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Fixed Odds Betting Terminals — [Sir Alan Meale in the Chair]

Backbench Business – in Westminster Hall at 9:30 am on 26th April 2016.

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Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Equality) 9:30 am, 26th April 2016

I beg to move,

That this House
has considered fixed-odds betting terminals.

Fixed odds betting terminals are a big issue, and a big crowd of hon. and right. hon Members are here to speak about them. There is a lot of concern in the House about the issue. There are probably some hon. Members here today—perhaps not so many—who will not be speaking with the same level of concern as me, but Opposition Members intend to take the issue further in their speeches today.

Fixed odds betting terminals are touch-screen roulette machines found in betting shops across the whole United Kingdom. Gamblers can play casino-style games with a maximum stake of £100, which can be wagered every 20 seconds. That is a possible total of £300 a minute. We have more than 35,000 fixed odds betting terminals in the United Kingdom’s bookmakers. FOBTs are disproportionately found in the poorer parts of the United Kingdom and generate some £1.7 billion of revenue for bookmakers. Campaigners have labelled the machines the crack cocaine of gambling, and that is what they are. The issue is of great importance.

Bookmakers have a powerful lobby and powerful friends. They have kept arguing that we need more evidence, despite the obvious case for regulation, in order to protect their huge profits made at the expense of the vulnerable. We are here to speak for the vulnerable, for legislative change and for better protection.

Photo of Fiona Bruce Fiona Bruce Chair, International Development Sub-Committee on the Work of the Independent Commission for Aid Impact

The hon. Gentleman is bringing forward the debate with his characteristic compassion. Does he agree that it is a matter of social justice that we address this issue? Those affected are not just those who are addicted, but their families, and in particular their children. It is primarily for them that many of us are here today.

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

As always, I thank the hon. Lady for her intervention—she is an hon. Friend, too. She speaks with heart and compassion, and she speaks for me as much as everyone else here.

Our Prime Minister told Parliament more than 12 months ago that FOBTs are a serious issue, and that he would act as soon as there was more evidence. Since then, two tragic cases of suicide have been linked to the machines, and there are numerous reports of the terrible impact they are having on the most vulnerable, but the Government are yet to act. The Minister is here to respond to the debate, and we look forward to hearing the ideas that he will put forward in response to what we have to say. There is no place for £100-a-spin games on the high street in bookmakers that have little or no supervision. There is a simple answer to protect the vulnerable, as the hon. Lady said, and that is to reduce the stake.

Photo of Mark Tami Mark Tami Opposition Pairing Whip (Commons)

While a lot of us have worries about what is going on in betting shops, does the hon. Gentleman agree that we do not know enough about the people who gamble at home on their phones and on the internet? There is no control over that at all, and they are being equally affected.

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

The hon. Gentleman is absolutely right. We have many concerns. Today’s debate is fixed primarily on the fixed odds betting terminals, but I accept that control is needed elsewhere.

The lack of regulation of FOBTs has meant that they have clustered in areas of high social deprivation. They can prey on the young and vulnerable. There is strong evidence that the high stakes on FOBTs in the low-supervision environment of a bookmaker have led to increased problem gambling. Recent Responsible Gambling Trust research on FOBTs showed that 37% of players exhibited signs of problematic gambling. At stakes of more than £13.40 a spin, that rose to 80% of players exhibiting problem gambling behaviour. One third of problem gamblers calling the national problem gambling helpline cited FOBTs as their issue. Let us be clear that the debate is about fixed odds betting terminals and the blight they cause on society.

Photo of Sylvia Hermon Sylvia Hermon Independent, North Down

There is evidence that the terminals have been used for money laundering. Will the hon. Gentleman reflect on the involvement of paramilitary organisations in money laundering through the terminals in Northern Ireland?

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

The hon. Lady is absolutely right. There is evidence of that, and I will give examples shortly. I am sure others will, too. Whenever there is misuse and a dirty laundering system, that has to be addressed.

More than half the UK population plays the national lottery, and they lost £7.2 billion last year. That compares with the less than 4% of the population who play FOBTs, who lost £1.6 billion. The unemployed are twice as likely to play the machines as someone in work. The demographic that bookmakers target with FOBTs are also the least likely to have access to bank accounts, debit cards and credit, and thus have restricted access to remote gambling sites. Bookmakers and the gambling associations are clearly targeting those who are vulnerable to start with, but who are perhaps in some difficulties with money, too.

Bookmakers are using the cover of account-based play, which was instigated by the Government, to provide cash top-up cards that facilitate access to their online sites; Mark Tami mentioned such sites in his intervention. The gambling lobby says that we need more evidence, but it is clear that the evidence is out there. It is comprehensive, and it consistently lines up on the right side of the argument: we need to protect the vulnerable and enact regulation. I hope that, arising from this debate, we will have a chance to enact regulation that will filter out from this House to the whole United Kingdom, including Scotland and Northern Ireland.

FOBTs are useful for money laundering, as Lady Hermon said. The machines have a few filters, but the money launderers know them and work within the limits. Supervision is low and closed circuit television is poor, so it is a safe way to money launder. Low-level drug dealers clean cash in case they are pulled over by the police. Generally, they are younger lads with smaller amounts of cash. In one West Yorkshire case, the police uncovered £18,000 of FOBT tickets being held by one drug dealer. The machines are used for underworld criminal activities by those whose thoughts are nothing but criminal and outside the law.

Using the proceeds of crime to fund a gambling addiction, or cleaning the cash obtained from a crime, is common. The most common use of FOBTs since they landed on the high street is for getting rid of dyed notes obtained during robberies on armoured vans, cash machines and so on. The notes are sprayed with an irremovable dye that is an immediate alert as to their origins. They are therefore not exchangeable. However, they are still identified as legitimate currency by note accepters on gaming machines. The machine with the highest cash transaction capability and ticket pay-out facility would be the preferred option for laundering, and that is the fixed odds betting terminal.

The bookies and the suppliers adapted the software controlling ticket pay-outs to identify where less than 40% of the cash put in is wagered—that is where people either put cash in a FOBT and then print a ticket straight out, or stake a minimal amount of the total cash inserted—so that staff are alerted when people cash those tickets. Launderers have adapted to that by using minimal-risk wagering. The bookies are now making it easier for criminals by allowing them to put cash winnings on to a pre-paid credit card. They are not just hiding the cash, but making it electronic. Never ever think that the criminals and evildoers have not got ideas as to how to get around the law, how to work it to their advantage and how to launder some of that dirty money.

Following on from weaknesses in money laundering policies at Ladbrokes in 2013, Paddy Power was recently the subject of a high-profile money laundering investigation. That investigation resulted in the Gambling Commission reprimanding Paddy Power and imposing a £280,000 penalty; there were also serious failures in social responsibility. The Government are considering including betting shops in the European Union’s fourth money laundering directive. That would require the identification of customers transacting over £1,500 in a 24-hour period. The bookmakers are lobbying to be excluded from that, despite recommendations that they should be included first being made in 2001 in the Budd report.

The lack of FOBT regulation is a huge issue that cannot be ignored, and I am keen to ensure that the debate highlights it. Gambling the world over has evolved into a consistent structure, with the hardest gambling reserved to highly regulated venues such as casinos, where customers go with the knowledge and expectation of experiencing a harder gambling environment. Casinos have very high levels of player supervision and therefore protection. Players tend to be occasional visitors, and the casinos tend to be viewed as a destination leisure venue with more than just gambling on offer.

The Gambling Act 1968 put in place a regulatory permit for gambling. This set out that high-stakes gambling should take place in highly regulated and highly supervised environments such as casinos, and low-supervision environments should have lower stakes and require lower levels of supervision. Those principles were reaffirmed in the Gambling Act 2005 by Sir Alan Budd. Other countries follow this model. The UK is alone in offering very-high-stakes gambling of £100 on Britain’s high streets in the low-supervision, easily accessible environment of a bookmaker. Little or no monitoring and little or no supervision means vulnerable people can be taken advantage of. The regulation of fixed odds betting terminals is out of kilter with the principles of gambling regulation. They offer very-high-stakes gambling in an unregulated environment.

The only material restriction is that bookmakers are allowed four fixed odds betting terminal machines per shop. The result of this is that bookmakers have opened multiple betting shop branches in close proximity. That is a concern. When we look at the streets of the United Kingdom of Great Britain and Northern Ireland, we sometimes wonder whether we are in a gambler’s paradise—if there is such a place—because betting shops seem to be prevalent everywhere.

The bookmaker Paddy Power has focused its branches in areas with high immigrant populations. We have seen a 43% increase nationally in the number of betting shops located in town centres.

Photo of David Nuttall David Nuttall Conservative, Bury North

On the number of machines allowed in each shop, is the hon. Gentleman arguing for fewer in each shop, or for more in a smaller number of shops?

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

I seek a lesser number in the shops, and fewer shops as well. We agree on many things, but we do not agree on this topic. The opinion that I express will win: ComRes did a survey of MPs seeking their opinion, and of the MPs who responded, seven out of 10 want FOBTs regulated. They want a reduction in the number of machines and shops. It was quite clear. If a private Member’s Bill is brought before the House—some in this Chamber are of a mind to do that—we can tackle the problem.

Photo of Patricia Gibson Patricia Gibson Scottish National Party, North Ayrshire and Arran

Does the hon. Gentleman agree that reducing the maximum stake to £2, which is opposed by betting shops, would be a good way forward?

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

I thank the hon. Lady for that; it is one of my concluding points. I know that other Members are of the same opinion. Yes, the maximum stake should be lowered; then we could manage the issue, so that people are not deprived.

The regulation of FOBTs is out of kilter, as I have said. The only material restriction is the four machines per shop. We have seen an increase nationally in the number of betting shops in town centres, and last year the Government stepped in and imposed a £50 staking threshold on fixed odds betting terminals, above which players are required to identify themselves to staff or sign up for a loyalty card. The objective of this measure is to help players stay in control. I suggest that that has not happened. The measure is non-evidence-based and the Department for Culture, Media and Sport failed to quantify what impact it would have on players other than the £17 million reduction—1%—in bookmaker revenue from the machines. Secondary research based on the British gambling prevalence survey 2010 estimates that up to 40% of B2 revenue comes from at-risk and pathologically addicted players—higher than all other combined gambling activities—so the Government predicted very little impact. There is also evidence that bookmakers are using the player registration as a mechanism to market FOBTs further.

An evaluation of the DCMS assessment of the £50 measure so far, carried out by Landman Economics, highlighted issues with the quality of the data provided by the bookmakers; it also noted that DCMS could not assess changes in staking, mentioned the absence of a pilot scheme so that the measure could be evaluated better, and noted that the evaluation omitted key questions that it is important to consider when looking at the success or failure of the £50 regulations. For example, the question why fixed odds betting terminal machine players might wish to remain anonymous is not discussed. Despite the Government measure, players are still able to stake up to £100 per spin, and it appears that bookmakers are using the change as an opportunity to further market products to vulnerable gamblers. Even £50 is still materially out of kilter in the normal gambling world.

Photo of Kevin Foster Kevin Foster Conservative, Torbay

I congratulate the hon. Gentleman on securing this important debate. Does he agree that the issue is also about making sure that players can make a genuinely informed choice? If a sign was required to be displayed that said, “A machine of this type made on average £825 a week in profit for its owners in 2012”, would people be inclined to gamble on it? In short, it would be a bet not worth having.

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

Absolutely. I thank the hon. Gentleman for his wise words.

I am conscious that many people want to speak, Sir Alan. I gave you an undertaking that I would not speak for too long, but I want to set the scene, and then I will give other Members an opportunity to participate.

The Government must take urgent action to regulate fixed odds betting terminals and reduce the stake that can be gambled from £100. Patricia Gibson referred to £2; I think that many in this House would be happy with that. This is the only way effectively to tackle the growing problems that these machines are inflicting on our communities and on those who can least afford it. The Minister responsible for gambling has said that the Government want to reduce the stake for FOBTs, so let us hear what the reduction will be. A substantially lower stake would bring fixed odds betting terminals into line with machines in other low-supervision environments such as adult gaming centres and bingo halls.

The Gambling Commission has said that if staking levels were being set now, it would advise against the £100 stake on a precautionary basis. The previous Government said that a lower stake would bring adequate public protection. The Government should take this opportunity to control the gaming machines and the stakes and reduce significantly the numbers of shops and machines on the high street. The evidence is out there and is clear: the bookies are in the wrong. They are on the wrong side of the argument, and it is our job to put it right.

I want to say one quick thing in relation to Scotland, as hon. Members from Scotland are here. The Bill in Scotland gives some control to the Scottish Parliament, but if we were to bring forward a private Member’s Bill in this House to legislate for change, this debate today would be the first stage in that process. If that happens, that will filter its way out to Scotland and to Northern Ireland as well. We in this House today have the opportunity at least to start the first stage of that process. I believe that many in this House—seven out of 10 MPs—wish for that to happen.

Photo of Alan Meale Alan Meale Labour, Mansfield

Eleven people have put their name down to speak in this debate. The subject is popular—or, depending on your perspective, unpopular. Many people want to speak. I will have to call the Front-Bench speakers at about 10.30 am, so that means approximately four minutes each for everyone else. Since Jim started the debate, people who have put their name down to speak have been bobbing up and down. That is unfair of them, because they can make their points in their four minutes. Perhaps Members will restrict themselves. Those who have not been able to write in to put their name down to speak can intervene to make their points. I ask speakers to be fair to one another, and to restrict their contributions to four minutes or under.

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

If it helps, Sir Alan, the Front-Bench speakers will be happy to take 10 minutes to allow Back Benchers more time.

Photo of Alan Meale Alan Meale Labour, Mansfield

That is very kind of you. We will review that, depending on how Members progress.

Photo of Laurence Robertson Laurence Robertson Chair, Northern Ireland Affairs Committee 9:48 am, 26th April 2016

I pay tribute to Jim Shannon for securing the debate. May I declare my registered interests? I have received hospitality from bookmakers and racing; along with your good self, Sir Alan, I am joint chairman of the all-party group on racing and bloodstock; and I have the Cheltenham racecourse in my constituency.

It is from the horse-racing point of view that I come to this debate, because bookmakers very largely finance horse-racing through the betting levy and through media rights. If we lose too many bookmakers we will lose horse-racing, there is absolutely no question about that. There are two very good racecourses in Northern Ireland, which I have visited a number of times. We also see the spectacle of the grand national, the Derby, Royal Ascot and, in my own constituency, the Cheltenham gold cup.

Photo of Graham Jones Graham Jones Labour, Hyndburn

The hon. Gentleman is beginning to make an interesting point about the connection between the old type of bookmakers, with sports betting and horse-racing, and the prevalence of high street bookmakers, but will he accept that there is clustering? He argues that doing away with bookmakers will affect the horse-racing industry, but does he not see a line of bookmakers all next to each other one side of the road, and another line on the opposite side of the road? There is a clustering effect.

Photo of Laurence Robertson Laurence Robertson Chair, Northern Ireland Affairs Committee

I will come to that in a moment, but I just wanted to establish where I am coming from on this issue. There is a link between bookmaking and horse-racing, and if we lose one, without doubt we will lose the other. I want that to be very clear. There are far fewer betting shops than there used to be. We hear about the proliferation of bookmaking shops, but there are something like half the number there used to be. It is important to recognise that, while certainly acknowledging the issues raised by the hon. Member for Strangford.

You have asked us to take very little time each, Sir Alan, and I am happy to comply with that. I hope that the Government will continue with their evidence-based approach. I am not convinced that there has been an increase in the number of problem gamblers. There are people with addictive natures who will be addicted to something, whether that is alcohol, drugs or gambling, but we are discussing only one form of gambling, and many other forms are available.

Any Member could use their mobile phone to empty their entire bank account into a betting account and lose all that money within a minute or two. I mention that to draw attention to whether it would be fair to place restrictions on one kind of gambling when so many other forms are available, including the national lottery. I have linked horse-racing to bookmaking, and I also want to link the national lottery to the many good causes it supports. Billions of pounds have been spent on good causes thanks to the national lottery. I have some news for Members: that money is taken not from the millions of pounds that are won but from the money that people lose on the national lottery each and every week.

I hope we can get a measure of proportion into this debate. The Government should take seriously the important points and concerns raised by the hon. Member for Strangford, but I ask them to continue with their evidence-based approach and to remember that the great sport of horse-racing depends on the actions taken by my right hon. Friend the Minister and the Government.

Photo of Sylvia Hermon Sylvia Hermon Independent, North Down

The hon. Gentleman is of course the Chair of the Northern Ireland Affairs Committee, of which I am very proud to be a member. He chairs us well.

The hon. Gentleman has called for an evidence-based approach to be taken before the Government do anything, and he mentioned race courses in Northern Ireland. Can he produce any shred of evidence that those who go to the horse-racing in Northern Ireland, or anywhere in the United Kingdom, are the same people who play on fixed odds betting terminals? Where is the evidence for that connection?

Photo of Laurence Robertson Laurence Robertson Chair, Northern Ireland Affairs Committee

That is not quite the point I was making. The situation is a lot worse now, but five years ago PricewaterhouseCoopers produced a report that said that up to 95 shops in Northern Ireland, which represents around 30% of the total there, would close if fixed odds betting terminals were banned. The hon. Lady is not calling for them to be banned, but that shows the scale of the problem. Some 975 jobs would be lost, costing £18 million per annum throughout Northern Ireland. The knock-on effect for the betting industry and therefore for horse-racing would be huge, because it is the machines that tend to keep the shops going. I am sorry that I did not explain that earlier, but that is my point. Fixed odds betting terminals are far rarer in Northern Ireland, where there are fewer than two per shop, than in Great Britain, where the number is nearer to four, so I am not convinced that the problem is greater in Northern Ireland. That does not mean that there is no problem, but if there is one I do not think it is of the same scale.

Sir Alan, you have indicated to me that I should draw my remarks to a close, so I repeat to the Government: please continue to take an evidence-based approach, and please remember that the sport of horse-racing depends on bookmaking.

Photo of Alan Meale Alan Meale Labour, Mansfield

Order. May I again ask Members to be more succinct in their addresses? We have already run over the suggested time limit at an early point in our proceedings.

Photo of Carolyn Harris Carolyn Harris Labour, Swansea East 9:55 am, 26th April 2016

It is a pleasure to serve under your chairmanship, Sir Alan. I declare an interest as the newly elected chair of the all-party group on fixed odds betting terminals. I congratulate Jim Shannon on securing the debate. I know that my hon. Friend Graham Jones was also very keen for it to take place.

Huge amounts are being lost in fixed odds betting machines by those who can least afford it. In 2014-15, gamblers lost £2 million in my constituency alone. There are 20 licensed betting shops in the area, which means that that £2 million was lost on 80 FOBTs in Swansea alone—£25,000 on each machine. As many Members will point out, there are 35,000 FOBTs located in bookmakers throughout the UK, on which gamblers can play casino-style games with a £100 maximum stake every 20 seconds—that is £300 a minute. We know that there is a link with problem gambling: four out of five FOBT gamblers exhibit problem gambling behaviour at stakes in excess of £13 a spin, compared with one in five at stakes of £2 and under.

Not only do FOBTs provide hard, high-stakes gambling on British high streets, but many bookmakers have only one member of staff on duty. Bookmakers’ shops often suffer high levels of crime and violence, and a single member of staff is expected to manage the premises, supervise the gambling, memorise scores of faces to enforce a self-exclusion scheme, and carry on their other duties. It is ludicrous.

Photo of Scott Mann Scott Mann Conservative, North Cornwall

Does the hon. Lady agree that the difference between where gambling was 15 years ago and where it is now is that there used to be a pause for reflection between, for example, greyhound races and horse races? Gamblers would think about whether they were going to continue to spend their money. With fixed odds betting terminals, there is no pause for reflection, which tends to be where problem gambling comes in.

Photo of Carolyn Harris Carolyn Harris Labour, Swansea East

FOBTs have been called the “crack cocaine of gambling”, and what the hon. Gentleman says reinforces that idea. Betting shop staff are not in a position to intervene when punters, as they like to be called, exhibit signs of problem gambling. They have no training to deal with it. Every year, 7,000 FOBTs are smashed up by irate customers and there are 10,000 calls to the police, despite the fact that bookmakers discourage staff from reporting such crimes.

As was mentioned earlier, FOBTs are used for money laundering. I recently asked the Treasury to look into the problem. The machines have few filters and the money launderers know how to work within the limits. Supervision is low and CCTV is poor, so it is a safe environment—a haven—for money launderers. Regulations were introduced last year to require players to open an account in a bookmaker if they want to stake more than £50. In my experience, that opens people up to receiving advertising and tempting texts and emails encouraging them back into the bookmakers to spend money that they do not have. Some people get around the stake limit by gambling between £40 and £50, while others use two machines simultaneously.

Before FOBTs were introduced, bookmakers were a relatively benign part of the social fabric. In fact, I would say they were welcome—everybody liked a flutter on a Saturday afternoon. Since the introduction of FOBTs, bookmakers have become a major problem, with rising crime levels. The introduction of FOBTs is the only variable that has changed. The ComRes survey that has been mentioned showed that seven out of 10 MPs from all parties agree with me and others that FOBTs are a dangerous pastime.

The Government are due to launch their triennial review, so now is the time to look carefully at the damage that these machines are doing. The Gambling Commission has said that, if the stake were being set now, it would advise against £100 as a precautionary measure and would advocate a £2 level. There is a wealth of evidence about the harm that these machines cause. There have even been two tragic suicides: Ryan Myers from Liverpool and Lee Murphy from Aberdeenshire took their own lives as a consequence of their addiction to these dreadful machines.

Bookmakers argue that reducing the stakes would have an economic impact. A report by NERA Economic Consulting assessed the claims of shop closures and job losses. It concluded that

“cutting the stake on these machines would reduce the numbers of bookmakers by about 800, primarily where the clusters have developed”

—there are often four or five bookmakers in a close-knit area—with

“just 5 to 10 per cent fewer shops than before the introduction of B2 machines in 2000.”

Moreover, it found that the move

“would create a net positive 2,000 high street jobs as money returned to the more labour-intensive and productive high street shops.”

Limiting the stakes would benefit traditional horse-racing, as money would return to over-the-counter betting and bookies would return to their traditional role as a valued part of the high street. The horse-racing industry would also benefit from an increased levy. It would be a win-win: a win for the high street and a win for the bookies as they returned to being bookmakers. There would be reduced harm, fewer deaths and more jobs. I ask the Government to look at these machines and to take Members’ thoughts on board.

Photo of Alan Meale Alan Meale Labour, Mansfield

Order. I again draw Members’ attention to the fact that we are overrunning. The time limit has been voluntary up to now, but we need to be fair to one another, and if people persist in overrunning I will have to impose one.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster 10:01 am, 26th April 2016

As Jim Shannon rightly pointed out, the size of the stake—up to £100—and the very short cycle make FOBTs a particularly aggressive form of gambling that encourages fast repeat visits. FOBTs now account for almost half of betting shops’ turnover in the UK as a whole. Given that shops are limited to only four terminals per site, the way to make more from that money spinner is to open additional branches. The result has been that betting shops have proliferated, particularly in the Chinatown area of my constituency. Local authorities are hamstrung by the “aim to permit” guidance under which they review premises’ licence applications for betting shops.

The Soho Society and the London Chinatown Chinese Association have become increasingly alarmed. Betting shops have been pushing for later opening hours and more branches to target people—particularly members of the Chinese community in my constituency, who work until the early hours in the area’s busy restaurant scene. Many of those people are particularly vulnerable to becoming problem gamblers.

Some 12 months ago, the Government accepted that FOBTs are a serious cause for concern and said that more evidence would be gathered on their negative effects. Unfortunately, there is still no sign of a definitive review. Several key questions need to be answered. Should £100 stake gaming machines be allowed in ambient gambling environments such as betting shops? Do those machines exacerbate problem gambling in betting shops? Would cutting the stake protect those who are vulnerable?

The regulator has a statutory duty to act to protect the vulnerable. It has suggested that a precautionary approach could be applied to reduce the stake. Campaigners against FOBTs want the maximum to be reduced from £100 to £2, in line with all other category B machines. I support that suggestion.

Gambling the world over has evolved within a fairly sensible, consistent structure. The hardest gambling is reserved to highly regulated venues such as casinos—my constituency has many—to which customers go with the expectation of experiencing a much harder gambling environment. Casinos have very high levels of player supervision and protection. Players tend to be occasional visitors, and casinos tend to be viewed as destination leisure venues that have more than just gambling on offer.

The Gaming Act 1968 put in place a regulatory pyramid. At the top, harder gambling was reserved to more strictly regulated venues. The lowest level of supervision was for soft gambling at seaside arcades, for example. The middle tier—the general, high street, ambient gambling, which we are discussing today—was expected to be fairly soft gambling with lower levels of player supervision. It is not, in my view, suitable for the kind of hard FOBT games that we see today.

B2 gaming machines are totally inappropriate for high streets across the country at the current level of stake. Until their advent, bookmakers had few issues with crime and attacks on staff. Since their introduction, police call-outs to gambling premises have rocketed, as frustrated users carry out damage to machines.

I understand that the instinct of this Government—a Conservative Government—is not to give in to nanny state urges. I make that sort of argument fairly regularly. However, it seems odd that at the self-same time as we are imposing a sugar tax and ever more draconian measures against smokers, we are allowing these high-stake gambling machines to proliferate in a loosely regulated environment. I ask the Minister to work with responsible operators in the gambling industry, of whom there are very many, to reduce the FOBT stake.

Photo of Conor McGinn Conor McGinn Opposition Whip (Commons) 10:05 am, 26th April 2016

I am pleased to have the opportunity to speak today. I thank Jim Shannon for securing the debate. I consider myself lucky to represent one of the best race courses in the country—Haydock Park—and I endorse the point made by Mr Robertson about bookies’ contribution to the survival and success of horse racing.

There are 14 betting shops in my constituency, which employ 67 people. They contribute hundreds of thousands of pounds in business rates and tax and a total of more than £1.3 million to the local economy. Those jobs and that money are important.

Emotions can run high when we talk about fixed odds betting terminals. I have seen—no doubt, like other hon. Members—the devastation that addiction, whether to alcohol, tobacco, drugs or gambling, can cause. One of my very good friends, a man widely known in sporting and media circles in Ireland—the Armagh Gaelic footballer Oisín McConville—has written and spoken extensively about his struggles with gambling. The problem has a disastrous effect on those who suffer from it or are in close proximity to it. I ask hon. Members to believe me when I say that I know.

I knew problem gamblers when I worked in a bookies at the age of 14. Before the internet, cashing-in, betting exchanges and FOBTs, we took people’s money over the counter and stamped their docket. Bookies did not open on a Sunday, and there was no Champions League football, no in-play betting, very limited evening racing and no FOBTs.

The reality for those who have developed a problem is that people now have a multitude of gambling opportunities, including online gambling, spread betting, casinos, the lottery or betting shops. The vast majority of people can control their gambling and view it as a leisure pursuit. That is demonstrated by the fact that problem gambling levels in the UK have remained constant for the past 30 years at about 0.5% of the adult population.

A veritable litany of academic research and evidence shows that problem gambling is not limited to one product or type of gambling. Many experts conclude that problem gambling is a complex issue. Focusing on one element of gambling alone will not give a better prediction of problem gambling or decrease the rates of gambling-related harm. I therefore ask that we look at the wider problems of gambling and, as ever, focus on the evidence and facts.

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party, Foyle

The hon. Gentleman is talking about the range of gambling options that exist. Problem gamblers are attracted to all of them. Does he recognise that many firms provide all of them? As he seems to be saying, those firms depend on FOBTs; otherwise they would go out of business.

Photo of Conor McGinn Conor McGinn Opposition Whip (Commons)

I am very clear that there should be no carte blanche for any part of the gambling or gaming industry. Regulation is important. Let us look at access to gambling and the amount that people can wager, and let us find ways of protecting those who are susceptible to developing a problem, but let us do it fairly and in the interest of good public policy.

Let us ensure that those with gambling addictions get the help and support they need to overcome their problems. We must ensure that the industry meets its obligations in that regard. Let us also acknowledge that having a flutter is a treasured and enjoyable national pastime, and that the vast majority of the millions of people who have a bet do so occasionally and in moderation—me included.

Photo of David Nuttall David Nuttall Conservative, Bury North 10:09 am, 26th April 2016

It is, as always, a pleasure to serve under your chairmanship this morning, Sir Alan.

Fixed odds betting terminals are entirely legal. Some claim that people become addicted to gambling but, unfortunately for those who advance the argument, that is simply not supported by the evidence. There is no objective evidence from gambling prevalence surveys or Government health surveys that the level of problem gambling in this country is rising. The inconvenient truth is that the level of problem gambling has remained constant at about 0.5% of the population for the past 13 years. Crucially, that level has not increased since the terminals were first introduced.

The FOBTs are already heavily regulated. Every aspect of their operation is controlled: they must be licensed; the maximum stake is controlled by Government; and the maximum pay-out is controlled. The fact is that gambling is available in many forms. There is no control over how much anyone may stake, say, on a five-furlong flat race, which is over in less than a minute. There is no control over how many scratchcards a 16-year-old may buy.

Photo of Graham Jones Graham Jones Labour, Hyndburn

The hon. Gentleman seems to be making a principled argument that we should not even have a £100 limit on FOBTs. He is asking why we should we have that—if someone can bet £1,000, or £10,000, on a horse race, or can walk into a casino and put x amount on whatever, what is the point in having a £100 maximum stake on a FOBT? Clearly, his argument is to remove the maximum stake and for people to have the freedom to stake as much as they want.

Photo of David Nuttall David Nuttall Conservative, Bury North

The fact is that very few people bet £100 a stake—only about one in 100 customers even stake over £50. The average stake on a machine is £5.13.

As I was saying, there is no control over how many games of bingo someone may play, and there is no control over how much people may spend on betting on their mobile phone. Betting shops, arguably, are the safest place to gamble responsibly.

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

I have some sympathy with the nanny state argument. As my hon. Friend knows, we have had discussions about that in many different areas of public policy. Does he not recognise, however, that there is an element of responsibility here? Without doubt, no self-respecting newsagent would be selling dozens and dozens of scratchcards to a 16-year-old; the newsagent would take responsibility there and then. A lot of things are regulated, but in this sort of area the Government need to find a balance. As I said in my contribution, it seems to me that what is happening in many of our betting shops should be regulated at a higher level than might be expected for a seaside arcade.

Photo of David Nuttall David Nuttall Conservative, Bury North

In answer to the point about scratchcards, there is nothing to stop people going into 10 different shops and buying as many scratchcards as they want. I am not suggesting that they would buy them all from the same shop.

I will make two final points. First, it is generally accepted, and it has been mentioned in the debate this morning, that the FOBT machines make a profit of about £1,000 a week—the figure given earlier was a little more than £800 a week. Given that the shops are open for about 90 hours a week, on average, that works out at a profit of about £11 an hour. So the question that those who want to control the machines further must answer is, do they think that such a level of hourly profit is fair? If not, what hourly rate do they think is fair?

Secondly, it is argued that the FOBTs are used for money laundering. That argument has been advanced again this morning. Unfortunately, however, it has been advanced by exactly the same people who argue that people are losing £300 a minute on the machines. Which is it? Are people losing £300 a minute, in which case that is not a good way to launder money, or are the machines being used for money-laundering purposes? Clearly, they cannot both be true.

We should protect the freedom of the individuals who want an occasional flutter, and allow them to do so.

Photo of Liz McInnes Liz McInnes Shadow Minister (Communities and Local Government) 10:13 am, 26th April 2016

It is a pleasure to serve under your chairmanship, Sir Alan.

As a member of the newly formed APG on fixed odds betting terminals, I am pleased that Jim Shannon secured this important debate. I also thank my hon. Friend Carolyn Harris for forming the APG, and I congratulate her on being elected as its chair.

I am pleased with my local council, Rochdale, which neighbours the constituency of Mr Nuttall. I was interested to hear what he had to say about problem gambling in Bury, because it is certainly not supported by his local newspaper, The Bury Times, which has highlighted the problems caused by FOBTs in Bury. Last September, however, my local authority, Rochdale Council, formally supported the campaign to have the maximum FOBT stake reduced from £100 to £2.

In the Metropolitan Borough of Rochdale, which encompasses my constituency and the Rochdale constituency, 140 FOBTs are estimated to be spread across 35 betting shops. The amount spent on the machines locally is staggering. According to data compiled by the Campaign for Fairer Gambling, residents of the borough gambled up to £152 million on FOBTs in 2013, which equates to £721 by every man, woman and child in the population—excluding residents aged under 18, who legally are not supposed to be gambling, that is nearly £950 per adult resident. By comparison with the 2012 figures, the research also seems to indicate that the local problem is getting worse. Between 2012 and 2013, the amount spent per resident increased by 112%, representing a massive drain on a borough facing significant challenges.

The gambling industry has introduced a range of voluntary measures to protect gamblers, such as gamblers being able to self-exclude themselves from betting premises, or the introduction of personal limits on the amount of money to be gambled during a single session. Given the vulnerable nature of those who tend to use FOBTs on a frequent basis, however, an approach that is more robust than self-regulation would be preferable.

On local licensing obligations, the Gambling Act 2005 requires local licensing authorities to “aim to permit” gambling, subject to licences complying with three licensing objectives: keeping crime out of gambling; ensuring that gambling is fair and open; and protecting children and vulnerable people. As a consequence, betting shops are required to obtain a licence from their local authority. FOBTs were previously restricted to the highly regulated casino environment but, as we have heard, they are now permitted in betting shops. For that reason, the licensing section of local councils has a role to play in ensuring that local betting shops comply with the relevant legislation.

I am pleased that Rochdale Council voted formally to support the campaign, and I believe that to be the action of a responsible council. I hope that others will follow suit.

Photo of Natalie McGarry Natalie McGarry Independent, Glasgow East 10:17 am, 26th April 2016

It is a pleasure to serve under your chairmanship, Sir Alan.

I congratulate Jim Shannon on securing the debate. Many of us have probably applied for a similar debate, and for a Glasgow Member the issue is particularly pertinent. In 2014, The Evening Times of Glasgow found that the city had the highest proliferation of FOBTs—puggies, as they are known colloquially—at one for every 2,458 adults, with losses of £30 million per year. Only Liverpool came anywhere close to matching the Glasgow figure. It is not a statistic that I am proud of.

In my constituency the number of betting shops is particularly high, and they are in a concentrated area. It has been suggested that the disproportionate impact of fixed odds betting terminals on poorer and more vulnerable communities is due to the massive overprovision of bookmakers in such areas. Some streets in the east end of Glasgow have as many as four bookmakers on them, within a few hundred yards of each other, and with multiple FOBT units in each shop. In parts of my constituency, the high street is dominated by fast food shops, payday loan shops and bookmakers, and their proximity to each other is no coincidence.

Areas with a higher density of gambling machines are therefore more likely to be poorer areas, with lower than average economic activity and more people in lower-paid jobs, which means that the machines have a higher impact on people in those communities. I might have taken this incorrectly, but I take issue with the idea that people in such areas have more addictive personalities than those in more affluent areas. This is about proliferation, availability, the absence of hope, and the desire for control. Gambling has a massive impact on the lives and families of problem gamblers, often leaving families in debt, desperate, and more dependent on council and Government services. A report by Glasgow City Council on the impact of FOBTs found significant evidence of clustering of betting shops on many local high streets and other retail centres in Glasgow. Despite a period of unprecedented growth in online gambling, the number of betting shops has remained consistent and floor space continues to increase.

On the points made by Mr Robertson, the idea that the poor pay in betting shops so that the more affluent can go horse-racing does not seem to me a reason to urge caution on the Government about taking action.

Photo of Natalie McGarry Natalie McGarry Independent, Glasgow East

Evidence from the Scottish health survey suggests that as many as one in 20 betting shop customers—[Interruption.] Would the hon. Gentleman like to intervene instead of speaking from a sedentary position? I would be happy to take an intervention.

Photo of Laurence Robertson Laurence Robertson Chair, Northern Ireland Affairs Committee

I am grateful to the hon. Lady for giving way. What she said was not remotely close to any point I made.

Photo of Natalie McGarry Natalie McGarry Independent, Glasgow East

That was an interpretational issue, then. I am glad to have my interpretation corrected, because what I said was what came across to me, and perhaps to others in the Chamber.

Evidence from the Scottish health survey suggests that as many as one in 20 betting shop customers may be problem gamblers. The addictive nature of the machines can and does devastate the lives of many people, especially those from poorer communities. The Government need to step in and do more to help those struggling with addiction, and they need to seek out preventive measures.

What is of most concern is the fact that many of the most popular games on fixed odds betting terminals are categorised as B2 casino content and are not subject to the same restrictions on stakes and prizes as traditional slot machine games. With vulnerable people already at risk, the Government must take action and reconsider the B2 classification.

Photo of Graham Jones Graham Jones Labour, Hyndburn

I am fascinated by the hon. Lady’s argument. She is a former member of the Scottish National party—I do not know whether she is still a member. The point was made to the Smith commission that Scotland wanted full devolution of powers over FOBTs, yet the party tabled no amendments to the Scotland Bill on the issue. It said nothing about it, and not one Scottish MP spoke about the matter during the passage of the Bill. For the SNP to criticise the Government is simply duplicitous.

Photo of Natalie McGarry Natalie McGarry Independent, Glasgow East

I admit that I find myself extremely disappointed that the hon. Gentleman makes a political point on an issue of great importance for people across the UK. Amendments were tabled on fixed odds betting terminals, but unfortunately, because of the constriction on the time given to the Bill, they could not be brought forward.

Photo of Natalie McGarry Natalie McGarry Independent, Glasgow East

No, I am sorry. There is a more important point to be made about the impact of fixed odds betting terminals on vulnerable communities, and I will thank the hon. Gentleman to sit down so that others can get to speak.

I urge the Government to consider the evidence from communities such as mine, and to take action to stop fixed odds betting terminals blighting people in vulnerable and disadvantaged communities.

Photo of Alan Meale Alan Meale Labour, Mansfield

Order. We still have six more Members wanting to speak. Unless hon. Members play fair with each other, they will not all get to speak.

Photo of Gerald Jones Gerald Jones Labour, Merthyr Tydfil and Rhymney 10:22 am, 26th April 2016

It is a pleasure to serve under your chairmanship, Sir Alan. I congratulate Jim Shannon on securing this important debate. I want to mention my membership of the newly established all-party group.

There is no doubt that fixed odds betting terminals are causing concern, and indeed misery, across the country. Many people believe that they are having a negative impact on society, and there is a widespread view that the maximum stake of £100 is far too high. No other country in the developed world has £100-stake machines other than in highly supervised casino environments. Addiction to these high-stakes machines is blighting people’s lives. It is of huge concern to me when I read reports that the number of betting shops is twice as high in the poorest areas of the UK. In Wales, more than £60 million vanished into fixed odds betting terminals last year, and there are 50 of them in the communities that I represent.

I have heard it said several times that fixed odds betting terminals are the crack cocaine of gambling, and that view has come from those engaged in support and counselling services—the very people who witness at first hand the misery caused, and who deal with the consequences of gambling addiction. There has been a significant rise in the amount of money gambled in fixed odds betting terminals in recent years, from £1.3 billion in 2010-11 to £1.6 billion in 2013-14, according to the Gambling Commission. That is not a light-hearted flutter. Punters are able to stake £300 per minute, or £18,000 an hour, and huge losses are quickly racked up. Gambling is a major cause of indebtedness, and commentators have indicated that betting on FOBTs alone equates to £675 for every Welsh adult each year.

It is time for the Government to commit themselves to tackling the issue seriously, and to reduce the maximum stake on the terminals. The starting point can be the review of stakes and prizes, which I believe is long overdue. The Government have stalled so far, and they must now signal that they are committed to taking action. There also is concern in many communities about betting shops clustering together on the high street, as we have heard. Many councils across England and Wales have called for the highest stake on fixed odds betting terminals to be cut to £2. They also want more local power to tackle some of the issues involved, as current planning and gambling laws are failing to protect our towns and high streets. I support that call from local government, as I believe that councils have the most awareness of the issues being created in their areas and should have more of a role in dealing with them, in partnership with communities.

Last year the Welsh Assembly passed a motion noting that

“the growth in online gambling and fixed odds betting terminals has turned gambling in the UK into a multi-billion pound industry”,

and urging the Welsh Government to

“engage with the UK Government to discuss the devolution of greater powers” to tackle the issue.

Fixed odds betting terminals have allowed betting shops to introduce low staffing by pushing the money on to machines, so there is little or no interaction with anyone behind the counter. Figures show an increase in the number of times police have been called to betting shops over the past few years. We have all heard about individuals who easily become addicted, and about those who have lost their jobs and homes, and in some cases their families, as a result. I am sure that many hon. Members have read case studies in which people have testified clearly that the introduction of fixed odds betting terminals was a major factor in their addiction.

The consequence of doing nothing is unthinkable. The Government need to take decisive action, and I look forward to hearing today the Minister’s clear commitment outlining what the Government intend to do about the situation.

Photo of Lisa Cameron Lisa Cameron Shadow SNP Spokesperson (Climate Justice) 10:26 am, 26th April 2016

It is a pleasure to serve under your chairmanship today, Sir Alan. I congratulate Jim Shannon on securing this important debate and setting out an extremely detailed position. I declare an interest, having worked in addiction services as a psychologist for a number of years.

It is true that gambling has been a problem in society for many years. However, problem gamblers have told me that the fact that it is possible to gamble at all hours of the day and night exacerbates their difficulties. The description of fixed odds betting terminals as the crack cocaine of gambling has already been referred to. Patients have described addiction to those machines to me: the loss of large sums of money—hundreds of pounds in an instant—and the insufferable pain that relapses of such magnitude cause to families and children, who can become impoverished because of debt and instability.

Gambling, like many other addictions, also causes people to engage in behaviour that they might not otherwise. Those who have had periods of problem gambling have spoken about stealing from society and from their families to support their habit. That has an impact on social services and the criminal justice system. The machines we are discussing are among the most addictive set-ups, because they involve repetitive behaviour, random reward and very high stakes, so problem gamblers are soon chasing their tail and trying to recoup money they have lost. The availability of the machines, virtually on the high street, is a cause for grave concern. People who are vulnerable to gambling addiction describe seeing them everywhere, finding it difficult to abstain, and relapsing even if they pop out to the shops for bread and milk.

I would argue that debt causes depression and mental health problems, and we have heard that at worst it can cause suicide. Those issues have an impact on the health service. Other types of gambling have been mentioned, such as the national lottery, but I have had discourse with patients who have stated that betting on the lottery is not as addictive, because they have to wait some time to get the result. The issue with these machines is their instantaneous and repetitive nature.

I will not speak for too long, because I wish everyone to be able to speak. I have significant concerns about the availability of these machines, the number of them in shops and the number of shops that have them, the level of the stakes and the level of supervision of vulnerable individuals. I ask the Minister to look at that.

Photo of Lisa Cameron Lisa Cameron Shadow SNP Spokesperson (Climate Justice)

I cannot give way, because I want others to have the chance to speak.

I support a responsible gambling industry. We all like to have a flutter occasionally or pop into a casino on a night out—very occasionally, I add—but I urge the Minister to act. We need a balance. Vulnerable individuals are being gravely affected by these machines, and we need to address that through independent research and by developing safe and responsible policy.

Photo of Jim McMahon Jim McMahon Labour, Oldham West and Royton 10:31 am, 26th April 2016

It is a pleasure to serve under your chairmanship, Sir Alan. May I thank Jim Shannon for securing the debate and my hon. Friend Carolyn Harris for leading the all-party group on this important issue?

A lot of ground has been covered in the debate, and I will not repeat other Members’ points. There is a pattern of bookmakers clustering in towns with high levels of deprivation. I speak from the perspective of Oldham, which the Office for National Statistics recently announced as the most deprived town in England. We see massive clustering there of not only bookmakers but payday loan shops, logbook loan shops and pawnbrokers. There is a cycle of people hoping they are going to win, losing and then pawning gold or something from their house to get more money, which they feed back into the machines.

I do not accept at all that there the arguments on this issue are conflicted. It is true that these machines are being used for money laundering. In fact, during the course of this debate, constituents have sent me messages on Twitter in which they name bookmakers in Oldham that are quite open about the fact that these terminals are used for money laundering. Let’s face it, if someone wants to find a way of cleaning money, losing 10% of it through one of these machines is not a bad transactional cost.

The poorest in society are paying the price. In 2014, Oldhamers fed £29 million into 100 terminals, losing an estimated £5.5 million. That is money from the pockets of the people who can least afford it. I believe in people being able to make adult choices about these things, but we have seen that the bookmakers cannot be trusted to monitor and support people who have problems. I will give one example. In Chadderton precinct, I can be stood at the door of one Ladbrokes—a bookmakers that has four fixed odds betting terminals, which is the maximum it is allowed—and you, Sir Alan, can be stood as close as we are now, at the other Ladbrokes across the precinct, which has the same number of terminals. Bookmakers know the rules and will seek a way around them. Any sense that we can trust bookmakers, which are there to make money, to look after people who are falling into trouble and have problems is wrong. I do not trust them one bit.

We need proper and fair regulation that strikes a balance between treating people like adults and letting them make a conscious decision to spend the money they earn however they choose, and ensuring there are proper restrictions where bookmakers are taking liberties. I do not believe that the Local Government Association and the 100-odd local authorities that are supporting the proposals made under the fantastic leadership of Newham Council are wrong. They know their communities, and they are asking for more Government action and local accountability and support. That is the least we can do to address this very real modern problem.

Photo of Stuart McDonald Stuart McDonald Shadow SNP Spokesperson (Immigration, Asylum and Border Control) 10:34 am, 26th April 2016

I was delighted recently to be elected the vice-chair of the new all-party parliamentary group on FOBTs. I too congratulate Jim Shannon on securing this debate. He has said it all, and there have been many excellent contributions, so I will be incredibly brief.

Against the background of what many hon. Members have said, the degree of lax regulation of FOBTs is extraordinary. Two pounds is deemed the correct stake for machines in arcades and bingo halls—environments that have far higher levels of supervision than bookies. High-stakes gambling should take place only in highly supervised and regulated environments such as casinos. Our lax approach to FOBTs makes no sense, and it sticks out like a sore thumb compared with the equivalent regulations that apply in other European countries.

The Government promised to review stakes and prizes, but to date, they have failed to do so. The longer they prevaricate on this, the greater the damage that will be done to individuals, families, communities and, indeed, our economy. It is time for the Government to get their act together. I look forward to working with hon. Members across the House and with colleagues in the new all-party parliamentary group to ensure that that happens.

Photo of Patricia Gibson Patricia Gibson Scottish National Party, North Ayrshire and Arran 10:35 am, 26th April 2016

It is a pleasure to serve under your chairmanship, Sir Alan. I congratulate Jim Shannon on securing this debate. We have witnessed today the common agreement among most in this Chamber that there is a particular problem with fixed odds betting terminals, which leads those who are vulnerable and seduced by the promise of easy money into all sorts of difficulty.

In my constituency and the neighbouring constituency, there are 135 FOBTs in bookmakers, where gamblers racked up losses of more than £5 million in the year to 2015. Those are two constituencies with some of the deepest pockets of poverty and deprivation in the entire United Kingdom, and they host 37 betting shops. That spend of more than £5 million is set to increase, and campaigners have expressed deep concern.

This problem affects some of the most vulnerable people in communities right across Scotland and the United Kingdom. People who struggle with gambling are drawn in by the glamour, the glitter and the promise of easy wins for the hollow thrill that these machines offer. They promise so much and deliver so little. We have heard today that vulnerable players are gambling as much as £100 in 20 seconds. Who can afford to sustain such losses without facing huge difficulties? It is no wonder that FOBTs are called the crack cocaine of the gambling world.

So far, the approach of the gambling industry has been about self-exclusion, but we know that that does not work. Research has shown there were around 22,000 self-exclusions in 2012-13, but more than two thirds of those who self-excluded cancelled the exclusion after the minimum period expired. As Fiona Bruce has pointed out, this is an issue of social justice. It is clear that the particular danger of these machines is that so much money can be lost so quickly. We cannot continue to stand aside and watch this problem develop. The casino industry has said in evidence to the Scottish Parliament that these machines are a hard form of gambling and are completely unsuitable, as we have heard today, for the unsupervised environment of a bookmakers shop.

We know that more research needs to be done to inform policy. We need play to be safe and enjoyable. The Responsible Gambling Trust has said there should be further studies so that we can target problem gamblers using informed research. It is time the Government looked at the recommendations from the Responsible Gambling Trust on these machines.

We have heard today about inconvenient truths, and I would like to point out one such truth. We have all seen areas—usually ones with socially disadvantaged communities—that have bookie after bookie on each street corner. Despite what Mr Robertson said, 55 of the most deprived boroughs in the United Kingdom have more than twice as many betting shops as those in the most affluent areas. That is an inconvenient truth. Too many local authorities feel powerless to stop that clustering, and the Scottish Government have taken action to tackle the issue through planning policy.

The betting industry has claimed that reducing the maximum stake from £100 to £2 would put betting shops at risk. It is a little known fact that like Conor McGinn, I, too, once worked for betting shops—for two high–street betting shops to put myself through university, working in just about every bookmakers in and around Glasgow. I can tell hon. Members categorically that there were no FOBTs at that time and that profitability for bookmakers was never an issue. There are now about four terminals in each shop.

I want to make a very important point. There has been an attempt to make political points in this debate, which is utterly inappropriate, but they have been raised and therefore must be answered. It was suggested that the Scottish National party did not table any amendments to the Scotland Bill with regard to these machines. I can tell Graham Jones, who made that point, that that is utterly untrue. Perhaps he was so busy working with his Tory allies against more powers for Scotland that he missed it. The SNP tabled an amendment on 4 November 2015 to clause 45 on page 47 and it was not accepted. It is true that some power has been devolved under the Scotland Act 2016, but what the Scottish Government are not able to do with the powers is retrospectively re-examine the licences for the number of betting terminals that are already available. The way that the powers have been devolved will create confusion because there will, in effect, be a two-tier system.

We know that these machines are an issue. We know that we need to tackle it, and I ask the Minister—if one thing comes out of today’s debate—to seriously consider making the maximum stake £2 so that people can gamble with much more safety and responsibility, and so that they are less open to being preyed upon by these machines and mistaken about the riches that they offer.

Photo of Clive Efford Clive Efford Shadow Minister (Culture, Media and Sport) 10:41 am, 26th April 2016

It is a pleasure to take part in this debate under your chairmanship, Sir Alan, and I start by congratulating Jim Shannon on securing it; it is important and has certainly attracted a lot of support on both sides of the House.

I get a feeling of déjà vu when I come to these debates, particularly when I read the briefings from the Association of British Bookmakers—I think I could have written the opening sentence of the one I have here before I even received it. It says:

“There is no objective evidence from either past British Gambling Prevalence surveys or Government Health surveys that problem gambling levels in the UK are rising.”

We ask the question, “Is there a problem with FOBT machines?”, and we get an answer to a completely different question. This has got to stop. That sort of propaganda does the industry no service whatsoever, and it is not fooling anyone.

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

No, I will not, because of the time. I have argued consistently that if we are going to move ahead with any restrictions on FOBTs, we need to do so on the basis of evidence. People are calling for a £2 stake, but there is no evidence that that will be any safer than the existing stake.

However, in terms of the issues confronting us—as many hon. Members have said today—this is about location more than anything else. It is about the proximity of these machines to people who may be vulnerable to developing a gambling habit and to falling foul of their propensity to gamble too much by going into a betting shop and losing more money than they can afford to. There is no denying that a high proportion of these machines are in proximity to socially deprived communities, and a disproportionate amount of the money gambled in them comes from people on low incomes.

We hear the figures about the numbers of betting shops and all the rest of it, but it is clear that the trend in betting shops is for more money to come from B2 machines than from over-the-counter betting on horse racing, dog racing or football, as more of that sort of betting moves online. The growth in the gross gambling yield from machines has more than covered the decline in over-the-counter betting, with a combined gambling yield in 2014-15 of £3.74 billion, which is higher than in any previous year recorded by the Gambling Commission. The yield from the machines has been higher than that of over-the-counter betting every year since 2011-12 and now represents 54.2% of the combined gross gambling yield. The number of premises has been in decline since March 2014: there were 299 fewer premises on 30 September 2015 than on 31 March 2014. However, the number of B2 machines has increased year on year since records began in 2008-09 and has now reached 34,500.

We have a growing problem in our communities, given the proximity of FOBTs to locations where, I think, they do not belong. Anyone who has been to discuss these machines with me knows I loathe them. I do not think they belong in our high streets, but they are an unintended consequence of the Gambling Act 2005, and they are now there. Many businesses are predicated on the machines being there and if they were to be removed, people would lose their jobs and livelihoods, which is why we must move forward on the basis of evidence.

We are told that there is no problem, or that the problem lies elsewhere, or perhaps that the problem is not getting any worse, so we should not do anything about it—or a combination of all those arguments. However, the number of people in treatment, according to GamCare, is up by 39%, and the number of people who present problems as a result of playing FOBT roulette machines represent 26% of those who are in contact with GamCare. The number of calls from people addicted to FOBTs has gone up by 50% over the last five years.

I accept that there is a growing problem online. For the first time ever, the current figures show that the number of people presenting problems to GamCare from gambling online has increased over the number of people who are presenting problems from machine-related abuse. However, that can be explained by the increase in the number of people who are contacting GamCare and does not show a reduction in the problems from FOBTs. It shows an overall increase of people who are presenting with problems, and we have to address that issue going forward.

The Gambling Commission wrote to the Secretary of State in March 2015 about the conclusions of research carried out by the Responsible Gambling Trust and NatCen Social Research. It was based on people who gamble from accounts, because they can be tracked and their gambling behaviour can be followed. There were some interesting factors: 37% of the number of people who have loyalty cards or gambling accounts said that at some time, they had a problem with machine gambling—so a very high proportion are presenting with a problem.

The Gambling Commission says that the betting industry needs to increase the number of people who have accounts, so that detailed research can be carried out on what is going on with these machines. In the letter, it states:

“Consequently, we recommend encouraging operators to promote account-based play with the aim of increasing uptake significantly. If they succeed, playing anonymously might itself become a useful indicator of risk. If operators fail to make sufficient progress with promoting account-based play, then the case for making it mandatory would need very serious consideration.”

Will the Minister therefore consider, in his next discussions with the betting industry, whether that should be made mandatory? If we are not making any progress, we are just not finding out what the problem is. We have the technology. We can do it and we need to make more progress in this area.

I say to the betting industry, “Make this move before it is forced on you, or you will lose the machines completely.” I think that the time is coming when action on these machines will be forced on the gambling industry. If there is not a problem, let us have the data and the account-based play, so that we can demonstrate that there is no harm.

The time has come to apply the precautionary principle. The betting industry says there is no evidence to prove that the machines are harmful, but there is no evidence to prove that they are not, so we should apply the precautionary principle that if it cannot be proved that they are not harmful, let us remove them until there is proof that they are not. It is time to act. The data are available to the Minister so let us move towards account-based playing of the machines and ensure that we satisfy ourselves that it is safe to have them on our high streets. Otherwise, they should be removed.

In conclusion, I want to ask the Minister a few questions. The Government are carrying out a review of the £50 stake, which is why the triennial review has been delayed. When will the former be concluded and when will the triennial review of stakes and prizes start? What steps is he taking to investigate money laundering—several hon. Members highlighted that this morning—and whether there is a money laundering problem?

There is concern about late-night betting and that fact that stakes on these machines tend to increase late at night. Should we review the opening hours and the rules that allow live racing from Hong Kong to be played and betting shops to stay open even later so that more people can play these machines? Should we mandate account-based play on these machines? Will the Minister support giving local authorities, once and for all, the powers they are demanding so they can control the proliferation of betting shops in our communities?

Photo of David Evennett David Evennett Government Whip, The Parliamentary Under-Secretary of State for Culture, Media and Sport 10:51 am, 26th April 2016

It is a pleasure to serve under your chairmanship, Sir Alan. I congratulate Jim Shannon on securing this debate and on his passionate and thoughtful speech, which I think we all appreciated.

We have had a good, constructive and measured debate. All hon. Members who spoke took a balanced approach, and I am grateful for their informed and helpful contributions to this important debate. I appreciate that gambling is a devolved matter for Northern Ireland, so I shall concentrate on Great Britain.

I start by restating that the Government recognise the concerns around subcategory B2 gaming machines, or fixed odds betting terminals, as they are more commonly known. I assure the hon Gentleman and all hon. Members here that the Government take the issue seriously and keep it firmly under review. I appreciate the matters that have been raised and share the concerns that the hon. Gentleman highlighted. I have listened carefully to the comments made and take note of the strong views that have been expressed.

I congratulate Carolyn Harris on being elected to the chair of the new all-party parliamentary group on fixed odds betting terminals. I welcome its establishment and look forward to hearing from her and her group. Perhaps we can chat later about issues that we cannot cover here. I wish the group well in its work. This is a good opportunity to say that the Government are listening and looking at the whole issue, and will make strong recommendations in due course.

Photo of David Evennett David Evennett Government Whip, The Parliamentary Under-Secretary of State for Culture, Media and Sport

I cannot give way because I have so little time.

The Government are consistent in their approach to gambling legislation. Any changes in the industry must go hand in hand with enhanced player protection and a genuine commitment to social responsibility. We recognise public concern about the increased visibility of gambling and its potential harm, particularly as regards B2 gaming machines. That is why the Government introduced measures in April 2015 to end unsupervised high-stake play on those machines and gave more powers to local communities, requiring planning applications for new betting shops to be submitted to local authorities. That was a positive move to allow local authorities to make decisions in their area. The industry and the Gambling Commission introduced additional measures to further the social responsibility agenda at this time, and I will touch on that shortly.

The Government subsequently conducted an evaluation of the regulations on B2 gaming machines, which was published earlier this year. In summary, there has been a significant reduction in the number of stakes above £50 and there are indications that, as a result of these regulations, players on B2 gaming machines may now be making a more conscious choice to control their playing behaviour. In addition, the regulations led to an increase in the use of verified accounts, so the number of people able to track their play through an account and make more informed decisions as a result has increased. Although that is a positive step in the right direction, it is prudent to think carefully about what further player protection measures might be appropriate, particularly in relation to B2 gaming machines.

The coalition Government concluded the last triennial review of stakes and prizes in October 2013. They noted in their public response that the reintroduction of a triennial review system was appropriate and anticipated that the next formal review would conclude by 2016. We are aware that there is an expectation of a review this year, and we will set out our views on a review of the stakes and prizes on gaming machines in due course.

It is important to note the role of the Gambling Commission and the industry in the social responsibility agenda. The Association of British Bookmakers, the trade body representing the vast majority of high street bookmakers, introduced new measures for its members in 2014 under its code on social responsibility, which was further updated in 2015. We have made it clear to the industry that although these measures are welcome, they must be independently evaluated and built on to ensure they are fit for purpose.

The Gambling Commission updated its social responsibility provisions in its revised licence conditions and codes of practice, which were introduced in May 2015. This included requirements that customers of B2 gaming machines make an active choice on whether to set time and monetary limits to help them to control their play.

There is little time left, but I want to highlight the issues of money laundering and crime, particularly money laundering through B2 gaming machines. Crime in the gambling sector is obviously worrying, and we and the Gambling Commission are looking closely at the issue. I assure the hon. Member for Strangford and other hon. Members that the Government take the issue of money laundering in gambling very seriously indeed.

The Gambling Commission already requires operators to take measures to prevent money laundering through its licence conditions and codes of practice, and it will shortly announce its conclusions following a consultation on proposed regulatory changes to strengthen the fight against crime linked to gambling. In addition, the Treasury is planning to consult shortly on the EU’s fourth directive on money laundering, which will seek evidence about the extent of risk in certain sectors, including gambling, of money laundering practices. The combination of these measures represents the Government’s continued focus on preventing crime in gambling, including money laundering.

Time is extremely short, but I re-emphasise the fact that the Government recognise the concerns expressed. I welcome the constructive comments of Clive Efford, but time does not allow me to answer all his questions, so I will write to him with my answers. I am grateful for his constructive contribution to the debate. Much has been done, but much more needs to be done. We will certainly look at the matter carefully and monitor it to ensure there is protection and social responsibility, which, as the debate has highlighted, are so important in the gambling industry.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Equality) 10:59 am, 26th April 2016

I thank the Minister, the shadow Minister and right hon. and hon. Members for their significant contributions. A significant proportion—higher than for any other product—of users of fixed odds betting terminals are problematic gamblers, and that has come out of this debate. Fixed odds betting terminals are the crack cocaine of gambling. They are totally addictive, destroy lives and focus on the vulnerable. What must we do? We must reduce the number of machines from four per shop to one, and we must reduce the maximum stake from £100 to £2. We must remove the table game content from fixed odds betting terminals, because the pace of the games is faster than in real casinos. We must reduce the spend frequency from 20 seconds to 60. Those are some of the things we can do.

I welcome the new all-party group on fixed odds betting terminals, and I thank hon. Members for their contributions. The Minister can be sure that Members here will return to look for change through legislation.

Motion lapsed (Standing Order No. 10(6)).