arrangements, education and training, rulebook amendments, the media and Government liaison to work together. They need help to come out of the shadows and to be perfect organisations for the sport itself.

Online gambling has changed sport dramatically. It still has to emerge from the shadows to be part and parcel of the great sporting activities in which people indulge. However, it can do that only by sharing what goes on; betting and sport must become truly intertwined. I doubt whether we will get rid of these classic cases—there will always be one or two—but there are too many opportunities to fix matches now, and we have to stop that. The way to do so is to get organisations together to support the people who do the intelligence work and keep the sport intact, and the Government can do that quite quickly.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster 10:09 am, 18th March 2009

I congratulate my hon. Friend Robert Neill on introducing the debate. The issue is of great importance; indeed, we have come back to it, and I suspect that we will do so again. I hope that the Minister is not getting too bored of responding on these matters.

My constituency is at the heart of many of the creative industries, and many large technology industries are also based there. In addition, many bookmakers are based there, and I have visited a branch of Ladbrokes on Charing Cross road in the past few weeks. Increasingly, of course, even the old-fashioned providers supply a high-profile, innovative online offering to their shops.

I do not know whether this applies to other Members, but over the years during which I have been a Member of Parliament I have had the benefit of a close connection with the Betfair organisation, which was referred to earlier. It has assisted by providing me with general and specific briefing on technical matters. I shall touch on one or two of the issues that have been mentioned, particularly by my hon. Friend the Member for Bromley and Chislehurst.

There exists a significant threat that United Kingdom remote gambling companies will be permanently impeded from trading freely and fairly across the European Union, despite operating under the robust UK regulatory regime. Although betting companies that are large-scale employers are committed to staying in this country rather than going offshore, they take the view that if they are playing the game under the Government's regulatory and licensing regime, they understandably expect the Government to stand up for that regime abroad. It is not meant as a threat by Betfair or any of the other operators, but they have the opportunity to go offshore, and they may use that option if they find not only that UK regulation is overly robust but that the regulatory playing field is not being defended abroad by the Government.

The Minister will be aware that a number of EU member states, including Germany, France, the Netherlands and Greece, are seeking to implement, or already have in place, licensing regimes that restrict operators holding full UK remote gambling licences from operating in those other jurisdictions. As has been pointed out, that is in direct contravention of the free market principles of the EU and at odds with the UK's own regime. I regret to say that the Government have done little to demonstrate either defence or advocacy of their regulatory system as compliant with EU free trade principles. Neither have they been willing to support remote gambling companies based on our shores.

One could take a purist view and say that we do not want gambling companies onshore, perhaps because of the nefarious activities to which Dr. Gibson referred. Indeed, we all have some concerns about the integrity of the gambling industry. My preference would be to encourage the gambling industry to stay onshore. From the Government's point of view, that creates significant income and employment; but it also gives us the opportunity properly to regulate the industry, so that we do not end up with a wild west show.

Many Members will be aware, as is the Minister, of the European Court of Justice case between Betfair and the Dutch Government. It has pretty wide implications for the effective operation of the internal market. I shall not go into great detail about that case, as time is somewhat short, but the Government have the opportunity to make a submission to the ECJ in support of British companies and in defence of the principle of the free provision of access to services across the EU. That is the principle upon which the UK's regulatory regime is based. I respect our regime, and I wish that we were able to stand up and make that case. Have the Government any plans to revisit their decision not to make a written submission in support of Betfair in its ECJ case against the Dutch Ministry of Justice, given that no fewer than 15 other member states have written in support of the Dutch?

On a slightly more serious note, given the banking crisis of the past six months and the Government's reaction to it, what will be the Government's position on the Dutch Government's recent request of ABN AMRO? We should not forget that it is now wholly owned by Royal Bank of Scotland, more than 75 per cent. of which is now owned by the taxpayer. Given that the Government have a majority share, they should ensure that we implement financial transaction blocking against online gambling operators.

My hon. Friend the Member for Bromley and Chislehurst referred to the report by the Danish MEP Christel Schaldemose. One disappointment—I suspect that it was in part caused by many MEPs not understanding precisely what they were voting on—is that all 19 of the governing Labour party's members voted in favour of the report, as it actively undermines the UK's regulatory regime for remote gambling. I realise that they may not have appreciated all the implications. Indeed, probably all Members of Parliament know of various times when we have voted, perhaps on a particular subsection, and only when our constituents get in touch with us subsequently do we realise that we may not have understood quite what was being voted on. It is a worry, and I hope that the Minister will give us some idea of how to ensure that all our MEPs make the case on behalf of British companies. As my hon. Friend the Member for Bromley and Chislehurst said, it is a matter that goes well beyond the confines of partisan politics.

I fear that the Government have too often failed to stick to their principles and defend their own regulatory regime. Moreover, in these troubled economic times, the Government should actively support British companies. I speak only for myself and my party, but I believe that the Minister would receive support from both sides of the House for so doing. I take this opportunity to ask why the Government believe that companies in remote industries will stay in the UK if the Government choose not to defend their own regulatory system by supporting such companies in the EU and elsewhere.

Photo of John Grogan John Grogan Labour, Selby 10:15 am, 18th March 2009

I inherited from my late father a number of things, one of which was a William Hill telephone betting account. He would have been very pleased that it was in credit at the time of his death; it contained £7.33. I love gambling, and I make the occasional modest return. I have guarded my father's inheritance well.

I am not an online better, but I am an avid reader of politicalbetting.com. I recommend it to the House, as it is one of the best commentaries on political odds—who is likely to win the next election, or who is likely to be the next leader of a party. Indeed, political betting is a growing part of online betting.

In a previous debate, Mr. Foster laid out the tremendous economic potential of online betting. In many ways, the Government were ahead of the game when they set up the present regulatory regime under the Gambling Act 2005. However, although the Gambling Commission is four times bigger than its predecessor body, not many of its staff regulate online gambling.

A report about the commission's performance is to be published soon; we are looking forward to the Hampton review, as the commission has not undertaken a study of online gambling. There may be a variety of reasons for that. Tax may be one. That subject has not yet been mentioned, but the tax on online gambling is 15 per cent., which could tempt many online operators to go offshore.

The Government were very progressive a few years ago when they abolished betting tax. The replacement tax has led to an increase in revenue. That was a brave move. I believe that we should integrate tax policy with regulation policy; otherwise, many in the Gambling Commission will be sitting around waiting for people to come onshore. So far, they have not done so in large numbers.

My personal friend and neighbour, Mr. Greenway, said that a code across Europe is essential so that those who operate in the European Union meet common standards. Equally, I support Mr. Field in asking the Government robustly to defend our regulatory regime in cases such as the Betfair one.

I exempt my hon. Friend and fellow Bradford City supporter, the Minister, from this accusation, but because of all the political fuss that took place over the Gambling Act, I believe that the Government are reluctant to engage with gambling issues. When civil servants bring files on gambling to Ministers, many of them less knowledgeable than the Sports Minister, they must be tempted to put them in a far-away tray, as they are fearful of engaging with gambling issues.

It is some time since the Gambling Act was passed. I call upon the Government to defend our regulatory regime and to argue in Europe for tough codes that the whole of Europe will abide by. The situation will change worldwide, and I predict—perhaps I shall place an online bet—that, in President Obama's first term, US regulation and law will change, because arguments have already begun there about how prohibition does not work. Indeed, many of the problems with sports betting, which is completely unregulated in the US, and to which Dr. Gibson referred, are far worse there than in the UK.

Photo of Philip Davies Philip Davies Conservative, Shipley

I agree with the hon. Gentleman that the Government should do more to support Betfair, Ladbrokes and other UK betting organisations that are trying to access the European market. If the single market means anything, it should allow them that access. The Prime Minister is a renowned anti-gambler, unless we are talking about the nation's finances, in which case he is prepared to gamble the lot. Does the hon. Gentleman think that, because the Prime Minister is supposedly anti-gambling, the Government are reluctant to get involved?

Photo of John Grogan John Grogan Labour, Selby

I am a keen student of the Prime Minister's character and motivation, but I think that the hon. Gentleman is perhaps being a little unfair. I mentioned the revolution in betting tax; who abolished the betting tax but the very same Prime Minister? I would not say, therefore, that that is the reason for the Government's reluctance. However, the hon. Gentleman was right to point out that many of the traditional bricks-and-mortar gambling firms, such as Ladbrokes and William Hill, are now as much into online gambling as anyone. The Government should be as vigorous in trying to open up European betting markets as they have been in opening up energy markets.

We must face the fact that many of the traditional betting companies, such as those represented by the British Amusement Catering Trade Association, feel a little bruised, because while they have been very well regulated by the Gambling Commission, a large section of offshore online gambling has not. The commission should raise its game. We all look forward to the Hampton review, and I think that we have a friend in the Minister, but the Government need to engage with the issue much more than they have in recent years.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

Before I call Mr. Greenway, I remind everybody that I am very keen to call Mr. Foster at half-past 10.

Photo of John Greenway John Greenway Conservative, Ryedale 10:22 am, 18th March 2009

It is a pleasure to be here with you, Mr. Wilshire. You will know from our conversation in Paris, last Friday, that I might have been in Azerbaijan right now. When I decided that I could not go and discovered that we would be having this important debate, I realised that I had made the right decision, because this is an extremely important issue affecting many of our constituents—many more than perhaps we give credit for. The Chamber will know that I chaired the Joint Scrutiny Committee on the Gambling Act 2005 and that I am the chairman of the Responsibility in Gambling Trust, to which my hon. Friend Robert Neill, whom I congratulate on securing this debate, referred. I was also a very strong supporter of the white list and, in particular, the Alderney Gambling Control Commission's successful application to be on it.

Connected with online gambling are many issues, myths, facts and truths that are not fully appreciated. I want to focus on regulation. In the UK, the general consensus has been—the Joint Scrutiny Committee supported this view—that it was right that the Gambling Act sought to regulate the online gambling sector. However, as Mr. Grogan just said, the majority of online operators have not been regulated in the UK, because of the level of tax. We should accept that and move on from that argument. We are where we are. The key question is: if online operators, based outside the UK, seek to exploit the British market, what regulatory arrangements are appropriate and possible to protect UK punters and consumers? What standards are appropriate in respect of consumer protection, the integrity of sport, to which a number of speakers referred, and the contributions made to organisations by UK operators, such as the levies to my trust, British horse racing and so forth?

The white-list approach, to which my hon. Friend the Member for Bromley and Chislehurst referred, is based on the principle of equivalence of UK regulations for jurisdictions on the white list. It is based on very high standards in respect of the rights of consumers to complain and pursue their rights, of confidence that bets laid will be paid, of the integrity of the financial system being betted on and of pre-agreed limits on gambling activity. Good, regulated sites do all those things already. Sites should deal with money-laundering regulations properly, and we should ensure that applicants for licences are fit and proper and that not everybody is given one. Furthermore, sites should provide for mystery shopping, to which he referred, and contribute to research, education and treatment. Those are licence conditions for UK operators. All that was agreed with the Alderney Gambling Control Commission and with the Isle of Man, which was white-listed about 18 months ago. I cannot speak for the agreement with Antigua, but I would be surprised if the same high standards had not been negotiated by the Minister and his team.

Some colleagues mentioned sports betting. If there is haemorrhaging from the main UK industry, through betting shops or the Betfair site, a contribution should be made back to sport. That would be difficult to negotiate, but both main Opposition parties and the Government would be generally supportive. It is critical, however, to have proper memorandums of understanding on integrity and to ensure that suspicious betting patterns are reported. Dr. Gibson was right to refer to that.

Everyone understands that the Gambling Act—this was the point of the white list—was designed to prohibit operators based outside the European economic area from operating in the UK by offering gambling services to UK consumers. However, the Government's view has always been that there is no legal basis for a ban on operators based in EEA jurisdictions. This is the nub of the problem. Not all other EU countries are quite so open: the Schaldemose report has been referred to, and a highly protectionist attitude exists in a number of other EU Governments, with the prohibition of online gambling altogether, which seems to be in clear breach of EU competition and internal market law. The Government should be more robust in pursuing the interests of British operators—colleagues have mentioned Betfair and Ladbrokes—which should be able to pursue the opportunities opened up by the internal market.

A considerable number of online operators are based in other jurisdictions, especially in Malta and Gibraltar. In my three years as chairman of the RIGT, I have been arguing for common standards across Europe on all the issues that I have mentioned. In particular, I want contributions to research, education and treatment for problem gambling. A number of operators in Gibraltar and some of the biggest names in the online world make voluntary contributions already. The Minister knows that we have managed to agree with the industry that research, education and treatment will be funded to the tune of £5 million a year for the next three years, and we look forward to him announcing, probably in April, after Easter, that he will agree to that.

Consumer protection is paramount, but I despair at the lack of progress. It is not rocket science. More should be done by EU Governments. Instead of pursuing this protectionist, beggar-thy-neighbour, finger-in-the-dyke attitude, they should recognise that these activities will happen and protect their consumers through a common code and common standards. The RIGT created the GambleAware website, which has been visited by more than 350,000 people. Its purpose is to raise consumer awareness: to ensure that people understand how to bet on online sites, are aware of their rights and avoid becoming the problem gamblers of the future.

My time is running out, Mr. Wilshire, but you and I are used to having to make brief contributions, and I have had rather more time today than I normally would have in Strasbourg. However, I will say in conclusion that gambling activity will occur. The issue is how we regulate it and how we get common standards. Above all else, if we are concerned, as my hon. Friend the Member for Bromley and Chislehurst was when he introduced the debate, to ensure that there is a safety net for people who have a problem with their gambling, we should be equally concerned to prevent people from becoming problem gamblers in the first place. That is the feature of the RIGT's work on which we must build. We must use some of this new money to raise awareness and improve education and prevention. Once again, I am grateful to my hon. Friend for giving us the opportunity to make these important points today.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

Anybody who put money on us reaching Mr. Foster by half-past 10 will have won.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport 10:30 am, 18th March 2009

I am delighted to serve under your chairmanship, Mr. Wilshire. Like others, I wish to congratulate Robert Neill on securing the debate and on his excellent contribution. I have enjoyed and learned from the contributions of many hon. Members. I particularly enjoyed hearing about how Mr. Grogan has looked after the inheritance bequeathed to him by his father.

May I also say how delighted I am to be making my contribution immediately after Mr. Greenway? All Members of the House, regardless of party, owe him a great debt of gratitude for the enormous amount of work that he has done in this area and for his real commitment to addressing not only some of the many issues that have been raised but the concerns that many of us have about the large number of people who fall prey to the problems of gambling addiction. He is aware of the importance of education and research to prevent such addiction and of the work that is done to treat those who get into that sad condition.

Internet gambling is very big business. It is estimated that there are about 6,500 such websites around the world. Sadly, 5,500 of those are in no way regulated. Only about 1,000 websites are regulated by one jurisdiction or another around the world. Punters spend about £12.5 billion every year. Fortunately, some 80 per cent. of that is spent on a regulated website. We have real concern about the very large number of websites that are not regulated anywhere in the world.

However we define online gambling, we have to acknowledge that it is at the harder end of gambling. Whether we look at the prevalence studies, the telephone calls made to the various helplines or the number of hits received by online support services, internet gambling comes very high on the list of those types of gambling that are likely to lead to addiction. Therefore, we are talking about the hard end of gambling. It is very big business, which, sadly, is largely unregulated.

Much of the debate has rightly had to concentrate on areas in which there is regulation and in which we can have some influence. I am talking about the influence that we can have in Europe. Across Europe, far too many countries seem to be protectionist about their own gambling companies rather than being concerned about cross-EU regulation that would allow for the protection of people. I was disappointed with some of the discussions that took place in the lead-up to the debate in Europe on 10 March. The European Parliament must consider some of these issues again and far more seriously, with a real concern about the problems that are being caused rather than about protecting individual companies.

Moreover, we must consider some of those areas that have been touched on in the debate. I am grateful to the hon. Member for Bromley and Chislehurst for drawing our attention to the various concerns that I raised in an earlier debate in February and for pushing the Minister to get some of the answers that I, too, sought during that debate. Those who have studied that debate will know that we were debating white listing. The hon. Gentleman rightly said that there were issues relating to those other jurisdictions outside the UK that are within the European economic area, and we must return to those. However, he rightly concentrated on those non-EEA jurisdictions that are deemed to be white-listed.

To get white-listed status, a jurisdiction must prove to the Government that a set of regulatory standards are in place that are similar to and match the aims and objectives of our own regulatory regime. If a jurisdiction gets that status, they have the great benefit of being able to advertise their services within the United Kingdom. As a result, they will be able to pick up a large number of punters from the UK. About one in 10 adults in this country has been involved in some form of online gambling, whether it is through their computer, their mobile phone or their interactive television. Therefore, white-listed companies are given the privilege of being able to advertise within this country and, presumably, they get great benefit from it. We know that from some of the figures that we have seen.

Some 11 per cent. of total worldwide internet betting—equivalent to about £1.4 billion—comes from within the United Kingdom. Therefore, it is big business for white-listed countries. Yet, can we be convinced that we have done enough to secure the right deal with them and that we are doing the right investigation to see that they are living up to the standards that we expect of them? We know that one third of internet gambling sites failed the earlier mystery shopper test, which could have allowed under-18s to gamble on those sites. More worryingly, since September 2007, the Gambling Commission—the body described as "moving ahead gingerly"—has done no mystery shopping in any of those white-listed jurisdictions. When we had the debate in February, the Minister assured us that mystery shopping was going to recommence in the near future. His word was—and he is a good user of this word—"soon". My first question to the Minister is: can he tell us whether mystery shopping in white-listed jurisdictions has now begun? If not, when does he expect it to begin?

When I asked the Minister how many prosecutions there had been, he was unable to answer. He has had over a month, so I am sure that he will now be able to tell the Chamber how many prosecutions there have been under the legislation in respect of this issue. Somewhat worryingly, he also said in February that he could not tell us what costs the United Kingdom has incurred as a result of the white-listing procedure. Again, he has had over a month. I am sure that in a few minutes he will tell us how much cost there has been.

More significantly, I raised with the Minister the fact that if we were facing costs to enable white listing we had to have a mechanism of getting back some of that money. Therefore, will he please tell us how much we will get back, what the mechanism will be and what procedures will be put in place?

Finally, in that debate, I said to the Minister that although there is a requirement in those jurisdictions to contribute to research, education and treatment, the contribution did not have to be to the United Kingdom. We have already heard from the hon. Member for Bromley and Chislehurst that all those operating out of the jurisdiction of Alderney currently contribute, as do a number from Gibraltar. I welcome that, but it is not compulsory. There should be a requirement to contribute, and I should like to know what the Minister is planning to do in that regard.

In the minute or so left, may I also say to the Minister that I share the concerns about sports betting? Concerns have been growing ever since the Hansie Cronje case. I want to pay huge tribute to Betfair for the way in which it has been so open—desperate almost—to work with governing bodies to pass on information. Others are now doing so. Of the 47 cases investigated by the Gambling Commission, 35 arose as a result of information from gambling companies. I welcome the fact that they are acting.

Will the Minister acknowledge that gambling on the internet is growing? I suggest that it is growing for two reasons. The first is that more people have access to computers, but the second—this is my concern—is that the Government have failed to act quickly in respect of softer gambling, whether in supporting bingo, as they did belatedly, or in sorting out stakes and prizes, which they are also doing belatedly. By creating problems at the softer end of gambling, the Government are driving more people towards the harder end, whether it is fixed-odds terminals in betting shops or internet gambling. I urge him to say that he will consider regulation, white listing and issues within the EEA and European Union. However, he must recognise that action on softer forms of gambling is also important, and I urge him to continue considering that as well.

Photo of Tobias Ellwood Tobias Ellwood Shadow Minister (Culture, Media and Sport) 10:41 am, 18th March 2009

It is a pleasure to participate in this important debate. I congratulate my hon. Friend Robert Neill on securing it and on his opening remarks. It is interesting that almost every one of us who has spoken began by admitting an interest in gambling, in some form or another, at a younger age.

The debate touches on the bigger issue of internet use, which should not be underestimated. It affects every walk of life. Its impact is considerable and permanent. It is changing how society functions. The 9 o'clock watershed is anathema on the internet. It does not happen. The internet does not sleep; it is always there, and it is challenging some of our values as a society. That obviously applies to the subject that we are discussing.

The Conservative approach is simple. We support forms of gambling with the correct level of legislation, whether they are penny arcades, bingo, land-based casinos or on the internet. We should see gambling as a form of entertainment, where one is likely to lose, rather than a form of investment, where one thinks one might win. People who go in with that approach will not go far wrong.

The problem that we face, however, is that the playing field out there is uneven, a fact emphasised by a number of hon. Members. The UK approach is to allow internet companies to list in three ways: directly through the UK, through the so-called white list of countries—I will come to the introduction of Antigua and Barbuda a couple of weeks ago—and through the European economic area. In each of those cases, we find different standards for the level of gaming required. That cannot be right. Surely there should be one acceptable level agreed by all member states in the EU and any other jurisdiction with an interest in advertising here in the UK.

The EU market is flawed. In Germany, for example, internet gambling is outlawed entirely. In France, Sweden, Austria and other countries, it is nationalised to the point that UK companies cannot get into the market; in fact, it is illegal for them to try. By contrast, Unibet, an Austrian company, advertises and operates freely in the UK, whereas any UK company would run into severe problems getting into Austria. Le Croupier, a French-based company, is setting up in the UK, taking advantage of our open market while enjoying a monopoly back home. Surely that cannot be right. The recent Schaldemose report, by an EU committee with which the Minister should be familiar, endorsed the uneven playing field. It was British MEPs alone—I think they were Conservative MEPs—who put in a minority report to say, "This isn't the way forward. This isn't what we should be doing." I hope the Minister will be able to comment.

The scale of the problem is huge. Mr. Foster and I may have slightly different statistics, but they amount to the same thing. I understand that there are 7,000 internet gambling companies online, about 6,000 of which are unauthorised. The Government seem happy to sit idly by while nothing is done to stop the surge of unregulated online gambling. With each year that passes, more people become addicted to such sites, which offer little consumer protection, an issue on which my hon. Friend Mr. Greenway has done much work. I offer my support for the evolution taking place through the Responsibility in Gambling Trust to ensure that research, education and treatment are given the respect and finance that they deserve.

The 2007 prevalence study indicates the growth of internet gambling. Internet gambling alone is at 7.4 per cent., but spread betting is at the worrying level of 14.7 per cent. I met representatives of the Financial Services Authority—oddly enough, spread betting is overseen not by the Gambling Commission but by the FSA—who were not aware of any of the good work done by my hon. Friend the Member for Ryedale. They were not aware of the importance of ensuring a safety net for people. In fact, they were not even aware that there were spread betting operations in the UK that are not registered here and that they should be examining. The Minister needs to recognise that closer co-operation is needed between the Gambling Commission and the FSA to ensure that all bases are covered. Companies are slipping through the gap.

The Gambling Commission also seems unable to cope with simple policing of the internet, as the hon. Member for Bath pointed out. I am curious to know whether the mystery shopping approach of visiting various websites to ensure that they meet standards has recommenced. I would also like to know how much it costs the Gambling Commission. I understand—I do not know whether it is true—that about one third of all sites, even British-registered ones, do not meet the standards required. The reasons may be technical rather than due to the full corruption that we see at the worst end of the scale, but nevertheless, if we have minimum standards, surely they should be met.

Photo of Don Foster Don Foster Shadow Secretary of State for Culture, Media and Sport

Does the hon. Gentleman agree that it is extremely bizarre that the Government are refusing even a freedom of information request for the names of those websites, so that people can be warned?

Photo of Tobias Ellwood Tobias Ellwood Shadow Minister (Culture, Media and Sport)

The hon. Gentleman makes an important point that I remember discussing in some detail. Rather than investigating the issues, we have widened the number of companies that we need to examine by introducing Antigua and Barbuda, a country in which, as my hon. Friend the Member for Ryedale said, dodgy practices go on anyway, what with Allen Stanford and cricket financing.

Any internet company wanting to advertise in the UK might as well go to Antigua and Barbuda, where a different level of regulation applies. I know that because I have seen it myself. The tick box to ensure that users are 18 just says, "Make sure you're over 18. You must be over 18; tick here." A UK-registered company based in the UK would have to say, "It is illegal to be under 18", which is a different approach to ensuring that the user is over 18. That is a small example, but it ripples all the way through and shows the different degrees that exist. If I wanted to exploit the public, I would certainly base my operation in Antigua and Barbuda to get exposure to the market, rather than in the UK, Gibraltar or other such places, which must meet high standards.

Does the Minister have a strategy to update legislation relating to the internet? What will he do about the differences in standards across the EU? Does he believe that the Gambling Commission is capable of policing the internet properly? Is it right that online gambling companies based in Austria or other parts of the EU can operate in the UK when UK or Gibraltar-based companies cannot operate there? What assurances can he give that online gambling companies advertising in the UK contribute to RGIT or its successor? I am not sure whether the name has been confirmed yet—

Photo of Tobias Ellwood Tobias Ellwood Shadow Minister (Culture, Media and Sport)

Will the Minister examine the relationship between the FSA and the Gambling Commission to ensure that a better relationship is developed on spread betting, which has an appalling 14.7 per cent. of problem gamblers? Finally, will he consider the Conservative proposal for a kitemark on UK-approved sites, so that users will know straight away whether a site plays by the high standards that we expect, and that when they sign on, the seven other people at the virtual table are not in fact all the same person but are genuine players?

Those are the type of standards that we want to introduce. There should be a link between a company's ability to advertise and the high standards that we expect, so that the many internet companies with which many of us have good relationships are allowed to continue what they are doing, without the threat posed to them by rogue companies that choose to exploit those poor-quality rules.

In conclusion, when Tim Berners-Lee created the world wide web he introduced an invention that has arguably had a bigger impact than John Logie Baird's television or Marconi's radio. People of all ages in every corner of the country are exposed through the internet to information or opportunities, many of them financial, which would have seemed unimaginable just 30 years ago. The internet certainly can be a very positive tool, but unless legislation keeps pace with its evolution it can be used as a most efficient and powerful tool to exploit the user.

I hope that the Minister, who is responsible for what happens in just a small slice of the internet spectrum, will acknowledge how far behind legislation is and also how unfair EU legislation is, to allow genuine online gambling companies, which are willing to meet high standards and indeed already meet them to operate in a free but fair competitive market.

Photo of Gerry Sutcliffe Gerry Sutcliffe Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Sport) 10:51 am, 18th March 2009

It is indeed a pleasure to serve under your chairmanship Mr. Wilshire.

I want to congratulate Robert Neill on introducing the debate and for the spirit in which he did so. I congratulate him on the points that he raised and I will try to respond to all the points that hon. Members have raised. As time often runs out on these occasions, if I am not able to address a point made by a hon. Member, I will ensure that I write to them with a detailed response. I can tell Mr. Foster that he will shortly—soon, even—receive a letter with the answers he requires.

It has been an informative debate. The Government take gambling regulation and protection of the public extremely seriously. I am grateful to hon. Members for their comments. This is an issue that I care passionately about. Indeed, today I will be meeting the Association of British Bookmakers to hear its concerns about some of the issues that have been discussed here this morning.

The Gambling Act 2005 was the largest overhaul of gambling regulations in more than 40 years. It ensured that remote gambling was brought firmly within the robust regulatory framework that we had created. Gambling via the internet is still a relatively new phenomenon and one that poses unique regulatory and social policy challenges.

The latest Gambling Commission figures show that 9.7 per cent. of people gambled online between March 2008 and December 2008, compared to 8.8 per cent. of people during 2007. However, when we take out the number of people who participate in the national lottery online, those figures fall to 5.6 per cent. in 2008, compared to 5.2 per cent. in 2007.

The hon. Member for Bromley and Chislehurst asked what is being done to deal with the growth in problem gambling among online gamblers. The Gambling Commission's 2007 prevalence study, which has already been mentioned today, showed that 7.7 per cent. of people who bet online and 7.3 per cent. of those who play casino or poker games online could be categorised as problem gamblers. However, that 2007 study was the first to include questions relating to online gambling, so the evidence to date that indicates a growth in problem gambling among online gamblers is not certain in that sense.

It has never been possible to say that one particular form of gambling is the cause of problem gambling. The 2007 prevalence study found that, on average, problem gamblers participated in more than six forms of gambling, so we are not talking about just one form of gambling; different types are involved. It thus becomes extremely difficult to single out any particular forms of gambling that are especially related to problem gambling.

The hon. Members for Bath and for Bournemouth, East (Mr. Ellwood) quoted statistics showing the number of online sites involved. They said that there were 6,000 sites. Industry sources tell us that there are 2,381 sites run by 493 companies licensed in 50 jurisdictions worldwide. So there are some discrepancies in the figures that we are using.

Photo of Tobias Ellwood Tobias Ellwood Shadow Minister (Culture, Media and Sport)

I must make the specific point that those companies are licensed in other countries. Many companies that are based on the internet are not licensed anywhere. That is the point that I think that Mr. Foster and I are trying to make. Someone can set up an internet company anywhere in the world, if they can get an internet service provider with access to the world wide web. Those are the companies that are not authorised and that are threatening the good companies that are authorised.

Photo of Gerry Sutcliffe Gerry Sutcliffe Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Sport)

I understand that point. I purely wanted to say that there are disputes about the number of sites involved. None the less, I accept the point that the hon. Gentleman is making. Furthermore, regardless of the number of sites we still need to ensure that funding for research, education and treatment for all problem gamblers is one of our top priorities. I am grateful for the work that has been done by Mr. Greenway and for all that he has done in helping us to secure the £15 million that we require over the next three years to ensure that there is comprehensive provision in that area, and I look forward to making announcements about it shortly—just after Easter. Again, I congratulate the hon. Gentleman on all the work that he has done.

Although the Gambling Commission's figures show that the popularity of online gambling is growing at a relatively steady rate, the issue seems to cause, in equal measure, interest and alarm across the world. As has been said already, just last week the European Parliament adopted a controversial report on the integrity of online gambling, despite concerns and objections from a number of MPs, MEPs and the remote-gambling industry, in respect of the report's impartiality and factual accuracy. Indeed, we briefed British MEPs on the Government's position.

I know that hon. Members are aware of the changing landscape of gambling regulation in Europe, which has been brought about by the European Commission's numerous infringement proceedings against member states that prohibit online gambling from overseas without sufficient justification. As has been said, there is no harmonisation in the regulation of online gambling across the European Union. Gambling was excluded from the scope of the services directive, which means that member states have the latitude to regulate gambling as they see fit, albeit within the parameters of European Community law.

All those issues demonstrate how important it is for us, as a Government, to ensure that we view remote gambling as an international, cross-border activity and that we continue to take steps to maintain the protection of the British public in a technologically fast-paced and ever-changing regulatory environment. That can be achieved in a number of ways. For example, we can provide greater education for consumers and increase their awareness of what to look out for when gambling on sites that may be regulated outside the UK. Protection can also be achieved through increased regulatory standards and enhanced international co-operation, which is something that the Gambling Commission is doing through its work with the Gaming Regulators European Forum and the International Association of Gaming Regulators.

There seemed to be some criticism of the Gambling Commission. My hon. Friend Dr. Gibson raised a point about integrity issues. I have asked the Gambling Commission to examine more closely how it deals with such issues. Integrity is a big issue, but there must be a good relationship between sport and the bookmakers. I think that good relationship is evidenced by the number of reports that have been made about betting patterns. None the less, it is an issue that I have taken up with the Gambling Commission and I will report back to hon. Members in due course about the aims that we are trying to achieve and the process involved.

There remains a key role for the Government in keeping our policies and regulations under regular review, to ensure that they continue to be effective in the light of both international and domestic developments. As has been said, we must keep a close eye on developments in Europe, the United States and beyond in respect of how remote gambling is approached and regulated, in order to determine any policy implications for the UK.

There may be more that we can do to put overseas operators that are able to advertise their gambling services in the UK on a more equal footing with British-based operators licensed by the Gambling Commission. As has been pointed out, during the recent debate on the advertising of foreign gambling, I said that I would reflect upon a number of issues, in particular the contributions made by overseas operators towards research, education and treatment for problem gambling in the UK. It is only right that I should look at such issues and concerns, and in the coming months, I intend to set out the process of how we will undertake to ensure that we get a return from those operators.

Like other Members, I would like to see a fairer playing field for British-based operators in Europe. The Government are committed to the principles of freedom of establishment and freedom to provide services that are enshrined in the European Community treaty, and we have been active in supporting the UK gambling industry in recent months. For instance, last year the Minister for Trade, Development and Consumer Affairs and I wrote to Commissioner McCreevy about issues affecting the freedom of UK companies to operate in Europe. My officials have also attended key events in Europe to promote the benefits of the UK system of regulation, including the council working groups dedicated to studying gambling under the French presidency. We will continue to participate actively in European gambling discussions under the Czech presidency and beyond, identifying appropriate opportunities to share the achievements of the UK model with other member states. However, when we are conducting ourselves in Europe, we must be sure that we utilise the most appropriate and effective way to engage with European institutions and other member states, given the political and cultural sensitivities surrounding gambling.

I understand the frustration felt by British businesses that pride themselves on their social responsibility standards but that are unable to offer their services within Europe when other European operators are free to offer their services in the UK. In particular, there is the issue involving Betfair. I understand the frustration felt by Betfair and Ladbrokes, but we looked at the issue very seriously, to try to make sure that it was appropriate for us to intervene. On reflection, it was not appropriate for us to intervene in that way and we had to look at the wider issues affecting gambling in the UK. I know that that is frustrating for hon. Members.

In the time that is left for the debate, I am not able to give the detailed responses on white-listing procedures that the hon. Member for Bromley and Chislehurst would like, but I will write to him to respond to his questions.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

Order. I am sorry, Minister, we must move to the next debate, so there is not time for any of that, but I am sure that you will write.