Written evidence submitted by the Hon. Phillida Bunkle (GA 60)

1.1 From:

The Hon. Phillida Bunkle, New Zealand Minster of Consumer Affairs, 1999-2002; from 1996 member of Internal Affairs Select Committee Review of Gambling Act; Patron Compulsive Gambling Society (NZ) which was the major advocacy organization and treatment provider for problem gamblers.

In Parliament I developed a detailed knowledge of the regulatory issues around the expansion of machine gambling. I ensured that consumers of gambling products enjoyed the same high level of protection as the consumers of other hazardous consumptions. I played a significant role in developing the Public Health Approach to gambling regulation, which was incorporated into the New Zealand Gambling Act 2003

I am familiar with the regulatory environment in other Anglo jurisdictions and have published and spoken extensively at gambling studies and public interest conferences.

2.1 I submit that:

2.1. The Gambling Act 2005 is unbalanced because it

· Does not sufficiently embrace the public interest and because it fails to ensure open and accountable governance. Information of the greatest importance to the public interest is routinely withheld by the Gambling Commission as ‘commercially sensitive’. There is no mechanism through which the public can hold the Gambling Commission to account.

· Does not mention ‘consumers’ and therefore creates no independent mechanisms to represent or protect their interests.

· Is, in the absence of an organised and well resourced consumer voice, only concerned with industry and Government’s interests.

· Does not require the Secretary of State to levy the industry for the harms that gambling causes. Moreover, it does not ensure that the dispersal of funds available to alleviate harm takes place under clear and transparent governance.

2.2 The Gambling Act 2005 is unbalanced between central government and Local Authorities because it

· Gives Local Authorities reasonability to licence gambling premises but deprives them of the power to effectively control the growth of gambling facilities in their communities. Contrary to repeated assurance by the minister before the passage of the Act Local Authorities cannot deny a licence on the grounds of market saturation.

2.3 The Gambling Act 2005 is unbalanced because it

· Has created strict protections around the development of casinos but lax regulation around the very rapid growth of machine gambling in what is called ambient but should perhaps be more appropriately labelled, ,ambulant ‘community’ venues.

· Has enabled industry to seek new markets, not in the highly regulated casinos but in the poorly regulated High Street not so ‘mini-casinos’ which are now to be found on most shopping centres in the country.

2.4 The Gambling Act 2005 is deficient in its regulation of gambling machines

· The expansion in the number of machines which has taken place under it is not the intention of the Act but the result of private arrangements made between the industry and the Minister. The public has had no role in making these ‘arrangements’. However, the Minister shows no sign of willingness of review them.

· Observational and anecdotal evidence suggests that the increase in machine numbers is the result of a growth of ambient venues; and that these are concentrated in the poorest areas. For example, Hackney has 63 bookies shops each with four FOBTs.

· The Gambling Commission, however, does not make the location of gambling machines publicly available on the grounds of ‘commercial sensitivity’, although the correlation with poverty is an issue of the utmost public interest.

· The Gambling Commission has made the regulation of machine gambling unnecessarily complex and obscure. Overseas research shows that machines are a continuous form of gambling and, therefore, dangerous if played regularly irrespective of their location, and the stakes and prizes on offer. There is no sign that the Gambling Commission adopts a precautionary approach towards them.

3.0 The Gambling Act 2005 has, as a consequence, led to

· The rapid growth of dangerous levels of machine gambling

· The prevalence survey reports a 50% increase in pathological gambling between 2007 and 2010. But the Gambling Commission chooses to present this as statistically ‘barely’ significant’. (It uses a significance test of 0.5 throughout but a test of 0.1 for this variable).

· The Gambling Commission does not adequately identify the source of this increase. The public therefore cannot be really sure where it is coming from, however it seems likely that the most significant source is the increase accessibility of gambling machines.

3.1 Despite the tight regulation of casinos in the 2005 Act, machine gambling has expanded into particularly vulnerable communities.

· Machine Gambling appeals to vulnerable groups because it demands no skill, language, ethnic or physical abilities.

· FOBTs have proliferated on the High street as a result of the Minister’s decision to allow each bookies shop to have 4 of these high value machines. As a result the industry has rapidly increased the number of such ambient venues. Local authorities and the public have no way of challenging this growth.

· For example the industry has been able to develop a new market among women as machines have increased very rapidly in number and intensity in the traditional female dominated bingo halls.

· My local bingo hall, (the closest to the Parliament) has 140 machines. This venue is attended predominantly by poor, black and elderly women.

· The impact of these machines in Bingo halls has been increased by 2 developments:

· (1) Companies have been allowed to increase the number of higher value machines from 4 to 8 in response to commercial pressure from other forms of gambling. This ratcheting up of the provision of one form of gambling against the expansion of another is not compatible with the aims of the 2005 Act which do not include stimulus to the industry but rather the protection of vulnerable persons.

· (2) The Gambling Commission, in response to industry demands, increased the stakes and prizes on the most common, barely restricted, category ‘C’ machines. These increases sounded minor but led to an increase in gambling intensity which has been poorly understood and the impact, especially on vulnerable communities, of which has not been measured,.

· For example: the prize was increased to £70 but more importantly the stake was raised to 25p. This means that at my local bingo hall, if I play a 20 line machine I can bet £1 a play. On ‘auto-play’ there is a game every second. Thus, (so long as I use the ‘note accepter) I could bet £1 per second or £3,600 an hour.

· There is now pressure to further increase this to a maximum of £2 a play.

4.0 Conclusion:

· The insidious creep of poorly regulated competition between sectors of the gambling industry has led to the increasing exposure of vulnerable communities.

· There has been little attempt to measure, or indeed acknowledge, the impact of these increases

· The significant increase in the prevalence of the most serious levels of problem gambling now makes it incumbent on government to fulfil their promise that if there was any sign of an increase in problem gambling with its attendant social and economic costs then restraints would be introduced.

· If these assurances are to mean anything then:

(1) The act must be amended to ensure that the gambling commission acts with due accountability to the public interest.

(2) The act must be amended to establish an independent and representative organisation to promote the public interest in gambling.

June 2011

Prepared 1st August 2011