Gambling

Written evidence submitted by the GREat Foundation (GA 17)

1.0 INTRODUCTION

1.1 This submission is made on behalf of the Trustees of The GREaT Foundation.

1.2 The GREaT Foundation was created in 2009 as the dual, funding raising and distribution, responsibilities of the Responsibility in Gambling Trust (RIGT) were split.

1.3 Thus GREaT became part of what is now called ‘the tripartite structure’ whereby GREaT raises voluntary donations from the gambling industry, the Responsible Gambling Strategy Board (RGSB) sets strategy in th e areas of research, education and treatment and the Responsible Gambling Fund (RGF) receives and independently distributes the funds raised by GREaT .

1.4 The tripartite str ucture was recommended by the G ambling Commission as part of a governance structure to facilitate a 3 year voluntary structure as an alternative to a statutory levy to fund research, education and treatment.

1.5 As part of the voluntary structure the gambling industry guaranteed to raise a minimum of £5m per annum for 3 years – 2009/10, 2010/11, 2011/12. In addition aspirational targets, above the minimum, were set for 2010/11 (£6m) and 2011/12 (£7.2m).

1.6 GREaT has a legally binding D istribution A greement with RGF and certain large operators agreed to underwrite the £5m per annum commi t ment. This commitment was communicated to the then DCMS Minister (Gerry Sutcliffe) in writing.

1.7 The 3 year voluntary agreement thus ha d full ministerial and Gambling Commission support.

1.8 The current 3 year commitment to underwrite and raise a minimum of £5m per annu m, together with the GREaT/RGD D istribution A greement, expire s in March 2012.

1.9 In 2009/10 the gambling industry raised £5m, including a small underwrite in 9 months. In 2010/11 it raised £5m+, without recourse to the underwriters, from voluntary donations , and is on track to do so again in 2011/12.

2.0 RESPONSIBLE GAMBLING

2.1 The British gambling industry (the industry) has a worldwide reputation for integrity and for remaining largely crime free.

2.2 The industry has always supported the concept of responsible gambling and through self-regulation introduced self-exclusion policies and helpline referral posters and stickers in gambling premises. Many large operators are also individually accredited by GamCare in this respect.

2.3 The GREaT Foundation has created, and continues to develop, the Gamble Aware website which gives information on responsible gambling and easy referral to counselling services if individuals feel they have a problem with their gambling and require further help.

2.4 GamCare and Gordon House (now Gordon Moody Association) ( residential care) were created and developed with industry donations prior to the Gambling Act 2005 and the National Problem Gambling Clinic in Soho was established in 2008.

2.5 Thus it is fair to say that the British gambling industry is also a world leader in socially responsible gambling and has been so for many years, indeed well before the Gambling Act 2005 and the creation of the Gambling Commission.

2.6 The industry is rightly proud of its achievement of raising £5m+ per annum in voluntary contributions in the middle of a severe recession, which has put huge pressure on consumer facing businesses.

3.0 PROBLEM GAMBLING

3.1 GREaT is of the view that t here is no evidence to conclude that the Gambling Act 2005 has any impact on levels of problem gambling in Britain.

3.2 In the recent (2010 ) Prevalence Study there was an increase in gambling participation but no clear statistically relevant , increase in the incidence of problem gambling in Great Britain. Furthermore the report’s authors were unable to say if this was an on-going trend or a temporary fluctuation.

3.3 78% of respondents to the Prevalence Study said that ‘fun’ was their primary reason for gambling, which is now well established as a largely harmless mainstream leisure pursuit.

3.4 As stated above the gambling industry takes its (social) responsibilities very seriously indeed. As well as actively promoting responsible gambling the industry voluntarily donates £5m to be spen t on research, education and treatment in this area.

3.5 The incidence of problem gambling in Britain is very low by international standards and at circa 400,000 it pales into social insignificance when compared to smokers (13m), those with alcohol or drug problems (6m) and obesity (16m). Indeed a recent Prevalence Study in Ireland showed a higher rate of problem gambling than in Britain despite the fact that Ireland has no full scale casinos and no FOBTs. The study used the same methodology as the British study. This indicates that the type of gambling allowed or the tightness of regulation is not a major determinant of the level of problem gambling.

3.6 Despite the low level of problem gambling in Britain and an industry that has proactively adopted measures and funding, to promote responsible gambling , prevent problem gambling and identify and treat those who develop problems, GREaT is of the opinion that there has been an unnecessary and damaging over focus on the issue of problem gambling.

3.7 The Budd Report (2001) and the DCMS reply "A Safe Bet For Success" (2002) saw the Gambling Act 2005 as balancing legitimate commercial interests and effective regulation / protection of the vulnerable.

3.8 The worrying over focus on the issue of problem gambling is wholly disproportionate to the harm caused and has materially damaged legitimate commercial businesses which are an integral part of a modern, service based, British economy. The gambl ing industry in Britain provides over 100,000 direct jobs (250,000 indirect l y) and £1.4b in tax revenues.

3.9 GREaT believes that the time has come for a more mature debate about gambling which is evidence based and balances the rights of individuals to spend their leisure time and money how they wish with the legitimate commercial interests of a socially responsible gambling industry and with effective regulation / social protection. GREaT, by raising £5m per annum, is providing funds to support such an evidence based approach to policy making. However , thus far such thinking has been conspicuous in its absence.

3.10 GREaT and its predecessors (RIGT and GICT) were formed in response to some of the 175 recommendations contained in the Budd Report. Many other recommendations have not been adopted which continues to skew the balance between commercial interests and social protection towards over caution, over regulation and over protection.

3.11 GREaT believes that the Gambling Commission has a responsibility not only to regulate effectively but also to be an advocate for what they should see as a well regulated global leading British gambling industry.

3.12 GREaT also believes that the process of regulation and deregulation should be as depoliticised as possible and that the Gambling Commission should be required to report annually to DCMS on the appropriateness of current regulations and any recommendations for new , removed or amended regulations. Such recommendations should seek to balance legitimate commercial interests with the need for public protection and should be evi dence based. In this way we would hope that regulatory change will happen in a depoliticised way and allow the Gambling Act 2005 to remain current and reflect changes in both technology and society, as was originally intended.

4.0 THE TRIPARTITE STRUCTURE

4.1 There is little doubt that the current tripartite structure has not yet achieved what it was set up to do. Indeed some industry donors believe that the structure has proved to be cumbersome, bureaucratic, costly and largely ineffective. This is clearly having a negative impact on GREaTs fundraising activities. However, in a very short period of time, RGF has made good progress on the treatment and prevention front, which is aimed at minimising gambling related harm, and has put in place an on-going research programme. In particular RGF has launched pilot projects aimed at early interventions, which is both cost effective and minimises gambling related harm. GREaT welcomes and encourages such positive new initiatives from RGF.

4.2 However , w hilst the RGSB has created a clear framework for research, education and treatment, GREaT has become increasingly concerned at the poor, and deteriorating , relationship between RGF and one of the large treatment provider s (GamCare). GREaT fully supports RGFs desire to commission services in a structured way, and to evaluate outcomes, thus driving maximum impact and value for every £1 raised by GREaT. The current poor rel ationships cannot be helping this process and is extremely damaging for the image of the (RET) sector. GREaT is keen to see a more harmonious and constructive dialogue and will continue to play an active part in trying to ensure that the RET sector operates in a joined up and cost effective way.

4.3 We urge GamCare and RGF to positively engage in the current mediation process and to arrive at a position where the original objectives of the tripartite structure are delivered – professionally commissioned treatment and prevention activity which provides true value for money and measurably reduces gambling related harm, and research which underpins social policy and treatment / prevention activities from a solid base of empirical evidence. There is no reason why the current structure cannot achieve this if all parties work together towards this end objective.

4.4 From a cost perspective the one incontrovertible fact is that RIGT raised and distributed funds for £361,000 per annum, and RGSB/RGF/GREaT collectively does the same job, and provides advice to the Gambling Commission , for £747,000. Whilst it is fair to note that RIGT said it would need £475,000 to raise £5m per annum, and that the Gambling Commission contributes £250,000 to the cost of the RGSB, giving a like for like comparison of £475,000 (RIGT) v £500,000 (RGF/GREaT) in net cost terms, this is still a huge overhead, for what is a £5m business for social purpose, to have to bear. This issue needs to be addressed and GREaT would like to see a degree of streamlining and a focus on greater efficiency, and de-bureaucratisation, in how the structure works. We will play our part in this process.

4.5 GREaT would like to see a very real focus on the cost effective delivery of services to those who need them and on obtaining the research evidence required to underpin proportional regulation. The end of the RGF / GREaT contract, and the 3 year underwritten voluntary arrangement, in March 2012 present s a golden opportunity to review the effectiveness of the existing structure against this objective, and to make changes and improvements where necessary.

5.0 CONCLUSION S / RECOMMENDATIONS

5.1 GREaT recommends that the CMS S elect Committee urgently addresses the current damaging imbalance between allowing legitimate and responsible ga mbling companies to grow and thr ive as part of a modern economy and social protection. The Committee should examine why this did not happen as Budd and DCMS originally intended.

5.2 The current tripartite structure in respect of responsible / problem gambling is currently being reviewed prior to the expiry of the current 3 year voluntary arrangement in March 2012 .

5.3 If the CMS select Committee is planning to hold an evidence session on problem / responsible gambling GREaT would very much welcome being involved.

June 2011

Prepared 29th July 2011