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18 Mar 2009 : Column 245WH—continued
It is some time since the Gambling Act was passed. I call upon the Government to defend our regulatory regime and to argue in Europe for tough codes that the whole of Europe will abide by. The situation will change worldwide, and I predict—perhaps I shall place an online bet—that, in President Obama’s first term, US regulation and law will change, because arguments have already begun there about how prohibition does not work. Indeed, many of the problems with sports betting,
which is completely unregulated in the US, and to which the hon. Member for Norwich, North (Dr. Gibson) referred, are far worse there than in the UK.
Philip Davies: I agree with the hon. Gentleman that the Government should do more to support Betfair, Ladbrokes and other UK betting organisations that are trying to access the European market. If the single market means anything, it should allow them that access. The Prime Minister is a renowned anti-gambler, unless we are talking about the nation’s finances, in which case he is prepared to gamble the lot. Does the hon. Gentleman think that, because the Prime Minister is supposedly anti-gambling, the Government are reluctant to get involved?
Mr. Grogan: I am a keen student of the Prime Minister’s character and motivation, but I think that the hon. Gentleman is perhaps being a little unfair. I mentioned the revolution in betting tax; who abolished the betting tax but the very same Prime Minister? I would not say, therefore, that that is the reason for the Government’s reluctance. However, the hon. Gentleman was right to point out that many of the traditional bricks-and-mortar gambling firms, such as Ladbrokes and William Hill, are now as much into online gambling as anyone. The Government should be as vigorous in trying to open up European betting markets as they have been in opening up energy markets.
We must face the fact that many of the traditional betting companies, such as those represented by the British Amusement Catering Trade Association, feel a little bruised, because while they have been very well regulated by the Gambling Commission, a large section of offshore online gambling has not. The commission should raise its game. We all look forward to the Hampton review, and I think that we have a friend in the Minister, but the Government need to engage with the issue much more than they have in recent years.
Mr. David Wilshire (in the Chair): Before I call Mr. Greenway, I remind everybody that I am very keen to call Mr. Foster at half-past 10.
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Mr. John Greenway (Ryedale) (Con): It is a pleasure to be here with you, Mr. Wilshire. You will know from our conversation in Paris, last Friday, that I might have been in Azerbaijan right now. When I decided that I could not go and discovered that we would be having this important debate, I realised that I had made the right decision, because this is an extremely important issue affecting many of our constituents—many more than perhaps we give credit for. The Chamber will know that I chaired the Joint Scrutiny Committee on the Gambling Act 2005 and that I am the chairman of the Responsibility in Gambling Trust, to which my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), whom I congratulate on securing this debate, referred. I was also a very strong supporter of the white list and, in particular, the Alderney Gambling Control Commission’s successful application to be on it.
Connected with online gambling are many issues, myths, facts and truths that are not fully appreciated. I want to focus on regulation. In the UK, the general consensus has been—the Joint Scrutiny Committee
supported this view—that it was right that the Gambling Act sought to regulate the online gambling sector. However, as the hon. Member for Selby (Mr. Grogan) just said, the majority of online operators have not been regulated in the UK, because of the level of tax. We should accept that and move on from that argument. We are where we are. The key question is: if online operators, based outside the UK, seek to exploit the British market, what regulatory arrangements are appropriate and possible to protect UK punters and consumers? What standards are appropriate in respect of consumer protection, the integrity of sport, to which a number of speakers referred, and the contributions made to organisations by UK operators, such as the levies to my trust, British horse racing and so forth?
The white-list approach, to which my hon. Friend the Member for Bromley and Chislehurst referred, is based on the principle of equivalence of UK regulations for jurisdictions on the white list. It is based on very high standards in respect of the rights of consumers to complain and pursue their rights, of confidence that bets laid will be paid, of the integrity of the financial system being betted on and of pre-agreed limits on gambling activity. Good, regulated sites do all those things already. Sites should deal with money-laundering regulations properly, and we should ensure that applicants for licences are fit and proper and that not everybody is given one. Furthermore, sites should provide for mystery shopping, to which he referred, and contribute to research, education and treatment. Those are licence conditions for UK operators. All that was agreed with the Alderney Gambling Control Commission and with the Isle of Man, which was white-listed about 18 months ago. I cannot speak for the agreement with Antigua, but I would be surprised if the same high standards had not been negotiated by the Minister and his team.
Some colleagues mentioned sports betting. If there is haemorrhaging from the main UK industry, through betting shops or the Betfair site, a contribution should be made back to sport. That would be difficult to negotiate, but both main Opposition parties and the Government would be generally supportive. It is critical, however, to have proper memorandums of understanding on integrity and to ensure that suspicious betting patterns are reported. The hon. Member for Norwich, North (Dr. Gibson) was right to refer to that.
Everyone understands that the Gambling Act—this was the point of the white list—was designed to prohibit operators based outside the European economic area from operating in the UK by offering gambling services to UK consumers. However, the Government’s view has always been that there is no legal basis for a ban on operators based in EEA jurisdictions. This is the nub of the problem. Not all other EU countries are quite so open: the Schaldemose report has been referred to, and a highly protectionist attitude exists in a number of other EU Governments, with the prohibition of online gambling altogether, which seems to be in clear breach of EU competition and internal market law. The Government should be more robust in pursuing the interests of British operators—colleagues have mentioned Betfair and Ladbrokes—which should be able to pursue the opportunities opened up by the internal market.
A considerable number of online operators are based in other jurisdictions, especially in Malta and Gibraltar. In my three years as chairman of the RIGT, I have been arguing for common standards across Europe on all the issues that I have mentioned. In particular, I want contributions to research, education and treatment for problem gambling. A number of operators in Gibraltar and some of the biggest names in the online world make voluntary contributions already. The Minister knows that we have managed to agree with the industry that research, education and treatment will be funded to the tune of £5 million a year for the next three years, and we look forward to him announcing, probably in April, after Easter, that he will agree to that.
Consumer protection is paramount, but I despair at the lack of progress. It is not rocket science. More should be done by EU Governments. Instead of pursuing this protectionist, beggar-thy-neighbour, finger-in-the-dyke attitude, they should recognise that these activities will happen and protect their consumers through a common code and common standards. The RIGT created the GambleAware website, which has been visited by more than 350,000 people. Its purpose is to raise consumer awareness: to ensure that people understand how to bet on online sites, are aware of their rights and avoid becoming the problem gamblers of the future.
My time is running out, Mr. Wilshire, but you and I are used to having to make brief contributions, and I have had rather more time today than I normally would have in Strasbourg. However, I will say in conclusion that gambling activity will occur. The issue is how we regulate it and how we get common standards. Above all else, if we are concerned, as my hon. Friend the Member for Bromley and Chislehurst was when he introduced the debate, to ensure that there is a safety net for people who have a problem with their gambling, we should be equally concerned to prevent people from becoming problem gamblers in the first place. That is the feature of the RIGT’s work on which we must build. We must use some of this new money to raise awareness and improve education and prevention. Once again, I am grateful to my hon. Friend for giving us the opportunity to make these important points today.
Mr. David Wilshire (in the Chair): Anybody who put money on us reaching the hon. Member for Bath (Mr. Foster) by half-past 10 will have won.
10.30 am
Mr. Don Foster (Bath) (LD): I am delighted to serve under your chairmanship, Mr. Wilshire. Like others, I wish to congratulate the hon. Member for Bromley and Chislehurst (Robert Neill) on securing the debate and on his excellent contribution. I have enjoyed and learned from the contributions of many hon. Members. I particularly enjoyed hearing about how the hon. Member for Selby (Mr. Grogan) has looked after the inheritance bequeathed to him by his father.
May I also say how delighted I am to be making my contribution immediately after the hon. Member for Ryedale (Mr. Greenway)? All Members of the House, regardless of party, owe him a great debt of gratitude for the enormous amount of work that he has done in this area and for his real commitment to addressing not only some of the many issues that have been raised but the concerns that many of us have about the large
number of people who fall prey to the problems of gambling addiction. He is aware of the importance of education and research to prevent such addiction and of the work that is done to treat those who get into that sad condition.
Internet gambling is very big business. It is estimated that there are about 6,500 such websites around the world. Sadly, 5,500 of those are in no way regulated. Only about 1,000 websites are regulated by one jurisdiction or another around the world. Punters spend about £12.5 billion every year. Fortunately, some 80 per cent. of that is spent on a regulated website. We have real concern about the very large number of websites that are not regulated anywhere in the world.
However we define online gambling, we have to acknowledge that it is at the harder end of gambling. Whether we look at the prevalence studies, the telephone calls made to the various helplines or the number of hits received by online support services, internet gambling comes very high on the list of those types of gambling that are likely to lead to addiction. Therefore, we are talking about the hard end of gambling. It is very big business, which, sadly, is largely unregulated.
Much of the debate has rightly had to concentrate on areas in which there is regulation and in which we can have some influence. I am talking about the influence that we can have in Europe. Across Europe, far too many countries seem to be protectionist about their own gambling companies rather than being concerned about cross-EU regulation that would allow for the protection of people. I was disappointed with some of the discussions that took place in the lead-up to the debate in Europe on 10 March. The European Parliament must consider some of these issues again and far more seriously, with a real concern about the problems that are being caused rather than about protecting individual companies.
Moreover, we must consider some of those areas that have been touched on in the debate. I am grateful to the hon. Member for Bromley and Chislehurst for drawing our attention to the various concerns that I raised in an earlier debate in February and for pushing the Minister to get some of the answers that I, too, sought during that debate. Those who have studied that debate will know that we were debating white listing. The hon. Gentleman rightly said that there were issues relating to those other jurisdictions outside the UK that are within the European economic area, and we must return to those. However, he rightly concentrated on those non-EEA jurisdictions that are deemed to be white-listed.
To get white-listed status, a jurisdiction must prove to the Government that a set of regulatory standards are in place that are similar to and match the aims and objectives of our own regulatory regime. If a jurisdiction gets that status, they have the great benefit of being able to advertise their services within the United Kingdom. As a result, they will be able to pick up a large number of punters from the UK. About one in 10 adults in this country has been involved in some form of online gambling, whether it is through their computer, their mobile phone or their interactive television. Therefore, white-listed companies are given the privilege of being able to advertise within this country and, presumably, they get great benefit from it. We know that from some of the figures that we have seen.
Some 11 per cent. of total worldwide internet betting—equivalent to about £1.4 billion—comes from within the United Kingdom. Therefore, it is big business for white-listed countries. Yet, can we be convinced that we have done enough to secure the right deal with them and that we are doing the right investigation to see that they are living up to the standards that we expect of them? We know that one third of internet gambling sites failed the earlier mystery shopper test, which could have allowed under-18s to gamble on those sites. More worryingly, since September 2007, the Gambling Commission—the body described as “moving ahead gingerly”—has done no mystery shopping in any of those white-listed jurisdictions. When we had the debate in February, the Minister assured us that mystery shopping was going to recommence in the near future. His word was—and he is a good user of this word—“soon”. My first question to the Minister is: can he tell us whether mystery shopping in white-listed jurisdictions has now begun? If not, when does he expect it to begin?
When I asked the Minister how many prosecutions there had been, he was unable to answer. He has had over a month, so I am sure that he will now be able to tell the Chamber how many prosecutions there have been under the legislation in respect of this issue. Somewhat worryingly, he also said in February that he could not tell us what costs the United Kingdom has incurred as a result of the white-listing procedure. Again, he has had over a month. I am sure that in a few minutes he will tell us how much cost there has been.
More significantly, I raised with the Minister the fact that if we were facing costs to enable white listing we had to have a mechanism of getting back some of that money. Therefore, will he please tell us how much we will get back, what the mechanism will be and what procedures will be put in place?
Finally, in that debate, I said to the Minister that although there is a requirement in those jurisdictions to contribute to research, education and treatment, the contribution did not have to be to the United Kingdom. We have already heard from the hon. Member for Bromley and Chislehurst that all those operating out of the jurisdiction of Alderney currently contribute, as do a number from Gibraltar. I welcome that, but it is not compulsory. There should be a requirement to contribute, and I should like to know what the Minister is planning to do in that regard.
In the minute or so left, may I also say to the Minister that I share the concerns about sports betting? Concerns have been growing ever since the Hansie Cronje case. I want to pay huge tribute to Betfair for the way in which it has been so open—desperate almost—to work with governing bodies to pass on information. Others are now doing so. Of the 47 cases investigated by the Gambling Commission, 35 arose as a result of information from gambling companies. I welcome the fact that they are acting.
Will the Minister acknowledge that gambling on the internet is growing? I suggest that it is growing for two reasons. The first is that more people have access to computers, but the second—this is my concern—is that the Government have failed to act quickly in respect of softer gambling, whether in supporting bingo, as they did belatedly, or in sorting out stakes and prizes, which they are also doing belatedly. By creating problems at the softer end of gambling, the Government are driving
more people towards the harder end, whether it is fixed-odds terminals in betting shops or internet gambling. I urge him to say that he will consider regulation, white listing and issues within the EEA and European Union. However, he must recognise that action on softer forms of gambling is also important, and I urge him to continue considering that as well.
10.41 am
Mr. Tobias Ellwood (Bournemouth, East) (Con): It is a pleasure to participate in this important debate. I congratulate my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) on securing it and on his opening remarks. It is interesting that almost every one of us who has spoken began by admitting an interest in gambling, in some form or another, at a younger age.
The debate touches on the bigger issue of internet use, which should not be underestimated. It affects every walk of life. Its impact is considerable and permanent. It is changing how society functions. The 9 o’clock watershed is anathema on the internet. It does not happen. The internet does not sleep; it is always there, and it is challenging some of our values as a society. That obviously applies to the subject that we are discussing.
The Conservative approach is simple. We support forms of gambling with the correct level of legislation, whether they are penny arcades, bingo, land-based casinos or on the internet. We should see gambling as a form of entertainment, where one is likely to lose, rather than a form of investment, where one thinks one might win. People who go in with that approach will not go far wrong.
The problem that we face, however, is that the playing field out there is uneven, a fact emphasised by a number of hon. Members. The UK approach is to allow internet companies to list in three ways: directly through the UK, through the so-called white list of countries—I will come to the introduction of Antigua and Barbuda a couple of weeks ago—and through the European economic area. In each of those cases, we find different standards for the level of gaming required. That cannot be right. Surely there should be one acceptable level agreed by all member states in the EU and any other jurisdiction with an interest in advertising here in the UK.
The EU market is flawed. In Germany, for example, internet gambling is outlawed entirely. In France, Sweden, Austria and other countries, it is nationalised to the point that UK companies cannot get into the market; in fact, it is illegal for them to try. By contrast, Unibet, an Austrian company, advertises and operates freely in the UK, whereas any UK company would run into severe problems getting into Austria. Le Croupier, a French-based company, is setting up in the UK, taking advantage of our open market while enjoying a monopoly back home. Surely that cannot be right. The recent Schaldemose report, by an EU committee with which the Minister should be familiar, endorsed the uneven playing field. It was British MEPs alone—I think they were Conservative MEPs—who put in a minority report to say, “This isn’t the way forward. This isn’t what we should be doing.” I hope the Minister will be able to comment.
The scale of the problem is huge. The hon. Member for Bath (Mr. Foster) and I may have slightly different statistics, but they amount to the same thing. I understand that there are 7,000 internet gambling companies online, about 6,000 of which are unauthorised. The Government seem happy to sit idly by while nothing is done to stop the surge of unregulated online gambling. With each year that passes, more people become addicted to such sites, which offer little consumer protection, an issue on which my hon. Friend the Member for Ryedale (Mr. Greenway) has done much work. I offer my support for the evolution taking place through the Responsibility in Gambling Trust to ensure that research, education and treatment are given the respect and finance that they deserve.
The 2007 prevalence study indicates the growth of internet gambling. Internet gambling alone is at 7.4 per cent., but spread betting is at the worrying level of 14.7 per cent. I met representatives of the Financial Services Authority—oddly enough, spread betting is overseen not by the Gambling Commission but by the FSA—who were not aware of any of the good work done by my hon. Friend the Member for Ryedale. They were not aware of the importance of ensuring a safety net for people. In fact, they were not even aware that there were spread betting operations in the UK that are not registered here and that they should be examining. The Minister needs to recognise that closer co-operation is needed between the Gambling Commission and the FSA to ensure that all bases are covered. Companies are slipping through the gap.
The Gambling Commission also seems unable to cope with simple policing of the internet, as the hon. Member for Bath pointed out. I am curious to know whether the mystery shopping approach of visiting various websites to ensure that they meet standards has recommenced. I would also like to know how much it costs the Gambling Commission. I understand—I do not know whether it is true—that about one third of all sites, even British-registered ones, do not meet the standards required. The reasons may be technical rather than due to the full corruption that we see at the worst end of the scale, but nevertheless, if we have minimum standards, surely they should be met.
Mr. Don Foster: Does the hon. Gentleman agree that it is extremely bizarre that the Government are refusing even a freedom of information request for the names of those websites, so that people can be warned?
Mr. Ellwood: The hon. Gentleman makes an important point that I remember discussing in some detail. Rather than investigating the issues, we have widened the number of companies that we need to examine by introducing Antigua and Barbuda, a country in which, as my hon. Friend the Member for Ryedale said, dodgy practices go on anyway, what with Allen Stanford and cricket financing.
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