Gambling

Written evidence submitted by the Evangelical Alliance (GA 76)

Summary of recommendations

The Evangelical Alliance would ask that the committee consider the following recommendations:

1. The ethical dimension must be considered in gambling legislation, it is an industry based on one person winning at the expense of another, this should not be ignored.

2. Planning policy and premises licensing should be amended to take account of the social consequences of gambling.

3. Local Authorities should be permitted to apply a blanket ban on different categories of gambling premises in the same manner as they can with casinos.

4. Local Authorities should be permitted to adopt a cumulative impact policy on gambling premises.

5. Minors should not be permitted to play any gaming machines, including Category D machines.

6. The age limit for the National Lottery should be raised to 18 to ensure consistency across different forms of gambling.

7. The British Gambling Prevalence Survey must be maintained in its current form.

8. The Gambling Commission should be given stronger power in recourse to premises that fail test purchases.

9. No further development of casinos until those permitted under the Act have been fully assessed and shown not to have any impact on problem gambling.

10. The Gambling Commission maintain a count of Category C machines.

11. The Government withdraws the draft statutory instrument making changes to B3 gaming machines.

12. Fixed Odds Betting Terminals removed from betting shops.

13. Advertising for gambling removed from locations with a high proportion of children present, i.e. close to schools.

14. Research to focus on the causation of problem gambling.

15. Education on gambling issues to provide clear examples and warning of the danger that gambling causes.

The Evangelical Alliance

1. The Evangelical Alliance welcomes the opportunity to respond to this inquiry into gambling and in particular the implementation and operation of the 2005 Gambling Act.

1.1. The Evangelical Alliance works with a range of organisations to ensure that gambling takes place within a regulatory framework that ensures that the most vulnerable are protected.

1.2. The Evangelical Alliance is the oldest and largest organisation representing Evangelical Christians in the United Kingdom. Formed in 1846 we represent over 3300 churches and 700 organisations.

1.3. On gambling issues we regularly work with member organisations CARE and the Salvation Army as well as the Methodist Church, the Church of England, Church of Scotland, and Quaker Action on Alcohol and Drugs.

The Gambling Act 2005

2. The Gambling Act 2005 was a much needed update to the laws that regulated gambling activity. It provided essential changes to the regulatory framework for an industry that evolves with technological development and therefore presented challenges that were unforeseen under the 1968 Act.

2.1. The Gambling Act 2005 was a complete rewriting of the laws regulating a complex and varied industry, during pre-legislative scrutiny a series of predictions were made about the effect the changes would have on the industry.

2.2. Some of the problems that were anticipated during the passage of the Act have not been realised, others are exactly as predicted and further still are evident which were not expected when Parliament approved the wide ranging reforms.

2.3. We were grateful that the final Act, and the initial statutory instruments of its implementation, limited some of the more extreme deregulatory measures initially proposed, such as the introduction of regional casinos. These changes were essential to take account of the social cost that accompanies gambling.

Ethical considerations

3. Ahead of engaging with specific issues relating to the Gambling Act 2005 it is worth stating the Evangelical Alliance's position on gambling activity. Gambling is an industry that ultimately thrives on people losing money. For the owners and operators of gambling premises (both physical and virtual) to make money it is necessary for the customers to lose. This is significantly different from the purchase of other forms of entertainment, in gambling the customer is buying the chance to win more money.

3.1. We readily acknowledge and support the freedom of people to spend their money how they choose. However, this freedom is not unrestricted; the law accepts that the purchase of certain goods and services requires regulation.

3.2. The economic crises of the past few years have highlighted the deeply pernicious affect that avarice causes. The fact that we would endorse such motives remains an enigma. The gambling industry is regulated greed.

3.3. Gambling is legal, and we do not seek to bring this into question. However, we encourage the committee to consider how best such legal activity can be regulated without offering undue support for what can be an unwise use of money, and at times a deeply immoral use thereof.

3.4. The Treasury Select Committee has considered [1] how to discourage casino banking, we do not see why such discouragement could not also apply on the individual as well as the corporate level.

Planning and licensing

4. The Evangelical Alliance remains concerned that the planning and licensing regimes are too complicated and do not provide local communities with sufficient avenues to influence the profile of gambling activities in their area.

4.1. The removal of the demand test in the 2005 Act placed power in the hands of the gambling industry at the expense of local communities.

4.2. The variety of regulation for different aspects of the gambling industry is also inconsistent. We suggest that the same suite of options is available to local authorities and community groups in the planning and licensing of all gambling premises. At the moment authorities can adopt a casino veto if they decide that they do not want casinos in their area but have no power to limit the number or density of betting shops or arcades. We understand that proposals in the Localism Bill will enable communities to adopt neighbourhood development plans which will allow them to determine the planning policy for their area. While we welcome the proposed power we believe further amendments could allow communities to have a greater say in the make up of gambling opportunities in their area.

4.3. The Evangelical Alliance considers it essential that more is done to bring together the planning and licensing processes, both at central government and local authority level.

4.3.1. We also consider it an anomaly that betting shops share a use class order with other premises such as banks which have a very different impact on a high street. We look forward to the Government’s forthcoming review [1] into use class orders and suggest that betting shops and AGCs are placed in a separate category or are sui generis in order to prevent such changes of use without the need to seek planning permission.

4.3.2. The Gambling Act 2005 gave local authorities licensing powers for gambling premises which took the responsibility away from the Magistrates Courts. While this was a common sense move echoing changes made in the 2003 Licensing Act it also gave local authorities two separate powers over gambling premises.

4.3.3. Local authorities therefore are responsible for granting planning permission (where necessary) and licensing. There is a challenge under the current system that these two responsibilities are not played off against each other: so that if planning permission has been granted the licensing committee comes under pressure to effectively rubber stamp the earlier planning permission with a premises license..

4.3.4. We suggest that as well as the proposed changes in the Localism Bill and the forthcoming use class review, there are several other changes which would help the system function more effectively.

4.3.4.1. Planning and licensing committees need to give greater attention to social impact as well as economic impact.

4.3.4.2. The freedom for local authorities to adopt a veto on issuing any casino licences ‘having regard to any matter or principle’ should be extended to other gambling premises.

4.3.4.3. The option for local authorities to adopt a cumulative impact policy for gambling premises in the same manner that they currently can for alcohol licenses.

Children

5. We have mainly focused our intention on the licensing objective that relates to protecting children and vulnerable people from the adverse effects of gambling.

5.1. One point worthy of note is that this is not a group of people that can be defined and identified with ease, nor can it be considered as a unit that is itself unaffected by gambling. For instance, the adverse effects of gambling can make a person vulnerable, so the objective should apply to not only those who are vulnerable, but those to whom gambling can make vulnerable. During the pre-legislative scrutiny of the gambling bill we stated: 'It is apparent that any adult susceptible to gambling addiction is a potentially vulnerable individual' [1] .

5.2. We fully support and have repeatedly welcomed the explicit reference to the protection of children in the licensing objectives.

5.2.1. The removal of gaming machines from unregulated premises, such as takeaways or cafes, was a positive step taken in the 2005 Act. The principle that machines that only adults should play are only in locations where adults visit is a crucial one.

5.2.2. We remain concerned that a class of gaming machine (category D) remain accessible and explicitly targeted at children. The United Kingdom is the only country in western Europe that allows children to gamble. We believe that this should stop.

5.2.3. The 2010 Gambling Prevalence Study shows a clear increase in the propensity to develop problem gambling tendencies for those who begin to gamble when they are children (table 6.3) [2] .

5.2.4. There remains a discrepancy between the ages of eligibility for the National Lottery and other forms of adult gambling. With the forthcoming merger of the Gambling Commission and the National Lottery Commission we suggest that now would be an appropriate time to rectify this anomaly and raise the age threshold for the lottery to 18.

5.2.5. The test purchases undertaken by the Gambling Commission shows a worrying propensity for betting shops not to challenge customers that appear under 18.

Gambling Commission

6. The establishment of an independent regulator, in the form of the Gambling Commission, was an essential outcome of any review of the gambling legislation. We strongly supported the development of the Commission out of the Gaming Board which had previous dealt with many regulatory matters.

6.1. A key aspect of the Gambling Commission was its role as a unified regulator for the various parts of the industry. The recent announcement that the National Lottery Commission will be merged with the Gambling Commission from 2012 is therefore welcome.

6.2. The Gambling Commission performs a vital function through ensuring that operators comply with the Gambling Act and providing guidance to the industry. It has also served a crucial role in the commissioning and publication of the 2007 and 2010 British Gambling Prevalence Surveys.

6.3. However, the operation of the Gambling Commission is not without its flaws. As part of the 2010 Comprehensive Spending Review the Government announced that grant in aid funding to the Gambling Commission for the prevalence study would be discontinued. This coincided with a consultation on how prevalence should be assessed in the future. Section 16(1) of the Act stipulates that the Gambling Commission has a duty to advise the Secretary of State about the incidence, manner, effects and regulation of gambling – the Prevalence Survey was the principle evidence base for this advice.

6.4. We are concerned with the indecent haste with which the Commission accepted that the withdrawal of the grant in aid funding necessitated a rejection of the current methodology. We believe that the current Prevalence Survey remains the best option and the alternatives currently under consideration will hamper the Commission’s ability to fulfil its duty.

6.5. This is particularly the case with reference to Section 26(1)(b), which details the duty to advise on the manner in which gambling is carried on. The format of the current survey enables important analysis showing the types of activity where problem gambling occurs most frequently, and provides indicative evidence which can guide policy decisions.

6.6. Even in the absence of grant in aid money the Commission’s effectiveness will be significantly undermined in the absence of a robust prevalence survey. The Alliance therefore recommends that a full prevalence study is maintained and funded from the industry – either through fees or the industry levy.

Remote Gambling

7. The Evangelical Alliance member organisation CARE has submitted a memorandum to the committee focused on remote gambling which we fully support.

Casinos

8. The 2005 Gambling Act brought about fundamental changes to the way that casinos operate and the terms under which they can be developed.

8.1. Through the Act and subsequent secondary legislation the development of casinos since 2005 has been subject to appropriate scrutiny and careful restraint. Even within this cautious framework the casino industry has been able to expand significantly, total drop in 2000/01 was £3.3billion [1] , while industry statistics for 2009/10 show total drop of £4.4billion [2] .

8.2. We note that despite the consent given through the Act for the development of eight small and eight large casinos none have to date opened..

8.2.1. It is also worth drawing attention to the fact that a 'small casino' is larger than any currently in operation from the previous regime.

8.3. During the intense public scrutiny that surrounded the proposed 'regional casinos' we suggested that the purported goal of regeneration was a completely unsuitable aim to tie to gambling.

8.3.1. While we do not deny that the development and operation of a large scale casino would create jobs we firmly maintain that these jobs would come at too great a cost.

8.3.2. We firmly hold that the final decision reached to not permit the development of any regional casinos was the correct one and remains the right decision.

8.4. It is foreseeable that some of the permitted casino development under the 2005 Act will take place in the coming years. It is therefore far too early to provide any judgement on what impact the changes introduced have had.

8.4.1. We will carefully consider the correlation between their introduction and any changes to the rates of problem gambling (c.f. Section 10). If the opening of new casinos can in anyway be linked an increased prevalence then we would expect the Government to take swift regulatory action. We strongly recommend that no changes are made to the casino licensing regime until further prevalence studies and other research can make a thorough assessment of their impact.

Gaming Machines

9. As with most other aspects of gambling activity the 2005 Act completely redrew the categories of and restrictions placed on different types of gaming machines.

9.1. The Act removed machines from unlicensed premises such as cafes, and this was a move we fully supported. It is inappropriate for opportunities to gamble to be available in locations where their use cannot be properly monitored.

9.2. The Gambling Commission does not regulate pubs, clubs, working men’s clubs or family entertainment centres (FECs) that do not have adult areas [1] . Therefore data from these premises are not included in the industry statistics detailing the number of gaming machines in operation.

9.2.1. The Gambling Commission know [2] how many alcohol licensed venues have taken up their automatic entitlement, so the Alliance would suggest that they also account for the number of machines and are therefore able to provide a total figure for the number of gaming machines in operation.

9.3. The Act defined a limited scope for gaming machines in pubs and other licensed non-gambling establishments.

9.3.1. The prizes and stakes for these machines (category C) were doubled in 2009 following pressure from the gambling industry on the basis of the difficult economic trading conditions.

9.3.2. The consultation on changes to category B3 machines noted that the industry projections for growth on the basis of the planned changes had so far not been realised.

9.4. It was therefore with immense disappointment that we saw the Government recently capitulate to further industry pressure, based on similar unproven projections, to change the rules relating to B3 machines placed in arcades and bingo halls.

9.4.1. The 2005 Act placed clear restrictions on the number of higher value machines that could be placed in adult venues, either Adult Gaming Centres (AGCs) or Bingo halls.

9.4.1.1. As well as limiting their number to 4 per premises the stakes were capped at £1 and the prize at £500

9.4.1.2. The draft statutory instrument currently before parliament will increase the stake to £2 and change the numerical limit to a proportional one, that of 20% of the total machines on the premises.

9.4.2. One of the motivations behind the changes to the B3 regulation was to remove the incentive for AGCs to split premises to maximise the number of machines that they can have. The Gambling Commission were aware that AGCs were operating in adjacent premises with sometimes very limited distinction between the two premises. By replacing the limit of 4 machines with a 20% ratio this incentive will be removed. However, we are now concerned that this could lead to the development of large AGCs without a limit on the number of high prize machines. In effect the problem of split premises is being addressed by allowing multiple premises to merge.

9.5. The 2005 Act brought fixed odds betting terminals (FOBTs) into the gaming machine regulatory system and allocated them a separate category (B2) within the new framework.

9.5.1. Previously FOBTs were unregulated; therefore the changes in the Act were necessary and welcome. However, the unique status and far higher level of stakes and prizes was retained. This resulted in betting shops taking gaming machine custom away from AGCs, and as a result placed pressure for the stakes and prizes of machines to be increased to generate increased custom and revenue. Changes have since been made to stakes and/or prizes for C, D and B3 machines.

9.5.2. The Gambling Commission’s most recent industry statistics [3] show a year on year increase of gross gambling yield in betting shops that comes from gaming machines as opposed to over the counter betting. We consider this to place in jeopardy the primary activity of betting shops.

9.5.3. GamCare statistics [4] show that 22 per cent of callers to their helpline cite FOBTs, this is particularly worrying considering that 2010 Prevalence Survey [5] showed only 6 per cent of past year gamblers use them.

9.5.4. The presence of these machines in betting shops places a mini casino on the street corner, in many urban areas such mini casinos now litter the high street..

9.5.5. The Evangelical Alliance considers that given the indication of harm that FOBTs pose, and the distortion that they place on the gaming machine industry, these machines should be removed from betting shops.

9.6. The original Gambling Review Report, from which the 2005 Gambling Act stemmed, suggested [6] that the prizes and stakes were only increased in line with inflation. The Government’s response, in ‘A Safe Bet For Success’ [7] rejected this proposal and recommended triennial reviews taking account of other factors such as changes in the overall gambling market, and potential issues of problem gambling and consumer protection. The evidence so far is that the principal driver for changes has been the demands of the industry in order to increase their profit margins, the protection of the consumer and concerns about problem gambling were given scant attention in the most recent Government consultation. [8]

Problem Gambling

10. In February 2011 the Government minister responsible for gambling, John Penrose MP, blamed the previous Government for liberalising the gambling laws and accredited the significant increase in problem gambling to the changes made in the 2005 Gambling Act [1] . To date the Department of Culture Media and Sport or the Minister have not offered any policy response to the rise in problem gambling.

10.1. The Prevalence Survey, which the Gambling Commission produced with NatCen in 2007 and 2010, with an earlier study commissioned by GamCare in 1999 is the principal tool for measuring the extent of problem gambling in the UK. The problem gambling screen that was used in all three studies, DSM IV, showed the prevalence of problem gambling at 0.6% in 1999, 0.6% in 2007 and 0.9% in 2010. We acknowledge the difficultly in drawing conclusions from changes in a small sample size, which in 2010 meant 64 people were classed as problem gamblers, but also want to emphasis that this did constitute a significant increase. If such an increase was projected onto the entire population the level of problem gambling was around 300,000 people in 2007 and 450,000 in 2010.

10.2. The increase in problem gambling that the most recent prevalence study shows emphasises why it is essential that further thorough prevalence studies are conducted to provide an ongoing picture of the changing gambling landscape. The way in which the current survey is conducted, and notably absent from the proposed replacement, is the reporting of both prevalence of problem gambling and patterns of gambling behaviour. This approach enables indicative conclusions to be drawn about which forms of gambling are most likely to lead to gambling problems. This in turn can guide more detailed research which can inform more closely on questions of causation that the Prevalence Survey is unable to do.

10.3. Previous Government ministers have echoed John Penrose’s sentiment, Tessa Jowell, giving evidence to the Draft Bill Committee stated: "if this legislation gave rise to an increase in problem gambling then it would have failed and it would be bad legislation and it would have defeated the intention and the purposes that we have" [2] . We hope that this inquiry will help the Department of Culture Media and Sport to look carefully, along with the Gambling Commission, at what regulatory action will do the most to reduce the prevalence of problem gambling.

Advertising

11. The 2005 Gambling Act legalised advertising for gambling. This is arguably the single biggest cultural shift brought about through the Act, it is now common place to see gambling advertising on public transport, television adverts, innumerable internet pop ups and the sponsorship of sporting activities.

11.1. The Evangelical Alliance would like the committee to consider the tension evident between permitting legal activity and not promoting activity that can have harmful consequences. The sudden inundation of gambling adverts that the public is now party to promotes the false idea that gambling is an activity without consequences.

11.2. In other public policy areas there has been a shift towards greater regulation of advertising. Advertising and sponsorship of tobacco products was gradually withdrawn until its absence is now normal. The recent Bailey Review into the sexualisation of children also called for restrictions on adverts of a sexual nature. We therefore see the changes made in the 2005 Act as moving against the tide and promulgating the idea that gambling is harmless. This is something that should be immediately rectified.

Research

12. The Gambling Act 2005 created the Responsibility in Gambling Trust as a charitable organisation to oversee and fund research, education and treatment to address the potential for harm that is inherent in gambling. This body has since been replaced with a tripartite structure with the Responsible Gambling Strategy Board, The Responsible Gambling Fund and GREaT to deal with strategy, commissioning and fund-raising respectively.

12.1. The current structure goes someway to ensuring that attention is given to the harmful consequences of gambling but we remain uncertain that it is fully effective. The dispersion of responsibilities, which also includes the DCMS and the Gambling Commission allows plentiful opportunity to pass the buck and say that it is someone else's job to address a certain problem.

12.2. To date the voluntary levy has raised the requisite funds but we encourage the Government to maintain the option of a compulsory levy as a Damocles sword should the gambling industry show reticence to pay up.

12.3. One of the principal criticisms of the current prevalence survey is that it does not assess the causation of problem gambling, this we accept although the Gambling Commission is often too quick to skip over indications of associated activity which could guide policy without implying direct causation. The research that the RGF commissions needs to be focused on filling this gap.

12.4. GamCare is one of the principle recipients of funding for treatment and due to the nature of the funding process continued operation seems to constantly be in question. The funding of treatment should be over a longer term and therefore allow more consistent operation without the threat of closure.

12.5. The fund-raising arm of the structure is heavily occupied with gambling industry representatives, while this may be necessary to ensure that funds are raised we insist that it does not have any bearing on the way in which those funds are used. The operation of the Strategy Board and the RGF must be independent. In the division of funding, with money going towards research, with results potentially obscured by academia, and to treatment to alleviate their conscience, we consider that there is a potential risk of avoiding education which would require the acknowledgement that gambling causes harm.

June 2011


[1] http://www.publications.parliament.uk/pa/cm200809/cmselect/cmtreasy/767/767.pdf

[1] http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm110517/debtext/110517-0004.htm Column 275

[1] http://www.publications.parliament.uk/pa/jt200304/jtselect/jtgamb/63/4010810.htm Ev 77

[2] http://www.gamblingcommission.gov.uk/PDF/British%20Gambling%20Prevalence%20Survey%202010.pdf Page 93, Table 6.3

[1] A Safe Bet For Success: Annex A http://webarchive.nationalarchives.gov.uk/20031220221853/http://culture.gov.uk/NR/rdonlyres/54AC9E8A-DC24-4A69-8DC8-561C70D45E82/0/gamblingreportappen.pdf

[2] http://www.gamblingcommission.gov.uk/pdf/Gambling%20Industry%20Statistics%202009%202010%20WEB%20-%20January%202011.pdf page 15

[1] http://www.gamblingcommission.gov.uk/pdf/Gambling%20Industry%20Statistics%202009%202010%20WEB%20-%20January%202011.pdf page 19

[2] http://www.gamblingcommission.gov.uk/pdf/Licensing%20authority%20statistics%20April%202009%20-%20March%202010.pdf page 8

[3] http://www.gamblingcommission.gov.uk/pdf/Gambling%20Industry%20Statistics%202009%202010%20WEB%20-%20January%202011.pdf page 8

[4] http://www.gamcare.org.uk/data/files/GamCare_statistics_0910.pdf page 8

[5] http://www.gamblingcommission.gov.uk/PDF/British%20Gambling%20Prevalence%20Survey%202010.pdf page 21, table 2.1

[6] http://webarchive.nationalarchives.gov.uk/20031220221853/http:/culture.gov.uk/global/publications/archive_2001/gamb_rev_report.htm paragraph 23.54

[7] http://webarchive.nationalarchives.gov.uk/20031220221853/http://culture.gov.uk/NR/rdonlyres/E2667C96-B033-41B0-B027-8691B0232F5B/0/gamblingreportpgs.pdf paragraph 4.21

[8] http://www.culture.gov.uk/images/consultations/categoryB3-gaming-machines_condoc.pdf

[1] http://www.dailymail.co.uk/news/article-1357276/Gambling-soars-UK-75-admit-having-flutter.html

[2] http://www.publications.parliament.uk/pa/jt200304/jtselect/jtgamb/63/4030103.htm Q1693

Prepared 1st August 2011