Joint Committee on the Draft Gambling Bill

Joint Committee on the Draft Gambling Bill First Report

6 Social implications of the draft Bill

205. For the majority, gambling is a harmless leisure activity. For some, however, it has serious adverse effects, not only for the gambler but also for those around them.[292] This range of effects of gambling is illustrated in Figure 2 below (The Gambling Continuum),[293] showing gambling as an enjoyable pastime at one end of the gambling continuum and pathological gambling at the other.

206. The Budd Report cites a number of potential negative consequences of gambling, including: job loss, absenteeism, poor work/study performance, stress, depression and anxiety, suicide, poor health, financial hardship, debts, asset losses, exposure to loan sharks, bankruptcy, resorting to theft, imprisonment, neglect of family, impacts on others, relationship breakdown, domestic or other violence, burdens on charities and burdens on the public purse.[294] We heard about some of these consequences during our visit to GamCare in January and many have also been highlighted in the written and oral evidence we have received.[295]

207. We have not sought to define problem gambling in medical terms. As the Centre for Gambling Research in Australia has commented:

"problem gambling is no longer viewed from a medicalised perspective as an individual 'addiction'. Research has consistently found that problem gambling can affect any gambler; there are no apparent psychological or psychiatric predictors[…]."[296]

208. We consider gambling to be a problem when it begins to have serious adverse consequences for the gambler or for those around them. Such an "effects based" definition of problem gambling was used in both the 2000 Prevalence Study[297] and the Budd Report:[298]

"gambling to a degree that compromises, disrupts or damages family, personal or recreational pursuits."[299]

209. Budd explained that, with respect to problem gambling:

"we need to try to understand how possible changes will lead to future costs, and to try to identify and suggest strategies for mitigating present and future costs".[300]

210. We have sought to do this in our scrutiny of the draft Bill and the accompanying policy statements, asking ourselves and our witnesses:

how are the proposed changes likely to impact on problem gambling?
how effective are the "strategies for mitigating present and future costs" likely to be?
is there anything else the draft Bill needs to address?
is there anything that the Government, the regulator or the industry need to do in order to balance any adverse impacts that the Bill could have on problem gambling?

211. Limiting the risk of increased problem gambling has informed many of our recommendations elsewhere in this Report, such as our proposals to limit the proliferation of casino slot machines. Such instances are highlighted at the end of this Chapter.

Impact of the draft Bill

Prevalence study and other research

212. The last large-scale study into the prevalence of problem gambling in the United Kingdom was conducted in the Autumn of 1999, under the auspices of GamCare and with support from gambling industry bodies.[301] This suggested that, at that time in Britain, between 275,000 and 370,000 people aged 16 or over were problem gamblers. We received evidence recommending that a new study must be carried out into the prevalence of problem gambling before the Bill is enacted. The Methodist Church stated that "it is vital that a new baseline survey is commissioned by DCMS prior to de-regulation so that the impact of legislative change on problem gambling can be accurately judged",[302] a view echoed by the Evangelical Alliance[303] and Professors Orford and Griffiths.[304]

213. GamCare's 2002 Report stated that it is "beginning to suspect that the prevalence of problem gambling may be rising[…][and that this] is a factor we should all keep very much in mind as new legislation is progressed".[305] A number of witnesses have, in particular, cited Fixed Odds Betting Terminals (FOBTs), spread betting and remote gambling as areas which seem to have had an impact on problem gambling levels since the last study:

"Statistical information collected and collated by us reveals: 1) A quantitative increase of 56.25% in applications made to us during October-December 2003 compared to October-December 2002. 2) Qualitative diversity in the range/type of gambling media identified by applicants as their primary gambling addiction. Most notable amongst which are currently spread betting, remote gambling, and Fixed Odds Betting Terminals".[306]

214. Lord McIntosh of Haringey, Parliamentary Under-Secretary of State, DCMS, acknowledged that the last prevalence study could be out of date and that a revised study would be valuable.[307] He explained that "The first step that we would do is conduct a simpler study of the prevalence of different forms of gambling closer to the date of implementation of the Act [to] establish whether [the last study] is out date and if it is […] we will have to consider whether to conduct a full Prevalence Study".[308] This was confirmed by the Secretary of State in evidence to us:

"We certainly need to establish a baseline against which we can monitor any growth in problem gambling."[309]

215. We recommend that, prior to the implementation of the Bill, the Government should commission and publish the results of a baseline prevalence study against which the impact of the Bill can be measured. We recommend that this should cover all existing forms of gambling including those which have become more widespread since 1999, namely spread betting, betting exchanges, remote gaming and FOBTs. We believe that such a comprehensive study is necessary in order to provide data on gambling that will be needed to inform future regulatory decisions.

Potential impact of the draft Bill on problem gambling

216. The Budd Report recognised that the weight of evidence suggested that its proposals would "lead to an increase in the prevalence of problem gambling".[310] The Government has also acknowledged this possibility, and the Regulatory Impact Assessment which accompanied the November draft of the draft Bill commented that "extending the choice and availability of gambling could lead to an increase in problem gambling."[311] Lord McIntosh of Haringey, Parliamentary Under-Secretary of State, DCMS, outlined this in oral evidence, stating:

"Basically we acknowledge there is a risk, that the greater availability of gambling, which will certainly be […] one of the effects of the Bill, involves a risk that the amount of gambling and therefore the amount of problem gambling will increase."[312]

217. The Secretary of State, on the other hand, told us:

"I do not accept that the Bill will lead to an increase in problem gambling […] No secretary of state, no minister comes in front of a committee and says, "we are commending to you legislation that is going to increase a particular social problem". 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."[313]

218. The evidence we have received has not been conclusive as to whether the draft Bill will lead to an increase in the rate of problem gambling amongst those who gamble. Many commentators have, however, made the point that the draft Bill is likely to lead to an increase in the number of people who gamble and that, in absolute terms, this is likely to increase the number of problem gamblers:

"Basically, where you increase opportunity and access to gambling, not only do you increase the number of regular gamblers but you will also increase the number of problem gamblers. […]. Tessa Jowell was quoted as saying that a 50 per cent increase in turnover of gambling would not lead to any increase in problem gambling whatsoever. I find the mathematics of that unbelievable."[314]

The only evidence we have received to contradict this view has been submitted by Frank Fahrenkopf Jr. who has commented that a "significant body of research contradicts the common assumption that increased gambling opportunities lead to higher levels of pathological gambling."[315]

219. While most of our witnesses have declined to comment on the scale of the likely increase,[316] NERA Economic Consultants have reported that the draft Bill will result in up to one million problem gamblers in the UK, representing a three to four-fold increase from the current level.[317] A recent Report from the Henley Centre, commissioned by BACTA, stated that "problem gambling will increase from the current 400,000 level to 703,000, i.e. 1.4% of the adult population by 2010 with the proposed Gambling Bill".[318] The Responsibility in Gambling Trust (the Trust) commented that "[the] Trustees recognise that there is a prospect that some of the Government's proposals will lead to an increase in problem gambling [but that] there are conflicting views amongst some of them about the likely size of any increase".[319]

220. We would expect the draft Bill to lead to an increase in the prevalence of problem gambling, even if only as a result of an increase in the numbers of those who gamble. We do, however, expect that a number of the recommendations in this Report would, if implemented, contribute to a reduction in the scale of any increase which might otherwise occur.

221. We recommend that the Government should fund prevalence studies at five-yearly intervals. These measures would enable the impact of the Bill to be accurately measured and also enable the Government and the Gambling Commission "to take the toughest possible action if there is any evidence that modernisation has given rise to an increase in problem gambling".[320] We further recommend that, in order to monitor the impact of change closely and adjust regulations according to the findings, the Gambling Commission should undertake appropriate studies and publish a report within three years of enactment of the Bill.

Safeguards in the draft Bill

222. The draft Bill recognises that gambling can be extremely damaging to some. The statutory recognition of this has been welcomed by many of our witnesses:

"By and large the draft Bill does an excellent job of requiring everyone to pay attention to the very important matter of social responsibility".[321]

London Clubs International commented that they "believe this legislation offers a real opportunity to bring gambling and any associated problems there may be, visibly into the public arena."[322]

223. The draft Bill begins by setting out the three licensing objectives that would underlie many of the functions of the Gambling Commission and local authorities in Clause 1. The third objective is: "protecting children and other vulnerable persons from being harmed or exploited by gambling".[323] Accordingly, "protecting the vulnerable" would be a statutory obligation of regulation. In addition, the draft Bill would require the Commission to advise the Government on the incidence and effects of gambling,[324] and to enforce the sanctions contained in the draft Bill, many of which are designed to protect the young and vulnerable.

224. The draft Bill also empowers the Gambling Commission to issue codes of practice about the manner in which gambling services are provided.[325] These would become part of the conditions of operating licences. The requirement that gambling operators demonstrate compliance with a code of social responsibility would be one important means by which the Gambling Commission would be able to address the potential downsides of gambling.[326] The Government has indicated that such codes might include: avoiding the encouragement of children to gamble; provisions for players to bar themselves from gambling; the display of clear information about the chances of winning and losing; and the provision of information to customers about problem gambling and advice about where to go for help.[327] Given that the codes will be "a central feature of the new framework",[328] the Methodist Church has recommended that "a reference to social responsibility Codes should be included in the draft Bill itself."[329]

225. The industry has been eager to see drafts of these codes of practice as soon as possible, but, as we have already discussed, they are not yet available. Despite this, the Government has recognised that many sectors of the industry have adopted their own voluntary codes of social responsibility and commented that "while the Commission will no doubt wish to look afresh at each issue, the work already done in a number of areas will inform its views."[330] BACTA has sought "confirmation that the recently updated Codes will form the basis of the proposed Statutory Codes for machines".[331] We understand that all such voluntary codes have been drawn up following consultation with GamCare.

226. We have received evidence highlighting the importance of the contents of the codes of practice and a number of suggestions have been made for matters they should include.[332] Involvement of both the industry and those with expertise in problem gambling, when formulating the codes, has also been encouraged and the draft Bill contains detailed consultation provisions.[333] Negotiation and development of codes of practice with each sector of the industry is likely to be a significant task for the new Commission, yet one which will be important in tackling problem gambling. When questioned on this, the Gaming Board told us that:

"There are a number of codes already in existence which the Board has been engaged in in one capacity or another. Some of them have been issued by the Board; some of them have been issued by the industry, and we have consulted on them. Therefore, the notion of codes is not one which is strange to the industry and quite a lot of the content of the new codes, so far as they affect the practicality of the work in the industry, will take advantage of the work that has already been done on the existing codes."[334]

227. We welcome the provisions of the draft Bill, such as the licensing objectives in Clause 1, that address problem gambling and recommend that the Commission is given adequate resources and time to enable it to carry out its many important responsibilities in this area. We also recommend that the Commission should use the existing codes of practice voluntarily adopted by the industry as a starting point for those it is to issue under Clause 16 of the draft Bill and that it should start consultation on the new codes of social responsibility as soon as possible.

The industry-funded trust

228. In light of its acknowledgement that "the incidence of problem gambling increases with gambling opportunities", Budd concluded that "the industry has a duty to finance measures to limit and treat problem gambling".[335] Accordingly, it recommended that "the industry should set up a voluntarily funded Gambling Trust".[336]

229. The Trust (originally the Gambling Industry Charitable Trust, and renamed the Responsibility in Gambling Trust in February 2004) was established in January 2002 and in the financial year 2003/2004 raised £1.2 million in contributions from the industry. The Government, accepting that there is a lack of information on the causes and treatment of problem gambling, has welcomed the establishment of the Trust to commission research into these areas.[337]

230. We consider an effective, independent and adequately-funded Trust that provides support for treatment, education and research to be a crucial counterbalance to the deregulatory aspects of the draft Bill. We greatly welcome the steps that have been taken to date to establish the Trust and consider that it might provide a valuable model for other jurisdictions.

231. The Trust has set as its mission statement:

"to make it less likely that people will become problem gamblers and more likely that those who do will seek and will be able to secure effective help."[338]

Its strategy is to (a) support problem gamblers and their dependants; (b) educate vulnerable persons about the risks of gambling; (c) conduct research into the best ways of providing that support and education; and (d) fund and implement the strategy.

232. The Trust's research panel has determined that its first priority should be to commission systematic reviews of existing international research which will enable it to identify those areas in which available research provides adequate answers and those in which more research is needed.[339] We have received evidence suggesting a wide variety of areas into which the Trust should fund research, including: alcohol consumption and gambling;[340] forms of gambling that are particularly dangerous;[341] treatment trials;[342] and non-problematic gambling behaviour.[343] We have also heard about the need for the Trust "to spend money on creating public awareness of help services" that are currently available.[344] As the Centre for Gambling Research in Australia has commented:

"responsible gambling strategies do not focus mainly on treatment programmes for individual gamblers; they extend to prevention, rehabilitation, community education and community engagement. In effect, problem gambling is seen as a complex public health issue requiring a multi-faceted approach which emphasises prevention."[345]

233. The Committee recommends that, in the run up to enactment of the Gambling Bill, the Responsibility in Gambling Trust provides funding for the provision of treatment for problem gamblers and their families; education programmes to promote responsible gambling and highlight dangers of excessive gambling; public awareness campaigns to inform everyone as to the help available; and research into aspects of gambling and of problem gambling.

Relationship with industry

234. The Trust is industry-funded and, of its ten trustees, at present the Chairman and three others are independent, with the remaining six representing the industry.[346] The need for the Trust to become more independent has been stressed by a number of commentators:

"the Trust must be, and must be seen to be, independent of the industry, or its role and its research will be discredited in the public eye".[347]

235. We have been warned that "the research and funding programmes of industry-based or government-based trusts tend to favour projects that do not question/challenge gambling development and impacts (at best) or complement gambling activities (at worst)."[348]

236. The Trust has acknowledged that independence is important, and this is one of the reasons cited for its recent name change.[349] Its Chairman told us that the Trust is in the process of looking for three further independent trustees, which would mean that a majority would be independent of the industry. It is particularly looking for people with experience of counselling, education, finance or law, other forms of addiction and treatment and problem gambling.[350] We have also heard strong arguments for maintaining industry participation in the Trust:

"there are real benefits to the Trust in having people from the industry present, both in terms of […] a reality check on what the Trust is about but also in terms of assuring themselves that the Trust is spending their money wisely."[351]

237. In particular, we have heard concerns about the risks associated in having a single body acting as the sole collector and allocator of funds for research into problem gambling, for raising awareness of problem gambling and also for treating problem gambling.

238. While industry representation is of clear benefit in the context of fundraising, it is important that sectional interests and bias do not impact on the way those resources are allocated.

239. We recommend that the Trust continue with its proposals to achieve a majority of independent Trustees. We further recommend that "industry trustees" should not be appointed to act as representatives of trade associations, but that they should be appointed and should act on the basis of their experience of problem gambling from an industry perspective. In particular, we recommend that the distribution of resources by the Trust should be assessed by the Gambling Commission and should be included in their three-yearly monitoring report to the Government (which we recommend in paragraph 221).[352]

Relationship with service providers

240. The fact that the industry has been encouraged to make contributions to the Trust has had a measurable and deleterious impact on the levels of funding that it had hitherto paid direct to service providers. As we were told by GamCare:

"direct contributions have, as of now, completely dried up because it seems to be government policy to make it almost obligatory to send funds direct to the Responsibility in Gambling Trust, as it now is. With Camelot, for example, who used to contribute £50,000 a year to us, now, as you have heard this morning, they are contributing direct to RIGT. Sky, who were contributing £45,000 a year to us, were under extreme pressure and they now send it direct to RIGT […]. It does concern us because there is no guarantee RIGT will give all this to us, and we are concerned for our own future."[353]

In response to these comments, the Trust has told us that it "will continue to support GamCare and is about to start discussing grants for the period after June this year […] [and] come to an agreement with them which will enable GamCare, cost effectively, to continue to improve its services".[354] It has further commented that "The Trustees fully accept that when assessing future grants, they will need to take account of the funds that GamCare previously received from the above named companies [Sky, Camelot and Betfair], so that GamCare continues to be adequately funded."[355] Gordon House has identified two major concerns with the Trust's funding strategy: (A) Trust led, not treatments needs driven, funding allocation; and (B) funding instability that impacts upon projections for future provision.[356]

241. We recommend that industry contributions made directly to service providers should also be taken into consideration as a demonstration of operators' social responsibility.

Level of funding

242. Budd recommended that the industry should seek to raise a level of funding approaching £10 per problem gambler.[357] As noted above, this initial target of £3 million has not yet been met. Quaker Action on Alcohol and Drugs argued that "it is already apparent that the funding of £3 million per annum for the Gambling Trust is unlikely to be adequate at approximately £10 per existing problem gambler",[358] adding: "We would like to see a figure more commensurate with the £44, £40, and £26 per problem gambler spent in New Zealand, Canada, and Australia respectively".[359] The figure of £10 is particularly questionable in light of the Trust's aim to fund support for dependants of problem gamblers and the indication that the number of problem gamblers may have already risen since the last prevalence study.

243. We asked the Trust, GamCare and Gordon House whether a higher amount would be more appropriate. The Trust told us that "If we were, say, to get £10 million for the coming year we would not be able to spend it effectively."[360] GamCare and Gordon House, on the other hand, commented that they could happily spend £10 million and that such additional funding was needed to increase the availability of treatment services and to raise awareness of the services that already exist.[361]

244. In the context of our inquiries, we have also learnt a great deal about the value of the existing industry and the amount it is likely to grow as a result of the draft Bill. The Henley Study, sponsored by BACTA, has for example given the net spend on gambling in 2002 as £8.5 billion. On the basis of this figure, the current aim of £3 million represents only 0.035% of net spend, or 35 pence for every £1,000 of net spend. Given the industry's value, it is clear that, whether the amount required is £3 million or £10 million, this would not represent an unreasonable burden on the industry.

245. We recommend that before the Bill receives Royal Assent, the Trust should commission an independent assessment as to the cost of: (i) providing the services required to run a nationwide education campaign; (ii) raising public awareness of the help that is already on offer; (iii) providing efficient counselling and other treatment, for both problem gamblers and their dependants; and (iv) determining and conducting the research needed to inform decision-making. We recommend that the industry should contribute the funds that are determined to be necessary to meet those costs and consider that, given the industry's current value and likely growth as a result of the proposals in the draft Bill, this would not be an unreasonable burden.

Contributions in proportion to risk

246. The Secretary of State has called for "every sector and every company [to] join in the effort" to contribute funds to the Trust.[362] Despite the call for all sectors to contribute, we have heard a variety of suggestions as to the most equitable means of determining how much each sector should pay. Sir Peter Fry (Chairman of the Bingo Association) commented "if one believes in the principle that the polluter pays, is it right for a working man's club, for a bingo hall, to pay the same as a casino with 1,000 slot machines?", explaining that "one of the difficulties in getting some people to contribute to the trust has been just this point: 'Why should I pay, I am not much of a polluter?'"[363]

247. Some have commented that those sectors that will benefit from the draft Bill should contribute more.[364]Others have told us that it is unfair for businesses offering "softer" gambling products to contribute to the Trust "to address problems caused by much harder gambling products."[365] The Pools Promoters' Association has noted that it "is very keen to ensure that the sector's contributions to the support of problem gambling are minimal, commensurate with that risk".[366] The Lotteries Council have also sought special treatment, commenting that they should not be required to make contributions as this would merely reduce the money they are able to give to good causes.[367] We are also aware that some charities may be subject to legal restrictions preventing them from contributing to the Trust.

248. All of this illustrates that it would not be an easy task to agree an equitable mechanism for contributions. This seems to us to be a significant advantage of the current voluntary system over a statutory levy. The Casino Operators' Association has suggested that "if the industry does not satisfactorily support the Trust and a levy is imposed, the levy should be based on turnover, the payment of which the Commission would be able to check".[368] Such an apparently simple approach would not address all of the concerns raised above. Similarly, we do not accept that it would be equitable to classify forms of gambling according to the relative risks they pose and to use this as a basis for differential contribution levels.[369] We understand that the majority of problem gamblers gamble on more than one activity, ranging from "soft" to "hard" products (illustrated in Figure 3 below (Gambling Activities - First Time Callers)). Every gambling activity contributes to the potential for problem gambling. In principle, therefore, and subject to any legal restrictions preventing this, every commercial operator should contribute something to help address problem gambling.

249. The contributions that the industry might be required to make in order to address problem gambling adequately, are likely to represent a tiny fraction of the industry's profits. We, therefore, recommend that, as far as legally possible, all sectors of the industry should contribute to the Trust. We note that, by making such contributions voluntarily, businesses will not only illustrate that they are socially responsible but will also avoid the imposition of the statutory levy.

Method of funding

250. As noted above, contributions to the Trust are currently made on a voluntary basis. This has created a free-rider problem, with some operators not contributing and instead relying on the most socially responsible to foot the bill.[370] It also leaves open the risk that insufficient voluntary contributions will be made. For this reason, the draft Bill contains the reserve power for the Secretary of State to make regulations requiring operating licence holders to pay an annual levy to the Commission.[371]

251. As noted above, the imposition of a statutory levy would, however, create significant technical difficulties. Furthermore, as Rachel Lampard of the Methodist Church told us:

"My view is that we ought to give the voluntary approach a chance. That is partly on the basis that it is always good if you can get people to buy into things as they are far more likely to care about the spirit of it".[372]

252. We agree that there are significant benefits to maintaining a voluntary system of contributions and for avoiding the statutory levy. Nevertheless, it is vital that problem gambling is adequately addressed and that the industry acknowledges its financial responsibility in contributing to this. The Evangelical Alliance has suggested that "adequate contributions to the Trust, or another approved organisation supporting problem gamblers, should be taken as evidence towards compliance with the social responsibility conditions necessary for the grant of an operating licence".[373] Several witnesses have also suggested that financial contributions be considered as part of the tests applied by the Commission when determining whether to issue or renew an operating licence.[374]

253. We recommend that the ability to impose a statutory levy under Clause 98 of the draft Bill should be retained. We acknowledge Lord McIntosh's comment that "I do not see how you can make contributions to a voluntary trust a condition of licensing".[375] However, we do not believe that this would prevent the Commission taking account of an operator's financial contributions, whether to the Trust or direct to a service provider, when considering, under Clause 58 of the draft Bill, whether they are suitable to carry on a licensed activity. We consider that such an approach would encourage operators to make voluntary contributions, but we would not expect non-payment to be a reason, in itself, for the Gambling Commission to refuse to issue or renew a licence.

Government responsibility

254. A number of commentators have expressed concerns that the existence of the Trust could cause public-funded bodies to take no responsibility for problem gambling.[376]Budd recommended that increased funding be made available to the NHS for the treatment of problem gambling, and that problem gambling be recognised as a health problem by the Department of Health.[377] The Culture, Media and Sport Committee also suggested that "the Government be prepared to invest in both the research and treatment of problem gambling, through the NHS nationwide, independent of the Industry Trust".[378] This has been echoed in much of the evidence we have received. For example, Professor Orford told us that:

"One of the things that has somewhat surprised me and disappointed me is the apparent lack of the Department of Health in all of these discussions […]. it is a public health issue and in my view the Department of Health ought to be a lot more involved than they are."[379]

255. We understand that, while a small number of publicly-funded treatment schemes have been conducted, the NHS are very reluctant to address problem gambling. We also understand that this difficulty is exacerbated by the fact that the National Addiction Centre only recognises substance misuse as an addiction.[380] In this context, we welcome the Secretary of State's comments that the Department of Health:

"have made clear in the context of the development of the legislation the recognition that the National Health Service has a key role to play in the treatment of problem gambling. There is certainly a role for the Department of Health through the National Health Service but there is also, in terms of prevention, a role for the Department of Health's developing public health strategy in this respect."[381]

256. We also welcome the Minister of State for Health, Rosie Winterton MP's written answer to a question in Parliament about the assessment the Government had made of the best method of meeting the health needs of problem gamblers:

"The national development group for specialised mental health services will review treatment for problem gambling to provide guidance that will help groups of primary care trusts to commission appropriate services and support the development of services in those areas where there are significant problems."[382]

257. The Trust should not absolve the Government of its responsibilities with respect to problem gambling. We recommend that the Government should accord greater priority and resources to problem gambling and that problem gambling should be recognised as a public health issue.

258. Earlier in this Chapter (paragraphs 221 and 239), we recommended that, three years after the Bill has received Royal Assent, the Commission should publish a report into the impact of the Gambling Act on problem gambling and the effectiveness of the distribution of resources by the Trust. We recommend that following this, the Secretary of State for Culture, Media and Sport should report to both Houses of Parliament on: (a) the success of the Trust in meeting its objectives and in particular the distribution of funds; (b) the steps the Gambling Commission has taken to address problem gambling; and (c) the work the Government, and particularly the Department of Health, have done to address problem gambling.

259. We also recommend in paragraph 221 that prevalence studies should be conducted at five yearly intervals. We recommend that, after the results of the first post-enactment prevalence study are available, the Secretary of State for Culture, Media and Sport should update both Houses of Parliament on the impact of the Gambling Act on problem gambling prevalence.

The young

260. The Government has stated that it is "unwavering in its belief that gambling is for adults only [and that] the minimum age to take part should generally be 18."[383] As noted above, protecting the young from being harmed or exploited by gambling is one of the licensing objectives set out in Clause 1 of the draft Bill. Accordingly, this would become a statutory obligation of the Gambling Commission and of local authorities. In addition, the draft Bill proposes a number of age-related offences, including offences of inviting under-18s either to gamble or to enter gambling premises; offences relating to the employment of under-18s to provide facilities for gambling; and offences for those aged between 16 and 18 of taking part in gambling.[384] In addition to such statutory safeguards, the Commission will be able to attach conditions to operating licences, regulating the supervision of areas in which gambling takes place and codes of practice covering such matters as not encouraging children to gamble.[385]

A uniform age limit of 18

261. There are a number of exceptions to the general principle that the minimum age for gambling should be 18. The minimum age for buying and selling lottery tickets, including the National Lottery, and for participation in pools competitions, is 16.[386] Several submissions to the Committee have suggested that this should be raised to 18. The Evangelical Alliance commented that "the minimum age to play the Lottery should be increased to 18 to match the current age for adult gambling establishments";[387] Gala recommended that "the minimum age of play should be in line with all other forms of gaming at 18 years",[388] and Barcrest suggested that "social responsibility considerations must require that the age limit for participation in the National Lottery be raised to 18".[389] Others commented that an across-the-board imposition of a minimum age limit of 18 would emphasise that gambling is an adult activity and would avoid confusion as to the age limit that applies to a particular product.

262. On the other hand, the Pools Promoters' Association commented that it is "pleasing to note that in retaining a minimum playing age of 16, the Government equates the risk to the vulnerable posed by the football pools as being no different to lotteries, be they society lotteries or the National Lottery itself."[390] The National Prevalence study, supported by GamCare's statistics, also indicated that these activities are not significant factors in problem gambling. The Government has similarly used the argument that these forms of gambling are relatively low risk to justify the lower age limit and has commented that:

"To raise the minimum age to 18 would buy consistency at too high a price, paid amongst others by the many lotteries which involve young people and the shops in which they work part-time."[391]

The serious consequences upon the businesses that sell these products have also been raised by both the Lotteries Council and Camelot.[392]

263. When we asked representatives of these industries whether consistency should be achieved by imposing a uniform minimum age of 18, the responses we were given indicated that this would not have a significant financial impact. Camelot commented: "It is a matter of record that on a couple of occasions we have said to the Department for Culture, Media and Sport that we in fact would not oppose a change to 18[…] the work we have done would indicate it would be a loss of about £20 million a year on scratch cards."[393] Although the Lotteries Council said that they would prefer the age limit to stay the same, they also confirmed that raising the age by two years would not have a major financial impact.[394] The major consideration of the Lotteries Council was that "the worst outcome of all, from the point of view of society lotteries, would be that the National Lottery age stayed at 16 and ours went up to 18. That I do not think could conceivably be justified."[395]

264. We recommend that the minimum age to buy and sell pools coupons and lottery tickets, including for the National Lottery, should remain at 16, as is currently proposed in Clauses 36(2) and 42 of the draft Bill, given the lack of evidence that this causes harm. We recommend that the Government commission further research to ascertain whether 16 and 17 year olds are harmed by this experience and that the age-limit should be re-assessed in the light of that research.

Employment of young persons in gambling premises

265. Clauses 41 to 45 of the draft Bill restrict the ability to employ children and young people in connection with gambling. We have received evidence on the potential implications of these clauses on certain sectors of the industry. Many of these comments are set out in the Schedule of Detailed Comments on the draft Bill (Annex 1). In particular, the British Amusement Catering Trades Association (BACTA) has commented that the wording of Clause 44(1)(b) which prohibits the employment of children or young persons to perform a function "in connection with [a] gaming machine" is too wide. [396] MGM Mirage has also commented that "a young person[…]should be able to be employed in the non-gaming areas of a gaming complex (for example, as a junior waiter in a restaurant) as long as he does not enter the gaming floor and/or perform a gaming related function".[397] In response to this comment, the Government has indicated, in the Schedule of Detailed Comments on the draft Bill (Annex 1), that:

"there will be a difference in some cases between licensed casino premises and ancillary areas such as a hotel or restaurant forming part of the overall complex[…]the draft Bill does not prevent distinctions being drawn between such premises, and other areas which may be related to a casino, but which are not licensed as a casino."[398]

266. We welcome the Government's clarification that young persons will be able to be employed in areas of casino complexes in which gaming does not take place. We consider that Clauses 41 to 45 of the draft Bill should not prevent young persons being employed in gambling premises, provided that the employment does not relate to the gambling provided in those premises. As discussed above, we consider it to be appropriate that Clause 42 permits over-16s to be employed to sell lottery tickets and pools coupons.

Children and gaming machines

Family entertainment centres

267. We have heard evidence from a number of sources about the risks associated with gambling by under-18s. The majority of these comments have focused on the use of gaming machines by children, given that this is the only major form of commercial gambling in which those under the age of 16 are legally able to participate.[399] GamCare's call statistics indicate that gaming machines are by far the most dominant form of gambling for under-18s (Figure 4 (Age Profiles - Under 18s)). The draft Bill proposes that certain low stake and low prize gaming machines (Category D Machines) should continue to be available for use by children.[400]

268. Professor Orford commented:

"I believe [that the continued ability for children to play Category D machines] is one specific area of the proposals where the Government is in most danger of being seen to be inconsistent, and is putting young Britons at risk […]. Britain is alone in allowing children to play certain types of gaming machine and the Government's Gambling Review Body expressed unease about it […]. The Government is therefore, in danger of acting irresponsibly by proposing that the anomaly of juvenile gaming machine playing be allowed to continue and thereby of failing to protect young people and their families."[401]

269. The Royal College of Psychiatrists also commented that "in view of the nature of gambling, it is clearly not an activity that is suitable for children" and "It is […] a matter of great concern that gaming machines […] will continue to be available to children. There is no justification for this".[402] Several submissions have argued that machines paying out low value prizes are still enticing for children, given the relative value of the prize to their target customer.[403] The Royal College of Psychiatrists further commented that "it has been firmly established that all gaming machines, regardless of the size of stake or the amount of prize money, are unsuitable for children and young people".[404]

270. When considering the question of machine gaming by children, Budd noted "a woeful absence of research"[405] and recommended that:

"further research should be commissioned to examine the impact of machine gaming by children and […] the Government should formally review the position in five years time to determine whether any such gaming by under 18s should continue to be permitted."[406]

271. This recommendation was repeated in 2002 by the House of Commons Culture, Media and Sport Committee (the CMS Committee).[407] It is to be regretted that independent research into the impact of machine gaming by children has not been commissioned by the Government between the publication date of the Budd Report and now, nor indeed as a result of the CMS Committee recommendation.

272. When asked whether machine gaming by children should continue to be allowed, Lord McIntosh of Haringey, Parliamentary Under-Secretary of State, DCMS, told the Committee that:

"those who want to abolish what has existed for many years would have to do a bit of research and show what harm they are doing before we will be convinced that we should cut out this business."[408]

273. The evidence we have received has not been conclusive as to the extent to which Category D machines played by children are a direct cause of problem gambling. Much of it has focused on the relationship between starting to gamble at an early age and problem gambling later in life. For example:

"I know of at least four independent studies that have shown that the younger you start the more likely you are to have problems-even within the adolescent period."[409]

and

"Analysis of our male client group during the period April 2002 to March 2003 revealed some 34.8% were primarily addicted to fruit machine gambling. This sub-group of our population were found […] more significantly to have begun gambling at a much earlier age than those who engage in On and Off Course Betting and Casino gambling."[410]

274. We understand that when low-value gaming machines are mentioned by problem gamblers calling GamCare it is usually in the context of these machines having been the initial introduction to gambling as a child and, most often, when visiting (or living) at the seaside. We do not consider this to be the same as asserting that there is a direct link between machine gaming by children and problem gambling.

275. During our visits to Great Yarmouth and Blackpool we saw at first hand the importance of family entertainment centres in the range of activities that British seaside resorts offer their visitors. We have also received evidence suggesting that "use of Category D machines by children not only allows the whole family to participate in harmless and enjoyable entertainment; it provides an opportunity to encourage responsible attitudes towards the use of machines".[411] Others have commented that the limits placed on the stake and payout of these machines is likely to ensure they remain as trivial entertainment.

276. We agree with the conclusions of Budd and the Commons Culture, Media and Sport Committee that there is an absence of sufficient evidence to show that the playing of Category D machines by under-18s causes problem gambling. We recommend that the Government commission research to ascertain whether there is any causal link between the playing of Category D machines by under-18s and problem gambling. The decision to permit the playing of Category D machines by under-18s should be reviewed in the light of that research. We do not, however, agree with their recommendations that a formal review should take place after a specific period of time. Such a measure would unfairly penalise the industry by creating unacceptable uncertainty and deterring investment.

277. The trade association, the British Amusement Catering Trades Association (BACTA), of which around 85% of family entertainment centres are members, has told us about the good practice its members have adopted through self-regulation. Through its codes of practice, supported by training initiatives and followed-up through its compliance officers, BACTA is taking positive steps to ensure its members bar children during school hours and that they exclude children from any 'restricted' areas in which higher-value gaming machines are sited. We also understand that some family entertainment centres operate a policy of requiring children under the age of 16, but not between the ages of 16 and 18, to be accompanied by an adult. If children are to continue to be permitted to play Category D gaming machines, we believe such measures, and in particular adequate supervision, to be vital.

278. Given the existing lack of clear evidence as to whether machine gaming by under-18s causes problem gambling, we recommend that children should continue to be permitted to play Category D machines in adequately supervised family entertainment centres as is currently envisaged in Clauses 36(2)(e) and 37(5) of the draft Bill. We also recommend that family entertainment centres should be subject to strict codes of social responsibility to be issued by the Commission under Clause 16, like those voluntarily adopted by BACTA members including, as discussed below, strict enforcement of segregated areas in which adult gaming machines are sited.

Adult gaming machines and segregation

279. The draft Bill prohibits the use of gaming machines, other than Category D gaming machines, by under-18s.[412] Under-18s would, however, continue to be permitted to enter premises which are permitted to have adult gaming machines and to offer other forms of gambling:

a) children and young persons are, for example, permitted to enter family entertainment centres which the draft Bill would permit to have any number of Category C gaming machines;[413]

b) children are generally permitted to enter tracks which would be permitted to make four Category B and any number of Category C gaming machines available for use;[414]

c) children are entitled to enter clubs which would be permitted to have up to three gaming machines, of Category B, C or D as well as to offer other forms of gambling;[415] and

d) subject to the provisions of the Licensing Act 2003, children would be entitled to enter premises licensed for the supply of alcohol which the draft Bill would permit to have a minimum of two Category C or D machines and to offer bingo.[416] We understand that these provisions would apply equally to tenpin bowling centres.

280. The Government has made clear its policy that "[o]n any premises, no person under the age of 18 is to have any access to gaming machines in any category above Category D".[417] We have not received evidence that questions this basic position. The draft Bill seeks to achieve this in a number of ways, including by making it an offence:

a) to permit under-18s to gamble and for those between the ages of 16 and 18 to gamble - including on Category A, B or C gaming machines;[418]

b) to permit children to enter parts of family entertainment centres in which Category C machines are available for use;[419] and

c) to permit children to enter areas of tracks where Category C machines are situated or, subject to some exceptions, where betting takes place.[420]

281. In addition, the draft Bill provides that mandatory conditions of machine permits for clubs would include that no one under the age of 18 shall use a Category B or C gaming machine on the premises and that the holder will comply with any relevant provision of codes of practice about the location and operation of gaming machines.[421] It also provides that premises licensed to sell alcohol must comply with any relevant provision of a code of practice about the location and operation of gaming machines.[422]

282. Whilst we have received some detailed comments on the way these provisions are drafted, set out in the Schedule of Detailed Comments on the draft Bill (Annex 1), our witnesses have not questioned the principle underlying them. Instead, they have focused on the practicality of ensuring compliance with these rules and, in particular, of supervising adult gaming machines to prevent underage play. When asked whether pubs would put adult gaming machines in a separate area, to which children would not have access, the British Beer and Pub Association (BBPA) commented:

"It is a question of management more than anything else. Our members argue that you manage a pub by walking about, you do not manage it by hiding away and you do not manage it by having green lines on the floors or barriers around machines or sticking them into a separate area, all of which I think are laughable ways of dealing with the problem, if there is a problem"[423]

283. The British Amusement Catering Trades Association (BACTA) have taken a very different approach. Their codes of practice relating to family orientated destinations, require that its members:

a) "[s]trictly enforce the exclusion of persons under the age of 18 years from entering 'designated areas' and undertake efficient and effective monitoring of all entrances to those 'designated areas' to ensure compliance";[424]

b) "[d]isplay prominent notices to at least BACTA standard at all entrances to 'designated areas' stating that it is illegal for persons under the age of 18 years to enter the 'designated area'";[425] and

c) "[d]efine and separate the 'designated areas' from other parts of the premises by the installation and maintenance of a permanent physical barrier designed and constructed for the purpose of preventing unauthorised access to within by persons under the age of 18 years."[426]

When asked about the supervision of such designated areas in motorway service stations, BACTA told us: "Our code of practice says they should be monitored continuously. That means if it is monitored by a camera someone is going to be watching that camera all the time and taking action."[427]

284. We agree with the Government's position that under-18s should not be able to play Category A, B or C gaming machines and support the Clauses of the draft Bill designed to ensure this. We recommend that detailed codes of social responsibility relating to the enforcement of those rules should be issued by the Gambling Commission under Clause 16. Such codes should, however, take account of practicalities and of the effectiveness of measures in the context of different types of premises.

Ambient gambling

Destination gambling

285. Lord McIntosh of Haringey, Parliamentary Under-Secretary of State, DCMS, has explained to the Committee that:

"we have taken the view that in what I call destination gambling - in other words where you have to make a positive decision to go into a location where gambling takes place, rather than casual gambling which is thrust at you at the street corner - there is likely to be less increase in problem gambling than there is from casual gambling."[428]

286. The Government's distinction between destination and casual/ambient gambling is an important part of its strategy for restricting problem gambling levels. Dr Moran has supported the value of such a policy, commenting that "in view of the nature of gambling, when you participate in any type of activity it is vital that this should be a conscious decision".[429] This also enables those who have recognised that they have a gambling problem to avoid the temptation to gamble.

287. Nevertheless, the draft Bill does not propose to prohibit all forms of gambling in premises which are not dedicated to gambling. As noted above, the draft Bill will continue to permit Category D machines being sited in premises like cafes and fish and chip shops. Professor Orford said of this exception:

"The Government is talking about destination gambling but at the same time, I understand, is suggesting that there should continue to be the lower stake, lower prize machines in places like station buffets, motorway services, takeaways and so on. A station buffet is not a gambling destination […] If it is important to confine gambling to destinations, then I do not think we should also allow people to walk past machines in a station buffet. It is very confusing."[430]

288. Other exceptions to this general rule include the proposal that premises licensed to sell alcohol will continue to be able to offer a range of gambling, including Category C and D gaming machines.[431] The Association of Licensed Multiple Retailers (ALMR) has commented about the relationship between this and the policy of destination gambling: "Whilst […] it is helpful to differentiate those premises whose primary purpose is gambling, we remain to be convinced that the concept of "ambient gambling" is appropriate or accurate to describe the playing of gaming machines in a pub context."[432]

289. We recommend that, in general, gaming machines should not be permitted in premises where gambling is ancillary to the main services provided. We do not, however, consider that this should apply to pubs, clubs and tenpin bowling centres, on the basis that these premises are licensed and gambling has become an accepted and important part of the facilities they offer.

Children

290. Budd expressed specific concern about locating machines in places such as cafes and taxicab offices, noting that "The lack of supervision and ready accessibility of these machines is particularly worrying in relation to children."[433] The Gaming Board has also commented that:

"We are content that category D machines should be available in Family Entertainment Centres, but remain uncomfortable about children having casual access to gambling in other miscellaneous premises."[434]

291. As noted above, BACTA members are subject to a voluntary code containing provisions dealing with supervision. Conversely, the weakness of the single site operation, where the machines are ancillary to the main business, is that there is likely to be less of an incentive to ensure safeguards are followed and no specific code of practice to guide them. These concerns have prompted local authorities to refuse to issue or renew permits in such non-gambling premises. The existing power of local authorities to do this is proposed to be retained in the draft Bill.[435]

292. In addition, the Gaming Board has commented on the regulatory difficulties posed by the siting of gaming machines in such premises:

"The Board also has regulatory concerns in that the number and variety of outlets make enforcement difficult. We know of instances where machines have been sited without the necessary permission and/or of the wrong type for such premises (e.g. Jackpot machines). The draft Bill, as does the present Act, allows local authorities to introduce a blanket ban in their areas. But where they do not, we believe proper monitoring and enforcement is unlikely. It remains our view that a complete ban would be more effective to prevent both illegal gaming and unsupervised gambling by children."[436]

When asked about these concerns, the Secretary of State admitted that "[t]here are undoubtedly periodic problems with unlicensed machines and we are absolutely clear that it is the category D machines that are available […] If the category C machine were to be there, as people from time to time will say, they are there unlawfully".[437] She went on to explain that the Government "would look in that case to the local authority and the Gambling Commission to assist authorities in dealing with illegal machines."[438]

293. BACTA have commented that single site operations should continue to be able to operate Category D gaming machines provided that such machines are only supplied by regulated licence holders, noting that "we believe the Government should continue to oppose changes requested simply on the basis of insufficient management resources."[439]

294. We are concerned about the difficulties in ensuring that illegal machines are not sited in premises like cafes and taxicab offices and that children are adequately supervised when using machines in these premises. Accordingly, we recommend that the draft Bill should be amended to prohibit Category D gaming machines from such locations. We consider that this should be a blanket prohibition rather than a prohibition that local authorities are able but not required to impose, as is currently proposed in paragraph 7(2)(a) of Schedule 7 of the draft Bill. As discussed above, we do not, however, consider that this prohibition should extend to motorway service stations, pubs or bowling alleys, subject to compliance with strict codes of social responsibility and the provision of appropriate physical supervision.

Problem gambling: additional recommendations

295. It will be clear to those reading this Report that we have taken the issue of problem gambling very seriously. A desire to limit any increase in problem gambling has informed many of our recommendations. For ease of reference, we have indicated below those additional recommendations which we consider to be particularly pertinent to problem gambling:

The National Lottery and spread betting

Advertising, inducements and credit

We have made a number of recommendations in Chapter 7 of this Report (Advertising, Inducements and Credit). These relate to:

controlling the access of under-18s to gambling advertisements (paragraph 305);
the inclusion of information regarding sources of help for problem gamblers on advertisements and the adoption of codes of social responsibility (paragraph 312);
the ability of the Commission to regulate inducements to gamble or to increase gambling activity (paragraph 322);
the use of loyalty cards to obtain information on gambling behaviour (paragraph 326); and
restrictions on the ability of operators to offer credit (paragraph 334).

Casinos

Our recommendation on the linking of machines between casinos (paragraph 436) is based on the concern that the increased availability of high-value gaming machines could increase problem gambling prevalence.

Bingo

Our recommendations regarding the ability of casinos to offer bingo arise, in part, from concerns about the potential impact that this could have on problem gambling (paragraphs 458 and 459).

Gaming machines

Remote gambling

Our recommendations in this context have been informed by the desire to establish a well-regulated remote gambling industry. We consider that this would be of benefit to consumers (paragraph 559).

292 Gordon House, Ev 477: In its submission to the Committee, Gordon House has referred to the impact of problem gambling on members of "problem gambling families", para 4. Back

293 Productivity Commission 1999, Australia's Gambling Industries, Report No 10, AusInfo, Canberra, Vol I, 6.20 Back

294 DCMS, Gambling Review Body Report, Cm. 5206, July 2001, para 17.41 Back

295 See, for example: the Methodist Church, Ev 77: 'Research shows that gambling damages the mental and physical health, employment, relationships, and family lives of those whose gambling gets out of control (and are customarily called 'problem gamblers') and it can leave them with massive debts', para 3.1. See also Park Baptist Church, Ev 591. Back

296 Australian Centre for Gambling Research, Ev 694 Back