CMS_LawTax_Negative_28-100.eps Place your bets Gambling and the General Election 2017 June 2017 Contents General Election 2017 3 House of Cards – the politics of gambling in 2015-2017 Parliament 4 The current domestic issues 7 How did we end up here? Reviewing the review 8 The Brexit effect 11 The runners and riders 14 The Party manifestos 16 Gambling team contacts 18 2 | Place your bets – Gambling and the General Election 2017 General Election 2017 Two years ago, in advance of the 2015 General Election in the United Kingdom, Olswang and Regulus Partners issued an analysis of what we saw then as the prevailing public policy issues facing the gambling sector. We stated that there was a ‘watershed moment’ and that the sector was facing an unprecedented range of political risks and threats. Since then much has changed 1 most notably the Brexit also poses several significant challenges to the outcome of the referendum in June 2016 regarding sector. Domestically, restrictions on immigration will exiting the European Union, the change of Prime challenge those gambling operations which employ Minister and the focus of much of public policy concern significant numbers of overseas workers. Internationally, towards the single issue of Brexit. However, the risks remote operators will lose even their theoretical and threats now facing the industry appear if anything protections to provide their services into the UK under to be even more acute. the European Union (and from the UK into the EU). The post-Brexit blueprint for the UK set out by the Most significantly, the political mood towards gambling Conservative Party suggests little encouragement appears to have deteriorated further. The Blair era’s more for the sector. libertarian attitude towards gambling (as articulated in the Budd report) seems distant now. There has been In this note, we update our analysis of the public policy conjecture in the press regarding Theresa May’s views issues facing the sector we produced two years ago to on gambling – but little in the way of fact to support it. reflect the new realities. Nevertheless, a May administration, comfortable with an interventionist approach to the economy, would appear Once again, we look at the manifestos of the major to have few qualms about intervening robustly in the political parties. As we approach the final hurdles, a sector if they perceived social or public health issues. Conservative victory still appears the most likely outcome – but in recent years we have learned not to Nor is there much succour to be found in any obvious place too much faith in political certainties. Moreover, alternative, with the Labour Party likely to be even more Opposition policies may be revealing in terms of the antagonistic towards the sector. Meanwhile, control of general political climate on gambling issues and sources gambling has become a touchstone for devolution in of future pressure. both Scotland and Wales. The SNP’s position has the potential to cut both ways – depending on the greatest Any result other than the return of the Conservative perceived benefits to Scotland – but in the near-term is Party to Government with an enlarged majority is likely almost certainly negative. to play badly for those hoping to change the negative regulatory-political tide for gambling. It is perhaps a sign of the times for gambling that in 2017, restrictive policies (chiefly on the issue of machines In light of these concerns, the need for the industry in betting shops) appear in the election manifestos for to identify and address political-regulatory concerns and Labour, the Liberal Democrats, the SNP and UKIP. to respond effectively has rarely seemed so important. 1 Not least Olswang has merged to become part of CMS Cameron McKenna Nabarro Olswang LLP. 3 House of Cards – the politics of gambling in the 2015-2017 Parliament Although it was relatively brief, the 2015-17 Parliament was significant for gambling both in terms of legislation and in terms of political discourse. In terms of legislation, the last Parliament was notable for Unsurprisingly, problem gambling and machine gaming the first modest steps to devolve gambling regulation to were the two most commonly addressed themes the Scottish Parliament and Welsh Assembly (the Scotland (35% and 34% respectively) – often in conjunction. Act 2016 and the Wales Act 2017); and to give Police Sports funding (largely in relation to the Horse-racing powers of seizure over gambling assets such as betting Levy) and crime (anti-money laundering and staff abuse) slips, machine receipts and casino chips (the Criminal were the subjects of written PQs in 14% and 10% Finances Act, pushed through just before dissolution). of PQs respectively. The General Election prevented the taxation of free plays being included in April’s Finance Bill – but it seems highly Chart B: Written Parliamentary likely that this provision will be passed early into the new Parliament and implemented on schedule in August. Questions – gambling theme, House of Commons, 2015-2017 Parliament The period was also notable for an intensification of public policy interest in gambling (mainly negative for the industry) with pretty much the full range of parliamentary procedures being deployed to apply scrutiny on the industry. Problem gambling Machines During the course of the parliament, a total of 203 gambling-related written Parliamentary Questions Sports funding (perhaps the most constant measure of interest) were Crime asked by Members of the House of Commons. Localism Betting shops was the most commonly discussed sector Other of the gambling industry, featuring in 36% of the PQs (or 60% where a specific sector was cited – see chart [A]) while remote gambling was mentioned in 13%. By contrast, casinos and arcades barely figured at all (1% each) while bingo was not mentioned at all in written PQs. The most prolific interrogators of Government policy on gambling during the Parliament were chair of the Chart A: Written Parliamentary All Party Parliamentary Group on Fixed Odds Betting Questions – gambling mode, House Terminals, Carolyn Harris (Lab, Swansea East), the deputy leader of the Labour Party, Tom Watson (Lab, of Commons, 2015-2017 Parliament West Bromwich East), Stephen Timms (Lab, East Ham) and Ronnie Cowan (SNP, Inverclyde). A total of 56 MPs submitted written questions on gambling during the Parliament (31 Labour, 14 LBO Conservative, seven SNP and four ‘other’) including the Remote leader of the Liberal Democrats, Tim Farron (LD, Westmorland and Lonsdale), the former Minister of State Lottery for Culture and Tourism, Margaret Hodge (Lab, Barking) Other and the sole UKIP MP, Douglas Carswell (Clacton). 4 | Place your bets – Gambling and the General Election 2017 Chart C: EDM 61 – proportion of party MPs to sign 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% SNP DUP SDLP Labour Green Lib Dem All MPs Conservative Plaid Cymru Independent A total of 85 MPs signed Early Day Motion 61, laid by The long-running issue of machines in betting shops Carolyn Harris and calling for curbs on machines in was also the focus for a number of parliamentary betting shops, including a reduction in maximum stake debates (notably a Westminster Hall Debate in March per spin to £2. It was the 20th best-supported EDM in 2016 and a debate on betting shops and serious crime the session out of 1,209 and was signed by 44% of MPs in the Lords in September that year). Gambling matters in Scotland, 28% of MPs in Northern Ireland, 23% of also put in cameo appearances in a wide range of MPs in Wales but only 8% of MPs in England. In recent debates on matters such as the content of the Queen’s years, only one gambling EDM (pertaining to animal Speech, greyhound welfare, the National Curriculum, rights and greyhound racing) has received greater FIFA, anti-corruption, the Investigatory Powers Bill, local parliamentary support. government finance and various matters of English, Welsh and Scottish sovereignty. The 2015-2017 Parliament also featured one Private Members Bill in relation to gambling – also calling for With three reviews/investigations of the industry greater controls on machines in betting shops – from currently in train, gambling is bound to feature more the Rt Rev Alan Smith, Bishop of St Albans. The bill prominently than many executives would like when didn’t even receive a date for its second reading but Parliament sits again in June. In addition to these with the General Synod of the Church of England voting matters, the interest in youth gambling displayed by the unanimously in opposition to so-called ‘FOBTs’, it is House of Lords since the start of the year may presage unlikely we have heard the last on gambling from the heightened interest in that particular subject. Hertfordshire prelate. 5 6 | Place your bets – Gambling and the General Election 2017 Current domestic issues Levy growing public and political pressure to crack down on the gambling industry, a more hard-line approach may As almost the last gasp of the last Parliament and be taken. The longer-term impacts of the investigation after finally receiving state aid approval from the will likely be felt throughout the sector, with the European Commission, the secondary legislation was Commission likely to impose additional requirements passed to bring into force the long proposed changes on all licensees, not just those investigated. to the horserace betting levy. This extended the levy to offshore operators (and to the Tote on-course) ICO investigation and fixed the levy rate at 10%. In tandem with this, the online gambling sector has These measures are controversial with the legal basis also had to grapple with an investigation from the UK’s for them uncertain and they could potentially be data protection regulator – the Information challenged in whole or in part in the courts both Commissioner’s Office (‘ICO’) – into the use of personal domestically and also in Europe, the latter by means details to promote gambling websites.