On 11th March 2016 the House of Lords considered at Second Reading the Gambling (Categorisation and Use of B2 Gaming Machines) Bill [HL] – a Private Member’s Bill introduced by Lord Clement Jones. Introducing the Bill, Lord Clement Jones said
“Fixed-odds betting terminals—FOBTs—are touch-screen roulette machines in betting shops that allow the user to bet up to £100 every 20-second spin. It is clear that the experiment to allow high-speed roulette in easily accessible betting shops has been a disaster..The essence of my Bill is to reduce the stake to £2 a spin.”
The Bishop of St Albans, Rt Revd Alan Smith, spoke in support of the Bill.
The Lord Bishop of St Albans: My Lords, I am grateful to the noble Lord, Lord Clement-Jones, for taking forward the Bill, which I support. It enables us to have an opportunity to discuss an area of deep concern to many people on all sides of the House. There is little doubt that B2 gaming machines can be very addictive, which is why, for well over a decade now, successive Governments have talked tough about regulating them, although it seems to me that regulation is not tough enough. This modest Bill is immensely helpful.
I assure the noble Lord, Lord Lipsey, that my friends would be greatly amused if they thought I was motivated by puritanism. This is not about trying to get rid of the whole gambling industry, but trying to address one particular point that is causing great concern. I also have to say in passing that I am constantly amazed to be part of this House, having just received a masterclass on how to launder money. I thought, with the television cameras around, I should not be filmed making notes assiduously as that happened.
I also say to the noble Lord, Lord Lipsey, that I have not tried one of these FOBTs, but I do have the anecdotal evidence of many of our clergy who live in every single part of our nation, who are often the only professionals living in some of the poorest neighbourhoods of this country. For example, in my diocese we are deeply involved with a charity that deals with all forms of addiction, so we hear very real stories from the grass roots, most of which do not get in the newspapers, of the concerns being expressed.
As other noble Lords have pointed out, some people are suspicious that one of the reasons why the Government have not responded robustly enough is that there are considerable receipts to the Treasury. In response to my Written Question at the end of January, the Government informed me that the total value of machine games duty receipts for 2014-15 was £562 million. Given the increased top rate of machine games duty announced at the last Budget, the 2015-16 figure will no doubt be substantially higher. Not all of this tax revenue will come from FOBTs, of course, but we can expect that a significant majority of it does. It has been suggested to me by someone who has understanding of these things that the proportion is likely to be just under 70% of the total value. I would welcome clarification from the Minister on whether that sounds like a fair reflection of reality.
Fixed-odds betting terminals may well bring in substantial tax receipts, but they come in at a considerable and substantial cost, not just to individuals, but to local authorities and to the wider economy. Even for the Treasury, it seems, there is no such thing as a free lunch. The cost to the individual has already been brilliantly outlined by other Peers, and I do not want to repeat a lot of stories. I also recognise that there is some question of finding really precise and conclusive statistics on the precise number of individuals who suffer gambling-related harm as a result of FOBTs, although I think there is some not insignificant evidence. I think we can also agree that the cost to the individuals affected has the potential to be very serious indeed. I imagine that noble Lords have read, as I have, stories recently in the paper of at least two young men who committed suicide, having lost thousands of pounds on FOBTs. I guess that many noble Lords would feel, as I do, a deep sense of sadness—indeed anger—at what has gone on.
However, for every individual tragedy that reaches the headlines there are thousands of other individuals, often young people, people from poorer areas and areas of high unemployment, who fall into traps of addiction and problem gambling, losing very significant sums of money over a short period of time. There is a popular fiction that this is the limit of FOBT harm: individual harm resulting from addiction and problem gambling, with little to distinguish unregulated casino gambling on the high street from unregulated casino gambling online, in the privacy of one’s home. Yet, as other Peers have indicated, the prevalence of FOBTs has a profound social effect, particularly in those areas of deprivation where betting shops tend to congregate in the greatest number. The extraordinary fact that 93 local authorities—the people on the ground who see the effect it is having—have demanded a reduction in the maximum stake is telling. These are communities that suffer, by their own account,
“significant crime and anti-social behaviour”,
as a result of the prevalence of high street betting shops. To add to those statistics, Newham Council recorded 9,308 incidents in 2013-14 that required police assistance as a result of gambling activity in betting shops.
We know from anecdotal evidence that many incidents go unreported. There is also Gambling Commission data that many betting shops are themselves reporting concerns about cash laundering, and we have heard that it happens in many different ways. There are particular concerns about the way betting companies seem to be targeting socially vulnerable areas of deprivation and high unemployment. Analysis from Landman Economics found that there were more than twice as many FOBTs per 1,000 people in areas of highest deprivation than there are in areas of lowest deprivation. Even more concerning is the fact that 61% of Paddy Power betting shops are located in the 40 UK authorities with the highest percentage minority-ethnic populations; Luton, in my own diocese, being one.
Given that studies by the Responsible Gambling Trust have identified a higher likelihood of at-risk gambling among ethnic minority groups, this fact might suggest to one of a cynical disposition that such communities have been targeted in the hope of richer rewards. I note from his comments that the noble Lord, Lord Lipsey, disagrees—nevertheless, there is a significant correlation. I am not arguing for a causation. The Government need to tackle the issue of FOBTs head on.
In 2013’s triennial review the Government protested that they did not have the necessary evidence on levels of gambling-related harm that would have allowed them to act. That excuse will not wash this time around, not least after debate after debate and news item after news item in the media. If the Government do not have the evidence, they need to go out and gather it, through a fair, objective and impartial process. Will the Minister assure the House that Her Majesty’s Government will have the necessary evidence available, when the triennial review comes around, to facilitate a well-informed decision on FOBTs? Will the Minister further assure the House that the concerns of local authorities will be considered under the Sustainable Communities Act and appropriate action taken to relieve those concerns?
For far too long, decisive action on this issue has been absent. We cannot leave it to the betting industry to self-regulate, certainly not when profits from FOBTs now make up around half of the industry’s high street revenues. The conflict of interest is simply too great. I hope that this debate will serve as an opportunity for Her Majesty’s Government to consider their position and I look forward to engaging with Ministers on this issue in the coming months.
The Earl of Courtown (Con): [extract]…The noble Lords, Lord Clement-Jones, Lord Foster and Lord Collins, and the right reverend Prelate the Bishop of St Albans mentioned the existing powers held by local authorities. I turn to the resubmission made under the Sustainable Communities Act by Newham Council and other local authorities for the Government to reduce B2 stakes to £2. Although the resubmission is currently under consideration, the Government are determined that local authorities should play a central role in managing local gambling provision—a principle deeply embedded in the Gambling Act 2005.
…The right reverend Prelate the Bishop of St Albans and the noble Baroness, Lady Howe, also raised the issue of tax on B2 machines. I do not have the information available at present, and I will of course write to the noble Baroness and the right reverend Prelate. The Government understand the concerns about problem gambling and, in particular, about fixed-odds betting terminals. We are clear that this issue will be kept under continual review.
…We recognise this problem. The Bill would tie the Government’s hands when trying to promote a comprehensive strategy to tackle problem gambling across the piece. The Government therefore express reservations about the Bill.