Richard Holden and James Wild: Ministers must bring gambling regulation into the 21st Century

2 Jul

Richard Holden is MP for North West Durham. James Wild is MP for North West Norfolk. Both were elected in the 2019 General Election and are members of the Public Accounts Committee.

A day at the races. A night out at the dogs or the bingo. A flutter on the Grand National at the bookies.

Most common of all, checking that pink ticket you got from the corner shop and maybe, just maybe you’ll become a multi-millionaire – and if not at least you are helping support good causes.

For most people, our interaction with the gambling industry is part of destination or event-based gambling. We only do it when it’s part of a social activity or its based on a specific event at a specific time – like the Friday night Euromillions draw.

But, behind the façade of a flutter, Labour’s mass liberalisation of gambling in the 2005 Gambling Act transformed the industry into something else. The Act opened-up “casinos in the High Street” with the £100-a-spin Fixed Odds Betting Terminals, four per bookies office, that took years to be reigned back down to a £2 stake (as part of the consultation the Gambling Commission recommended the stake be lowered to £30 or less), and opened the door to online casino gambling.

At the same time the Gambling Commission, which the Public Accounts Committee (PAC) report at the weekend is largely about, was formed.

During the passage of the 2005 Act those opposed to gambling harm became side-tracked in a totemic focus on the wrong target – the possibility of so called ‘Super-Casino’ – an easily understood enemy.  But Parliamentarians didn’t focus on the much more dangerous parts of the Act, which allowed FOBTs on every high street and casinos on every mobile phone. Opponents went for the wrong target: a destination casino has more benefits and fewer downsides than what was allowed by the rest of the Gambling Act.

More money is now staked online that in all the physical bookies, casinos, and on-course bookmakers combined. The gambling industry has adapted much faster than almost any other business to the changing world. With net income (staked monies minus winnings) of £11.3 billion in the UK, it’s big business.

Together, we led the questioning of the Department of Digital, Culture, Media and Sport (DCMS) and the Commission as part of the hearing into gambling harm being held by the Public Accounts Committee (PAC), to which we were both elected as newbie MPs. As we dug around this matter, with constituency cases that had helped focus our minds on specific issues, what we found shocked us.

There are 395,000 problem gamblers in the UK. The effects can be devastating: damaging mental health, causing family break-ups, and even contributing to suicide. As MPs we’ve heard personal accounts of the impact of problem gambling on constituents and their families. A problem gambler will likely cause problems for their immediate family, extended family, and friendship group as debts accumulate, money is borrowed, and promises broken.

It shouldn’t be like this. It doesn’t have to be like this.  We can have sensible regulations that reflect the reality of modern gambling and that protect the vulnerable.

But the Gambling Commission isn’t doing that job effectively or efficiently. It is behind the curve. Too slow to deal with FOBTS or making sure people could withdraw funds from online accounts. Too slow on gambling on credit. It doesn’t measure the impact of the action it takes and has no target to cut levels of problem gambling.

Too often the industry, with public, media and political pressure ends up leading on so-called ‘responsible gambling’ measures before the regulator has even got out of bed.

Some of this is down to how the Commission is funded.  Bizarrely, it gets less funding if there are fewer but larger gambling companies – and we’ve seen massive mergers recently. So the Commission gets £19m a year to regulate a sector clearing the thick end of 1,000 times that in gross profit. We’ve got analogue regulation for an industry that’s undergone a digital revolution.

PAC recommended several key steps, the most important of which is to get the review of the Gambling Act, promised in the Conservative Party manifesto, underway as soon as possible.

Online fixed-odds betting urgently needs reviewing too – controls need to be at least as clear as those in betting shops. Loot boxes, gambling advertising on children’s computer games, 16- and 17-year-olds being able to gamble hundreds a week via a loophole for lotteries, unlimited roulette available in the isolation of your bedroom but no-where else… all raise questions.

The Gambling Commission needs to prove, and sharpish, that it’s up to the job. It needs proper research into problem gambling, targets to reduce it, and to measure the effects of the actions it does take. All we really know at present is that since the regulator was formed, public confidence that gambling is fair has fallen from about 50 per cent to around a third of the population.

Finally, individuals must be able to get redress through the regulatory regime when companies fail to meet social responsibility obligations. A proper Ombudsman for gambling is required. The fact that the most vulnerable only really have legal recourse (not much use if you’ve got no money) is absurd.

The deck is stacked against problem gamblers and in favour of the gambling companies, many of which have clearly used the lockdown to further cash in on coronavirus. It’s time for sensible, conservative action to protect the vulnerable and allow the majority a safe flutter.

Richard Holden and James Wild: Ministers must bring gambling regulation into the 21st Century

2 Jul

Richard Holden is MP for North West Durham. James Wild is MP for North West Norfolk. Both were elected in the 2019 General Election and are members of the Public Accounts Committee.

A day at the races. A night out at the dogs or the bingo. A flutter on the Grand National at the bookies.

Most common of all, checking that pink ticket you got from the corner shop and maybe, just maybe you’ll become a multi-millionaire – and if not at least you are helping support good causes.

For most people, our interaction with the gambling industry is part of destination or event-based gambling. We only do it when it’s part of a social activity or its based on a specific event at a specific time – like the Friday night Euromillions draw.

But, behind the façade of a flutter, Labour’s mass liberalisation of gambling in the 2005 Gambling Act transformed the industry into something else. The Act opened-up “casinos in the High Street” with the £100-a-spin Fixed Odds Betting Terminals, four per bookies office, that took years to be reigned back down to a £2 stake (as part of the consultation the Gambling Commission recommended the stake be lowered to £30 or less), and opened the door to online casino gambling.

At the same time the Gambling Commission, which the Public Accounts Committee (PAC) report at the weekend is largely about, was formed.

During the passage of the 2005 Act those opposed to gambling harm became side-tracked in a totemic focus on the wrong target – the possibility of so called ‘Super-Casino’ – an easily understood enemy.  But Parliamentarians didn’t focus on the much more dangerous parts of the Act, which allowed FOBTs on every high street and casinos on every mobile phone. Opponents went for the wrong target: a destination casino has more benefits and fewer downsides than what was allowed by the rest of the Gambling Act.

More money is now staked online that in all the physical bookies, casinos, and on-course bookmakers combined. The gambling industry has adapted much faster than almost any other business to the changing world. With net income (staked monies minus winnings) of £11.3 billion in the UK, it’s big business.

Together, we led the questioning of the Department of Digital, Culture, Media and Sport (DCMS) and the Commission as part of the hearing into gambling harm being held by the Public Accounts Committee (PAC), to which we were both elected as newbie MPs. As we dug around this matter, with constituency cases that had helped focus our minds on specific issues, what we found shocked us.

There are 395,000 problem gamblers in the UK. The effects can be devastating: damaging mental health, causing family break-ups, and even contributing to suicide. As MPs we’ve heard personal accounts of the impact of problem gambling on constituents and their families. A problem gambler will likely cause problems for their immediate family, extended family, and friendship group as debts accumulate, money is borrowed, and promises broken.

It shouldn’t be like this. It doesn’t have to be like this.  We can have sensible regulations that reflect the reality of modern gambling and that protect the vulnerable.

But the Gambling Commission isn’t doing that job effectively or efficiently. It is behind the curve. Too slow to deal with FOBTS or making sure people could withdraw funds from online accounts. Too slow on gambling on credit. It doesn’t measure the impact of the action it takes and has no target to cut levels of problem gambling.

Too often the industry, with public, media and political pressure ends up leading on so-called ‘responsible gambling’ measures before the regulator has even got out of bed.

Some of this is down to how the Commission is funded.  Bizarrely, it gets less funding if there are fewer but larger gambling companies – and we’ve seen massive mergers recently. So the Commission gets £19m a year to regulate a sector clearing the thick end of 1,000 times that in gross profit. We’ve got analogue regulation for an industry that’s undergone a digital revolution.

PAC recommended several key steps, the most important of which is to get the review of the Gambling Act, promised in the Conservative Party manifesto, underway as soon as possible.

Online fixed-odds betting urgently needs reviewing too – controls need to be at least as clear as those in betting shops. Loot boxes, gambling advertising on children’s computer games, 16- and 17-year-olds being able to gamble hundreds a week via a loophole for lotteries, unlimited roulette available in the isolation of your bedroom but no-where else… all raise questions.

The Gambling Commission needs to prove, and sharpish, that it’s up to the job. It needs proper research into problem gambling, targets to reduce it, and to measure the effects of the actions it does take. All we really know at present is that since the regulator was formed, public confidence that gambling is fair has fallen from about 50 per cent to around a third of the population.

Finally, individuals must be able to get redress through the regulatory regime when companies fail to meet social responsibility obligations. A proper Ombudsman for gambling is required. The fact that the most vulnerable only really have legal recourse (not much use if you’ve got no money) is absurd.

The deck is stacked against problem gamblers and in favour of the gambling companies, many of which have clearly used the lockdown to further cash in on coronavirus. It’s time for sensible, conservative action to protect the vulnerable and allow the majority a safe flutter.