Culture, Media and Sport CommitteeWritten evidence submitted by the Methodist Church in Great Britain

The Position of the Methodist Church on Gambling

1. The Methodist Church in Britain is delighted to respond to the Culture, Media and Sport Committee’s consultation on the implementation of the Gambling Act 2005.

2. Methodists have been concerned with the impact of gambling on the poorest and the most vulnerable for over two centuries. Originally this manifested itself in a prohibitionist stance towards gambling activities. In recent decades the Methodist Church has moved away from absolutist viewpoints and instead focuses on the personal and social harm that gambling can cause. In doing so we have worked closely with our ecumenical partners, especially the Salvation Army, the Evangelical Alliance, Quaker Action on Alcohol and Drugs, CARE, the Church of England and the Church of Scotland.

3. We engaged with the 2005 Act, not with a view to prohibition, but to ensure effective regulation, prevention of proliferation of gambling activities and protection of children and the vulnerable. We have continued to engage with regulatory bodies following the Act and are pleased to respond to this inquiry. We wish to see a well-regulated gambling industry committed to minimising the harm that gambling undoubtedly has the potential to cause.

4. Methodists and partners have consistently called for the debate involving industry, faith-groups and others to be grounded in a solid evidence base. We welcomed the creation of the Gambling Commission (hereafter simply called the Commission) and affiliated bodies, and the research undertaken since the 2005 Act. The recent Gambling Prevalence Survey 2010 enables comparison with the (initial) 2007 Survey. This serves as a landmark of research into gambling, underscoring the importance of the evidence-based approach.

Failures of the 2005 Act and Conclusions from the Gambling Prevalence Survey 2010

5. The Gambling Act 2005 specified three clear objectives: keeping gambling crime free; making sure that gambling is fair and open; and protecting children and vulnerable adults”.1 Evaluating the success of the first two objectives mostly goes beyond Methodist expertise, but the implementation of the Act has manifestly failed with regard to the third.

6. It is clear from the 2010 Prevalence Study that problem gambling is on the increase, although the industry and perhaps disappointingly the Commission chose to play this down.

7. “Statistical significance” here means that these survey results would not have been seen if there were no rise in problem gambling, even if the survey were repeated 20 times. This is a very stringent test of data, which all agree the Prevalence Survey problem gambling screen achieved. It is not credible to claim that problem gambling has not increased since 2006.

8. When questioned on the Draft Gambling Bill by the Joint Committee, the Rt. Hon. Tessa Jowell MP said that if there were an increase in problem gambling, then the Act would have failed. In light of the Prevalence Survey, this would imply that the Act has indeed failed.

9. The rise in problem gambling appears to be linked to the rise in gambling participation. Conversations with the Commission and industry following the publication of the 2010 Prevalence Survey suggest that around 1 in 100 customers of the gambling industry will be significantly harmed. We look forward to secondary analysis of the data which explores the nature of the relationship between participation levels and numbers of problem gamblers.

10. Further industry expansion is only compatible with the aims of the Act if accompanied by a decrease in the proportion of problem gambling. Otherwise, it will inevitably lead to increased levels of problem gambling. As a Church we are primarily interested in reducing the harms to people’s physical and mental health, relationships, housing situation, as well as their risk of getting into debt.

How effective the Act has been in its core objectives to:

Ensure that gambling is maintained crime-free and conducted in an open and fair manner;

Protect children and vulnerable people from the adverse effects of gambling;

Update the legislative framework with regards to online gambling

11. Openness and fairness apply at different levels. Those aspects relating to the interaction of gamblers (as customers) with the industry go beyond Methodist expertise. But fairness also includes ensuring that gambling, especially its particularly addictive forms, does not proliferate so as to cause serious harms to the vulnerable.

12. The relationship of crime to gambling goes beyond specific examples of crime connected with gambling establishments. Combating crime must be seen against the localism agenda. The Methodist Church welcomes strengthening of powers that enable communities to limit harms in their areas. This should include the power to limit the proliferation of betting shops in high streets, particularly in poor or otherwise vulnerable areas. Such local powers would complement the components of the Police Reform and Social Responsibility Bill enshrining robust powers in combating alcohol-related disorder.

13. As problem gambling is associated with debt, the issue of credit providers and “loan sharks” should also be considered alongside the dangers of particularly addictive forms of gambling, as part of local crime reduction strategies.

14. There has been no comprehensive survey of youth gambling in Britain and this is urgently needed. But even the existing evidence makes it clear that early exposure to gambling is linked to later patterns of problem gambling. By implication, British children are potentially at greater risk of problem gambling than children in other countries. Furthermore, it is likely that children’s gambling (both legal and illegal) has increased.

15. We believe that, as protection of children should be a primary aim of the legislation, the collection of authoritative data on children’s gambling (both legal and illegal), and their rates of problem gambling is necessary. The link between youth gambling and later problem gambling also needs explored in the context of Britain’s unique position in allowing children to gamble legally: category D gambling machines have no age restriction.

16. Any examination of the Gambling Act 2005 should consider whether the Act fails to protect children sufficiently by permitting them to gamble on Category D machines. We, along with many other churches, charities and academics, would support moves to prevent commercial gambling aimed at children.

17. The Commission’s mystery shopping exercise showed that 98/100 high street bookmakers failed to prevent 17 year-olds from placing bets. Unless rigorously enforced, the rules on underage gambling are often ignored. We welcome the Commission and the Association of British Bookmarkers’ steps to improve compliance in this area but remain concerned that children under 18 will not consistently be prevented from gambling, both in bookmakers and other gambling venues which have not been subject to Commission investigation.

18. Discussions with the industry have noted that staff working alone in a bookmakers’ do not feel empowered to monitor potential underage gambling effectively: this would require them to move from behind the counter and to feel safe when challenging a customer. While the industry has introduced tough sanctions on workers found not to be enforcing age-regulations it has been less keen to take more expensive steps, such as ending lone-working, which would ensure a culture of rigorous enforcement.

19. In other fields, when dealing with children, the precautionary principle is normally applied, recognizing both their vulnerability and our increased responsibility towards them. The lack of base line information, the troubling levels of compliance and the lack of research all suggest the opposite is the case in the formulation and implementation of policy in Britain relating to children’s gambling.

20. The issues around vulnerable people have been discussed in paragraphs 5–10 above. The findings around the failures of the 2005 Act to increase opportunities for safe gambling are a serious concern, as this was a key intention of the work preceding the formulation of the Act.

21. One of the challenges of the online gaming environment is the loophole in the regulation of offshore gambling. At present, Britain only requires companies wishing to provide online gambling services or advertisements to obtain licenses for key equipment (computers etc). The Government has been slow to act on this situation. The Methodist Church would strongly encourage Government to introduce a requirement that all companies operating in Britain act under license in the full sense and not just with respect to equipment.

The financial impact of the Act on the UK gambling industry

22. Gambling is not an industry where “light-touch” regulation should be the default assumption, as its potential to be harmful and addictive is well understood. Financial considerations should never have the sole or last word in legislation. The Commission has declared the relevance of the principle that “the polluter pays”. This is particularly relevant because the features that make gambling exciting—eg that it is fast, involves repetitive play and the excitement of near misses etc - are identical in type to the features that cause problem gambling. The difference is a matter of degree.

23. Claims of financial impact need to be assessed objectively. There have been suggestions that the gambling industry has suffered financial harm from the 2005 Act. The Methodist Church and ecumenical partners have expressed an interest in seeing evidence for this claim, but this has not been forthcoming. In particular, the Smoking Ban was introduced in 2007 and it is likely that this is a prime cause of any significant fall in industry profits.

24. Worryingly, the evidence shows that, contrary to beliefs that the recession might limit gambling, it has continued to rise including problem gambling. This is at a time of greater risk to gamblers’ finances. So it is hard to see how the industry’s profits can be falling.

The effectiveness of the Gambling Commission since its establishment, and whether it represents good value for money

25. The Commission is an intrinsically valuable body, due to its independent role and its use of a risk-based approach embedding the role of evidence-based action, which is necessary both strategically and tactically. The Methodist Church also notes the Commission’s commitment to meet regularly with churches and charities concerned with gambling, (rather than just the industry), and to consult widely. The Church would like to see this developed further.

26. One particular example of value for money the Methodist Church would like to highlight is the Commission’s role in overseeing the Gambling Prevalence Survey. This has become an important part of national efforts to curb the growth of, and harm caused by, problem gambling. In a survey of this nature, it is important that there is a baseline for future comparison. The 2007 survey set this baseline and in an important sense the 2011 survey was the first opportunity to assess trends and harms in gambling in Britain.

27. The effectiveness of what has been achieved by the Commission should not be undermined at this point where a satisfactory profile of problem gambling is emerging, nor should the money already spent be wasted by discontinuing necessary work where problem gambling is on the increase. But Government funding for it has been removed. This has been done despite promises during the passage of the 2005 Act that the prevalence survey would happen every three years and be paid for by Government. This was done specifically so as to allay the concerns of groups like the Methodist Church with concerns about the Act.

28. The Methodist Church believes that Government should reverse its decision to remove funding from Prevalence Survey. If this is not done, the Survey should not be directly funded by industry but by fees. It is also vital that future studies continue to be comparable.

29. The Methodist Church neither endorses nor criticises the tripartite structure of the Responsibility in Gambling Trust (now GREaT Foundation), Responsible Gambling Fund and Responsible Gambling Strategy Board. But we have found it confusing. However, in a system where the industry funds key areas of prevention and treatment, it is important that it does not acquire excessive influence. The danger of putting both the industry and regulators into difficult situations involving allegations of conflict of interest has been noted.

30. The Methodist Church is clear that, if the present system of voluntary donation does not lead to the industry providing adequate funds for the prevention and treatment of problem gambling, there remain strong grounds for implementing a levy.

The impact of the proliferation of off-shore online gambling operators on the UK gambling sector and what effect the Act has had on this

31. The Methodist Church is concerned that an attempt to advantage UK-based gambling industry may lead to a contradictory and unworkable attempt at increasing liberalisation of gambling domestically, while aiming to introduce greater controls on internationally-originated gambling. Allegations of any ensuing difficulty in maintaining an international regulatory framework may act as the thin end of the wedge for calls for deregulation in the UK following claims that regulation in general is proving too hard to enforce.

32. Ultimately, the Church is concerned with harm resulting from gambling, not with revenue. The location of a particular computer that provides the opportunity to gamble is not fundamental. It is regrettable that certain major UK based companies, e.g. Sky and William Hill, have chosen to serve their UK customers from international locations to avoid regulation. There is a need for better offshore regulation, not domestic deregulation.

Why the Act has not resulted in any new licences for casinos or “super” casinos

33. Super casinos received a thorough debate in Parliament and in public. The message was clear: the public at large had no appetite for them. This was the consensus during times of economic growth: super casinos are even less appropriate at a time of recession and cuts in public spending.

The effectiveness of the classification and regulation of gaming machines under the Act

34. Despite the detail of the classification system, as designed it reflects a simple and realistic separation into venues, gaming environments and hard gaming locations. Worryingly, these distinctions are increasingly being eroded. For example, the spread of new kinds of machines have made many adult environments such as pubs essentially equivalent to what would previously have been considered a gaming environment.

What impact the Act has had on levels of problem gambling

35. As clearly shown by the Prevalence Survey 2010, the Act has failed to stop problem gambling rising along with general levels of gambling. As stated in paragraphs 5–10 the Act must be judged to have failed in its mandate to protect the vulnerable. Methodists would add its failure to protect children to its shortfalls.

Conclusion—reason for the failure of the 2005 Act to promote safe gambling and limit problem gambling

36. The key concern is the use—or absence of use—of evidence in policy making. This data is required to understand developments in the industry and patterns of gambling behaviour. We therefore welcomed the provisions of the 2005 Act allowing for the creation of a high quality evidence base upon which to make regulatory decisions, gathered and analysed by the research community and supplemented by specially commissioned research where appropriate.

37. The Commission within its resource constraints has sought to build this evidence base, and we are grateful to them for that. Its data and expertise are extremely useful when trying to understand the harm caused by gambling to society. However, the Government’s apparent reluctance to act on clear findings raises the worrying concern that policies which favour short-term industry concerns are being prioritised.

38. One example was the change in Category C machines in 2009. The rules around machine classifications are meant to follow a three year cycle. But the Category C review was brought forward by around two years following a claim that change was needed to bring additional profit to the industry, notably in seaside resorts hit by the recession. Evidence for this special need was not provided. Government doubled the stake to £1 and increased the prize to £70. Another recent example was Government’s announcement of its plans to relax rules on the number of Category B3 machines allowed in arcades and double the stake from £1 to £2.

39. These two cases show gambling policy being made without research to establish whether it risks causing increased problem gambling. Even more seriously, the recent plans to liberalise B3 machines were the first examples of policy to be formulated after the results of the Prevalence Survey 2010, establishing the rise in problem gambling. This step towards promoting the industry’s interests was in directly the opposite direction to the evidence.

40. There are two possible explanations, both worrying: either the Government has decided to abandon evidence-based policy making in the case of gambling, or it has decided that the available evidence does not given sufficient guidance for policy making. If the latter is the case, the Methodist Church would request a clear statement of this view along with a description of what would constitute criteria for intervention. However, the Church holds to the view that the findings of the Survey are already robust and clearly show the case for action.

Suggestions

41. It is important that all involved parties clearly understand how the ongoing cooperation between DCMS, the Commission and the Minister works. This should make clear how policy decisions follow on from clear reasoning on an established evidence base.

42. Just as Government is committed to transparency through measures like a register of hospitality, a similar register of meetings held and their results would allay concerns raised by various parties in this debate around fairness.

43. In view of ongoing challenges in implementing some of the 2005 Act, a commitment to regular reviews around strategy and resource allocation, giving rise to a clear and realistic plan around implementation and enforcement, is essential.

June 2011

1 www.culture.gov.uk/what_we_do/gambling_and_racing/3305.aspx accessed 27/06/2011

Prepared 23rd July 2012