HOUSE OF LORDS Select Committee on the Social and Economic Impact of the Gambling Industry Report of Session 2019–21 Gambling Harm— Time for Action Ordered to be printed 16 June 2020 and published 2 July 2020 Published by the Authority of the House of Lords HL Paper 79 Select Committee on the Social and Economic Impact of the Gambling Industry The Select Committee on the Social and Economic Impact of the Gambling Industry was appointed on 13 June 2019, and re-appointed on 22 October 2019 and 22 January 2020, “to consider the social and economic impact of the gambling industry.” Membership The Members of the Select Committee on the Social and Economic Impact of the Gambling Industry were: Baroness Armstrong of Hill Top Lord Parkinson of Whitley Bay (appointed 29 Lord Butler of Brockwell October 2019 and resigned 18 February 2020) Lord Filkin Lord Smith of Hindhead Lord Foster of Bath The Lord Bishop of St Albans Lord Grade of Yarmouth (Chair) Baroness Thornhill Lord Layard Lord Trevethin and Oaksey Lord Mancroft (appointed 3 October 2019) Lord Watts Baroness Meyer (resigned 3 October 2019) Baroness Wyld (resigned 26 September 2019) Declarations of interests See Appendix 1. A full list of Members’ interests can be found in the Register of Lords’ Interests: http://www.parliament.uk/mps-lords-and-offices/standards-and-interests/register-of-lords- interests Publications All publications of the Committee are available at: https://committees.parliament.uk/committee/406/gambling-industry-committee/publications/ Parliament Live Live coverage of debates and public sessions of the Committee’s meetings are available at: https://parliamentlive.tv/Lords Further information Further information about the House of Lords and its Committees, including guidance to witnesses, details of current inquiries and forthcoming meetings is available at: http://www.parliament.uk/business/lords Committee staff The staff who worked on this inquiry were Michael Collon (Clerk), Megan Jones (Policy Analyst) and Hannah Murdoch (Committee Assistant). Contact details All correspondence should be addressed to the Select Committee on the Social and Economic Impact of the Gambling Industry, Committee Office, House of Lords, London SW1A 0PW. Telephone 020 7219 4384. Email [email protected]. Twitter You can follow the Committee on Twitter: @HLGamblingCom. CONTENTS Page Summary 6 Chapter 1: Introduction 9 One inquiry, three committees 10 Our working methods 10 Other contemporaneous work 11 The devolved administrations 12 A word on terminology 13 Acknowledgements 14 Implementation of this report 14 Chapter 2: Background and the current situation 15 Gambling—the statutory definition 15 Betting and gaming 15 Lotteries 15 Gambling Commission 15 Legislative background 16 Budd Report 17 Children 19 Draft Gambling Bill and pre-legislative scrutiny 20 Post-legislative scrutiny 21 Political shift 21 Gambling prevalence 23 Social and economic benefits of gambling 24 Social benefits 24 Economic benefits 26 Chapter 3: The gambling industry: structure, development and current picture 28 Gambling industry 28 Size of the sector 28 Figure 1: GGY by Sector, October 2018 to September 2019 29 Offline gambling 29 Gaming machines 29 Figure 2: Machines GGY by sector location 30 Triennial reviews 31 Gambling venues 32 Casinos 33 Clustering of betting shops 35 Figure 3: Percentage of bookmakers located by geographical decile, as defined by the MHCLG’s index of multiple deprivation 36 Lone working in betting shops 36 Fixed Odds Betting Terminals 37 Online Gambling 39 Background 39 Technology 41 The range of online gambling 42 Unregulated online gambling 44 Prevalence of online gambling 45 Figure 4: Location of online gambling in the past four weeks 46 Young people and online gambling 46 Online problem gambling 47 Building safer online gambling 48 Assessment of new games 50 Online stake limits 50 Speed of play limits 52 Chapter 4: Regulation 54 The Gambling Commission 54 Box 1: The Commission’s statutory functions under the Act 54 Funding 55 Strategy 56 Strategy to reduce gambling harms 57 Licence Conditions and Codes of Practice (LCCP) 58 Enforcement 59 How the Gambling Commission is performing: the views of witnesses 62 The view of this Committee 63 Licensing of affiliates 65 The house edge 67 Regulation by local authorities 68 Chapter 5: Gambling-related harm 70 The scale of the issue 70 Figure 5: Distribution of problem gamblers in Great Britain by age and sex 71 British Gambling Prevalence Survey 72 Longitudinal surveys 73 The value to the industry: the greater the problem, the higher the profit 74 Figure 6: Percentage of online gambling industry profits derived from each category of gambler 74 The wider impact of gambling harms 75 A health issue 78 The Department with primary responsibility 78 Box 2: Government departments with responsibilities for gambling 79 Suicide 80 The dearth of statistics 81 Statistics through the coronial process 82 Training of doctors 83 Affordability checks 83 How to measure affordability 85 Data protection issues 86 The role of the banks 88 VIP schemes 90 Figure 7: VIP account and deposit comparator (online) 91 Abuse of VIP schemes 91 The industry view 92 Self-exclusion 95 Self-exclusion disregarded 96 GAMSTOP 97 A Duty of care 98 Disputes between customers and operators 102 Non-disclosure agreements 103 An Ombudsman scheme 106 Chapter 6: Children and young people 108 Young people and gambling prevalence 108 Young people and problem gambling 109 Loot boxes 110 Loot boxes and problem gambling 112 Redefining gambling 115 Underage gambling and problem gambling 116 Minimum age for gambling 117 National Lottery 117 Category D gaming machines 118 Children at racecourses 121 Chapter 7: Advertising 122 Facts and statistics 122 Regulation of advertising 123 Effect of advertising 124 Advertising and children 125 Sport and advertising 126 Complex sports betting 127 Interdependence of sport and betting 128 The whistle-to-whistle ban 129 A later watershed 130 A ban on all advertising of gambling 131 Sports kit and sports grounds 132 Bet to View 133 Other inducements 134 Direct marketing 135 Chapter 8: Research, education and treatment 137 Funding of research, education and treatment 137 A mandatory levy 137 Funding problems with a voluntary levy 142 GambleAware 144 Funding by GambleAware 145 Independence of GambleAware 146 Research 146 The Chadlington Committee 148 Availability of data for research 150 Education 151 Treatment 153 The National Problem Gambling Clinic 154 GamCare and Gordon Moody 155 Chapter 9: Lotteries, including the National Lottery 159 Society lotteries 159 The National Lottery 160 Gambling prevalence for lotteries 161 Lotteries and taxation 162 Lotteries and advertising 164 Summary of conclusions and recommendations 166 Appendix 1: List of Members and declarations of interest 174 Appendix 2: List of witnesses 177 Appendix 3: Call for evidence 186 Appendix 4: Extracts from election manifestos 189 Appendix 5: Acronyms and abbreviations 190 Evidence is published online at https://committees.parliament.uk/ committee/406/gambling-industry-committee/ and available for inspection at the Parliamentary Archives (020 7129 3074). Q in footnotes refers to a question in oral evidence. The prefixes ZGDA and GAM refer to items of written evidence. The prefixes are interchangeable and the same evidence will be found under each number in both series. 6 SOCIAL AND ECONOMIC IMPACT OF THE GAMBLING INDUSTRY COMMITTEE SUMMARY Summary One third of a million of us are problem gamblers. On average, one problem gambler commits suicide every day. The young are most at risk: • 55,000 problem gamblers are aged 11–16; • for girls aged 11–16, the rate of problem gambling is twice that of any other female age group; • for boys, the rate is three times the rate for adults; • for all of them, gambling is illegal, yet such efforts as the industry makes to prevent it are altogether unsuccessful. The harm goes wider: for each problem gambler, six other people, a total of two million, are harmed by the breakup of families, crime, loss of employment, loss of homes and, ultimately, loss of life. The gambling industry spends £1.5 billion a year on advertising, and 60% of its profits come from the 5% who are already problem gamblers, or are at risk of becoming so. Addiction to alcohol or drugs is high profile and highly resourced. The comparable harm caused by gambling addiction has not received the same attention and is only now beginning to be recognised. How did we get to this state? Until the Gambling Act 2005, public policy decreed that while Parliament did not want to ban gambling, it would do nothing to stimulate it. All that changed with the radical Budd Report of 2001 which laid out a blueprint for the liberalisation of gambling, promoting consumer freedoms to choose in a wider competitive gambling market. The Government accepted this departure, and it was on this that the 2005 Act was based. A second revolution, unforeseen by policy makers at the time, was the almost universal adoption of the smart phone and other devices which enabled gambling 24/7—whenever and wherever the gambler wanted, totally unsupervised. Gambling operators have made hay exploiting the laissez faire regime that has existed hitherto, while successive governments and regulators have failed to keep up with the revolution in the UK gambling sector. Our report demonstrates the wholly reactive nature of regulation since gambling was liberalised. The unscrupulous methods and ingenuity of some gambling operators makes for shocking reading. Their tactics are to change their working methods just enough to avoid more regulation being imposed on them from outside; and to date that has worked well. This cannot continue. We have made over fifty recommendations which, we believe, will begin to address the misery that a gambling addiction can visit on individuals and their families and friends. At any age, affordability is key.