SELECT COMMITTEE ON THE SOCIAL AND ECONOMIC

IMPACT OF THE GAMBLING INDUSTRY

COLLATED WRITTEN EVIDENCE VOLUME

Contents

Advertising Standards Authority – Written evidence (GAM0059)........................ 1

Advertising Standards Authority – Supplementary written evidence (GAM0125). 7

Alberta Gambling Research Institute – Written evidence (GAM0017) ............... 10

Harvey Alexander – Written evidence (GAM0087)........................................... 30

Anonymous 1 – Written evidence (GAM0095)................................................. 31

Association of Convenience Stores – Written evidence (GAM0015) .................. 32

Dr Frank Atherton, Chief Medical Officer for Wales – Written evidence (GAM0006).................................................................................................................... 35

Bacta – Written evidence (GAM0050)............................................................. 45

Geoff Banks – Written evidence (GAM0003) ................................................... 61

Dr James Banks – Written evidence (GAM0033) ............................................. 64

beBettor Limited – Written evidence (GAM0021) ............................................ 67

Betting and Gaming Council – Written evidence (GAM0068)............................ 75

Betting and Gaming Council – Supplementary written evidence (GAM0129)... 100

BetVictor Limited – Written evidence (GAM0062).......................................... 105

Bet365 – Supplementary written evidence (GAM0121) ................................. 116

Bingo Association – Written evidence (GAM0013) ......................................... 117

Bingo Association – Supplementary written evidence (GAM0103) .................. 121

Bournemouth University – Written evidence (GAM0001) ............................... 122

British Beer & Pub Association – Written evidence (GAM0073) ...................... 129

British Horseracing Authority – Written evidence (GAM0065) ........................ 134

Camelot UK Lotteries Ltd – Written evidence (GAM0040) .............................. 144

Camelot UK Lotteries Ltd – Supplementary written evidence (GAM0111) ....... 155

Christian Action Research and Education (CARE) – Written evidence (GAM0047).................................................................................................................. 161

Church of England’s Mission and Public Affairs Council – Written evidence (GAM0011) ................................................................................................. 178

CLOSER, the home of longitudinal research – Written evidence (GAM0060) ... 217

Dr Peter Collins – Written evidence (GAM0079) ............................................ 226

2

Professor Mike Daube, Associate Professor Samantha Thomas and Dr Hannah Pitt – Written evidence (GAM0097) .................................................................... 233

Department of Health and Social Care, Department for Digital, Culture, Media and Sport and the Department for Education – Supplementary written evidence (GAM0020) ................................................................................................. 234

Dr Carolyn Downs – Written evidence (GAM0049) ........................................ 239

East Riding of Yorkshire Council – Written evidence (GAM0028) .................... 246

EG (Estates Gazette) – Written evidence (GAM0005) .................................... 254

Geraldine Eley – Written evidence (GAM0025).............................................. 256

English Football League – Written evidence (GAM0082) ................................ 259

EPIC Risk Management – Written evidence (GAM0107) ................................. 265

European Lotto Betting Association – Written evidence (GAM0007) ............... 271

Evangelical Alliance UK – Written evidence (GAM0072) ................................. 276

Federation of Racecourse Bookmakers – Written evidence (GAM0008) .......... 279

Federation of Racecourse Bookmakers – Supplementary written evidence (GAM0127) ................................................................................................. 282

Susanna FitzGerald QC – Supplementary written evidence (GAM0093) .......... 284

Flutter Entertainment Plc – Written evidence (GAM0055) .............................. 285

Flutter Entertainment Plc – Supplementary written evidence (GAM0130) ....... 291

Forces in Mind Trust – Written evidence (GAM0010) ..................................... 292

Professor David Forrest – Written evidence (GAM0123) ................................ 301

Anthony Franklin – Written evidence (GAM0046) .......................................... 314

GambleAware – Written evidence (GAM0014) .............................................. 320

GambleAware – Supplementary written evidence (GAM0101) ....................... 328

GambleAware – Supplementary written evidence (GAM0128) ....................... 329

Gambling Commission – Written evidence (GAM0071) .................................. 333

Gambling Commission – Supplementary written evidence (GAM0116) ........... 350

Gambling Division, Government of Gibraltar – Written evidence (GAM0026) .. 355

Gambling Research Exchange (GREO) – Written evidence (GAM0052) ........... 360

Gambling with Lives – Written evidence (GAM0098) ..................................... 366

Gambling with Lives – Supplementary written evidence (GAM0131) .............. 375

GamCare – Written evidence (GAM0063) ..................................................... 427

GamCare – Supplementary written evidence (GAM0124) .............................. 439

Gamesys Group – Supplementary written evidence (GAM0104) .................... 445

Gauselmann Group – Written evidence (GAM0096)....................................... 447

Gordon Moody Association – Written evidence (GAM0032) ............................ 455

Gordon Moody Association – Supplementary written evidence (GAM0133) ..... 462

Gerald Gouriet QC – Written evidence (GAM0045) ........................................ 463

Gerald Gouriet QC – Supplementary written evidence (GAM0114) ................. 469

3

GVC Holdings Plc – Written evidence (GAM0042) .......................................... 471

GVC Holdings Plc – Supplementary written evidence (GAM0117) ................... 478

GVC Holdings Plc – Supplementary written evidence (GAM0126) ................... 480

Hippodrome Casino Limited – Written evidence (GAM0070) .......................... 481

Hippodrome Casino Limited and Rank Group Plc – Supplementary written evidence (GAM0102)................................................................................... 509

HM Government – Written evidence (GAM0090) ........................................... 513

HM Government – Supplementary written evidence (GAM0135) .................... 530

HM Treasury – Written evidence (GAM0080) ................................................ 555

HM Treasury – Supplementary written evidence (GAM0134) ......................... 557

Peter Holloway – Written evidence (GAM0081) ............................................. 558

Roger Horbay – Written evidence (GAM0067)............................................... 572

Professor Dr Julia Hörnle – Written evidence (GAM0034) .............................. 602

Independent Betting Adjudication Service (IBAS) – Written evidence (GAM0048).................................................................................................................. 610

Information Commissioner’s Office – Written evidence (GAM0119) ................ 617

Institute of Licensing – Written evidence (GAM0054) .................................... 620

Ipsos MORI, Professor Agnes Nairn and Josh Smith – Written evidence (GAM0069) ................................................................................................. 626

Professor Bev John and Professor Gareth Roderique-Davies – Written evidence (GAM0023) ................................................................................................. 632

Martin Jones – Written evidence (GAM0115) ................................................ 636

Landman Economics – Written evidence (GAM0039) ..................................... 642

Erika Langham, Professor Gerda Reith, Professor Robert D Rogers and Dr Heather Wardle – Written evidence (GAM0043) ............................................ 654

Leeds City Council – Written evidence (GAM0038) ........................................ 668

Associate Professor Charles Livingstone – Written evidence (GAM0108) ........ 678

Lloyds Banking Group – Written evidence (GAM0120)................................... 685

Local Government Association – Written evidence (GAM0057) ...................... 691

The Lotteries Council – Written evidence (GAM0030) .................................... 701

Dr Ruxandra Monica Luca – Written evidence (GAM0100) ............................. 706

Elliot Ludvig, Philip Newall and Lukasz Walasek – Written evidence (GAM0089).................................................................................................................. 711

Alex Macey – Written evidence (GAM0058) .................................................. 717

Associate Professor David McDaid – Written evidence (GAM0076) ................. 719

Professor Agnes Nairn, Josh Smith and Ipsos MORI – Written evidence (GAM0069) ................................................................................................. 722

National Casino Forum – Written evidence (GAM0064) ................................. 723

National Centre for Social Research – Written evidence (GAM0066)............... 740

National Lottery Distributors – Written evidence (GAM0041) ......................... 746

4

Philip Newall, Lukasz Walasek and Elliot Ludvig – Written evidence (GAM0089).................................................................................................................. 749

Novomatic UK Ltd – Written evidence (GAM0051) ........................................ 750

Ofcom – Written evidence (GAM0106) ......................................................... 762

Professor Jim Orford – Written evidence (GAM0019)..................................... 765

Dr Katie Palmer du Preez – Written evidence (GAM0009) .............................. 776

Parent Zone – Written evidence (GAM0056) ................................................. 783

Antonio Parente – Written evidence (GAM0016) ........................................... 787

Dr Hannah Pitt, Professor Mike Daube and Associate Professor Samantha Thomas – Written evidence (GAM0097) .................................................................... 788

People’s Postcode Lottery – Written evidence (GAM0031) ............................. 789

People’s Postcode Lottery – Supplementary written evidence (GAM0110) ...... 795

Richard Powell – Written evidence (GAM0044) ............................................. 797

Public Health England – Written evidence (GAM0061) ................................... 799

Quaker Action on Alcohol And Drugs (QAAD) – Written evidence (GAM0083) . 800

Rank Group – Written evidence (GAM0029) ................................................. 809

Rank Group and Hippodrome Casino Limited – Supplementary written evidence (GAM0102) ................................................................................................. 822

Professor Gerda Reith, Professor Robert D Rogers, Dr Heather Wardle and Erika Langham – Written evidence (GAM0043) ..................................................... 823

Responsible Affiliates in Gambling (RAiG) – Written evidence (GAM0113) ...... 824

Professor Gareth Roderique-Davies and Professor Bev John – Written evidence (GAM0023) ................................................................................................. 829

Professor Robert D Rogers, Dr Heather Wardle, Erika Langham and Professor Gerda Reith – Written evidence (GAM0043) ................................................. 830

The Royal British Legion – Written evidence (GAM0086) ............................... 831

Royal College of Psychiatrists – Written evidence (GAM0091)........................ 837

Oliver Scholten, Dr James Walker and Dr David Zendle – Written evidence (GAM0074) ................................................................................................. 842

Dr Steve Sharman and Professor John Turner – Written evidence (GAM0037) 847

Robert Simpson – Written evidence (GAM0035) ........................................... 854

Sky – Written evidence (GAM0053) ............................................................. 861

Sky Betting & Gaming – Written evidence (GAM0085) .................................. 863

Josh Smith, Ipsos MORI and Professor Agnes Nairn – Written evidence (GAM0069) ................................................................................................. 868

Sophro – Written evidence (GAM0078) ........................................................ 869

Starling Bank – Supplementary written evidence (GAM0122) ........................ 877

Lydia Thomas, Producer, BBC Radio 4 – Written evidence (GAM0004) ........... 880

Associate Professor Samantha Thomas, Dr Hannah Pitt and Professor Mike Daube – Written evidence (GAM0097) .................................................................... 882

5

Tombola – Supplementary written evidence (GAM0105) ....................... 890

Torutek Ltd – Written evidence (GAM0036) .................................................. 894

Professor John Turner and Dr Steve Sharman – Written evidence (GAM0037) 899

UK Tote Group – Supplementary written evidence (GAM0112) ...................... 900

Dr May van Schalkwyk – Written evidence (GAM0094) ................................. 904

Vulnerability Registration Service – Written evidence (GAM0018) .................. 909

Lukasz Walasek, Elliot Ludvig and Philip Newall – Written evidence (GAM0089).................................................................................................................. 910

Dr James Walker, Dr David Zendle and Oliver Scholten – Written evidence (GAM0074) ................................................................................................. 911

Dr Heather Wardle, Erika Langham, Professor Gerda Reith and Professor Robert D Rogers – Written evidence (GAM0043) ..................................................... 912

Dan Waugh – Supplementary written evidence (GAM0024) ........................... 913

Derek Webb – Written evidence (GAM0027) ................................................. 914

White Ribbon Association – Written evidence (GAM0099).............................. 921

William Hill Plc – Written evidence (GAM0084) ............................................. 927

William Hill – Supplementary written evidence (GAM0118) ........................... 939

Dr David Zendle – Written evidence (GAM0022) ........................................... 940

Dr David Zendle, Oliver Scholten and Dr James Walker – Written evidence (GAM0074) ................................................................................................. 944

Dr. David Zendle – Supplementary written evidence (GAM0132) ................... 945

Advertising Standards Authority – Written evidence (GAM0059)

Advertising Standards Authority – Written evidence (GAM0059) 1. Background and Introduction

3.1This submission is provided by the Advertising Standards Authority (ASA),

the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) – the ‘ASA system.’

3.2The ASA is the UK’s independent advertising regulator. We have been administering the non-broadcast Advertising Code (written and maintained by CAP) for 56 years and the broadcast Advertising Code (written and maintained by BCAP) for 14, with our remit further extended in 2011 to include companies’ advertising claims on their own websites and in social media spaces under their control.

3.3We are responsible for ensuring that advertising is legal, decent, honest and truthful and our work includes undertaking proactive projects and acting on complaints to take action against misleading, harmful or offensive advertisements. We are committed to evidence-based regulation and we continually review new evidence to ensure the rules remain fit-for-purpose.

3.4In addition to investigating ads, we also provide a wealth of training and advice services (most of which are free) for advertisers, agencies and media to help them understand their responsibilities under the Codes and to ensure that fewer problem ads appear in the first place. CAP and BCAP provided over 500,000 pieces of advice and training in 2018.

3.5The ASA’s five year strategy, More Impact Online, emphasises our commitment to strengthening further the regulation of online ads. This includes exploring new technological solutions, including machine learning, to improve our regulation.

3.6The ASA is providing this written submission in response to the House of Lords Select Committee on the Social and Economic lmpact of the Gambling Industry.

3.7 Under 18s are accorded special protection under the law, operators’ licences provisions and our Codes.

3.8The ASA regulates gambling advertising under the umbrella of the Gambling Act 2005 and through collective regulation with the Gambling Commission and Ofcom.

3.9 In a nutshell, we set and enforce rules to ensure that gambling ads (wherever they appear) don’t undermine safe gambling and are socially responsible. The rules do that by 1.1 Keeping gambling ads away from TV programmes, websites and other media content that appeal more to people under 18 than to adults.

2

1.2 Ensuring that the content doesn’t exploit vulnerabilities associated with gambling.

3.10 We monitor and report on compliance with our rules, including through innovative Avatar technology, which the Secretary of State recently acknowledged as [quote]

3.11 We monitor and report on children’s exposure to gambling ads on TV, which indicates that children’s exposure to TV ads for gambling is declining.

3.12 We have an excellent track-record of reviewing and responding to the best available evidence relating to gambling advertising, which has led us to recently implement and act on strengthened guidance in relation to problem gambling and protection of under 18s.

3.13 We are publically committed to responding to the latest evidence commissioned by the advisory board for safe gambling.

3.14 We would be happy to provide oral evidence if the Committee wishes.

2. Setting and enforcing advertising standards

2.1The ASA acknowledges the public concerns around the potential impact of

gambling on children. This is why we have tough restrictions when it

comes to gambling advertising.

2.2The ASA is the UK’s frontline regulator for ads across all media, including online ads; we

regulate companies’ claims on their own websites, and ads in social media and apps.

2.3We’re supported by a range of expert statutory backstops, who can assist us, where

necessary, to bring non-compliant advertisers into compliance. For gambling advertising, our

statutory backstops include Ofcom for broadcast gambling ads, and the Gambling

Commission for non-broadcast gambling ads.

2.4Together, this ‘collective regulation’ helps to protect people and responsible business from

irresponsible online ads: ads that mislead harm or offend their audience.

2.5The ASA’s role is to prohibit irresponsible marketing. The strict rules on the content and

targeting of gambling ads apply and are enforced just as rigorously online as on TV. This

includes advertising claims on companies’ own websites, social media spaces and advergames.

2.6Crucially, gambling ads mustn’t be directed at children. Ads can’t portray gambling in a way

that’s socially irresponsible or could lead to financial, social or emotional harm. They can’t

exploit children or other vulnerable people, including through advertising content which

appeals particularly to young people or which reflects youth culture. Amongst other

restrictions, ads can’t suggest gambling provides an ‘escape’, can solve financial worries, or

can enhance personal qualities.

2.7The ASA works to ensure that gambling is advertised responsibly. We continually review the

rules, taking into account evidence about the impact of gambling advertising on potential

problem behaviour as well as gauging wider societal concerns to ensure that they remain

effective.

2.8In February 2018, CAP and BCAP published a dedicated piece of guidance on

gambling advertising, setting new standards to ensure that ads are safe and with a

3

particular focus on mitigating potential harms associated with problem gambling. The new

guidance focuses on the ‘tone’ of ads. In essence, advertisers must be more careful with the

messages they use. Based on evidence, we targeted risk factors (presented in advertising

claims, imagery or other marketing approaches) that could unduly influence vulnerable

groups to behave irresponsibly.

2.9Significant new provisions in the guidance include:

• Restricting ads that create an inappropriate sense of urgency like those including “Bet Now!” offers during live events.

• Curbing trivialisation of gambling (e.g. encouraging repetitive play).

• Preventing approaches that give an irresponsible perception of the risk

or control (e.g. “Risk Free Deposit Bonus”).

• Providing greater detail on problem gambling behaviours and associated behaviours indicators that should not be portrayed, even indirectly.

• Preventing undue emphasis on money-motives for gambling.

2.10 In February 2019, we published a report that showed that in recent years,

children’s exposure to TV ads for gambling is declining.

2.11 Children’s exposure to all TV ads peaked in 2013 (229.3 ads per week) and declined,

year-on-year, to 161.2 ads per week in 2017; a reduction of 29.7%. Over the same period,

children’s exposure to TV ads for gambling decreased by 37.3%.

2.12 We have also undertaken joint work with the Gambling Commission to protect

children, for example, we took joint-enforcement action against gambling operators who we advised to amend or remove immediately any ads on their website or in third party

media that are:

o likely to appeal particularly to people aged 17 or younger (‘under 18’); and,

o generally available to view (‘freely accessible’). This relates particularly to freely accessible ads for play-for-free and play-for-money games and includes all graphics and images displayed on a website or in third party media.

2.13 Following our ‘cease and desist’ letter aimed at companies who used cartoon

imagery in breach of our rules, online gambling operators took the necessary action to

comply with our rules.

2.14 Examples of some of our recent rulings on gambling advertising include:

o Tombola - A gambling ad appeared in the ‘I’m A Celebrity, Get Me Out Of Here’ app. It was banned because it was likely to be used by under-18s, but the app did not have a mechanism through which age-restricted ads could be targeted only to the appropriate age group.

o Greentube Alderney – A gambling ad in an in-game app was seen by the complainant’s seven-year-old son. The ad was banned because the advertiser did not use tools available to target ads away from children on shared devices.

4

o Paddy Power – A gambling ad on TV featuring Rhodri Giggs, brother

of retired footballer Ryan Giggs, was banned for implying gambling was a way to achieve financial security or improving image or self-esteem.

o WHG Ltd – An ad for gambling operator William Hill seen on the dating app Tinder was banned for linking gambling with sexual success.

o Coral Interactive Ltd - The gambling website promoted three

different games which featured animated images of a rainbow, a pot of gold and a leprechaun; fishes swimming in the ocean; and of a wizard which we banned as they were likely to be of particular appeal to children.

2.15 The gambling industry have also undertaken a voluntary whistle-to-whistle ban on

ads shown during live sporting events before the 9pm watershed.

Gambling by young people and children 3. How are new forms of technology, including social media, affecting

children’s experiences of gambling? How are these experiences

affecting gambling behaviour now, and how might they affect

behaviour in the future?

3.1The evidence suggests that exposure to gambling ads that comply with the

UK’s Advertising Codes is, of itself, unlikely to harm under-18s. Targeted restrictions are still required, however, to address the potential risks associated with irresponsible advertising. While our review of the evidence suggests to us and our regulatory partners that the core advertising rules are generally in the right place, CAP has introduced new standards to strengthen how they apply in practice. This includes:

o Social media – gambling operators must use all the tools available to

them on a social network platform to prevent inadvertently targeting their ads at under-18s. This includes both ad targeting tools provided directly by the platform (based on their platform users’ interests and browsing behaviour), and tools that restrict under-18s’ access to marketers’ own social media content.

o Advertisers have the ability to select or deselect interest-based factors, such as what users are interested in, share on social media or the accounts with which they interact. This, combined with age-targeting tools, can help remove certain demographics, including children, from a certain audience. For example, a child who misreports their age is still very likely to remain interested in content designed for their real age and less likely to be interacting with much content designed for adults.

5

o Parts of websites for under-18s – gambling operators should take particular care to avoid placing their ads on parts of websites of particular appeal to under-18s. For example, a football club’s website might have a strongly adult audience in general, but it would be inappropriate to place gambling ads in pages dedicated to younger supporters.

o Social and online gaming – Gambling-like games or games that feature elements of simulated gambling activity may be appealing to children and young people. Such games should not be used to promote real-money gambling products. Where social and online games feature marketing communications for gambling games, they should not be directed at under-18s.

o Influencers – gambling operators should take particular care when identifying influencers to promote their products or brands. They should take into account the influencer’s likely appeal and obtain audience data (for instance, the age-breakdown of a follower or subscriber-base) to ensure that under-18s are not likely to comprise more than 25% of the audience.

o Affiliates – Responsibility lies with gambling operators to ensure that affiliates or other third parties acting on their behalf to publish or disseminate ads that comply with the advertising rules.

3.2In April 2019, the ASA published the results of a project which used new

monitoring technology in the form of child avatars (simulated consumers) to uncover which ads they see online. While the ASA has regulated online ads for many years, this strand of work heralds the beginning of a new phase in the ASA’s regulation as part of its new five year strategy on having more impact online.

3.3We worked with an expert data, analytics and technology consultancy to

create seven online avatars. Their profiles were designed to reflect the browsing characteristics of children aged 6-7, 8-12 and 16 (a teenage avatar), an adult, a person of an indeterminate age, and a profile reflecting the browsing behaviour of an adult and a child using the same device.

3.4Between 26 November – 9 December 2018 the avatars:

• Undertook in total 196,000 visits to 210 websites and 40 YouTube channels • Each visited every website and YouTube channel twice a day, each time viewing the main page and one associated page/video • Were, in total, presented with over 95,500 ads of which 4.62% (4,412) were for gambling ads • Importantly, of those, 156 (0.0016% of the total ads served) were served to an under-18 avatar on a children’s websites

6

• 80% of those (125 gambling ads) came from one operator

3.5 As a consequence of this work, we have already taken action to ban ads

from five gambling operators which were served to the child avatars on children’s websites in clear breach of the UK Advertising Codes.

3.6The gambling operators have accepted their ads broke the rules. In most

instances, we were informed that the problems arose due to errors by third-party companies who served the campaigns on behalf of the operators. We instructed the companies to take immediate action to review their online ads, ensure they are not served to web users aged below 18 years of age through the selection of media or context in which they appear and to put in place measures to ensure this does not happen again.

3.7The avatar research is a breakthrough in harnessing technology to provide

the ASA with intelligence to help it better protect children and vulnerable groups. The new approach is part of wider efforts to ensure action can be taken against unsafe ads without the need for members of the public having first to suffer harm and raise a complaint. The Secretary of State for the Department for Digital, Culture, Media and Sport said: “This is an excellent example of how technology can play a pivotal role in tackling online harms, and I congratulate the ASA on this innovative approach to ensure that rules to protect children from online gambling advertising are enforced.”

3.8The findings from the avatar research provide a snapshot of the ads that

children are seeing online, with invaluable data and real examples of where ads for age-restricted products are appearing. They are also enabling speedy action to enforce the rules in respect of the small number of ads which are found to be targeted irresponsibly.

3.9The ASA is now exploring whether the approach can be extended to

logged-in environments like Facebook, Instagram and Twitter.

6 September 2019

7

Advertising Standards Authority – Supplementary written evidence (GAM0125) 1) What is your definition of ‘vulnerable people’, and can you provide

any tangible examples? You do not need to redact the names; unless you feel, you need to for a particular reason.

Although the Gambling Act 2005 includes protection of children and “other vulnerable persons” among its licensing objectives, the latter term is not defined. The ASA therefore assesses marketing communications on a case by case basis to determine whether the vulnerabilities of groups or people within the audience are relevant to a decision over whether the communication has breached the Code. Evidence suggests that certain marketing approaches are likely to have a disproportionate impact on problem gamblers and those at risk of problem gambling. GambleAware defines problem gambling as: “behaviour related to gambling which causes harm to the gambler and those around them. This may include family, friends and others who know them or care for them, such as those they work with. If someone is struggling to control their gambling behaviour, it can cause stress, depression, anxiety, or they may fall behind at work and worry about money. If someone’s gambling is causing any of these effects, it is considered problem gambling.” The ASA has regard to the vulnerability of particular groups or people when considering complaints. For instance, the evidence strongly suggests that younger men (aged 18-34) are at heightened risk of irresponsible gambling behaviour. The ASA might consider that this factor is relevant when assessing complaints under rules such as 16.3.10 (gambling as a rite of passage) that are in large part focused on protecting younger people. At the same time, the ASA will have regard to vulnerabilities affecting individuals, groups of whom may be disproportionately represented in an audience. These include economic constraints, limitations on the capacity to understand information, mental health issues and engaging in riskier patterns of play (for example, loyalty card holders or people who participate late at night). 2) Can you consider how any targeted advertising can anything be other

than targeted differentially at vulnerable people?

Deliberate targeting of ads at under 18s or other vulnerable groups or people through content (e.g. addressing or exhorting children or problem gamblers) or placement is inherently irresponsible and banned under our rules. In addition, the Codes include rules to keep gambling ads away from children’s media, including online, and where children are a significant part of the audience. For adults, the rules include extensive content restrictions that prohibit content and approaches that might appeal to people’s vulnerabilities (gambling-related, social, economic etc.). 3) Can you provide any evidence you have received of individuals who

have self-excluded then were targeted by gambling companies? On

8

page 5 of the transcript, you mentioned you were not sure of the evidence you had in relation to individuals self-excluding and then receiving further advertising. Please find attached the transcript from our experts by experience panel who shared their experiences of this.

Our data tells us that in 2019, the ASA received under 1,000 complaints about gambling advertising. These complaints are divided into three categories: Harm; Offence; and Misleadingness. The majority of gambling advertising complaints are about Misleadingness (for example, around the terms of a bet) rather than about Offence or Harm. Unfortunately, we don’t have concrete data on how many gambling advertising complaints categorised as Harm were specifically from individuals who may have self-excluded from being targeted with advertising. This is because our data collection does not go down to that granular a level. Rather, we separate out complaints under those three broad category headings and investigate ads against the relevant Code rules and take action where they have been broken. It is a principles based approach that provides a catch-all for every scenario as opposed to having prescriptive rules to cover every potential issue for a complaint. However, this would be something we would agree is against our rules. If gambling companies have data that consumers have self-excluded they should use this to target away from them in their advertising. For example, we ruled against a Google sponsored search result for Casumo Services, a gambling app. The sponsored ad was seen in 2019 following a search by a consumer for “how to unsubscribe from all gambling”. It was headed "Welcome Bonus to New Players Casumo 100% and 20 Free Spins" and stated, "Create an Account & Play now!” We considered that the search term was likely to be used by consumers seeking further information about opting out of gambling ads and that this group was likely to include vulnerable persons. 4) Can you provide data on adult and child exposure to TV advertising

for the last 10 years?

Please find our reports on children’s exposure to age-restricted TV ads attached.

5) Can you consider the evidence of the harm caused by gambling advertising and whether this is fully considered by your code?

We know that gambling advertising has the potential to cause harm. That is why the sections of the Codes dedicated to gambling advertising contain strict content and scheduling restrictions. As an organisation that is subject to judicial review it’s obviously vital that we’re an evidence-based regulator and that our regulation is proportionate. We have continuously reviewed the evidence base for gambling advertising and its impact on young people and problem gambling behaviour. It’s common sense that ads that directly address people they shouldn’t (under 18s or problem gamblers) or include content intended to influence those groups in ways they shouldn’t (encouraging underage gambling or risky play) have a heightened risk of causing harm and are inherently irresponsible. The Codes were developed with this in mind.

9

CAP reviewed the evidence in 2014 based on the Responsible Gambling Trust’s evidence review on vulnerable adults carried out by Per Binde and our own literature review related to gambling advertising and children. It updated these reviews in both 2018 and 2019. They concluded that our rules and guidance respond appropriately to areas identified in the evidence base, such as animated content with unacceptable appeal to children and risks around urgent calls to action appearing in-play that can lead to rushed decision making. But, we are not complacent. We have committed to reviewing the evidence provided by GambleAware’s Final Synthesis Report, and recognise the importance of their research to our work ensuring that protections are evidence-based and effective. 6) Can you provide the evidence surrounding the ASA’s statement that

“exposure to gambling ads that comply with the UK’s Advertising Codes is, of itself, unlikely to harm under-18s”?

Please find attached our 2014 evidence review, as well as the updated reviews from 2018 on responsibility and problem gambling, and from 2019 on protecting children and young people.

7) Can you provide information on who funded the Per Binde research?

Per Binde’s ‘Gambling advertising: A critical research review’ was published in 2014 and commissioned by the Responsible Gambling Trust in the UK.

8) Can you provide information on whether the Gambling Commission

had included gaming in the indicators for child participation in gambling?

The Gambling Commission’s Young People and Gambling survey does not include gaming as a category.

9) Also, could you provide us with the TV data for 2019 when this is

published?

We will be happy to send over our report on children’s exposure to age-restricted TV ads in 2019 once it’s published. 31 March 2020

10

Alberta Gambling Research Institute – Written evidence (GAM0017) Below is a summary of research by AGRI and AGRI affiliated researchers produced over the past five years which is relevant to the questions about the adequacy of the UK Gambling Act 2005.

The Gambling Act 2005 Q1: Are the three primary aims of the Gambling Act 2005 (to prevent

gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld?

1. Nicoll’s research suggests that the 2005 Act may not be sufficient to

ensure that gambling is conducted in a fair and open way. She documents harms connected specifically to electronic gaming machines, the operation of which is not transparent to players who consume them in casinos and betting shops (Nicoll, 2019).

Q2: What changes, if any, are required to bring the Act up to date with new

technology and the latest knowledge about how gambling harm is distributed? 2a. Nicoll examined gambling spaces in the UK and Australia as spaces of

community and belonging which create disproportionate harms to members of lower socio-economics groups where they are often concentrated (Nicoll, 2019).

2b. Mazar et al. found a strong relationship between problem gambling and engaging in certain forms of gambling (e.g., online gambling). Online gambling is a significant predictor of at-risk gambling (Mazar, Williams, Stanek, Zorn, & Volberg, 2018).

2c. Cunningham et al. explored the benefits of providing online mental health and gambling interventions to people seeking help for their gambling. He found that adding a mental health intervention to an online gambling intervention does not improve gambling or mental health outcomes (Cunningham et al., 2019).

2d. Several features of gambling, such as multi-line betting on EGMs, may facilitate in-game dissociation (Schluter & Hodgins, 2019).

2e. The population prevalence of online gambling is strongly related to its legal availability, the range of games available, and how long online gambling has been legally available (AGRI, 2019).

2f. Online gambling poses higher risks for harm due to its greater convenience, 24-hour access, ability to play when intoxicated, and solitary nature of play (AGRI, 2019).

2g. Online gambling can both promote the development of problem gambling as well as provide additional gambling opportunities to individuals who already have a gambling problem (AGRI, 2019).

2h. Online gambling has potential to increase social harm (AGRI, 2019). Q3: Is gambling well regulated, including the licensing regime for both on-

and off-shore operations? How successfully do the Gambling Commission, local

11

authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions?

3. Authorities should require licensees to monitor and control patrons’

consumption as to prevent over-consumption and guard against foreseeable harm (Chamberlain, Simpson, & Smith, 2019).

Q4: Should gambling operators have a legal duty of care to their

customers? 4a. Dr Garry Smith has argued strongly for the duty of care owed by

operators to their customers. His recently published article, titled “When should casinos owe a duty of care toward their patrons?”, explores the circumstances under which the Anns/Cooper framework could be applied to find that such a duty exists. In some circumstances, casinos might owe a duty of care to their patrons to prevent gambling-related harm. For instance, a duty of care should be imposed where a casino knows or ought to know (as a result of loyalty program data) that a patron is engaging in extreme gambling and the casino has no credible reason to believe that the patron’s existing or imminent losses are sustainable (Chamberlain et al., 2019).

4b. Casinos would be liable to the extent that they deliberately ignored or exacerbated the patron’s mounting losses (Chamberlain et al., 2019).

4c. The self-exclusion program was created by Ontario Lottery and Gaming Corporation as a means for gamblers to acknowledge their problematic behaviour and take steps to curtail it. Enrolment required individuals to complete a form and provide photo identification, which was then photocopied and circulated to security personnel. Security could then deny self-excluders entry into gambling facilities or eject them if found on the premises. However, this form of “memory-based enforcement” is relatively weak and gamblers might re-entry despite the self-exclusion agreements (Chamberlain et al., 2019).

4d. The casino should have a duty to intervene, as such patrons will predictably incur ever more serious losses if permitted to continue gambling (Chamberlain et al., 2019).

4e. Casinos are not only sufficiently analogous to commercial alcohol providers but interact in a considerably more intense and purposeful manner with their patrons; the element of proximity should therefore be established (Chamberlain et al., 2019).

4f. The casino should not be permitted to seek even greater profits, at least not without obtaining credible assurances of the patron’s ability to absorb current and additional losses (Chamberlain et al., 2019).

4g. Liability exposure should be limited to patrons who: (1) are loyalty program members; (2) display extreme metrics of excessive gambling consumption; (3) were actively subjected to inducements to gamble more; and, perhaps, (4) not subjected to reasonable efforts to confirm financial sustainability or prevent future harm (Chamberlain et al., 2019).

12

Social and economic impact Q5: What are the social and economic costs of gambling? These might

include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs.

5a. Nicoll notes the social and economic costs of gambling on specific

communities and the interconnection of gambling harms with targeted welfare policies (2018).

5b. Christensen et al. note that problem gambling cause financial problems (e.g., borrow or sold items, financial trouble, not paid money back, borrow money) and health and relationship issues (e.g., neglect children or family, arguments with family) (Christensen, Williams, & Ofori-Dei, 2019).

5c. Social, environmental, and financial reasons are the most commonly reported reasons for increases and decreases in gambling behavior (Mutti-Packer, Kowatch, et al., 2017).

5d. Mishra et al. provide evidence that gambling and antisocial behavior are highly associated, largely due to shared personality traits associated with risk (Mishra, Lalumière, & Williams, 2017).

5e. Like licenced alcohol providers, casinos contribute to the creation of risk and stand to profit by encouraging excessive consumption. While gamblers losses are ostensibly economic, they often lead to mental illness, loss of employment, family breakdown, and, to a lesser extent, bankruptcy, criminal charges, and suicide (Chamberlain et al., 2019).

Q6: What are the social and economic benefits of gambling? How can they

be measured and assessed? 6. Nicoll notes significant social benefits of gambling on games where stakes

are low and the mechanisms for setting wagers are transparent and those with skill can enjoy some success when playing within their means (2019).

Levy Q7: Is the money raised by the levy adequate to meet the current needs for

research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons?

7a. Academic freedom and integrity are paramount in gambling research;

there is a significant risk that funds raised by levies will corrupt research bodies and beneficiaries (Nicoll, 2019).

7b. AGRI provides a model of transparency and integrity that could also be used to guide research arrangements in the UK. Each qualifying university would be a stakeholder in a consortium governed by a board of academic faculty members with knowledge of gambling from a range of disciplines (including humanities and social sciences) to oversee the quality and integrity of research proposals. These faculty members would also set priority areas for address in submissions for funding (Nicoll, 2019).

13

Research Q9: If, as the Responsible Gambling Strategy Board (RGSB)1 has

suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation?

9a. Research on gambling by children and young people should be a priority

as videogames are the primary platform through which many are first encountering gambling via liminal products such as ‘lootboxes’ and ‘skins’ trading. The question of whether videogames are grooming young people for addiction to gambling platforms should be considered in light of the broader knowledge available on algorithmic systems designed to be ‘sticky’ in order to extract profit from play via micro-transactions (Nicoll, 2019).

9b. Rash and McGrath identified motives for not gambling in a sample of young adult non-gamblers. The results revealed eight specific motives for why participants chose not to gamble: ‘financial reasons and risk aversion’; ‘disinterest and other priorities’; ‘personal and religious convictions’; ‘addiction concerns’; ‘influence of others’ values’; ‘awareness of the odds’; ‘lack of access, opportunity, or skill’; and ‘emotional distress’ (Rash & McGrath, 2017).

9c. Given that gambling products and operators are driven by transnational corporate interests in gambling operations and products, it could also be that international public health instruments modeled on the WHO Framework Convention on Tobacco Control, are useful for duty of care enforcement on gambling (Hancock & Smith, 2017).

9d. Rigorous Responsible Gambling measures and their enforcement, are essential for a safe and caring gambling environment that will prevent harm (Hancock & Smith, 2017).

9e. Robust measures that could effectively protect or reduce harm are too often avoided by providers. For example; mandatory codes of practice, reducing the intensity of EGMs (for example, slower spin rate, lower bet stakes, reducing lines of play multipliers of stake, banning near misses, losses disguised as wins, and note acceptors), banning ATMs from venues and playing on credit, proof of identity for casino entry, player tracking used for protective interventions, and a host of public health and consumer protection reforms that directly flow from research (Hancock & Smith, 2017).

9f. Hancock and Smith suggest the need for re-framed RG policies as RG-Consumer Protection, that are preferably driven by an international coalition committed to consumer protection and structural regulatory reform. Their suggested improvements include:

* consumer protection/safety as the pre-eminent principle (over revenue generation);

* consumer redress for harms with clarified duty of care under the license to operate;

* a public health population approach focused on prevention of harms rather than focusing solely on ‘problem gamblers’ or prevention only pitched at gamblers rather than harmful product formats and industry regulation;

* community empowerment as the basis for licensing/planning decisions (e.g. gambling venue licensing) and industry consultation, not the compromises that come with Reno-style ‘collaboration’;

* an onus on regulators to mandate RG practices that protect players from harmful gambling formats and environments and provide industry workers with

14

safe work environments, and a responsibility of operators/gambling providers (as in New Zealand), not individual consumers, to ensure consumer protection effectiveness;

* operator duty of care with legalised redress for harms under mandated RG codes of conduct;

* transparency of industry research, player data and revenue reporting (with researcher access to industry data a condition of license);

* transparency and public reporting of regulatory efforts; * research that is independent of industry funding and influence; * independent RG regulation focused on integrity of operations,

transparency of monitoring, enforcement and operations, with accountability via the parliament (Hancock & Smith, 2017).

Education Q10: Is enough being done to provide effective public education about

gambling? If not, what more should be done? 10a. Cognitive fallacies are more often reported by those with an

incongruency between their perceived change and problem gambling severity score, suggesting that prevention and intervention efforts should focus on correcting these erroneous beliefs (Mutti-Packer, Kowatch, et al., 2017).

10b. The limits of public education in addressing harmful gambling (and other addictions) is well known. If quality research is given adequate funding, the public will be educated as to the evidence produced by credible academics. Nicoll suggests that science communication in public broadcasting outlets may do a better job of education than targeted advertising campaigns to specific consumer groups (Nicoll, 2019).

10c. Consumer education, in the face of relentless disinformation, deception, and inducement, has little beneficial effect (Hancock & Smith, 2017).

Treatment Q11: Are the services available for the treatment and support of people at

risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help?

11a. If treatment services are not immediately available to people requiring

support and assistance, their value is questionable for those experiencing harms from their gambling. There is a unique shame attached to gambling; consumers can feel stupid for repeatedly losing money and disturbed by the effect this has on those who are affected by their decisions. The best way to reduce this stigma is to make 24/7 assistance available – with digital interfaces enabling anonymity. Treatment that over-emphasizes gambling addiction as a mental illness could be avoided in favour of more generic messages like ‘Losing more than you intended? Call xxxx if you want to talk about it’. Such outreach is likely to be less stigmatizing than messages targeting gamblers as already poor, mentally ill or otherwise ‘vulnerable’ (Nicoll, 2019).

15

11b. Mader et al. argue that specific groups of problem gamblers require tailored intervention and prevention efforts (Mader, Christensen, & Williams, 2019).

11c. As with 11 a., van der Mass et al. aimed to provide a scoping review of the use of internet-based interventions for problem gambling treatment and prevention to provide an understanding of the current state of the field. He found that Internet-based interventions are a promising direction for treatment and prevention of problem gambling, particularly in reducing barriers to accessing professional help (van der Maas et al., 2019).

11d. Treatment initiatives for problem gambling may benefit from including training for clients in alternative and more adaptive coping strategies for the effective management of intense affective states (Kim, Poole, Hodgins, McGrath, & Dobson, 2019).

11e. Development of adaptive and healthy coping skills may be of particular importance in minimizing the rates of problem gambling among individuals with increased traits of urgency (Kim et al., 2019).

11f. Contacting (providing personalized feedback) highly engaged consumers about their gambling expenditure appears to be an effective method for gambling companies to meet their duty to care for customers (Jonsson, Hodgins, Munck, & Carlbring, 2019).

11g. Pop-up messages during gambling may be vital in reducing gambling-related harms by disrupting in-game dissociation (Schluter & Hodgins, 2019).

11h. Interventions for problem gambling should target cognitive, feedback, planning, and urge management strategies (Rodda et al., 2018).

11i. Religiosity may act as a static protective factor against problem gambling severity but may play a less significant role in predicting change in problem gambling severity over time (Mutti-Packer, Hodgins, Williams, & Konkolÿ Thege, 2017).

11j. Honesty–humility dimension may be a target for the prevention efforts against problematic gambling outcomes among young adults (McGrath, Neilson, Lee, Rash, & Rad, 2018).

Q12: What steps should be taken better to understand any link between

suicide and gambling? 12. Better mechanisms could be developed to enable coroners’ officers to

receive information from family members, gambling shop managers, treatment providers and others who were aware that an individual was gambling excessively prior to self-administering death. Numbers of suicides every year linked to gambling could also be available in the public domain to public media organizations (Nicoll, 2019).

Advertising Q13: The RGSB has said that by not taking action to limit the exposure of

young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.”2 Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons?

16

13. The Australian experience indicates the importance of distinguishing between reporting on sporting events and reporting on the odds and opportunities for gambling that these events offer. The potential for corruption that gambling on large and small competitions should be openly discussed by sport journalism. This is an area where schools can make a difference in teaching about the intrinsic enjoyment and value of sporting competitions, independent of the involvement of gambling corporations (Nicoll, 2019).

Gambling and sport Q14: Gambling is becoming an integral part of a growing number of sports,

with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this?

14. In Canadian context, unfair odds and payouts are customary in

Canada’s legal sports betting operation. Single event sports betting is not allowed in Canada, only parlay wagers (a bet on two or more events whereby any money wagered and won on the first bet is placed on the second bet and so on. If any bet loses, the player gets no return) (Hancock & Smith, 2017).

Gambling by young people and children Q15: How are new forms of technology, including social media, affecting

children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future?

15a. See response to question 9a (Nicoll, 2019). 15b. Sanders and Williams found an association between video game

playing and problem gambling in young people. Problem video gamers tending to be of younger age, somewhat less impulsive, less likely to have a substance use disorder, and more likely to have depression (Sanders & Williams, 2019).

Q16: The legal availability of certain forms of commercial gambling to

under-18s in Great Britain is unusual by international standards and has been described as an ‘historical accident’.3 Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins?

16. There is some research suggesting that scratch tickets can be addictive

(Nicoll, 2019). Q17: Should children be allowed to play Category D games machines (which

include fruit machines, pushers and cranes)? 17. It is important that the branding of Category D games machines

remains very distinct from those available in casinos. Otherwise brand recognition will likely transfer youth markets for arcade games to adult markets for casino games. In particular, popular television, videogames and movie titles used in slot machines should be prohibited from adaptation to category D games (Nicoll, 2019).

Lotteries

17

Q18: The restrictions on society lotteries were relaxed by the Gambling Act

2005, and there is concern that some of them are effectively being taken over by larger commercial lotteries. Is this concern well founded? If so, what should be done?

18a. It important that consumers have transparent information about the

beneficiaries and providers of lotteries. In particular, they deserve to know what parties are profiting through the process of delivering lottery opportunities to citizens (Nicoll, 2019).

18b. At-Risk Gamblers are more likely to play the instant and daily lottery (Mazar et al., 2018).

Appendix A: References

AGRI (2019). Online gambling in Alberta. Unpublished Alberta Gambling Institute report.

Chamberlain, E., Simpson, R., & Smith, G. (2019). When should casinos owe a duty of care toward their patrons? Alberta Law Review, 56(4), 963-990. doi:10.29173/alr2542

Christensen, D. R., Williams, R. J., & Ofori-Dei, S. M. (2019). The multidimensional structure of problem gambling: An evaluation of four gambling categorization instruments from an international online survey of gamblers. Journal of Gambling Studies, 1-30. doi:10.1007/s10899-019-09832-5

Cunningham, J. A., Hodgins, D. C., Mackenzie, C. S., Godinho, A., Schell, C., Kushnir, V., & Hendershot, C. S. (2019). Randomized controlled trial of an Internet intervention for problem gambling provided with or without access to an Internet intervention for co-occurring mental health distress. Internet Interventions, 17, 1-7. doi:https://doi.org/10.1016/j.invent.2019.100239

Hancock, L., & Smith, G. (2017). Critiquing the Reno Model I-IV International Influence on Regulators and Governments (2004–2015)— the Distorted Reality of “Responsible Gambling”. International Journal of Mental Health and Addiction, 15(6), 1151-1176. doi:10.1007/s11469-017-9746-y

Jonsson, J., Hodgins, D. C., Munck, I., & Carlbring, P. (2019). Reaching out to big losers: A randomized controlled trial of brief motivational contact providing gambling expenditure feedback. Psychology of Addictive Behaviors, 33(3), 179-189. doi:10.1037/adb0000447

Kim, H. S., Poole, J. C., Hodgins, D. C., McGrath, D. S., & Dobson, K. S. (2019). Betting to deal: Coping motives mediate the relationship between urgency and problem gambling severity. Addiction Research & Theory, 27(2), 95-103. doi:10.1080/16066359.2018.1455188

Mader, J., Christensen, D. R., & Williams, R. J. (2019). An evaluation of the pathways model using the Quinte Longitudinal dataset. International Gambling Studies, 1-15. doi:10.1080/14459795.2019.1602158

18

Mazar, A., Williams, R. J., Stanek, E. J., Zorn, M., & Volberg, R. A. (2018). The importance of friends and family to recreational gambling, at-risk gambling, and problem gambling. BMC Public Health, 18(1), 1-14. doi:10.1186/s12889-018-5988-2

McGrath, D. S., Neilson, T., Lee, K., Rash, C. L., & Rad, M. (2018). Associations between the HEXACO model of personality and gambling involvement, motivations to gamble, and gambling severity in young adult gamblers. Journal of Behavioral Addictions, 7(2), 392-400.

Mishra, S., Lalumière, M. L., & Williams, R. J. (2017). Gambling, risk-taking, and antisocial behavior: A replication study supporting the generality of deviance. Journal of Gambling Studies, 33(1), 15-36. doi:10.1007/s10899-016-9608-8

Mutti-Packer, S., Hodgins, D. C., Williams, R. J., & Konkolÿ Thege, B. (2017). The protective role of religiosity against problem gambling: Findings from a five-year prospective study. BMC Psychiatry, 17(1), 1-10. doi:10.1186/s12888-017-1518-5

Mutti-Packer, S., Kowatch, K., Steadman, R., Hodgins, D. C., el-Guebaly, N., Casey, D. M., . . . Smith, G. J. (2017). A qualitative examination of factors underlying transitions in problem gambling severity: Findings from the Leisure, Lifestyle, & Lifecycle Project. Addiction Research & Theory, 25(5), 424-431. doi:10.1080/16066359.2017.1307967

Nicoll, F. (2019). Gambling in Everyday Life Spaces, Moments and Products of Enjoyment. New York, NY: Routledge.

Nicoll, F. (2018). Beyond the figure of the problem gambler: Locating race and sovereignty struggles in everyday cultural spaces of gambling. Journal of Law and Social Policy, 30, 127-149.

Rash, C. L., & McGrath, D. S. (2017). Self-Generated Motives for Not Gambling Among Young Adult Non-gamblers. Journal of Gambling Studies, 33(3), 825-839. doi:10.1007/s10899-016-9656-0

Rodda, S. N., Bagot, K. L., Cheetham, A., Hodgins, D. C., Hing, N., & Lubman, D. I. (2018). Types of change strategies for limiting or reducing gambling behaviors and their perceived helpfulness: A factor analysis. Psychology of Addictive Behaviors, 32(6), 679-688. doi:10.1037/adb0000393

Sanders, J., & Williams, R. (2019). The Relationship Between Video Gaming, Gambling, and Problematic Levels of Video Gaming and Gambling. Journal of Gambling Studies, 35(2), 559-569. doi:10.1007/s10899-018-9798-3

Schluter, M. G., & Hodgins, D. C. (2019). Dissociative Experiences in Gambling Disorder. Current Addiction Reports, 6(1), 34-40. doi:10.1007/s40429-019-0238-y

van der Maas, M., Shi, J., Elton-Marshall, T., Hodgins, D. C., Sanchez, S., Lobo, D. S. S., . . . Turner, N. E. (2019). Internet-based interventions for problem gambling: Scoping review. JMIR Ment Health, 6(1), 1-11. doi:10.2196/mental.9419

Apppendix B: Relevant AGRI publications over the past three years

19

Publication Abstract Chamberlain, E.,

Simpson, R., & Smith, G. (2019). When should casinos owe a duty of care toward their patrons? Alberta Law Review, 56(4), 963-990. doi:10.29173/alr2542

With the release of the Ontario Court of Appeal’s decision in Paton Estate, the possibility was left open for a casino to be found to owe a duty of care to patrons who gamble excessively. This article explores the circumstances under which the Anns/Cooper framework could be applied to find that such a duty exists. Specifically, where the gambler is a member of a casino’s customer loyalty program, thereby imputing knowledge of extreme gambling behaviour on the casino, and where the casino has no reason to believe the patron’s losses are sustainable, a duty of care should be imposed. Liability should follow in cases where the casino knowingly contributed to or deliberately ignored these losses.

Christensen, D. R., Williams, R. J., & Ofori-Dei, S. M. (2019). The Multidimensional Structure of Problem Gambling: An Evaluation of Four Gambling Categorization Instruments from an International Online Survey of Gamblers. Journal of Gambling Studies, 1-30. doi:10.1007/s10899-019-09832-5

To examine the underlying dimensionality and structure of problem gambling using a comprehensive range of problem gambling assessments from an international online survey of gamblers. A total of 12,521 gamblers from 105 countries were recruited through banner advertising placed on a popular online gambling portal to take an online survey. Although participants were recruited online, the majority of the sample (71.6%) gambled only at land-based venues in the past 12 months. A total of 5081 individuals completed all items from the four problem gambling assessments. Participants were allocated to answer one of the four problem gambling assessments and the remaining unique items from the three other problem gambling assessments. The order of assessments were counterbalanced. Two optimal scaling procedures were independently employed to estimate the number of dimensions within the data: exploratory categorical principal component bootstrap analysis and multidimensional scaling. Nonlinear canonical correlation was then used to establish how well each of the four assessment instruments captured the identified dimensions. A final confirmatory principal component analysis was run to understand and characterise the nature of the dimensions that were identified. Both the categorical principal component bootstrap analysis and multidimensional scaling indicated the data was multidimensional, with four dimensions (including a single dominant dimension) providing the best characterisation of the data. The nonlinear canonical correlation analysis found that the Problem and Pathological Gambling Measure and the National Opinion Research Center DSM-IV Screen for Gambling Problems operationalization of the Diagnostic and Statistical Manual of Mental Disorders Four (DSM-IV) criteria best captured these multiple dimensions. Confirmatory principal component analysis suggest a core experience of generic problem gambling symptomology

20

and three other components: “financial problems”, “health and relationship issues”, and “difficulty controlling gambling”. Problem gambling symptomology appears to be multi-dimensional. Certain assessments capture this heterogeneity better than others and thereby provide a more complete and accurate assessment of this construct.

Cunningham, J. A., Hodgins, D. C., Keough, M., Hendershot, C. S., Bennett, K., Bennett, A., & Godinho, A. (2018). Online interventions for problem gamblers with and without co-occurring problem drinking: study protocol of a randomized controlled trial. Trials, 19, 1-7. doi:10.1186/s13063-018-2672-x

Background The current randomized controlled trial seeks to evaluate whether providing access to an Internet intervention for problem drinking in addition to an Internet intervention for problem gambling is beneficial for participants with gambling problems who do or do not have co-occurring problem drinking. Methods Potential participants will be recruited online via a comprehensive advertisement strategy, if they meet the criteria for problem gambling. As part of the baseline measures, problem drinking will also be assessed. Eligible participants (N = 280) who agree to partake in the study and to be followed up for 6 months will be randomized into one of two versions of an Internet intervention for gamblers: an intervention that targets only gambling issues (G-only) and one that combines a gambling intervention with an intervention for problem drinking (G + A). For problem gamblers who exhibit co-occurring problem drinking, it is predicted that participants who are provided access to the G + A intervention will demonstrate a significantly greater level of reduction in gambling outcomes at 6 months compared to those provided access to the G-only intervention. Discussion This trial will expand upon the current research on Internet interventions for addictions and inform the development of treatments for those with co-occurring problem drinking and gambling.

Hancock, L., & Smith, G. (2017). Critiquing the Reno Model I-IV International Influence on Regulators and Governments (2004–2015)— the Distorted Reality of “Responsible Gambling”. International Journal of Mental Health and Addiction, 15(6),

This article critically examines the Reno Model responsible gambling undertaking: its evolution, core ideological beliefs and promotion in four internationally influential journal articles, published between 2004 and 2015. This discourse has framed the international RG policy landscape for over a decade; emphasising individualised responsibility for harms and providing governments with justifications for compromised RG regulation. Axioms of the Reno Model are individual responsibility, framed as personal control and autonomy for informed choice and a focus on problem gamblers who manifest clinical symptoms of impaired control. Drawing on corporate political activity (CPA) analysis, regulatory-avoidance framing strategies of the gambling industry include shaping the evidence base, policy substitution (voluntary industry operator codes of conduct and problem gambler treatment programs) and assertions of insufficient

21

1151-1176. doi:10.1007/s11469-017-9746-y

evidence for introducing reforms. Barriers to ethical RG standards include deception and exploitation, faulty regulation and grim working conditions in gambling environments, along with Reno Model adherents’ dismissal of contradictory evidence. The critique proposes a shift in the dominant regulatory Model from industry self-regulation under self-monitored codes of practice to RG-Consumer Protection that addresses structural issues of power and vested interests, featuring core principles of public health, consumer protection, operator duty of care, regulatory transparency and independent research.

Jonsson, J., Hodgins, D. C., Munck, I., & Carlbring, P. (2019). Reaching out to big losers: A randomized controlled trial of brief motivational contact providing gambling expenditure feedback. Psychology of Addictive Behaviors, 33(3), 179-189. doi:10.1037/adb0000447

Gambling disorder is a public health issue in many countries, and expectations that the gambling industry protects individuals from harm are increasing. The primary objective of this study was to investigate the effects of providing personalized feedback on gambling intensity among high consumers of venue-based and online gambling in Norway. A randomized controlled trial design was used to evaluate how behavioral feedback by telephone or letters sent via surface mail affects subsequent gambling expenditure and use of responsible gambling tools and whether a follow-up contact increases the effect. Gambling expenditure, the primary outcome, was measured using theoretical loss, which is the actual cost to the player, adjusted for the house advantage. From the top .5% of customers based upon annual expenditure, a sample of 1,003 statistical triplets, matched on sex, age, and net losses, were randomly assigned to the feedback intervention by telephone, letter, or a no-contact control condition. Participants assigned to the phone call or letter were also randomly assigned to receive or not receive a subsequent follow-up contact. The results showed that over 12 weeks, theoretical loss decreased 29% for the phone and 15% for the letter conditions, compared with 3% for the control group. A positive effect of the follow-up contact was limited to participants who at the initial call indicated an interest in receiving a follow-up call. Contacting high consumers about their gambling expenditure appears to be an effective method for gambling companies to meet their duty to care for customers.

Kim, H. S., Poole, J. C., Hodgins, D. C., McGrath, D. S., & Dobson, K. S. (2019). Betting to deal: coping motives mediate the relationship between urgency and

Background and aims: Elevated impulsivity traits, particularly negative and positive urgency, have been identified as robust predictors of problem gambling. However, the mechanisms that link urgency to problem gambling remain unknown. The present research examined whether self-reported gambling motives (social, coping, enhancement, financial) mediated the association between urgency and problem gambling severity. Methods: The sample consisted of 564 community gamblers (52.1% female; M age =36.10, SD = 11.25)

22

Problem gambling severity. Addiction Research & Theory, 27(2), 95-103. doi:10.1080/16066359.2018.1455188

including 156 (27.7%) who were classified as moderate risk gamblers and 141 (25%) as problem gamblers. Results: The mediation analyzes revealed that both negative and positive urgency were associated with problem gambling severity. Coping was the only motive that mediated these associations. The pattern of results remained the same when the analyzes were restricted to problem gamblers and when controlling for days gambled and money spent in the past 30 days. Conclusions: The desire to alleviate strong emotional states (negative or positive) maybe an important determinant of problem gambling. Furthermore, results indicate that treatment initiatives for problem gambling may benefit from including training for clients in alternative and more adaptive coping strategies for the effective management of intense affective states.

Mader, J., Christensen, D. R., & Williams, R. J. (2019). An evaluation of the pathways model using the Quinte Longitudinal dataset. International Gambling Studies, 1-15. doi:10.1080/14459795.2019.1602158

The present study tested tenets of the Pathways Model of problem gambling by completing a cross-sectional latent class analysis using an existing dataset. The sample in this study consisted of 125 first-time adult problem gamblers from Ontario, Canada who participated in the Quinte Longitudinal study of Gambling and Problem Gambling. A three-class solution was found to be the best fitting model. There was a class resembling Behaviourally Conditioned gambler (n = 40), demonstrating minimal rates of pre-existing psychopathology and social dysfunction; a class that shared consistencies with the Emotionally Vulnerable gambler (n = 56), showing intermediate rates of anxiety, depression, problematic substance use and social dysfunction prior to onset of problem gambling; and a class resembling the Anti-social Impulsivist gambler (n = 29) characterized by the highest impulsivity, social dysfunction, antisociality and pre-existing psychiatric illness. Overall the findings provide evidence for the etiological assumptions of the Pathways Model by demonstrating that problem gamblers can be sub-grouped on traits pre-existing the development of aberrant gambling. These findings have implications for prevention and clinical practice, as specific groups of problem gamblers may require tailored intervention and prevention efforts.

Mazar, A., Williams, R. J., Stanek, E. J., Zorn, M., & Volberg, R. A. (2018). The importance of friends and family to recreational gambling, at-risk gambling,

Background The variables correlated with problem gambling are routinely assessed and fairly well established. However, problem gamblers were all ‘at-risk’ and ‘recreational’ gamblers at some point. Thus, it is instructive from a prevention perspective to also understand the variables which discriminate between recreational gambling and at-risk gambling and whether they are similar or different to the ones correlated with problem gambling. This is the purpose of the present study. Method

23

and problem gambling. Bmc Public Health, 18, 1-14. doi:10.1186/s12889-018-5988-2

Between September 2013 to May 2014, a representative sample of 9,523 Massachusetts adults was administered a comprehensive survey of their past year gambling behavior and problem gambling symptomatology. Based on responses to the Problem and Pathological Gambling Measure, respondents were categorized as Non-Gamblers (2,523), Recreational Gamblers (6,271), At-Risk Gamblers (600), or Problem/Pathological Gamblers (129). With the reference category of Recreational Gambler, a series of binary logistic regressions were conducted to identify the demographic, health, and gambling related variables that differentiated Recreational Gamblers from Non-Gamblers, At-Risk-Gamblers, and Problem/Pathological Gamblers. Results The strongest discriminator of being a Non-Gambler rather than a Recreational Gambler was having a lower portion of friends and family that were regular gamblers. Compared to Recreational Gamblers, At-Risk Gamblers were more likely to: gamble at casinos; play the instant and daily lottery; be male; gamble online; and be born outside the United States. Compared to Recreational Gamblers, Problem and Pathological Gamblers were more likely to: play the daily lottery; be Black; gamble at casinos; be male; gamble online; and play the instant lottery. Importantly, having a greater portion of friends and family who were regular gamblers was the second strongest correlate of being both an At-Risk Gambler and Problem/Pathological Gambler. Conclusions These analyses offer an examination of the similarities and differences between gambling subtypes. An important finding throughout the analyses is that the gambling involvement of family and friends is strongly related to Recreational Gambling, At-Risk Gambling, and Problem/Pathological Gambling. This suggests that targeting the social networks of heavily involved Recreational Gamblers and At-Risk Gamblers (in addition to Problem/Pathological Gamblers) could be an important focus of efforts in problem gambling prevention.

McGrath, D. S., Neilson, T., Lee, K., Rash, C. L., & Rad, M. (2018). Associations between the HEXACO model of personality and gambling involvement, motivations to gamble, and gambling

Background and aims Substantial research has examined the role of personality in disordered gambling. The predominant model in this work has been the five-factor model (FFM) of personality. In this study, we examined the personality correlates of gambling engagement and gambling severity using a six-dimensional framework known as the HEXACO model of personality, which incorporates FFM characteristics with the addition of honesty–humility. In addition, the potential mediating role of gambling motives in the personality and gambling severity relationship was explored. Methods

24

severity in young adult gamblers. Journal of Behavioral Addictions, 7(2), 392-400.

A sample of undergraduate gamblers (n  = 183) and non-gamblers (n = 143) completed self-report measures of the Problem Gambling Severity Index (PGSI) and the Gambling Motives Questionnaire-Financial, as well as self- and observer report forms of the HEXACO-100. Results Logistic regression results revealed that scores on honesty–humility were positively associated with non-gambling over gambling status. Furthermore, it was also found that honesty–humility, agreeableness, and conscientiousness were each uniquely associated with PGSI severity scores. The results of the mediational analyses suggest that each personality factor has different gambling motivational paths leading to PGSI gambling severity. Discussion and conclusions The findings of this study contribute to the literature on behavioral addictions by providing an increased understanding of individual personality factors associated with likelihood of gambling, overall gambling severity, and gambling motives. Ultimately, these findings suggest that the honesty–humility dimension may be a target for the prevention efforts against problematic gambling outcomes.

Mishra, S., Lalumière, M. L., & Williams, R. J. (2017). Gambling, Risk-Taking, and Antisocial Behavior: A Replication Study Supporting the Generality of Deviance. Journal of Gambling Studies, 33(1), 15-36. doi:10.1007/s10899-016-9608-8

Research suggests that high frequency gambling is a component of the “generality of deviance”, which describes the observation that various forms of risky and antisocial behavior tend to co-occur among individuals. Furthermore, risky and antisocial behaviors have been associated with such personality traits as low self-control, and impulsivity, and sensation-seeking. We conducted a replication (and extension) of two previous studies examining whether high frequency gambling is part of the generality of deviance using a large and diverse community sample (n = 328). This study was conducted as a response to calls for more replication studies in the behavioral and psychological sciences (recent systematic efforts suggest that a significant proportion of psychology studies do not replicate). The results of the present study largely replicate those previously found, and in many cases, we observed stronger associations among measures of gambling, risk-taking, and antisocial behavior in this diverse sample. Together, this study provides evidence for the generality of deviance inclusive of gambling (and, some evidence for the replicability of research relating to gambling and individual differences).

Mutti-Packer, S., Hodgins, D. C., Williams, R. J., & Konkolÿ Thege, B. (2017). The protective role of religiosity

Background Little research has examined the potential protective influence of religiosity against problem gambling; a common addictive behavior, and one with a host of associated negative health and social outcomes. The aims of this study were to examine (1) the potential longitudinal association between religiosity and problem gambling

25

against problem gambling: findings from a five-year prospective study. Bmc Psychiatry, 17, 1-10. doi:10.1186/s12888-017-1518-5

among adults and (2) the potential moderating role of gender on this association. Methods Data were from five waves of the Quinte Longitudinal Study (QLS), between 2006 and 2010. Participants were Canadian adults from Belleville, Ontario, Canada (n = 4121). A multiple group (based on gender) latent growth curve analysis was conducted to examine the overall trajectory of problem gambling severity. Two models were tested; the first examined the influence of past-year religious service attendance, and the second examined an overall measure of personal religiosity on the trajectory of problem gambling. The Problem and Pathological Gambling Measure (PPGM) was used as a continuous measure. The Rohrbaugh-Jessor Religiosity Scale (RJRS) was used to assess past-year frequency of religious service attendance and personal religiosity. Religious affiliation (Protestant, Catholic, Atheist/Agnostic, Other, Prefer not to say) was also included in the models. Results At baseline, higher frequency of past-year religious service attendance (males: β= −0.54, females: β= −0.68, p < 0.001 for both) and greater overall personal religiosity (males: β= −0.17, females: β= −0.13, p < 0.001 for both) were associated with lower PPGM scores. The moderating effect of gender indicated that the influence of past-year religious service attendance was greater among females (χ2diff(44) = 336.8, p < 0.001); however, the effect of overall religiosity was greater among males (χ2diff(36) = 213.4, p < 0.001). Findings were mixed with respect to religious affiliation. No measures of religiosity or religious affiliation were associated with the overall decline in problem gambling severity. Conclusions These findings suggest that religiosity may act as a static protective factor against problem gambling severity but may play a less significant role in predicting change in problem gambling severity over time.

Mutti-Packer, S., Kowatch, K., Steadman, R., Hodgins, D. C., el-Guebaly, N., Casey, D. M., . . . Smith, G. J. (2017). A qualitative examination of factors underlying transitions in problem

Background: The current study sought to explore the narrative accounts of individuals who underwent changes in their problem gambling severity, and identify subjective factors underlying these transitions. Additionally, respondents’ perceived change in their gambling behavior was compared with a validated measure of problem gambling severity. Methods: Participants were recruited from The Leisure, Lifestyle, & Lifecycle Project (LLLP), a prospective cohort study based in Alberta, Canada. In-depth, semi-structured telephone interviews were conducted with a subset of participants identified as showing a significant increase or decrease in problem gambling severity between Wave 4 and 5 of the LLLP (n = 41). Principles of phenomenology

26

gambling severity: Findings from the Leisure, Lifestyle, & Lifecycle Project. Addiction Research & Theory, 25(5), 424-431. doi:10.1080/16066359.2017.1307967

and grounded theory were used to thematically code interviews. Results: About half of respondents increased in problem gambling severity between Wave 4 and 5 (n  = 22), while 19 respondents decreased. For those who perceived this change (n = 13), the most common factors underlying increases in problem gambling severity were the same factors underlying decreases and included financial, social, and internal reasons. More than half of the sample (n  = 28) perceived stability in, or a change in their gambling behavior that was incongruent with their problem gambling severity score. These respondents tended to endorse a greater degree of gambling fallacies, dissonant feelings, and mental health issues, compared to those who had accurately perceived their change. Conclusions: The findings suggest that many individuals may not accurately perceive transitions in their gambling. Gambling fallacies and dissonant feelings seem to underlie this discrepancy, highlighting the need for public health initiatives to focus on correcting these erroneous beliefs.

Nicoll, F. J. (2019). Gambling in Everyday Life Spaces, Moments and Products of Enjoyment. New York, NY: Routledge.

The book adopts a critical cultural studies lens to explore the entanglement of government and gambling in everyday life. Its qualitative approach to gambling creates a new theoretical framework for understanding the most urgent questions raised by research and policy on gambling. In the past two decades, gambling industries have experienced exponential growth with annual global expenditure worth approximately 300 billion dollars. Yet most academic research on gambling is concentrated on problem gambling and conducted within the psychological sciences. Nicoll considers gambling at a moment when its integration within everyday cultural spaces, moments, and products is unprecedented. This is the first interdisciplinary cultural study of gambling in everyday life and develops critical and empirical methods that capture the ubiquitous presence of gambling in work, investment and play. This book also contributes to the growing cultural studies literature on video and mobile gaming. In addition to original case studies of gambling moments and spaces, in-depth interviews and participant observations provide readers with an insider’s view of gambling. Advanced students of sociology, cultural theory, and political science, academic researchers in the field of gambling studies will find this an original and useful text for understanding the cultural and political work of gambling industries in liberal societies.

Nicoll, F. (2018). Beyond the figure of the problem gambler:

As gambling has become a ubiquitous feature of many neoliberal capitalist societies, the problem gambler has become a familiar cultural figure, invoked in regulation, popular culture and everyday life. This article brings critical research on governmentality together with cultural studies

27

Locating race and sovereignty struggles in everyday cultural spaces of gambling. Journal of Law and Social Policy, 30, 127-149.

and critical Indigenous scholarship on whiteness, race and sovereignty to understand the racial biopolitics of gambling beyond the individual subject of problem gambling. I argue that, for settler-colonial states, gambling plays a role in maintaining tropes of cultural representation and securing legal and political power within an overarching system of white racial entitlement. An investigation of cultural spaces and products of gambling in Australia, together with close readings of Indigenous creative works, ties the figure of the problem gambler to broader processes of what Goldberg calls ‘racial neoliberalism’. I show how this figure becomes a metonym for dysfunctional consumption, is harnessed to racially targeted welfare reforms, and used to undermine the rights of Indigenous people, both as gamblers and as sovereign political and legal subjects.

Sanders, J., & Williams, R. (2019). The Relationship Between Video Gaming, Gambling, and Problematic Levels of Video Gaming and Gambling. Journal of Gambling Studies, 35(2), 559-569. doi:10.1007/s10899-018-9798-3

The relationship between video gaming and gambling was examined in a large cross-sectional sample of 3942 Canadian online panelists who responded to a solicitation recruiting individuals who regularly gambled or played video games. Most past year video gamers reported gambling in the past year (78.5%) and most past year gamblers reported playing video games in the past year (70.7%). However, frequency of involvement in gambling as well as all individual types of gambling was only weakly correlated with frequency of involvement in video games. Problem gamblers and problem gamers were found to have similar demographic features as well as high rates of mental health problems and impulsivity. Some differences did exist, with problem video gamers tending to be younger, somewhat less impulsive, less likely to have a substance use disorder, and more likely to have depression. Despite having similar profiles, overlap between problematic levels of gaming and gambling was modest, with only 10.5% of the 466 problem gamblers also being problem video gamers and 24.1% of the 203 problem video gamers also being problem gamblers. In general, the evidence would suggest that although the risk factors and manifestations of problem gaming and problem gambling are similar, involvement and/or overinvolvement in one is not a strong predictor of involvement and/or overinvolvement in the other.

Schluter, M. G., & Hodgins, D. C. (2019). Dissociative Experiences in Gambling Disorder. Current Addiction Reports, 6(1), 34-40.

Purpose of Review This review provides a summary of the literature (2012–2018) regarding dissociative experiences in Gambling Disorder (GD). We provide an overview of conceptualizations of dissociation, its relationship to GD, dissociation within specific types of gambling, and harm reduction strategies targeting gambling-related dissociative experiences. Recent Findings The gambling literature lacks a unified conceptualization of dissociative experiences, and measures different aspects of

28

doi:10.1007/s40429-019-0238-y

dissociation across studies. The propensity of some individuals toward general and in-game dissociation appears to be involved in the development and/or maintenance of GD. Several features of gambling may facilitate in-game dissociation, particularly among individuals with GD. As such, tools that disrupt in-game dissociation may be crucial for harm reduction. Summary Future research should be aimed at developing a single, operational definition of dissociation in gambling, and this should be systematically examined across gambling modalities. Additionally, ongoing refinement of interventions that effectively interrupt in-game dissociation holds promise for reducing gambling-associated harms.

van der Maas, M., Shi, J., Elton-Marshall, T., Hodgins, D. C., Sanchez, S., Lobo, D. S. S., . . . Turner, N. E. (2019). Internet-Based Interventions for Problem Gambling: Scoping Review. JMIR Ment Health, 6, 1-11. doi:10.2196/mental.9419

Background: This study seeks to give an overview of academic research on internet-based interventions that are used to address problem gambling. The rate of treatment seeking has been demonstrated to be low across several research environments. This is in part because of the systemic barriers that treatment seekers face to accessing traditional face-to-face treatment. Making treatment resources for problem gambling available through the internet is one way to reduce the impact of those systemic barriers. The use of internet-based resources to address problem gambling has been growing, and a field of research evaluating it has developed as well. However, little has been done to summarize this collection of research. Objective: This study aimed to provide a scoping review of the use of internet-based interventions for problem gambling treatment and prevention to provide an understanding of the current state of the field. Methods: A scoping review was performed for 6 peer-reviewed research databases (Web of Science, PsycINFO, Cumulative Index to Nursing and Allied Health Literature, MEDLINE, Social Science Abstracts, and Scopus) and 3 gray literature databases (MedEdPortal, Proquest: Dissertations, and OpenGrey). Article inclusion criteria were as follows: published over the 10-year period of 2007 to 2017, including an intervention for problem gambling, and involving the use of internet to deliver that intervention. Results: A total of 27 articles were found that met the review criteria. Studies were found from several different areas, with particularly strong representation for Australia, New Zealand, and Scandinavia. Cognitive behavioral therapy was the most common form of internet-based intervention. Internet-based interventions were generally shown to be effective in reducing problem gambling scores and gambling behaviors. A wide range of interventions that made use of internet resources included text-based interactions with counselors and peers, automated

29

personalized and normative feedback on gambling behaviors, and interactive cognitive behavioral therapies. A lack of diversity in samples, little comparison with face-to-face interventions, and issues of changes in the treatment dynamic are identified as areas that require further investigation. Conclusions: Internet-based interventions are a promising direction for treatment and prevention of problem gambling, particularly in reducing barriers to accessing professional help. The state of the current literature is sparse, and more research is needed for directly comparing internet-based interventions and their traditional counterparts.

4 September 2019

30

Harvey Alexander – Written evidence (GAM0087) Grab Machines are found in many chain restaurants, motorway service stations and amusement arcades. They are mainly played by young children, who often pester their parents for several pound coins to put in to these machines, to attempt to win a soft toy. What the children do not realise is that they are gambling. These machines are not games of skill. To win a soft toy a player has to direct the grab to descend over a toy, grip it, then lift it into a shoot. What children and their parents are unaware of, is that even when the grab is directed accurately and should pick up a toy it fails to do so because the grip mechanism is programmed to grip a toy hard enough to lift it one in ten times and in some locations never. These machines are gambling machines, they should only be played by people over the age of 18 and there should be a clear notice on these machines stating, that they are games of chance and not games of skill and should not be played by children 12 September 2019

31

Anonymous 1 – Written evidence (GAM0095) I write to your Select Committee as the father of a problem gambler who has gambled away a consistent £20,000 per year in each of the past 10 years. I do so in the hope that through detailing my personal experience that this will aid the broader understanding and appreciation as to the nature of problem gambling and the human misery it creates. We believe my son’s problem started while at school but went completely out of control when he left for University. He was reportedly coerced into gambling away a terms funding at a Casino during his 1st night away. His problem continued, but was only revealed to us a further 2 years later. In the Christmas of his final year, with approaching £25,000 in debts on top of his student loans and unable to fund the deposit for his second terms accommodation he broke down following a Boxing Day online gambling binge in which he spent the £1000 he had begged from his mother on Christmas day to alleviate this debt crisis. He was in such despair that with a doctor’s note he was granted permission to put his education on hold and re-sit his final year. Now aware of the problem the family sought guidance from Gamblers Anonymous and Gamcare. Over the following 8 years a very careful balancing act in following their expert guidance on addressing his gambling has, to this point, failed. After his bail out and resit he was awarded a 2.1 but homeless, unemployed and with a now pregnant partner he managed to secure a high pressure job in recruitment with a performance dependent income. Despite this new responsibility, self-exclusion from gambling websites and eventually self-referral for counseling over the next 2 years the extent of his gambling remained unaltered. Subsequently a new job, that has provided a successful and well paid career, has also offered no rest bite but served only to fund more gambling, with gambling binges most recently last Christmas and in April this year. This has left his two young children and partner without the basics, bills unpaid and him often unable to fund transport to work. I believe that over this 10 year period the gambling industry identified, targeted and ruthlessly exploited my son. It would appear that no attempt has been made by them to use the data trail of his online gambling to limit or block his expenditure at any time. Indeed the reverse looks to be the case Where is the duty of care here? This is a problem that has proved, to date, impossible to cure and I believe much more could have been done by the industry to stop the creation of the problem in the first place. For many the cost of family breakdown and neglect will be recovered from the public purse while the perpetrators are allowed to extract millions from their shameful businesses. 13 September 2019

32

Association of Convenience Stores – Written evidence (GAM0015)

1. ACS (the Association of Convenience Stores) welcomes the opportunity to respond to the House of Lords Gambling Industry Committee’s call for evidence to inform their inquiry into Social and Economic Impact of the Gambling Industry. ACS is a trade association representing 33,500 local shops. Our members include the Co-Op, McColl’s, SPAR UK, Nisa and thousands of independent retailers. For more information about ACS, see Annex A.

2. There are 46,262 convenience stores in the UK, employing 365,000 people

selling a range of grocery products and providing a number of services to their local communities. The majority of convenience retailers (82%) offer lottery products1. By far the most common lottery products offered in-store are for the National Lottery. The National Lottery has proved to be an extremely valuable development for convenience stores, not only bringing new income in the form of retailer commission offered on sales, but also introducing new customers to stores and bringing footfall.

3. ACS is proud of the role that local shops have played in the success of the

National Lottery. Retailers have actively promoted the games and taken part in new marketing activity. This has driven sustained growth for the National Lottery which has generated £40bn2 for good causes. Many of these good causes are in the communities served by retailers selling National Lottery games, which has allowed stores to promote the value of the National Lottery to local customers.

4. The Department for Digital, Culture, Media and Sport are currently

consulting on plans to increase the minimum age of play for National Lottery scratchcards to ensure that young people are protected from the potential risks of gambling related harm. ACS will be responding to the consultation and we have set out our position on changing the age restriction below. We will share our full submission to the consultation with the Committee once agreed with members.

Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins?

5. If the government decides, after careful consideration and the commissioning of new research, that there is evidence of harm on young customers, and that the age restriction for scratchcards should be increased, we will work with retailers to ensure that the change is implemented effectively across the sector. The convenience sector is extremely effective at enforcing age restrictions in store on a wide range of products including alcohol, tobacco, fireworks, and lottery products. We provide comprehensive guidance in our Preventing Underage Sales

1 ACS Local Shop Report 2018 2 The National Lottery: Life Changing

33

Assured Advice3 on enforcing age restrictions, which is approved by trading standards as part of ACS’ Primary Authority Partnership.

6. If the age restriction on scratchcards is moved to 18, we believe that the

government should increase the minimum age of play for all National Lottery products to 18. It is important to ensure that there is a consistent message about the sale of lottery products. Having two separate age restrictions within the same product category would not only cause confusion for retailers but it would also cause confusion for customers.

7. This is also supported by ACS’ Voice of Local Shops survey of 1,174

independent convenience retailers which found that 38% of retailers support the existing legal age restrictions for National Lottery products. This is likely due to very few retailers having difficulty enforcing the current age restriction and that their staff members are already familiar with the regulations. However, 34% of retailers supported changing the legal age restriction for all National Lottery products to 18, compared to 4% of retailers who supported changing the legal age restriction of scratchcards to 18 but keeping lottery at 16, and 1% of retailers who supported changing the age restriction for lottery to 18 but keeping the age restriction for scratchcards at 16. The survey also found that 24% did not have an opinion on the age restriction of National Lottery4.

For more information, please contact Julie Byers, ACS Public Affairs Manager by emailing Julie.Byers@acs.org.uk or calling 01252 533008. 2 September 2019 ANNEX A

3 ACS Assured Advice: Preventing Underage Sales 4 ACS Voice of Local Shops Survey August 2019

34

35

Dr Frank Atherton, Chief Medical Officer for Wales – Written evidence (GAM0006) Summary of response

i. The Gambling Act 2005 has had unintended consequences in the growth of gambling and has led to an increase in gambling-related harm. The harm caused by gambling is unequal in distribution, with those who are economically inactive and living in deprived areas suffering the most harm. It is time to rebalance the economic benefits of gambling by applying a public health approach to the issue along with a precautionary approach to protect children from the harms and potential harms from gambling. There is a clear risk to our younger generation who are exposed to gambling-type behaviours from an early age through online gaming and high levels of advertisements accessed via a range of media channels.

ii. The Gambling Act 2005 needs to be amended to: ensure it reflects on all forms of gambling, including online and gambling-type behaviours within games; make operators responsible for under-age gambling; and place statutory restrictions on where and how gambling products may be advertised, particularly around sports, as the impact of advertising cannot simply be controlled through codes that aim to prevent the appeal of adverts to children as their impact is more nuanced then that. There perhaps need to be a complete review of the gaming machine categories to ensure they are fit for purpose given the changes in the market since they were introduced. Research into the impact of under-18 use of Category D games machines and prediction of future behaviours would inform policy here.

iii. Additionally, only a statutory levy can ensure a consistent and adequate level

of funding is received to properly support harm minimisation, prevention, evidence-based treatment options and research into gambling-related harm. The services currently available are insufficient and better evidence on what works in practise is needed. A longitudinal study to explore the mobility in and out of the problem gambler category identified in population surveys would help to inform the factors causing gamblers to become problem gamblers and why some problem gamblers relapse, thus informing policy options. There is some evidence of associations between online gaming and gambling addiction but further research is needed to explore whether a causational relationship exists. The blurring of the lines between online gaming and gambling needs to be resolved.

36

Questions The Gambling Act 2005 1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld? 1. The Gambling Act 2005 has had unintended consequences in the growth of

gambling and has led to an increase in gambling-related harm. The harm caused by gambling is unequal in distribution, with those who are economically inactive and living in deprived areas suffering the most harm.5 The Welsh Government added questions on gambling in the Health Behaviour in School-aged Children/School Health Research Network survey added during 2017-18; data from this survey show that 13% of adolescents in Wales had spent money on gambling in the last seven days. Among the gambling activities most frequently reported were fruit/slot machines (5%), playing Lotto (3%), National Lottery Scratchcards (3%); playing machines in a betting shop and other gambling machines, betting in a betting shop, National Lottery instant win games (internet) and any other National Lottery games were also reported but at lower levels. Adolescents reporting gambling in the past seven days increased with age, from 11% in year 7 to 17% by year 11.6 It has been proposed that adolescent gambling is a high-risk behaviour, similar to alcohol, substance or tobacco use and unprotected sexual activity.7

2. It is time to rebalance the economic benefits of gambling by applying a public health approach to the issue. This has been understood in many countries across the world, including Canada, New Zealand and Australia, where such an approach has already been adopted.

2. What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed? 3. The Gambling Act 2005 needs, in particular, to be amended to address the

rise in on-line gambling, provide tighter restrictions on advertising and broaden the definition of ‘gambling’ to bring the gambling-type behaviours within gaming into its jurisdiction to address that overlap.

4. The primary aims of the Gambling Act 2005 should also be amended to require that children are prohibited from gambling, rather than simply protected from being harmed or exploited.

5 Wardle, H., Keily, R., Astbury, G. and Reith, G., 2014. ‘Risky places?’: Mapping gambling machine density and socio-economic deprivation. Journal of Gambling Studies, 30(1), pp.201-212.

(2017) Gambling Behaviour in Great Britain in 2015. Evidence from England, Scotland and Wales. NatCen. 6 Student Health and Wellbeing In Wales: Report of the 2017/18 Health Behaviour in School-aged

Children Survey and School Health Research Network Student Health and Wellbeing Survey. http://www.shrn.org.uk/wp-content/uploads/2019/05/SHRN-HBSC-NR_31.05.2019.pdf 7 Messerlian C, Gillespie M, Derevensky JL. Beyond drugs and alcohol: Including gambling in a high-risk behavioural framework. Paediatrics and Child Health 2007;12(3):199-204.

37

3. Is gambling well regulated, including the licensing regime for both on- and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions? 5. There is room for improvement here. Survey data from Wales show that

under-18s are engaging in gambling activities8 therefore age-verification checks are clearly not robust enough. The permission of gaming machines through alcohol licences should be reviewed given the results of test purchase data, published by the Gambling Commission in 2018, which showed an 89% failure rate to prevent children accessing 18+ gaming machines in pubs.9 As far as is feasible, off-shore operations should be subject to the same requirements as on-shore operations.

4. Should gambling operators have a legal duty of care to their customers? 6. Yes; as should any responsible provider of goods or services. They should

also have a legal duty to prevent underage gambling; this should be linked to their conditions of licence.

Social and economic impact 5. What are the social and economic costs of gambling? These might include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs. 7. The harms caused by gambling for the individual include anxiety, stress,

depression, and alcohol and substance misuse10. These factors are likely to have a wider impact on family and friends. Further family problems can include ‘money troubles’ and family breakdown, as well as neglect and violence towards any partner or children. There are higher rates of separation and divorce among problem gamblers compared to the general population11. Further impacts of gambling include the inability to function at work, and financial problems which can lead to homelessness12. The harms from gambling to wider society include fraud, theft, loss of productivity in the workforce, and the cost of treating this addiction13. Gambling harm not only affects the individual.

8. The cost to society of gambling is hotly debated and, while there is no definitive sum which can be attributed to the cost of gambling in the UK, the

8 See 2 9 https://www.gamblingcommission.gov.uk/news-action-and-statistics/News/gambling-

commission-highlights-failures-to-stop-children-playing-on-18-pub-gaming-machines 10 Cowlishaw, S. and Kessler, D., 2016. Problem gambling in the UK: implications for health, psychosocial adjustment and health care utilization. European addiction research, 22(2), pp.90-98. 11 Department of Culture, Media and Sport. Scoping Study for a UK Gambling Act, 2005 Impact Assessment Framework. DCMS, 2007 12 Eby, L.T., Mitchell, M.E., Gray, C.J., Provolt, L., Lorys, A., Fortune, E. and Goodie, A.S., 2016.

Gambling-related problems across life domains: an exploratory study of non-treatment-seeking weekly gamblers. Community, Work & Family, 19(5), pp.604-620. 13 Thorley, C., Stirling, A. and Huynh, E., 2016. Cards on the table-The cost to government associated with people who are problem gamblers in Britain. IPPR Report.

38

Institute for Public Policy Research estimated the societal cost of problem gambling in 2016. Due to limitations in the data, these findings should be taken as an illustrative estimate of the excess costs incurred beyond those which are incurred by otherwise similar people. This study does not determine the causality between problem gambling and the incurrence of cost. The estimated excess cost of gambling for Wales is between £40 million and £70 million14, which includes estimates for primary care (mental health) services, secondary mental health services, hospital inpatient services, Job Seekers Allowance claimant costs, lost labour tax receipts, statutory homelessness applications, and incarcerations. The costs listed represent those where data are available and is not an exhaustive list.

9. It has been reported that people who identified themselves as problem

gamblers are twice as likely to consult their GP for mental health concerns, five times as likely to be hospital inpatients, and eight times as likely to access psychological counselling when compared with people who do not identify as problem gamblers15.

6. What are the social and economic benefits of gambling? How can they be measured and assessed? 10.Gambling is a widespread and socially acceptable activity in the UK. It can

provide social spaces for people to meet, and is enjoyed as a recreational activity by many. People can experience excitement when placing a bet, heightened pleasure watching a sporting event, and a thrill if they win. The gambling industry also offers employment and leisure opportunities and other social and economic benefits. Tax revenues are considerable in the UK: in 2017 this amounted to £2.7 billion16. However, the economic benefits of gambling need to be balanced against the social and health harms to people who gamble, their family, friends and wider society. While most people who participate in gambling activities do so without any significant problems, for others gambling is problematic; causing damage to their health and to wider society.

11.The benefits and harms experienced from gambling are variable. For example, a person who has a good income and plays the lottery once a week may experience little harm and some pleasure from playing the lottery. However, a person on a limited income who gambles to try and improve their financial position but experiences significant losses may experience a great deal of harm and little pleasure. Not all gambling exposes people to the same level of gambling harm. Research has indicated some forms of gambling are associated with higher levels of gambling-related harm17,18 but causality has not been proven. The complexity of gambling means that individuals

14 Thorley, C., Stirling, A. and Huynh, E., 2016. Cards on the table-The cost to government associated with people who are problem gamblers in Britain. IPPR Report. 15 Cowlishaw, S., Gale, L., Gregory, A., McCambridge, J. and Kessler, D., 2017. Gambling problems

among patients in primary care: a cross-sectional study of general practices. Br J Gen Pract, p.bjgp17X689905. 16 HM Revenue & Customs (2016). HMRC Annual Report and Accounts 2016-17 p.163. 17 Reith, G. and Dobbie, F., 2011. Beginning gambling: The role of social networks and

environment. Addiction Research & Theory, 19(6), pp.483‑493. 18 Breen, R.B. and Zimmerman, M., 2002. Rapid onset of pathological gambling in machine gamblers. Journal of Gambling Studies, 18(1), pp.31-43.

39

experiencing severe harm from gambling often gamble using several different products and channels19. At a population level, there are lots of people experiencing small amounts of harm from gambling, and a small number of people that experience high levels of harm20.

Levy 7. Is the money raised by the levy adequate to meet the current needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons? 12.At present, the monies raised are inadequate to meet the current needs for

research, education and treatment. Due to their voluntary and irregular nature it is difficult for recipients to plan, budget and forecast their spending. In addition, Government has little control or influence where the contributions are directed. Ultimately, only a statutory levy can ensure a consistent and adequate level of funding is received to meet these aims and I therefore fully support this approach. Any monies received, whether voluntarily or through a mandatory levy should be used to support harm minimisation, prevention, evidence-based treatment options and research into gambling-related harm. The Gambling Commission should be responsible for auditing the monies received and spent to ensure full transparency and accountability. This information should be included in their annual report. Government, including the devolved governments, should be consulted on and approve an overarching plan on how the contributions received are spent.

13.In New Zealand, the ‘problem gambling levy’ is set under the Gambling Act 2003 to reimburse the Government for the costs of the problem gambling integrated strategy to prevent and minimise gambling harm. The levy is collected on the profits of New Zealand’s four main gambling operators: gaming machines in pubs and clubs, casinos, the New Zealand Racing Board and the New Zealand Lotteries Commission. The levy is set every 3 years, with the formula used for calculating the levy rates for each sector specified by the Gambling Act 2003. The levy is calculated using rates of player expenditure (losses) on each gambling subsector and rates of client presentations to problem gambling services attributable to each gambling subsector – so reflects money lost and associated harm. The Levy is reviewed every 3 years. For 2013-16 – the levy ranged from 0.3% for the Lotteries Commission to 1.3% for Gaming Machine operators.

Research 8. How might we improve the quality and timeliness of research in the UK? What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons? 14.The Gambling Commission’s new national strategy suggests the need for an

independent research hub. I agree that there is a need to co-ordinate

19 Conolly, A., Fuller, E., Jones, H., Maplethorpe, N., Sondaal, A., and Wardle H. 20 Browne, M., Langham, E., Rawat, V., Greer, N., Li, E., Rose, J., Rockloff, M., Donaldson, P.,

Thorne, H., Goodwin, B. and Bryden, G., 2016. Assessing gambling-related harm in Victoria: a public health perspective. Victorian Responsible Gambling Foundation.

40

research efforts across the UK to avoid overlap/duplication and to ensure future research addresses the existing gaps in knowledge. This could be achieved through a research forum, hosted by the Gambling Commission, which brings together key partners to agree a programme of research and monitor research outputs, including those from other countries.

9. If, as the Responsible Gambling Strategy Board (RGSB) has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation? 15.A precautionary approach should be adopted to protect children from the

harms and potential harms from gambling; this should include harm caused by their own gambling and harm caused through the gambling of others. There is a clear risk to our younger generation who are exposed to gambling-type behaviours from an early age through online gaming and high levels of advertisements accessed via a range of media channels.

16.More robust measures should therefore be in place to prevent underage gambling, this should include online gambling. The Gambling Act 2005 should be amended to make it a condition of licence that operators demonstrate the measures they have in place to prevent underage gambling. The definition of ‘gambling’ in the 2005 Act should be extended to include the gambling-type behaviours seen in gaming such as skins betting and loot boxes. Parents, guardians and those responsible for the health and wellbeing of children and young people should be made aware of the harms, and potential harms, of both online gaming and gambling. The minimum age for the National Lottery should be increased from 16 to 18 years old; this should be extended to all National Lottery products including those available online, scratchcards and the main draw.

Education 10. Is enough being done to provide effective public education about gambling? If not, what more should be done? 17.No. Prevention and education are key and more could be done via a public

health approach to educate the public about gambling.

18.For children and young people, this can be addressed through the school curriculum in the first instance. In Wales, changes to the national curriculum are underway that make financial education a key element offering robust provision to help learners develop their financial skills. The new Personal and Social Education framework for 7-19 year olds includes the themes ‘Health and Emotional Wellbeing’ and ‘Preparing for Lifelong Learning’; these allow gambling as a topic to be picked up by learners when considering how lifestyle choices affect health and well-being and developing skills regarding managing money and budgeting. Advice to parents and carers has already been issued via the Welsh Government’s Hwb to address the risk to our younger generation of exposure to gambling-type behaviours through online gaming.

19.Awareness of gambling treatment services should be increased; this should

be via a public awareness campaign of the signs to look out (for both the individual and friends/family of gamblers) and where help can be sought.

41

More awareness also needed about the available blocking software such as Gamban and banks/credit card providers that offer gambling-product blocks. Primary care workers and other frontline staff need to be educated in identifying those suffering from gambling-related harm and be made aware of the services available for referrals.

Treatment 11. Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help? 20.The services currently available are insufficient and better evidence on what

works in practise is needed. Treatment services in Wales that are funded by GamCare are in the process of being expanded through additional funding of the treatment provider Ara; however, whether this will fully address treatment needs in Wales is not yet known. The call by the National Institute for Health Research (NIHR) for evidence on which interventions are most effective and the consideration of treatment guidelines by the National Institute for Health and Care and Excellence (NICE) should go some way to address this issue.

21.Given the clear correlation between problem gambling and other health risk behaviours such as substance misuse and poor mental health, pathways between treatment services for these health issues should be improved and/or co-located to ensure a holistic, patient-centred approach. Behavioural treatment providers should be trained to identify gambling-related harm to improve links between services.

22.Although population rates of problem gamblers are usually relatively stable (in Wales, the prevalence of problem gamblers was 1.1% of adults in 2015 and 0.8% in 201621), there is some evidence to suggest that there are new problem gamblers every year and an element of relapse22 23 24. A longitudinal study to explore the mobility in and out of the problem gambler category identified in population surveys would help to inform the factors causing gamblers to become problem gamblers and why some problem gamblers relapse. Exploration of this issue would help to inform the approach taken in promoting treatment services and when intervention would be most successful.

21 https://www.gamblingcommission.gov.uk/news-action-and-statistics/Statistics-and-research/Levels-of-participation-and-problem-gambling/Levels-of-problem-gambling-in-Wales.aspx 22 Public Health Agency of Sweden. 2014. Swelogs Factsheet 20. https://www.folkhalsomyndigheten.se/contentassets/d17b1189058e4edbb6cc1e6f702f0775/what-

do-we-know-about-gambling-problems-in-sweden-2014-eng.pdf 23 Wardle H, Fuller L, Maplethorpe N, Jones H. Follow-up study of of loyalty card customers: changes in gambling behaviour over time.GambleAware, 2017. 24 Billi R, Stone CA, Marden P, Yeung K. The Victorian gambling study: a longitudinal study of gambling and health in Victoria, 2008-2012.Victorian Responsible Gambling Foundation, 2014.

42

23.International evidence shows higher rates of problem gambling amongst veterans than the general public but there is little UK data available25. Swansea University has been funded by the Forces in Mind Trust to undertake the first ever UK survey to understand and explore the levels of gambling participation and attitudes to gambling in ex-Service personnel26.

12. What steps should be taken better to understand any link between suicide and gambling? 24.This is one of many research questions but something that needs addressing

given findings from a recent review of the latest available evidence, which suggested that problem gamblers had elevated rates of suicidal thoughts, attempts and non-suicidal self-harm.27 This review was based on 2007 data and so there is a clear need for more research in this area given the proliferation of gambling across the UK since that data was collected.

Advertising 13. The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons? 25.Yes, I agree. The liberalisation of gambling as a result of the Gambling Act

2005 has resulted in huge increases in the volume of gambling advertising provided across the range of media channels. My 2017 Annual Report, Gambling with our Health28 followed my return to the UK after four years of working in the Canadian public health system. On my return, I was immediately struck by the huge expansion of advertising for gambling products that had occurred in my absence.

26.Codes of practice exist to control the content of gambling adverts29 but do not address the general volume. The recently published Ipsos MORI Interim Synthesis Report on the effect of gambling marketing and advertising on children, young people and vulnerable adults30 noted that exposure to the sheer volume of advertising and marketing led to perceptions of normalisation and, in time, legitimisation. I understand that the full synthesis report will explore this relationship further; these findings will be useful in the development of policy. I believe we should take greater regulatory control and place statutory restrictions on where and how gambling products may be advertised, similar to restrictions on the advertising of tobacco and alcohol.

Gambling and sport

25 Gambling Problems in UK Armed Forces Veterans: Preliminary Findings. Roberts, E., Dighton, G.,

Fossey, M., Hogan, L., Kitchiner, N., Rogers, R. and Dymond, S. https://www.fim-trust.org/wp-content/uploads/2017/06/Gambling-Report-FINAL.compressed.pdf 26https://www.swansea.ac.uk/psychology/news/departmentawardedfundstobetterunderstandlevels

ofgamblinginex-servicepersonnel.php 27 https://about.gambleaware.org/media/1978/summary_gamblingandsuicide.pdf 28 https://gov.wales/sites/default/files/publications/2019-03/gambling-with-our-health-chief-medical-officer-for-wales-annual-report-2016-17.pdf 29 https://www.asa.org.uk/news/don-t-gamble-with-under-18s-ad-protections.html 30https://about.gambleaware.org/media/1965/17-067097-01-gambleaware_interim-synthesis-report_090719_final.pdf

43

14. Gambling is becoming an integral part of a growing number of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this? 27.Gambling advertising and sponsorship within certain types of sport,

predominantly football, has mostly replaced tobacco and alcohol advertising which was previously prolific in such arenas. Steps to address this close association should be a key area for action is it presents the risk of over-exposure to gambling adverts children and young people as well as vulnerable adults.

28.The Remote Gambling Association (RGA) proposed ‘whistle-to-whistle’ advertising ban due to come into effect later this year is welcome but we cannot rely on the industry self-regulating and simply being responsible. In Australia, changes to broadcasting rules that came into effect in March 2018 that place more restrictions on live sport broadcasts between 5.00 am and 8.30 pm meaning that no gambling advertising or promotion of odds is permitted from five minutes before the published scheduled start of play, until five minutes after play, including during breaks.31

29.The recently published Ipsos Mori report32 found that gambling advertising in sport is a clear example of a category that can appeal to a wide audience (for example in the use of sports stars), including children, even if this is not the overall intention. In his review of tobacco product packaging, Sir Cyril Chantler talks of a ‘spill-over’ effect whereby packages that are designed to appeal to a young adult, also, albeit inadvertently, appeal to children 33. I believe that a similarly plausible argument can be made in respect of gambling adverts, particularly when linked to sport; the impact of advertising in this space cannot simply be controlled through codes that aim to prevent the appeal of adverts to children as their impact is more nuanced then that.

Gambling by young people and children 15. How are new forms of technology, including social media, affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future? 30.There is some evidence of associations between online gaming and gambling

addiction but further research is needed to explore whether a causational relationship exists. The blurring of the lines between online gaming and gambling needs to be resolved. Some games permits users to pay money to play games where they can win online prizes or tokens, which can then subsequently be sold online thus exposing children and young people to gambling-type behaviours before they are 18 years old.

31.In 2015, the Gambling Commission identified several risks associated with social gaming: problem gambling type risks - spending large amounts of time and/or money; transitional risks – social gaming increasing young people’s participation in real money gambling; and consumer protection type risks.34

31 https://www.acma.gov.au/theacma/new-gambling-advertising-rules-during-live-sports 32 See 23 33 https://www.kcl.ac.uk/health/10035-TSO-2901853-Chantler-Review-ACCESSIBLE.PDF 34 https://www.gamblingcommission.gov.uk/PDF/Social-gaming-January-2015.pdf

44

32.The recent Ipsos Mori research found that adverts with no specific gambling

reference feature particularly on social media where ‘content marketing’ was widely used to build brand loyalty rather than prompt a specific gamble (for example promoting a discussion about who are the best players in the league).35 Given that over two-thirds of 12 to 15 year olds report using either Facebook or Instagram36, this is an approach that has the potential for gambling operators to build their future customer base.

16. The legal availability of certain forms of commercial gambling to under-18s in Great Britain is unusual by international standards and has been described as an ‘historical accident’. Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins? 33.I believe that the age of national lottery participation should be increased

from 16 to 18 year olds and would like to see this across all products, including the national draw, online instant wins and scratchcards. The latest Health Behaviour in School-aged Children/School Health Research Network survey data show that the Lotto (3% of respondents) and National Lottery Scratchcards (3%) were among the gambling activities most frequently reported for adolescents to have participated in; National Lottery instant win games (internet) and any other National Lottery games were also reported but at lower levels.37

34.We also need to better understand the extent to which some people are spending large proportions of their disposable income on National Lottery. Research in this area would help to inform the consideration of player protection options which could be used to support people in this position.

17. Should children be allowed to play Category D games machines (which include fruit machines, pushers and cranes)? 35.Research into the impact of under-18 use of Category D games machines and

prediction of future behaviours needs to be undertaken to inform a response to this. There is anecdotal evidence of problem gamblers starting their gambling addiction through the use of penny slot machines and pushers. Given the recent lowering of the maximum stake for fixed odds betting terminals (Category B2 gaming machines), which has led to similar stakes and prizes in this category as compared to B3 and B3A machines, there perhaps need to be a complete review of the gaming machine categories.

5 August 2019

35 See 23 36 https://www.statista.com/statistics/415138/social-media-usage-among-children-uk/ 37 See 2

45

Bacta – Written evidence (GAM0050) Executive Summary

1. Bacta represents the amusement machine industry.

2. There are 310,000 machines of many different kinds from juke boxes and pool tables to fruit machines and children’s rides located in pubs, arcades, and other premises in the UK. The industry employs 34,000 people and contributes £2 billion to the UK economy.

3. The industry is tightly regulated and operates its own Code of Conduct which goes beyond statutory controls in for example age verification.

4. Bacta believes that gambling is generally well-regulated in the UK and that the licensing objectives form a clear basis upon which to build legislation and regulation.

5. Bacta does not believe however that the Gambling Commission has found the right balance in permitting gambling insofar as it is consistent with the licensing objectives. We believe it fails to understand business and this inhibits its effectiveness as a regulator. At times is can be pedantic, disproportionate and dismissive. We are concerned about a tendency towards regulatory creep.

6. The Gambling Act has not kept pace with technology. Most gambling takes place on mobile devices that were not around in 2005.

7. Bacta is proud of its record on age verification testing. We blind test all our members who have age-controlled premises (which goes beyond the regulatory requirement) with a pass rate consistently around 85%.

8. Bacta operators exhibit a duty of care towards their customers but we do not believe that this should be legal. It would be near impossible to define and impossible to establish where that duty began and ended.

9. The costs of problem gambling can be estimated. Work has been done to establish a workable definition and others (Centre for Economics and Business Research) came up with a number for the cost of problem gambling associated with Fixed Odds Betting Terminals that may be instructive. Any costs must be set against the benefits of gambling to provide context and meaning.

10.Any mandatory levy should be based on a detailed analysis of what research is needed. The current 1% figure is not based on any proper analysis and in any case for many businesses is unaffordable. The public purse receives significant sums from the gambling industry and should be used to pay for education and treatment – problem gambling, like alcohol and drug addiction, should be treated as a public health issue. Any levy should be ‘smart’ in that it should if introduced reflect the level of harm caused. It is wrong to expect a society lottery to fund research into

46

problem gambling at the same level as on-line sports betting which has much higher rates of problem gambling associated with it.

11.Gambling should be part of the PSHE curriculum in schools.

12.Young people spend their lives on-line. This is where the highest risk resides and where legislation and regulation should be designed accordingly.

13.Permitting young people to play on amusement machines is not an ‘historical accident’ and neither is it unique to the UK. These machines come in many shapes and sizes. There is no concern about machines such as cranes or pushers which provide the mainstay of the family fun nearly 20 million people enjoy each year. The issue has been examined carefully numerous times since the 1960’s and the conclusion has always been that the risk of harm is so low that, with the extensive protections in place, change is not warranted.

14.Bacta has listened to recent concerns about Category D reel-based cash payout fruit machines by instigating a new voluntary measure which only permits people over the age of 16 to play on these machines unless accompanied by an adult.

47

RESPONSE TO THE HOUSE OF LORDS SELECT COMMITTEE ON THE SOCIAL AND ECONOMIC IMPACT OF THE GAMBLING INDUSTRY 1. INTRODUCTION 1.1. Bacta represents the owners and operators of seaside amusement

arcades, over-18 amusement centres, and the companies that hire machines to pubs, clubs, bowling alleys, bingo halls and similar venues. It also represents the manufacturers and distributors of all types of amusement equipment. This can range from children’s rides, to jukeboxes, fruit machines in pubs and clubs, crane grabbers, penny falls, tuppeny nudgers, test your strength machines, videos, pool tables and gaming machines.

1.2. Bacta welcomes the opportunity to contribute to the Lords Select

Committee and would be happy to appear before the Committee to expand upon the responses provided below.

1.3. We have confined our responses to those questions where we believe we

have relevant knowledge and experience to contribute. That is not to say that we do not have a view on those questions to which we have not responded, but rather that we believe there will be individuals and organisation better qualified to provide an answer to the Committee.

2. BACKGROUND 2.1. The amusement machine industry is a very broad church. We have listed

in paragraph 1.1 just some of the machines our industry covers. In total there are 310,000 machines of one kind or another found in a wide range of venues some of which are also listed above. Our industry has a collective turnover over of £1.6 billion employing directly and indirectly 34,000 people and contributing £2 billion to the UK economy annually.38 The industry is a significant part of the tourism and entertainment sector.

2.2. Bacta members are in the serious business of fun. Our customers, like all

public facing businesses, are at the heart of our offer, an offer that in one form or another can be traced back to the Victorian era when mechanical entertainments and diversions began to appear at the seaside. The industry today provides a blend of machine-based entertainment along a spectrum that stretches from the low stake gaming machine-focused adult gaming centre (AGC), to the seaside Family Entertainment Centre that continues to provide the family-focused entertainment it has for generations. Culturally, the industry has strong links to the travelling showmen community. At the same time it has in recent years attracted significant inward investment from two global companies, Gauselmann and Novomatic.

2.3. As a long-standing public facing industry we have always been alive to the

need to ensure we exercise exemplary social responsibility. Whilst the

38 PWC 2015 copy available on request

48

products found in our industry are by and large amusement machines, some are classified as games of chance and subject to statutory control and regulation. We have always augmented the law with our own Code of Conduct stretching back to the time of the first modern gaming laws in the 1960s. A copy of our current Code is attached at Appendix A [not published as evidence to the Committee]. In addition, Bacta has employed since the late 1980s a team of Compliance Officers who have assisted members with their statutory and regulatory obligations as well as those under our Code. The Code remains constantly under review and Bacta has recently responded to public concerns by trialling an amendment to the Code which would augment the law and prevent persons under the age of 16 playing on Category D cash payout fruit machines unless accompanied by an adult.

2.4. Bacta campaigned to have the maximum permitted stake on Fixed Odds

Betting Terminals reduced to £2. These machines were out of kilter with the gaming machine hierarchy, caused well documented harm and as a result contributed to a negative perception of all risk-based entertainment that included many of the products Bacta members operate. The debate around gambling activities has as a result become increasingly febrile and their Lordships are to be commended for instituting an Inquiry that will seek to make considered recommendations on the basis of the evidence put to it.

2.5. The end of the debate on FOBTs has allowed Bacta to return its focus to

promoting its members’ amusement offer. We launched at the beginning of the summer a campaign called Siding with the Seaside. This campaign re-enforces many of the public policy recommendations emerging from the Lords Select Committee into Regenerating Seaside Towns. We were pleased to see that the Government last month published the Tourism Sector Deal through which we will continue promoting the great British seaside.

3. RESPONSE TO QUESTIONS The Gambling Act Q1. Are the three primary aims of the Gambling Act 2005 (to prevent

gambling from being source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld?

3.1. The licensing objectives set out in section 1 of the Gambling Act provide a

concise and clear basis upon which to frame the subsequent sections of the Gambling Act.

3.2. We would point out however that in our view the necessary generality of a

principle has been exploited by the Gambling Commission to exercise what has been described as ‘regulatory creep’. In particular, and by way of example, we would suggest that the Commission now interprets the third licensing objective to protect children and vulnerable far more widely than

49

intended. On a natural reading of the principle it would indicate that there is a particular onus on considering for the purposes of the legislation, those who are identifiably and specifically vulnerable. That would include for example not only children but vulnerable adults such as those with learning difficulties, mental illness or affected by substance misuse. The Commission currently reflects a view that everyone is vulnerable to gambling related harm and therefore the entire population is covered by this principle. As a result policy proposals from the Commission that have, as their intent, the putative protection of the vulnerable, are applicable to the population as a whole - most of whom gamble perfectly safely. Recent proposals by the Commission to require retail operators to individually track players we would argue falls squarely into this camp. Incidentally we also believe that this proposal in itself is deeply flawed.

3.3. Gambling in this country is generally crime free and fair. We would argue

the amusement machine sector has done well in keeping it so. Q2. What changes, if any, are required to bring the Act up to date with

new technology and the latest knowledge about how gambling harm is distributed?

3.4. The pace of change exhibited by developments in technology is breath-

taking. It is hard to believe that the first iPhone appeared in 2007. This fact alone makes the point eloquently that the Gambling Act 2005 is out of date. The amount of gambling activity that takes place via mobile devices dwarfs that of any other channel. We have no specific view on what changes to the Act are required to accommodate this development other than as a point of principle the retail and on-line sectors should in respect of their offers be broadly similar. That is to say stakes and prizes and game specifications should be equivalent. That in itself would be a significant player protection measure. By way of example the maximum permitted stake on a Category C machine is £1. The maximum permitted prize is £100. These machines are mainly located in pubs and AGCs. In theory a customer could sit next to a stake and prize-limited Category C machine in a pub consuming alcohol (which is not permitted in an AGC) betting on their mobile device for stakes of a £1000 and prizes in millions. We think this is simply wrong.

3.5. In an increasingly cashless society it is odd that the Act does not fully

address the impact of this form of payment. We are currently being consulted by the Gambling Commission on the desirability of the use of credit cards to gamble on-line (Bacta does not support the use of credit cards for gambling). Of course cards are the only way that on-line gambling can be facilitated but it should be limited to debit cards so people are not directly gambling with debt. On machines the use of credit and debit cards is prohibited. We would suggest that cashless technology is likely to be the principal method of payment for goods and services and its role in the gambling sector needs to be properly addressed through gambling legislation.

3.6. Cashless technologies offer the opportunity for enhanced social

responsibility measures. Card numbers provide a unique identifier for a

50

particular activity, can be blocked or their use constrained (by for example limiting the amount of expenditure). All of which offers an additional tool to the problem gambler to control their gambling or to the gambler that simply wishes to budget. For the operator it is meeting the needs of their customers by giving them the option to pay for their entertainment using a cashless method in addition to cash or ticket.

Q3. Is gambling well regulated, including the licensing regime for both

on and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned for comparisons with other regulators and jurisdictions?

3.7. Broadly speaking we believe the industry is well-regulated. It is viewed by

other regulators in other countries with whom we come into contact, as an exemplar.

3.8. It is a difficult challenge to balance the commercial imperatives of a

legitimate and legal business activity that can cause harm (with alcohol being arguably a useful comparator), and the necessary measures that protect those that are more likely to come to some harm from that activity. The Act gives Britain’s regulator a clear framework within which to operate, namely to ‘permit gambling insofar as it is consistent with the licensing objectives’. Coupled with those licensing objectives this provides we believe a useful construct for the regulation of gambling in this Country. We have made the point that the Commission in our view can be charged with regulatory creep.

3.9. In a similar vein there have been a large number of consultations over

recent years that have increased the depth and breadth of the Licensing Conditions and Codes of Practice (LCCP).

3.10. We would add that our experience of regulation is that it can be overly

pedantic, disproportionate and unsympathetic to the operational aspects of business. Again the Commission has improved and we have been pleased that the Commission launched last year its Hot Shoes initiative to get its staff out into gambling premises to see how business work on a day to day basis. This can only improve regulatory decision making. There is still nevertheless quite a long way to go. Operators complain frequently to Bacta that the Commission is bureaucratic, unreasonable (particularly on time scales) and lacking in industry knowledge. This is deeply frustrating and unhelpful.

3.11. We have also accused the Commission in the past as being headmasterly

in tone. As a consequence operators reacted badly to requests from the Commission. The tone has improved significantly and relationships have improved. As a general point, Bacta believes that a good regulator will understand the industry it regulates and work in partnership to achieve commonly agreed goals. For the gambling sector these goals are enshrined in the licensing objectives and agreed by all. Disagreements and discussions are therefore only to be found over the method to achieve them. Whilst we accept that the partnership will be asymmetric (the

51

Commission is the Regulator after all), there is no reason why mutual respect and co-operation cannot be the norm.

3.12. In our experience, local authorities have taken their obligations under the

2005 Act seriously. They have robust statements of principles that have recently been through a statutory process of review. They have statutory planning powers and in the case of unlicensed Family Entertainment Centres they are the controlling body. They have enforcement teams that engage regularly with Bacta members. Of course the experience will vary from Authority to Authority, but it has generally been a positive one.

3.13. In respect of age-verification, Bacta’s Code of Conduct goes beyond the

statutory obligations and requires ALL its members operating Adult Gaming Centres to undertake age-verification testing at least once a year. Our industry pass rate is consistently above 80% with a goal of achieving 100%. It is important to note that the failure rate of a test is not indicative, as the media often suggest, that there is an equivalent percentage of people under the legal minimum age entering the premises. Nothing could be further from the truth. The AV test is rather a test of the robustness of a premise’s protocols and procedures. Where a test is failed, Bacta will assist its members through additional training and a retest will be conducted. Operators do not know when tests will take place. The testing protocol itself has been approved by our Primary Authority in Reading. Local Authority/Gambling Commission AV tests supplement the industry’s testing regime. Failures are treated with a high degree of seriousness.

3.14. Pub companies have recently begun to focus more actively on age-

verification in their venues. A code of practice is being developed and random age verification tests will become more widespread. There has been some delay in producing a testing protocol following consultation with the Gambling Commission we understand which is unfortunate. Bacta machine manufacturers have agreed to offer pub customers on their products the opportunity to display an age confirmation message which a player must answer in the affirmative before the machine can be played.

Q4. Should gambling operators have a legal duty of care to their customers?

3.15. No. Operators should put the welfare of their customers first. Nobody

wants to profit from someone who is in distress or not enjoying the experience they are purchasing. This duty of care however should not be a legal duty. It would be near impossible to determine the extent of that duty of care and the extent of any responsibility and thereafter liability. This is a concept that has been explored extensively in the alcohol sector in relation to death or injury which occurred as result of alcohol affected decision making by a pub customer. It is suggested their Lordships take evidence on this question from legal experts from the alcohol/licensing sector.

52

3.16. It is worth acknowledging that for our sector the level of care demonstrated by operators is extensive. In addition to the licensing requirements and Bacta’s industry Code, the structure of the amusement machine sector as a customer facing business means that operators are constantly seeking to ensure appropriate levels of supervision of customers’ activities. This is done on a face to face basis (as opposed to an electronically generated intervention) which brings sensitivity, nuance and diligence to the interaction from well-trained staff who can make sensible decisions about what is best for the customer. It is for this reason as well as the prohibitive cost, that Bacta is opposed to the introduction of player tracking for machine players.

Social and Economic Impact Q5. What are the social and economic costs of gambling? These might

include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs.

3.17. In answer to this question we would simply refer to the Gambling

Commission supported work of Dr Heather Wardle, Dr Gerda Reith et al which can be found here. This is important work and provides a now widely adopted definition. We do not think the definition is perfect but is workable.

3.18. It is worth noting that the question implies that all gambling has a social

and economic cost. It does not. The question surely refers to problem gambling and that is what we have assumed.

3.19. The Centre for Economics and Business Research (CEBR) undertook a

study of the social and economic impact of Fixed Odds Betting Terminals. We attach a copy of their work at Appendix B [not published as evidence to the Committee] (Chapter 5) as their Lordships may find the analysis helpful in answering this question more generally.

Q6. What are the social and economic benefits of gambling? How can they be measured? 3.20. The majority of the population gamble in some shape or form and the

majority do so without experiencing gambling-related harm. It is important to acknowledge that their participation in gambling is a leisure pursuit that brings definite but intangible social benefits associated with the well-being leisure activities of all kinds bring. In addition, the positive economic impact of any industry with a £14 billion turnover needs to be considered in weighing public policy decisions. The Gambling industry pays direct and indirect taxes, employs people and supports a supply chain that has value to the country and its people. The economics are relatively easily captured and measured. The welfare benefits are harder to quantify but similar approaches to that used to measure harm could and should be employed to allow for a balanced consideration of the public policy issues facing Government and others.

53

Levy Q7. Is the money raised by the levy adequate to meet the current

needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should the income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons?

3.21. Researchers have made a compelling case for additional research into

gambling. They have said that the current levy does not generate enough to fund the research required. We should take that at face value.

3.22. It is also the case that problem gambling treatment services are few and

far between. Treating problem gambling as a public health issue would bring this provision into the mainstream and unlock the public funding it warrants in the same way as for drug and alcohol problems.

3.23. We believe that the approach to funding that research is relatively

straight-forward. Researchers should identify what research needs to be done and the cost of doing it. That should then be the money the industry should in large part find. This may or may not be more or less than the oft quoted 1% of gross gaming yield but will be linked to research requirements not a figure that is plucked from the air. The research funding is most easily administered through an existing research council such as the MRC. Those funds can be collected on a voluntary basis or a mandatory basis. Education and treatment should be funded via the public health budget.

3.24. Bacta is not opposed to a mandatory levy but would point out that

introducing one has associated costs that will have to be met (collecting and administering funds in an open and accountable way will require a bureaucratic infrastructure). This will be money that is not spent on Research Education or Treatment. We would also point out that the 1% figure has been pulled out of the air. It has no solid basis. For many it would have a considerable impact on their businesses (and would be unfair – see para 3.25). Before any levy amount can be determined the process we outline above has to be pursued. As we also point out any levy is only part of the funding pot. Gambling business pay taxes of various kinds (betting, gaming and machine duties, VAT, income tax and National Insurance which in total are not insignificant contributors to the Exchequer. The amusement machine industry covering both games of chance and skill or entertainment machines contributes alone £2 billion to the economy. The industry also pays fees to the Gambling Commission to fund their work. There is a need for a public health approach to problem gambling that rightly should unlock funds from the public purse as is the case with alcohol and drug related problem behaviours.

3.25. Bacta also believes that if there is to be a mandatory levy then it should be

constructed in a way that not only reflects research requirements but

54

which also weighs the relative contribution to gambling related harm associated with different products. It is unreasonable for non-contentious and relatively harmless forms of gambling such as the public health lottery or providers of seaside amusements such as penny falls machines, to pay a levy at the same rate as say on-line casinos or sports betting sites where there is no limit on stakes and prizes. It is also worth noting that the retail gambling sector has a cost basis that the on-line sector does not and that this might be a factor that needs to be taken into account should a mandatory levy be entertained.

3.26. We would argue that in the meantime it is imperative that the Gambling

Commission does what it can to compel operators to contribute the current 0.1% to RET. Some operators do not.

Research Q8. How might we improve the quality and timeliness of research in

the UK? What changes, if any, should be made to the current arrangements founding, commissioning and evaluating research in the UK? What might be learned from international comparisons?

3.27. We refer to answers above. A voluntary or mandatory contribution

matched to research needs and administered through an existing research council would in our view be the most appropriate model. Industry could meet the lion’s share of the research funding through that contribution but not all. Funding for education and treatment properly rests within the public purse. As mentioned in 3.24 the industry makes substantial additional contributions to the Exchequer.

3.28. Questions of independence from the industry, which have been raised, are

for others to debate but our perspective is the above model, i.e. funds are paid to, granted and administered by an independent body, should allay any concerns that there is industry or other influence over the research undertaken or the results it uncovers.

3.29. Diversity is recognised as being important for all organisations seeking to

take decisions that properly balance and acknowledge diverse views and perspectives. Decisions are better as a result. In the research field our view is that diversity is lacking – diversity is not just about skin colour or gender it is about background, experience and approach. It is our perception that research is dominated by middle class academic thinking and it does not accommodate sufficiently a wide range of potentially difficult views from others. We readily admit that this is a perception and would welcome an opportunity to be proved wrong on this point. Nevertheless we believe that in the gambling research space researchers must look to the lived experience of ALL gamblers and try to understand better wider perspectives on research topics from say industry. If that research is independent (see above) then there should be no fear that listening to these wider voices would diminish the value of the work.

Q9. If, as the Responsible Gambling Strategy Board (RGSB) (now the

Advisory Board for Safer Gambling) has suggested, there is limited

55

evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation?

3.30. We refer to our answers above. If there is a research gap it is for the

researchers in this field to identify it and to propose through the system that exists or will exist what research is necessary. Funding is currently available through Gamble Aware.

Education Q10. Is enough being done to provide effective public education

about gambling? If no, what more should be done? 3.31. It is our view that the population is generally well aware of the upsides

and downsides of gambling. It is a feature of many people’s lives and gambling opportunities of whatever kind continue to be part of everyday life. People will have all sorts of views about gambling as a pastime as well as about the perception of odds and chances of winning. People often behave irrationally around gambling as the increase in participation in the National Lottery shows when there are a number of rollovers. It is for many these half-acknowledged self-delusions around the chances of winning that add to the popularity of gambling as a leisure pursuit.

3.32. Nevertheless it is important that choices are as well informed as they can

be. In relation to gambling this is routed in mathematics and statistics and therefore is a function of the quality of maths education in the country.

3.33. It is also suggested that gambling, given that it can lead, like alcohol, to

harm for some, is taught in schools as part of the PSHE curriculum. It is acknowledged that this is a crowded space but like other parts of the PSHE timetable it is important to give schoolchildren the opportunity to think about the issues surrounding gambling activity through a broader and less academic approach.

Treatment Q11. Are the services available for the treatment and support of

people at risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help?

3.34. We would defer to experts in this field for a detailed response to this

question. Our perspective however is that provision for treatment is currently insufficient and that a public health approach to treatment would significantly redress the balance, putting the treatment of gambling related problems on a par with those arising from drugs and alcohol.

56

Q12. What steps should be taken to better understand any link between suicide and gambling?

3.35. Again we would defer to experts in this field for a detailed answer to this

question. Advertising Q13. The RGSB has said that by not taking action to limit the

exposure of young people to gambling advertising ‘we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant’. Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons?

3.36. Bacta members do not advertise much beyond their own localities and we

are unaware of any broadcast advertising having taken place. Bacta believes that much of the concern around advertising stems from the sheer volume of sports betting advertising on television and greater emphasis needs to be placed on understanding its impact, particularly on young people. A sober and measured approach to understanding is required rather than knee-jerk responses based on perception, and we refer back to our answers around research above. Those with an academic interest in this area need to come forward with proposals that can be funded properly to deliver helpful answers. Useful comparisons with the evidence base generated by similar concerns about the impact of advertising cereals and other foodstuffs to children could inform the debate.

Gambling and Sport Q14. Gambling is becoming an integral part of a growing number

of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters/ What are the risks attached to this?

3.37. We would defer to experts in this field for a detailed answer to this

question as well as our answers above about research. Gambling by young people and children Q15. How are new forms of technology, including social media,

affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future?

3.38. Young people and children spend their social lives on-line. They meet,

interact and use their mobile devices to learn and to play. So it stands to reason that any gambling activity they may participate in is these days going to be largely in the on-line space. We know from the Gambling Commission’s annual participation survey that this is the case. We also

57

know that the participation survey does not capture everything that this cohort might do on-line which would be classed as gambling. For example children and young people might be invited to participate in a simple quiz or even just invited to text in their mobile number to win prizes associated with a TV programme. This was the case with the Gadget Show. Also there has been much discussion recently of loot boxes in video games. These are prevalent and an unavoidable part of the gaming scene. Whilst the Gambling Commission does not class this as gambling, most people would argue that it is. We would concur. Furthermore we would argue that as the use of the mobile device is a solitary activity that often takes place at home and away from supervision that the impacts of gambling in this way are potentially and likely to be more serious. More research is needed to say so definitively but as we said above the growth of technology has outpaced our gambling legislation and its use by adults and young people is not sufficiently well studied nor regulated.

Q16. The legal availability of certain forms of commercial

gambling to under-18s in Great Britain it is unusual by international standards and has been described as an ‘historical accident’. Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins?

Q17. Should children be allowed to play Category D games

machines (which include fruit machines, pushers and cranes)? 3.39. The legal availability of certain forms of commercial gambling is not

unusual by international standards. Products such as cranes and penny fall machines can be found across the globe. A list of countries with developed legal codes that permit under 18s to gamble is included at Appendix C [not published as evidence to the Committee]. As can be seen, the form of gambling permitted is akin to that of Britain’s Category D products like crane grab machines and penny falls machines.

3.40. To describe the availability of certain forms of gambling to under-18s in

Great Britain as an historical accident is incorrect. This country has had a unique and diverse gaming offer that has been well-regulated since the 1960s. This question has been explored many times by the Rothschild Committee in 1974, by the Budd Report in 2001 and by Parliament on the four occasions when it has considered new gambling legislation (1968 Gaming Act, 1974 Lotteries and Amusements Act, 1996 Deregulation Order and 2005 Gambling Act). On each occasion the considered view was that certain forms of gambling did not present sufficient concerns to warrant any change to the status quo. These games were what are now classified as Category D machines and were known more accurately under previous legislation as Amusement with Prizes machines. They provide amusement with a small prize and are games of chance or chance and skill combined. They are designed as a diversion and entertainment where the player essentially pays for some time on the machine and sometimes wins a prize. Please see Appendix D [not published as evidence to the Committee] for a layman’s guide to Category D machines.

58

3.41. It was also acknowledged that these types of games formed the backbone of Britain’s family seaside arcades. We know from our PWC report that approaching a third of the British population enjoys visiting these arcades each year. They provide local jobs and economic activity in towns up and down the country that have little in the way of other economic activity. Without them these towns would fall into further decline. Bacta welcomed the Report of the Lords Select Committee that looked at the regeneration of seaside towns and is now campaigning for its recommendations to be implemented. Seaside arcades will be one of the pillars upon which the success of the initiatives recommended can be built. It is already the case that the private investment provided by seaside amusement arcade operators has added considerably to the amenity value of towns up and down the country. It is also true that it is the income from the seaside arcades that keeps Britain’s Piers from falling into the sea.

3.42. The 2005 Gambling Act nevertheless made some significant changes to the

regulation of Category D machines. Bacta supports these changes. They have struck the right balance between ensuring proper regulation without strangling the enjoyment they provide to generations of families. They include (on top of planning controls):

▪ Banning Category D fruit machines from café’s, fish and chip shops,

taxi offices and similar venues ▪ Giving Local Authorities the powers to permit unlicensed Family

Entertainment Centres (Category D only venues) ▪ The introduction of extensive regulatory powers to Local Authorities to

police uFECs ▪ Statutory and extensive consultation procedures with an explicit

requirement to consult the police. ▪ Requirement staff are fully trained ▪ Requirement that no operator has any criminal convictions ▪ An explicit emphasis on the protection and safeguarding of young

people and children. 3.43. The Gambling Commission’s Licence Conditions and Codes of Practice have

additional provisions that relate to FECs. The Commission also provides detailed guidance to Local Authorities.

3.44. Industry also imposes further controls on itself to ensure the protection of

children is watertight. Bacta’s Code of Conduct and Social Responsibility Charter includes a mandatory provision that no local school children are allowed on the FEC premises during school hours. Bacta has also been trialling over the Summer a new condition that will require members to prevent anyone under the age of 16 playing on a Category D cash payout fruit-machine unless accompanied by an adult. This will be evaluated in September and if, as expected the trial is a success, will be incorporated into our Code at the Annual General Meeting later this year. A copy of a sticker we have made available to members to use in the trial is attached at Appendix E [not published as evidence to the Committee].

3.45. We would add that ensuring our staff are well-trained and well-versed in

their responsibilities, is central to our mission as the trade body for the

59

sector. We provide face to face training through our Regional Compliance Officers and have hosted a very successful Social Responsibility Exchange to allow staff to share best practice. Our next Exchange is in November. We will shortly be widening our training offer to members through an on-line training portal.

3.46. It is worth pointing out that there is one additional logistical control on the

access to seaside arcades by young people, namely their location. For the majority of the population the only way to visit the arcade will be with an adult as they are located at the coast and it would take a train or car journey to reach them.

3.47. It is therefore no surprise to find that these measures coupled with the

preference by young people for modern forms of entertainment that the participation rates in fruit machine gambling is now their lowest ever at 3%.

3.48. We also know from a study by Professor David Forrest and Dr Ian McHale39

that whilst adolescents at the coast are more likely to participate in gambling activities than those that do not, they are no more likely to be problem gamblers than those that do not live at the coast. This is an important finding. Many people cite early exposure to gambling as a cause of later gambling problems. There is no evidence of a causal link. As David Forrest stated at conference in Toronto in 2012 ‘marginal gamblers induced to participation by ease of access do not appear prone to problem gambling and more children gambling does not carry through to more children being problem gamblers. Panic about arcades does not appear justified’.

3.49. That is not to say that some young people do not experience gambling-

related harm even if it is only for a short while. This has can have serious impacts for them and their family. The question has to be whether the measures currently in place do enough to minimise the occurrence and impact of gambling related harm. We would argue the balance is currently right. Nearly 20 million people enjoy family seaside arcades every year and the regulations and self-imposed controls we have in place minimise the chance that any of them whether young or old, will experience gambling related harm.

Lotteries Q18 The restrictions on society lotteries were relaxed by the Gambling

Act 2005, and there is concern that some of them are effectively being taken over by large commercial lotteries, Is this concern well-founded? If so, what should be done?

Q19. Should changes be made to the statutory regime governing

the National Lottery, to bring it into line with the regime governing operator of other lotteries?

39 Journal of Gambling Studies December 2012

60

3.50. We have no opinion on these questions. 6 September 2019

61

Geoff Banks – Written evidence (GAM0003) Company GB Sports advisors Ltd Gambling Act 2005 The act sought to widen the appeal of gambling in the UK and to an extent de-regulate markets. In its key objective the act demonstrably failed and was poorly constructed. There was no separation between the core elements of gaming and sport wagering. One is clearly far more damaging that the other. It treated all bookmakers in the same way, so for example an on course bookmaker is viewed in the same way as a global online betting supermarket like Bet365. It would be important, going forward, to fully recognise these fundamental issues. The net effect of the 2005 act has been to put many independent UK tax paying small businesses out of business, whose costs and requirements have been viewed and set by regulators as the same type of entity. That’s hardly the role of good governance! Whilst fixed odds betting terminals did need to be curbed, Ministers moved too far in effectively eradicating an important part of the High Street. Bookmakers. They took up business and rents. They employed staff. Whilst those businesses prospered, so did many who depended upon them. For example Racing’s rights fees grew exponentially, and fees to Bookmakers doubled. Racing aligned itself therefore to FOBT’s. With their eradication (£2 is effective removal) many of the companies who depended on betting in the High Street will all struggle and we have already seen significant closures. Parliament failed to recognise High Street bricks and mortar business was always going to struggle to compete with the global online internet market. It’s costs were much higher and the FOBT’s were an integral part of this pack of cards. The correct move would have been a more proportionate cut per spin to a level of around £20. Recognising there were some users who could not control their gambling, without eradicating the business and putting thousands casually out of work. Of course the Government itself has in effect shot itself in the foot. The country needs business to fund taxation. The removal of the betting shops has left a giant fiscal gap. One Ministers casually dismissed with arguments the ‘online businesses would have to pick up the slack.’ A childish notion that the removal of a profitable business should penalise that business. Where did Government envisage this slack to be taken up? Whilst we have indeed managed to protect a tiny element of vulnerable people, a move some describe as ‘necessary’ – to do so we have affected adversely thousands of families who depended on the industry directly and indirectly. I struggle to understand why such consideration is given so low weight. In seeking to protect a few, we impact negatively so many. Social responsibility has a far more direct and accurate cost. When we discuss ‘responsible gambling’ we hear so often levels of problem gamblers bandied about by a small army of rather vindictive individuals and some Members of Parliament chasing populist votes. 435,000 problem gamblers

62

in the UK is one I’ve heard recently in media and the deputy leader of the Labour party. Yet this fanciful figure is not ground in any way in fact. It is based on a telephone poll conducted 3 years ago of just 1000 people. We should remember in any telephone poll, those who are satisfied simply hang up. How many of those were accurately considered in said polls? What questions were asked? What type of individuals were called? Where were they located? In depressed areas or affluent? We don’t know the answer to these questions. In similar vein the 55,000 problem children gamblers is another number actively peddled. Yet this was based on another poll of just 2500 children, conducted 2 years ago. Are members properly aware as to how this poll was conducted? Are members aware that most children gamble with each other? These days gambling on a penny arcade is considered as part of a modern social ill. When did such low grade gambling become an issue. When we all grew up such gambling was of absolutely no consequence. The UK didn’t become a problem gambling state as a result of gambling of such low consequence. In these matters, a self serving UK Gambling Commission has done nothing to correct the figures being touted as ‘factual.’ In this regard the UKGC has shown itself as socially irresponsible. More concerned as to the number of regulators they employ, security of their own jobs and mandates. Frankly it suits the regulators to allow these rumours to continue unchecked. It gives the appearance they’re a necessary force. In fact many of their arguments are based on polls conducted years ago and dubious extrapolation of data. They have wildly over-estimated problem gambling levels. The GC don’t understand policies they incepted such as ‘self exclusion’ schemes. There’s an assumption a customer who self excludes considers himself a PG. In reality most individuals gamble again within a very short time with another operator. They’re either in some way dissatisfied with a service level with an operator, or simply averse to losses! I have asked many times for the GC to analyse percentage of customer who self exclude but who return to gambling shortly afterwards. This would appear a critical piece of data and practicably easy to poll. Yet they refuse to consider ascertaining properly what self exclusion means to most customers. Again I would argue a not fit for purpose Commission feels to examine such returns wouldn’t bolster their position that Britain is a nation who’s gambling is out of control. Finally, Sirs, I respectfully point out that for many millions of people gambling is a highly enjoyable pastime and gives meaning and purpose to many sporting events for the same. Yes, there are those who ‘tip over the edge’ – who go too far. But this is a tiny minority of those who gamble. What concerns me most, is an ignorant populist argument currently dominating the airwaves and with some MP’s that everything in gambling is bad. That’s so far from the truth it defies belief. There are ways to control gambling levels, such as marketing of bookmakers. Once again this is an area the UKGC has shamefully failed to take a position on. Gambling also funds huge and necessary levels of taxation. Vital to the prosperity of a cash stripped country. We can go about do-good projects to protect a tiny, but vocal element, of problem gamblers and the cottage industry that has grown up to support the same. However, in doing so we wreck our

63

economy, put thousands out of work, decimate our High Streets and industries such as Racing who depend upon gambling to survive. There’s a price to all regulation. It should be proportionate and balanced. In the debate about problem gambling levels, it is the views of the silent majority of happy and satisfied consumers and associated business which is being far too casually dismissed in this rush to be seen as politically correct 20 July 2019

64

Dr James Banks – Written evidence (GAM0033) Please find below my responses to questions 1 and 5 of your call. The Gambling Act 2005 1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld? 1.1 With regard to preventing gambling from being a source of crime or disorder, I would encourage LBO operators to abolish lone working, with a view to reducing the likelihood of robbery and the risk posed to retail staff. This may be considered essential given that our analysis40 of betting shop robberies indicates that LBOs represent suitable targets for robberies that are typically violent in nature. The data presented in our paper illustrates that although crimes were committed across LBOs opening hours, many of the robberies took place in the evening when neighbouring shops will have closed and fewer people will be present either in the shop or the surrounding vicinity. This reduction in suitable guardians increases the potential risk to LBOs, their staff and customers. The risk of criminal victimisation is likely to be greater in the darker winter months, as LBOs remain open until 10pm in order to enable customers to place bets on a wide range of sporting events as they happen. The suitability of LBOs as a target for acquisitive crime is likely to be compounded further by the use of lone working. Lone working typically occurs in the evening, but also the early morning, further reducing capable guardianship at LBOs at times when the number of people in and around betting shops are likely to be at their lowest and the rewards at their highest. Where lone working was in evidence, it often involved female workers, including one woman who was pregnant, working late at night. Previous research that has explored the prevention of robberies at commercial premises, such as building societies, provides important lessons for the gambling sector. These studies highlight that increasing ‘guardianship’ and the risk of detection of offenders are key factors in preventing retail crime. Most significantly LBOs, previous research has demonstrated that greater numbers of ‘frontline’ staff or the introduction of specialised security personnel into retail environments where there is only a small volume of staff can serve to reduce the occurrence of violent crime. Social and economic impact 5. What are the social and economic costs of gambling? These might include costs associated with poor health and hospital inpatient services; welfare and

40 Banks, J., Addis, N. and Waters, J. (In Preparation). Betting Shop Robberies: Reducing the Risk

to Retail Staff.

65

employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs. 5.1 Our recent research41 illustrates how gambling-related harms extend beyond individual gamblers, affecting families, friends and communities. Through survey and interview data we identified that family members and friend of individuals with gambling problems experienced harms across financial, health, work and/ or education, emotional and psychological, relationship and 'other' domains. Family members of loved ones who gamble have valuable and insightful things to say yet their voices are rarely heard in academic studies or policy debate. Our research represents the first UK study to give voice to family members, highlighting how they experience significant and sustained gambling-related harm across multiple domains. Family members highlight how they need help and support to assist in both addressing their loved one's problem gambling and their own needs. Family members also report that individual needs are often distinct, requiring help and support in different forms and modalities. Yet for some family members significant barriers to help seeking prevent them accessing the support services they desperately need. Overcoming such barriers should be considered a priority, if we are to better support and treat those who are vulnerable or otherwise in need of help as a result of gambling. In turn, policy makers and support services must ensure that they are responsive not simply to the needs of the individual gambler, but also family members, friends and other loved ones harmed by gambling. 5.2 In addition, our systematic review42 of the prevalence of gambling disorder among prisoners illustrates that rates of problem gambling among prison inmates in the UK are between 12 and 24 times greater than those recorded in general population surveys. To date, policy makers and practitioners have been slow to respond to the crime and criminal justice implications of problem gambling, and gambling treatment and support in carceral settings remains underdeveloped. Evidence indicates that gambling disorder underpins a broad range of offending behaviour, as crimes can be committed to fund gambling activities or gambling related shortfalls in finance. There is also emerging evidence that gambling may be linked to acts of violence. As such the captive nature of the prison population presents opportunity for courts to mandate treatment for gambling disorder as part of

41 Banks, J., Andersson, C., Best, D., Edwards, M. and Waters, J. (2018). Families Living with

Problem Gambling: Impacts, Coping Strategies and Help-Seeking. London: GambleAware. 42 Banks, J., Waters, J., Anderrson, C. and Olive, V. (2019). Prevalence of Gambling Disorder

Among Prisoners: A Systematic review. International Journal of Offender Therapy and Comparative Criminology.

66

offenders’ prison based rehabilitation. Subsequently, criminal justice agencies need to be active in identifying problem gamblers and ensuring they engage with treatment offered by correctional services. The screening for problem gambling at various stages of the criminal justice process, alongside awareness training by staff has already proved effective in the UK in a local context43. 5 September 2019

43 Platt, N., Faint, B., Battersby, M. and Harvey, P. (2017) Arresting Problem Gambling in the Criminal Justice System. Liverpool, UK: Beacon Counselling Trust.

67

beBettor Limited – Written evidence (GAM0021) 1. This is a response to the Social and Economic Impact of the Gambling Industry Committee on behalf of beBettor Limited - The Responsible Gambling Network: http://www.bebettor.com/ 2. We note that the Committee is examining the social and economic impact of the Gambling Act 2005 and related regulation, and we wish to make representations in relation to some of the questions posed in the call for evidence. Context and Summary 3. beBettor is a third party gambling compliance data processing company assisting gambling companies with the issue of affordability. We help gambling companies understand how much their customers can afford to gamble before experiencing financial harm, and we measure gambling activity data within our network of operators against these affordability estimates. 4. The affordability estimates we provide are calculated through processing individual customer data, and mapping this against socio-demographic and economic data sources available in the public domain (“Open Data”). 5. Part of the difficulty in assessing the social and economic impact of gambling to date is that the industry response has been fragmented, with operators reluctant to work together. However, operators working collaboratively will achieve greater results in the area of problem gambling than more isolated efforts. 6. Gambling companies are currently required to conduct checks on their customers in relation to age and identity, but not affordability. The Gambling Commission (“GC”) considered the scope for introducing mandatory limits on accounts, or affordability checks in their “Changes to the licence conditions and codes of practice on age and identity verification for remote gambling - Consultation Response”, February 2019, in which the GC stated: “Additional call for information - mandatory account limits 5.1 Our review of online gambling stated our intention to consult on requirements for licensees to set limits on customers’ gambling activity which could only be changed once the licensee had further verified information about the customer. 5.2 We are not proposing at this stage to introduce a specific licence condition or code to require mandatory account limits. However, we asked consultation respondents to provide us with information or evidence of good practice that helps licensees and customers to ensure gambling remains fair and safe. We asked for evidence both in terms of existing practice and what is possible, and which could later inform specific proposals on mandatory account limits to strengthen provisions for preventing gambling-related harm. …. … 5.53 We welcome the responses to these questions from licensees, consumers and third parties, and we will use the feedback to continue to develop our work in this area. We will continue to engage with remote

68

gambling licensees and encourage them to collaborate in developing approaches to assess the levels of gambling that a customer might be able to afford. This will form part of our broader work with licensees and financial institutions to better understand the range of accessible data and how it could inform mandatory limit setting, before we consider consulting on options at a later date. 5.54 We note the concerns raised by consumers regarding the purpose of any such checks, and the related issues of data security and privacy. In progressing our work in this area, we will consider the balance that may be needed between allaying these concerns and the opportunities for stronger consumer protections that could be delivered”. 7. beBettor is already providing these opportunities for stronger consumer protections to our clients’ customers. It seems likely that further conditions and best practice codes will be introduced by the GC in this regard in the future. This is important for moral reasons and commercial reasons. Responsible gambling companies will want to safeguard their customers to any extent reasonably within their power. It is in the interests of no-one to encourage customers to gamble to the point of harmful financial impact. Gambling companies also understand that exerting positive control over gambling habits enables their customers to be healthy, loyal and satisfied gamblers indefinitely. This is a positive outcome for all concerned. Questions. The Gambling Act 2005 Question 1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld? 8. The aims are being upheld to an extent, but there is room for improvement. beBettor provides a service to gambling companies who are held in tension between the need to run commercially viable operations and the need to comply with regulation which protects the public by upholding the primary aims of the legislation. 9. As with most licensable activities, whether supply of alcohol, ownership of firearms, or gambling, the only way to ensure that crime and disorder is entirely prevented, or the young and vulnerable are completely protected is to ban the activity entirely. This is not the route that society as a whole chooses to take. On the understanding that some harmful impacts from the licensable activity are inevitably going to result at times, the objectives of the legislation and regulation are to minimise it. 10. The GC has recently increased the standards for compliance and regulatory intervention in relation to age and identity verification by introducing new requirements into the Licensing Conditions and Code of Practice (LCCP – May 2018).

69

11. In 2019, the GC published its second annual enforcement report: “UKGC Enforcement 2018/19 Review”, providing an overview of its work in the last year and guidance for compliance going forward. In addition to common areas of compliance such as safer gambling and anti-money laundering, a particularly notable feature of the latest guidance is the addition of an entirely new section addressing customer “affordability”. 12. It is clear that the GC is contemplating a requirement for operators to assess their customer affordability processes and frameworks. Gambling operators are currently in a state of transition, trying to adapt to meet the enhanced compliance requirements in relation to age and identity. In the future, it seems probable that licensed operators will have to meet enhanced compliance in relation to customer “affordability”, as part of both social responsibility and anti-money laundering considerations. 13. There are increasingly sophisticated technological methods to assist gambling companies to meet all these enhancements in regulation, but not all operators are yet equipped or taking advantage. For example, any individual gambling company may analyse its own data on problem gambling, but has no means of knowing how many other accounts with other companies their customers have. The average online gambler in the UK has four betting accounts with different online companies. Given this fact, operators cannot truly know if a customer is at risk or is a problem gambler as they are unaware of customer spending activity on other operators’ websites and within the industry as a whole. The regulators can do more to uphold the licensing objectives, and operators can do more to meet them. Affordability is a key area to address in this regard. Question 2. What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed? 14. The Gambling Commission requests information on various topics, which include new technology or latest knowledge about gambling harm, in the form of consultation exercises. In this way, the GC updates the LCCP, which is a more flexible approach than updating the Act. It is very important, however, for the regulation of gambling to keep up to date with new technology, both in terms of how the games are played and how the gambling activity can be controlled and regulated. Technological advances are varied and rapid, and it is a challenge to “future-proof” regulation of the industry. Question 3. Is gambling well regulated, including the licensing regime for both on- and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions? 14. Our answer to this question really addresses the potential for future regulation of affordability levels, and the imposition of appropriate new conditions that are not currently part of the gambling regulatory regime.

70

15. The licensable activity of gambling is different from all other licensable activities, in that it is possible to monitor the way in which members of the public engage with the activity on an individual basis, in real time, and after the event, by the analysis of technology. Particularly with online gambling, customers must identify themselves and provide certain personal information before they can proceed with the activity. Once customers are undertaking the activity, their behaviour and outcomes can be monitored in detail; such as the amount they are gambling, the times of day they are active, and the extent to which they are losing but continue to play. 16. Gambling companies can discover more about their customers by analysing data available in the public domain (“Open Data”), and the GC encourages operators to do so: “Open source data exists which can help operators assess affordability for its GB customer base and improve its risk assessment and customer intervention.” Socio-demographic and economic data sources are useful indicators of customer affordability. However, few operators currently consider socio-demographic or economic data in this way. Some of the sources of public UK data that can be used to inform an assessment of what a customer may be able to afford to gamble include: ● Office for National Statistics ● HM Land Registry ● Ministry of Housing, Communities & Local Government ● Socio-demographic analysis such as levels of deprivation associated with postcodes, and more. However, the public data sets contained within these data sources are large and complex, and are constantly being updated by the UK Government (new data can be released every 1-5 months). Individual operators use these data sets, if at all, differently from each other to calculate customer affordability, potentially leading to customers being overexposed to gambling promotions and harms. Given the range of practical complexities involved with individual operator affordability checks, we see a specialist gambling affordability data company such as beBettor playing an integral role in providing operators with standardised customer affordability solutions that keep customers safe and operators compliant with regulation. 17. At beBettor, we aggregate customer data from each operator who joins our network, to develop more sophisticated algorithms for problem gambler identification. Thus, when individual operators share their customer activity with us, all operators in the beBettor network benefit in measuring aggregate consumer gambling spend versus their affordability, as opposed to isolated measurement. We combine public UK government and private operator data to assist operators in preventing customers from experiencing gambling-related harm. 18. The goal is for gambling companies to track customers’ on-site spending against their estimated gambling affordability. Operators can classify their customers more effectively: whether healthy; at-risk; problem gambler; proceeds of crime risk, or other, and tailor their interaction appropriately. For

71

example, if a customer is consistently spending more than their assessed affordability level, this would be a clear indicator that the customer is potentially at risk of experiencing gambling related harm. Companies would then be in a position to take preventative action to protect the customer, for example by sending them responsible gaming interactions (“RGI’s”), such as emails, SMS messages, telephone calls or even educating those deemed at risk. 19. All customer activity can be tracked by the companies with whom they are gambling if those companies invest in doing so. Customer preferences can be analysed, such as the markets they like to bet on, what days of the week they like to bet, at what times of the day, and so on. Another example would be information that operators can glean and share from the practice of “bonusing” – incentives that all operators send out to customers to encourage them to play more. Such shared information can help operators understand customers’ propensities to bet, e.g.: how quickly they use their bonus. 20. Only when someone cannot afford their gambling preferences does their leisure choice start to become a problem. The more operators who engage with this technological analysis, the earlier they can identify the problem signs and commence RGIs. There are clear behavioural risk indicators and markers of harm which can be detected very early on in a company relationship with a new customer, particularly when operators have access to pooled information with other operators, and the technology to analyse it. Examples of such indicators are:

• Long user sessions • User sessions at certain times of night • Betting patterns after losses • Bet settlement disputes • Customer spending going beyond an identifiable norm for that customer • Frequency of play • Time spent gambling • Deposit frequency • Multiple payment methods • Reverse withdrawals • Customer initiated contact • Use of player management tools (deposit limits, time outs, self exclusion

etc). 21. All these indicators need to be combined with affordability assessments to provide a holistic picture of customer activity. Operators could build predictions for existing customers who are beginning to exhibit problem gambling behaviour and take pre-emptive RGIs to protect customers from experiencing gambling related harm on their site. 22. The “Behavioural Analytics - RGA Good Practice Guidelines” provide operators with good guidance on how to analyse their own data to identify possible problem gamblers. There are problems with this exercise, as outlined above. 23. Currently, gambling operators are competing in their own “zero sum game” for customers’ gambling spend. Operator A believes that “bonusing” customers (encouraging them to play more) is a better commercial option than

72

sending an RGI, no matter what competitor Operator B does, and vice-versa. This “prisoner’s dilemma” has led to the industry’s dominant retention strategy, which is to “bonus” all customers, including potential at-risk customers, problem gamblers and possible proceeds of crime customers. 24. The above situation is compounded as very few operators currently carry out affordability checks on their customers at all, and those that do will have different methods of calculating affordability. Consequently, operators do not know whether their customers can afford their spending levels and are essentially guessing what their customers can afford to lose, which is resulting in inevitable problem gambling scandals. beBettor research has identified that individual operators implementing "one-off" affordability checks themselves, or via traditional credit checking providers will not solve problem gambling. 25. Holistic gambling affordability data and standardised and controlled approaches to affordability assessment enable individual operators to look after their customers to a far higher standard. Companies who embrace this approach can: • Optimise the delivery of RGI’s to problem gambler customers who need assistance in avoiding gambling related harm • Reduce the number of at risk / problem gambler customers they have in their user base • Reduce self-exclusion rates by players • Reduce the likelihood of money laundering / problem gambling scandals and the need for public censure and tougher regulation • Identify suitable and responsible bonusing targets and retain loyal, healthy customer bases • Re-frame and educate the behaviour of potential problem gamblers which, for some, might prevent them crossing the line. 26. This technological progress empowers the industry to adopt a collective approach to their corporate social responsibility for at-risk customers and problem gamblers, which will ultimately lead to a safer and more sustainable UK online gambling industry. We believe all this can be achieved with minimal disruption to the customer. beBettor does not check customers’ credit scores, bank accounts or any financial documents (payslips, dividends, inheritance etc). In comparison to traditional credit checks, and hard affordability checks such as Source of Funds (SOF) and Source of Wealth (SOW) checks, beBettor affordability analysis does not invade customers’ privacy or financial life, avoiding potential GDPR compliance implications and unintended legal issues. This holistic approach also reduces reliance upon individual customers submitting SOF/SOW documents, which some customers can be reluctant to provide. It does not rely upon customer consent, and the beBettor data are harvested from legitimate, GDPR compliant sources. The analysis calculates customer affordability dynamically, combining companies’ individual customer data with Open Data sources to produce global monthly net affordability estimates for each customer. beBettor then tracks customers’ real-time betting activity across all their beBettor connected accounts to calculate the customers’ global net profit/loss each date, which is reported back to the companies as a percentage of monthly net affordability.

73

27. In relation to Question 3, this is our vision for enhanced affordability regulation in the future. Social and economic impact Question 5. What are the social and economic costs of gambling? These might include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs. 28. beBettor are not best placed to offer evidence on the details of the social and economic costs of gambling, but many of those costs are well-known and unfortunately common. 29. Regardless of the specifics of the negative impacts of problem gambling on individuals and their families, there appear to be two very clear causes, which are also linked to each other. The first is gamblers who are too young, and less likely to exert the required levels of self-discipline and responsibility. The second is affordability. A significant majority of negative impacts from gambling can be traced back to the fact that people spend more than they can afford on the activity, and the consequent pressures upon them result in crime, physical and mental health issues, loss of contribution to society, and more. Monitoring affordability is absolutely central to addressing social and economic costs. Question 6. What are the social and economic benefits of gambling? How can they be measured and assessed? 30. Gambling is a licensable activity that society as a whole has accepted. In similar ways to the consumption of alcohol, obtaining tattoos, or using licensed guns, many people appreciate the activity without suffering or causing any harm. These are legitimate personal decisions, that enhance peoples’ lives in accordance with their preferences and choices. Any such decision will bring fulfilment to peoples’ lives, improving well-being and overall happiness. The line beyond which that well-being and happiness is compromised, for the person engaged in the activity, or for others affected by it is the line that the law and regulations seeks to enforce. If gamblers could all be encouraged to stay on the right side of that line, then the activity is a net social benefit. 31. Affordability is closely associated with the fun and light-heartedness of the gambling activity, and is absolutely key to maintaining that line. Affordability is also fundamental to the economic benefits of gambling to society as well. Profitability of gambling companies contributes to the national economy to a significant extent, not least through taxation and employment. Profit derived from healthy, responsible and happy gamblers is not a problem for anyone, and need not be deterred. The focus should be upon maintaining gamblers in their affordable range, which is also a benefit for gambling companies who thereby retain longer term income from gambling activity which is not curtailed because customers “go over the edge”. There is no incentive for gambling companies to drive customers to financial ruin, and it makes more commercial sense for companies to employ all techniques to ensure that their customers reduce activity when affordability levels are reached.

74

32. One of the difficulties is conveying this message to all the gambling companies who also operate in a climate of competition with each other for a finite pool of customers. Encouraging customers to open more accounts and bet more with each company can seem inimical to maintaining the affordability line. beBettor is engaged with communicating with gambling companies to demonstrate how healthy gambling can be achieved and maintained. On behalf of beBettor, we are grateful for the opportunity to submit these representations respectfully to the Committee. Harry Cott beBettor, Chief Executive Officer Scott McGregor beBettor, Chief Operating Officer. 4 September 2019

75

Betting and Gaming Council – Written evidence (GAM0068)

Introduction

i. The Betting and Gaming Council (BGC) has been formed in response to a growing need for the UK gambling industry to bring its combined effort and resources together to raise standards and share learnings on safer gambling and regulatory compliance. Our mission is to champion the highest standards in safer gambling and to ensure consumer and public trust in our industry. Despite the large volume of work and support the industry puts into a range of actions from treatment to interaction, we recognise more needs to done. The Betting and Gaming Council will be fully operational in November 2019, when it is expected to represent around 90 per cent of the UK gambling industry (excluding the National Lottery). This submission is made by the Betting and Gaming Council on behalf of the current membership of the Remote Gambling Association, the Association of British Bookmakers (both of which will cease to operate when the BGC is fully operational) and a number of major casino operators. We have taken the opportunity to respond to the questions that directly relate to the members of these organisations. We have sought to draw upon the most recent data and research available to underpin the positions set out in this response. We would be happy to discuss and expand upon any aspect of our response.

Summary

ii. Gambling plays an important part in the social lives of millions of people in the UK, with 46% of the UK population gambling at least once per month and the vast majority doing so safely. Our industry employs over 106,000 people, 56% of our workforce are women and 24% are aged under 24. Sport is a major beneficiary, in particular horse racing which supports 59 racecourses across the UK and 85,000 jobs. Betting and gaming companies and their staff play an active role in their communities supporting many charitable causes from Alzheimer’s Society, and Prostate Cancer UK to Jessie May Children’s Hospice and the Special Care Baby Unit at Borders General Hospital to name but a few.

iii. By international standards, Great Britain has a well-regulated and well-functioning gambling market with high levels of consumer choice and low levels of crime and problem gambling. This situation is the result of a coherent legislative framework, robust enforcement and continually improving standards from licensed operators.

iv. The perception of strong growth in gambling expenditure is the result

in a change in reporting conventions – with the vast bulk of online revenues not included in Gambling Commission figures prior to 2015. In fact, a lower proportion of Household Disposable Income was

76

spent on gambling between 2008 and 2018 than in the period 1999 to 2006.

v. Rates of problem gambling in Great Britain are stable and low

by international standards and we are committed to doing more to ensure safer gambling.

vi. We are investing substantial resources in developing and

deploying a range of harm prevention initiatives. Building on independent research, our members have developed behavioural tracking systems, designed to identify harmful play and deliver a set of tiered and tailored interactions to encourage customers to stay in control of their gambling. We are also working with the Gambling Commission on patterns of play and undertaking research on game characteristics and what impact they have on customer behaviour. We are also improving the technological capability of industry self-exclusion schemes and developing trials around affordability in relation to gambling harm.

vii. All products offered by members are strictly 18+. Our members

operate a zero-tolerance approach to anyone under the age of 18 attempting to use their products. New age-verification measures introduced by the Gambling Commission in 2019 now mean that it is virtually impossible for any child to open an online gambling account. Age restrictions in betting shops and casinos are regularly and independently tested in line with Gambling Commission Guidance. Reported rates of youth gambling in the UK are in decline.

viii. In recent years, funding for research, preventative education and

treatment (‘RET’) for gambling-related harm has exceeded targets set out by the Responsible Gambling Strategy Board; and at present the Gambling Commission and GambleAware have sizeable reserves for deployment in these areas. Recent commitments from a number of Britain’s largest operators (an additional £100m for treatment services over the next four years) along with Department of Health plans for a network of NHS clinics will lead to a significant expansion of RET services. We continue to support and fund existing services delivered by Gordon Moody Association, GamCare’s 120 treatment centres located throughout the UK and their youth outreach programme, the National Gambling Helpline, YGAM and Netline. Through continued funding by our industry over more than 20 years, these charitable services are able to provide free of charge treatment, support & advice services for anyone affected by gambling. There may be merit in carrying out a new detailed assessment of what services are required, how effective they are and the most appropriate mechanisms for funding.

ix. A more expansive, pragmatic and coordinated approach to gambling research may be required – particularly given increased funding. We would support a further nationwide gambling prevalence study to better inform decision making.

77

x. Public education should be a focus of any strategy to reduce harms. Our members continue to fund and support a range of initiatives in this area.

xi. In recent years, there has been a raising of standards in the

responsible promotion of gambling. This has been the result of both our members’ efforts and closer engagement with regulatory bodies – including the use of technology to empower consumers to block or receive advertising. The ability for operators licensed by the Gambling Commission to advertise in Britain provides an important means for customers to identify legal from illegal operators.

xii. The Betting and Gaming Council is firmly committed to

providing a safe and enjoyable gambling experience and we will work with politicians, the government, regulator and stakeholders to further improve this experience for all our customers.

Q1. Are the three primary aims of the Gambling Act 2005 being upheld?

1.1Based upon the evidence available, the primary aims are - to a large extent - being upheld. We consider evidence in relation to the three objectives below. Preventing gambling from being a source of crime or disorder

1.2On the basis of data available, licensed gambling in Great Britain is almost entirely free from criminal involvement from an operational or ownership perspective. The UK has been highly successful in suppressing the development of a black market for gambling. This is likely to be the result of laws to permit the range of betting and gaming products that consumers wish to play; the maintenance of taxes (with some exceptions) at reasonably sensible levels; and by effective enforcement by the Gambling Commission and other relevant authorities. Other European countries with more restrictive regulation than the UK have experienced much higher levels of illegal gambling.

1.3In 2016, the Gambling Anti-Money Laundering Group (GAMLG) was formed to increase the gambling industry's ability to combat money laundering. GAMLG is chaired by a former Director General of the National Crime Agency and works in collaboration with the Gambling Commission.

1.4The main source of quantitative evidence in this area relates to

offences under the Gambling Act 2005. Official data shows that in 2016, 140 defendants were proceeded against at magistrates courts for offences under the 2005 Act (down from 208 in 2012). 44The overwhelming majority of these (129) were for the unlicensed supply of

44 Between 2011 and 2016, the official youth gambling surveys measured participation by 11-to-15-year-olds; in the 2017 and 2018 surveys, the sample was expanded to include 16-year-olds

78

gambling facilities. Separately, in 2018/19, the Gambling Commission took action against 31 remote unlicensed operators. It is worth noting that fiscal and regulatory interventions that potentially distort the market (especially online) are possible and that a growth in a black market may still be possible under the structure of Gambling Act 2005 (e.g. the taxing of free bets gives a material cost advantage to black market operators).

Non-compliance 1.5The Gambling Commission adopts a vigorous approach to regulatory

compliance. In 2018/19, the regulator carried out 1,200 compliance assessments on licensees.

1.6During the same period, a total of £19m of divestments by gambling

companies were made in relation to regulatory investigations (through penalties on operators). This reflects an increasingly stringent approach to enforcement by the regulator. In the year to April 2019, the Gambling Commission revoked five operating licences and issued warnings or conditions to a further eight companies. The regulator also revoked 20 personal licences and issued warnings to a further eight personal licence holders.

Gambling-centred crime 1.7According to the 2015 National Risk Assessment by HM Treasury,

gambling is classified as a “low risk” activity in terms of facilitating money-laundering: “The 2015 NRA assessed overall that the gambling sector was less attractive to criminals than other sectors and less exploited to launder significant volumes of criminal funds. Due to the continued lack of evidence of the use of the sector for money laundering on a significant scale, the sector continues to be assessed as low risk for money laundering. Neither regulated nor unregulated gambling are judged to be attractive for terrorist financing, and we have seen no evidence of these services being abused by terrorists, so the terrorist financing risk associated with the sector is low.”

1.8Our members are increasingly diligent in reporting suspicious activity,

such as source of funds, to the Gambling Commission and other relevant authorities. Members have also introduced enhanced social responsibility measures and capabilities, especially around customer due diligence such as Know Your Customer (KYC) and affordability that further strengthen licensee capabilities in this area.

1.9Further, the industry has a long history of working with law

enforcement to minimise risks in this area. The Safe Bet Alliance was developed in partnership with the Metropolitan Police, Community Union, the Institute for Conflict Management and other stakeholders. In 2016, the Safe Bet Alliance won the Metropolitan Police Service ‘Police and Security‘ Award, for providing intelligence that led to a reduction in robberies and was described by the Association of Chief Police Officers

79

(ACPO) as ‘not only an effective tool for reducing violent crime, but also a clear example of best practice for partnership working.”

1.10 There have been very small instances of crime being perpetrated

through breaches in betting integrity. Such instances have often been traced back to non-UK organised crime, but overall betting markets for UK customers have been relatively free of match-fixing.

Ensuring that gambling is conducted in a fair and open way 1.11 The vast majority of gambling activity in Great Britain is carried out

in a fair and transparent fashion. Government and Gambling Commission data shows very small levels of fraudulent activity; and most people who gamble in this country do so with companies licensed by the regulator.

Competition and Markets Authority investigation 1.12 Following an investigation into online gambling in 2016 by the

Competition and Markets Authority (‘CMA’), a number of large licensees gave undertakings to amend practices and guidance was issued to all licensees to ensure high standards across the industry. This included providing clearer information, reforming restrictions on withdrawals and account dormancy. We believe that the investigation has been successful in raising standards of fairness and transparency across the industry.

Dispute arbitration 1.13 Our members are fully committed to operating sustainable

businesses that properly identify risk and protect customers. Complaints about bets placed with operators are dealt with by the operator in the first instance however where a satisfactory resolution for the customer is not possible, an independent adjudicator will make an impartial judgement. This is provided by the Independent Betting Adjudication Service (IBAS), the principal alternative dispute resolution provider for gambling in Great Britain. In 2017/18, it considered 5,186 cases of which 3,595 were ruled upon. In 1,923 cases, IBAS ruled in favour of the operator; in 1,445 cases resolution was achieved without the need for a ruling; and in 227 cases IBAS found in favour of the customer. In total, £656,805 was refunded to customers (representing 0.004% of gross gambling yield) as a result of IBAS arbitration. The number of cases however was down by over 10% from the previous year.

Public perceptions and revealed attitudes 1.14 The Edelman Trust Barometer, indicates that gambling is trusted

only somewhat less (at 30%) than business in general (at 40%) and higher than social media companies. In addition the Barometer found that more than three in four Brits believing that CEOs should take the lead on change rather than waiting for the government to impose it. To

80

this end our members and business leadership will not simply wait for further legislation, we will take action now to address public and political concerns. This is demonstrable through voluntary action already taken to address concerns on TV advertising, safer gambling funding and affordability.

Protecting children and other vulnerable persons from being harmed or exploited 1.15 We currently provide a range of harm prevention measures and are

investing substantial resources in developing and deploying new harm prevention initiatives.

1.16 All licenced operators are required to offer players the ability to set deposit limits, allowing players to take control of the amount of money they can spend over a specified time period. Online the customer is able to set a deposit limit at registration and at any time during play. The deposit limit cannot be increased within the same 24 hours and if the customer wants to decrease their deposit limit this has immediate effect. These tools provide the player the opportunity to take control of the amount they are prepared to spend in a session.

1.17 Operators continually monitor patterns of account based play

making thousands of interventions each month to prevent harm occurring. Building on independent research, our members have developed these behavioural tracking systems to identify harmful play and deliver a set of tiered and tailored interactions to encourage customers to stay in control of their gambling.

1.18 Our members provide self-exclusion schemes which bar the

customer from using their services. We are continually improving the technological capability of these schemes.

1.19 The BGC is leading a group of major operators to develop an

industry model for assessing affordability risk across operator customer bases, using a combination of socio-demographic and credit data to identify players who would be subject to due diligence checks.

1.20 We support calls for banks to enable customers to block gambling transactions as a further way for people to stay in control.

1.21 It is illegal for anyone under the age of 18 to use our members’

products. A number of recent or proposed changes are likely to further reduce youth participation in gambling. These include the requirement by remote operators to verify age prior to deposit and play; the DCMS consultation on raising the minimum age of scratchcard play from 16 years to 18 years; and the decision by a large number of arcade operators to try to prevent unaccompanied gambling by under-16s on low-stake/low-prize Category D machines.

81

Problem gambling among children

1.22 A number of steps have been taken to ensure that children and the vulnerable are protected. Under the Gambling Act 2005 fruit machines were banned in take away food shops and other non-arcade premises such cafés, restaurants, minicab and taxi offices. This was to ensure that children and other vulnerable people are not exposed to gambling in certain non-gambling premises.

1.23 According to official estimates, 39% of 11-to-16-year-olds are likely

to have gambled at least once in 2018. While this is relatively high (the adult population estimate of gambling participation is 59%), the overwhelming majority of gambling by children appears to be legal – private betting or gaming (e.g. card games) with family and friends; National Lottery products; and low-stake gaming machines in arcades. We recognise that there are arguments in favour of raising the minimum age for all commercial gambling to 18 years – but this is not something that we are best placed to comment on as all products provided by our members are strictly for those over the age of 18.

1.24 Reported rates of gambling by children have declined significantly in

recent years. Between 2011 and 2017, past-week gambling by 11-to-15-year-olds fell from 23% to 12%45. Gambling by children on age-restricted products appears to be relatively low – much lower for example than for consuming alcohol46. Between 2011 and 2017, past-week gambling on age-restricted products fell from 14% to 6%. These patterns were observed across each age and gender cohort. Past-week rates of online gambling also halved – from 2% in 201147 to 1% in 2017. A significant proportion of this online activity appears to have taken place under parental consent. The Gambling Commission youth gambling report found that around half of past-year online gamblers aged 11-16 are gambling online (non-lottery) with parental permission. This suggests that educating parents about the risks of underage gambling may be a useful area to focus on in the future.

1.25 Estimates of problem gambling among 11-to-15-year-olds (using the DSM-IV-MR-J screen, designed for use with children) have been published since 2014. The reported rate of problem gambling in this age group was 0.7% in 2014; 0.6% in 2015 and 2016; and 0.9% in 2017. Caution should be exercised in attempting to draw conclusions about changes in problem gambling rates between surveys. Over the course of the five surveys where problem gambling has been measured, the mean number of children diagnosed is less than 20 per year. We should therefore be careful in how we use such small numbers to arrive at population-level estimates.

1.26 Therefore it is likely that further research is required in this area to

better understand prevalence and the education and treatment that is

45 We estimate that in 2018, 10.9% of 11-to-15-year-olds participated in gambling on a past-week

basis. 46 Past-week alcohol consumption by 11-15-year-olds was estimated at 10% in [2016] 47 An earlier survey, in 2007 estimated that 3% of children were past-week online gamblers

82

required. However, this should not delay efforts to address those children who are identified and diagnosed with problem gambling.

Problem gambling among adults 1.27 The rate of problem gambling among adults in Great Britain has –

according to official estimates – remained broadly stable over the course of the last two decades. The first major household survey to assess problem gambling rates in Great Britain – the British Gambling Prevalence Survey 1999 – reported a problem gambling rate of 0.6% of the population (16-years and above). The most recent estimate – from the combined Health Surveys 2016 – also reported a rate of 0.6%48. The highest rate of problem gambling was recorded in 2010 (0.9%) and the lowest in 2012 (0.5%).

1.28 In 2016 (the most recent year for which we have data from a major

household survey), the central estimate of the number of people in Great Britain with problem gambling (using the DSM-IV) was 290,000 (0.6% of the population above 16 years). If those identified as problem gamblers under the Problem Gambling Severity Index (but not under the DSM-IV) are added, the central estimate rises to 340,000.

1.29 It is often reported that there are two million people in Great Britain

at risk of “developing a serious gambling problem”. This is based upon the findings from Health Surveys that people are classified (under PGSI) as ‘low-risk’ or ‘moderate risk’ gamblers. Low-risk gamblers are defined within the PGSI as having "few or no identified negative consequences" from their gambling. Moderate risk gamblers are described as having "some negative consequences. In 2016, an estimated 1,886,000 people scored 1 or more (out of a maximum 27) on the PGSI. Of this number, 506,000 were estimated to be "moderate risk" and 1,150,000 "low-risk".

1.30 Analysis of questions from the survey that might identify specific

harms suggests relatively little change. Over the course of the six surveys, the percentage of respondents who bet more than they could afford has fallen. The same is true of those borrowing money, selling items or committing a crime in order to gamble. The proportion of respondents stating that gambling had caused them financial problems or health problems has been stable across the surveys.

1.31 The use of self-report surveys to identify gambling-related harms is

not perfect. Some critics argue that problem gamblers are likely to be under-represented and that accuracy of recall (or even dishonesty) may depress reporting49. On the other hand, some researchers contend that problem gambling prevalence surveys produce a high proportion of false-positives50 and have poor validity when compared with clinical

48 Problem gambling estimate according to the DSM-IV screen which was used across all three

British Gambling Prevalence Surveys and all three combined Health Surveys 49 e.g. Doughney, 2007 50 e.g. Ross et al, 2008

83

screening. This, it is argued inflates reported rates of problem gambling.

1.32 Caution should be exercised in making comparison of problem

gambling rates between international jurisdictions, given the capacity for methodological and cultural differences to distort results. However, so far as we can tell, the rate of problem gambling in Great Britain is relatively low by international standards51.

1.33 To the extent that problem gambling affects a relatively small

proportion of Britain’s population and a somewhat larger (but small) proportion of gamblers; that the reported rate of problem gambling has remained relatively stable between 1999 and 2016; that harms (to the extent that they are recorded) appear to be stable or in decline; and that rates appear low by international standards (and in line with western Europe), we consider that Britain has been moderately successful in fulfilling this licensing objective.

1.34 While the rates of problem gambling are relatively low we believe that we can make gambling safer through the measures that our members are developing and introducing.

Q2. What changes, if any, are required to bring the Act up to date?...

2. Gambling Act 2005- The nature of gambling regulation in Great Britain has changed significantly since the passing of the 2005 Act. This has happened through a mixture of new primary legislation, secondary legislation, Licence Conditions and Codes of Practice and self-regulation under industry codes. Some examples are set out in table 3 (below):

Table 3: Examples of changes to gambling legislation, regulation and self-regulation

Primary legislation

2014 Gambling (Licensing and Advertising) Act 2014

Required online operators marketing to customers in GB to hold an operator’s licence from the GC

Secondary legislation 2018 The Gaming Machine

(Miscellaneous Amendments and Revocation) 2018

Reduced the maximum stake on B2 machines from £100 a spin to £2 a spin

2018 The Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2018

Restricted betting on the EuroMillions Draw

2018 Criminal Finances Act 2017 Enabled Police to seize gambling funds (e.g. casino chips, online account balances) in criminal cases

Licence Conditions and Codes of Practice

51 Significantly higher rates of problem gambling have for example been observed in Australia, Hong Kong, Macau, South Africa and The United States of America

84

2019 Licence Conditions and Codes of Practice

Tightened verification procedures for online gambling (including age verification prior to play

2018 Licence Conditions and Codes of Practice

Raised reporting disclosure requirements

Self-regulation

2019 ‘Whistle-to-whistle advertising ban’

Banning TV advertisements 5 mins before, during and 5mins after sports broadcasts before 9pm.

2.1The Gambling Act 2005 has provided significant scope to keep pace

with technological change. Firstly, the Act provided for a new regulator the Gambling Commission'. The role of this body is to interpret the legislation and apply it to unforeseen future changes in technology, primarily by way of engagement with and advice and guidance to the industry. Secondly, the Act provided that many areas would be subject to the issuance of further delegated legislation if and when change demanded. The authorities would therefore be in a position continuously to update the legislation by way of order, regulation or other delegated instruments as necessary from time-to-time, examples of which are stated above. Thirdly, those definitions in the Bill which referred to technological matters particularly liable to change (for example the definitions of 'Remote Gambling' in Section 4 and 'Gaming Machine' in Section 235) are drafted so widely that they could not fail but to cover all future developments. The onus of proof would therefore be put on gambling operators to show how the definitions did not apply rather than being put upon the authorities to show how they did apply.

The effect of the Gambling Commission.

2.2The Gambling Commission has provided the clear advice and guidance that the gambling industry (and indeed the wider public) need in order to apply the wide and imprecisely defined terminology of the Gambling Act 2005 to the realities of technological change. Furthermore, the Commission has used and is increasingly using its 'umbrella' discretion under Section 24 of the Gambling Act 2005 (to issue Codes of Practice)52 to, effectively, legislate in those areas where it considers it desirable for the prevention of any harm that might be caused by gambling. Recently, for example, the 72-hour 'window' for age verification was abolished and the use of credit cards for remote gambling is also under review. These are major changes and point to the flexibility afforded by the Act to the regulator.

The effect of the drafting of the Gambling Act 2005

2.3In relation to the drafting of the Gambling Act 2005, it is not obvious

that it is in need of change. Some commentators have accused the Act for failing to specifically refer to such technologies as emails, 'smartphones', social media and the internet. However, Section 4 of the

52 The Commission has other such discretions, for example the ability to attach conditions to licences as set out in SS. 75-88.

85

Gambling Act 2005 is so broadly defined so as to cover all areas of communication, so much so that ‘The Secretary of State may…provide that a specified system or method of communication is…to be treated as a form of remote communication'. Given the reserved power for Secretary of State it is difficult to envisage any technology that the Gambling Act 2005 would fail to cover.

Changes required to the Gambling Act 2005

2.4While all legislation is a matter for government and parliament, we do not believe that a new gambling bill is required. The cyber-universe is far too fluid and fast-moving to be contained by prescriptive definitions at primary law level. And it is therefore highly likely that any new Bill would contain the same multi-level 'sweeping-up' approach exemplified by the structure of Section 4 of the Gambling Act 2005.

Q3. Is gambling well regulated. How successfully do the GC, LAs and others enforce licensing conditions including age verification?...

Licensing regime 3. Great Britain has (so far as we can tell) low levels of illegal gambling;

relatively low levels of problem gambling by international standards; low levels of cheating; and a generally compliant industry.

3.1The Gambling Commission is a strong enforcer of age verification regulations. On 7th May 2019 new age verification requirements were introduced for remote gambling operators. The GC conducted investigations into several remote gambling operators to ascertain their compliance with the new requirements. The new measures now mean that it is virtually impossible for any child to open an online gambling account. Age restrictions in betting shops and casinos are regularly and independently tested in line with Gambling Commission Guidance.

Comparisons with other regulators and jurisdictions

3.2By international standards, the Gambling Commission is a strong and

respected regulator and is considered a role model by other regimes.

3.3As regards learning from other jurisdictions this is done under a various number of fora – mainly the International Association of Gambling Regulators (IAGRA), the Gambling Regulators European Forum (GREF) and previously the EU Expert Group under the Chair of the European Commission. In all circumstances the Gambling Commission is an active participant and information and best practice are shared amongst these forums.

Q4. Should gambling operators have a legal duty of care to their customers?

4. The BGC assumes that the contemplated duty of care: (i) differs from the existing duties imposed by the regulatory regime under the 2005 Act because it is enforceable in a private law claim by an individual

86

rather than by the regulator; and (ii) differs from the narrow duty of care already recognised at common law because it is owed to customers as a class and enforceable by any customer rather than limited to individual customers towards whom the operator has assumed a particular responsibility. The BGC considers that a new duty of care with these features is both unnecessary and inappropriate.

4.1It is unnecessary because the existing duties under the 2005 Act

regime already impose extensive obligations on operators to protect children and other vulnerable persons from being harmed or exploited by gambling, and there is no evidence that these obligations and their enforcement by the Gambling Commission have proved to be ineffective or insufficient. A new duty of care enforceable in a private law claim by an individual customer would inevitably impose very similar obligations to those currently enforced by the Gambling Commission, leading to a risk of piecemeal, overlapping and inconsistent enforcement.

4.2Further, the potential availability of private law remedies – particularly

compensation or the reimbursement of gambling losses – recoverable in claims by individual customers would risk incentivising gamblers to take greater risks in the hope or expectation that the operator will underwrite their losses and thereby provide them with risk-free betting.

4.3The arrangements prescribed by the Commission in the LCCP amount

to a comprehensive code and lay down in far greater detail than would be possible in a new duty of care the protective measures considered appropriate by the expert regulator. Indeed, it is noteworthy that so-called duties of care introduced in other EU member states appear to cover only some of the extensive obligations covered in this country by the LCCP. Thus in the Netherlands (where online gambling is in the process of becoming regulated), the draft “Duty of Care Guidance” issued by the Netherlands Gambling Authority on 11 March 2019 (following the enactment by the Dutch Parliament of the Remote Games of Chance Act in February 2019) explains that the “duty of care” has three limbs: a duty to provide customers with correct, reliable information; a duty to apply fair terms and conditions; and a duty to prevent gambling addiction wherever possible. In Sweden (where a new Gambling Act came into force on 1 January 2019) operators are required to alert players when their gambling pattern is assessed to be risky and to offer information on what help is available and where.

4.4The LCCP can be easily updated to take account of technological and

other developments in the industry, which would not be possible in piecemeal, episodic litigation based on a new private law duty of care.

4.5The High Court has held53 that the extensive protective duties imposed

on operators under the 2005 Act do not give rise to a private law cause of action enforceable at the suit of an individual customer – rather they are enforceable by regulatory sanctions and criminal prosecutions.

53 Ritz Hotel Casino Ltd v Al Geabury [2015] LLR 860 at [139].

87

There are sound reasons for this. The regulator can enforce the protective duties in a systematic, consistent manner raising and maintaining standards throughout the industry. Private law actions by individual customers would carry a risk of overlapping, inconsistent enforcement.

4.6The existing common law allows the imposition of a narrow duty of care

to a vulnerable individual in appropriate circumstances. A broad duty owed to all customers, whether vulnerable or not, is contrary to the policy of English law and should be rejected.

Q5. What are the social and economic costs of gambling?... 5. The absence of a systematic framework to measure costs or harms to

date has resulted in a dearth of reliable data and the generation of some questionable research studies on this subject.

5.1It is important to note that gambling-related harms are not necessarily

the same as harms caused by gambling. We do not dispute the fact that excessive gambling can lead to some very severe harms; but it ought to be recognised that excessive gambling can also be the result of pre-existing harms. Comorbidity is the term used to describe the existence of concurrent disorders in an individual. It also refers to the ways in which these disorders interact or interfere with each other.

5.2A 2008 study by Harvard Medical School’s Department of Health Care

Policy analysed the gambling data in the National Comorbidity Survey Replication (NCS-R). They discovered that survey participants with any other psychiatric disorder are 17.4 times more likely to develop pathological gambling than those without such problems. The largest study that examined the comorbidity of pathological gambling surveyed more than 43,000 representative Americans and concluded that almost 75 percent of those diagnosed with a gambling disorder also had a co-occurring alcohol use disorder, while almost 40 percent had a co-occurring drug use disorder.

5.3Studies have also found that people with gambling disorders had very

high rates of personality disorders (more than 60 percent), mood disorders (almost 50 percent) and anxiety disorders (more than 40 percent).

5.4Researchers have attempted to determine whether or not a gambling

disorder precedes a co-occurring disorder, or vice versa. In 2008, researchers found that among those who were diagnosed with pathological gambling, 23.5 percent developed the gambling disorder before any other psychiatric problem. In contrast, 74.3 percent developed the gambling disorder after experiencing co-occurring disorders.54

54 Kessler RC, Hwang I, LaBrie R, et al. DSM-IV pathological gambling in the National Comorbidity Survey Replication. Psychol Med. 2008;38(9):1351–60.

88

5.5The research available on economic costs reveals what Professor David

Forrest (Management School, University of Liverpool; member of the Advisory Board for Safer Gambling) has described in his ‘An Economic and Social Review of Gambling in Great Britain’ as “a striking lack of consensus over methodology that suggests caution in taking any purported estimates of social cost too literally.”55

5.6Forrest identifies three key factors that influence measurement: 1)

“what should count as a social cost”; 2) “to what extent social costs associated with problem gambling are caused by gambling”; and 3) how to “place money values on any of the negative outcomes associated with problem gambling”56.

5.7The result is that researchers are given “considerable scope…to

exercise judgement in constructing their measure of social cost, with the risk that their own ideological perspectives may drive the results they report.”57 For example, in 2016, the Institute for Public Policy Research (‘IPPR’) published a report entitled ‘Cards on the Table58’. The authors of the report clearly state the study attempts to provide estimates of excess costs related to problem gambling but not caused by problem gambling as they are unable to control for the existence of other characteristics. In April 2019, the Government’s Regulatory Policy Committee (‘RPC’) raised concerns about the IPPR report (along with a separate study by the Centre for Economics and Business Research on costs). The RPC commented on “limitations in the available data”, noting that the Government had been “unable to replicate the analysis, or to critique or test all of the assumptions that underpin the calculations and outputs59”.

5.8Perhaps the main contribution of these reports is to highlight the

absence of any reliable and scientifically robust framework for assessing social and economic costs. This is therefore an area in which further independent research would be beneficial to the overall understanding of the effects of gambling in Great Britain.

Q6. What are the social and economic benefits of gambling? How can they be measured and assessed?

6. Our members are a key part of the leisure and entertainment industry. Our industry employs over 106,000 people and contributes more than £14 billion to the UK economy. Of the 106,000 people employed in our industry, 56% are women and 24% are aged under 24. Jobs in our industry range from retail assistants in betting shops (each shop employing on average six members of staff), skilled croupiers in casinos to high tech jobs in online operators and suppliers. Our

55 Forrest, 2013a, p.21 56 Ibid. 57 Ibid., p.22 58 Thorley, Stirling & Huyhn, 2016 59 ADD CITATION

89

members also support training and apprenticeships, which is growing in provision.

6.1Sport is also a major beneficiary. Horse racing receives over £350

million per annum through the horse racing industry levy, media rights and sponsorships. Racing in turn supports 59 racecourses across the UK, 85,000 jobs and delivers an economic value of £3.45 billion to the UK economy. For other sports, gambling supports everything from international sporting events to grass roots activities.

6.2Betting and gaming companies and their staff play an active role in their communities. Over the past few years, support has been given to range of charitable causes, including partnerships with Alzheimer’s Society, Prostate Cancer UK, White Ribbon (campaign against domestic violence which was highly commended in the 2019 Business Charity Awards) and providing grants and funding to organisations like Cash4Clubs, Jessie May Children’s Hospice at Home, Movember, Football In The Community, the Retired Greyhound Trust and the Special Care Baby Unit at Borders General Hospital.

Consumer enjoyment 6.3The principal social and economic benefit of the gambling industry is to

allow adults to engage in pursuits that they wish to do and find enjoyable. Reports such as the Business in Sport and Leisure, KPMG study on The Economic Value and Public Perceptions of Gambling in the UK found in terms of attitude towards gambling: a. Most people think that most forms of gambling are socially

acceptable. b. 89 per cent gambled at least once in the previous year and a

majority of the population gambled between one and three times each week.

6.4The Government also published its response to the Budd report in 2002, "A Safe Bet for Success" which stated that: "In the Government's view the law should no longer incorporate or reflect any assumption that gambling is an activity which is objectionable and which people should have no encouragement to pursue. It is an important industry in its own right, meeting the legitimate desires of many millions of people and providing many thousands of jobs."

6.5Economists traditionally measure consumption benefit by estimating

consumer surplus. Consumer surplus describes the difference between the value that consumers ascribe to a product or service and the price that they pay to obtain it. As part of any official attempt to measure costs and benefits of gambling, independent work should be undertaken to calculate consumer surplus for gambling.

6.6A recent study by Blackman et al. (2019) found not only higher levels

of well-being among recreational gamblers than non-gamblers but also found that well-being increased with gambling engagement – except in those cases where problem gambling occurred. In the case of elevated

90

and decreased well-being, the research identified correlation rather than causal relationship.

6.7Research has also indicated that gambling can involve a range of

additional benefits, including the opportunity for social engagement and increases in mental acuity. It is difficult to quantify these benefits but we believe that they should be recognised nonetheless. Forrest (2013a) notes that “interaction with others is widely regarded in the psychology literature as important to a feeling of satisfaction with life. Much gambling takes place in social settings. The bingo hall can provide its patrons with a sense of camaraderie. Casino players appear to value social contact with dealers and other players (Cotte & Latour, 2009). Even in machine gaming, an apparently asocial mode of gambling, groups may form to turn the activity into a collective rather than an individual experience (Cassidy, 2012). All these are aspects of gambling which accord with ideas in psychology about what makes for happiness”. It seems that many of these benefits will also apply in the case of online and mobile gambling, which often take place in social settings60.

6.8Estimating the economic and social benefits of gambling is complex.

We note that some of the psychosocial benefits of gambling (as with costs) may be difficult to estimate in monetary terms. Nevertheless, they should be acknowledged and more should be done within research to understand them.

Q7. Is the money raised by the levy adequate? How effective is the voluntary levy? ... 7. The first in this group of questions assumes that there is a clear

understanding of a) how much is raised; and b) how much is required for research, education and treatment.

7.1There has been a tendency in policy debates to focus exclusively on funding provided to GambleAware. However, this does not represent the sum total of contributions from our industry to research, education and treatment (‘RET’) and is only a fraction of industry funding for harm prevention more widely.

7.2We can however make assessments of funds raised in relation to the

three-year National Responsible Gambling Strategy (or the ‘NRGS’) which set out the official approach to RET. Under the NRGS, the Responsible Gambling Strategy Board (now called the Advisory Board for Safer Gambling ABSG), the Gambling Commission and GambleAware agreed how much would be required for GambleAware to fulfil its responsibilities.

60 Gambling Commission, 2019

91

7.3This does not include general expenditure by the Gambling Commission in pursuit of its responsibilities (which is funded separately by the industry through licence fees61) nor the direct costs to the industry, for example; in establishing and operating multi-operator self-exclusion schemes which have substantial resources.

Table 6: Funding targets/ funds raised for National Responsible Gambling Strategy 2016-2019 Year Budget* Contributions Settlements** Total % of

budget 2018/19 £9.5m £9.6m £7.3m £16.9m 178%

2017/18 £9.3m £9.5m £5.0m £14.5m 156% 2016/17 Not

disclosed £8.2m £0.3m £8.5m n/a

Excludes GambleAware running costs ** Excludes funds from settlements allocated elsewhere Source: ABSG; GambleAware

7.4In recent years, voluntary contributions from licensees to GambleAware

in relation to the NRGS have been closely aligned to the budget set. With the inclusion of voluntary regulatory settlements there is now a sizeable reserve that has not been allocated to be spent.

7.5In 2019, an additional £10m was contributed by our industry to RET

that was outside the National Responsible Gambling Strategy. This included £3.7m to support the BetRegret Campaign (with media companies providing an additional £1.6m of resource). Direct support for organizations like Young Gamers and Gamblers Education Trust (YGAM), Gordon Moody, GamCare, GAMSTOP and others cover the remainder of the additional £10m contribution over and above contributions to GambleAware.

7.6Therefore, if we are considering whether the industry has provided

sufficient funds to meet the RET requirements identified by the RGSB/ABSG, then the answer would appear to be emphatically positive.

7.7However, we recognise that there have been calls for greater funding.

In 2018, the Gambling Commission published estimates for future funding indicating a range from £21.5m-£67m62. In response five major operators committed to increase their funding to 1% of GGY by 2023 (raising an additional £60m per annum). This strongly suggests that it should be possible to achieve the implied upper estimate of required funding (of £67m per annum)63.

7.8As we have demonstrated (above), the current system does indeed

appear to be working in achieving official targets for funding RET. Moreover, the effectiveness of the voluntary system has increased over recent years. Voluntary commitments by the largest operators to

61 In 2018, the Gambling Commission received £19m in licence fees 62 https://www.gamblingcommission.gov.uk/PDF/Review-of-RET-arrangements-February-2018.pdf 63 In April 2019, the chair of the Gambling Commission, Bill Moyes indicated that c£70m a year may be required

92

increase funding suggests that the voluntary scheme can be relied upon to achieve not simply current funding requirements but also a substantial and sustained increase in funding requirements.

7.9While a statutory levy may appear a straightforward policy measure to

address funding, we would caution that there are potential downsides to this policy. A statutory levy would invariably incur additional costs to the state and to industry in administrating such a scheme, consuming funding that could otherwise be better used. In addition, the shift from a voluntary scheme to a statutory one may result in a diminution of engagement and innovation in the industry and organisations carrying out work in research, education and treatment as responsibility is transferred to a new statutory body. In short, there are advantages to a system built on intrinsic motivation rather than coercion. Further, we observe that the gambling industry has provided funding – almost entirely exclusively - for RET for over 20 years.

7.10 We recognise that state spending on healthcare is under pressure

but believe that it is worth considering the validity of requiring gambling companies to fund services that the state does not consider worthy of significant funding from public finances – even where finances are based upon additional taxation of the gambling industry.

7.11 The gambling industry contribute around £3bn a year in duties64

around £2bn of which relates to non-lottery products. We estimate that Her Majesty’s Revenue receives at least £200m more in taxation each year than if instead of duties, the industry was subject to VAT.

Q8. How might we improve the quality and timeliness of research in the UK?...

A long-term and inclusive strategy 8. There is a need for a more expansive, pragmatic and coordinated

approach to research. Further, research should be peer reviewed to ensure the independence and accuracy of all published works. We would like to see the development of a proper research strategy, involving longitudinal studies of gambling and problem gambling behaviour and prevalence alongside applied research conducted in association with operators and treatment providers. As part of this approach, attempts should be made to synthesise findings and identify practical solutions.

Data sharing 8.1We support the Gambling Commission’s ambition to create a data-

sharing hub. Procedures will need to be put in place to ensure the safe handling and use of data and to ensure that researchers understand and use any data responsibly and accurately. Given the complexity and heterogeneity of data held by different operators, a scoping study

64 This is just a part of the industry’s tax ‘footprint’ which includes corporation tax, VAT, business rates, PAYE and National Insurance Contributions.

93

should be carried out to ensure data comparability, coherence and reasonableness of data requests and efficient use of resources.

Evaluating legislative change 8.2In addition, changes to regulation and legislation that have occurred to

date should be assessed. With a small number of exceptions, this has been largely ignored over the last 18 years. We consider that where regulatory relaxation or tightening are concerned, there should be trials. In this way, the consequences of restrictions can be better understood before full enactment.

Understanding positive play 8.3We support the recommendation made in the Report of the Gambling

Review Body in 2001 (the ‘Budd Report’) that the benefits of gambling should be studied in addition to harms. This is critical to provide balanced policy that “puts the customer at the heart” (as the Gambling Commission has urged).

8.4To date, there has been almost no official research carried out on

consumer benefits and positive play; and it has been indicated that there is no official appetite to conduct such work. This appears to us to be imbalanced. The current stigma attached to industry involvement in any form of research currently restricts and discourages the engagement by industry and academics for fear of attack by commentators. Therefore, official government commissioned and independent research on the benefits of gambling would substantial inform the current debate on gambling. Without this, it seems likely that academic experts will continue to feel intimidated about engaging in such work for fear of criticism, particularly on social media.

Q9. If, as the RGSB has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation?...

9. At present the Gambling Commission’s annual survey of gambling by 11-to-16-year-olds is the principal research vehicle for understanding gambling – and problem gambling – behaviour by children. As we have noted earlier, a high degree of caution is required when attempting to draw conclusions from this data – including interpretation and sample sizes. We suggest that this survey be continued but that thought be given to using a larger survey sample and that the research methodology be independently reviewed in the light of latest research into youth studies.

9.1We note too that the Avon Longitudinal Study of Parents and Children

(‘ALSPAC’) has provided some useful information about gambling by young people and, in particular, how gambling attitudes and behaviours change as children grow up. There has also been a number of studies

94

of gambling by children and young people. However, there appears to be an absence of coordination between these projects.

9.2We recommend that consideration be given to developing a research

strategy to enhance understanding of gambling by children and young people.

Q10. Is enough being done to provide effective public education about gambling? If not, what more should be done?...

10.Public education about the potential risks of gambling is still relatively undeveloped in the UK. In recent years substantial sums have been invested in this area – most prominently through the Senet Group’s ‘When the Fun Stops Stop’ and ‘Bad Betty’ campaigns; and more recently through GambleAware’s ‘Bet Regret’ campaign. There has also been a number of schools-based initiatives through organisations such as GamCare, YGAM and Fast Forward. Some operators have also significantly increased commitment to this area.

10.1 In order to assess effectiveness, it is important to understand –

prior to commencement - the aims that the public education programme is designed to achieve. For example, research has shown that public education programmes may be successful in raising awareness of risks but have little positive effect on behaviour (and sometimes may result in unintended negative consequences).

10.2 At present, there is little coordination between public health

campaigns (to raise awareness of risks at a population level), operator-led campaigns (to encourage moderation and play management by their customers) and treatment campaigns (to encourage help-seeking). It is likely that an overarching strategy may be required to link each of these elements.

10.3 We believe that public education should be a focus of any strategy

to reduce harms – but that simply increasing scope of current initiatives without attempting to gauge effects and recalibrate may not be a good use of resources. There is likely to be merit in understanding what lessons may be learned from other jurisdictions (notably Canada, which has pioneered education campaigns in relation to gambling) and other domains (e.g. alcohol).

Q11. Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective?...

Expansion of provision 11.We support the expansion of treatment services in UK. Currently we

continue to support and fund existing services delivered by Gordon Moody Association, GamCare’s 120 treatment centres located throughout the UK and their youth outreach programme, the National Gambling Helpline, YGAM and Netline. Through continued funding by our industry over more than 20 years, these charitable services are able to provide free of charge treatment, support & advice services for anyone affected by gambling. Based upon the recent increase in

95

funding by our largest operators, as well as plans published under the NHS Long-Term Plan, it seems likely that the resources necessary to achieve a substantial expansion of treatment and support can be met. The critical challenge is to ensure that funds are spent wisely to support those in greatest need.

Improvement of services 11.1 There is little research currently available into the effectiveness of

treatment services in Britain. There has also been no systematic attempt to understand the full extent of treatment provision across the country (outside services funded by GambleAware). Importantly, it should be noted that not everyone with a gambling disorder will need treatment. As Blaszczynski (2017) observes, only those for whom gambling is the primary disorder should receive treatment for problem gambling: “In diagnosing the condition [problem gambling], it is important to rule out any other psychiatric explanation - for example. a bipolar or psychotic (schizophrenia) disorder – that might be the main cause of excessive gambling65.”

11.2 While it is commonly stated that only 2% to 3% of problem

gamblers receive treatment, these estimates ignore therapy services provided by Gamblers Anonymous, by private organisations, by the National Problem Gambling Helpline and by community and health groups. It also ignores findings from the AMPS 200766 that a high proportion of problem gamblers access non-gambling-specific mental health services.

11.3 The ambition should be to provide treatment and support based

around the needs of the individuals concerned. Research has indicated that, for some, helplines can be effective in achieving moderated behaviour and/or abstinence. The value of such services for people with lower severity gambling disorder should not be discounted.

11.4 Research indicates that most problem gamblers correct their

behaviour without recourse to formal treatment services; and that relapse is a significant factor in sustaining levels of problem gambling. It is likely that efforts to improve long-term effectiveness of treatment services may be more effective.

11.5 Clearly, more effective prevention measures – such as encouraging

healthy approaches to gambling and providing customers with tools to manage their play – should be expected over time to reduce the number of individuals who require help in relation to their gambling.

Encouraging greater use of treatment services

65 Blaszczynski, 2017, pp.124 - 125 66 Cowlishaw & Kessler, 2016

96

11.6 A recent study67 has indicated that the biggest single reason for not seeking help is the belief that the individual concerned can address his or her gambling problems without the need for formal help. Given high levels of self-correction, this may be a rational point of view for some – but certainly not all – problem gamblers.

11.7 We suggest that taking steps to destigmatise help-seeking may help. Communications and sign-posting to treatment providers should be supportive, reassuring, relevant and non-judgemental. We should consider that public criticism of treatment services (particularly on social media) may undermine help-seeking.

11.8 A better understanding of pathways to problem gambling and stronger links between specialist treatment services (e.g. GamCare and its partners) and operators, healthcare providers (GPs or other mental health services for example), homelessness services, the criminal justice and penal system may increase use of treatment.

Q12. What steps should be taken to better understand any link between suicide and gambling? 12.Suicide is a complex issue and the examination of any links to gambling

or disordered gambling requires great care and sensitivity. 12.1 We suggest that a collaborative and careful approach to

understanding linkages is required. The aim of research should be to explore what is clearly a difficult subject and provide pragmatic solutions.

Q13. The RGSB has said “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” Do you agree?...

13.The fact that only companies licensed by the Gambling Commission may advertise in the UK provides an important means for customers to identify legal from illegal operators. It is also provides a means for companies to inform gambling consumers about the products that they enjoy.

13.1 The rules governing gambling advertising have recently been

significantly strengthen with both new Advertising Standards Authority (ASA) and the Committee of Advertising Practice (CAP) standards. ASA standards introduced this year further protect children and young people by prohibiting online ads for gambling products being targeted at groups of individuals who are likely to be under 18 based on data about their online interests and browsing behaviour; extensively listing unacceptable types of content and further restricting advertising content such as any messaging that creates an inappropriate sense of urgency.

67 INSERT CITATION

97

13.2 Our members acknowledge that there is both public and political

concern about the quantity and in some cases the content and tone of gambling advertising. Through self-regulation a voluntary ‘whistle to whistle’ ban was recently introduced on all TV sport advertising (excluding horse and greyhound racing) before 9pm. This ban commences 5 minutes before the sporting event begins and ends 5 minutes after the event ends, which commenced on 1st August 2019.

13.3 To date, there has been a limited number of studies of attitudes of

schoolchildren in this country towards advertising. The April 2019 report by CAP entitled “Gambling Advertising: Protecting Young People and Children”, suggested that “the evidence base does not suggest gambling advertising that complies with the UK Advertising Codes is likely to cause harm to under-18s.” Against this, we must balance studies of Gambling Commission survey data that have shown a dramatic reduction in both gambling and gambling on age-restricted products by 11-to-15-year-olds.

13.4 In addition, the proportion of young adults (aged 16-24 years in the

combined Health Surveys) gambling has also declined. Based upon this information – alongside research on the effects of advertisements on adults which indicate low influence on gambling initiation – we view with scepticism claims that the relaxation in advertising laws has led to increased gambling participation by children and young adults.

13.5 We note that a number of official research studies have been

commissioned – and so far these have failed to provide support for legislative intervention. We believe that the inclusion of youth studies within a longitudinal approach to understanding gambling would help guide approaches to advertising in the future.

Future regulation 13.6 Any consideration of future legislative changes should – as with all

such changes – seek to understand and balance benefits and costs. Important restrictions on advertising have been implemented in recent years through self-regulation and the actions of regulatory bodies without the need for legislation. We believe that this approach offers the greatest opportunity for agile responses to concerns while allowing benefits to be retained for recreational gamblers.

13.7 It is also critical to understand the chain of advertising, in particular

the role of online platforms. Further efforts need to be made by online platforms to prevent under-age access to gambling advertising through measures such as age-gating and their own customer profiling tools.

International comparisons 13.8 We believe that the Government and Gambling Commission should

continue to monitor developments across a range of markets in order to understand effects. We identify four key markets where monitoring

98

would be particularly beneficial in terms of understanding policy outcomes: • Italy: where a complete advertising ban has just been enforced (but

caused considerable confusion in its detail and is now causing efficacy concerns for the regulator)

• Sweden: where a legislative requirement to advertise ‘in moderation’ is being tested in the and may give rise to further legislative intervention (after only 6 months)

• Belgium: where a new set of restrictive regulations on gambling advertising has just come into force (strengthening and codifying enforcement and restrictions)

• Spain: where regions are already taking restrictive action on broadcast advertising and a national attempt to create an advertising watershed (or a complete ban) is ongoing

13.9 It should be noted that while all of this activity will be instructive from a policy and impact perspective to Britain’s policymakers, none has yet had sufficient time from an implementation standpoint (if at all) for clear conclusions to be drawn. The impact of markets opening from an advertising perspective should be considered to be just as instructive to potential harm and benefit as those being restricted, in our view.

Q14. Gambling is becoming an integral part of a growing number of sports… What are the risks attached to this?

14.The relationship between gambling and sports has existed in various formats for centuries. In some sports (horseracing and cricket for instance), wagering played a seminal role in their establishment, structure and growth. This continues to be the case today where gambling companies provide significant financial resources for professional and grass roots sport in the UK.

14.1 In recent years, linkages have become more visible and more

complex as a result of developments such advertising through sport to non-UK based customers. For example, for the 2019/20 English Premier League season, the vast majority of gambling shirt sponsors are largely or entirely non-UK facing brands.

14.2 Further, we understand concerns that sponsorship should not

glamorise gambling to children. Gambling sponsor logos on youth sizes on replica kits is banned. We note the point raised in Cassidy (2017) that some children outgrow youth sizes with the result that parents then have no choice but to purchase adult replica kits. We believe that by working with researchers and concern groups we can address these concerns in a targeted fashion.

14.3 The development of adtech means that it may soon be possible for

TV viewers to be able to filter out gambling advertisements (TV spots and perimeter advertising). We believe that this area offers tremendous promise as a targeted means of addressing risk.

99

14.4 There may also be opportunities to use relationships between gambling sponsors to promote awareness of the risks of gambling. In 2018, a major operator started using high profile former sports stars to promote safer gambling and to encourage use of play management tools (deposit limits, time-outs and self-exclusion)68. This seems to be a promising area to evaluate and expand upon.

14.5 What is critical is that all parties – sponsors, rights-holders, media

companies, kit manufacturers - participate actively in this process.

Q15. How are new forms of technology affecting children’s experiences of gambling? ...

15.As we have noted earlier, participation by children in activities legally designated as gambling has fallen significantly over the last eight years. Gambling on age-restricted products (including online gambling) has also fallen dramatically. Given tightening of age verification procedures and the removal of free-to-play content from pre-registration pages, it seems plausible that these trends will continue.

15.1 We are aware of concerns that children may be participating in

activities that are similar to gambling without meeting the criteria established by the Gambling Commission. These activities may include participating in ‘social games’ (e.g. casino, bingo or slots-style games where credits gained cannot be redeemed as cash) or in gambling-style features within video games (such as ‘loot boxes’). The limited research conducted on these to date suggests that further regulatory attention may be required.

15.2 We note a recent GambleAware study on advertising identified

concerns in relation to how social media may affect attitudes and relationships with gambling among children. This is an area that warrants further attention and we are working with social media companies on this matter.

Questions 16 -19 - we have elected not to answer these questions as our members’ products are strictly for those aged 18 and over and our members do not operate lotteries.

6 September 2019

68 We note examples from other domains – such as Heineken’s use of the former Formula One champion, Jackie Stewart to promote total abstinence from alcohol consumption when driving

100

Betting and Gaming Council – Supplementary written evidence (GAM0129) Following the evidence session on 4th February, at which I gave evidence, Lord Layard asked how much money is laid by people on their own, as opposed to what is being said now that it is basically a social activity? I promised to write to the committee on this matter. The extent to which gambling in Britain takes place with others or alone is unknown. However, there are a number of studies which can help inform as to how people gamble. I have included these separately with this letter. With regards to Non-Disclosure agreements I understand that our members who were asked for evidence on this matter will be responding directly to the Committee on this matter. We do not have any further information to add. With regards to social media and affiliates, we are supportive of affiliates being regulated (which is not currently the case). In addition we published a 10 point action plan to further guide members during the COVID crisis which includes a requirement for members to operate a one-strike-and-you’re-out policy on affiliates that breach our code of conduct. The COVID 10 point action plan is included below. While millions of people regularly enjoy a flutter and do so safely, I am determined to ensure that the standards in our industry are the highest in the world. That is why we have announced our safer gambling commitments which include 22 actions based around 5 core areas of consumer safety and protection. As part of these commitments, our members have already introduced a ‘whistle to whistle’ ban on advertising during sport; substantially increased funding for research, education and treatment; implemented new ID and age-verification checks; ended exclusive rights to screen FA Cup games and will implement a ban on betting with credit cards. We are also continuously developing new safer gambling tools with bespoke messaging and reviewing interactions to ensure that they have maximum positive impact. I am determined to continue to drive change across the betting and gaming industry to ensure the highest standards are met. Studies on gambling behaviour The latest Health Survey data (England, 2018) indicates that the majority of people who gamble do so in the company of other people: - 43% of people gamble (past-year), excluding the National Lottery - only 15% of men gamble online and 4% of women (past-year)69

69 https://files.digital.nhs.uk/B5/771AC5/HSE18-Adult-Health-Related-Behaviours-rep-v3.pdf

101

It is unclear how much of online gambling is solitary but clearly the majority of gambling must be in venues with other people present, in betting shops, on-course, pubs, arcades, casinos and bingo clubs. A number of studies have highlighted the importance of gambling venues in bringing people together. For example, in 2007 the Henley Centre found that: "Bingo plays an important role in promoting a sense of belonging to a local community. It is one of the few leisure pursuits that brings together people of all ages: • When a bingo club closes, former patrons can feel isolated and alone, and some even cease to leave their homes altogether • In comparison with the general population, bingo players spend a great deal of time with their families – 82 per cent of bingo players see their families either every day or a few times a week, compared with an average of 54 per cent among those involved in other social activities." While the Health Survey data (England, 2018) shows that only 15% of men gamble online and 4% of women (past-year) the Gambling Commission statistics (2019) attempt to identify locations where that gambling takes place. Of those who gamble online rather than in a physical premises, the locations that they have gambled online in the past four weeks are 95% at home, 15% at work, 12% on their commute, 7% at a pub or club and 4% at a sports venue.70 It may be a reasonable assumption that a large part of gambling at home is solitary. But that does not mean that other people are not present (which may be a critical mediating factor). Gambling online at home is also likely to be non-immersive and a large number of people use chat rooms when gambling (particularly on bingo), creating a level of social interaction. Philander & McKay (2014) analysed data from the BGPS 2010 and found that - adjusting for endogeneity - participation in online gambling predicted lower problem gambling PGSI scores. They speculated that this may be because online gambling was subject to a wider range of natural interruptions and alternative pursuits: "The convenience of access to online gambling is often noted as a source of risk but gambling in the home or another comfortable location may actually cause players to end playing sessions more quickly due to the availability of alternate activities. If a player reaches his/her predetermined money limit early in a session at home, he/she would be able to quickly perform many non-gambling activities at home – surf the Internet, watch TV, cook a meal, talk to family/room-mates, etc. ...The presence of the gambler at an Internet enabled device also implies quick and easy access to a wide range of online help materials for responsible gambling and problem gambling. Gamblers with concerns about their play, or simply seeking to improve their informed decision-making, are typically no more than a couple of clicks away from responsible gambling materials and contact information, which may or may not be easily available (or evident) in a physical gaming location. Online gamblers are also not

70 https://www.gamblingcommission.gov.uk/PDF/survey-data/Gambling-participation-in-2019-behaviour-awareness-and-

attitudes.pdf

102

restricted to accessing the materials provided by the operator, but can also immediately seek out information from non-profit and health providers." Bernhard, Dickens and Sahpiro (2007) observed (in Las Vegas) that suggestions that slots gaming was non-social may be misplaced: "Our data clearly contradict Putnam's impressionistic statement that the increasing popularity of machine gambling represents an anti-social (or at least non-social) development. While machine gambling does not appear to be as popular with those who gamble alone, perhaps other forces are at play here. For instance. solo gamblers tend to be more frequent and heavier bettors, and perhaps they have developed a savvy understanding that machine games cannot be "beaten" in the same way that other games (such as table poker or sports betting) can. What is more, it would seem that gambling should not be characterized monolithically, especially as it pertains to social interaction. For instance, while craps and sports betting spaces are loudly and visibly social, other gambling spaces have their own social nuances. Table game play incorporates not only the obvious sharing of space and inevitable small talk that occurs within these confines, but also distinct table etiquette and shared codes that most players eventually adopt. Sometimes chatter is intended to gain an advantage, as is often the case with table poker. Often, however, even in non-directly confrontational games such as blackjack, players readily strike up casual conversations -as might be expected among any individuals sharing common space, interests, and conversation material." COVID-19 action plan - pledges:

Pledge #1: Members will increase safer gambling messaging across all sites, apps and channels including inbox messaging to all existing and new customers reminding them of the safer gambling tools available.

Messaging is a crucial method of nudging customers into taking actions to remain in control. Actions include using tools that offer customers an important way to set limits and raise awareness of their play. Their prominence in the customer journey should be emphasized during this period.

Pledge #2: Members will implement heightened monitoring and data collection in the knowledge that customers are required to abide by social distancing measures. Any material change in customer play patterns, including any increase in time and spend, beyond normal patterns before the crisis, indicates potential markers of harm and operators must step up interventions.

While total gambling has reduced due to no UK sporting events taking place internal tracking and customer protection systems should be adjusted where necessary to ensure that changes in customer behaviour are identif ied.

103

Pledge #3: Members, operating heightened monitoring, shall actively promote deposit limits and send a deposit limit message with link to the tool to any player exhibiting abnormal patterns of play that are a marker of harm.

The current crisis can lead to changing patterns of consumer behaviour, particularly online. Where gambling companies are aware of customers increasing their play beyond their normal routine, they should ensure this triggers an appropriate response in establishing the customer’s welfare and being prepared to intervene with a deposit limit message or mandatory limited where appropriate. Pledge #4: Members shall commit to an immediate and ongoing review of their marketing and advertising – in volume, content and targeting – and will act to ensure it is both appropriate and respon sible given the increased risk.

Members should ensure that that gambling is not portrayed as a suitable or desirable response to those experiencing boredom or frustration during self-isolation. Telephone, text and e-mail contact should not be increased from normal patterns during this period with the exception of promoting safer gambling messaging. The industry is acutely aware of the risks arising from potential new patterns of work and leisure caused by the current lockdown. As such the industry is determined to ensure that marketing and advertising is appropriate and sensitive to these potential risks. Pledge #5: Members will report to the BGC instances of illegal rogue and inappropriate advertising and the BGC will report these to the regulator.

Illegal offerings and their advertising can be found on the web and are unethical where they seek to take advantage of a customer’s vulnerability. BGC members should report such advertising to BGC who will inform the regulator. This is part of the overall effort to clean up advertising which is irresponsible and accessible to the UK public. Pledge #6: These Pledges will fully apply to all aff iliates. Members will enforce a strict one-strike-and-you’re-out policy for breaches of these Pledges.

Affiliates provide an important role in providing messaging and responsible advertising to customers. This means affiliates must in no way mention or use the words associated with the Coronavirus such as ‘’bored’’, ‘’isolation’’, ‘’stay at home’ ’amongst others. The BGC will collect and provide a list of key words and phrases to members, affiliates and social media platforms to prevent their misuse.

104

Pledge #7: Members will sign-post to GAMCARE advice and the 24-hour free to call National Gambling Helpline and GamStop for self-exclusion in their safer gambling messaging, particularly where issues around anxiety or isolation are apparent from monitoring systems or customer interactions.

The industry provides safer gambling messaging to all customers. At this time, it also needs to address issues arising directly from the current crisis. To this end members shall incorporate additional information for customers requiring intervention as part of our corporate responsibility to the public. Pledge #8: Members restate their commitment to maintaining the vital f low of important funding for Research, Education and Treatment (RET).

There are a great many companies and people reliant on our businesses as suppliers, many of them small organisations that may lack the resilience to navigate this crisis. This is even more important for charities and organisations that deliver the crucial Research, Education and Treatment services which need to stay available to customers. Pledge #9: Members shall conduct welfare checks on employees durin g this crisis.

Our employees are similarly affected by the same challenges and emotional risks as others. Companies should ensure that they have the mechanisms in place to make regular welfare checks on employees and fulfil their duty of care to ensure their safety and wellbeing. Pledge #10: Members should play a full part in supporting the Government’s ‘National Effort’ by encouraging staff to volunteer for community service, as well as offering premises where possible for use by those supporting the eff ort to tackle the Coronavirus.

For those companies with large retail businesses on the high street, our employees will often know of people who may live alone or be unable to fully support themselves during this crisis. They are in a good position to assist where possible. The NHS also has a volunteer service which we would encourage those willing employees to volunteer. 7 April 2020

105

BetVictor Limited – Written evidence (GAM0062) Questions The Gambling Act 2005 1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld? Our view is that it’s taken some time for the industry to achieve a standard that meets the objectives (down to the complexities of a technically fragmented supply chain more than apathy) but we believe these aims are now being upheld. By way of example into each objective: Fair and Open Provisions Since the joint investigation from the Competitions and Marketing Authority (“CMA”) and the Gambling Commission (“GBGC”) around unfair terms and provisions, all customer Terms and Conditions, including those around bonuses and wagering have become more transparent and understandable to customers. In addition, the GBGC and the Advertising Standards Agency (“ASA”) work as effective ‘checks and balances’ stakeholders ensuring the advertised provisions for gaming are fair and open. The ASA has investigated specific examples and issued rulings where Terms and Conditions have been unclear or significant terms have not been presented as part of an advert or promotion. This has helped to ensure that the industry continues to improve. Specifically, the industry has simplified explanations around the use of bonus funds and applicable wagering requirements to make them clearer and more prominent. The introduction of the General Data Protection Regulations (“GDPR”) has also increased the level of transparency regarding Data Subject’s rights and how their information is stored, processed and used by operators within the gambling industry. The frequency of such rulings has been reducing steadily over time, showing an increase in the industry’s compliance with terms. Focusing on the gambling product itself, the online industry has moved towards more visible and readily available tools to assist all customers, especially those who could be at risk of harm, to control and restrict their own gambling. In recent years, companies have developed standalone portals for such information and these tools are becoming more prominent and, in some cases, a required part of the customer journey. The continuing improvements to the licence conditions and codes of practice (“LCCP”), as further developed by the GBGC, mean that all aspects of the supply chain are continually improving; gambling software developers and game suppliers are also required to constantly monitor their games to ensure that they

106

are operating within normal and expected parameters, so as to protect customers when they are not. All games are also required to carry with them very clear pay tables, return to player information and game rules so customers can be as informed as possible before wagering. Protect children and other vulnerable persons Industry: The GBGC have recently updated their requirements for Age and Identity Verification of remote gambling customers, which now prevents anyone participating in gambling before they have been verified as being over 18. The ASA also enforces its codes with regards to:

• Responsible targeting of gambling adverts and understanding viewership figures;

• Bans on sponsorships of football clubs’ youth kits and academy pages; • Restrictions on the use of under 25s in marketing for gambling companies;

and • Prohibition of the use of any imagery that might be of particular appeal to

children if it might be seen by children.

The industry has also undertaken a number of initiatives to educate users about the harms of gambling, through funding organisations like GamCare, the Senet Group, YGAM and other charities. Prevent Gambling being a source of Crime and Disorder All Gambling companies licensed in Great Britain fall under national Anti-Money Laundering legislation and are regulated by a statutory AML Supervisor. They are required to not only follow the Regulations, but the guidance that is issued by the GBGC. Gambling Companies are also required under the legislation to assist the Sports Betting Integrity Unit (“SBIU” - Part of the GBGC) as well as all Sports Governing Bodies (“SGBs”) listed in Schedule 371 of the Act in investigations relating to potential match fixing or breaches of SGB rules. Further to this, the industry is improving its standards of affordability checks on customers that pose a higher risk for Money Laundering or markers of harm. These sorts of checks go well beyond other sectors when it comes to protecting the customer and are akin to the sort of credit controls put in place by financial institutions when offering mortgage and debenture products. BetVictor is a member of the International Betting Integrity Association (“IBIA”)72 who work with most major gambling companies to identify concerning betting behaviour that might be associated with Match Fixing, analyse its prevalence across the industry and, where necessary, raise a report to the relevant SGB.

71 https://www.legislation.gov.uk/ukpga/2005/19/schedule/3 72 https://ibia.bet/

107

There are many other industry groups that look to supplement the legislation and the LCCP and whilst they are not mandatory (such as IBIA, GamShield, RGA, and CIFAS) they are further pushing the industry forward and, for those that are members, helping improve fraud detection and prevention. In summary we believe the standards as mandated by the Gambling Act and the GBGC in the GB online gambling sector are stronger than all other publicly perceived ‘vice’ sectors, and stronger than most other consumer entertainment sectors or luxury consumer product sectors. There are no such rules and regulations stopping consumers from taking high interest credit facilities to buy luxury items or luxury consumer goods beyond the consumers’ affordability, likewise no obligations or systems enforced on retailers to ensure customers are aware of how much alcohol or tobacco is being purchased and consumed. Even looking at digital entertainment, today children and vulnerable persons can spend £’000 on virtual currency without any oversight or obligation on curbing such spending or spend excessive hours on addictive social media platforms being exposed to potentially damaging content. We strongly believe the licensing objectives are being upheld and, in many cases, more upstanding licensees are going above and beyond. 2. What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed? There are a few areas that we consider pose a risk to the objectives of the GBGC, but are currently not covered in the legislation:

• Social Gaming that resembles gambling; • Loot Boxes and other forms of virtual currency gambling within games;

and • ‘Softer’ gambling products such as bingo and lottery.

The risk that these technologies pose is mostly regarding the protection of children and other vulnerable people. While the industry seeks to exclude children from gambling in all cases, they are still being exposed to the concepts of gambling through other mediums, such as social gaming, loot boxes and the advertising of softer gambling products. We believe the government should take a harder line on virtual currency gambling, loot boxes, and pay to play digital entertainment as they currently do not have any standards or social responsibility requirements. Bingo is traditionally perceived as a softer form of gambling, and as such is still permitted to advertise before the watershed and also as advertorials in magazines. We are concerned that this also provides an introduction to gambling for young people, even if the age restrictions for play still apply. This is an overtly visual form of gambling, that includes casino games and we therefore believe that pre-watershed advertising restrictions should be expanded to encompass Bingo. We have included our concerns around the national lottery under question 16.

108

3. Is gambling well regulated, including the licensing regime for both on- and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions? The GBGC has undertaken a large body of work to enforce its Licencing Conditions by reviewing a number of licence holders, most often around the areas of Anti-Money Laundering and Social Responsibility. Results of these reviews have caused Gambling Companies to refund to customers where their procedures have failed to uphold the licencing objectives. So far in 2019, the Gambling Commission has issued 9 enforcement actions that have resulted in a total of £13.5million in fines, and the revocation of one operating licence. The GBGC are fair in their assessments and use an effective system to enforce their licensing conditions. The regulations in Great Britain are often seen as a benchmark to other jurisdictions looking to introduce or improve their own regulatory framework. A licence in GB is regarded as a mark of excellence when applying for a licence in other jurisdictions. There are areas of concerns for offshore operators, predominantly where such operators have no substantive presence within a fellow licensing EEA member state, or where offshore operators advertise offshore gambling facilities through sponsorship deals with GB institutions. The most obvious concern is non-GB (or even non-EEA) betting companies taking English Premier League sponsorship. This sort of activity brings the sector into disrepute where those operators sit outside the reach of the GBGC in how they offer gambling services; and unfairly disadvantages reputable licensed GB operators through unfair sponsorship and advertising pricing. In such circumstances, the football clubs themselves are advertising unlicensed gambling services to GB customers yet all parties fall into a grey area of the legislation. 4. Should gambling operators have a legal duty of care to their customers? As stated in our answer to question 1, we believe the standards and regulations mandated by the GBGC set a high burden already with notable fines and penalties being enforced against breaches by licensees. We do not believe a legal duty of care should exist between a licensed operator and a customer as ultimately gambling is an entertainment/hobby product that is not used by the majority of the population (in the same way that the general public will need to access medical services, or obtain gainful employment or even consume food and drink in public places). Gambling is a discretionary pastime that is already well controlled by the GBGC through the LCCPs at a time when the industry is genuinely changing and improving. Furthermore a lot of the regulations particularly around AML and safer gambling are subjectively applied for each and every customer and it would be nearly impossible to introduce a standard duty of care framework that could be applied to every case to clearly identify the legal obligation and standards on the

109

licensee and how they can be navigated by the licensee. Introducing a legal standard may also create a ‘risk free’ betting environment where more customers who wouldn’t otherwise trying gambling, do so on the illusion that no matter what happens, the operator has a legal duty to protect the customer come what may. Again, this is very different to the medical profession or an employment scenario where there is clear contract for services, where-as fulfilment of a contract in the gambling space between a licensee and a customer is subject to a variety of elements, random luck and entropy being two. Social and economic impact 5. What are the social and economic costs of gambling? These might include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs. Not answered. 6. What are the social and economic benefits of gambling? How can they be measured and assessed? Gambling provides the following economic benefits to society:

• Taxes (£2.55billion in 2017/18 tax year73) • Charitable Donations (£9.6million to Gamebleaware.org in 2018/201974 -

this does not include donations to other charities). • Employment Salaries for 106,670 individuals employed in the gambling

industry in Great Britain75 • Sponsorship of events/individuals

o Primary Sponsorships of Premier League football teams’ shirts by Gambling Companies accounted for a reported £49.1m in revenue in the 2018/19 season76

• Food/Rent/Events and the tertiary employment that comes from events like Horse Racing

• Local economies o Casinos and resorts, as well as racecourses, attract tourists and

bring a need for additional accommodation and food services as well as tertiary entertainment, boosting revenue in that local area for businesses outside of the gambling industry.

Social benefits of gambling are harder to measure, but there has been literature and research into such topics, which have raised the following points:

• It is a form of recreation and entertainment • Prohibition of gambling prevents individuals from taking accountability for

their own actions

As a practical example and in addition to the above, BetVictor furthermore has established a social responsibility program, which:

73 https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/betting-gaming-duties/ 74 https://about.gambleaware.org/fundraising/201819-supporters/ 75 https://www.gamblingcommission.gov.uk/news-action-and-statistics/Statistics-and-

research/Statistics/Industry-statistics.aspx retrieved 26th August 2019 76 https://www.statista.com/statistics/254513/value-of-jersey-kit-sponsorships-in-the-barclays-premier-league-by-club/ retrieved 26th August 2019

110

• Raises of money for local charities • Promotes health and wellness for our workforce • Educates local teaching staff about the risks of gambling related harm • Promotes environmental initiatives

Levy 7. Is the money raised by the levy adequate to meet the current needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons? No. The fact that 5 major operators have agreed to commit extra funds over the next five years demonstrates that the industry understands that the levy currently is not delivering sufficient revenues to fund the necessary research, education and treatment. The Voluntary Levy is not effective enough. The point above helps demonstrates this. There is also currently not sufficient transparency with regard contributions (there is simply an annual published list with no benchmarking) and therefore an unlevel playing field as some companies fulfil or over-pay against the minimum requirement while others do not meet it. The GBGC has updated its licensing conditions to require gambling companies to only provide their donations to charities that are deemed by them to be fulfilling a prescribed list of criteria regarding the use of the funding. This will come into effect in January 2020. Donations should be made part of the quarterly Point of Consumption Tax collection performed by HMRC. Every single operator must account for their UK revenues and pay the tax due. The industry and regulator should agree a levy percentage as part of that process, get HMRC to collect it and pass it on. A recent consultation77 on the matter indicated that the gambling industry as a whole recommended to the GBGC that a body be set up to receive and allocate all donations to aid in attaining the objectives set out by the Advisory Board for Safer Gambling (“ABSG”) in its 3-year National Strategy. It should also be noted that Gambling Companies undertake their own research in the field of problem gambling, investing significant time and resources outside of funds donated through the levy. We do however agree that a more strategic and focused approach to the allocation and use of the funds raised by the levy would allow for a more efficient and effective use.

77 https://www.gamblingcommission.gov.uk/PDF/consultations/ADR-CI-RET-ResponseDocument.pdf Section 5 - retrieved 26th August 2019

111

The GBGC has already sought information from the industry and other respondents regarding monitoring the effectiveness of the use of funds, research, tools and education78. Research 8. How might we improve the quality and timeliness of research in the UK? What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons? Not answered. 9. If, as the Responsible Gambling Strategy Board (RGSB)(1 Now called the Advisory Board for Safer Gambling) has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation? Data should be collected from across the industry to allow for further statistical analysis. There is also no analysis of customers that hold multiple gambling accounts with different operators, because we are unable to identify them or share information about them in the current environment. A data sharing arrangement through an independent party to conduct research should be undertaken. Further research should be done amongst children and young people, as this will provide the most accurate information. Researchers should engage with A-Level, Vocational and University aged students (16-21) to understand how prevalent gambling is within those age groups, the levels of exposure and the propensity to suffer gambling related harm. Research should also include information about what makes people start gambling. Where is the information about gambling obtained from and how are they encouraged to participate? Education 10. Is enough being done to provide effective public education about gambling? If not, what more should be done? There are already a number of companies that are offering educational training around the risks of gambling and gambling related harm: Paul Buchanan EPIC GAMCare Youth Voice Program Wise Up BetNoMore Free online Training YGAM

78 https://www.gamblingcommission.gov.uk/PDF/Strategy-consultation-responses-document.pdf retrieved 26th August 2019

112

However, because there is no national standard, the quality of the training and resources varies among the different companies. The targets also vary, some focusing on the young people, others on the teachers and carers. As with Drug and Alcohol awareness, Gambling Addiction should be taught as part of the national curriculum which would standardise information delivered and ensure exposure to all young people. The only other forms of public education are currently television adverts, the “When the Fun Stops, Stop” campaign and messages on gambling companies’ websites. More could be done among higher risk groups, for example as part of betting integrity training within sporting organisations, with charities that work with vulnerable individuals. Treatment 11. Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help? Not answered. 12. What steps should be taken better to understand any link between suicide and gambling? We suggest:

• Focus groups with problem gamblers, who are at the heart of this issue. • Speaking to the gambling treatment centres about their experiences with

problem gamblers. • NHS/Samaritans or other organisations that interact with those who

attempt or commit suicide as they might have additional insights to offer or lessons that we can learn from.

• Engage with organisations such as Gambling with Lives (for those affected by people who have committed suicide).

• Share more information: o We want and need to learn from specifics of these cases so that we

can prevent them from occurring in future, but we receive no information or feedback once the customer leaves our site.

Advertising 13. The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” (p12) Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons?

113

Since the derestriction of gambling advertising in 2007, the social experiment has already taken place. In response to such behaviour and exposure, a number of regulations regarding the advertising of gambling have already been implemented:

• In all locations where the audience can be controlled, gambling advertising is strictly prohibited to those under the age of 18.

• Where it is not, the audience must contain no more than 25% under 18s (This is the same as for alcohol)

o This content must not contain anything that would be seen to be of particular appeal to children.

• The industry has implemented a voluntary Whistle-to-Whistle advertising ban79

o in response to concerns that gambling advertising around sporting events (excluding horse and greyhound racing) was causing increased exposure of young people to gambling advertising.

Further to this, the ASA is more rigorously enforcing its guidance and regulations around gambling advertising, having released new guidance in April for Gambling Companies with regards to protecting children and young people80. Gambling and sport 14. Gambling is becoming an integral part of a growing number of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this? This was mentioned in our answer to question 3, however we believe the risks are:

• Exposure of young people to gambling advertising • Exposure of vulnerable people to gambling • Glamorisation of gambling • Reliance on Gambling Sponsorships to the detriment of

clubs/sports/leagues o Inflation of sponsorship and advertising prices o Concerns over betting integrity

However, these risks can be mitigated using a number of different measures that are already employed by a number of gambling companies, for example:

• No advertising on youth kits • Removing references to gambling from kids and academy websites, or

other forms of electronic media (video games for example) or implementing effective age gating controls

• Promoting responsible gambling messages • Stringent Age Verification processes

79 http://igrg.org.uk/wp/wp-content/uploads/2019/01/Gambling-Industry-Code-for-Socially-

Responsible-Advertising-5th-Edition.pdf 80 https://www.asa.org.uk/resource/gambling-protecting-under-18s.html

114

• Betting Integrity Training for clubs

The flip side being that the sponsorship funds can be directed into areas within the club that wouldn’t otherwise have enough financing such as grass roots academies, subsidised tickets, away team transport and so on, which in turn is in the best interest for financially disadvantaged communities who wouldn’t otherwise be able to access the sports clubs. Gambling by young people and children 15. How are new forms of technology, including social media, affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future? We have identified two major concerns: Social gaming Social games often mimic traditional casino style games, and currently do not have a restriction on who can view or play them. Children can become addicted to these games when playing for fun money, which in turn can be transferred to a real money casino once they come of age. In-game purchases Such purchases, which are not monitored from a gambling perspective, can also be considered to be a form of gambling, when considering Loot Boxes, or spinning wheels for prizes (even when there is no money in kind value for those items). 16. The legal availability of certain forms of commercial gambling to under-18s in Great Britain is unusual by international standards and has been described as an ‘historical accident’. (p2) Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins? Draw based games and instant games (scratch cards or digital instants) provide for large value wins and in the case of the latter, high frequency wins which can be addictive traits. There is an increased risk with more immediate games, such as scratch cards, and online instant wins, which technically behave the same as games on remote casino operators’ websites. We believe that if Camelot wish to offer scratch games they should be done in accordance with the LCCP which essentially means being made available for 18+ customers only. 17. Should children be allowed to play Category D games machines (which include fruit machines, pushers and cranes)? There is not yet enough information to suggest a full ban, but we do agree that more research needs to be done to see whether there is a correlation between children that play Category D Machines and those more likely to experience gambling related harm at a later stage in life. Certainly, on these games we also

115

believe there should be more information about the impact of skill and the return to player calculation for luck-based games. 6 September 2019

116

Bet365 – Supplementary written evidence (GAM0121) We completed a full review of our affiliate programme (including any ‘tipsters’) in 2017 and we now only work with four ‘tipster’ affiliates on social media who we feel are trusted and responsible. All four of these affiliates are paid on a cost per acquisition basis (e.g. a flat fee for each new customer found) rather than on a net revenue basis (e.g. based on a customer’s losses). To advertise bet365 on any form of social media the affiliate must obtain bet365’s prior written permission and take appropriate steps to exclude under-age groups where tools to do so are available. As a general point, no bet365 advertising can appear in media for children (aged 0-15) or young people (16 and 17) or where children or young people make up more than 25% of the audience. We undertake a number of routine affiliate checks (both manual and automated) to ensure they are abiding by their agreements with bet365. Any affiliate found breaching these agreements must immediately remove the advert and, depending on the breach, further action may be taken, including the suspension or termination of the agreement with that affiliate. We also make it a requirement that any affiliate that provides tips as part of their services does so in a responsible, fair and transparent manner. Our approved affiliates must not encourage individuals to repeatedly reinvest winnings as part of their tipping services and must not provide inaccurate or misleading information about their tips and the success of them. This is something that we monitor very closely. 13 March 2020

117

Bingo Association – Written evidence (GAM0013) Q1. The Bingo Association’s policy is to avoid commenting on other sectors within the gambling industry. We seek to focus on promoting and developing the interests of all licensed bingo operators. This tends to be in contrast with both government and regulator who insist on using the gambling industry as a generic term in its narrative with the industry when in fact it is a loose coalition of operators in possession of different categories of gambling operating licence, with different conditions that they must comply with, operating in different environments with different types of consumer and with different levels of risk. The licensed bingo industry can agree that the three primary aims of the Gambling Act 2005 are being upheld in Licensed Bingo but cannot comment on their application across other sectors. Q2. The Bingo Association believes that the statutory instrument preventing the use of debit cards on gaming machines requires attention. Bingo clubs are increasingly the target for theft and armed robbery, this is because they are one of the few remaining locations where significant amounts of cash are kept on site. This creates a significant risk for the safety of our employees. Consumer behaviour is also driving the cashless revolution and we believe bingo clubs should not be left behind through being unable to satisfy consumer demands. The concerns of bingo, as well as others in the business community, were articulated in responses to HM Treasury’s call for evidence on cash and digital payments, launched in March 2018. The Bingo Association recognises the reasons why the regulator and the government may hold reservations about allowing the use of debit cards from a safer gambling perspective and shares those concerns, but we believe that appropriate protocols could be implemented to regulate/limit spending on debit cards and these should be looked at and agreed as soon as possible. Q3. The Bingo Association believes that licensed bingo operators are successfully regulated by the Gambling Commission and their local authorities. Bingo operators have chosen to retain membership as a requirement to play in their premises (in spite of the removal of this requirement by the Gambling Act 2005) which affords operators and their customers a significant degree of protection from potential harm. Q4. For licensed bingo operators a duty of care to their customers is integral to the customer experience – so yes, in theory it should be a legal duty of care. The only caveat to this is agreeing an adequate definition of what scope a legal duty of care constitutes in practice and what the potential liabilities might be. Q5. The Bingo Association finds this question very difficult to answer accurately. In July 2016, Ipsos MORI conducted an independent survey into problem gambling in bingo. It found levels of problem gambling to be relatively low in comparison to other forms of gambling (2.5 % of regular players). These figures have been underpinned by various prevalence and health surveys. They also found that the average spend of a bingo player was £33 per visit. Undoubtedly for those few experiencing harm there will be some degree of impact and social cost. However, there is no metric available to evaluate this, if only because the amounts involved and numbers affected, are so small. The

118

recently published Raising standards for consumers Enforcement report 2018/19 from the Gambling Commission contains a useful section on affordability benchmarks based on a YouGov survey. We believe this is not only a useful tool for managing interventions but that spending on Bingo is relatively affordable aspect of an individual’s disposable income. Q6. There is considerably more information around the positive social and economic contribution that bingo clubs make to society. The Ipsos MORI research into problem gambling in bingo in 2016 devotes a chapter to this effect. The report concludes that a visit to a bingo club is a crucial lifeline to those whose ‘life circumstances limit their ability to participate in other leisure pursuits’. 92% of bingo customers attend their club with friends or family, and many make connections whilst at the bingo. It is therefore a social support system, where the key motivation for attending is to socialise and relieve isolation and boredom. Other benefits, as reported by the research, are that playing bingo improves mental agility, and offers a place in which to feel safe. The report concludes that length of time spent in a bingo club does not have a correlation with harm or spend; time spent gambling on a product is usually seen an indicator of harm by the DSM5 and PGSI tests. Research by the University of Kent in 2016 on bingo and gambling regulation highlighted and endorsed the Mary Portas review of the high street. This states that bingo is a ‘brilliant way to bring people together’. The study concludes that there is a case that bingo’s distinctive social nature and player demographic should be deserving of a more bespoke approach to regulation. In December 2013 Ernst & Young produced a study into the economic and social impacts of a bingo club closure on the UK economy. A bingo club in the Westcountry was taken as the club that was modelled. The study concluded that the economic loss after substitution was approximately £360,000 of Gross Value Added of £210,000 of tax contribution, eleven employees and eleven roles within the supply chain. Crucially, this was also without the social impact of the loss of a community-based leisure venue for a predominantly female (80%) middle aged (45+) and low income demographic. Finally, a recent follow up study of the Whitehall 11 cohort study (August 12 th, 2019) suggest a protective effect of social contact against dementia and that more frequent contact confers higher cognitive reserve. This finding was reported by The Sun newspaper and quotes one of the researchers Gill Livingston as saying amongst other things that ‘meeting in the pub, a bit of bingo, or out for dinner and a chat’ should be encouraged. The Bingo Association recommends to members of the House of Lords select committee by way of an open invitation, a visit to a bingo club to witness how they are central to some communities and in particular to older people seeking fellowship and companionship in an age of well publicised loneliness. Q7. The debate around the levy and whether it should be mandatory or not is one of the most frustrating debates in the gambling sector at present. The adequacy of the levy can only be determined once a comprehensive review is conducted to determine what is needed to address the problem. Otherwise it is just a guess, with the cart being positioned firmly before the horse.

119

Whilst efforts surrounding the collation of the voluntary levy and subsequently the amount raised from it has improved in recent years, there is still much that can be done to improve the reporting and administration of the funds raised. It is still very difficult to accurately report who is, and importantly who isn’t contributing the expected amount when contributions can still be made to organisations other than GambleAware and are therefore not reported publicly. There tends to be considerable misreporting of industry efforts as reports tend to be solely based on GambleAware reporting of its own receipts. In addition, companies representing businesses in different sectors tend not to split out their donation but give a lump sum, and there is still confusion about the definition of Gross Gaming Yield (GGY). A mandatory levy, as the Labour Party is recommending, may improve the funds that can be dedicated towards research, education and treatment. However, The Bingo Association could never commit to such a method without first having an indication of the level at which it would be set. For example, total retail bingo GGY is £628m (2018/2019), which would mean that current contributions should be around £600,000. Or on current profitability, around 1.5% of annual profits. If the levy was increased tenfold across the board to 1%, then this would require a contribution of £6m, or 15% of current Industry profitability. Such an impact on profitability would decimate an industry which is generally accepted to be at the lower end of the problem gambling risk profile. Therefore, The Bingo Association could only support a mandatory levy if the equivalent overall contribution remained the same as 0.1%. Q8. The Bingo Association would welcome some clarity and leadership on the research debate. We, like many other gambling operators, have many questions that remain unanswered, these include, but aren’t limited to, the following:

• Is research funded by industry contributions to be taken seriously or not? • Would the “tainted money” argument stand if that money was collected by

a statutory levy rather than given voluntarily?

This dilemma is hampering progress, which ultimately impacts on consumers, as academics continually dispute one another’s findings. We have even seen the refusal to acknowledge the legitimacy of each other’s findings. We also recognise the precarious position that GambleAware finds itself in, it is almost a “dammed if they do, dammed if they don’t” situation. This ‘cloud’ over the value and appropriateness of research efforts as a result of the source of funding is ultimately slowing progress and needs resolving. Q9. The Bingo Association does not feel in a position to comment on this. Q10. The Bingo Association does not feel in a position to comment on this. Q11. The Bingo Association does not feel in a position to comment on this. Q12. This area requires researching thoroughly as a matter of urgency. This is because it is such an emotive subject where the facts need to be established quickly one way or the other.

120

Q13. The Bingo Association and its members do not currently advertise on TV and do not feel in a position to comment. Some Bingo Association members do also have an online offering and do advertise Bingo. They may well wish to comment separately on this. Q14. The Bingo Association is not in a position to comment on this. Q15. The Bingo Association members operate a membership-only environment in the retail bingo space. Age verification testing also ensures that club procedures are in place to prevent children and young people from gaining access. Q16. The Bingo Association’s view is that it makes sense for all significant gambling products to be age restricted to 18 years old. However, there are some benign and fun low stake, low prize products (found in seaside arcades) that should remain without a lower age limit. The introduction of a requirement of a minimum age of 18 years could disproportionately detract from a traditional British family holiday experience. Q17. Yes, if they are found to be low stakes and low prizes and part of an ‘all the fun of the fair’ type of experience, particularly at the seaside, which many of us will have enjoyed as part of our childhood. Q18 – The Bingo Association is not in a position to comment on this. Q19 – The Bingo Association will be responding separately to the DCMS Consultation on the minimum age for playing National Lottery games. Miles Baron Chief Executive, The Bingo Association 2 September 2019

121

Bingo Association – Supplementary written evidence (GAM0103) QUESTION 83 The Bingo Association would like to see contactless payments made available for gaming machines subject to necessary caveats to ensure safe and responsible use. This is not necessarily driven by a desire to increasing spends but by individual customer behaviour, and in order to reducing operating costs and barriers to businesses. The number of ATM’s is reducing along with the overall use of cash in society. The ability to find and acquire cash to continually float machines is becoming harder and harder as a consequence of this societal change. Licensed Bingo Clubs stand out like a beacon to criminal elements looking to find opportunities in a ‘shrinking pool of opportunity’ and this is of great concern to retail bingo premises and the safety of their employees. And in a modern leisure environment customers have come to expect the use of contactless for small payments in the same way as they do in pubs and other leisure outlets. With the right protections and protocols in place (and contactless already has some anyway) everyone benefits. It would also reduce the number of clever and innovative solutions that industry inevitably is innovating with via ‘electronic third parties’ and which will end up having the same end result. QUESTION 87 The Bingo Association believes that no one should fund their gambling from debt and responded in this fashion to the recent Gambling Commission consultation. If this leads to the prohibition of credit cards in gambling then the BA supports this; however it is important to again mention that Licensed Bingo does not permit the use of credit card payments. With regard to ATM’s Bingo clubs adhere to the protocol that ATM’s must be so positioned within licensed Bingo premises that a customer has to physically leave the bingo game or gaming machine in order to use them. In order to use credit facilities on an ATM, the ATM must be stocked by an external cash handling banking facility and not the licensed bingo premises. This complex and bureaucratic process effectively renders the availability of credit on ATM’s as impracticable bearing mind the low demand for the service, and therefore licensed Bingo premises have chosen to switch off the credit facility. 13 January 2020

122

Bournemouth University – Written evidence (GAM0001) Professor Raian Ali (Professor in Computing) and Associate Professor John McAlaney (Associate Professor in Psychology) 1. Written evidence submitted on Wednesday 17 July 2019 by Professor Raian

Ali and Associate Professor John McAlaney, on behalf of Bournemouth

University, to the House of Lords Select Committee on Social and Economic

Impact of the Gambling Industry.

2. Professor Ali is a Professor in Computing and leads the EROGamb,

GamInnovate and Responsibility by Design projects. His research is focused

on the engineering of social informatics – the social aspects of

computerisation – and specifically includes the design of systems which are

receptive and responsive to the feedback of users.

3. Associate Professor McAlaney is a Chartered Psychologist and Chartered

Scientist in the Department of Psychology. His research focuses on social-

psychological determinants of risky behaviours, with an emphasis on

addiction. His involvement in EROGamb81 centres on the role of perceived

social norms, and how challenging misperceptions of gambling behaviour can

be used for prevention and intervention. He is also a trustee board member

at the Gordon Moody Association.

4. John and Raian would be pleased to provide further information or give oral

evidence if it would support the Committee’s inquiry.

The Gambling Act 2005

Question 2: What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed?

5. The scope and richness of data that flows between the gambler and the

operator in online gambling has increased substantially since the publication

of the Act, as has the ability of the operators to use data analytics predictive

modelling to identify current and future problem gamblers. Gambling

operators could allow gamblers easy access to the data they hold so the

gamblers themselves can monitor and modify their behaviour. Our research

shows that it is possible to use API (Application Programme Interface)

technology to provide personalised real-time data to a gambler82. Currently,

GDPR rules allow players to ask for data held about them by others but does

not mandate the sharing of such data in real time, e.g. via automated tools.

If the data could be provided in an automated, real-time manner to players,

81 https://www.bournemouth.ac.uk/research/projects/erogamb-enabling-responsible-online-

gambling

82 https://www.bournemouth.ac.uk/about/our-faculties/faculty-science-technology/our-departments/department-computing-informatics/our-research/engineering-social-informatics-

research-group-esotics/projects

123

it would enable them to visualise and understand their gambling behaviour,

support them with budgeting and to identify potentially harmful behaviour.

6. The real-time data could also be harnessed to support players in managing

time and money limits. Personalised limits could be set by the gamblers

themselves, potentially with third-party verification for problem gamblers

(e.g. bank, therapist, family member). This use of personalised messages

delivered through devices such as smartphones has been used to reduce risk

behaviours in other domains, such as alcohol use. This type of feedback is

much more salient and persuasive to an individual than a mass media

campaign aimed at the public in general. This may be of particular

importance in relation to online gambling.

7. Gamblers who have taken part in our research talk about the fact that money

does not seem real in online gambling; they feel that time limits which

restrict the total amount of time spent gambling and increase the time

between bets would help them maintain control of their gambling. Any such

limits would need to apply across operators - and the technology exists to

prevent users simply switching to other sites and apps once they have

exceeded their limit on one.

8. Our research participants told us that enforced cooling-off periods (time gaps

between bets) could help them regain some control as the gaps between bets

in online betting can be very short and players are driven by emotion rather

than rational thought. The combination of understanding the role of the

emotions with the real-time, personalised data may support gamblers to

identify and track their personal triggers and consequences. There is also the

potential to harness physical device actions (e.g. movements and gestures

whilst using smartphones) to provide feedback on a player’s state of mind

and prompt appropriate messages.

9. Greater transparency and access to this data (anonymised if appropriate) by

researchers, public health bodies and regulators can substantially improve

our understanding of how gambling harm is distributed. Online gambling data

in particular can be used to map the demographics of gamblers, often also

including an approximation of their physical location. This in turn can be used

to make an estimation of factors such as socio-economic status.

10. Updating the Act to ensure the legal and regulatory framework facilitates

and supports the above technological advances, rather than inadvertently

stalling them, would provide tools for gamblers to maintain control and

manage their spending and emotions.

Question 3: Is gambling well regulated, including the licensing regime for both on- and off-shore operations?

How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification?

What might be learned from comparisons with other regulators and jurisdictions?

124

11. Many aspects of gambling are well-regulated. However, new and emergent

technologies have made the enforcement of these regulations challenging,

e.g. loot boxes in online gaming do not currently come under the regulations.

In addition, children and young people have the means (shared via online

forums and other spaces) to circumvent age verification systems. There is

the potential for financial services providers to contribute towards age

verification; for example, some banks already provide services in which

accounts can be blocked from being used for any gambling-related

transactions. By utilising such systems, it may be possible to make it harder

for age verification systems to be bypassed.

Question 4: Should gambling operators have a legal duty of care to their customers?

12. Yes, gambling operators should have a legal duty of care to their

customers. As part of our research83, the EROGamb (Enabling Responsible

Online Gambling) project explored the gambling industry’s perspective on its

corporate social responsibility84. As part of this work, we discussed

sustainability with operators, and how it is a better business model for them

to retain a customer database which gambles safely and responsibly over an

extended period of time rather than having customers who develop gambling

problems and quickly escalate to a situation where they are no longer willing

or able to gamble. Making these responsibilities by the operators a legal care

of duty would reinforce the expectation that the onus is on the gambling

operators.

13. Currently, gambling operators do not have the capability to design a site

that embeds responsible gambling within it; our new Responsibility by Design

project is looking at establishing a data set that would achieve that aim. The

infrastructure of most gambling interfaces is not designed with this type of

function in mind and if the gambling operators want to facilitate responsible

gambling, their websites require certain functionality to be built in from the

start. If this can be done, then the gambling sites and apps themselves could

be prepared to inherently host, facilitate and deliver responsible gambling

solutions to the players, saving the operators time and investment and

reducing harm for the players and their dependents.

The Levy

83 The BU Gambling Group’s research is available through the below website, scroll down to

Publications section: https://www.bournemouth.ac.uk/research/projects/erogamb-enabling-responsible-online-gambling 84 Elvira Bolat, Emily Arden-Close, Raian Ali. Building a responsible ecosystem: examining trust and responsibility in the gambling industry. Bournemouth University, Technical Report. Dec 2018. This

paper is currently under peer review with International Gambling Studies:

Bolat, E., Arden-Close, E., Ali., R. , and Renshaw-Vuillier, L. 'Towards building a trustworthy and responsible online gambling - an insiders’ view’. International Gambling Studies (under review).

125

Question 7: Is the money raised by the levy adequate to meet the current needs for research, education and treatment?

How effective is the voluntary levy?

Would a mandatory levy or other alternative arrangement be more productive and effective?

How should income raised by a levy be spent, and how should the outcome be monitored?

What might be learned from international comparisons?

14. The levy and donations are not enough as they are not the only resource

needed. The main issue from our experience is the lack of meaningful and

substantial collaboration between operators and researchers. The gambling

industry is still reluctant to engage fully with research and this is due to the

way funds are allocated, whereby operators are support partners in projects,

but without any legally binding commitments.

15. Currently, most funding for gambling research comes from GambleAware

and the industry, with other smaller pots of money coming from a range of

charities. There is no obvious source of funding from the UK Research

Councils, although it is not clear if this is because they do not see the topic

as part of their remit. Public Health England recently referred to gambling

problems as a public health issue and this has somewhat changed the

narrative around gambling as an addiction. NIHR (National Institute for

Health Research) subsequently launched a call for research into interventions

and harm prevention.

16. A mandatory levy and objectives would support and develop the seniority

and prominence of the harm reduction agenda within companies – at the

moment corporate social responsibility holds a minor position in the gambling

operators’ priorities and wields little real power.

17. We propose a better way of achieving meaningful engagement with the

gambling operators would be to consider such engagement as part of the

financial donation/levy they give. For example, they could contribute staff

time and access to IT infrastructure and marketing material, as well as

provide technical assistance to researchers who wish to develop prevention

and intervention tools that would interface with the operator’s API.

Research

Question 8: How might we improve the quality and timeliness of research in the UK?

What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK?

What might be learned from international comparisons?

18. There is, of course, a possibility that gambling operators might avoid

commissioning research where the outcomes might be unfavourable. Siting

126

funding for gambling research within the UKRI (the UK research councils)

would be a positive move, although it is important that this does not

undermine the efforts of GambleAware, who are keen to build up and

diversify research capacity in the UK.

19. If gambling operators are directly involved in the funding of gambling

research, then it is important that this is done publicly and transparently.

This could be aided by actions such as researchers publicly posting their

study protocol before the research project starts. As in the principle of open

data, the results of the study could also be made publicly available, allowing

other, independent, researchers to conduct their own analysis.

20. In addition, furthering the opportunities for national funding makes it more

likely that research will be undertaken that relates to gambling harm, but is

beyond the remit or business interests of gambling operators. Examples of

this include research into potential links between gambling and poverty, or

gambling in specific geographic settings such as coastal towns.

If, as the Responsible Gambling Strategy Board (RGSB)1 has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation?

1 Now called the Advisory Board for Safer Gambling.

21. The increasing blurring of the boundaries between gaming and gambling is

of particular concern for young people and there is debate over whether

gaming can be regarded as a gateway to gambling. We are currently

analysing data from a study which explored the conceptualisation of loot

boxes, which includes people’s perceptions and expectations when accessing

them and the potential gaming/gambling overlap. We would be happy to

share the outcomes of this work with the Committee when it concludes in

early autumn 2019.

22. Furthermore, we intend to extend this work as it is increasingly vital to

understand more about the impact of loot boxes, the effect of embedded

marketing promoting gambling within non-gambling apps (included those

accessed by children despite parental controls), and whether educational

resources for school-age children can help increase awareness of the

distinction between gambling and gaming and how children and young people

can safeguard themselves.

23. The Belgian government has banned loot boxes with games, and

suggestions have been made in several other countries, including the US and

Sweden that similar legislation is passed. There is, though, a lack of research

evidence on which to base these decisions. As researchers within the

gambling field, we are keen to investigate the involvement of children within

gambling and are actively seeking funding and collaboration to take this

forward.

127

Education

Question 10: Is enough being done to provide effective public education about gambling?

If not, what more should be done?

24. Public education about gambling is not highly visible; more broadly, there

is a lack of public education about online systems and the algorithmic

manipulation of behaviour. There is a need for increased education in schools

on the risks of online behaviour, including not only online gambling, but other

areas such as involvement in hacking or the modification of video games. As

has been achieved in areas such as substance use and sexual health, the aim

is to help children and young people become informed decision makers who

are able to navigate safely a fluid and changing world. Educational resources

of this type are currently being developed by the researchers at BU, which

will be made freely available and shared with the Department of Education

and the Committee.

Treatment Question 11: Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? How might they be improved?

What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help?

25.The extent and prevalence of gambling-related harm among young people is

still not completely known. Young people are a risk group and bringing a

focus to understanding their involvement and treatment for addictive

gambling is important.

Question 12: What steps should be taken better to understand any link between suicide and gambling?

26. Family members, therapists, banks and employers should be included in

the responsible gambling process – with the proper consent of the players.

With such access, they could report any mental health issues which may not

otherwise be properly identified if the onus remains purely on online

gambling data and self-report by the gamblers themselves.

27. It is difficult to establish reliable statistics about the link between suicide

and gambling as it is not a requirement for the coroner to record the factors

relating to a verdict of suicide. Josephine Holloway, whose son Daniel

committed suicide after 18 years of gambling addiction, and who is one of

the supporters of our research, is campaigning to have the law changed in

order for her son’s death to be registered as gambling related. Only once

coroners are able to state the factors in a death by suicide will there be any

meaningful statistics on the link.

128

Gambling by young people and children

Question 15: How are new forms of technology, including social media, affecting children’s experiences of gambling?

How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future?

28. As mentioned in the response to Question 8, new forms of technology are

blurring the lines between gambling behaviour and gaming. It is unclear if

there is a relationship between gaming and gambling, for example, with

regard to loot boxes in video games. It is again unclear if this overlap will be

problematic for young people who play video games, and in particular for

those who play games with more gambling elements and/or for extended

periods of time.

29. The interrelation between game elements and gambling can be subtle and

requires extensive research. We suggest that mechanisms, such as loot

boxes, which deal in real money are suspended until the gaming industry can

clarify - with evidence from impartial research - whether or not it is a form of

gambling. At Bournemouth University we have conducted an interview study

with 20 game players who are familiar with loot boxes, and we expect to

publish the results in August 2019. We would be pleased to share the results

with the Committee if it can assist this inquiry.

17 July 2019

129

British Beer & Pub Association – Written evidence (GAM0073) The British Beer & Pub Association is the UK’s leading organisation representing the brewing and pub sector.

Our members account for some 90 per cent of beer brewed in Britain today, and

own around 20,000 of the nation’s pubs. A full list of our members can be found

here.

Our members operate pubs across the UK and many of these have gaming

machines (Category C) on their premises, generating an important source of

income. Our most recent estimates are that there are around 40,000 Category C

machines in the pub sector. We welcome the opportunity to respond to this call

for evidence and our thoughts are set out below.

Introduction

The British Beer & Pub Association is the UK’s leading organisation representing the brewing and pub sector. Our members account for 90% of the beer sold in the UK and own around 20,000 of Britain’s pubs. The pub plays a vital role in community cohesion and social life in Britain. They remain one of the few places where communities can come together to socialise. The British pub has been part of people's lives for hundreds of years. First and foremost, they are businesses which serve their local communities and contribute much to the social life of each and every community. The pub sector has enormous potential to generate economic growth and create jobs. It can also play an important part in local regeneration projects and has been at the heart of the regeneration of many of our key towns and cities over the last fifteen years. A major study undertaken by Oxford Economics in 2018 clearly identifies the significant local impact of brewing and pubs. Currently over £1.5 billion is invested in the pub sector per annum. Pubs employ 600,000 people across the UK, often providing vital work in small towns and villages. Questions

130

The Gambling Act 2005 1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld? Yes, from our sector’s perspective we believe they are and that the risks of gambling harms are low in pubs due to both the low stakes and prizes plus the machines being located within a managed environment. We would highlight that some recent failures of test purchasing have led to the development of a refreshed and more comprehensive social responsibility charter for our members, greater self-testing for under-age playing, and a range of other activities across our membership (e.g. revised and refocused training material for pub staff, improved messaging on machines). 2. What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed? The ability for customers to use either debit and/or credit cards for gaming machines in pubs could, if properly regulated, provide a means of ensuring that all players are 18+ and also could be used as part of a framework for restricting the amount spent by a player. 3. Is gambling well regulated, including the licensing regime for both on- and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions? There is currently no consistent, national test protocol for gaming in pubs that is used by both industry (for self-testing) and by regulators (Licensing Authorities, Gambling Commission etc). The BBPA has developed a standardised protocol for industry which will be launched in the coming weeks to be used by our members, but there is no guarantee it will be adopted by regulators. Evidence from our members suggests that there is inconsistency in the age-verification testing being undertaken by regulators, and this can lead to questionable results and/or action being taken on pubs based on poor evidence. We feel matters would be improved in terms of the reliability of testing results if regulators would adopt a consistent test protocol. 4. Should gambling operators have a legal duty of care to their customers? No comment on this question Social and economic impact 5. What are the social and economic costs of gambling? These might include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs. No comment on this question 6. What are the social and economic benefits of gambling? How can they be measured and assessed? In terms of economic benefits, whilst gaming machines are ancillary to the main business of pubs, the monies generated by gaming machines is an important source of income for pubs that are coming under increasing pressure from rising costs (e.g. business rates, beer duty, apprenticeship levy, the increasing rates

131

for National Minimum Wage and National Living Wage, rising salaries to address staff shortages). The income from gaming machines enables pubs to invest in the business and make an important social resource viable. This is particularly true for community pubs Levy 7. Is the money raised by the levy adequate to meet the current needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons? We support the current ability for our members to contribute voluntarily to support charities and organisations that are associated with gambling and tackling its harms, and we encourage our members to contribute. We don’t believe a mandatory levy for pubs is required due to the lower risks involved. Research 8. How might we improve the quality and timeliness of research in the UK? What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons? No comment on this question. 9. If, as the Responsible Gambling Strategy Board (RGSB)85 has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation? No comment on this question. Education 10. Is enough being done to provide effective public education about gambling? If not, what more should be done? As part of our steps to address gambling harms, we are investigating options that our members can take that might further bolster existing activity. This is likely to include standard messaging aligned with Challenge 21/25 initiatives (in relation to under-age gambling in pubs), and pressure on machine manufacturers and suppliers to develop and implement new technologies to tackle both under-age gambling and excessive gambling. Treatment 11. Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help? No comment on this question. 12. What steps should be taken better to understand any link between suicide and gambling? No comment on this question.

85 Now called the Advisory Board for Safer Gambling

132

Advertising 13. The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.”86 Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons? No comment on this question. Gambling and sport 14. Gambling is becoming an integral part of a growing number of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this? No comment on this question. Gambling by young people and children 15. How are new forms of technology, including social media, affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future? No comment on this question. 16. The legal availability of certain forms of commercial gambling to under-18s in Great Britain is unusual by international standards and has been described as an ‘historical accident’.87 Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins? No comment on this question. 17. Should children be allowed to play Category D games machines (which include fruit machines, pushers and cranes)? We would agree that such machines, where there is no gambling element, can be suitable for players under 18 years old. Within the context of a responsible, family friendly pub, such machines can provide entertainment for children and valuable income for pubs. We are not aware of any evidence that shows that players of these machines are more inclined to undertake other, more costly gambling activity when they are older. Lotteries 18. The restrictions on society lotteries were relaxed by the Gambling Act 2005, and there is concern that some of them are effectively being taken over by larger commercial lotteries. Is this concern well founded? If so, what should be done? No comment on this question. 19. Should changes be made to the statutory regime governing the National Lottery, to bring it into line with the regime governing operators of other lotteries? No comment on this question.

86 https://www.gamblingcommission.gov.uk/PDF/RGSB-Gambling-and-children-and-young-people-

2018.pdf , p.12. 87 https://www.gamblingcommission.gov.uk/PDF/RGSB-Gambling-and-children-and-young-people-2018.pdf , p2

133

6 September 2019

134

British Horseracing Authority – Written evidence (GAM0065) Introduction 1. The British Horseracing Authority (BHA) – the governing and regulatory body

for thoroughbred horseracing in Great Britain – is delighted to respond to the House of Lords Select Committee Inquiry on the Social and Economic Impact of the Gambling industry. This response is being submitted by the BHA on behalf of the wider British racing industry incorporating our racecourses, licenced personnel (including trainers, jockeys and owners) and media rights holders.

2. British racing is the UK’s second largest sport behind football in respect of attendances, employment and revenues generated annually. In 2018, 5.77 million people attended over 1,500 individual race meetings held across England, Scotland and Wales. Our largest events are not only highlights in the increasingly competitive international racing calendar, but also the UK sporting and social calendar. British racing’s cultural significance is demonstrated by the fact that ours is the only sport which has two annual nationwide events – the Grand National and the Derby – which are included on the Group A list of full live coverage protected events for FTA broadcast.

3. This translates into a significant economic benefit for the UK, with our

industry generating £3.45 billion in direct, indirect and associated expenditure annually for the British economy. Much of this is focused in rural areas with over 20,000 people employed across our 59 licensed racecourses, hundreds of training yards and thousands of breeding operations – all of which play a key role in the life of the many hundreds of rural communities they operate in. British racing supports the Government’s wider trading and soft power agenda by encouraging multi-billion-pound investment into the UK, with the Minister for Arts, Tourism and Heritage Rebecca Pow MP recently commenting that: “We welcome the contribution British horseracing makes to the national economy and our quality of life. It is also a significant soft power asset to the UK and enhances the strong bilateral relationships we have with the Gulf States and many other countries around the world.”

British racing and the betting industry

4. The British racing industry has limited involvement, beyond pool betting, in the operation of betting services in the UK. However, we are an industry which is heavily interlinked with the UK betting sector. Our Fixture List, race programme and many of our Rules are developed in order to provide a consistent, high-quality betting product on which people can gamble responsibly 362 days a year.

5. British racing works hard via regulation from the BHA to ensure that the sport that takes place on a racecourse – and on which significant betting activity takes place every day in Licensed Betting Offices (LBO) and online – has the highest standards of integrity and fairness. This gives confidence for betting

135

customers that the over 10,000 races which they are responsibly betting on 362 days per year are open and trustworthy gambling opportunities.

6. Betting activity on horseracing in the UK is growing, showing its continued

popularity as a culturally accepted betting product. The latest statistics from the Gambling Commission, for the 12 months prior to September 2018 (as represented in Figure 1), outline that over £14 billion was bet on horseraces in Great Britain at racecourses, in LBOs and online. Online betting now accounts for some 65.6% of turnover, and 50.4% of gross gambling yield on horseracing. This demonstrates that betting patterns now follow the general societal trend of business moving away from retail shops and onto digital platforms.

Figure 1- Turnover and Gross Gambling Yield on horseracing, October 2017 to September 2018

136

Figure 2 – William Hill betting shops where customers collected Cheltenham Festival winnings (William Hill H1 2019 Results)

8. Betting on horseracing is also an intrinsic and social element of a day’s racing – either with on-course betting operators or pool betting services. In June, Ascot Racecourse’s Bet With Ascot pool betting service handled over 577,000 bets from the nearly 300,000 attendees over the five days of the Royal Ascot meeting. The average bet size during the meeting was £13.57 and means that the average amount wagered per attendee at the event was £26.75. From this the Government would have earned significant tax revenue, while the event provided an employment opportunity to 500 members of staff from Bet with Ascot and over 100 on course, independent bookmakers with their own staff. This demonstrates the economic opportunities and benefits which betting activity at a major event Royal Ascot provides.

9. We are clear that British racing’s relationship with the betting industry is

positive for the sport but believe it is also vital that it receives a fair return from betting activity. Our historic relationship with the betting industry has been recognised on numerous occasions by Parliament including through the introduction of the Horserace Betting Levy in the 1960s when betting away from racecourses was first legalised, and most recently in 2017 when it amended the Levy to ensure it captured a return from online betting activity on the sport.

10.Racing’s symbiotic relationship with the UK betting industry also means that it can be greatly impacted by changes to the wider regulatory environment around gambling. We believe that it is critically important that policymakers are aware of the depth and complexity of these connections as they make future gambling policy. Figure 3 outlines the range of links between the betting industry and elements of the British racing sector.

Figure 3 – Key links between the Racing and Betting industries in the UK

7. William Hill, one of the UK’s largest

betting operators with over 2,300 LBOs,

reported in their May 2019 annual

report that “although there has been a

shift by consumers to increased betting

on football, horseracing still contributes

almost half of revenue from sports

betting.” This demonstrates that British

racing is still a popular product for

betting customers, and an important

industry for the betting sector.

Furthermore, as Figure 2

demonstrates, betting activity on

horseracing – in particular, on our major

Festivals such as the Cheltenham

Festival – is truly a nationwide pursuit

that crosses the length and breadth of

the United Kingdom, much like the

British racing industry’s economic

impact.

137

11.British racing is a sport with a strong social conscience. We are acutely aware

of the social and economic damage that problem gambling can cause to individuals and communities. As a sport which generates a significant amount of revenues from betting, we keenly recognise our social responsibility and encourage all efforts to reduce problem gambling in the UK. It is important that we as a sport work towards the Government’s ambition for the betting sector of the “right balance between a sector that can grow and contribute to the economy, and one that is socially acceptable and doing all it should to protect consumers and communities.”

12.We have responded to the questions within this consultation based on ensuring that the Committee has all the evidence it requires relating to aspects of gambling policy affecting British racing. Please note that not all questions are answered as we have only given responses to questions that we felt were relevant to horseracing.

Q1) Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld? 13.British racing is very keen to ensure that racecourse betting environments are

places of integrity, and where fair and open gambling takes place. Every

Racing Industry Sector Link to Bookmakers

Racecourses Race sponsorship & prize money, for example Ladbrokes recently assuming sponsorship of the King George VI Chase at Kempton Park on Boxing Day; on-course bookmaker pitches; TOTE; course/bookmaker exclusive deals.

Trainers/Jockeys Individual sponsorship deals with bookmakers. All deals are registered with the BHA.

Horserace Betting Levy Board

Racing’s central funding body primarily funded by a 10% levy on bookmakers’ gross profits on horse racing. This income totalled £78m in 2018. It allows HBLB to invest money back into the sport through prize money, industry training and equine research. Money also funds the BHA’s raceday services and fixture incentive payments to racecourses for racing at certain times of day.

BHA Working with bookmakers for anti-corruption purposes in the integrity department, mostly by data sharing of any suspicious betting trends. The BHA Intelligence Team then work to try and disrupt any potentially corrupt activity.

Media Companies (RMG, ATR, ITV, SIS)

Betting companies contribute significant sums of money in media rights deals to broadcast racing in their shops & also stream races online. Right holders also receive income from betting adverts during broadcasts.

Attendees and off course TV viewers

On and off course betting activity on racing – in Licensed Betting Offices and online.

138

bookmaker that operates on a racecourse must act in accordance with the Gambling Commission’s rules, and British racecourses have a zero-tolerance policy on Under-18 betting activity on racecourses. We look forward to continuing to work with the Gambling Commission on ensuring that racecourses are safe environments at which people can gamble fairly and responsibly.

14.The BHA’s world-leading intelligence department works closely with UK Gambling Commission licensed bookmakers in order to identify, prevent and disrupt any potential betting-related corruption in the sport, which could otherwise undermine people’s faith in British racing as a fair betting product. The BHA uses the ‘Racestraight’ website which provides an anonymous opportunity for anyone in the sport to report corruption.

15.There is still more that can be done and in our role as a Member of the Sports

Betting Group (SBG) – which brings together representatives from across sport to provide leadership and share good practice to address the risks from sports betting corruption – we would like to see further changes to Licence Condition 15.1.2 of the Gambling Commission’s Licence Conditions and Codes of Practice. This would further improve access to information for Sports Governing Bodies such as the BHA in the case of suspicious betting activity.

16.The 2005 Act introduced regulations for different types of gambling (online

sports betting, casino style games, fixed odds betting terminals) but did not differentiate between them. One of the appeals of horseracing is that betting on the sport can almost be considered as a skill and is enjoyed by many as an intellectual challenge, as well as, a leisure activity. Whether you’re a punter who has religiously scanned the form, or a once a year racegoer who picks on names, both have an opportunity to profit from fair and open gambling. The time gaps between races also allow punters to take a much more considered and responsible approach to their betting, reducing the potential for harm.

Q6) What are the social and economic benefits of gambling? How can they be measured and assessed? 17.It is, in the view of British racing, very important that any assessment of the

social and economic benefits of the gambling industry in the UK takes account of the considerable links between the racing and betting industries, and the contribution made by betting activity on the sport to its profile, popularity and £3.45 billion economic impact.

18.The clearest example of the social and economic benefits of gambling, and

how this feeds through to the racing industry, can be demonstrated by the Horserace Betting Levy. The Levy is charged at 10% of a betting operator’s gross profit on British racing. Receipts from the Levy are then distributed in line with three statutory purposes: • the improvement of breeds of horses; • the advancement or encouragement of veterinary science or veterinary

education; • the improvement of horseracing.

19.The majority of Levy expenditure is reinvested by the Horserace Betting Levy

Board (HBLB) for the improvement of horseracing, funding prize money which

139

acts as the lifeblood of the industry – supporting participants, keeping more horses-in-training and improving the popularity of the sport as a socially responsible betting product.

20.Levy expenditure also funds training, recruitment and retention including the industry’s accredited training centres – the British racing School in Newmarket and the National Horseracing College in Doncaster – and the Careers in Racing team at the BHA which provide pathways into the industry for young people. In 2019, the HBLB contributed £2m in grants towards veterinary research, disease surveillance and improving horse welfare both in and out of racing. More than £35 million has been invested through the Levy in veterinary science since 2000 and helped to make Britain a global beacon of equine veterinary science internationally. HBLB also played a vital role in containing the equine influenza outbreak earlier this year as they provided funding which paid for trainers to swab their horses.

21.In the coming months, utilising the return from betting activity, British racing

has significant plans to further bolster investment in: a range of areas including the mental and physical wellbeing of our participants; equine welfare initiatives including a predictive model to reduce fallers and injuries in Jump racing; and a landmark integrity education programme to provide participants and the public with information on the Rules of Racing and to help prevent participants from inadvertently acting in a manner which contravenes these. All this important investment comes through the Levy and betting activity on the sport. However, this requires stability in income from the Levy and other funding sources which are under increasing pressure as we outline below.

22.We also work more broadly with betting operators outwith the Levy to

generate social good in communities. In March 2019, William Hill and Scottish Racing (which represents Scotland’s five racecourses), announced a partnership with Alzheimer’s Scotland. As part of the year-long initiative, every racecourse in Scotland and 1,600 members of William Hill staff have been trained as ‘dementia friends’ while raising awareness and funds for Alzheimer’s Scotland.

Q10) Is enough being done to provide effective public education about gambling? If not, what more should be done? 23.British racing is already taking action to try and prevent problem gambling

from taking place both on-and-off course and is acutely aware of its responsibility to promote responsible gambling. The Racecourse Association – the trade body for 59 British racecourses – is partnered with the Gambleaware campaign and aims to raise awareness of responsible gambling through advertising across racecards, on-course advertising and on bookmaker stands.

24.During live racing broadcasts on ITV and our dedicated racing channels – Racing TV and Sky Sports Racing – all gambling adverts will have a responsible gambling message at some point during the advert in order to try and dissuade people from betting beyond their means. Racing’s Free-To-Air (FTA) broadcaster, ITV, have previously partnered up with

140

BeGambleAware.org on the ‘BetRegret’ campaign which included TV spots discouraging ‘bored betting’ around this year’s Cheltenham Festival in March.

25.We strongly welcome the recent news that five of the UK’s biggest operators

(William Hill, Bet365, GVC, Flutter and Sky Betting & Gaming) making large increases to their ‘voluntary contributions’ to provide treatment and support to those suffering with gambling addictions; and support former Secretary of State for Digital, Culture, Media and Sport Jeremy Wright MP’s call for other firms to ‘engage in tacking problem gambling and look at what they can also do to step up’. In the future, British racing would look to work more closely with betting operators that show serious commitment towards social responsibility and tackling the issue of problem gambling.

Q13) The Responsible Gambling Strategy Board has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons?

26.British racing is in the fortunate position of being one of the major sports in this country that is still broadcast regularly on FTA television, with the current ITV deal running from 2017-2020. As part of the exclusive deal, there are 93 days of racing a year across ITV and ITV4, by far the most FTA coverage of any sport in the UK – allowing our sport to reach millions of households every year.

27.Gambling advertising, targeted at adults, is a key aspect of the funding model for FTA broadcasting of sport on UK television, generating revenues for broadcasters to allow them to bid for sports rights and ITV Racing is no exception. It is wholly appropriate – provided that responsible gambling messaging is included and that the content and tone of the advert is suitable – for opportunities to bet responsibly on British racing to be advertised during broadcasts of the sport.

28.Racing’s broadcasters are subject to a comprehensive and binding set of

regulatory rules that apply to the content and scheduling of gambling advertising on TV whenever that advertising is broadcast. In broad terms, these rules are set out in the BCAP Code which broadcasters are obliged to adhere to as an Ofcom license condition, with oversight and enforcement by the ASA and ultimately by Ofcom. Adherence to these rules is mandatory and, ultimately, broadcasters can face very significant fines from Ofcom for serious or persistent breaches and could ultimately lose their licenses in the most serious circumstances.

29.The Gambling Industry Code for Socially Responsible Advertising recognises

British racing’s ‘inherent links with the gambling industry, which is not the case with other sports’ which means that it is exempt from the new ‘whistle to whistle’ advertising regulations which ban gambling advertisements during sporting events before the watershed. This recognises the historic interdependency between racing and betting, that is reflected in numerous

141

ways including our funding legislation, our fixture list and rules, our appeal as a socially responsible betting product and the excellent broadcasting of the sport.

30.Given these links, and the measures taken to promote responsible gambling,

it is highly questionable whether any further restrictions on advertising of betting around horseracing broadcasts based on protecting under-18s from gambling-related harm would be justified or effective, particularly given the significant impact which this would also have on the finances of British racing.

31.It is notable that there is international precedent for this position. Since

March 2018, a ban on gambling advertisements during live sport in Australia has been in place, but this also includes an exemption around horseracing events. These regulations have been working well to date and demonstrate that the current approach being adopted by the IGRG code is proportionate in reducing the volume of gambling advertising on TV, while not adversely impacting the ability for horseracing to remain on an FTA broadcaster and be enjoyed by millions of people.

Q14) Gambling is becoming an integral part of a growing number of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this? 32.In its comprehensive 2017 State Aid clearance of reforms to the Horserace

Betting Levy, the European Commission stated: “In the UK, racing and betting have a unique interdependency that goes back over 200 years. A day at the races includes, for most participants, betting on horse races as well.”

33.Whilst the ‘gamblification’ of other sports may therefore be a more modern trend, the relationship between Racing and Betting in the UK is far deeper rooted and symbiotic than any other sport. As outlined above in Figure 3, the intricacies of the relationship reach almost all elements of the racing and betting industries and has been recognised by successive UK Governments in gambling legislation, including the 2005 Gambling Act and the Horserace Betting Levy. As such, British racing works closely with betting operators across a range of areas to grow socially responsible betting activity on the sport.

34.Fundamental to this relationship, however, is that there is a fair and sustainable return provided to the horseracing industry from betting activity generated on the sport – recognising the common interest between the racing and betting sectors in a sustainably funded racing industry. After unlocking a statutory return from all online betting operators as a result of The Horserace Betting Levy Regulations 2017, the Levy yielded a return of £94.7 million in 2017-18 (a 90% increase on the year prior). However, this yield reduced again by £16.7 million (18%) to £78 million in 2018-19 despite growing betting activity on the sport as outlined in Figure 1.

Figure 4 – Return from betting in horseracing in 2017 – International comparisons

142

35.In our view, further reform to the Levy system is required which would deliver

much more consistency in terms of the sports’ income and allow British racing to better plan critical expenditure for the future. Moreover, – in terms of prize money, key metrics, and the basis of the statutory return from betting to racing – we remain behind our major international rivals, which despite the prestige of our bloodstock and racing will put the sport at an increasing disadvantage internationally. The comparison of British racing against fellow international jurisdictions is demonstrated in Figure 4. This comes at a time when, contrary to many other jurisdictions, betting activity on horseracing in

the UK is growing rather than declining.

36.Nonetheless, there are critical projects which are funded in the British racing industry as a result of investment facilitated by a return from betting activity on horseracing. This is a key contribution which the betting industry makes to the funding of the country’s second largest sport, a major industry in the UK rural economy, and a key soft power asset for the UK internationally.

Conclusion 37.It is our view that British racing has greatly benefitted, both socially and

economically, from the liberalised, evidence-based approach towards gambling regulation in the UK since 2005.

38.British racing is an increasingly popular, socially responsible and culturally accepted form of betting activity that provides enjoyment to millions of people, supports jobs and contributes significantly to rural economies and communities. This impact would not be what it is today without the

Great Britain

Ireland France Australia

Total betting activity

€ 15.6bn € 5.2bn € 9.1bn $ 17.0bn

Basis of return to racing

10% of Gross Gambling Yield on British racing

Drawn from General Betting Duty – 2% of turnover on all sports

5.6% of turnover return on online betting Pool betting monopoly in retail

Racefields legislation – Between 1% and 3% of turnover, with higher rate for premium races

Return from racing outwith jurisdiction?

No Yes Yes Yes

Return to racing

£ 86.3m € 64m € 792.7m € 446.8m

% return to racing

0.6% 1.2% 8.7% 2.6%

143

relationship between racing and betting – which is secured through a sustainable return from betting activity.

39.Nonetheless, we encourage all betting operators involved in our sport to make

efforts to reduce problem gambling and as an industry we are keenly aware of our responsibilities towards promoting and supporting responsible gambling.

40.As the committee considers the regulatory environment surrounding gambling

as part of its Inquiry, we ask that the complexities and specificities of British racing’s relationship with gambling are appropriately considered, allowing British racing to continue to grow and lead the increasingly competitive international racing sector, while supporting rural communities across the country.

6 September 2019

144

Camelot UK Lotteries Ltd – Written evidence (GAM0040) Summary Introduction The National Lottery has been a fantastic success over the last 25 years, exceeding expectations to deliver over £40 billion for Good Causes. The impact of this Good Cause funding can be seen in every part of the country, from entire areas regenerated with National Lottery arts and heritage programmes, such as the Sage at Newcastle Gateshead and the Turner Contemporary at Margate, to the growing success of our Olympians and Paralympians as well as hundreds of thousands of smaller local projects who have received grants of £10,000 or less to expand their work. Player Protection There has, rightly, been a significant increase in focus on player protection in both the public and policy sphere in recent years. As a responsible business, Camelot must ensure that The National Lottery portfolio remains the safest place to play. We continuously improve our approach, fine tune what we currently do, and search for new and innovative ways to protect players. To this end, we have recently updated our player protection strategy to strengthen our work in this area and ensure that our approach is industry-leading. Our aims are to make The National Lottery the safest place to play games, and to promote healthy play. We do this through identifying vulnerable players (both underage and problem players) and limiting their access to our games; ensuring our games are not high-risk or likely to appeal to vulnerable groups; and creating safe environments for players to enjoy our games – both in retail and online. Optimising the policy and regulatory environment In order to continue to maximise returns to Good Causes in a sustainable and responsible way, it is essential that the policy and regulatory environment helps The National Lottery to flourish. To achieve this: • The National Lottery should be migrated from Lottery Duty to a Gross Profits

Tax regime; • There should be the reintroduction of an expenses cap for large-scale

‘synthetic’ national lotteries at between 5-10% of sales. In the meantime, there should be greater assurance and transparency as to the reasonableness of their expenses;

• The Gambling Commission, as part of the fourth National Lottery Licence competition process, must give clarity of the market in which The National Lottery will be operating, and some level of protection for the operator against future legislative or regulatory changes that could affect its ability to make a reasonable return and thereby maintain its financial viability.

145

1. Introduction to The National Lottery and Camelot The National Lottery

1.1 The National Lottery has been an undoubted success since it was launched in 1994. Under Camelot’s stewardship, The National Lottery has raised over £40 billion for Good Causes across the UK from grassroots projects in local communities to iconic, world-class landmarks and events. More than 565,000 individual awards have been made across the UK – an average of over 200 lottery grants in every UK postcode district. The National Lottery has delivered in excess of £5.6 billion in funding for the arts, £13.7 billion for communities, £7.8 billion for heritage projects and £6.3 billion for grassroots and elite sport. In addition, more than £16.5 billion has been returned to the Exchequer in Lottery Duty and £71 billion in prizes to players. The National Lottery has also paid out over £6.5 billion in retail commission providing a vital source of income for many small, independent shops in communities across the UK.

1.2 The wider impact of National Lottery funding should also be considered: it can kick-start the regeneration of an entire area and unlock other forms of funding – being seen as a badge of quality making it easier to attract other funders or investors. This in turn leads to greater levels of philanthropy and financial giving, which then becomes a positive cycle with more funding leading to better facilities and so on.

1.3 With over 44,000 retailers selling National Lottery products, more than 96% of the UK adult population live or work within two miles of a National Lottery terminal, and around 60% of UK adults currently play National Lottery games. Camelot

1.4 Camelot has been the licensed operator of The National Lottery since its launch in 1994, and the current Licence runs until January 2023, meaning that we have almost 25 years’ experience of responsibly operating a national asset and one of the most successful lotteries in the world. Camelot’s overarching objective is to maximise returns to National Lottery Good Causes through selling lottery products in an efficient and socially-responsible way. While we are responsible for generating returns to Good Causes, we do not play a role in the allocation of Good Cause funding. This is the specific responsibility of 12 lottery distribution bodies, each with specialist knowledge of their sectors.

1.5 We welcome the opportunity to respond to the Committee’s inquiry on the Social and Economic Impact of the Gambling Industry. This submission will set out: ▪ Camelot’s commitment to player protection and ensuring that The

National Lottery portfolio remains the safest place to play, including our views on the minimum age for playing National Lottery games;

▪ The importance of maintaining the single National Lottery model and Camelot’s concerns about the threat posed by growth of ‘synthetic’ national lotteries;

▪ The need to reform the taxation regime of The National Lottery.

2. Camelot’s approach to player protection

2.1 There has, rightly, been a significant increase in focus on player protection in both the public and policy sphere in recent years. As a responsible business, Camelot must ensure that The National Lottery portfolio remains

146

the safest place to play. Player protection is a key priority for us, and we spent £1.98 million in 2018/19 on player protection measures with plans to increase our spend this year.

2.2 Our strategy has always been about encouraging lots of people to play, but to individually spend only relatively small amounts. Our strategy works – we are ranked 66th in the world in terms of per capita spend, despite being the sixth largest lottery in the world by sales.88

2.3 We continuously improve our approach, fine tune what we currently do, and search for new and innovative ways to protect players. To this end, we have recently updated our player protection strategy to strengthen our work in this area and ensure that our approach is industry-leading. Our aims are to make The National Lottery the safest place to play games, and to promote healthy play. We do this through identifying vulnerable players (both underage and problem players) and limiting their access to our games; ensuring our games are not high-risk or likely to appeal to vulnerable groups; and creating safe environments for players to enjoy our games – both in retail and online. In order to promote healthy play we have recently launched National Lottery-specific messaging in retail, and aim to expand this programme this year.

2.4 We also acknowledge that we have a leadership role to play in the wider UK gambling industry – sharing best practice, promoting healthy play, and participating in research groups. Our approach to player protection is being aligned to the new National Strategy to Reduce Gambling Harms which was launched in March 2019, and we expect to play a key role in supporting the Gambling Commission in achieving its strategic objectives. We contribute substantially to research, education and treatment including by an annual donation to GambleAware, and this year we have also funded the expansion of an education programme by GamCare. Inherently Low-risk Games

2.5 Rates of problem play with National Lottery games are very low due, in part, to the structural characteristics of lotteries. A lottery is a system of play in which prizes are distributed by chance among persons who are required to pay for their chance to take part. Lotteries are distinct from both gaming and betting, where in many cases there may be some element of judgement or skill involved in maximising the chances of winning. A lottery is generally in the form of a draw at a specific time (e.g. Lotto), or an instant experience (e.g. Scratchcards or Instant Win Games).

2.6 The most recent problem gambling prevalence figures show that National Lottery draw games and Scratchcards have some of the lowest rates of problem gambling across all gambling types at 1-2%.89 Typically, problem gamblers will have seven or more types of gambling product in their portfolio so we know that, because of the scale of The National Lottery, problem gamblers are likely to play National Lottery games alongside other types of gambling products. However, because of the nature and style of our games, it is very unlikely that National Lottery games directly drive their problematic behaviour. For example, just 2% of calls to the

88 La Fleur’s World Lottery Almanac 2019 89 https://www.gamblingcommission.gov.uk/PDF/survey-data/Gambling-behaviour-in-Great-Britain-2016.pdf

147

GamCare helpline referenced Scratchcards as problematic in 2017/18, and 0% mentioned National Lottery draw games.90

2.7 Knowing that our games are played by problem gamblers means that we have both a responsibility to ensure that our games are designed to be of low appeal to vulnerable groups, but also an opportunity to identify and interact with these players, change their behaviour and signpost to relevant sources of help and support. Responsible Game Design

2.8 We aim to minimise any risk of harm that National Lottery games might cause to players, no matter how small that risk might be. The first line of defence against excessive and underage play is our ‘Responsible Game Design Process’, which all of our games go through. As part of this process, all games go through Gamgard, an online tool that assesses a game’s structural risk levels, including jackpot sizes and speed of play.

2.9 The Gamgard tool is based upon the known risks of specific game features for people who are vulnerable to develop gambling problems. The project was developed in 2007 by two experts in the gambling studies field – Dr Richard Wood and Dr Mark Griffiths – by examining the current state of research on structural and situational characteristics worldwide and utilizing a team of seven leading world experts, in terms of responsible gambling issues and treating people with gambling problems. Oversight and Regulation

2.10 All game updates go through the responsible game design process, and games which are significantly new and different from existing games, are then submitted to the Gambling Commission for approval prior to launch. This robust and formal approval process does not apply to the broader gaming and gambling industry, and means that the games we have in market remain low-risk.

Reducing excessive play in retail

2.11 Our retail partners play a critical role in helping us to ensure that playing National Lottery games continues to be a safe and enjoyable experience. Building on a pilot programme we ran in 2017 to help us better understand what problem play specific to The National Lottery looks like in retail and identify what additional support our retail partners may need, we have continued to develop our approach to reducing excessive play in retail with expert partners. We started to roll out this training programme to retailers in January 2019. The ‘Preventing Excessive Play’ programme aims to support our retailers in feeling confident and equipped in helping to prevent excessive play. It promotes a consistent approach to responding to a customer if they directly ask for help, and also provides retailers with the appropriate resources to be able to offer further information or support if they are concerned about one of their customers.

2.12 We will continue to roll out and evaluate the training programme during 2019/20. In addition, we plan to enable our retail partners to print out

90 https://www.gamcare.org.uk/app/uploads/2019/03/GamCare-Annual-Statistics-2017-18.pdf

148

responsible play messaging from their National Lottery terminal, giving them a quick and easy way to provide a customer with helpful information.

Reducing Excessive Play Online

2.13 Due to our scale we have a responsibility to identify – and tackle – patterns of behaviour that may be an indicator of excessive play. To do this, we use the most current thinking on gambling-related harm to identify at-risk and problem players using our online behavioural analytics model, Mercury. We then use online interventions to raise awareness of the responsible gambling tools available to players to help them stay in control of their online playing habits – and so encourage a positive change in behaviour.

2.14 In addition, we are currently looking at how we can share data and insight from our in-house behavioural analytics model and enhanced interventions with other operators to further collective understanding in this important area. We will also be launching a new series of test-and-learn interventions to better understand what messaging and method of delivery leads to the most positive changes in player behaviour, both in the short and longer term.

Preventing Underage Play on The National Lottery in Retail

2.15 We have a legal and moral responsibility to ensure that National Lottery products – whether that is draw-based games or Scratchcards – are not played by anyone under the age of 16. It is therefore critical that we work closely with our retail partners – all of whom are independent of Camelot – to educate them on when to ask for ID.

2.16 One way we check that retailers have the correct safeguards in place to prevent underage sales is through our mystery shopper programme, which was developed by Camelot in 1999 and subsequently adopted by the National Lottery regulator as a licence condition. Our mystery shoppers are young people who are aged 16 or over but who look younger, and the programme enables us to test retailer awareness of, and compliance with, the safeguards that exist when selling National Lottery products.

2.17 To support last year’s programme, we introduced a number of measures to reinforce retailer awareness of their responsibilities – including distributing updated leaflets to our entire retail estate, together with supporting materials such as terminal stickers and Refusal Register sheets. Targeting those areas with historically low pass rates, we also emphasised the importance of responsible selling through articles in our bi-monthly retailer magazine, face-to-face visits and telephone calls, and added messaging about responsible play to our new retailer website.

2.18 As a result of the measures we have put in place, the programme once again delivered excellent results in 2018. Of the 11,600 mystery shopping visits that took place, 91% of retailers correctly asked for ID as proof of age on the first visit – exceeding our target of 90%. This matches 2017’s figure, and is up 5% on 2015’s results. To ensure that our retail partners continue to achieve high pass rates, we plan to further strengthen the programme in 2019/20 by continuing to focus on boosting retailer awareness and providing training, including distributing a refreshed range

149

of responsible play material to National Lottery outlets and improving the visibility of 16+ age signage. Preventing Underage Play Online

2.19 As part of our commitment to preventing underage play across our online channels, all players must go through a rigorous registration process and pass an Experian identity check if they want to set up an online National Lottery account. This enables us to ensure that players are who they say they are, and verifies their age. Minimum age for playing National Lottery games

2.20 Whilst there is not currently evidence of a significant risk of harm to 16 and 17 year olds from playing any National Lottery game,91 we believe that the Government’s review of the minimum age for buying National Lottery products as part of the next Licence competition process is appropriate as it has been 25 years since these restrictions were introduced. We have been providing data to DCMS on the topic and will respond formally to the government consultation in due course.

2.21 Taking into account Camelot’s 25 years’ experience of successfully

operating The National Lottery, our view from an operational standpoint is that it is important to ensure consistency for retailers and players by having one aligned minimum age for the purchase of all National Lottery products. Splitting the age of play between product categories poses a significantly more difficult operational challenge, and therefore a unified approach is our strong recommendation. However, we believe it is for Government to decide the age of play for the next National Lottery Licence period, whether that be 16 years or 18 years.

3. Society Lotteries and The National Lottery

The Single National Lottery Model and the Lottery Ecosystem 3.1 In 1994, a clear and complementary distinction was established between

smaller traditional society lotteries, fundraising for local good causes and The National Lottery, offering life-changing prizes in order to deliver large returns to Good Causes. The single national lottery model has been reviewed several times and it remains the most efficient way to maximise returns to Good Causes and society.

3.2 The accepted principle of the single national lottery model has been eroded in recent years, and the Government’s announcement in July 2019 to increase the prize and proceed limits for society lotteries represents a further step away from this model.92 Camelot has long argued that there should be a clear distinction between society lotteries and The National Lottery, and, while Camelot has continuously been supportive of ‘traditional’ charity society lotteries, we have repeatedly raised concerns about the growth of ‘synthetic’ national lotteries.93

91https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/f

ile/817457/Consultation_on_the_minimum_age_for_playing_National_Lottery_games.pdf p8 92https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/f

ile/817544/Response_to_Consultation_on_Society_Lotteries_PDF.pdf 93 By ‘synthetic’ national lotteries, we mean society lotteries which operate on an industrial scale, are marketed under an ‘umbrella’ brand and compete at a national level with The National Lottery

150

3.3 The society lottery legislation was intended for small-scale charity lotteries. They are exempt from paying Lottery Duty, operate under a lighter touch, less transparent regulatory regime. ‘Synthetic’ national lotteries such as the People’s Postcode Lottery and the Health Lottery clearly encroach into the territory originally intended by Parliament to be the sole preserve of The National Lottery. This challenges the established policy principle that there should only be one national lottery to ensure maximum benefit to society, and undermines the Secretary of State’s and the Gambling Commission’s express statutory duty to maximise returns to National Lottery Good Causes (there being no equivalent duty in relation to society lotteries of any kind).

3.4 We welcome DCMS’ announcement that the Gambling Commission intends to consult on the levels of transparency for society lotteries and agree that it is “important that society lotteries demonstrate the highest levels of transparency”94 as they raise funds for charities. We agree that the Gambling Commission should focus on transparency, including how the proceeds of society lotteries are spent, returns to good causes and executive pay.

3.5 In so using light-touch society lottery regulation to spend large sums on marketing to precipitate growth, the People’s Postcode Lottery in particular has seen extraordinary growth leading to sales of £365 million last year. The impact of competition on The National Lottery

3.6 Frontier Economics (Frontier) was commissioned by Camelot in 2018 to analyse the effect of competition on National Lottery sales. Frontier found that competition has had a negative impact on National Lottery sales compared to what they otherwise would have been.

3.7 Frontier estimated that National Lottery sales have been cannibalised by

£703 million as a result of competition over the period 2011 to 2017, leading to a reduction of National Lottery returns to society of £266 million over the same period.

3.8 It is also instructive to look at the lotteries market in Northern Ireland,

where the People’s Postcode Lottery and the Health Lottery do not operate. In the absence of competition from ‘synthetic’ national lotteries, National Lottery performance metrics are consistently higher in Northern Ireland than the rest of the UK. For example, in Northern Ireland in 2018: ▪ The National Lottery had 80% marketing share of voice compared to

45% in the rest of the UK; ▪ Participation (‘played last week’) in The National Lottery is higher at

51% compared to 46% in the other UK nations; ▪ Positivity towards The National Lottery was 49% vs 42% on average in

the other UK nations; ▪ 47% of respondents agreed with the statement ‘The National Lottery is

relevant to me’, compared to 37% in the other UK nations.

Eroding the efficiency of the ‘single National Lottery’ model 3.9 Beyond the negative impact identified by Frontier, the competitive market

created by ‘synthetic’ national lotteries has forced The National Lottery to

94 DCMS, Government Response to the Consultation on Society Lottery Reform, July 2019, 1.7

151

spend more on marketing in order to maintain share of voice – an indicator of future market share – at the expense of Good Causes.

3.10 The result has been to establish a marketing ‘arms race’ in which The National Lottery is forced to compete for share of voice in a market designed around the economically-efficient model of a ‘single National Lottery’, inflating its marketing costs and driving a cycle of inefficiency. In this financial year, The National Lottery will spend three times more on advertising than it did in 2010 for half of the impact.

3.11 It is also instructive to look at the marketing spend of the People’s Postcode Lottery over the same period, which saw its advertising spend increase from £6.3 million (2010) to £41.3 million (2018) – an increase of 556%. This is possible as the People’s Postcode Lottery continues to operate with high levels of expenses, and is not subject to Lottery Duty.

3.12 Indeed, DCMS recently noted that “the two sector leaders currently return amongst the lowest proportion of revenue to good causes.”95 In real terms, in 2018 the People’s Postcode Lottery returned £116.9 million to good causes (32% of revenue) and spent £102.3 million in expenses (28% of revenue).96 More than a third of this spend is used on advertising, a market in which it competes directly with The National Lottery. Proposed solution to the marketing spend challenge: re-introduce a cap on

expenses 3.13 Camelot believes that there must be the reintroduction of an expenses cap

for large-scale ‘synthetic’ national lotteries at between 5-10% of sales. Prior to the Gambling Act 2005, maximum expenses were capped at 15% for large lotteries and 35% for smaller lotteries. For the avoidance of doubt, we are not suggesting that the expenses cap applies to traditional society lotteries – only to ‘synthetic’ national lotteries. We urge the Gambling Commission to include this in any future consultation on transparency in the society lottery sector. In the meantime, we would also ask the Commission to re-examine the extent to which the expenses currently retained by the external lottery managers of the ‘synthetic’ national lotteries can properly be regarded as reasonable. Impact on the fourth National Lottery Licence Competition

3.14 As mentioned above, the competition for the fourth Licence to operate The National Lottery commences this year (2019). We believe that the growth of ‘synthetic’ national lotteries is very damaging to the long term value of a hugely successful national asset and looking ahead, there is a significant risk that further relaxations of society lottery regulations could weaken the forthcoming fourth Licence competition process. It is therefore very important that bidders for the fourth Licence are given clarity by the Gambling Commission on the market in which they will be operating. This should include:

i. The regulator setting out common assumptions around how competition to The National Lottery will evolve over the fourth Licence period.

ii. Inclusion in the Licence of reasonable protections for the operator against legislative or regulatory changes that take place after the

95https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/f

ile/817544/Response_to_Consultation_on_Society_Lotteries_PDF.pdf p14 96https://www.postcodelottery.co.uk/uploads/media/default/0001/07/8569fb5b69b2a3e76f3c26bef767d54b0b5cf575.pdf p28

152

award of the fourth Licence and that would materially and adversely affect the reasonable level of return on which the operator’s bid was based and thereby the operator’s financial viability.

3.15 Risks include increased complexity, and bidders raising prices (i.e. any profit they may wish to take) to adjust for competitive market uncertainty, with the potential for this to result in a reduction in overall returns to society in the long term. Further, it will likely increase the complexity of Licence negotiations to manage the risk of adverse regulatory or policy changes.

4. The statutory regime governing The National Lottery 4.1 As above, we remain firmly of the view that the single national lottery

model is the key to ensuring the highest possible returns to Good Causes and society, as well as ensuring protection of players, and the fitness and propriety of The National Lottery’s operation. Accordingly, there should be a clear distinction between the regulatory regime of The National Lottery and society lotteries.

4.2 The National Lottery was constituted by The National Lottery Etc. Act 1993

and is regulated by the Gambling Commission. Prior to this, it was regulated by The National Lottery Commission. The National Lottery is far more closely regulated than any other form of gaming, gambling or lottery. Given that the licensee is awarded a contract to operate an important national asset with revenues now reaching over £7 billion per year, regulatory oversight is essential. However, in order to operate The National Lottery to the best of our ability, it is imperative that the policy and regulatory environment evolves and modernises in order to allow it to flourish.

Reforming the Taxation Regime of The National Lottery

4.3 Alongside increased direct competition in the lotteries market from ‘synthetic’ national lotteries, the wider market in which The National Lottery operates has transformed significantly in recent years. Over time, all major gaming and gambling sectors have been moved to a Gross Profits Tax (or equivalent), while The National Lottery remains an outlier taxed on turnover – Lottery Duty at 12%. This tax regime restricts The National Lottery’s capacity to respond to the changing market dynamics and its ability to compete on price or value. Camelot believes that migrating The National Lottery to a Gross Profits Tax would help to meet our overarching objective of maximising returns to National Lottery Good Causes through selling lottery products in an efficient and socially-responsible way.

4.4 In other markets a response to increased competition would be to reduce price to the consumer, but in the case of The National Lottery the effective response would be to increase the share of sales returned to players – the prize payout. Evidence shows that being able to compete on prize payout is a key part of maintaining an attractive and relevant consumer proposition. This is particularly true of instant win games (online instant win games and Scratchcards), which attract customers on the basis of a frequent winning experience and therefore require a higher prize payout to compete in the market.

153

4.5 The current Lottery Duty regime creates a misalignment between the Exchequer and Good Causes, leading to distorted incentives. This is because, under the current regime, returns to the Exchequer are based on turnover but returns to Good Causes are based on sales less prizes (gross profit). Therefore, although gross profit could be increased through a higher prize payout to players, under the current Lottery Duty regime this would likely mean more income for the Exchequer and less for Good Causes (undermining The National Lottery’s ability to meet its duty to maximise returns to Good Causes).

4.6 A Gross Profits Tax regime provides The National Lottery with the tools required to respond to new market forces. It enables the operator to deliver even more value to players by increasing the share of sales it returns to players through its prize payout, while also maximising returns to society by offering an attractive proposition that increases the entertainment value of The National Lottery. In short, a Gross Profits Tax enables Camelot to develop more attractive and compelling National Lottery games that stimulates player interest and demand thereby maximising returns to society. It is important to remember that games will continue to be designed in a socially-responsible way encouraging lots of people to play but to spend relatively small amounts.

The Benefits to Society of Taxation Reform

4.7 Camelot commissioned Frontier Economics to estimate the impact of moving from Lottery Duty to Gross Profits Tax and their central scenario modelling suggests that it would unlock £1.7 billion additional returns to society over the 10 year period to 2028/29. In addition, there would also be increased retailer commission of £1.1 billion over the same period.

4.8 There is, however, potential for further significant upside if, as we expect,

the scope to increase prize payouts unlocks new innovations that increase demand for The National Lottery over and above Frontier’s central scenario. Under a range of different assumptions, Frontier estimate that additional returns to society could be as high as £6.6 billion, though it should be noted that the total impact is sensitive to the specific assumptions used. Similarly, the increase in retailer commission could be as high as £2.1 billion over the same period. Camelot has proposed that it receives no unearned benefit from the change.

4.9 With the competition for the fourth Licence approaching, this is the right

time to consider The National Lottery’s taxation regime in order to provide clarity for all potential bidders. In the increasingly competitive market within which The National Lottery operates, a move to a Gross Profits Tax could be a key factor in ensuring its current and future health.

5. Conclusion 5.1 The National Lottery has been a fantastic success over the last 25 years,

exceeding expectations to deliver over £40 billion for Good Causes. The impact of this Good Cause funding can be seen in every part of the country, from entire areas regenerated with National Lottery arts and heritage programmes, such as the Sage at Newcastle Gateshead and the Turner Contemporary at Margate, to the growing success of our Olympians and Paralympians as well as hundreds of thousands of smaller local

154

projects who have received grants of £10,000 or less to expand their work. Player Protection

5.2 There has, rightly, been a significant increase in focus on player protection in both the public and policy sphere in recent years. As a responsible business, Camelot must ensure that The National Lottery portfolio remains the safest place to play.

5.3 We continuously improve our approach, fine tune what we currently do, and search for new and innovative ways to protect players. To this end, we have recently updated our player protection strategy to strengthen our work in this area and ensure that our approach is industry-leading. Our aims are to make The National Lottery the safest place to play games, and to promote healthy play. We do this through identifying vulnerable players (both underage and problem players) and limiting their access to our games; ensuring our games are not high-risk or likely to appeal to vulnerable groups; and creating safe environments for players to enjoy our games – both in retail and online. Optimising the policy and regulatory environment

5.4 In order to continue to maximise returns to Good Causes in a sustainable and responsible way, it is essential that the policy and regulatory environment helps The National Lottery to flourish. To achieve this: ▪ The National Lottery should be migrated from Lottery Duty to a Gross

Profits Tax regime; ▪ There should be the reintroduction of an expenses cap for large-scale

‘synthetic’ national lotteries at between 5-10% of sales. In the meantime, there should be greater assurance and transparency as to the reasonableness of their expenses;

▪ The Gambling Commission, as part of the fourth Licence competition process, must give clarity of the market in which The National Lottery will be operating, and some level of protection for the operator against future legislative or regulatory changes that could affect its ability to make a reasonable return and thereby maintain its financial viability.

6 September 2019

155

Camelot UK Lotteries Ltd – Supplementary written evidence (GAM0111) Camelot is proud to have operated The National Lottery for the past 25 years. Our overriding objective is to raise the maximum amount of money for National Lottery Good Causes in an efficient and socially responsible way. As such 95% of National Lottery revenue goes back to players and society (in the form of prizes, returns to Good Causes, Lottery Duty and Retailer Commission), one of the highest percentages of lottery revenue back to society in the world. This has resulted in over £40 billion being delivered to National Lottery Good Causes, an additional £17 billion to the Treasury in Lottery Duty and £6.5 billion paid in commission to retailers on high streets across the UK. In 1994, a clear and complementary distinction was established between smaller traditional society lotteries, fundraising for local good causes and The National Lottery, offering life-changing prizes in order to deliver large returns to Good Causes. This distinction is one of the main reasons behind the success of The National Lottery. This ‘single national lottery’ model has been reviewed several times and it remains the most efficient way to maximise returns to Good Causes and society. However, the single national lottery model has been eroded by the growth of industrial-scale society lotteries which operate across Great Britain (society lotteries in Northern Ireland are subject to separate legislation) in competition with The National Lottery. The extraordinarily fast levels of growth we have seen in the industrial society lottery sector can be attributed to the removal of the expenses cap in the Gambling Act 2005. This means that industrial-scale society lotteries can spend virtually uncapped levels of revenue on expenses, as long as a 20% minimum is returned to good causes. Much of these expenses are spent on marketing, meaning that The National Lottery is competing for advertising share of voice in a market designed around the economically-efficient model of a ‘single national lottery’, inflating its marketing costs and driving a cycle of inefficiency. The result is that the People’s Postcode Lottery’s advertising spend is now approximately 75% of that of The National Lottery, even though they are only 5% of The National Lottery’s size by sales (£365.3 million vs £7,206.8 million respectively). As the Committee prepares its recommendations from this inquiry and the Government begins its review of the Gambling Act, I reiterate my call for an expenses cap on industrial-scale society lotteries of between 5-10% of sales. For the avoidance of doubt, I am not suggesting that the expenses cap should apply to traditional society lotteries. The context and potential for future growth is also important, as the Government intends to raise the sales limits and jackpot sizes for society lotteries this summer. We are concerned that this will have a further detrimental impact on National Lottery sales and therefore returns to National Lottery Good Causes. In response to the Committee’s request for further information on the breakdown of National Lottery expenditure, including advertising costs and to illustrate the points I have made above, we have prepared the following information. Advertising spend data analysis Source: Nielsen AdDynamix97 At the Committee hearing, I said that between 2010 and 2018 the advertising spend of the People’s Postcode Lottery increased by 556%. This figure is based

97 Nielsen AdDynamix is a media monitoring tool that provides an analysis of trends, brands, advertisements and campaigns across all media sectors.

156

on data from Nielsen AdDynamix which analyses the advertising spend of companies in the UK. The AdDynamix tool includes analysis of advertising that consumers see by means of television, press, radio, digital, out of home, cinema, direct mail and door drops. It does not include agency spending, advertising design or staffing costs. As detailed below, Nielsen AdDynamix analysis shows that the People’s Postcode Lottery spent £41.4m on advertising in 2018 versus £6.3m in 2010 – representing a 556.5 percentage increase.

Revenue and Expenditure: Breakdown of the ‘Lottery Pound’ The National Lottery portfolio consists of draw-based games (such as Lotto and EuroMillions), Scratchcards and online Instant Win Games. Lottery Duty at 12% is paid on sales of all National Lottery products and retail sales of National Lottery products pay commission for retailers of 5% for draw-based games, 6% for Scratchcards and 1% on certain prizes paid out in store. As discussed at the hearing, the People’s Postcode Lottery does not sell Scratchcards or Instant Win Games and as their lottery is sold online and by telephone, no retailer commission is due. For these reasons, in our portfolio we would consider National Lottery draw-based games sold digitally to be the most comparable product to that offered by the People’s Postcode Lottery. For National Lottery draw-based games sold digitally in the financial year 2018/19, 35% of revenue was returned to Good Causes and 12% returned in tax as Lottery Duty, representing a 47% return to society as compared to 32% for the People’s Postcode Lottery in 2018. The total cost of operating The National Lottery represents 4% of revenue and profit to the shareholder at around 1% compared to 28% in total for the People’s Postcode Lottery.

2010 2011 2012 2013 2014

TNL £34,631,298 £37,123,431 £44,776,233 £44,358,736 £30,224,027

PPL £6,300,602 £3,180,325 £4,758,490 £6,933,219 £12,366,836

2015 2016 2017 2018 TNL £41,146,793 £45,702,591 £39,120,837 £54,512,566

PPL £19,865,855 £26,610,639 £35,350,201 £41,369,231

157

Due to rounding totals may not add up to 100%

As detailed in the most recently published People’s Postcode Lottery annual report100, the lottery’s revenues in 2018 were £365.3m and expenses were £102.3m, representing 28% of revenue. We understand this includes a 4% licence fee to Novamedia along with an additional 1% management fee.101 £116.9m was returned to good causes (32%) and £146.1m (40%) paid in prizes to players.

98 Internal Camelot figures Financial Year 2018/19 99 https://www.postcodelottery.info/media/1343/postcode-lottery-annual-report-2018.pdf p28 100 Ibid 101 https://www.novamedia.nl/charity-lotteries/206-novamedia-revenue-from-licence-fees (accessed 03/02/2020)

National Lottery Draw-based games sold digitally98

People’s Postcode Lottery99

Prizes 48% 40%

Good Causes 35% 32% Retailer Commission

0% 0%

Lottery Duty 12% 0% Operating Costs (including marketing & profit)

5% 28%

Returns to Society (Good Causes + Lottery Duty)

47% 32%

158

Camelot UK Lotteries Limited accounts

2018/19:102 Due to rounding totals may not add up to 100%

Additional points to note • VAT: Sales of lottery tickets are exempt from VAT. Therefore VAT is not

normally recoverable on the Camelot’s costs and is a charge against profits. The VAT cost for the year, including that arising on capital expenditure, was £41.2m.

• Marketing expenditure: According to the terms of the Third National Lottery Licence103, Camelot spends 1.07% of revenue on marketing. Due to the increased competition for marketing share of voice we have seen in the last decade, The National Lottery’s marketing cost base has been inflated. Following full regulatory scrutiny, the Gambling Commission approved additional marketing investment for Lotto and EuroMillions from the National Lottery Distribution Fund (NLDF) of £73.4 million over a two-year period, with the first instalment of £39.0 million paid in 2018/19. Over 2018/19 and 2019/20 the NLDF is expected to see net increase in funds of £114.6 million as a result of this investment, a 150% return on investment.

• During the year, Camelot has maintained the infrastructure to run The National Lottery and at the end of the financial year 44,235 lottery terminals were in operation across its retail footprint.

102 https://annualreport2019.camelotgroup.co.uk/reports-and-financial-statements/ 103 https://www.gamblingcommission.gov.uk/PDF/NL-licences/NL-Third-licence.pdf Schedule 10, Condition 11, Part 1, 1.1a

Camelot UK Lotteries Limited

Sales £7,206.8m 100%

Prizes £4,128.5m 57% Good Causes £1,529.6m 21%

Retailer Commission & Transaction Fees

£303.9m 4%

Lottery Duty £864.8m 12%

Operating Costs Total: 303.3m 4% Gaming Systems & Data Communication Costs

£125.3m

Administrative expenses - of which marketing £77.3m

£178.0m

Profit after tax £68.0m 1%

159

• Capital Expenditure: Since the start of the third National Lottery Licence, our shareholder has invested £228.6m in capital expenditure to date, £141.8m (+163%) more than was set out in the third Licence business plan.

I hope the above is helpful and please do not hesitate to be in touch if you have any further questions. My thanks again to the Committee and we look forward to the publication of your report later this year. NIGEL RAILTON, CHIEF EXECUTIVE Explanatory Note: Competitor Advertising Spend Data Sources 1. Nielsen AdDynamix Camelot’s analysis of competitor advertising spending uses information gathered by the Nielsen AdDynamix media monitoring tool. Camelot monitors competitor spend in this market because it affects our ability to advertise The National Lottery and the costs associated with doing so. In the absence of public reporting by the People’s Postcode Lottery on their advertising spend (see point 2), the information provided by Nielsen is the best data available to us. By contrast, National Lottery spending on marketing is made in accordance with the terms of the Third National Lottery Licence and the level of spending is detailed in Camelot’s annual reports. Nielsen analyse the advertising output of companies in the UK in order to come to an estimated spend level. The AdDynamix tool analyses trends, brands, advertisements and campaigns across all media sectors. It looks at advertising directed at consumers by means of television, press, radio, digital, out of home, cinema, direct mail and door drops. Cost estimates are made using among other sources, industry and trade association supplied average rates, rate cards and campaign activity and station revenues. The tool cannot supply exact figures due to private negotiations undertaken by the advertiser. Likewise, the figure provided does not include agency spending, advertising design or staffing costs. For the Committee’s reference, we attach a summary short summary provided by Nielsen on their methodology. 2. Transparency in relation to advertising spending From 19 December 2019 to 12 March 2020, the Gambling Commission ran a consultation on Society Lottery Reforms, which included “looking at the current regulatory requirements to ensure that issues related to the fair and open licensing objective, regarding transparency to consumers, are addressed. [They were] seeking views on strengthening some aspects of the Licence conditions and codes of practice (LCCP) and producing guidance related to information available to consumers.”104 Camelot’s response to the consultation reiterated our long-held concerns around the operating costs of ‘synthetic’ national lotteries, particularly in relation to marketing costs. Our submission called for these large-scale operations to publish full details of the allocation of their proceeds so that they are easily available to players, ensuring that clear information is available relating to operating costs, specifying the amount spent on marketing versus other

104 https://www.gamblingcommission.gov.uk/news-action-and-statistics/news/2020/Consultation-on-society-lottery-reforms.aspx

160

operating costs. We hope that the Committee will support our calls for greater transparency requirements on ‘synthetic’ national lotteries. 2 April 2020

161

Christian Action Research and Education (CARE) – Written evidence (GAM0047) 0. About CARE

0.1. CARE (Christian Action Research and Education) is a well-established mainstream Christian charity which has been campaigning on gambling issues for a number of years.

0.2. Our submission sets out our response to each of the question areas set out in the Call for Evidence.105 Our primary focus is the need for protection for those vulnerable to becoming problem gamblers and for those who already are; and for rigorous regulation to ensure that the children and young adults are protected.

0.3. In summary, CARE believes that the significant growth in the remote gambling sector necessitates more rigorous regulation.

0.4. We recommend: a) increased transparency by the Gambling Commission on enforcement

and a detailed annual statement on action against unlicensed remote gambling sites (see para 3.1);

b) increased player protections on B type machines (see para 3.3); c) the full implementation of GAMSTOP should be completed with

urgency (see para 3.5); d) there should be a complete ban on the use of credit cards for

gambling on or offline (see para 3.7); e) there should be a license condition which means that sites with a UK

license cannot take bets between midnight and 6 am, a time when problem gamblers are particularly vulnerable (see para 3.8);

f) there should be a legal duty of care on gambling operators (see para 4.1);

g) a mandatory levy should be introduced to fund research, treatment and education. The funds should be independently managed and distributed (see para 7.3);

h) the Gambling Commission’s Social Responsibility code and age verification requirements should apply whether a person is accessing free-to-play games through gaming or gambling apps, Facebook or gambling websites (see para 9.3).

i) that restrictions on the promotion of remote gambling to children should be included in the Gambling Commission’s Licensing Codes (see para 13.3);

j) the Gambling Commission should be proactive in reviewing sites and apps that are of particular interest to young people to ensure that gambling adverts are not targeting children (see para13.4);

k) that data is published within the Gambling Commission industry statistics showing how much is being spent on betting and other forms of gambling on eSports by both adults and young people (see para 14.3);

105 https://www.parliament.uk/documents/lords-committees/Gambling-committee/Gambling-Call-

for-evidence.pdf

162

l) the Gambling Commission should be required to assess the industry to provide public transparency about the number of UK children and young people engaged in skins gambling, the sums of money being bet and lost and the types of gambling and websites (licensed and unlicensed) involved; and on the sums being spent on loot boxes (see para 15.7);

m) the Gambling Commission’s Virtual currencies, eSports and social casino gaming Position Paper should be updated to address the social problems surrounding the use of loot boxes see para 15.7);

n) the Gambling Commission and the Video Standards Council should be working with industry and other international regulators to develop a “duty of care” towards young people to ensure that young people are not drawn into gambling via loot boxes see para 15.7);

o) the Gambling Commission and the Video Standards Council should be providing information to parents about the dangers of loot boxes within video games see para 15.7).

The Gambling Act 2005

1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld?

1.1. CARE’s view is that the primary aims of the Gambling Act 2005

remain useful and focus attention in a helpful way; however, in the intervening period, the ubiquity and ready accessibility to gambling necessitates more rigorous regulation in order to give these aims effect. We note that there is no objective in the Gambling Act 2005 to require the Government nor the regulator to encourage gambling industry growth.

1.2. Despite attempts by the Government and the regulator to keep pace with developments, CARE is concerned about the growth in online gambling. The most recent data from the Gambling Commission suggests that the online sector accounts for almost 40% of the gambling industry as a whole.106 The Gambling Commission Review of Online Gambling suggests that this will rise to 50% over the next few years.107

1.3. In a Editorial published in late-2017, The Lancet noted that “Less publicised is the growth of online gambling, with a potentially greater danger to health than other forms of gambling, particularly for those younger than 16 years of age.”108 Online gambling presents special

106 39% is the market share of the remote sector. Industry Statistics, April 2016-March 2018,

Updated to September 2018 Published May 2019, Gambling Commission, page 1

https://www.gamblingcommission.gov.uk/PDF/survey-data/Gambling-industry-statistics.pdf 107 Gambling Commission, Review of Online Gambling, March 2018,

http://www.gamblingcommission.gov.uk/PDF/Online-review-March-2018.pdf 108 Problem gambling is a public health concern, The Lancet, vol 390, 2 September 2017

http://www.thelancet.com/pdfs/journals/lancet/PIIS0140-6736(17)32333-4.pdf

163

challenges because unlike betting shops, gambling is available 24 hours a day, 7 days a week from a multitude of different websites. CARE has been campaigning for some time on the impact gambling online can have for adult problem gamblers. The problem gambling prevalence rate for online gambling on slots, casino or bingo games is 9.2% (compared to the general population where the prevalence rate is just 0.7%) with rates of low risk gambling for online gambling on slots, casino or bingo games at 21.9% and moderate risk gambling 13.7%.109

1.4. We are very concerned that the problem gambling rate amongst young people, who are not supposed to be able to gamble, is higher than for adults. This suggests the need for further action to protect children and young people. Our concerns about young people and gambling and player protections for online gambling and the enforcement of non-regulated remote gambling below.

2. What changes, if any, are required to bring the Act up to date with

new technology and the latest knowledge about how gambling harm is distributed?

2.1. CARE has been recommending that the Gambling Act 2005 should

be amended to prohibit making online gambling games available to under 18s, even when there is no exchange of money to prevent children being drawn into gambling from a young age. We welcome the recent changes in the licensing conditions on age verification, which in theory should prevent this access. However, if the licence conditions do not prove effective, we would seek a change in the law.

2.2. We remain concerned about social media sites who offer free gambling like games and how they might be regulated under the Act.

3. Is gambling well regulated, including the licensing regime for both

on- and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions? 3.1. CARE is concerned that there is insufficient enforcement against

unlicensed remote gambling websites. Unlicensed gambling websites do not need to follow the social responsibility requirements set out by the Gambling Commission. The Government has repeatedly said that voluntary arrangements with payment providers would suffice to ensure that unlicensed websites do not operate in the UK. The Gambling Commission has committed to providing more public information on enforcement actions against unlicensed websites. In the Commission’s

109 Gambling behaviour in Great Britain in 2015: Evidence from England, Scotland and Wales,

Anne Connelly, et al, National Centre for Social Research (Natcen), September 2018, Prepared for the Gambling Commission. Pages 3, 53 and 54.

http://www.gamblingcommission.gov.uk/PDF/survey-data/Gambling-behaviour-in-Great-Britain-2016.pdf

164

enforcement report for 2018/19, they reported tackling 31 instances of remote unlicensed operators, a decline of previous years but with no explanation. The Commission do say they say are targeting a “significant volume” of illegal gambling offerings on social media.110 CARE recommends increased transparency on enforcement and a detailed annual statement on action against unlicensed remote gambling sites, which includes: a) the strategy of the Gambling Commission in the previous twelve

months for identifying unlicensed sites seeking to access the UK market,

b) the actual activities of the Gambling Commission in the previous twelve months to identify unlicensed sites accessing the UK market;

c) a record of the number of requests sent to financial transaction providers to block transactions;

d) the outcomes resulting from all these activities; and e) a comparison with activities of the twelve months in question with the

previous twelve months and identification of any longer-term trends.

3.2. CARE is concerned that there should be a rigorous regime for player protections. A GambleAware report published in October 2017 said that the execution of responsible gambling initiatives “was frequently disappointing”, commenting in particular on the message “When the Fun Stops, Stop” as ineffective for some gamblers.111 Commenting on their publication Gambleaware said it showed that the gambling industry as a whole is “poor at giving staff suitable training in how to promote safe gambling amongst customers. The report also revealed customers felt existing responsible gambling messages are often confusing and unclear.”112 Ladbrokes has recently been fined £5.9m partially for not protecting players.113

3.3. In the Government’s Consultation on proposals for changes to Gaming Machines and Social Responsibility Measures, October 2017, CARE argued that given the poor track record of the offline industry in supporting initiatives to prevent problem gambling, the voluntary changes proposed to encourage: i) set time and spend limits, ii) mandatory alerts, and iii) algorithms to identify problematic play should become obligatory licensing social responsibility conditions since a voluntary approach has not seen sufficient change to help problem gamblers. That continues to be our position, so we support the Gambling Commission’s initiative to increase player protection on all B mach ines. We support the proposal in the Commissions recent Call for Evidence: Player Protections on B Machines to consider the use of tracking data as

110 Raising Standards for Consumers: Enforcement report 2018/19, Gambling Commission, page

21 https://www.gamblingcommission.gov.uk/PDF/2604-GC-Enforcement-Report-2018-19-1.pdf 111 Responsible Gambling: Collaborative Innovation Identifying good practice and inspiring change,

Oct 2017, pages 10, 50 and 80. https://about.gambleaware.org/media/1581/revealing-reality-

igrg-report-for-gambleaware.pdf 112 https://about.gambleaware.org/media/1585/2017-10-04-revealing-reality-igrg-report.pdf 113 https://www.gamblingcommission.gov.uk/news-action-and-statistics/News/ladbrokes-coral-group-to-pay-59m

165

long as the data protection issues are addressed, and that data is used only with the player’s consent. This consultation ended in May 2019.

3.4. In the March 2018 Review of Online Gambling, the Gambling Commission said, “progress by the online industry to minimise harm has been significantly slower than we expected and required” and “progress is still slower than we hoped, and it is not consistent across the industry.”114 This was very disappointing. We welcome recent actions by the Gambling Commission to fine providers who do not “keep consumers safe from gambling harm".115 CARE also welcomes changes to the Licensing Codes from May 2019 which require age verification for free to play games, as we have been concerned about the ability of children and young people to access these games.116 We support further changes to improve communication with individuals who may be experiencing problem gambling, which are due to come into effect in October 2019.117

3.5. Self-exclusion (the opportunity to sign a form which requires a gambling company not to serve the person for a minimum period of 6 months) is a very important player protection provision, but its effectiveness has been undermined because anyone wanting to self-exclude has had to do so from each gambling website one at a time; something that it is virtually impossible to do. A new system called GAMSTOP allows a person to self-exclude from all licensed sites in one go. It is currently being implemented but has not been officially launched because not all websites are yet signed up.118 As of January 2019, approximately 50,000 people had signed up so far.119 GAMSTOP was criticised in the press on Monday 14 January 2019 because of suggestions that individuals can by-pass self-exclusion by giving themselves a new identity.120 CARE supports GAMSTOP and urges all remote operators to work closely with the Gambling Commission and GAMSTOP to ensure that multi-exclusion is robust and effective. However, its full implementation has been repeatedly delayed. On Sunday 1 September 2019 the Guardian reported that the Gambling Commission was to announce in a matter of days that “all gambling companies will be told to sign up to GAMSTOP”;121 this was subsequently denied by a spokesperson for the

114 Review of Online Gambling, Op Cit, paras 1.14 and 1.15 115 https://www.gamblingcommission.gov.uk/news-action-and-statistics/News/widespread-

regulator-action-results-in-further-45m-in-penalty-packages-for-online-gambling-sector 116 https://www.gamblingcommission.gov.uk/news-action-and-statistics/News/free-to-play-

games-being-available-through-gambling-affiliates;

https://www.gamblingcommission.gov.uk/news-action-and-statistics/News/new-age-and-identity-verification-rules-changes-to-the-lccp-from-tuesday-7-may

117 https://www.gamblingcommission.gov.uk/PDF/consultations/ADR-CI-RET-

ResponseDocument.pdf 118 https://www.gamstop.co.uk/ 119 Statement by GAMSTOP, 14 January 2019 120 https://www.theguardian.com/society/2019/jan/13/stricter-id-checks-aim-to-prevent-uk-

gamblers-cheating-system 121 https://www.theguardian.com/society/2019/sep/01/problem-gamblers-block-themselves-one-

click-gamstop-

betting?CMP=share_btn_tw&fbclid=IwAR2OSqy6nHjxzOC74RptJaB6RkN5WcOp4un5fRoiqqf_FJlJ10c9Z2iLZ6Y

166

Gambling Commission.122 Whatever the truth of the matter, implementation should be completed as a matter of urgency.

3.6. CARE raises a number of points in relation to GAMSTOP: a) There needs to be reassurance that this multi-operator scheme will be

designed and implemented robustly so we do not see any repeat of the problems with some of the self-exclusion schemes set up by individual operators. In August 2017, gambling firm 888 was fined £7.8 million after more than 7,000 people who had self-excluded were still able to access their account.123 In March 2018, Skybet was fined £1m over various abuses related to those who had self-excluded.124

b) Protections need to be in place to ensure that a problem gambler cannot circumvent the self-exclusion by creating additional online identities.

c) It will be important to monitor the two-tier scheme where GAMSTOP runs alongside the individual websites’ programmes for self-exclusion to make sure this works and does not undermine the efficacy of GAMSTOP. 125

d) We recommend that the Gambling Commission should monitor whether recent changes to the Social Responsibility Code are effective enough to ensure that tipsters and affiliates, who are active on social media, do not contact individuals who have self-excluded.

3.7. CARE fully supports the Government’s rationale for not allowing

contactless payments as a direct form of payment for gaming machines.126 We agree that players should not be able to directly use their debit or credit cards with gaming machines and this should not be changed to allow contactless payments. We also recommend there should be a complete ban on the use of credit cards for gambling on or offline. It is extraordinary that the current regulatory frameworks allow people to gamble using money that they do not have. CARE will be responding to the Gambling Commission’s consultation on restricting credit card use, which closes in November. 127

3.8. No steps have been taken to limit play in the middle of the night when problem gamblers are especially vulnerable. There should be a license condition which means that sites with a UK license cannot

122 https://www.gamblinginsider.com/news/7787/exclusive-gambling-commission-denies-reports-

it-has-approved-gamstop-scheme 123 https://www.theguardian.com/society/2017/aug/31/gambling-firm-888-fined-online-

bookmaker-problem-gamblers 124 http://www.gamblingcommission.gov.uk/news-action-and-statistics/news/2018/SkyBet-to-

pay-1m-penalty.aspx 125 See also Review of Online Gambling, Op Cit, para 1.16 126 Consultation on proposals for changes to Gaming Machines and Social Responsibility Measures,

October 2017, paras 4.21-22

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/655969/Consultation_on_proposals_for_changes_to_Gaming_Machines_and_Social_Resp

onsibility_Measures.pdf 127 https://www.gamblingcommission.gov.uk/news-action-and-statistics/Consultations/gambling-

with-credit-cards

167

take bets between midnight and 6 am, a time when problem gamblers are particularly vulnerable.

4. Should gambling operators have a legal duty of care to their

customers? 4.1. CARE has supported the policy change for a duty of care to apply to

social media. Given the long-term impact, gambling can have on individuals and their families, we support the proposal that there should be a legal duty of care on gambling operators. At the very minimum, there should be a duty of care to children and young people (see our comments under question 15.

Social and economic impact

5. What are the social and economic costs of gambling? These might include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs. 5.1. Research in Liverpool reported that the impacts of problem

gambling more generally include, “impact on family life, relationships and employment, as well as financial impacts. Gambling took respondents’ time away from relationships, as well as their money, and they led to mistrust and arguments within the family, or with friends. Problem gambling can lead to problems with sleep, due to anxiety, and has a ‘ripple’ effect, as one person’s gambling problems can impact upon a lot of people. Staff who worked with people who had problems with gambling reported that their families were at risk of anxiety and depression.”128

5.2. A study published in 2016 on addictive behaviours in 72 homeless adults in Westminster identified elevated rates of problem gambling in the group with 82.4% of those reported problem gambling stating that their gambling proceeded their homelessness. The authors reported that “our homeless participants identified Fixed Odds Betting Terminals as the most problematic form of gambling.”129

6. What are the social and economic benefits of gambling? How can they

be measured and assessed? 6.1. CARE has no response to make to this question.

Levy

128 Fixed Odds Betting Terminal Use and Problem Gambling Across the Liverpool City Region,

Liverpool Public Health Observatory Report No 95, April 2014, pages 1-2 http://researchonline.ljmu.ac.uk/1996/1/Problem%20gambling.pdf

129 Sharman S et al, Down and Out in London: Addictive Behaviors in Homelessness, Journal of

Behavioral Addictions 5(2), pp. 318–324 (2016). Quote from page 322 http://www.akademiai.com/doi/full/10.1556/2006.5.2016.037

168

7. Is the money raised by the levy adequate to meet the current needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons? 7.1. In 2018, CARE commissioned ComRes to conduct polling on public

attitudes to gambling. Between 19th and 21st January 2018 ComRes interviewed 2,036 GB adults online. Data were weighted to be demographically representative of all British adults aged 18+ by age, gender, region and social grade. The polling reveals that around 14.5 million people in Great Britain know someone with a gambling problem and that the majority of adults in Britain (63%) say that problem gambling is a significant issue in Britain. This clearly underlines the seriousness of the challenge. 66% of men (61% of men and women) think that the UK Government should make it compulsory for all gambling companies to pay a larger and equitable proportion of profit or turnover towards funding help for problem gamblers. Just 20% disagree (21% of men and women).

7.2. CARE believes that the system of the voluntary levy has not worked well. Indeed, the Commission has said, the voluntary funding model has “fallen short of their objectives.”130 GambleAware said they needed £10m to meet their obligations in 2019/20 under the current National Responsible Gambling Strategy, which is currently being reviewed. GambleAware ask operators to donate a minimum of 0.1% of their Gross Gambling Yield (GGY). 131 By June 2019 they had received £690,000 and published a list of contributions. 132 We welcome the recently announced commitment by the big five gambling companies to provide up to 1% of GGY within the next four years, i.e. £100m over four years.133 However, evidence presented to the Committee on 23 July suggested that funding of the order of £200m a year is needed for treatment alone.134

7.3. To meet this need, to ensure that other companies, who make up 50% of the market be held to account for their voluntary contribution, and to ensure that the funds supplied by the “big five” are maintained, CARE recommends a mandatory levy should be introduced. The sums raised by the levy should not be controlled by the gambling companies. The funds should be independently managed and distributed.

130 Page 17, https://www.gamblingcommission.gov.uk/PDF/consultations/ADR-CI-RET-

ResponseDocument.pdf 131 https://about.gambleaware.org/fundraising/ 132 https://about.gambleaware.org/fundraising/201920-supporters/ 133 Col 173, https://hansard.parliament.uk/Commons/2019-07-02 134 Q31, Evidence to the Select Committee on the Social and Economic Impact of the Gambling

Industry, Uncorrected oral evidence: The Social and Economic Impact of the Gambling Industry, 23 July 2019,

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/gambling-industry-committee/social-and-economic-impact-of-the-gambling-industry/oral/104255.pdf

169

7.4. The Gambling Commission consulted in April 2019 on licensing conditions to say where the money should go, but the conditions do not specify how much money needs to be given. The sum is entirely voluntary. While we welcome the changes to increase transparency and route funds to support the National Strategy to Reduce Gambling Harms, which will come into effect in January 2020, 135 and will be monitoring developments closely, we believe for the sake of those who struggle with problem gambling and their families, the powers to introduce a statutory levy that are in the Gambling Act 2005 must now be used. The levy must be enough to pay for: the treatment of all problem gamblers who request it; research into problem gambling; and strategies to prevent people becoming problem gamblers in the first place. The new National Responsible Gambling Strategy must be fully funded.136

Research

8. Question 2: How might we improve the quality and timeliness of research in the UK? What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons? 8.1. CARE believes that research should be funded by a compulsory levy

on the gambling companies. Please see our previous answer to question 7.

9. If, as the Responsible Gambling Strategy Board (RGSB)1 has

suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation?

9.1. In 2017, the Gambling Commission stated “new technology is

providing children with opportunities to experience gambling behaviours through products, such as free-to-play casino games, social media or within some computer games, which do not have the same level of protections or responsible gambling messages as regulated gambling products.”137 CARE believes that both promoting online gambling to children/young people and facilitating online gambling by children/young people are unacceptable. We fully support Principle 4 of the recently published Responsible Gambling Strategy Board’s138 Children, young people and gambling: A case for action: “Priority should be given to

135 Page 17, https://www.gamblingcommission.gov.uk/PDF/consultations/ADR-CI-RET-

ResponseDocument.pdf and Q5, Evidence to the Select Committee on the Social and Economic

Impact of the Gambling Industry, Uncorrected oral evidence: The Social and Economic Impact of the Gambling Industry, 16 July 2019,

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/gambling-industry-committee/social-and-economic-impact-of-the-gambling-industry/oral/104141.pdf

136 http://www.reducinggamblingharms.org/ 137 http://www.gamblingcommission.gov.uk/news-action-and-statistics/news/2017/Children-

experiencing-gambling.aspx 138 From April 2019, now known as the Advisory Board for Safer Gambling, http://www.rgsb.org.uk/Home.aspx

170

protecting children and young people from the rapidly developing risks of online gambling.”139 Evidence suggests that “there is an association between early gambling participation and problem gambling in adulthood”.140

9.2. According to the Young People and Gambling 2018 figures on the gambling participation of 11-16-year olds in Great Britain: • 5% had spent their own money on online gambling on at least one

occasion in the previous year, while 6% had gambled online using a parent’s account (some of these on the National Lottery sites which would be available to young people aged 16).141

• 13% had played gambling-like games online (free and without prizes).142 (Note that in the 2017 Young people and children gambling survey, among young people who have ever played online gambling-style games, a quarter (25%) had spent their own money on any gambling activity in the past week,143 suggesting that these games are encouraging a wider gambling habit. This question was not reported in the 2018 data, but the 2018 report indicates that 40% of those who played online gambling-style games played these before gambling for money.144)

• 59% have seen gambling advertisements on social media, compared with 66% on television.145

• More than one in 10 follow gambling companies on social media, and they are three times more likely to spend money on gambling than young people who don’t follow gambling companies on social media.

146 • 54% who play online gambling-style games do so via an app of which

18% had played via Facebook or another social media app. 15% had played via social media websites 147

• 13% had accessed free demo games via gambling apps. 148 • Of those who have ever played online gambling-style games, 24%

follow gambling companies online.149

139 https://www.rgsb.org.uk/PDF/Gambling-and-children-and-young-people-2018.pdf page 10 140 Consultation on proposals for changes to Gaming Machines and Social Responsibility Measures,

Op Cit, para 3.23 141 Young People and Gambling 2018, A research study among 11-16 year olds in England and

Wales, November 2018 https://www.gamblingcommission.gov.uk/PDF/survey-data/Young-People-and-Gambling-2018-

Report.pdf page 4 142 Ibid, page 26 143 Young People and Gambling 2017, A research study among 11-16 year olds in England and

Wales, December 2017 https://www.gamblingcommission.gov.uk/PDF/survey-data/Young-People-and-Gambling-2017-

Report.pdf, page 20 144 2018 Report, Op Cit, page 26 145 Ibid, page 4 146 Ibid, page 4 and 36 147 Ibid, page 27 148 Ibid, page 27 149 Ibid, page 36

171

• The latest data showed that the problem gambling rate among 11-16 year olds in Great Britain is 1.7% with 2.2% at risk of problem gambling.150

9.3. Given the concerns in other areas of policy about the impact of the

internet and social media on the attitudes and behaviour, it seems appropriate to take a precautionary approach with respect to the access of children and young people to gambling, in line with the objectives of the Gambling Act 2005. CARE recommends that the Social Responsibility code and age verification should apply whether a person is accessing free-to-play games through gaming or gambling apps, Facebook or gambling websites. Evidence to the DCMS Select Committee suggests that young people are able to play free gambling type games on gaming social media sites. 151

Education

10. Is enough being done to provide effective public education about gambling? If not, what more should be done? 10.1. CARE believes that education should be funded by a compulsory

levy on the gambling companies. Please see our previous answer to question 7.

Treatment

11. Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help? 11.1. CARE has made comments about the importance of self-exclusion

support in our answer to question 3.

12. What steps should be taken better to understand any link between suicide and gambling? 12.1. CARE has no response to make to this question.

Advertising

13. The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of

150 Ibid, page 30 151 Written evidence from the Gambling Commission to the DCMS Inquiry into Immersive and

Addictive Technologies, January 2019, para 4.19-4.23

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/digital-

culture-media-and-sport-committee/immersive-and-addictive-technologies/written/94963.pdf and Oral Evidence 22 July 2019 Q1561, Q1569, Q1599

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/digital-culture-media-and-sport-committee/immersive-and-addictive-technologies/oral/103954.pdf

172

inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” 2 Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons? 13.1. The long-term impact of this level of exposure to advertising

at a young age is unknown so we welcome the Gambleaware research in this area,152 and the work the Commission is saying that it is doing with DCMS and others.153 Statistics published by the Gambling Commission in November 2017 show that public trust in gambling has fallen dramatically from 49% in 2008 to just 34% in 2017. The report in question also observed that: “There are also significant public concerns about the volume, nature and scheduling of gambling advertising and the impact this could have on future generations.”154

13.2. As we said in our response to Question 9, we believe there is enough evidence to justify a precautionary approach with respect to the access of children and young people to gambling, in line with the objectives of the Gambling Act 2005.

13.3. We recommend that restrictions on the promotion of remote gambling to children should be included in the Gambling Commission’s Licensing Codes; in particular social responsibility code 3.2.11 should include the requirement to ‘not deliberately provide facilities for gambling in such a way as to appeal particularly to children or young people, for example by reflecting or being associated with youth culture’, which already apply in the non-remote SR measures (see paras 3.2.1, 3.2.3. 3.2.7).155 It is indefensible not to include this requirement for remote operators, especially given the evidence of the recent Interim report The Effect of Gambling Marketing and Advertising On Children, Young People And Vulnerable Adults suggests that while adverts are not targeting children per se (e.g. through children’s websites), there are adverts that “could appeal directly to children and young people” because of their content. The report states that ”researchers at University of Bristol found…21% of Traditional Betting Tweets, 59% of eSports Betting Tweets, and 37% of eSports Content Marketing Tweets were judged to contain features that could plausibly appeal directly to children and young people, largely accounted for by the use of images and animations. Examples of this included cartoon or animated style graphics, and features such as popcorn, lucky charms and unicorns, and game-like avatars.”156

152 https://www.about.gambleaware.org/media/1963/17-067097-01-gambleaware_interim-

synthesis-report_080719_final.pdf 153 Review of Online Gambling, Op Cit, para 4.22 154 Gambling Commission, Strategy 2018-2021, pages 2 and 6

http://www.gamblingcommission.gov.uk/PDF/Strategy-2018-2021.pdf, 155 http://live-gamblecom.cloud.contensis.com/PDF/LCCP/Licence-conditions-and-codes-of-

practice.pdf 156 Pages 3 and 6, https://www.about.gambleaware.org/media/1962/17-067097-01-

gambleaware_interim-synthesis-report-exec-summary_080719_final.pdf

173

13.4. CARE is concerned by any advertising or actions by gambling companies that encourage young people into gambling, especially online advertising via social media and access to gambling type games online. Recent guidance has been issued by the ASA and CAP which aims to tackle advertising that appeals to children, 157 but this needs to be monitored carefully.158 The advice from CAP on Q&A about gambling advertising159 says that “The medium in which an ad appears doesn’t affect whether or not its content has particular appeal to children. While we recognise that enforcement of the advertising codes lies with ASA/CAP, since data from the 2018 report showed 24% of 11-16 year olds who have ever played online gambling-style games follow gambling companies on social media,160 CARE recommends that the Gambling Commission be proactive in reviewing sites and apps that are of particular interest to young people to ensure that gambling adverts are not targeting children.

Gambling and sport

14. Gambling is becoming an integral part of a growing number of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this? 14.1. ESports is a burgeoning area of competitive video gaming attractive

to young people161 where skins gambling is involved. Like other sports, individuals bet on the outcomes of these video games; and other forms of gambling are associated with these games162 Academic evidence suggests, “Consumption of esports had small to moderate association with video game-related gambling, online gambling, and problem gambling.”163 Other evidence suggest that “increased spectating of eSports is associated with increased levels of gambling both online and directly related to video games”164 and that the problem gambling rate could a significant concern.165

157 Betting and Gaming: Appeal to Children https://www.asa.org.uk/advice-online/betting-and-

gaming-appeal-to-children.html; Regulatory statement: gambling advertising guidance

Protecting Children and Young People - gambling guidance https://www.asa.org.uk/uploads/assets/uploaded/43072c78-8a0e-4345-

ab21b8cbb8af7432.pdf 158 For instance, the recent upset about an app to vote on I’m a Celebrity, which showed ads for

gambling https://www.theguardian.com/society/2018/nov/22/children-bombarded-with-

gambling-adverts-on-im-a-celebrity-app 159 https://www.asa.org.uk/resource/gambling-advertising-q-a.html 160 Young People and Gambling 2018, Op Cit 161 RGSB Children 2018, Op Cit, page 10 162 For a complete list see Table 3 of Macey J, Humari J, eSports, skins and loot boxes:

Participants, practices and problematic behaviour associated with emergent forms of gambling, New Media & Society, 2019, Vol. 21(1) 20–41

https://journals.sagepub.com/doi/abs/10.1177/1461444818786216 163 Macey J, Humari J, Investigating relationships between video gaming, spectating esports, and

gambling, Computers in Human Behavior, (2018) 344-353,

https://www.sciencedirect.com/science/article/pii/S0747563217306659 164 Macey J, Humari J, 2019, Op Cit, page 32 165 Macey J, Humari J, 2019, Op Cit, page 33 reported “Rates of problematic gambling behaviour

in the sample appear substantial, with those classified as either being problematic gamblers or

174

14.2. In February 2018, for the first time, the Gambling Commission’s

Report on Gambling Participation included a section on eSports. The 2019 data suggests that 7% of people have ever bet on eSports; 5% in the previous 12 months.166 Previous data published by the Commission suggested that of those adults who bet on eSports, 88% have bet with money and 90% have bet with in-game items (including skins) and 78% have gambled with both. 167 (Note that these figures cover adults only and not young people). Recent academic evidence highlighted that that there are young under-age males involved in eSports gambling.168 The recent Interim report The Effect of Gambling Marketing and Advertising on Children, Young People And Vulnerable Adults suggests that 17% of the Twitter accounts following eSports gambling belong to children under the age of 16.169

14.3. While eSports is recognised to be growing, the figures of how much money is spent on eSports within the Gambling Commission’s industry statistics are opaque. In 2017, the Commission said they would be collecting data to help quantify and track more accurately the size of the licensed eSports gambling market.170 We note that there is no more detailed data in the latest Industry Statistics, but the Gambling Commission is working on this issue and the relevant data.171 We recommend that data is published within the Gambling Commission industry statistics showing how much is being spent on betting and other forms of gambling on eSports by both adults and young people.

Gambling by young people and children

15. How are new forms of technology, including social media, affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future? 15.1. CARE’s concerns about children, young people, social media and

gambling are already set out above in questions 9 and 13.

at moderate or low risk of developing problematic behaviour totalling 50.3% of the sample, with rates of 4.5%, 18% and 27.8%, respectively. Authors argued that this could be a function

of the self-selecting group who entered they survey and “requires additional scrutiny” (page 36)

166 Gambling Participation 2018, Feb 2019, page 5 https://www.gamblingcommission.gov.uk/PDF/survey-data/Gambling-participation-in-2018-

behaviour-awareness-and-attitudes.pdf 167 Virtual currencies, eSports and social casino gaming – position paper, March 2017, page 2,

http://www.gamblingcommission.gov.uk/PDF/Virtual-currencies-eSports-and-social-casino-

gaming.pdf, See also Macey J, Humari J, 2019, Op Cit, See Table 2 for list of all forms of currency being used to gamble on eSports

168 Macey J, Humari J, 2019, Op Cit, Abstract, Table 4, pages 34 and 37 169 Page 4, https://www.about.gambleaware.org/media/1962/17-067097-01-

gambleaware_interim-synthesis-report-exec-summary_080719_final.pdf 170 Virtual currencies, Op Cit, para 2.2, page 3 171 Written evidence from the Gambling Commission to the DCMS Inquiry, Op Cit, para 3.3

175

15.2. CARE responded to the House of Commons DCMS Select Committee on Immersive and Addictive Technologies and made many of the same points that we repeat here in that evidence.172 CARE is also extremely concerned about skins gambling, whereby in-game purchases become a source of virtual currency and can be used to gamble.173 The Young people and gambling 2017 report showed that 20% of boys said that they have been involved with “skins gambling”. 174 The 2018 data suggests that only 3% of young people (figures not broken down by gender in 2018) were involved in skins gambling.175 The Parent Zone Report on Skin Gambling published in June 2018 suggest that 10% of 13-18-year olds have gambled with skins.176 No explanation is given in the Commission’s 2018 Report as to why there is such a difference between the 2017 and 2018 figures for skin gambling, which is disappointing since there is clear international concern about this issue. An international declaration, entitled Declaration of gambling regulators on their concerns related to the blurring of lines between gambling and gaming, and signed in September 2018 said, “Given these shared principles, we are increasingly concerned with the risks being posed by the blurring of lines between gambling and other forms of digital entertainment such as video gaming. Concerns in this area have manifested themselves in controversies relating to skin betting, loot boxes, social casino gaming and the use of gambling themed content within video games available to children.” 177

15.3. Skins can be used to gamble as virtual currency. The Gambling Commission advice to operators on skins gambling is, “Where facilities for gambling are offered using such items, a licence is required in exactly the same manner as would be expected in circumstances where somebody uses or receives casino chips as a method of payment for gambling, which can later be exchanged for cash” but notes that many of the sites are ‘unregulated’.178 However, these “unregulated” sites are allowing children and young people to gamble which is contrary to the Gambling Act 2005. While the Government commended the Commission’s action to prosecute unlicensed sites,179 and the Commission says that it has “carried out

172 http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/digital-

culture-media-and-sport-committee/immersive-and-addictive-technologies/written/94974.pdf 173 See Parent Zone’s June 2018 Report on this issue: https://parentzone.org.uk/system/files/attachments/Skin_Gambling_Report_June_2018.pdf 174 Young People and Gambling 2017, Op Cit, page 5 175 Young People and Gambling 2018, Op Cit, page 28 176 https://parentzone.org.uk/system/files/attachments/Skin_Gambling_Report_June_2018.pdf,

page 5 177 Declaration 17 September 2018, https://www.gamblingcommission.gov.uk/PDF/International-

gaming-and-gambling-declaration-2018.pdf 178 Virtual currencies, Op Cit, paras 3.8, 3.12-3.16, 179 para 4.48, Government response to the consultation on proposals for changes to Gaming

Machines and Social Responsibility Measures, May 2018, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_dat

a/file/707815/Government_response_to_the_consultation_on_proposals_for_changes_to_gaming_machines_and_social_responsibility_measures.pdf

176

extensive actions to disrupt and deter unlawful activity, which might present a risk to children and young people”,180 skins gambling continues.

15.4. In the last few years, there has also been increasing attention on so-called “loot boxes” where gamers can purchase “mystery” items that can improve a player’s appearance (ie skins) or the player’s performance in a particular game but with no transparency of the odds of being successful. The contents of boxes can be gambled181 or, in some cases, traded in for cash. Loot boxes are a way of video game companies increasing revenue. It has been estimated that the global spend on loot boxes will be $22 billion by 2022.182

15.5. The Gambling Commission reported that in 2018, 31% of 11-16-year olds had bought loot boxes,183 which the Commission identified as blurring the lines between video gaming and gambling in a statement posted on the Commission’s website on 24 November 2017.184 The concern with loot boxes is that since it is chance as to what items are included in any purchase, it is effectively gambling. A recent academic paper states “loot-box systems share important structural and psychological similarities with gambling.”185 Indeed, a number of US States have considered or are considering legislation to outlaw loot boxes.186 Belgium has outlawed them.187 The Netherlands has ruled that loot boxes in certain games have been illegal.188 The Gambling Commission’s position paper on Virtual currencies, eSports and social casino gaming published in March 2017 did not address loot boxes, but Government statements say “Loot boxes do not fall under gambling law where the in-game items acquired are confined for use within the game and cannot be cashed out.”189 The Gambling Commission, in their evidence to the DCMS Select Committee, said that loot boxes could be gambling in certain circumstances and recognised that their paper on virtual currencies preceded the concerns about loot boxes. 190

180 Children, young people and gambling, Gambling Commission response to advice from RGSB

2018, para 4.1 https://www.gamblingcommission.gov.uk/PDF/Gambling-and-children-and-young-people-

response-2018.pdf See also Q1566 Oral evidence to the DCMS Select Committee, Op Cit 181 Including in eSports, see Macey J, Humari J, 2019, Op Cit, pages 33 and 35 182 https://www.juniperresearch.com/press/press-releases/loot-boxes-and-skins-gambling 183 Young People and Gambling 2018, Op Cit, page 28 184 “We are concerned with the growth in examples where the line between video gaming and

gambling is becoming increasingly blurred” https://www.gamblingcommission.gov.uk/news-

action-and-statistics/news/2017/Loot-boxes-within-video-games.aspx 185 Drummond A, Sauer D, Video game loot boxes are psychologically akin to gambling, Nature

Human Behaviour, Vol 2, August 2018, pages 530–532,

https://www.nature.com/articles/s41562-018-0360-1 186 https://www.nytimes.com/2018/04/24/business/loot-boxes-video-games.html 187 https://www.theguardian.com/games/2018/nov/21/square-enix-pulls-games-mobius-final-

fantasy-belgium-loot-box-ban 188 https://www.thetimes.co.uk/article/no-curbs-for-gambling-on-rare-items-in-video-games-

m68wzb3f0 189 https://www.parliament.uk/business/publications/written-questions-answers-

statements/written-question/Lords/2018-12-03/HL11957/ 190 Oral evidence from the Gambling Commission to the DCMS Inquiry Op Cit, Q1555 and Q1558

177

15.6. One journal article suggests that loot boxes are linked to problem gambling in adults saying, “there are key similarities between loot boxes and gambling. These similarities may cause individuals who are already problem gamblers to spend large amounts of money on buying loot boxes in games, just as they would spend large amounts of money on other forms of gambling.” In the survey conducted for the research, 78% of participants (all adults) had purchased a loot box. The research suggests “there is an important relationship between problem gambling and the use of loot boxes. The more severe that participants’ problem gambling was, the more money they spent on loot boxes”. The authors concluded, “we believe that the strength of the relationship that was observed here between problem gambling and loot box spending suggests that important gambling-related harm is experienced by users of loot boxes. We strongly recommend that relevant national and federal regulatory authorities consider restricting access to loot boxes as if they were a form of gambling.”191

15.7. These statements are of concern given the number of young people who are purchasing loot boxes. CARE recommends that: a) the Gambling Commission should be required to assess the industry

to provide public transparency about the number of UK children and young people engaged in skins gambling, the sums of money being bet and lost and the types of gambling and websites (licensed and unlicensed) involved; and on the sums being spent on loot boxes. Such a report would increase transparency for parents and policy makers about what is happening in a rapidly changing market and provide information for appropriate action by parents, policy makers and industry.

b) the Gambling Commission’s Virtual currencies, eSports and social

casino gaming Position Paper should be updated to address the social problems surrounding the use of loot boxes.

c) the Gambling Commission and the Video Standards Council should be

working with industry and other international regulators to develop a “duty of care” towards young people to ensure that young people are not drawn into gambling via loot boxes. We welcome the new logo on video games which indicate that in game purchases can be made192 but agree with the RGSB that “Games developers, internet service providers, app stores, search engine companies, and other relevant providers should be vigilant to the possibility of third party use of their products to provide illegal gambling to children and young people, and should be proactive in preventing it.” 193 This may mean age-restricting access to games that sell loot boxes.

191 Zendle D and Cairns P, Video game loot boxes are linked to problem gambling: Results of a

large-scale survey, 2018, PLoS ONE 13(11): e0206767. https://doi.org/10.1371/journal.pone.0206767, pages 2, 4, 6-7, 10

192 https://www.theguardian.com/games/2018/aug/30/video-games-that-allow-in-game-

purchases-will-carry-pegi-warning 193 RGSB Children 2018, Op Cit, page 11

178

d) the Gambling Commission and the Video Standards Council should be providing information to parents about the dangers of loot boxes within video games

16. The legal availability of certain forms of commercial gambling to

under-18s in Great Britain is unusual by international standards and has been described as an ‘historical accident’. 3 Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins? 16.1. CARE has no response to make to this question.

17. Should children be allowed to play Category D games machines

(which include fruit machines, pushers and cranes)? 17.1. CARE has no response to make to this question.

Lotteries

18. The restrictions on society lotteries were relaxed by the Gambling Act 2005, and there is concern that some of them are effectively being taken over by larger commercial lotteries. Is this concern well founded? If so, what should be done? 18.1. CARE has no response to make to this question.

19. Should changes be made to the statutory regime governing the

National Lottery, to bring it into line with the regime governing operators of other lotteries? 19.1. CARE has no response to make to this question.

6 September 2019

Church of England’s Mission and Public Affairs Council –

Written evidence (GAM0011) INTRODUCTION What is the Mission and Public Affairs Council?

The Mission & Public Affairs Council (MPAC) of the Church of England is the body responsible for overseeing research and comment on social and political issues on behalf of the Church. The Council comprises a representative group of bishops, clergy and lay people with interest and expertise in the relevant areas, and reports to the General Synod through the Archbishops’ Council. Why are we submitting this evidence?

The Church of England is one of the largest grassroots organisations in the country, with a presence in every community. Being able to speak from the

179

position of Parliamentarians, educators, as well as parishioners provides an opportunity for a fully holistic response. The Church has previously engaged on gambling-related issues and the Ethical Investment Advisory Group of the Church has previously published papers on the subject. The General Synod, the legislative body of the Church, debated a motion on gambling in 2019 and this response builds on that debate. What questions are we answering?

We are responding to 1-8, 10-15, and answering 16 and 17 together. Who prepared this document?

This document is submitted under the name of Mark Sheard, Chair of the Mission and Public Affairs Council, and prepared by Charles White in the department of Mission and Public Affairs.

180

QUESTION 1 Are the three primary aims of the Gambling Act 2005 being upheld? They are to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling.

Answer: It is our opinion that the aims of the Gambling Act 2005 (The Act) are not being sufficiently upheld. Background: The last major review of gambling was conducted in 2001 by Sir Alan Budd which became the foundation of the Act. The Budd report followed the 1994 introduction of the National Lottery which upended the consensus behind the earlier 1968 Act that gambling demand should not be stimulated. Contemporary critics of Budd’s report claimed it was too supportive of the industry. ‘The Independent suggested the report read like a “bookie’s wish list,” and a report in The Mirror stated, “Gambling firms hit the jackpot”’ (Orford, 2011: 21). Budd’s report, however, accepted the recommendations would be ‘likely to lead to an increase in problem gambling’ (Grant, et al, 2019: 21). The resultant Act four years later incorporated the three aims as a bid to mitigate the concern Budd expressed in the report about rising levels of gambling-related harm. First, the Act aimed to limit gambling becoming a source of crime and disorder. However, the public’s experience of gambling since 2007 (when the Act came into force) has demonstrated this aim has not been upheld. Delegates to the Church of England (CofE) General Synod in February 2019 described criminality linked with gambling. One person said a close friend ‘had been arrested’ after they ‘defrauded millions’ from members of the congregation. Adding:

‘It emerged that millions of pounds had been spent on gambling websites. Over £1 million was spent on one website alone… Emotionally, it was a trauma’ (Church of England, 2019: 704).

This snapshot of the damage gambling-related crime can do can be replicated across the country. Other more visible signs of criminality can also be linked with gambling. Policies such as single staffing, where bookmakers have only one member of staff on duty, have been linked with violence. A deputy manager of a William Hill shop said: ‘It’s normal for people to smash up the shop’ and others have claimed crime goes unreported if Fixed-Odds Betting Terminals (FOBTs) are replaced (Lamont, May 31, 2016). White-collar criminality, like money-laundering, is also frequently raised in discussion about British gambling.

181

Internationally, gambling is frequently linked with criminality. In 2017 the American FBI stated: ‘The victim count and financial losses suffered as a result of online gambling surpassed that of terrorism-related cybercrimes last year’ (Lincoln, August 19, 2018). Secondly, the Act aimed to ensure gambling is conducted in a fair and transparent manner. Fairness in gambling is often discussed in terms of issues like withdrawal of funds, targeting of vulnerable people or allegedly opaque business practices. The CofE however views concepts such as fairness holistically. In 2006 the Ethical Investment Advisory Group (EIAG) of the CofE was asked to investigate the ethics of investing in gambling-related companies. Fairness is a core aspect of their work as it is linked with exploitation. It stated:

‘…a culture of corporate despair and acquiescence in the huge divisions between rich and poor… are becoming entrenched in the global economy. Rather than being encouraged to invest together to improve their communities, people are tempted [by gambling] to seek individual escape’ (Church of England, 2006: 23).

The group, supported by academics, found gambling normalised exploitation and investment in these companies would be wrong. Gambling, it has been suggested, is intrinsically exploitative as it requires someone to win and someone to lose money (Newall, 2015). The third aim of the Act was to protect children and other vulnerable people from gambling-related harm and exploitation. As a fuller discussion will follow in Question 15, 16 and 17 on children and young people, this part of the response will review experiences of vulnerable adults. Transparently, disordered gamblers are vulnerable, and their relationship with gambling is akin with substance addiction. Both remote and land-based operators use addicts to form parts of their profits. One product highlights this situation. Electronic Gaming Machines (EGMs) form ‘grind income’ for some bookmakers, and the propensity by disordered gamblers (individuals who pathologically gamble) to become addicted to EGMs, suggests exploitation of vulnerable addicts is inevitably occurring (Livingstone, et al., 2017). Similarly, remote operators in 2018 were accused of being ‘addicted to addiction’ as ‘more than half’ of their profits came from ‘at-risk and problem gamblers’ (Cowen, et al., 2018). Other vulnerable groups include incarcerated communities, veterans and serving members of the armed forces and homeless people. Those in prison are ‘consistently’ identified around the world to be ‘significantly more vulnerable’ to gambling-related harm than ‘general populations in the same

182

countries’ (May-Chahal, et al., 2017: 65). Press reports of gambling-related harm demonstrate how frequently addiction plays a part in criminality. Greater support for all addictions is needed in prisons, and the CofE’s involvement in working with incarcerated communities provides much-needed support for many. All education and support, however, must be built on the same principles as outlined in our response to Question 10. The Rt Rev. the Lord Bishop of St Albans, Dr Alan Smith, has also frequently mentioned the experiences of those who have either served or are serving in the armed forces. With hundreds of chaplains embedded in the Armed Forces, pastoral care for the Army, Navy and Air Force, is crucial to the mission of the CofE. Charities and independent organisations who work with these groups have also reportedly expressed concern about gambling-related harm impacting their clients. The placing of EGMs, reportedly in alcohol-licenced Ministry of Defence (MoD) property, is of deep concern as vulnerable people, serving members of the armed forces, are being primed to gamble on addictive products, and mentally associating the action with respite, relaxation and socialising in a stressful environment. The Bishop of St Albans has requested data from the MoD for the number of EGMs on MoD sites, the amount of money taken, the safeguards available to those affected and has encouraged independent research. Elsewhere, through the network of parish churches, the CofE has worked with associated charities to provide advice for those impacted by homelessness (a group affected by gambling). Research shows that 11.6 per cent of the homeless population experience gambling-related harm, compared with less than one per cent in the general population (Johnston, September 10, 2018). We believe vulnerable people (homeless people, veterans and incarcerated populations) are not receiving adequate support and protection from and by state or industry actors. In sum, the impact of the Act has been profound. Yet the wider acceptance of gambling in society has been matched with greater concern for those experiencing gambling-related harm. While the Act aimed to promote a clean, fair and safe gambling industry the public’s perception does not match this ambition. The regulator’s research shows 71 per cent of people think gambling is dangerous for family life and 79 per cent think there are too many opportunities for gambling (Gambling Commission, February 2019).

183

Recommendation: The initial aims of the Act are not being suitably upheld. Strengthening the aims would be positive, and exploitative practices must be curtailed. Efforts to prevent clustering of gambling opportunities, greater treatment provision for incarcerated people, and a joined-up approach by mental-health staff working with rough-sleepers to spot and mitigate gambling-related harm, would all be welcome. Other aims can be consolidated through a clearer definition of fairness and including police and crime-experts in future discussions around gambling by policymakers. Clear data from the police and criminal justice system is needed to fully appreciate the degree to which this aim is not being upheld. QUESTION TWO

What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed?

Answer: The Act must be updated to appreciate technological developments. This includes reviewing the legislation and regulation around in-play betting, use of credit cards, the equalisation of spin, speed and stake online, and evaluating the practices of the industry. Background: The Act has frequently been labelled an analogue piece of legislation in a digital age. The legislation did not cover, and could not cover, the way technology changed gambling. For example, since the Act came into effect in 2007 there have been 21 new models of the Apple iPhone. With the rise in smartphones, and near-universal Internet-coverage, products have changed. Yet gambling apps have the possibility of being ‘more problematic’ for vulnerable people than FOBTs, as they can be accessed anywhere ‘with an Internet connection’ (Busby, February 22, 2019). The legislation does not adequately protect consumers from this potential harm. Product development has also changed since the Act was written and researchers have now suggested firms can increase the potential for addiction in products. FOBTs, for example, were increasingly recognised as addictive. The ‘sensory feedback’ including ‘bells and whistles’ join the speed of spin which creates ‘a feeling of continuous play’ alongside the near-miss sensation which ‘produces cognitive distortion where players feel like they’re about to win’ are cited as reasons for their addictive potential (Wealthsimple, February 7, 2019). Other newer products since the Act include in-play betting. This type of product has been a focus in New Zealand due to the potentially damaging impact this product has, and subsequently that jurisdiction has ‘developed strict criteria around this aspect of gambling’ (Atherton, August 2018: 16).

184

Greater technological understanding has also changed how choices are made by consumers. This is due to ‘nudges’ which attempt to improve ‘‘the environment in which people choose – what we call the “choice architecture –”’ without restricting options (Thaler, August 3, 2018). However, gambling firms allegedly use these nudges to ‘exploit’ punters’ ‘economic rationality’ a practice dubbed ‘dark nudges’ (Newall, 2019: 65). This could include the deliberate use of near-misses or ‘losses disguised-as-wins’ on EGMs (Dixon, et al., 2010). Technological changes have coincided with the rise in remote gambling. The current legislation, however, does not allow for the equalisation of spin, speed, and stake with land-based operators, despite the context for consumers when they are gambling online, as described above. Ministers are unable to increase or reduce the minimum stake online because the legislation is out of date, according to the Campaign for Fairer Gambling (CFG) (Campaign for Fairer Gambling, March 4, 2019). This environment online could explain the remote sector’s continued expansion. While the number of employees in the betting industry is falling, the gross gambling yield (GGY) for remote operators continues to expand, and in 2018 remote accounted for 35 per cent of the industry’s total GGY (Gambling Commission, May 30, 2019). Remote operators often claim they have a better understanding of consumers’ movements online and therefore can intervene to protect consumers from themselves, as opposed to in land-based shops. However, exploitative practices by remote operators challenge this view. At the All-Party Parliamentary Group (APPG) on Gambling-Related Harm in 2019 a discussion focussed on the capability of firms to ‘knit’ online data about those who suffer from gambling-related harm with adverts for addictive products. This has already occurred in 2017 when gambling companies were accused of using third-party companies to ‘harvest people’s data’ in order to ‘target people on low incomes and those who have stopped gambling’ (Busby, August 31, 2017). Other technological innovations which have challenged by campaigners and academics is the request-a-bet products that were heavily used during the 2018 World Cup. These types of bets often rely on complex combinations which appear to sports fans achievable but rarely pay out (Newall, Under Review). The high-profit margin bets provide few chances for punters to win large amounts of money but appear as if they potentially could. This development can constitute exploitive innovation which has been used to describe the technological changes in the gambling industry since 2005.

185

Other aspects of the Act have not been updated despite cross-party calls. Both the then Parliamentary Under-Secretary responsible for gambling, Mims Davies MP, and her then shadow Tom Watson MP have cited credit cards as an area of concern (Davies, December 5, 2018; Davies, September 19, 2018). The ability for consumers to gamble on credit cards, online and offline, is a key flashpoint as it allows punters to bet with funds they may not have and prevents cooling-off periods between bets. The regulator cites the ease with which people can borrow money which can ‘facilitate high levels of gambling debt e.g. through maximising credit limits across multiple cards’ as an issue (Gambling Commission, August 14, 2019). For their survey, the regulator found 57 per cent of participants in their survey were either experiencing low or modern levels of harm from gambling or were classed as problem gamblers. Additionally, of those classed as problem gamblers, 40 per cent used credit cards for gambling (compared with 5.5 per cent of those not classed as problem gamblers) (Gambling Commission, August 14, 2019). The concern for credit cards mirrors the Budd Report mentioning in 2001: ‘ATMs are increasingly being installed in gambling areas… the location of ATMs should be required to be such that players have to take a break from gambling to obtain more funds’ (Grant, et al, 2019: 31). While some banks have reviewed their policies in recent years, it is important those who do not have adequate funds are not betting on credit and are not gambling continuously. Recommendation: The legislation requires changes to adapt to technological advancement in the industry. New products; new ways to bet; restricted choice-architecture; asymmetric experiences of addictive products between online and bricks-and-mortar; predatory marketing practices; and the use of credit cards are all in urgent need of review. In our view, the potential to harm by new products needs to be assessed independently when they are being developed and not retrospectively. Credit cards should be banned for use on gambling products, while remote operators should be forced to equalise spin, speed, and stake of their products to best protect customers. QUESTION THREE

Is gambling well regulated, including the licensing regime for both on- and off-shore operations? How successfully do the Gambling Commission, local authorities and other enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions?

Answer:

186

Gambling is currently not as well regulated as it could be, based on international comparisons, and local authorities require greater support to enforce best practice. Background: Internationally there is not a consensus of how best to legislate for, and regulate, gambling. Sweden relies on an Act which came into force from 2019, which is designed to challenge non-domestic remote operators, while Belgium uses three Acts, one of which comes from 1851 (McDonald, McDonald, April 10, 2019; Paepe, November 1., 2016). Belgium and Italy take a much more stringent approach to legislation. Belgium’s laws bring products, such as loot-boxes, into the scope of gambling while Italy responded to a fourfold increase in gambling-related harm in the past decade with a Dignity Decree law which bans all adverts (excluding current ad-deals and the Government-approved lotteries) (Kelly, July 5, 2018). Domestically, the United Kingdom (excluding Northern Ireland) is legislated through the 2005 Act which created the Gambling Commission to regulate gambling in partnership with local authorities and issue licences for gambling operators. Northern Ireland’s distinction will be reviewed in a report, published in September 2019, on the regulatory and legislative harmonisation of Great Britain and Northern Ireland, following the Bishop of St Albans’ amendment to the Northern Ireland Executive (Formation) Bill 2019. The Government’s approach to gambling has been to encourage self-regulation. Moving gambling out of the Home Office and into Department for Digital, Culture, Media and Sport (DDCMS) is part of this view of how best to regulate the industry. Yet efforts to protect consumers, originating from the industry, have been controversial. For example, the Senet Group slogan, ‘When the fun stops, stop.’ The warning messages have been found to do little ‘or nothing’ to reduce gambling and the ‘fact that the word fun is printed in much larger font than any other word in the message’ has been criticised (Davies, R., August 4, 2019). Remote operators also fail to demonstrate adequate self-regulation. The development of VIP customers (some operators label them Key Account Management, or KAM), who lose heavily, is a representative example. These clients are often messaged free-bets and other inducements, despite exhibiting markers of gambling-related harm as a premise of becoming VIP clients. This can include being showered ‘with perks such as free tickets to football matches’ (Ford, March 3, 2019).

187

The industry is accused of allowing someone to be both a VIP client and be presenting signs of gambling-related harm. Clear data on this should be made available to the regulator. Bet365, Britain’s biggest online betting firm, in February 2019 was said to be giving rebates to players who lost money in an alleged attempt to ‘exploit vulnerable customers’ (Payne, February 17, 2019). Another person added the industry can choose to make people VIPs and ‘use that to their advantage’ (Davies, April 22, 2019). Examples include personalised messages stating: ‘We miss you at the tables’ from account managers to gamblers (Cheetham, April 16, 2019). Additionally, Gambling With Lives has accused firms of ‘luring’ those who are suffering from gambling-related problems and use FOBTs to online games which have stakes ‘as high as £10,000’ (Ungoed-Thomas, November 18, 2018). The consequence of this approach to self-regulation is increased gambling-related harm and growing mistrust by ordinary punters. Indeed, seven in ten gamblers think bookmakers are not serious about providing a responsible gambling experience (Smith, May 16, 2019). Figures including the Rt Hon. the Lord Kinnock, have made comparisons between the approaches in regulation of tobacco and gambling (HL Deb 2018). Tobacco has been extensively regulated since the mid-1960s, including a restriction on shop displays. It was subsequently found that the risk of 11 to 16-year-olds taking up smoking was significantly reduced (Ford, et. al., 2019). Tackling gambling-related harm through a public-health approach (as will be discussed in the response to Question 10), must include reviewing the cross-industry evidence of public-health approaches towards tobacco. Nevertheless, the gambling sector is not entirely self-regulated. The Gambling Commission has traditionally assumed a light-touch role. Recently, tougher sanctions and more robust rhetoric has started to become the norm. However, the relationship with the industry and the alleged reluctance to use the full extent of their powers remain an area of concern. Conversely, local authorities have traditionally taken a tougher line on gambling yet require more powers to regulate in the way they see fit. Local councils and authorities are restricted. The Local Government Association wrote in 2016 they required greater powers to prevent clustering of betting shops with four FOBTs in each (Local Government Association, November 2018). In July 2018 they cited the Act as a principle cause of the clustering, claiming: ‘The Gambling Act includes a statutory aim to permit licensing which has made it difficult to refuse new licences applications’ (Local Government Assoc iation, November 2018: 19).

188

Another problem facing local authorities is asymmetric information. It is often assumed bookmakers provide jobs, and social spaces, akin to a well-run restaurant. Yet, studies demonstrate the hyper-masculine, problematic spaces that bookmakers tend to be, and other studies demonstrate the negative economic impact they have on communities (Cassidy, 2013). Betting shops cluster in areas of higher deprivation (Morgan, Mudie, September 16, 2017). Westminster City Council also mapped the location of gambling-licenced spaces in relation to ‘food banks,’ ‘job centres,’ and ‘treatment centres’ for addictive substances, demonstrating a correlation (City of Westminster, March 8, 2016). The targeting of poorer residents then has an economic impact. For example, Respublica has suggested clustering of EGMs triggers ‘a negative multiplier effect on our high streets’ and had hastened ‘the decline of high streets’ and has ‘profound economic and social consequences for communities’ (Douglas, et al., October 2017: 15). Clearly, local authorities have been unable to properly regulate the gambling industry and the macro-regulation has similarly faced challenges due to the laissez-faire approach to regulation. Finally, any efforts to verify ages are demonstrably not watertight. The scale of children experiencing gambling-related harm shows this. The regulator’s power to revoke licences for operators should be employed when companies are found to allow children to gamble. Recommendation: The Commission, local authorities and the Government all have a responsibility to strengthen regulation for licence holders. The experience of too many vulnerable people suggest how lax our approach has previously been. The Government should consider more stringent international models of regulation. A review on banning VIP clients, or similar, giving local authorities more power to prevent clustering and a robust, regulator-created age verification system is necessary to guarantee all operators have the same standards of protection. QUESTION FOUR

Should gambling operators have a legal duty of care to their customers?

Answer: In our opinion, yes, it is clear gambling operators must have a legal duty of care to their customers. Background: MPAC is rooted in Christian values which emphasise mutual responsibility in society. We are each responsible for one another and have a duty of care, spiritually, to our neighbours.

189

In the biblical books of Matthew, Mark and Luke, Jesus is said to summarise the entire 613 laws of the Hebrew Bible in to two. The latter being: ‘Thou shalt love thy neighbour as thyself.’ Similarly, tort law states there must be a ‘neighbourhood’ principle for there to be a legal duty of care to exist. Currently, punters only have recourse under contract law but would benefit from a legal duty of care being created legislatively in order to allow recourse under tort law. The experiences of many people in Great Britain would suggest that gambling firms do not have customer best interests at heart, and certainly not a duty of care embedded in their practices. Recommendation: Allegedly typical, predatory behaviour described in the response to Question Three from some operators reflects why a legal duty of care would be welcomed by consumers and victims of gambling-related harm. This would require legal discussions and political action, but it would greatly improve the power of punters. QUESTION FIVE

What are the social and economic costs of gambling? These might include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs.

Answer: The costs, both social and economic, of gambling are significant because they impact every aspect of communities. Background: Gambling costs should never be understood by only referencing individual harm. The industry’s interest aligns with the view of individual focus as it shifts ‘attention away from the products’ and corporate behaviour (Wardle, et al., 2019). A society-wide approach is more accurate. In 2017, the Chief Medical Officer for Wales wrote: ‘Harm from gambling is found at individual, social (family and friends) and community levels. ‘This includes financial hardship, psychological distress and interpersonal conflict or relationship breakdown’ (Atherton, August 2018: 12). The industry regulator added in 2018 that the ‘“individual” is embedded within the “social”’ which means action for reducing harm must include aspects which ‘mitigate risks at the societal, community and inter-personal level’ (Wardle, et al., 2018).

190

Great Britain’s large numbers of gamblers presenting issues of gambling-related harm are of note. The Gambling Commission wrote in 2019 that 0.7 per cent of respondents to their research were ‘problem gamblers’ and 46 per cent of respondents ‘have participated in any form of gambling’ in the past month (Gambling Commission, February 2019). It is further estimated that there are around 430,000 people classed as ‘problem gamblers’ (House of Lords, November 1 2018). With these large numbers of people experiencing gambling-related harm, the Institute for Public Policy Research (IPPR) in 2016 estimated the cost to the public is between £260 million and £1.16 billion (Thorley, et al., December 2016). The wide range in the figures suggest they should be used as ‘an illustrative estimate of the excess costs incurred’ (Atherton, August 2018: 12). The CofE runs more than 33,000 social action projects, from food banks to debt counselling, and witnesses the impact of all social harms, including gambling-related harm. In 2006, the EIAG of the CofE mentioned concerns from clergy about the impact of gambling-related harm. A member of the clergy was said to have calculated ‘thousands of pounds leave his parish in a deprived estate every week through the National Lottery and other forms of gambling’ (Church of England, 2006: 22). The interplay between poverty and gambling-related harm has long been of concern. As the Chief Medical Officer in Wales wrote: ‘Gambling problems and harms impact the poorest in our society the most’ (Atherton, August 2018: 14). Synod delegates in 2019 also spoke of poverty’s intersection with gambling-related harm. One delegate said his father had lived in a ‘hut without main sewerage on top of a hill’ with four siblings because his grandfather had gambled away the family’s finances. He added: ‘They survived by eating stale bread’ (Church of England, 2019: 708). The social and economic impact of the experiences detailed above can never be fully calculated but has a lasting effect on communities. What the EIAG of the CofE called ‘regressive taxation’ has been explored domestically and internationally (Church of England, 2006: 14). The clustering of EGMs in deprived areas occurs globally. Australian academics have identified the practice and demonstrated money rarely returns to the communities using the machines. They conclude:

‘Gambling has enabled the dramatic redistribution of resources, transferring, with industrial efficiency, billions of dollars from the pay

191

packets of the working classes to the bank accounts of the richest 0.01 per cent’ (Markham, et al., 2015: 2).

Similar experiences in Great Britain have been remarked upon by city councils. When the Budd Report was published in 2001, the Rt Hon. the Lord Hattersley responded. His comments now appear to be prescient. He wrote: ‘Respect of the individual requires us to allow men and women to make their own mistakes. But, in a civilized society, there is no freedom to exploit others and no liberty to destroy families’ (Orford, 2011: 55). It is not just the economically deprived that face costs associated with gambling-related harm. It is in the interests of taxpayers to see a full assessment of the costs to public services, whether the police, the criminal justice system, health care providers (please see Question 11), coroners (please see Question 12), arguably favourable tax policies (see below) and much else besides. Debates on the social and economic costs of gambling-related harm inevitably leads to comments on the ‘polluter pays’ policy which underpins funding discussions in the Act (House of Commons, 2012). The tax-regimes governing gambling are arguably favourable, including exemptions from Value Added Tax (VAT) and no mandatory obligation to give one per cent of GGY to a levy (see Question Seven) (House of Lords, July 3, 2019). Additionally, the industry has become less welcoming to independent players. As Dr James Noyes wrote: ‘Industry omnipresence has been coupled with a constriction of market competition to a small group of big brands’ (Noyes, October 18, 2018). The regulator suggests 69.6 per cent of the total remote sector in 2017 was held by just five companies (namely Bet365, PaddyPower Betfair, SkyBet, Ladbrokes-Coral and William Hill). Research concurs, suggesting exploitive innovation has led consumer-friendly firms being unable to gain a ‘profitable foothold’ (Newall, 2019). Recommendation: It would be welcome to see a fully engaged gambling sector which recognises and contributes funds towards the social and economic costs of gambling-related harm and mitigates the spread of such harms by adapting its policies and practices. As will be discussed, a mandatory levy is necessary to mitigate the scale of costs to society, but a proactive effort to prevent gambling-related harm is also required from the Government. QUESTION SIX

192

What are the social and economic benefits of gambling? How can they be measured and assessed?

Answer: In our view there are no academically robust studies which demonstrate the social benefits of gambling, and the economic benefits which include taxation are hotly contested. Background: The Church inadvertently benefits from the gambling sector. While the EIAG of the CofE prevents the Church Commissioners from investing in any form of gambling, individual parishes receive funding from the National Lottery. As the Bishop of St Albans told the General Synod in 2019:

‘The CofE is the nation’s custodian for 45% of the country’s Grade 1 listed buildings, and therefore there is a nationwide benefit to Government sharing the responsibility for their maintenance and encouraging a wide sense of ownership amongst the community. ‘Of course, our parishioners pull their weight, financially raising £126 million in 2017 for repairs and maintenance, added to some extent by charitable trusts, yet with the ongoing and significant upkeep requirements there seems little choice but to use all the funding streams available. ‘The 2018 Taylor Review into the sustainability of church buildings underscores this, speaking of significant external funding for churches in the years up to 2016, recognising that since the establishment of the National Lottery in 1994 it has increasingly become the only source of major funding for church and cathedral building projects. ‘With historic churches and cathedrals facing the ongoing challenge to maintain their buildings whilst ensuring comfort, safety and accessibility for all, many places, including St Albans Abbey, have received money from National Lottery Heritage Funding. ‘I would much prefer that the Church and society should look to a funding model for a sustainable, accessible future for church buildings which does not raise these questions, for example the proposals which were explored in the self-same 2018 Taylor Review’ (Church of England, 2019: 688).

The economic benefits of gambling can arguably include taxation, despite the estimated social and economic costs of gambling-related harm ‘considerably outweigh’ the tax revenue benefits from the industry (Wardle, et al., 2019). Additionally, it has been suggested the initial spend on gambling could have been spent on other, equally taxed, products. There are currently seven types of betting and gaming duty (General Betting Duty; Pool Betting Duty; Bingo Duty; Gaming Duty; Remote Gaming Duty; Machine Games Duty; Lottery Duty). Since 1 December 2014, remote operators with British customers pay British taxes irrespective of where they are based. This was a shift from a place-of-supply to a place-of-consumption principle.

193

Other economic benefits have been suggested including shops, but as discussed in the response to Question One, there are doubts about the value of these jobs particularly single-staffed. Additionally, as discussed in our response to Question Three, betting shops are said to have a negative financial impact on the surrounding areas. Industry actors frequently mention the economic benefits offered by gambling. The controversial KPMG report ahead of the FOBT stake reduction was regularly raised by these firms. The lobbying on this issue has previously been identified by the current Secretary of State for the Department for Digital, Culture, Media and Sport (DDCMS). The Rt Hon Nicky Morgan MP wrote in 2018 about the ‘lobbying from vested interests’ which influenced decisions made in Government (Morgan, N., November 5, 2018). It is expected that industries will attempt to influence policy makers. This means, however, claims about economic and social benefits from gambling must be considered holistically. Recommendation: The CFG was correct when it wrote any boon from the Act, and greater remote gambling accessibility, was a boon for the operators and their partners, not consumers (Campaign for Fairer Gambling, January 22, 2019). Any discussion around benefits from the gambling industry must be alive to the significant costs associated with the sector. QUESTION SEVEN

Is the money raised by the levy adequate to meet the current needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangements be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons?

Answer: In our view, the money raised by the levy is not adequate to meet current needs for research, education and treatment (RET). The levy would be more productive and effective if it was mandatory, with the income spent and monitored independent of the industry. Background: The General Synod of the CofE passed a motion calling for the levy to be made mandatory in 2019. This would satisfy demands for a polluter-pays policy to exist when funding RET. The voluntary levy raises £10 million a year, which does not adequately fund what is needed.

194

At the House of Lords Social and Economic Impact of the Gambling Industry Committee, Dr Anna Van Der Gaag, Chair of the Advisory Board for Safer Gambling (ABSG) said the cost of treatment stood at £591 per person per year. She added: ‘If you were to take the population that we know about from research have a problem with gambling in this country—that is 340,000—you would arrive at a figure of just over £200 million per year needed for that extrapolated population’ (House of Lords, July 23, 2019). A mandatory levy would also provide certainty to charities and others about funding streams as well as neutering accusations that academic research could be influenced by a desire to maintain funding from the industry. This has been trialled successfully in New Zealand and would be welcomed in Great Britain. Currently, the Government is not using the powers given to it under Section 123 of the Act, which allows for Ministers to make the levy mandatory. While the chief executive of the Remote Gambling Association (RGA) has asked for a mandatory levy to ensure all firms are contributing, the Government has resisted (Ungoed-Thomas, October 7, 2018). The RGA’s comments came before it was revealed that prominent actors, including sponsors of Premier League gave small donations to gambling charities. As Lord Griffiths of Burry Port told the House of Lords: ‘SportPesa, which sponsors Everton, and Fun88, which sponsors Newcastle, gave £50 last year. ‘Both are white labels of TGP Europe. Best Bets gave £5: I have just paid more than that for a taxi to get here. ‘GFM Holdings Ltd gave a pound. What on earth would you get for £1 anywhere these days, even on the high street?’ (House of Lords, July 2, 2019). Similarly, the chief executive of NHS England, Simon Steven, has also expressed frustration.

He has said: ‘This is an industry that splashes £1.5 billion on marketing and advertising campaigns… but it has been spending just a fraction of that helping customers and their families deal with the direct consequences of addiction. ‘The sums just don’t add up and that is why, as well as voluntary action, it makes sense to hold open the possibility of a mandatory levy if experience shows that’s what’s needed. ‘A levy to fund evidence-based NHS treatment, research and education can substantially increase the money available, so that taxpayers and the NHS are not left to pick up a huge tab.’

Gambling firms have now pledged to give more money, in a voluntary capacity, to fund projects approved by an industry-run group. Cross industry experiences of industry funded treatment and research has demonstrated this would be an unhelpful approach to delivering on a polluter pays basis.

195

Concerns about conflicts of interests in commercially funded research are felt in other industries, include work supported by the Coca-Cola Company. For example, the drinks company allegedly ‘prevent publication of unfavourable research’ (Steele, et al, 2019). Academics refer to the ‘moral jeopardy’ of taking funding from gambling companies, whether for research or for community and other public good organisations (COPGOs). Moral questions are raised as these groups, established to support people, could inadvertently benefit from people’s pain. Questioning these complications could cause issues for management in either research bodies or COPGOs as other areas of the organisation may be receiving funds from gambling firms. Similarly, COPGOs could ‘become major advocates for the provision of gambling’ (Adams, 2006). Conversely, gambling firms derive public support from these donations, allowing them to ‘interface more easily in community, local authority, and public arenas’ for favourable regulatory benefit (Adams, 2006). Similar concerns about industry funded treatment exist and are discussed in the response to Question 11. Recommendation: A mandatory levy is the settled position of the CofE’s General Synod, most academics across the world, and experts-by-experience. It is the basis of any future gambling reform and any industry-controlled distribution of voluntarily agreed levels of funds is entirely inappropriate and does not address the central issues as discussed throughout this document. QUESTION EIGHT

How might we improve the quality and timeliness of research in the UK? What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons?

Answer: Research is always useful to make informed and sound decisions when it comes to gambling and young people, but enough information is already available to put in place greater safeguards. Background: The data-gap has long been a concern for researchers and policymakers, although funding could be a factor in this. Nevertheless, it is important policymakers recognise a significant quantity of research has been conducted and there is enough evidence to inform regulatory decisions. Unhealthy commodity industries (UCIs) often use various methods to undermine attempts to take public health approaches towards regulation (Petticrew, et al., 2017).

196

This can include suggesting any action can only take place when everything is known, as opposed to the expected position which would allow for policy changes to be made based on specific key data coming to light. Recommendation: Arguably, enough is known to make changes to better protect children and young people from gambling-related harm without waiting for more data and research to be gathered. A further discussion on what should be done can be found in the response to Question 15. QUESTION 10

Is enough being done to provide effective public education about gambling? If not, what more should be done?

Answer: There is currently not enough education about gambling in schools, universities and wider society and more must be done that is independent of the industry. Background: The CofE is the second-largest provider of education, behind only the state. With this network of 4700 schools, and approximately a million pupils, the Church can provide a unique account on education programmes. When discussed in schools, gambling forms part of Personal, Social, Health, Economic (PSHE) Education. This would be part of the school curriculum in the CofE’s 200 secondary schools. Schools are expected, as the Government confirmed in 2018, to promote ‘the spiritual, moral, social and cultural development of pupils’ and ‘some teach about gambling’ (House of Lords, December 19, 2018). Under the 2019 Relationship, Sex and Health Education guidelines students discuss gambling in conversations around internet safety and harms. The Government wrote: ‘Pupils should know… the risks related to online gambling including the accumulation of debt’ (Department for Education, February 2019). Currently, there is no formal, independent advice about what, and how, schools should be teaching children to comply with this new regulation. There has been concern from academics and campaigners about education programmes on offer, which are funded by the gambling industry. Some of these programmes may focus on spotting signs of gambling-related harm. Yet may not include discussions on why people gamble, may not reiterate gambling is harmful in-and-of-itself (see Question 12), may not remind pupils it is illegal for children to gamble (with some exceptions, see Question 16 and 17), and may not state it is wrong for children to gamble. The absence of these discussions could encourage children to gamble, thinking it was normal and a usual part of life.

197

Education goes beyond school however, which is why academics have encouraged a public health approach to gambling-related harm. The call for this type of initiative was made clearly in the British Medical Journal (BMJ) in 2019. Due to the overlaps between gambling-related harm and other local public health issues, local authorities have also begun discussing a public health approach to dealing with issues (Local Government Association, November 2018). Early reports from Leeds, following the soft-opening of the NHS Northern Gambling Clinic, suggests council workers are being trained to recognise gambling-related harm in residents, who may have approached the local authority on not overtly gambling related matters. The role of public health approaches includes continuous education. The General Synod motion in 2019 recognised the importance of churches becoming safe spaces for those impacted by gambling and the education of parishioners on this topic. There is a clear desire for greater information from adults on gambling and gambling-like products. Research has demonstrated parents are keen to know more about loot-boxes, for example, demonstrating the low level of understanding among the general public (Populus, February 2019). Recommendation: The Government has directed schools to discuss gambling-related harm with students. However, a programme of education must be drafted entirely distinct from the industry or any organisation that receive funding from the industry. More widely a public health approach should be adopted by the Government, which would then lead to wider education and prevention programmes. QUESTION 11

Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help?

Answer: The services available for treatment and support for those affected by gambling-related harm are not currently sufficient. This can be improved through adopting a public health approach (as discussed in the response to Question 10) and acquiring a reliable funding stream (as discussed in the response to Question Seven). Background: As Christians, caring for the sick is a core part of witness. Biblical authors describe the requirement to care for relatives (1 Timothy 5: 8), heal the sick (Matthew 10: 8), and Jesus states those who will ‘inherit the Kingdom’ include those who visit the sick (Matthew 25: 36).

198

It is therefore incumbent on Christians to alleviate the suffering of those who are afflicted by medical problems. Consequently, the Bishop of St Albans welcomed the inclusion of gambling in the NHS Long-Term Plan (LTP), so that those facing gambling-related harm received greater support. Bill Moyes, the chair of the Gambling Commission, has claimed the NHS lacks knowledge of gambling-related harm, and it must ‘take it seriously’ (Thomas, May 20, 2019). His call came as record numbers of gamblers were hospitalised by the NHS. Data suggested ‘more than 100 people were admitted’ because of gambling-related harm ‘so severe they needed hospital treatment’ (Hymas, October 20, 2018). In the summer of 2019 it was revealed 335 people were treated for ‘gambling-related problems at English NHS hospitals last year, up 27 per cent… some aged 10 to 19’ (Small, August 17, 2019). Similarly, the National Gambling Helpline took 29,889 calls in 2017-2018, which constitutes a rise of 30 per cent (BBC News, November 15, 2018). Arguably, this increase in presenting medical problems stems from the fact gambling-related harm is serious and must be correctly addressed by policymakers. Yet in 2018, the CEO of GambleAware wrote: ‘Despite gambling addiction being recognised by the World Health Organization as a behavioural disorder, the NHS does not currently fund specialist treatment’ (Etches, November 22, 2018). With the NHS LTP this appears to be changing, but the Bishop of St Albans has regularly raised the need to see data, funding details and projected costs from the relevant sections of the NHS and the Department for Health and Social Care. It has, however, become known that the National Problem Gambling Clinic in London will include a children and young people service, and the clinic in Leeds (as discussed in Question 10) is set to open in 2019 with satellites opening in Sunderland and Manchester. The development of youth services (with the opening of the under-18s clinic in London) followed a 2018 admission from a Government Minister that children were expected to use services designed for adults (House of Lords, November 23, 2018). The funding from GambleAware for these two projects and the details from Leeds have been shared with the Bishop of St Albans using Parliamentary Written Questions and Answers. Industry funding of treatment however is of concern and could constitute ‘moral jeopardy’ (as discussed in the response to Question Seven). Funding would benefit being independent, and consistent, through a mandatory levy that was then independently divided among beneficiaries.

199

The NHS must be needs-driven and therefore a rigorous, and regular, prevalence study conducted in all regions of the country is needed to best target future treatment centres. Recommendation: Any improvement in the quantity of treatment available to people, provided by the NHS and funded and managed at arms-length from the industry, is therefore to be welcomed and would have an incredibly positive impact on society. QUESTION 12

What steps should be taken better to understand any link between suicide and gambling?

Answer: Suicide is a tragedy therefore there must be a greater understanding of any link between suicide and gambling. Background: Gambling is, according to medical professionals, dangerous to human health. The director of the London clinic (referenced in the response to Question 11), Dr Henrietta Bowden-Jones wrote: ‘Gambling disorder is still in its infancy here in the UK in terms of high-quality research.’ Adding: ‘We would… be able to attribute 550 deaths a year to gambling driven suicide… the message from… research is clear: Gambling can kill you’ (Bowden-Jones, H., March 13, 2019). Similarly, Lord Chadlington has written that: ‘Some experts estimate that two suicides every working day can be attributed, at least in part, to’ gambling-related harm (Chadlington, L., July 19, 2018). The discussion around suicide and gambling have been put into a clearer context by the work of Gambling With Lives. This charity has worked to bring to the attention of policymakers, and the general public, the link between gambling and suicide. International research has established suicide rates are greatly elevated among individuals experiencing gambling-related harm. Indeed, these people are 15 times more likely to take their own lives than the general public (Karlsson, A., et al., 2018). Within domestic research, it has been demonstrated that those experiencing gambling-related harm are significantly more likely to attempt suicide. This work from 2019 found these individuals are three times more likely to consider or attempt suicide than the general public (Gambling Commission, July 19, 2019). Recommendation: It would be welcome to have better understandings of the link between suicide and gambling, but this must be followed by policymakers taking robust and rapid action based on any research to prevent further tragedies.

200

Practical steps can be taken, including mandating all coroners to make note of gambling as a factor in any suicides. Additionally, including gambling in any morbidity studies is necessary. QUESTION 13

The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons?

Answer: Yes, the rise in commercial gambling advertisements since the passing of the Act could have potentially harmful impacts on children and vulnerable people. Advertising regulation must be made stricter to better uphold the core aims of the Act (as described in the response to Question One), and international examples demonstrate robust regulation is possible. Background: Researchers have been unable to conclusively provide evidence which suggests exposure to adverts makes people more likely to buy the advertised products. Nevertheless, the gambling industry has consistently spent large amounts of money on advertising products since the Act came into force in 2007. GambleAware estimated the spend, excluding online advertising, has: ‘Steadily increased year on year from £264,657,325 in 2015 to £328,945,916 in 2018. This represents a 24% increase from 2015 to 2018’ (Ipsos MORI, July 9, 2019). Due to the direction of the industry towards a more remote focus (as described in the response to Question Two), advertising online represents a significant investment. Estimates put the total spend, including online, to be around £1.5 billion annually (Davies, November 24, 2018). It is reasonable to assume if there was no evidence suggesting adverts have an impact on consumption of UCIs, the gambling industry would not be spending an estimated 1/14th of their total GGY on adverts. While data is held confidentially by the gambling industry and its advertising and marketing agencies, researchers will be unable to properly assess causality. It is vital this data, including ‘behavioural player data, advertising strategy documents, marketing briefs, campaign evaluation data and case studies’ is shared with independent academics (Newall, et al., 2019). International researchers suggest children’s attitudes towards gambling can be influenced by adverts (Deakin University, February 20, 2017). Additionally, children’s recall of gambling adverts has revealed the extent to which young people are exposed to gambling adverts.

201

Most children surveyed in one study, aged between 8-16 years were able to recall the names of sports betting brands, and male children aged 12-16 years who play football or attend matches were more likely to recall brand names than younger children, girls or those who played other sports (Thomas, et al., 2016). Similarly, gambling adverts could have an impact on vulnerable adults. Although advertising guidance bans undue pressuring of people to gamble, live-odds TV adverts flourished before the voluntary advert curtailment. Both children and adults are susceptible to certain adverts, especially inducement bets. These often encourage registering with a remote operator and getting a varied amount of money ‘free’ or in ‘credit’ form. This rise in gambling advert exposure represents a significant shift in the British cultural understanding of the place of gambling adverts. Indeed, when Budd wrote his 2001 report:

‘It was still illegal for press advertising for casinos to make mention of gambling or to provide details of the venue’s location (such as a postal address); and for many forms of gambling, advertising on broadcast media was subject to significant limitations. ‘The advertising of betting and gaming on television was prohibited for all activities… [excluding] football pools, bingo and lotteries (under the Lotteries and Amusements Act 1976)’ (Grant, T., et al., 2019: 26).

The response to the advert explosion has been negative. The public, when polled, are opposed to the rate, pervasiveness and ubiquity of gambling advertising. The regulator stated in 2018 that there was: ‘Significant public concerns about the volume, nature and scheduling of gambling advertising and the impact this could have on future generations’ (Gambling Commission, April 24, 2019: 6). Indeed, as mentioned in the response to Question Three, comparisons with tobacco in the latter half of the 20th century have been widely made by policymakers. As part of this backlash, the CofE General Synod in February 2019 discussed gambling advertising. The discussion was tinged with a concern reflective of the regulator’s concern. One delegate said: ‘Do not be deceived. The adverts the 13-year-old next to you will see will be tugging at their most sensitive heartstrings, using every known way to get at them… Make no mistake, the gambling industry know what they are doing. They are there to hook them’ (Church of England, February 2019: 702). Gambling companies have recognised this public perception and offered statements which reflect this acknowledgment.

202

William Hill’s finance director, Philip Bowcock, said he was ‘sympathetic to some sort of curb’ on advertising because of his ‘teenage children’ (Davies, February 24, 2017). Subsequently, the whistle-to-whistle voluntary agreement which stops gambling adverts during live TV sport (including five minutes before, five minutes after on the understanding it is before 9pm) came into force with the 2019 Ashes cricket series (Davies, August 1, 2019). In public meetings of the APPG on Gambling-Related Harm, representatives from industry trade bodies stated there would be a net-reduction of adverts due to the agreement. The advertising regulator, the Advertising Standards Authority (ASA), has recently updated guidance around gambling adverts to better protect children and young people. The advertising landscape currently, which was called ‘out of control’ by the Bishop of St Albans, continues to change and adapt but moves towards self-regulation requires further scrutiny (Smith, September 12, 2018). Recommendation: It would be welcome to assess the impact of the Italian Dignity Decree (as discussed in the response to Question Three) in reducing gambling-related harm, but enough evidence exists to suggest regulating gambling advertising more robustly, including banning inducement bets and in-play adverts online, would better protect children and vulnerable people. A total ban on adverts, especially those linked with sports, must also be considered by the Government. QUESTION 14

Gambling is becoming an integral part of a growing number of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this?

Answer: Gambling is undoubtedly becoming an integral part of a growing number of sports, particularly football, and it is understood there are significant risks attached to this, especially around children and young people’s perception of gambling. Background: Gambling advertising has expanded rapidly since 2007, and the impact has been most keenly felt in the world of sports. Sport is highly valued by the CofE. In summer 2019, £12 million of Strategic Development Funding was allocated by the Renewal and Reform programme to support ‘sports ministry’ which includes funding football, netball and fitness groups (Church of England, August 4, 2019).

203

Nevertheless, serious concerns about the so-called gamblification of sport exists. No fewer than ten Premier League clubs ‘will have bookmakers or gambling firms as their main kit sponsors,’ in the latest season (Kay, July 18, 2019). Shirt sponsorship has been estimated at a record £349.1 million, with gambling accounting for £68.6 million (Ling, July 26, 2019). Shirt sponsorship is ‘highly prized’ by foreign gambling operators, as the Premier League continues to be popular across the world (Wood, September 9, 2018). However, the practice of shirt sponsorship has been controversial. The Bishop of St Albans said in 2019: ‘I know families that will not let their children watch football matches on television because they feel their children are being groomed into gambling. ‘My personal view is that the FA and others need to wake up very quickly to how damaging this is going to be’ (Burgess, February 2, 2019). In August 2019, the Bishop of St Albans added his voice to nine academics from across the world who criticised a shirt sponsorship deal struck between Wayne Rooney and Derby County (Morgan, August 8, 2019). Other aspects of football advertising, including pitch-side adverts, demonstrate that the whistle-to-whistle ban is unlikely to successfully limit exposure to gambling adverts. Research demonstrates viewers are exposed to more gambling adverts on the BBC’s Match of the Day than watching a live TV broadcast on Sky (Cassidy, et al., August 10, 2017). The result of the industry’s involvement in sports was highlighted by a study by Dr Darragh McGee who suggested football supporters in both Great Britain and Northern Ireland have become used to gambling being a central aspect of enjoying sport. This includes losing the ability to watch, or discuss, football unless they place multiple bets and focus on gambling while commonly owning ‘up to 25 accounts with online gambling companies’ (Conn, January 10, 2019). Sports players, as well as fans, are reportedly being targeted by gambling firms, including offers of ‘free’ credit to players who are turning to gambling online. The head of the Professional Footballer Association declared: ‘The biggest [mental health] issue at the moment is gambling’ (Lovett, August 1, 2019). Additionally, familiarity with betting logos and gambling concepts has become common among children and young people who enjoy sports. In one study, 46 per cent of young people surveyed were able, unprompted, to name at least one gambling brand, football fans had ‘significantly higher recall of brands,’ and two-thirds of young people could correctly place one or more shirt sponsor next to the corresponding football team (Djohari, et al., 2019).

204

As with discussions around public support for gambling adverts in the response to Question 13, an increasingly critical tone has been introduced in discussions around gambling and sports. Political observers have stated football is ‘addicted to gambling,’ and the adverts on sports serve to ‘normalise betting on sport in impressionable young minds’ (Freedland, February 13, 2019; The Times, December 7, 2018). The entanglement between sports and gambling ‘might be hard to separate’ but similar accusations were made with the banning of tobacco adverts, which has not hampered the Premier League and its clubs from increasing their net worth (Business Matters, June 18, 2019). Recommendation: Gambling and sport have become increasingly close and a moratorium on this involvement would be welcomed. A ban from the regulator for any operator to sponsor any kit, pitch-side adverts, adverts five minutes before, after and during matches is a necessity. This would facilitate research to assess the extent to which the current environment has had negative impacts, without waiting for much greater levels of harms to present themselves. QUESTION 15

How are new forms of technology, including social media, affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future?

Answer: Children’s experiences of gambling in Great Britain have fundamentally changed since the passing of the Act. Access to gambling products, exposure to gambling adverts and the rate of children gambling illegally especially those experiencing gambling-related harm is of great concern to senior Church figures, General Synod and other religious stakeholders. Background: The law is very clear: children should not be gambling (with the exceptions referenced in Question 16 and 17). This is because children are disproportionately more likely to experience gambling-related harm. Church leaders have described the ‘dubious morality’ involved in encouraging children to gamble and Synod delegates in February 2019 shared this concern (Hymas, October 28, 2018). The CofE views children and young people as full members of the Church and equal participants in society. Biblical writers say Jesus said: ‘Suffer little children to come unto me and forbid them not: for of such is the kingdom of God’ (Luke 18: 16).

205

Yet, it also sees children as inherently vulnerable to harms and deserve greater protection. Alarm in the Church has been shared by the incoming chair of the trade body the Betting and Gaming Council, which combines the Association of British Bookmakers and the RGA. In a 2004 appearance in Parliament, in a previous role, she said she was ‘horrified’ when she used websites aimed at children and was ‘offered that opportunity to gamble’ (House of Commons, House of Lords, January 13, 2004). The Financial Times has declared the gambling industry is ‘dicing with young lives’ and the product should be seen akin to tobacco (The Financial Times, November 25, 2018). The strong reaction is in response to the rise in gambling-related harm among children and young people. Rates of problem gamblers among children was 0.8 percentage points higher than in 2016, at risk gamblers was also higher, and currently problem gamblers among children stands at around 55,000 (Gambling Commission, November 2018). The regulator claims past week gambling participation among 11-16-year olds rose to 14 per cent in 2018, a two per cent rise from the year before, and estimated ‘1.7 per cent’ of the age group are ‘problem gamblers’ (Gambling Commission, November 2018). The higher rates of gambling-related harm among under-18s, compared with adults, demonstrate that children are more likely than the adult population to experience harm. Branded a ‘generational scandal’ the report showed more children had gambled than drank alcohol, smoked or taken illegal drugs (Gammie, November 21, 2018). The clinics focussing on children, as discussed in the response to Question 11, demonstrate the scale of the crises as the NHS is a needs-driven service. While it is true, remote gambling increases the availability of products to under-18s, land-based operators also have some responsibility for this situation. Public spaces are failing in their duty to prevent children gambling, with only 10 per cent of pubs stopping children gambling (BBC News, November 15, 2018). Dr Henrietta Bowden-Jones wrote about how gambling-related harm can present in children:

‘From my experience working with young people who experience significant compulsive behaviours, their inability to manage the amount of time they spend online… is often closely linked to emotional states that may feel overwhelming. ‘These are normally negative ones such as low mood, anger, feelings of abandonment and fear of social exclusion. At times, these behaviours worsen as the young person disengages from previously rewarding activities and relationships in the real world.

206

‘…The more isolated the person becomes, the more likely they are to turn towards online activities to supplement the loss of interaction… ‘This problematic use is often an attempt to navigate the difficulties of growing up in contemporary society. Driving users to understand the need for screen-free time, for exercise and for real life interactions is part of a stimulus control approach to shaping behaviour that will benefit everyone, whatever their age’ (Kidron, June 2018).

Researchers have also raised concerns that, because children perceive gambling differently to that of policymakers, the rate of youth gambling could be underestimated (Wardle, 2019). The concern for young people gambling after the passing of the 2005 Act has been summarised by academics. They wrote: ‘You might argue that we have created the conditions for a vast generational experiment, the outcome of which is uncertain but could easily lay foundations for future problems’ (Wardle, June 27, 2018). Laying the foundations for the future has been demonstrated by British researchers who found early age onset gamblers (those 12 years and younger) report increased gambling-related harm severity. Additionally, the same group were more likely to have committed an unreported crime and abused drugs or solvents (Sharman, et al., 2019). Protections from gambling-related harm can include better protection from gambling adverts (for a wider discussion on adverts see the response to Question 14 and 15). Children are exposed to 3.8 gambling adverts a day on television, despite the Act explicitly forbidding the targeting of under-18s (Populus, January 2018). In 2012 Ofcom estimated children, on average, were exposed to 230 gambling adverts a year (Ofcom, November 19, 2013). While some of these may be incidentally seen, there is evidence of explicit targeting. The ASA has used child ‘avatars’ (simulated profiles that replicated child activity online) to monitor online gambling advertisements. In an April 2019 study, the regulator found five gambling firms over a two-week monitoring period, broke the rules around child exposure to gambling adverts (Sweney, April 4, 2019). Bricks-and-mortar advert campaigns include William Hill’s ‘Get your 5 a day here: 5 extra place races every day’ poster shown in high street shop windows. The phrase, mimicking a healthy eating campaign which encourages children to eat fruit and vegetables, was highlighted online. William Hill have previously been revealed, alongside PaddyPower Betfair, as having adverts for their products in mobile phone apps approved for use by seven-year-olds (Davies, June 19, 2019).

207

Children are also exposed to gambling adverts through tie-in deals between celebrities popular among children and young people, and gambling firms. The Bishop of St Albans has condemned YouTube stars for participating in events supported by gambling companies. Policymakers have previously raised concerns that celebrities are followed by children online and use their social media presence to encourage gambling (Witherow, November 22, 2018). Young people will continue to be exposed to gambling adverts if regulations are not tightened. The impact, as discussed in the response to Question 13, is hard to establish, but advertising and marketing has been shown recently in British studies to ‘influence the normative environment for gambling and encourage some youth to want to gamble’ (Wardle, 2019). In short, people do not make choices in a vacuum and if children are growing up with the rate of adverts, and accessibility to products, they are currently experiencing, Great Britain risks seeing a huge health problem in the future. Other aspects of concern are the increasing normalisation of gambling in the perception of children. This includes loot-boxes, which do not meet the definition of gambling in the Act, but ‘rarely fail to meet the psychological definition of gambling, even when they do not meet the legal definition’ (Taylor, December 12, 2018). Whether or not loot-boxes are gambling, it has been suggested that these products can prime a child’s brain to gamble in the future, and to normalise the concept behind gambling. Recommendation: There is enough evidence suggesting children and young people are not being adequately protected from gambling-related harm, are more vulnerable to the harms of gambling than adults, and that significant concern exists in the public consciousness. Young people must be better protected. This includes immediate revocation of licences for operators found to have had under-18s using their products. A Government-led policy to combat the normalisation of gambling amongst children, alongside a total and complete end of any gambling adverts exposed to children, would be greatly welcomed. QUESTIONS 16 and 17

The legal availability of certain forms of commercial gambling to under-18s in Great Britain is unusual by international standards and has been described as an ‘historic accident.’ Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins? Should children be allowed to play Category D games machines (which include fruit machines, pushers and cranes)?

Answer:

208

The legal availability to under-18s of National Lottery products, both instant-win and draw-based games is regrettable. Category-D gaming machines are also legally played on by children which is equally regrettable. Background: As has been established, (see the response to Question 15), children are particularly vulnerable to gambling-related harm and access to gambling products at a young age are thought to prime young minds towards gambling-related harm in their future. Great Britain is unique in the exceptions it makes for certain types of activities deemed to be gambling. Research provided by the House of Lords Library reveal Italy, Germany, Portugal, and Denmark all prohibit gambling below the age of gambling 18 with no exceptions. Belgium prohibits access to people younger than 21 gaming arcades and casinos and all forms of betting are banned for under-18s. Similarly, France prohibits all types of slot machines, which Category-D machines would plausibly fall under in French law, other than in casinos which bans minors from entering. The British exceptionalism that Category-D machines and National Lottery purchases reveals is of great alarm to those concerned by gambling-related harm. Access to gambling products at a young age has often been associated with problematic relationships with them in the future (as discussed in the response to Question 15). This understanding is commonly accepted in general discussions around gambling. In the BBC’s documentary ‘Can You Beat The Bookies?’ both the host and those affected by gambling-related harm had started gambling under the age 18. Recommendation: While the CofE, the General Synod, or the EIAG has not made any public statement on these products, protecting children and young people is core to the witness and mission of the Church more widely. Therefore, any attempts to rectify this ‘historic accident’ would be welcomed as children and vulnerable people both need, and deserve, the most stringent protection possible. Gambling should begin at 18 years of age, with no exceptions, and the Government would be strongly supported by many actors, including MPAC, if it adopted this policy. BIBLIOGRAPHY

Adams, P. J, ‘Reducing the moral jeopardy associated with receiving funds from the proceeds of gambling,’ (2006), Journal of Gambling Issues 17

209

Atherton, F., ‘Gambling with our health,’ Llywodraeth Cymru, Welsh Government, August 2018, https://gov.wales/sites/default/files/publications/2019-03/gambling-with-our-health-chief-medical-officer-for-wales-annual-report-2016-17.pdf

BBC News, ‘Gambling addiction: Calls to helpline see 30% increase,’ BBC News, October 24, 2018, https://www.bbc.co.uk/news/uk-england-45954762

BBC News, ‘Pubs fail to stop underage gambling, watchdog warns,’ BBC News, November 15, 2018, https://www.bbc.co.uk/news/business-46209148

Bowden-Jones, H., (@ArtScienceDoc), ‘My very serious message this morning to those who can make change happen quoted in @Telegraph. Well done @charleshymas for covering this devastating issue of high rates of suicide in problem gamblers @rcpsych @CNWLNHS,’ March 13, 2019, Tweet.

Business Matters, ‘How the UK became the centre of the gambling industry,’ BusinessMatters, June 18, 2019, https://www.bmmagazine.co.uk/business/how-the-uk-became-the-centre-of-the-gambling-industry/

Burgess, K., ‘Football shirt sponsors “turn children into betting addicts”, says bishop,’ The Times, February 2, 2019, https://www.thetimes.co.uk/article/football-shirt-sponsors-turn-children-into-betting-gambling-addicts-says-bishop-st-albans-c9hg9tpcr

Busby, M., ‘Gambling apps more dangerous than FOBTs, study finds,’ The Guardian, February 22, 2019, https://www.theguardian.com/society/2019/feb/22/gambling-apps-more-dangerous-than-fobts-study-finds

Busby, M., ‘Revealed: how gambling industry targets poor people and ex-gamblers,’ The Guardian, August 31, 2017, https://www.theguardian.com/society/2017/aug/31/gambling-industry-third-party-companies-online-casinos?CMP=share_btn_tw

Campaign for Fairer Gambling, ‘Labour commits to regulating remote gambling by revising our “analogue” legislation,’ PoliticsHome, March 4, 2019, https://www.politicshome.com/news/uk/culture/opinion/campaign-fairer-gambling/102268/labour-commits-regulating-remote-gambling

Campaign for Fairer Gambling, ‘“Online gambling has been a boon for gamblers” claims Behavioural Insights Team researching gambling related harm,’ PoliticsHome, January 22, 2019, https://www.politicshome.com/news/uk/culture/opinion/campaign-fairer-gambling/101284/online-gambling-has-been-boon-gamblers

Cassidy, R., ‘A place for men to come and do their thing’: constructing masculinities in betting shops in London,’ The British Journal of Sociology, 65 (1), p. 1-23.

Cassidy, R., Ovenden, N., ‘Frequency, duration and medium of advertisements for gambling and other risky products in commercial and public service broadcasts of English Premier League football,’ Goldsmith: Research Online, August 10, 2017, http://research.gold.ac.uk/20926/

Conn, D., ‘Revealed: the “dire consequences” of football’s relationship with gambling,’ The Guardian, January 10 2019, https://amp.theguardian.com/football/2019/jan/10/football-gambling-dire-consequences-young-men-bet-new-study

Cowen., T., Blond., P., ‘Online Gambling: Addicted to Addiction,’ ResPublica, August 2018, https://www.respublica.org.uk/wp-content/uploads/2018/08/Online-Gambling-Addicted-to-Addiction.pdf

Chadlington, L., ‘Lord Chadlington: We must make our gambling legislation fit for purpose,’ The House Magazine, July 19, 2018,

210

https://www.politicshome.com/news/uk/culture/house/house-magazine/96992/lord-chadlington-we-must-make-our-gambling-legislation

Cheetham, D., (@DannyCheetham), ‘When people ask why children and gambling should be a worry, here is an exact example. A free to play poker on @GooglePlay & @iTunes (you can pay for virtual chips & play u18) contacting me with my 'own' VIP manager, trying to get me back. This is normalisation to the definition,’ April 16, 2019, Tweet.

Church of England, ‘Report of Proceedings 2019: General Synod, February Group of Sessions, Volume 50, No. 1,’ https://www.churchofengland.org/sites/default/files/2019-07/Report%20of%20Proceedings%20-%20February%202019.pdf

Church of England, ‘Sports ministry receives boost from Church of England,’ Church of England, August 4, 2019, https://www.churchofengland.org/more/media-centre/news/sports-ministry-receives-boost-church-england

City of Westminster, ‘Gambling research,’ March 8, 2016, https://www.westminster.gov.uk/gambling-research

Davies, M., ‘Mims Davies - Gamble Aware conference speech,’ December 5, 2018, https://www.gov.uk/government/speeches/mims-davies-gamble-aware-conference-speech

Davies, R., ‘Tom Watson: Labour would ban gambling with credit cards,’ The Guardian, September 19 2018, https://www.theguardian.com/society/2018/sep/19/tom-watson-labour-would-ban-gambling-with-credit-cards?CMP=share_btn_tw

Davies, R., ‘Rise in gambling ad spend fuels fears over impact on children,’ The Guardian, November 24 2018, https://www.theguardian.com/society/2018/nov/24/rise-in-gambling-ad-spend-fuels-fears-over-impact-on-children

Davies, R., ‘Online casinos ignored my obvious signs of addiction, says gambler,’ The Guardian, April 22, 2019, https://www.theguardian.com/society/2019/apr/22/online-casinos-ignored-obvious-signs-addiction-gambler?CMP=share_btn_tw

Davies, R., ‘Warning message on gambling ads does little to stop betting – study,’ The Guardian, August 4, 2019, https://www.theguardian.com/society/2019/aug/04/warning-message-on-gambling-ads-does-little-to-stop-betting-study

Davies, R., ‘William Hill's potential next CEO backs curbs on TV gambling adverts,’ The Guardian, February 24, 2017, https://www.theguardian.com/business/2017/feb/24/william-hill-philip-bowcock-curbs-tv-gambling-adverts

Davies, R., ‘Gambling advert ban takes effect from start of Ashes,’ The Guardian, August 1, 2019, https://www.theguardian.com/society/2019/aug/01/gambling-advert-ban-takes-effect-from-start-of-ashes?CMP=share_btn_tw

Davies, R., ‘William Hill and Paddy Power ads appeared in app aimed at children,’ The Guardian, June 19, 2019, https://www.theguardian.com/media/2019/jun/19/william-hill-and-paddy-power-ads-appeared-in-app-aimed-at-children?CMP=share_btn_tw

Deakin University, ‘Study shows betting ads influencing children's attitudes to gambling,’ Deakin.edu.au, February 20, 2017, https://www.deakin.edu.au/about-deakin/media-releases/articles/study-shows-betting-ads-influencing-childrens-attitudes-to-gambling

211

Department for Digital, Culture, Media and Sport, ‘Call for evidence: Review of Gaming Machines and Social Responsibility Measures,’ October 24, 2016, https://www.gov.uk/government/consultations/call-for-evidence-review-of-gaming-machines-and-social-responsibility-measures

Department for Education, ‘Relationships, Education, Relationships and Sex Education (RSE) and Health Education: Draft statutory guidance for governing bodies, proprietors, head teachers, principals, senior leadership teams, teachers,’ February 2019, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/781150/Draft_guidance_Relationships_Education__Relationships_and_Sex_Education__RSE__and_Health_Education2.pdf

Dixon, M., J., Harringan, K., A., Sandhu, R., Collins, K., Fugelsang, J., A., ‘Losses disguised as wins in modern multi-line video slot machines,’ Addiction, 105 (10), p. 1819-1824.

Djohari, N., Weston, G., Cassidy, R., Wemyss, M., Thomas, S., ‘Recall and awareness of gambling advertising and sponsorship in sport in the UK: a study of young people and adults,’ Harm Reduction Journal 16 (24), p. 16-24

Douglas, E., Noyes, J., Blond, P., ‘Wheel of Misfortune: The case for lowering the stakes on Fixed Odds Betting Terminals: A report by ResPublica for the Campaign for Fairer Gambling,’ ResPublica, October 2017, https://www.respublica.org.uk/wp-content/uploads/2017/10/Wheel-of-Misfortune-Embargoed-until-Monday-16th-October-00.01.pdf

Etches, M., ‘Too many children are hooked on gambling. Why aren’t they protected?’ The Guardian, November 22, 2018, https://www.theguardian.com/commentisfree/2018/nov/22/gambling-children-hooked-public-health?CMP=share_btn_tw

Ford, A., MacKintosh, A., M., Moodie, C., Kuipers, M., A., A., Hastings, G., B., Bauld, L., ‘Impact of a ban on the open display of tobacco products in retail outlets on never smoking youth in the UK: findings from a repeat cross-sectional survey before, during and after implementation,’ Tobacco Control, May 14 2019, https://tobaccocontrol.bmj.com/content/early/2019/05/29/tobaccocontrol-2018-054831.citation-tools

Ford, J., ‘Why the party is over for online gambling,’ The Financial Times, March 3, 2019, https://www.ft.com/content/b1121562-3c3e-11e9-b72b-2c7f526ca5d0

Freedland, J., ‘Football is addicted to gambling – and it’s harming children,’ The Guardian, February 13, 2019, https://www.theguardian.com/commentisfree/2019/feb/13/protect-children-gambling-ads-football-target?CMP=share_btn_tw

Gambling Commission, ‘Gambling participation in 2018: Behaviour, awareness and attitudes: Annual report,’ February 2019, https://www.gamblingcommission.gov.uk/PDF/survey-data/Gambling-participation-in-2018-behaviour-awareness-and-attitudes.pdf

Gambling Commission, ‘Young people and Gambling 2018: A research study among 11-16 year olds in Great Britain,’ Gambling Commission, November 2018, https://www.gamblingcommission.gov.uk/pdf/survey-data/young-people-and-gambling-2018-report.pdf

Gambling Commission, ‘Strategy 2018-2021: Making gambling fairer and safer,’ Gambling Commission, April 24, 2019, https://www.gamblingcommission.gov.uk/news-action-and-statistics/News/gambling-commission-launches-new-national-strategy-to-reduce-gambling-harms

212

Gambling Commission, ‘Latest industry statistics published,’ May 30, 2019, https://www.gamblingcommission.gov.uk/news-action-and-statistics/News/latest-industry-statistics-published-2

Gambling Commission, ‘Gambling Commission restates f irm commitment to reducing harm as research into suicidal behaviour is published,’ July 19, 2019, https://www.gamblingcommission.gov.uk/news-action-and-statistics/news/2019/Gambling-Commission-restates-firm-commitment-to-reducing-harm-as-research-into-suicidal-behaviour-is-published.aspx

Gambling Commission, ‘Consultation on gambling with credit cards,’ August 14, 2019, https://consult.gamblingcommission.gov.uk/author/consultation-on-gambling-with-credit-cards/

Gammie, J., ‘“Generational scandal”: More than 50,000 under-17s have gambling problems report reveals,’ The Independent, November 21, 2018, https://www.independent.co.uk/news/child-gambling-problem-betting-tv-adverts-a8643926.html

Grant, T., Waugh., D., ‘Nipped in the Budd? Assessing the wisdom of the Gambling Review Body’s recommendations in relation to problem gambling,’ UNLV Gaming Research & Review Journal, 23 (1), p. 19-39.

House of Commons, ‘The Gambling Act 2005: A bet worth taking?’ July 24, 2012, https://publications.parliament.uk/pa/cm201213/cmselect/cmcumeds/421/421vw.pdf

House of Commons, House of Lords, ‘Uncorrected transcript of oral evidence, to be published as HC 139 iv,’ January 13, 2004, https://publications.parliament.uk/pa/jt200304/jtselect/jtgamb/uc139-iv/uc13902.htm

House of Lords, (2018), September 12, 2018, Volume 792, https://libguides.ioe.ac.uk/c.php?g=482478&p=3299639

House of Lords, (2019), July 3, 2019, HL 16534, https://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Lords/2019-06-20/HL16534/

House of Lords, (2018), December 19, 2018, HL 12114, https://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Lords/2018-12-06/HL12114

House of Lords, (2018), November 1, 2018¸ Volume 793, https://hansard.parliament.uk/Lords/2018-11-01/debates/F6527CF8-35B3-4BC3-B0F9-B8D4486A8BE0/GamblingAddiction

House of Lords, (2018), November 23, 2018, HL 11749, https://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Lords/2018-11-23/HL11749

House of Lords, (2019), July 2, 2019, Volume 798, https://hansard.parliament.uk/Lords/2019-07-02/debates/7BA40075-B147-47BE-A7DA-6A67DCB0F2DA/ProblemGambling#contribution-9B9F7CAA-5280-4B34-8930-D3B4D6758473

House of Lords, (2019), July 23, 2019, ‘Select Committee on the Social and Economic Impact of the Gambling Industry,’ http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/gambling-industry-committee/social-and-economic-impact-of-the-gambling-industry/oral/104255.html

Hymas, C., ‘Record numbers of gambling addicts were hospitalised last year, new NHS figures reveal,’ The Daily Telegraph, October 20, 2018,

213

https://www.telegraph.co.uk/news/2018/10/20/record-numbers-gambling-addicts-hospitalised-last-year-new-nhs/

Hymas, C., ‘Church of England accuses games like Fortnite of “dubious morality” in encouraging children to gamble,’ The Telegraph, October 28, 2018, https://www.telegraph.co.uk/news/2018/10/28/church-england-has-accused-makers-games-fortnite-dubious-morality/

Ipsos MORI, ‘Interim Synthesis Report: The effect of gambling marketing and advertising on children, young people and vulnerable adults,’ July 9 2019, https://about.gambleaware.org/media/1965/17-067097-01-gambleaware_interim-synthesis-report_090719_final.pdf

Johnston, J., ‘St Mungos and GamCare team up to stop gamblers losing their homes,’ Southwalk News, September 10, 2018, https://www.southwarknews.co.uk/news/st-mungos-and-gamcare-team-up-to-stop-gamblers-losing-their-homes/

Karlsson, A., Hakansson, A., ‘Gambling disorder, increased mortality, suicidality, and associated comorbidity: A longitudinal nationwide register study,’ Journal of Behavioural Addiction, 7 (4), 1091-1099

Kay, O., ‘Paddy Power stunt shines light on football’s gambling problem,’ The Times, July 18, 2019, https://www.thetimes.co.uk/article/paddy-power-stunt-shines-light-on-football-s-gambling-problem-6t7jf8qq8

Kelly, T., ‘Italy bans advertising on all forms of gambling as part of new ‘dignity decree’ after populist 5-Star leader said betting destroys families,’ The Daily Mail, July 5 2018, https://www.dailymail.co.uk/news/article-5921655/Italy-bans-gambling-adverts-Luigi-Di-Maios-new-dignity-decree.html

Kidron, B., Evans, A., Afia, J., ‘Disrupted Childhood: The Cost of Persuasive Design,’ 5Rights Foundation, June 2018, https://5rightsfoundation.com/static/5Rights-Disrupted-Childhood.pdf

Lamont, T., ‘The big gamble: the dangerous world of British betting shops,’ The Guardian, May 31, 2016, https://www.theguardian.com/business/2016/may/31/big-gamble-dangerous-british-betting-shops

Lincoln, B., ‘Children and addicts need protection from online gambling,’ The Financial Times, August 19, 2018, https://www.ft.com/content/cdcf64a6-a20c-11e8-b196-da9d6c239ca8

Ling, D., ‘Gambling’s tightening grip on Premier League shirt sponsorship,’ Tableau Public, July 26, 2019, https://public.tableau.com/profile/daniel.ling#!/vizhome/GamblingsTighteningGriponShirtSponsorshipinthePremierLeague/GamblingShirtSponsorship?publish=yes

Livingstone, C., Adams., P., Cassidy., R., Markham., F., Reith., G., Rintoul., A., ‘On gambling research, social science and the consequences of commercial gambling,’ International Gambling Studies Journal., 18 (1), p. 56-68.

Local Government Association, ‘Tackling gambling related harm: A whole council approach,’ November 2018, https://www.local.gov.uk/sites/default/files/documents/10.28%20GUIDANCE%20ON%20PROBLEM%20GAMBLING_07.pdf

Lovett, S., ‘Gambling poses one of the greatest mental health risks in elite sport, player associations warn,’ The Independent, August 1, 2019, https://www.independent.co.uk/sport/mental-health-gambling-pfa-pca-rugby-premier-league-a8942226.html

Ofcom, ‘Ofcom publishes research on TV gambling adverts,’ Ofcom.org.uk, November 19, 2013, https://www.ofcom.org.uk/about-

214

ofcom/latest/media/media-releases/2013/ofcom-publishes-research-on-tv-gambling-adverts

Orford, J., An unsafe bet? The dangerous rise of gambling and the debate we should be having, (Chichester: Wiley-Blackwell, 2011)

Markham, F., Young, M., ‘“Big Gambling”: The rise of the global industry-state gambling complex,’ Addiction Research & Theory, 23:1, p. 1-4

May-Chahal, C., Humphreys, L., Clifton, A., Francis, B., Reith, G., ‘Gambling harm and crime careers,’ Journal of gambling studies, 33 (1), p. 65-84

McDonald, J., McDonald, M., ‘How Sweden’s new gaming and betting market works and its potential impact on the sports industry,’ Lawinsport.com, April 10, 2019, https://www.lawinsport.com/content/articles/item/how-sweden-s-new-gaming-and-betting-market-works-and-its-potential-impact-on-the-sports-industry

Morgan, L., M., Mudie, K., ‘UK gambling map of misery shows how betting shops cluster in poverty areas,’ The Daily Mirror, September 16, 2017, https://www.mirror.co.uk/news/uk-news/uk-gambling-map-misery-shows-11185213

Morgan, N., ‘Nicky Morgan: The Budget – and a Government that failed to listen to the country over problem gambling,’ ConservativeHome, November 5, 2018, https://www.conservativehome.com/thecolumnists/2018/11/nicky-morgan-the-budget-and-how-the-government-failed-to-listen-to-the-country-over-problem-gambling.html

Morgan, T., ‘Exclusive: Derby's decision to hand Wayne Rooney No 32 shirt brings scrutiny of FA and Church of England,’ The Telegraph, August 8, 2019, https://www.telegraph.co.uk/football/2019/08/08/exclusive-derbys-decision-hand-wayne-rooney-no-32-shirt-couldbe/

Newall, P., W., S., ‘How bookies make your money,’ Judgement and Decision Making Journal, 10 (3), p. 225-231

Newall, P., W., S., ‘Dark nudges in gambling,’ Addiction research and theory, 27 (2), p. 65-67

Newall, P., W., S., Walasek, L., Vázquez Kiesel, R., Ludvig, E. A., & Meyer, C., ‘Betting on intuitive longshots,’ (Under review)

Newall, P., W., S., Moodie, C., Reith, G., Stead, M., Critchlow, N., Morgan, A., Doobie, F., ‘Gambling Marketing from 2014 to 2018: a Literature Review,’ Current Addiction Reports 6 (2), p. 49-56

Noyes, J., ‘Gambling reform is not easy to do. But it’s worth the risk.’ New Statesman, October 18, 2018, https://www.newstatesman.com/politics/staggers/2018/10/gambling-reform-not-easy-do-it-s-worth-risk

Paepe, P., ‘Gaming in Belgium: overview,’ ThomsonReuters Practical Law, November 1, 2016, https://uk.practicallaw.thomsonreuters.com/6-635-9928?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1

Payne, T., ‘Gamblers paid to keep betting: UK's top online betting firm Bet365 gives losers CASH so they carry on spending, undercover investigation finds,’ The Daily Mail, February 17, 2019, https://www.dailymail.co.uk/news/article-6715159/Addicts-paid-gambling-UKs-online-betting-firm-Bet365-gives-losers-cash.html

Petticrew, M., Katikireddi, S., R., Knai, C., Cassidy, R., Hessari, N., M., Thomas, J., Weishaar, H., ‘“Nothing can be done until everything is done”: the use of complexity arguments by good, beverage, alcohol and gambling industries,’ Journal of Epidemiology Community Health, 71, p. 1078-1083

215

Populus, ‘Children and young people’s views of gambling advertising on television,’ January 19, 2018,

Populus, ‘UK adults’ view of ‘loot boxes,’ February 2019. Sharman, S., Murphy, R., Turner, J., Roberts, A., ‘Psychosocial correlates in

treatment seeking gamblers: Differences in early age onset gamblers vs later age onset gamblers,’ Addictive Behaviors, 97, p. 20-26

Small, N, ‘Six signs your partner could be hiding a gambling addiction,’ The Daily Mirror, August 17, 2019, https://www.mirror.co.uk/news/uk-news/one-gambling-addict-day-goes-18952831?utm_source=twitter.com&utm_medium=social&utm_campaign=sharebar

Smith A., ‘Bishop of St Albans: Enough is enough - gambling advertising is out of control,’ PoliticsHome, September 12, 2018, https://www.politicshome.com/news/uk/culture/opinion/house-lords/98168/bishop-st-albans-enough-enough-gambling-advertising-out

Smith, M., ‘Seven in ten gamblers think bookmakers aren't serious about responsible gambling,’ The Daily Mirror, May 16, 2019, https://www.mirror.co.uk/news/politics/seven-ten-gamblers-think-bookmakers-16154080

Steele, S., Ruskin, G., McKee, M., Stuckler, D., ‘“Always read the small print”: a case study of commercial research funding, disclosure and agreements with Coca-Cola,’ Journal of Public Health Policy, 40 (3), (2019), pp 273-285.

Sweney, M., ‘Five online gambling firms break UK rules on ads targeting children,’ The Guardian, April 4, 2019, https://www.theguardian.com/media/2019/apr/04/five-online-gambling-firms-break-uk-rules-ads-targeting-children?CMP=share_btn_tw

Taylor, H., ‘Loot boxes: An industry at war with itself over a technicality,’ GamesIndustry.Biz, December 12, 2018, https://www.gamesindustry.biz/articles/2018-12-12-loot-boxes-a-year-in-review

Thaler, R., H., ‘Nudge, not sludge,’ Science, Vol., 361, Issue, 6401, pp. 431 The Financial Times, ‘UK’s gambling industry is dicing with young lives,’ The

Financial Times, November 25, 2018, https://www.ft.com/content/4f1611ea-ef3d-11e8-8180-9cf212677a57

The Times, ‘Some bets are off,’ The Times, December 7, 2018, https://www.thetimes.co.uk/article/some-bets-are-off-72g0hfpdj

Thomas, R., ‘The Bedpan: The NHS must take gambling seriously,’ hsj.co.uk, May 20, 2019, https://www.hsj.co.uk/mental-health/the-bedpan-the-nhs-must-take-gambling-seriously/7025096.article

Thomas, S., L., Pitt, H., Bestman, A., Randle, M., Daube, M., Pettigrew, S., ‘Child and parent recall of gambling sponsorship in Australian sport,’ May 2016, https://responsiblegambling.vic.gov.au/resources/publications/child-and-parent-recall-of-gambling-sponsorship-in-australian-sport-67/

Thorley, C., Stirling, A., Huynh, E., ‘Cards on the table: The cost to government associated with people who are problem gamblers in Britain,’ IPPR, December 2016, https://www.ippr.org/files/publications/pdf/Cards-on-the-table_Dec16.pdf

Ungoed-Thomas, J., ‘£10,000 stakes for online gambling “put addicts at risk,”’ The Sunday Times, November 18, 2018, https://www.thetimes.co.uk/article/10-000-stakes-for-online-gambling-put-addicts-at-risk-s5j6snjxm

Ungoed-Thomas, J., ‘Betting chiefs ask for levy on firms,’ The Sunday Times, October 7 2018, https://www.thetimes.co.uk/article/betting-chiefs-ask-for-levy-on-firms-xtt52k38b

216

Wardle, H., Reith., G., Langham, E., Rogers, R., D., ‘Gambling and public health: we need policy action to prevent harm,’ (2019) BMJ, 365 (1807)

Wardle, H., Reith, G., Best., D., McDaid, D., Platt, S., ‘Measuring gambling-related harms: A framework for action,’ Gambling Commission, July 2, 2018, https://www.gamblingcommission.gov.uk/PDF/Measuring-gambling-related-harms.pdf

Wardle, H., ‘Perceptions, people and place: Findings from a rapid review of qualitative research on youth gambling,’ Addictive Behaviors, 90, p. 99-106

Wardle, H., ‘The tale of Iggle Piggle and the slot machine: children’s exposure to gambling,’ LSE Blogs, June 27, 2018, https://blogs.lse.ac.uk/parenting4digitalfuture/2018/06/27/childrens-exposure-to-gambling/

Wealthsimple, ‘Dumb Questions for Smart People: Why Our Brains Like Gambling,’ Wealthsimple, February 7, 2019, https://www.wealthsimple.com/en-ca/magazine/data-gambling-psychology Witherow, T., Greenhill, S., ‘Shame of stars “luring children into gambling”:

Kelly Brook and Anthony Joshua are named among celebrities who are plugging betting firms,’ The Daily Mail, November 22, 2018, https://www.dailymail.co.uk/news/article-6416355/Shame-stars-luring-children-gambling.html

Wood, G., ‘Shirt sponsors should have role in battle against gambling addiction,’ The Guardian, September 9 2018, https://www.theguardian.com/sport/blog/2018/sep/09/shirt-sponsors-gambling-premier-league

Young, A., ‘Gambling or gaming: Entertainment or Exploitation?’ Ethical Investment Advisory Group of the Church of England, March 2006, https://www.churchofengland.org/sites/default/files/2017-11/Gambling%20Policy.pdf

30 August 2019

217

CLOSER, the home of longitudinal research – Written evidence (GAM0060)

Author: Rob Davies

Reviewers: Professor Rebecca Hardy, Jon Tebbett

Contributors: Jon Johnson, Professor Alan Emond

1. Summary

1.1CLOSER, the home of longitudinal research, is an interdisciplinary partnership that brings together world-leading longitudinal studies with participants born throughout the 20th and 21st centuries, the British Library and the UK Data Service. Our work aims to maximise the use, value and impact of the UK’s longitudinal studies in order to help improve our understanding of the social and biomedical challenges facing the country.

1.2Longitudinal studies follow the same people and households over time, often from birth, collecting a wide array of information about study participants, which enable researchers and policymakers to explore people’s complex lives and how changes in society affect health, community and education.

1.3 The UK’s longitudinal studies are recognised as vital sources of evidence on

how early circumstances and experiences affect people’s lives from childhood to adulthood, providing insights into individual short and long-term change and the relationship between different elements of people’s complex lives that cannot be obtained from any other data sources. They allow researchers to explore how different groups vary, and how and why people’s lives change, enabling a greater understanding of the difference between causal relationships and correlation.

1.4 There is limited research examining gambling prevalence and behaviours in

the UK and the associated social and economic costs and benefits. This lack of independent research affects the ability of academics and policymakers to understand fully the impacts of gambling to individuals and society as a whole.

1.5Research using the CLOSER studies has investigated young people’s gambling

behaviour. The Avon Longitudinal Study of Parents and Children (ALSPAC) has asked study participants questions about gambling behaviour and investigated the background to regular and problem gambling. This research found that problem gambling behaviours are associated with poor mental health, involvement in crime and potentially harmful use of drugs and alcohol. It also highlights that the only gambling activity of study participants showing a consistent increase is online gambling and betting.

1.6The relevant longitudinal data collected by the CLOSER studies are currently underutilised, therefore presenting a number of opportunities for further research and analysis into the prevalence and social and economic impact of gambling.

218

1.7Given the paucity of data, a new longitudinal study on gambling should be considered. CLOSER is working with relevant bodies, including the Gambling Commission, to help explore how this can be progressed.

1.8When designing interventions for problem gambling, it is important to

recognise the relationship between other factors that may be associated with this behaviour, e.g. mental health and the home environment.

2. Longitudinal evidence (UK)

Response to Question 5 and 6. What are the social and economic costs of gambling? What are the social and economic benefits of gambling? Response to Question 15. How are new forms of technology, including social media, affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future? 2.1Fundamentally, there is a paucity of research in the UK examining the impact,

whether social or economic, of gambling, particularly that which examines change over time and across generations. This lack of independent research affects the ability of academics and policymakers to understand fully the social and economic costs and benefits of gambling.

2.2The only CLOSER study that has examined gambling behaviour in detail and over time is the Avon Longitudinal Study of Parents and Children (ALSPAC). ALSPAC is a longitudinal birth cohort study charting the lives of 14,500 people born in the former county of Avon between April 1991 and December 1992 as well as the lives of their parents and their children. To date, gambling behaviour questions have been asked four times in the ALSPAC study: first, when the child was age 6, their mothers and fathers provided information on their own gambling. Then at approximately ages 17, 20 and 24, the children in the study were asked about their gambling and, if they had gambled, were assessed using the Problem Gambling Severity Index (PGSI) and Diagnostic and Statistical Manual of Mental Disorders (DSM-IV).

2.3Previous research using ALSPAC data examined the link between young

persons’ gambling behaviour and potential influences from childhood. Witnesses highlighted this research in the committee’s 3rd September oral evidence session. GambleAware commissioned surveys about the young person’s gambling behaviour when they were age 17 years and again when they were age 20. In summary, this research found that at age 20, a little more than 10% of those surveyed were regular (weekly or more) gamblers. Apart from National Lottery products, online betting was the most common form of regular gambling. Evidence from this study found that problem gambling increased significantly when young people first have legal access to most forms of commercial gambling, suggesting a need to focus on and protect this age group. [1]

2.4New research using data from ALSPAC participants, ‘The ALSPAC Gambling

Study’, describes their gambling behaviour between the ages of 17 and 24,

219

investigates the background to regular and problem gambling, and explores the associations with other addictive behaviours and mental health.

2.5This research found that 54% of all 17 year olds had participated in gambling

in the past year, rising to 68% at 20 years and 66% at 24 years. The most common forms of gambling were playing scratchcards, the lottery and private betting with friends. Gambling on activities via the internet increased markedly between 17 and 24 years, especially among males. At 24 years, nearly 50% of all gambling activities in males were online, compared to 11% for females.

2.6This research identified a number of associated factors with those young

people who regularly gamble, including their home environment. Regular gamblers were more likely to be male, smoke, abuse alcohol and use social media than non-gamblers, have mothers who struggle financially and parents who gambled regularly. These associated factors identified in ALSPAC are in line with those found in other large, prospective international longitudinal studies (highlighted in Section 3 of this submission).

2.7Emphasising that many young people gamble without any harm, the research

underlines that a significant minority (6-7%, mainly males) show problem gambling behaviours that are associated with poor mental health, involvement in crime and potentially harmful use of drugs and alcohol. It also highlights that the only activity showing a consistent increase over the age range of the study was online gambling and betting and, crucially, that patterns of gambling were set by the age of 20 years. Whilst it should be recognised this finding is from one longitudinal study, it does suggest that early identification and targeted interventions, such as education, before this age could help reduce problem gambling behaviour. Note, a full report on this study will be published in October.

2.8The only other CLOSER studies that have collected information about people’s

gambling are the 1970 British Birth Cohort Study and the Millennium Cohort Study. The 1970 British Birth Cohort Study follows the lives of 17,198 people born in England, Scotland and Wales in a single week of 1970. The Millennium Cohort Study follows the lives of 19,517 children born across England, Scotland, Wales and Northern Ireland in 2000-01.

2.9In 1986, when participants were aged 16, the 1970 British Cohort Study

asked 6,000 16 year olds if they spend money on betting and or gambling. Of these, 5% spent money on betting or gambling, but of these, only 5% saw it as their most important spending activity. The question was not repeated in future sweeps (surveys of study participants). [2]

2.10 The Millennium Cohort Study collected some baseline information about

gambling behaviour when the study participants were age 14. They were asked if they have spent any of their own money on gambling over the past four weeks and which games they played (fruit machines, private bet with friends, placing a bet at a betting shop, or any other gambling, e.g. online). [3]

220

2.11 A total of 11,872 participants were asked these questions. Around 4% had used fruit machines, 6% placed a private bet for money, just under 2% had placed a bet at a betting shop and a similar percentage said they had taken part in other gambling. [3] The same questions were asked at the age 17 survey. At the time of writing, this data is not yet available, but is expected to be released before the end of 2019.

2.12 Note these longitudinal studies also ask a range of contextual questions in

their surveys, including about study participant’s mental health and wellbeing, their home environment, and background, enabling exploration of associations between behaviour and context.

2.13 Looking beyond the CLOSER studies, since 2002 the English Longitudinal

Study of Ageing (ELSA) has asked study participants a question on the amount won on football pools, national lottery or other forms of gambling, however no research using this data have been published. [4]

3. Longitudinal evidence (International)

Response to Question 8. What might be learned from international comparisons? 3.1Oral witnesses have already surfaced some of the international longitudinal

research on gambling behaviours, including from Canada. Other international longitudinal research worth noting is from Sweden, Denmark and Norway. This includes ‘Swelogs’, the Swedish longitudinal gambling study which ran from 2005 to 2016, and academic research in these countries investigating prevalence and problematic gambling among adolescents; associations between problematic gambling and later problem gambling; and the relationship between mental health symptoms and gambling behaviour in the transition from adolescence to emerging adulthood. [5]

3.2Evidence from this Nordic longitudinal research found there was a high degree of mobility in and out of gambling problems over time on an individual level, reflecting the complex nature of people’s lives and the need to understand behaviour over time. On prevalence, research found the frequency of gambling activities were low in both sexes, although higher among boys compared to girls, and problem gambling was almost eight times more common among boys. [5]

3.3Key lessons we can learn from these studies and research are:

1) The importance of understanding how the changing nature of peoples’ lives affects their gambling behaviour; 2) The need to conduct longitudinal research with a large sample in order to capture information over time; 3) The importance of recognising the common associations with gambling and problem gambling behaviour, for example having parents who gamble regularly [5].

4. Missing data and evidence gaps

221

Response to Question 9. If, as the Responsible Gambling Strategy Board (RGSB) has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation? 4.1Fundamentally, there is currently a lack of data and subsequent evidence on

gambling prevalence and behaviours in the UK.

4.2To help fill these evidence gaps and support world-class research, CLOSER has been working with the Gambling Commission to explore the existing evidence and the potential of a new longitudinal gambling study. CLOSER is convening a roundtable discussion in October 2019 to bring together experts in longitudinal study design and representatives from the Gambling Commission, Advisory Board for Safer Gambling and GambleAware to explore how this can be taken forward.

4.3There is an urgent need for new research exploring how individual gamblers’

behaviour changes over time. Longitudinal studies are uniquely placed to explore the factors that cause people to start, continue and stop gambling at different points in their lives, help to understand more about how people move in and out of harmful play and treatment, and crucially, examine changes over time and across generations. [6]

4.4Witnesses (including Dr Heather Wardle and Dr Anna van der Gaag) have

echoed this call in the committee oral evidence sessions of the need for longitudinal research to understand trends and behaviours and how these evolve over time. [7]

5. Recommendations

5.1The need to exploit existing publicly funded UK longitudinal studies: there should be a renewed effort to maximise the existing data from the relevant CLOSER longitudinal studies, for example, by adding questions about gambling behaviours to future sweeps (survey of study participants) and/or commissioning new research. We recommend the industry funds specific research about gambling behaviour, including the development of relevant questions for future sweeps in the existing UK longitudinal studies.

5.2To address the issues around the paucity of data, a new longitudinal study examining the social and economic impact of gambling should be considered. International studies and associated research demonstrate the value of conducting a bespoke longitudinal study into gambling behaviour. Given the high and ongoing costs associated with setting up and running a longitudinal study, it is unrealistic to expect the UK research councils to fund this. We recommend that the gambling industry bear the majority of the costs of any new longitudinal study, along with contributions from the relevant UKRI Research Councils. Ensuring access to relevant data will be key to the success of any longitudinal study; therefore, it is vital to ensure access to gambling companies’ data for bona fide researchers.

5.3Recognise the changing nature of gambling behaviour over time: given the

findings from the ALSPAC study on the rise of online gambling among

222

adolescents, future research questions and longitudinal studies need to adapt to changes in gambling behaviour.

5.4When designing interventions for problem gambling, it is important to

recognise the relationship between other factors that may be associated with this type of behaviour, including mental health and the home environment.

6. About CLOSER

6.1CLOSER, the home of longitudinal research, brings together eight world-leading longitudinal studies with participants born throughout the 20th and 21st centuries. Our work maximises the use, value and impact of these and other longitudinal studies to help improve our understanding of key social and biomedical challenges. [8]

6.2There are currently eight studies in CLOSER: four national and three regional birth cohort studies and Understanding Society (the UK Household Longitudinal Study). CLOSER is funded by the Economic and Social Research Council (ESRC) and Medical Research Council (MRC). [9]

6.3We enable change over time and across generations to be better understood: We bring longitudinal data together in a consistent format – a process known as data harmonisation. This is allowing longitudinal researchers to compare data from different studies for the first time, revealing how and why the country is changing over time – and what this means for the future.

6.4We enhance insights through data linkage: We lead research to link data held

by government to survey data collected by longitudinal studies across a range of areas, including health, geography, education and social media. Linking this data enables researchers to gain rich insights into how different aspects of people’s lives interrelate.

6.5We help researchers find data: Our flagship resource, CLOSER Discovery,

enables researchers to search and browse questionnaires and data from the UK’s leading longitudinal studies to find out what data are available in unprecedented detail. [10]

6.6We inspire and equip the next generation of scientists: We provide training

and capacity building opportunities for researchers and those running longitudinal studies. Our Learning Hub has information and resources aimed at those in academia, government and the third sector to help them better understand the value of longitudinal research and how to use the data. [11]

6.7We support innovative research projects: We support research projects that

use longitudinal data to investigate a wide range of areas of interest, including obesity, physical activity, mental health, and social media. Many of the research projects we support are creating harmonised datasets, improving data linkage or developing other resources for the wider longitudinal research community.

6.8We maximise the impact of longitudinal research: We work to achieve the

greatest possible impact for CLOSER’s outputs and activities, as well as our

223

studies. We do this by engaging with policy makers, producing longitudinal resources for the academic community and facilitating research that addresses the biomedical, social, economic and environmental policy challenges facing the UK.

224

7. References [1] Forrest, D. and McHale, I. (2018) Gambling and problem gambling among young adults: insights from a longitudinal study of parents and children: https://about.gambleaware.org/media/1799/gambling-and-problem-gambling-among-young-adults-revision-10818-final-publish-002.pdf [2] 1970 British Birth Cohort data: https://discover.ukdataservice.ac.uk/variables/variable/?id=3535_V1421 [3] Millennium Cohort Study data: https://discover.ukdataservice.ac.uk/variables/variable/?id=8156_V354 https://discover.ukdataservice.ac.uk/variables/variable/?id=8156_V355 https://discover.ukdataservice.ac.uk/variables/variable/?id=8156_V356 https://discover.ukdataservice.ac.uk/variables/variable/?id=8156_V357 [4] The English Longitudinal Study of Ageing (ELSA): https://www.elsa-project.ac.uk/ [5] Health at Stake: A longitudinal study on gambling and health in Sweden 2008-2015; Swedish National Institute of Public Health: https://www.folkhalsomyndigheten.se/globalassets/livsvillkor-levnadsvanor/andts/spel/swelogs/health-at-stake-2012-swelogs.pdf [5] The Swedish Longitudinal Gambling Study (Swelogs); The Public Health Agency of Sweden: https://www.folkhalsomyndigheten.se/the-public-health-agency-of-sweden/living-conditions-and-lifestyle/alcohol-narcotics-doping-tobacco-and-gambling/gambling/swelogs/ [5] Romild, Ulla et al. ‘The Swedish Longitudinal Gambling Study (Swelogs): design and methods of the epidemiological (EP-) track.’ International journal of methods in psychiatric research vol. 23,3 (2014): 372-86: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4279874/pdf/mpr0023-0372.pdf [5] Jonsson, Jakob et al. ‘Measuring Gambling Reinforcers, Over Consumption and Fallacies: The Psychometric Properties and Predictive Validity of the Jonsson-Abbott Scale’ (2017): https://www.frontiersin.org/articles/10.3389/fpsyg.2017.01807/full [5] Eva Samuelsson, Kristina Sundqvist & Per Binde (2018) Configurations of gambling change and harm: qualitative findings from the Swedish longitudinal gambling study (Swelogs), Addiction Research & Theory, 26:6, 514-524, DOI: 10.1080/16066359.2018.1448390 [5] Vadlin S, Åslund C, Nilsson KW. A longitudinal study of the individual-and group-level problematic gaming and associations with problem gambling among Swedish adolescents. Brain Behav. 2018;8:e00949. https://doi.org/10.1002/brb3.949 [5] Kristiansen, S., Reith, G., and Trabjerg, C. M. (2017) ‘The notorious gambling class’: Patterns of gambling among young people in Denmark: a longitudinal

225

qualitative study. Journal of Youth Studies, 20(3), pp. 366-381. (doi:10.1080/13676261.2016.1232480) [6] Gambling Commission Research Programme 2018-22: https://www.gamblingcommission.gov.uk/PDF/Research-Programme-2018-22.pdf [6] The Responsible Gambling Strategy Board’s advice on the National Strategy to Reduce Gambling Harms 2019–2022: https://www.gamblingcommission.gov.uk/PDF/The-Responsible-Gambling-Strategy-Boards-advice.pdf [6] Responsible Gambling Strategy Board, Children, young people and gambling: A case for action https://www.gamblingcommission.gov.uk/PDF/RGSB-Gambling-and-children-and-young-people-2018.pdf [7] Select Committee on the Social and Economic Impact of the Gambling Industry Uncorrected oral evidence (Tuesday 23 July 2019): http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/gambling-industry-committee/social-and-economic-impact-of-the-gambling-industry/oral/104254.pdf [7] Select Committee on the Social and Economic Impact of the Gambling Industry Uncorrected oral evidence (Tuesday 23 July 2019): http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/gambling-industry-committee/social-and-economic-impact-of-the-gambling-industry/oral/104255.pdf [8] https://www.closer.ac.uk/about/ [9] https://www.closer.ac.uk/about/partners/ [10] https://discovery.closer.ac.uk/ [11] https://learning.closer.ac.uk/ 6 September 2019

226

Dr Peter Collins – Written evidence (GAM0079)

By Dr Peter Collins, Professor of Public Policy Studies and Director of the Centre for the Study of Gambling, Salford (2000-2010, Retd); Founder and Executive Director, South African National Responsible Gambling Programme (1999-2013 Retd). Special Advisor to Joint Scrutiny Committee reviewing the National Gambling Bill (2003-4) Author (2003): Gambling and the Public Interest” Praeger, Books, USA, Principal Researcher author of Report of the Likely Effects of Reducing Maximum stakes on B2 machines (2016) etc.

QUESTIONS. I begin by answering briefly the Committee’s initial questions seriatim and then offer a brief conclusion about what’s gone wrong.

The Committee's call for evidence includes the following questions:

• How effective is the Gambling Act 2005 in achieving its aims of preventing gambling from being a crime or disorder, ensuring that gambling is conducted in a fair and open way, and protecting children and other vulnerable person from being harmed or exploited by gambling?

• Does the Act need to be updated to reflect the significant changes in technology, and latest knowledge on gambling-related harm, since it was introduced?

• Should gambling operators have a legal duty of care to their customers? • What are the social and economic costs of gambling? • How effective is the voluntary levy? • Are the services available for the treatment and support of people who are

harmed by gambling sufficient and effective? • What steps should be taken to better understand any link between suicide and

gambling? • What more should be done to educate the public about gambling?

How should we make decisions about the regulation of gambling advertising? • What are the risks associated with the increasingly close relationships between

betting operators and sports leagues, broadcasters and clubs? • Should children be allowed to play games machines including fruit machines,

pushers and cranes? • Should any changes be made to the rules governing the National Lottery?

ANSWERS

1. CRIME. Since the Gambling Acts of the 1960s, crime associated with gambling has never been a significant issue in the UK gambling industry. Anecdotally, small-scale money-laundering used to take place and may still take place at hard-to-regulate LBOs and so-called “1968” casinos. All other crime associated with gambling, e.g. embezzlement, is a consequence of “problem” or “excessive” or “disordered” gambling (defined here interchangeably as “instances of people regularly losing unaffordable amounts of money through gambling and/or spending unaffordable amounts of time gambling”).

2. AMENDING THE ACT. I am not really qualified to answer the specific issues this question raises about what needs to be in an Act and what can be left to regulation. My impression is that the Act itself does not need to be updated for this purpose but that regulations and definitions probably need to be tightened to take

227

account of ongoing (and entirely understandable) efforts by operators to circumvent the intentions of legislators. The pretence that FOBTs were not offering casino games has now been addressed (after nearly 20 years). Another issue that may need to be addressed is the increasing blurring the distinction between video games with prizes and electronic gambling machines (EGMs). Attention may also need to be given to the expansion of lottery products into harder forms of gambling online involving the kind of continuous, rapid action play which is much more likely to lead to problem gambling than the basic National Lottery product of a twice-weekly, big prize draw. With internet gambling generally the difficulty is to incentivise UK players to play on sites which are regulated in conformity to UK regulations. These need to include effective rules for identifying problematic play and intervening online appropriately and effectively. There is not much agreement or independent evidence about how to do this. There is also a strong case for reviewing the prohibition on “resort-type” casinos which were widely acknowledged as having the capacity to help regenerate places such as Blackpool. More generally, there has also been very little new knowledge about how to minimise gambling-related harms by regulation though many (expensive) research projects have been undertaken and many speculations have been both advanced and criticised since “Budd” first complained of the lack of reliable research findings in this area. There is, therefore, virtually no related “latest knowledge” to draw on. 3. DUTY OF CARE. What is usually meant by suggesting that operators have a duty of care to their customers is that they should identify and have strategies for intervening with customers who are apparently gambling compulsively, obsessively and beyond their means. This is very difficult to do and, for that reason, is not done very effectively anywhere. It is not impossible with the right training at different levels to solve the practical problems involved and so to exercise a duty of care in a way which is ultimately not significantly damaging to profits and is hugely beneficial to companies in terms of reputation management – and therefore less onerous regulation and lower taxes.

3. SOCIAL AND ECONOMIC COSTS. The biggest social costs such as suicide and family breakdown are not measurable and are mostly multi-factoral in respect of causation. Some argue that social costs also include degradation of high streets, saturation of sporting events by disagreeable gambling adverts, and corruption of public morals, especially amongst the young, by fostering an ethic of wanting something for nothing. Much the greatest benefit of allowing people to do things they want to do with their own time and money is simply player enjoyment. So-called “gambling privilege taxes,” aka sin taxes applied to gambling, may have the benefit of being relatively unpresented compared with alternatives. These considerations show that there is no

228

measurably right answer to cost-benefit questions applied to gambling policy. Getting an acceptable balance between the objectives of consumer choice and consumer protection is a matter for political judgment – as with the regulation of other activities which some think of as vices and others as mostly harmless forms of recreation.

4. VOLUNTARY LEVY. The voluntary levy would have worked if industry and regulators had begun by drawing up a list of activities that could reasonably be expected to contribute to the reduction of gambling-related harms; costed these; prioritised them and established a method and a time-table for evaluating their effectiveness. It would then have been possible to agree what activities would be funded, in what order, in respect of treatment, prevention and research. The industry would then be invited to contribute the necessary % of their winnings from players to fund such a programme of work over a period of, say, three years after which it would be evaluated and reviewed. Service providers would then bid for funds from a commissioning body composed of independent experts, regulators and industry representatives. Such an arrangement has the great advantage over a formal levy that it is administered by people who know the issues and the money is ring-fenced. The budget is also needs-based rather than thumb-sucked for diverse PR purposes.

As it has turned out, too many existing vested interests have successfully commandeered too much of the available money and greatly excessive sums have been spent on at least three regulatory bodies, of which the NGB is much the largest and most expensive. It is unclear whether any of these bodies and the funds they have spent have done anything which has clearly and substantially reduced gambling–related harms. Remember, too, that effectively this money is a tax which could have been spent, e.g. on improving the care system or ameliorating the circumstances of the poorest in society.

5. EFFECTIVENESS OF LEVY. Since no strategy for evaluating effectiveness was built in from the beginning or has been introduced subsequently, it is impossible to tell. There is some survey evidence to suggest that not just in the UK but world-wide problem gambling numbers, however measured, have remained stable.

6. EFFECTIVENESS OF TREATMENT. There is good evidence that people with addictions, depression and anxiety disorders are 5 times more likely to recover/get well if they seek treatment than if they don’t. It does not appear to matter what treatment (or how expensive) the treatment they seek is. A critical necessary though not sufficient condition for recovery is that the patient/client believes that the person they are seeking help from really cares about them. There is also evidence that outcomes are no better from in-patient treatment than out-patient treatment. Twelve-step programmes have the advantage that they are free and that “sponsors” and other members are not motivated by the need to

229

make money. Success rates from all forms of treatment seem to be about 20% complete abstinence after two years; 20% no improvement or reduction of engagement with harmful activities; the rest varying degrees of improvement in general well-being and variously frequent or infrequent “relapses.”

7. SUICIDE. Compulsive gamblers commit suicide considerably more frequently than people with other addictive problems. This seems to be because, even if they give up gambling, they typically have before them the spectre of financial ruin. Suicide rates are similarly high amongst those who are ruined by reckless investing. This suggests that psychological counselling of whatever sort needs to be accompanied by financial counselling. It is worth noting that some 80% of all premature deaths from addictions of any sort – drink, drugs, gambling, possibly over-eating – come from smoking-related disease rather than from suicide or other-substance-related diseases.

8. EDUCATION. As with sex, the public and especially the young need to be educated about the dangers of gambling and how to avoid them. They need to know that and why some people enjoy gambling – excitement – but also that if they gamble regularly they will pay for this excitement with their overall losses. They should never expect life-changing wins from high-prize gambling, like the lottery. Instead they should recognise that they are paying for fuel for their solitary or shared fantasies about what they would do if they did suddenly become hugely rich.

9. ADVERTISING. Advertising opportunities to bet during the televising of sporting events is something that mainly affects non-gamblers, especially those who find all gambling distasteful or immoral, by causing them much annoyance. It is unlikely to inform regular gamblers of things they didn’t already know or make them more likely to incur unaffordable losses. Much gambling advertising is also defensive in the sense that companies feel obliged to do it because their competitors do it. If no-one could do it, or everyone were subject to the same increased restrictions, bottom lines would probably not be much affected. What is much more concerning is predatory marketing by online gambling and gaming companies e.g. through offers of “free” money to gamble with which however can only be accessed after people have gambled with a specified amount of real money or for a specified period of time.

10. BROADCASTERS AND CLUBS. These would be seriously negatively impacted by rules prohibiting the promotion of gambling by advertising and sponsorship. As with many policy decisions which involve both competing interests and conflicting principles, there is no right answer to questions about what limits should be placed on commercial freedoms to make money other than the necessity to terrify people into abjuring the use of force and fraud (as Hobbes recommended). It is useful, however, here as elsewhere in thinking about gambling policy and regulation to ask: “What do we do and what should we be doing on this issue in relation to alcohol?”

230

11. CHILDREN AND MACHINES. The UK is the only country in the world which allows children to gamble on various types of machine and has done so for more than a century. There is no evidence at all that the UK has, as a consequence of this, higher problem gambling rates amongst either children or adults than are found in countries where children are prohibited from playing very low stakes machines, including cranes and the like. This form of gambling is also now arguably a part of British culture and many adults have agreeable memories of playing these machines on holidays as children. It clearly ain’t broke so don’t try to fix it.

12. NATIONAL LOTTERY. Although it is in the nature of lotteries to start by depending for their income on selling lots of tickets which offer the chance to win very high prizes, this market soon becomes saturated and lotteries then depend for growth on a) seeking to offer even higher prizes by amalgamating with other lotteries and b) seeking to offer other “harder” forms of gambling (i.e. rapid and continuous action gambling for medium-sized prizes) at outlets like supermarkets and on the internet. Scratchcards are the obvious example. The extent to which this has happened with the UK Lottery and whether there have been any undesirable consequences inconsistent with the intentions of parliament when the Lottey was originally authorised seems to me a subject which it would be worth researching.

13. GENERAL. The great strengths of the “Budd” report was that it placed the interests of the consumer first and applied to gamblers the principle that, provided they don’t wrongfully harm others, people should be free to spend their own time and money on recreational activities of their own choosing. Equally, provided they don’t engage in the abuses of force and fraud, businesses should be free to cater for those choices. “Budd” recognised, however, that as with other activities which have an unusually high propensity to lead to highly destructive addictive behaviours amongst a minority of vulnerable consumers, commercial gambling needs to be regulated so as to take account of this special need for consumer protection. The most important of these special regulations derives from the principle that if you are going to permit high stakes, rapid action gambling, this needs to be permitted only in a small number of large venues rather than a large number of small venues. This would have led to something like what the Scrutiny Committee recommended or what the then Government finally recommended which included permitting the construction of 8 casinos with unlimited numbers of unlimited stakes and prizes machines (as is the norm for casinos everywhere else in Europe, North America, and Australasia). Unfortunately this legislation was high-jacked and eviscerated during “wash-up” week for purely party political reasons and because the relevant minister was in the middle of being diagnosed with cancer when he was asked whether the government should accept the Opposition requirement that the number of such normal (rather than “super”) casinos be reduced to one – subsequently reduced to none by the Brown Government.

231

This not only meant that the regenerative casino project for Blackpool which MPs overwhelmingly supported had to be scrapped. It also meant that high stakes gambling now migrated to thousands of betting shops which, unlike a small number of large casinos, are impossible to regulate properly so as to minimise gambling-related harms. Consequently, a significant number of such harms occurred which could have been avoided. This was only finally remedied last year. There is a related principle in respect of high-stakes, high-prize gambling. This is that the number of venues (casinos) where such gambling can take place should be limited. This partly to reduce the temptation to gamble on impulse since a visit to a casino is more likely to be a planned outing rather than a casual visit made on the spur of the moment en route to the shops or returning from work. Ideally, the limited number of casinos will be located to attract spending by foreign tourists or from richer gamblers to poorer employees. However, how gambling is delivered within the limited number of casinos permitted should be left to market forces – table-to-machine ratios, size of stakes and prizes etc. In short all casino machines should be “Categorty A” machines” as they are in every casino everywhere else in the world and without there being any significant difference in problem gambling rates. Given, however, the peculiar nature of British casinos which, as a consequence of the unwise design and implementation of the 2005 Act, are most licensed under the 1968 law and are only permitted B1 machines there is no case at all for limiting the number of these machines to 20 per casino. This substantially limits consumer choice creating queuing for the available machines and otherwise effectively forcing player to play table games – often electronically relayed live roulette – which are no more or less dangerous from a problem gambling point of view than gambling machines but are much more popular internationally with customers, especially women. If only small reforms are politically possible the number of permitted machines should be increased to about 100. The main problem for Government is that, on the one hand, there are a large number of people who, for whatever reason, think that the less gambling there is in society, the better. These people then tend grossly to exaggerate, aided and abetted by a sensationalist media, the scale of problem gambling and propose remedies which are designed to cause maximum damage to gambling companies, regardless of whether they will have any benign effect on the incidence of problem gambling. At the same time, gambling companies have a vested interest not only in minimising the extent to which they are regulated but also in maximising the onerousness of regulations imposed on their competitors.

232

It was this moral outrage masquerading as a concern to protect the vulnerable combined with extensive lobbying for continued oligopolism by the existing industry which prevented “Budd’s” original and estimable concern with the interests of ordinary citizens from being implemented either in policy or in practice. It would be a good idea to shake the dust of the original All-Party Scrutiny Committee’s report.

9 September 2019

233

Professor Mike Daube, Associate Professor Samantha Thomas and Dr Hannah Pitt – Written evidence (GAM0097) Submission to be found under Associate Professor Samantha Thomas.

234

Department of Health and Social Care, Department for Digital, Culture, Media and Sport and the Department for Education – Supplementary written evidence (GAM0020)

The information below provides the additional information requested by the Committee during the officials evidence session on Tuesday 16 July. The Government will provide a separate response to the committee’s call for evidence by the deadline 6 September.

Details of the recently announced Industry Package

Five large gambling operators - Bet 365, GVC, Flutter (formerly Paddy Power / Betfair), Sky Betting and Gaming and William Hill - announced they will increase their financial contributions to support problem gamblers tenfold, from 0.1% to 1% of their gross gambling yield (money staked minus money paid out in winnings) over the next four years. This will involve an initial increase from 0.1% to 0.25% in 2020, rising to 0.5% in 2021 and 0.75% in 2022 until it reaches 1% by 2023, estimated to amount to an annual contribution of approximately £60 million at that point.

It is too early to say precisely what this increased funding will be spent on, but the five companies have committed to spend most of the funding on expanding treatment services, amounting to a cumulative total of approximately £100 million over the four year period. The five companies also committed to work with the Department for Digital, Culture, Media and Sport (DCMS), the Department of Health and Social Care (DHSC), providers of existing treatment services, and the NHS, to determine how additional funds are appropriately deployed. More recently, on 2 August, they announced that they have asked Lord Chadlington to chair the independent committee that will recommend how best to administer funds committed to safer gambling initiatives, including the treatment of problem gambling.

We are continuing to build evidence on treatment needs. This includes an evidence review by the National Institute of Health Research (NIHR) on which interventions are effective in preventing and reducing harm. For context, GambleAware, the leading charity commissioning services, is currently spending around £7 million per year on treatment, so an additional £100 million is a very significant uplift. We want to make sure this money is spent wisely, and it will take time to scale up service provision. This is a similar timescale to the NHS Long Term plan, which commits to opening up to 15 NHS clinics by 2023/24.

Gambling Commission’s licence conditions and codes of practice (LCCP) require all operators to make an annual financial contribution to one or more organisation(s) which between them research into the prevention and treatment of gambling-related harm, develop harm prevention approaches and identify and fund treatment for those harmed by gambling. This is part of a wider set of requirements covering social responsibility, which primarily focus on how the operators conduct their operations and engage with those who may be at risk of harm. It is for the Gambling Commission to assess whether LCCP requirements have been met by operators they license

235

Currently the licence condition does not specify how much any operator should donate, nor to which organisation. Most operators opt to give funding to the charity GambleAware, which in turn suggests operators should give a sum equivalent to 0.1% of their GGY. There are examples of operators giving less than 0.1%, and a small number give only a nominal amount to GambleAware. We know that GambleAware raised £9.6 million of its £10 million target in 2018/19, but it was fully funded for its £16 million budget, with voluntary donations being supplemented by payments from regulatory settlements made by operators following Gambling Commission enforcement action. We want to see all operators taking their responsibilities seriously, and we know operators also sometimes give to other organisations and initiatives, such as the safer gambling advertising campaign, announced in the Gambling Review. This is being delivered by GambleAware but funding is additional to their core funding target of £10 million.

As part of its commitment to strengthen the voluntary system for funding support, the Gambling Commission has recently announced a change to the licence requirements which will mean operators must donate to an organisation approved by the Gambling Commission. We work closely with the Gambling Commission and had several discussions about both the development of the National Strategy for Reducing Gambling Harm and the LCCP change. Both of these have been discussed at the cross government steering group.

Enforcement action

Over the past three years, penalty packages and settlements have totalled £39.7million. The Gambling Commission’s approach has toughened significantly over that time - in 2016/17 £1.7million settlements were agreed, rising to £18.4million in settlements and penalties in 2017/18. The Gambling Commission’s enforcement action in 2018-2019 resulted in £19.6million in penalty packages and the surrender of three Personal Management Licences (PMLs). The Gambling Commission has pointed out that revocation of an individual or an operator’s licence is appropriate where this is the only means of protecting consumers and maintaining public confidence.

Alongside regular enforcement work, the Gambling Commission launched an investigation into the online casino sector 18 months ago. It assessed or engaged with 123 online operators and since then five operators have surrendered their licences and can no longer transact with consumers in Britain.

Kenya - Gambling Regulation

With regards to the recent media coverage of alleged breaches of Kenyan law, the British High Commission in Nairobi are currently organising a visit by the Kenyan National Assembly Departmental Committee on Sports Culture and Tourism to London in September or October.

The purpose of the delegation’s visit will be to understand how the UK;

236

1. Prevents gambling from being a source of crime or disorder, being associated with crime, disorder, or as an accessory to crime;

2. Ensure that gambling is conducted in a fair fashion; 3. Protects children and other vulnerable persons from being harmed or

exploited by gambling.

The planned visit be an opportunity for the Kenyan lawmakers to learn UK best practice, and potentially for the UK Gambling Commission to offer advice on the regulation of their gambling system

Advertising

The most widely-quoted figure on gambling industry spend on advertising comes from financial analysis by Regulus consultancy, which estimated the gambling industry spent £1.5billion on advertising and marketing in 2017194.

GambleAware recently published the first tranche of research on advertising and marketing which included estimates of industry spend from the Ebiquity advertising database195. While the estimated £194 million spend on TV advertising was similar to Regulus estimates (£234 million), the overall Regulus results were much higher. Regulus included sponsorship (£60 million), and the cost of employing marketing teams, but the key difference was that Regulus estimated spend on online direct advertising, (£747 million) and on social media (£149 million). The GambleAware report only looked at online banner advertising, and estimated spend at £9 million. However, the GambleAware research also reported findings on exposure across different platforms. The second tranche of the research will explore the impact that exposure has on children, young people and vulnerable groups.

Detailed marketing expenditure is considered commercially confidential, so obtaining definitive figures is not possible. You suggested that advertising spend should be declared as part of operators’ regulatory returns. It is up to the Gambling Commission to advise whether this information is needed for assessing operators’ performance against the licensing objectives.

With regards to society lotteries advertising expenses, the government's response to the consultation on society lotteries196 set out an aim to launch a further consultation on introducing a higher tier licence. This would gather evidence about what additional licensing conditions should be attached to improve clarity for players and boost returns to good causes, as we are particularly concerned that the regulatory framework is not currently suitably robust for larger scale society lotteries. We share the concerns raised by some respondents about the marketing costs and relatively low rate of returns to good causes from the largest umbrella lotteries. Measures to be more fully explored and examined in the consultation could include, for example, a higher stipulated

194 Regulus estimates: (https://about.gambleaware.org/media/1857/2018-11-24-gambling-

marketing-online-five-times-tv-ad-spend.pdf) 195 GambleAware research: (https://www.about.gambleaware.org/media/1963/17-067097-01-

gambleaware_interim-synthesis-report_080719_final.pdf) 196https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/817544/Response_to_Consultation_on_Society_Lotteries_PDF.pdf

237

minimum return to good causes and more robust measures to limit the amounts spent on marketing and advertising.

Education

As Richard Vaughan said during the discussion, the Department for Education (DfE) has a budget of up to £6 million in this financial year to start developing a programme to support schools in delivering the new subjects. This money will be used to develop a central programme of support for schools; it is not funding to be distributed to individual schools. Any further funding beyond the next financial year is a matter of the forthcoming Spending Review.

We intend to focus on tools that will help teachers to improve schools’ practice. The DfE is currently working with lead teachers, non-specialist teachers and schools to develop training materials that are suited to their needs. Our plans include:

(a) an implementation guide to support teachers and school leadership teams to plan for the introduction of the new subjects.

(b) targeted support such as training materials and resources that teachers need to teach the new subjects effectively. The DfE has completed a user research exercise with schools and teachers and is currently undertaking the next stage of the research to understand more clearly the types of support on training materials teachers will want to have access to, to help them teach the new subjects effectively and meet the needs of young people. We know that easy access to quality-assured teaching resources and good practice is a key need for schools, and we will respond to this. We plan to encourage some of the materials to cover the subject of gambling and debt management.

(c) encouraging as many schools as possible to start teaching the new subjects from September 2019, so that we can learn lessons and share good practice ahead of compulsory teaching from September 2020. It is encouraging to see that approximately 1,600 schools have applied to become early adopter schools. We are planning to invite these schools to conferences towards the end of the year to discuss planning for teaching these subjects.

Research

On 19 July GambleAware published the results of a research project examining the link between problem gambling and suicide. Full details can be found here: https://about.gambleaware.org/news/gambling-and-suicide-research/

The National Institute of Health Research (NIHR) is carrying out a review of the evidence for effective interventions to prevent and reduce gambling-related harm.

2 September 2019

238

239

Dr Carolyn Downs – Written evidence (GAM0049) Dr Carolyn Downs is a senior lecturer at Lancaster University. Dr Downs has been researching gambling since 2001 and is a respected media commentator on issues around gambling. She served on the Gambling Commission advisory body on the structure of the UK Prevalence study (2007-2008). Dr Downs led the first UK study solely focussing on gambling related debt (2009-10) and conducted the first UK research into virtual gambling among children. She conducts research into bingo and social lotteries and was a member of the Expert Steering Group for the SRC Study on Socio-legal status of Bingo (University of Kent, 2014-2016). She is currently researching and is currently writing a book on the development of the UK gambling Industry. The ESRC, Gamcare, Money Advice Trust and People’s Postcode Lottery have funded Dr Downs’ gambling-related research. This evidence is given as an individual. Question 1: Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld? Response: The aim of protecting children and vulnerable persons from being harmed is not being upheld effectively. There have been some high-profile fines issued by the gambling commission over the last 30 months but in general this hides ongoing problems. Firstly, there is no definition of who might be considered a vulnerable person. It is important that this be addressed. Secondly, there needs to be specific regulation about the duty to identify potentially vulnerable people and ensure they are offered suitable support, thirdly, it is undoubtedly the case that smaller-scale money laundering is taking place across the UK via cash gambling in particular. As to the protection of children and young people, until virtual gambling, video gaming and gambling advertising and promotions are properly regulated children will continue to be at significant risk. There is a body of academic evidence that the younger a person becomes habituated to gambling the more likely it is they will progress into a person with a gambling problem. Question 4: Should gambling operators have a legal duty of care to their customers? Response: Undoubtedly. Gambling is great fun for many people, but for a significant number it is highly risky. Social responsibility policies are only as good as the enforcement mechanism. There have been no investigations in the UK into what robust social responsibility in the gambling industry looks like or how it could best be implemented. This is a neglected area of work which academics and the gambling industry should be developing in partnership. Question 5: What are the social and economic costs of gambling?

Response: As principal investigator of the first UK study exploring the relationship between gambling and debt (funded by Gamcare and the Money Advice Trust) the stark conclusion was that for each individual with a gambling problem between four and eleven other people or organizations were directly socially and economically adversely affected. The impacts of problem gambling

240

go beyond the individual, rippling out to the family, employer and local community of the affected individual. The UK Gambling and Debt study identified the following social and economic impacts, although other impacts have been found in work by many leading academics:

Economic Impacts

• Significant and intractable debt among all participants (amounts ranging from around £3000 to over £350,000

• Recurring debt – that is, debts paid off (by a family member, consolidation loans, re-mortgaging or inheritance for example) but the problem gambler would then fall into debt again, usually within 12 months

• Loss of home through eviction for rent or mortgage arrears and where accompanied by relationship breakdown, street homelessness

• Significant levels of acquisitive crime, including credit card fraud, mortgage fraud, theft from employers, theft from family, theft from friends, theft from clubs and from charities. Some companies have filed for bankruptcy after theft or fraud by problem gamblers in their employ, although none of the problem gamblers in the Gambling and Debt study had caused this level of loss to an employer

• Reduced productivity and absenteeism – distracted at work by thinking of gambling, or planning how to get money to gamble or replace money lost gambling

• Inability to financially provide for self or family (new clothes, shoes, food, holiday, car repairs)

• High risk of losing job (disciplinary action by employers in relation to absences, consistently poor work rates, misuse of IT facilities or theft or fraud being discovered)

• Problem gambling can act as a barrier to employment for those unemployed because having access to wages, bank account, consumer credit encourages a return to gambling on a scale that cannot be afforded when unemployed

• Serving time in prison (for failing to pay fines, council tax, acquisitive crime) and therefore the cost of a prison place, benefits for family, loss of job. The work of May-Chahal et al (2017) suggests that significant numbers of incarcerated populations are more vulnerable to problem gambling than the general population, with rates of PG up to 15% in prisons as opposed to around 1.4% of the general population. There has been little attempt to identify any relationship between offending behavior and problem gambling

• Pressure on NHS from associated conditions (stress, depression, co-morbidities including alcoholism and substance misuse)

Social Impacts

• Relationship difficulties up to and often including relationship breakdown • Intimate partner violence and domestic violence were commonly reported

by participants • Problem gamblers reported disengaging from family life • Personality changes (short-tempered, aggression, withdrawn) • Shame and social exclusion of family members when they discover levels

241

of debt or crime caused by their loved one • Family members unaware of problem gambling of loved one until loss of

home / arrival of bailiffs / arrival of police to arrest problem gambler • Social exclusion through poverty • Damage to communities from clusters of betting shops / arcades • Children of problem gamblers changing school as a result of eviction and

having education disrupted. • Mental and physical health problems for both the problem gambler and

family members • Low self-esteem among problem gamblers • Staff at betting shops /arcades experience abuse or violence from

disgruntled gamblers

Question 6: What are the social and economic benefits of gambling? How can they be measured and assessed?

Response: Gambling has economic benefits to the tune of almost £14bn annually to the UK gambling industry, and to the Exchequer from various gambling taxes. Employment within the gambling industry is significant because of the size of the sector, although individual outlets (betting shops, arcades) usually employ fewer people than a comparable sized retail outlet. As the industry is investing heavily in AI and machine learning it is likely that numbers of workers in terrestrial outlets will decline over the next 10 years, while all UK gambling companies are growing their online business.

Lotteries provide funds for various good causes, and the traditional draw-based game, especially the smaller, social lotteries, are much less likely to lead to the development of problem gambling, although scratch cards are problematic. Many modest gamblers enjoy participating occasionally in a range of gambling activities as part of their leisure. This has been shown to give people hope and pleasure as they speculate about what they might win, and is an important underpinning of the motivation to gamble, particularly on lotteries.

Measurement of the social and economic benefits of gambling should move beyond financial metrics and should include a cost-benefit analysis that takes into account levels of harm. For example, a society lottery, with direct-debit payments, limited draws and no opportunity for online or scratch-card gaming by participants will produce more benefits (in terms of donations to charity, prizes to winners, enjoyment of participants) and a lower risk of participants developing problem gambling than some other types of gambling. The current means of measuring the social and economic benefits of gambling do not take into account differing levels of risk, types of social responsibility measures or the wider social and economic costs (some of which are detailed in the response to question 5)

Question 7: Is the money raised by the levy adequate to meet the current needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons?

242

Response: The levy is wholly inadequate to fund research education and the treatment of around 450, 000 problem gamblers. Robust estimates suggest the cost of treating alcohol dependent people to the NHS is £3.5bn per year (Roberts et al, 2019), in the UK there are around 590,000 dependent drinkers, equating to around £5900 per year per person spent on treatment alone. This figure is for NHS treatments (periods spent as in-patients, visits to GPs etc) and does not include drug and alcohol addiction services as these are funded through local authorities rather than the NHS. If we were spending this much on problem gamblers, we would need a budget of £2.6bn per year. In fact, the UK is likely to be spending significant amounts on the consequences of problem gambling, but it will be coming out of general NHS, criminal justice and other budgets, undermining the ‘polluter pays’ principle of the Gambling Act (2005). It should be noted here that the 2.6bn a year would be solely for treatment, without any money set aside for research into the social, psychological, economic or other aspects of gambling nor for education programmes about responsible gambling. The maximum currently contributed by the gambling industry is £10m annually, and this is often a very reluctant donation. Numbers of gambling operators donate tiny amounts (£10 for example) so as to get on the list of donors. While I acknowledge that a group of larger operators plan to increase their donations towards the levy to 1% of profits over the next five years, that will only result in £100m of funding. This falls far short of what is realistically needed for a comprehensive treatment service, for example in 2013-14 £877m was spent on drug and alcohol addiction treatment in the UK. Establishing the true cost of gambling addictions to various services is critically important as it is only through knowing the costs that a judgement can be made as to the level of contribution the industry should make. There may also be a case for conducting research into the levels of harm caused by particular types of gambling so that those more likely to lead to addiction have to contribute more to the levy than those causing less harm. Question 9: If, as the Responsible Gambling Strategy Board (RGSB) has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation? Response: There is certainly very limited evidence on which to base sound decisions about gambling by children and young people. I produced the first research on children and virtual gambling in 2009. Virtual gambling is unregulated as it does not involve gambling for money but with tokens provided by the app developer. However, when the free tokens run out players can make an in-app purchase of more tokens. Children can use payment cards they can buy at many high street retailers to make in-app purchases. These sorts of games have spread exponentially since 2009 and the types of gambling are very varied and often concealed when simply viewing the front-end of an app. For example, along with games that are purely gambling (Zynga Poker on Facebook) there are gambling elements included in many games that at first sight are suitable for children. We have no research into the impacts of loot boxes in video games on children or young people’s understanding of gambling. Anecdotally a large number of X-box live and Play Station Plus gamers bet with each other while playing FIFA, Forza and so on, for virtual goods. We have no prevalence data, no age breakdowns for this type of gambling but we do know that hundreds of thousands of teenage boys in particular play these video games.

243

Many very young children are able to download apps by themselves, and certainly would not be barred from accessing apps with gambling elements. There should also be concern about the popular video game Grand Theft Auto, which has now activated a casino as part of it’s game. Players need to buy tokens to use in the casino but cannot cash out winnings, which enables the game developers to avoid regulation. However, although the game is certified as an 18, many younger teenagers have access to Grand Theft Auto, and therefore to the the casino that is part of the game. It is well established that the earlier people become habituated to gambling the more likely it is they will develop problem gambling. We also lack research into the ways in which children understand risk and odds, how they conceptualize gambling, how advertising and marketing affect their decisions regarding gambling. Question 13: The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.”

Response: I would certainly agree that there are significant risks with uncontrolled gambling advertising. I was supervising a small child using an educational app on an iPad only to be horrified when an advertisement for a gambling app (cartoon based) appeared. There should be significant restrictions on gambling advertising. Prior to the Gambling Act (2005) the general principle was that although gambling was legal it should only be provided where operators could show there was ‘unstimulated demand’. Restrictions on advertising were eased with the arrival of the National Lottery but are now completely absent. Some operators have decided to voluntarily limit their advertising with a ‘whistle to whistle’ ban on adverts during live sporting event, but many children and young people do not watch much live TV, preferring social media, You Tube, Netflix, Amazon and so on. Via personalized marketing children and young people are exposed to adverts and offers related to gambling. Again, I have personal experience with my 16 year old son getting gambling adverts appear on his Instagram feed. Many children lie about their age on their social media accounts and thus are vulnerable to seeing adverts or receiving marketing that are not age appropriate. Research by Ofcom found that a significant proportion of young people (between 27-34%) believe online adverts are ‘telling the truth’ (Ofcom, 2017b) and that almost 50% of children did not identify sponsored links or content online (Ofcom, 2017b)

Question 15: How are new forms of technology, including social media, affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future? Response: Most children over the age of 11 now have access to 4G enabled mobile phones (Ofcom, 2017a) which means they can access the internet 24/7, with parents rarely aware of the ways in which their children are using these devices. Children are using social media, (often lying about their age to access accounts), children have bedrooms equipped with internet access via video games machines and laptop computers. All of these changes mean children can easily access a wide variety of leisure activity. However, there are many

244

gambling adverts and marketing promotions running through social media – children can access these. Where a gambling promotion offers free play there may not be a requirement to sign up with a credit or debit card. There have been cases of children using relatives credit or debit cards or relatives online accounts to access gambling or to make in-app purchases for loot boxes (akin to gambling). Children can also easily use their own money to buy a voucher that enables in-app purchases, these are available at outlets like Game, Argos and major supermarkets. There has been in sufficient research into this topic so we do not understand how these experiences are affecting children’s understanding of or access to gambling or gambling like games. A large-scale, longitudinal study is urgently needed to assess children’s use of technology and access to gambling or gambling-like activities and to explore whether there is a relationship between early access and development of problem or habitual gambling. Closing remarks: This document is unable to address all of the questions posed by the committee due to space restrictions, and the questions addressed have answers that are summaries of complex matters. I would be happy to speak to the committee in person so that you had a more detailed picture. References

Downs, C (2011)‘Playing in a Virtual Bedroom: youth leisure in the Facebook generation’ pp 15-31 in Children, Youth and Leisure, Editors Ruth Jeanes and Jonathan Magee (LSA No 113) ISBN 978 1 905369 24 9

Downs, C and Woolrych, R (2010) ‘Gambling and Debt: The wider impact’ Community, Work and Families Vol. 13, No. 3, August 2010, 309-326

Downs, C (2010) ‘Young People Playing with Risk: Social networking and the

normalisation of gambling behaviours’ in Leisure Experiences: Space, Place and Performance ed: Marion Stuart-Hoyle and Jane Lovell LSA 109 ISBN 978 1 905369 20 1 pp25-47

Downs, C and Woolrych, R (2009) Gambling and Debt: Pathfinder Report (2009), Manchester: MMU RIHSC Occasional Publications Series ISSN 1750-1571 ISBN 978-1-900139-39-7 (Anonymously Peer reviewed before publication)

May-Chahal, C., Humphreys, L., Clifton, A., Francis, B. and Reith, G., 2017. Gambling harm and crime careers. Journal of gambling studies, 33(1), pp.65-84. Ofcom. (2017a). Share of children who regularly used mobile phones in the United Kingdom (UK) from 2014 to 2017, by age. Statista. Statista Inc.. Accessed: September 06, 2019. https://www.statista.com/statistics/398283/children-regular-use-of-mobile-phones-by-age-uk/ Ofcom (2017b) Children and Parents: Media Use and Attitudes Report accessed: September 06, 2019. https://www.ofcom.org.uk/research-and-data/media-literacy-research/childrens/children-and-parents-media-use-and-attitudes-report-2018

245

6 September 2019

246

East Riding of Yorkshire Council – Written evidence (GAM0028) The Gambling Act 2005

1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable people persons from being harmed or exploited by gambling) being upheld?

There is effort being made to meet the three primary aims, however, with new challenges in social media, gaming, advertising and promotion of gambling protection of children and other vulnerable people from the potential harms of gambling are becoming more difficult to control and measure the impact. . The Think Tank Centre for Justice quoted the Lord Chadlington who described the apparent dramatic failings of the Gambling Act 2005(1). They quote the following:

The Gambling Act 2005 has, as one of its three objectives, “protecting children and other vulnerable persons from being harmed…by gambling”. But we are failing to do that – dramatically. Of the 430,000 problem gamblers in this country, nearly 10% are young people aged between 11 and 15. Just 8,000 of those 430,000 are in treatment. This equates to just 2% of all gambling addicts in the country, compared with up to 20% of those addicted to alcohol or drugs.

UK data has shown an increase in children aged 11 participating in gambling which is a behaviour they adopt and maintain throughout their adolescent years(2). Online gaming is becoming the most prominent introduction to gambling-like behaviour for children and young people. See question 15 for more information of gambling with children and young people.

2. What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed?

There is a growing resource of literature looking at the massive growth in the online gambling and gaming market. The remote sector market share (i.e. online betting, gaming, bingo and casino games) is now 38.8% of the gambling market which is up 1.2% from April 2018(3). The biggest issue with the Gambling Act 2005 is the brief mention of the use of remote gambling. Since 2005, internet and mobile devices technology has grown exponentially. In 2005, it was estimated 13.9% of the world population uses the internet. In June 2019, it was estimated 58.8% of the world population now uses the internet(4). In the UK, it was estimated in June 2019 that 94.6% of the population use the internet(5). Changes to the Act should be made to accommodate for the diverse use of the internet. More effort to advertise the harms of gambling could be increased. Warning messages for electronic and online games should be increased but from reputable sources, such as PHE, UK Government, NHS and charity organisations. Warning messages are available on tobacco problems, which although don’t necessarily always prevent people from smoking, it does make people aware of the dangers that they may not consider. Likewise for gambling, where the

247

immediate harm is potential financial loss, advertising the wider harms of gambling such as relationship breakdowns, physical and mental health issues etc. could prompt consumers to consider the wider implications of their participation(6).

3. Is gambling well regulated, including the licensing regime for both on- and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions?

As a general rule, the legal age for gambling in the UK is 18. This is with the exception of the National Lottery, lotteries and football pools which have a minimum age of 16 years. However, gambling machines such as coin pushers, teddy grabbers and some fruit machines in family entertainment centres and amusement arcades are open to anyone of any age(7). Online gambling sites have been difficult in previous years to regulate, particularly in the attempt to protect children and young people from gambling. Customers must now verify their age before they can deposit funds or gamble with their own money or a free bet or bonus. The Gambling Commission new rules also require remote licensees to ask for any identification documents as early as possible and to take reasonable steps to ensure information on their customers’ identities are as accurate as possible(8). Offshore gambling has risen in recent years due to the increased popularity of foreign online casino operators. Only a quick Google® search of ‘Offshore gambling UK’ brings up thousands of results, most providing external websites and sources for UK residents to use for gambling.

4. Should gambling operators have a legal duty of care to their customers?

Yes. Other lifestyle behaviours such as alcohol have a related duty of care. Alcohol licensing mandates a duty of care of licensee and servers to protect those consuming alcohol and those around them from harm(9). As with other risk behaviours (such as drinking or drug taking) those who gamble can experience harm as can their immediate and extended network. The gambling industry therefore should have a legal duty of care to minimise the potential harm(10). Likewise, gambling has the potential to harm those who partake in the activities as well as those in their wider circle. Research has discussed the potential for using visible behavioural indicators to identify high-risk individuals within gambling establishments to provide interventional training for those who spot those problem gamblers(11). Should the gambling industry have to provide funding to educate young people on responsible gaming, identifying areas of risk?

5. What are the social and economic costs of Gambling?

• Family breakdowns • Debt counselling • Crime to fund gambling addiction • NHS treatment • Creation of future generations who continue to become addicted to

gambling

6. What are the social and economic benefits of Gambling?

248

• Social interaction for lone people/ elderly • Sponsorship of sports for example, which then gives pleasure to the

general public • Non remote gambling is done in a safe environment that is governed,

This data could only be collected from people involved in gambling, seeking their view on its benefits to their lives. Treatment

8. Are the services for the treatment and support of people at risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help?

A study researching how gambling impacts migrants and the migrant communities in Leeds identified a main reason gambling has such profound impacts on those engaging the activity is in part due to the unawareness of the services available to treat and support people at risk of being harmed by gambling(12). There is currently no treatment centre or integrated into NHS yet for online gaming and gambling addictions. The NHS has launched an internet addiction clinic which will be responsible for treatment, research and offering advice to individuals and families affected by internet addiction. This does not particularly address the needs for those with gambling and gaming addiction(13).

12.What steps should be taken better to understand any link between suicide and gambling?

GambleAware commissioned research found that problem gamblers are 6-times more likely to have suicidal tendencies and 15-times more likely to commit suicide. These increased rates also apply when excluding risk factors such as depression, substance abuse and financial problems(14). According to research from the University of Sheffield, there is no empirical research on death and fatalities related to gambling but many reliable media houses such as the BBC, The Guardian and the Mirror UK have reported violence incidence and deaths as a result of problematic online gaming, gambling and problematic gambling(13). To better understand this link, more concentrated and in-depth research needs to be conducted on those who participate in gambling as well as with those in their extended and intimate network. Developing a deeper understanding of the attraction, formation of addiction and repercussions of the activity will potentially be able to enlighten the mechanisms of decline in mentality, from when gambling is addictive to when gambling is suicide motivating. The Gambling Commission regularly receive information regarding the information about the consumer and the method they choose to gamble. Through online surveys and telephone calls, data is collected from consumers regarding gambling participation and online gambling behaviour(15). However, this data collection does not seem to enquire about gambling mind-set so does not contribute to the evidence base regarding the link between suicide and gambling. These survey’s also appear to underreport the level of problem gambling, with data indicating 0.7% of adults (16+) in the UK being defined as problem gamblers(15).

249

From current literature, and understanding of the basic influence financial situation has on the decline of mental health, but more specific insight is required on the link between suicide ideation and gambling. Steps to consider taking in order to understand the link between gambling and suicide could be:

• Continue with online surveys and telephone calls (appear to yield good level of reply)

• Engage with those using gambling; whether it is through online surveys or the telephone queries, recruit consumers to focus groups within local areas to have discussions around their gambling habits, motivations and emotions

• Ethnography is the practice of systematically studying people and their cultures. Put simply, observing people in their environment to make observations and develop understandings of habits and exhibited emotions.

o An interesting example of gambling ethnography was conducted by a student at the University of Wyoming(16).

▪ Although this project does not comment specifically on the emotions exhibited by gamblers, it does show the observations that could be made by conducting research of this kind in gambling institutions

• Interviews are a powerful tool in public health research. To investigate the link between suicide and gambling, interviews could be used to engage with consumers but also their network.

o Caveats to this method would be recruiting consumers or those affected by suicide or suicide-attempts due to gambling as for many this can be a difficult topic to discuss

o There are charities for those families/friends/peers affected by the loss of someone due to gambling-related pressures. These charity groups could be approached to discuss behaviours, emotions and circumstances around the gambling-related death to build a profile the link between the two.

In ERY, there is the suicide surveillance which aims to identify reasons for suicide as well as to monitor the areas where suicides occur. As part of this programme, it is hoped underlying reasons such as gambling-related issues (i.e. financial pressures) can be identified and services targeted to ensure locals receive the help they need. Gambling by young people and children

15.How are new forms of technology, including social media, affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future?

Gambling and social media: There has been an increase in the popularity of casino games and betting on social media in recent years. Gambling themes are popular in video and computer games, and simulated gambling activities are commonly offered by gambling operators as a way of enticing users to gamble online with money. Online games and social media do not necessarily involve ‘real’ money but can include in-game bonuses such as loot boxes (for example which contain new lives, treasure or weapons upgrades). These rewards feed the same neurological

250

response of gambling. A study by the University of York and York St John identified adults with problem gambling addictions were more likely to have paid more for video game features like loot boxes. This research found a significant relationship between problem gambling and loot boxes(17). Gambling and video gaming are two leisure activities in which children and young people participate and the relationship between the two is increasing in strength(18). Another element to social media is the publication of posts/tweets/status updates from peers or from social platforms such as UniLad® where anecdotes of bets placed winning high amounts of money, or just missing out on vast amounts of money following the completion of a game become entertainment. These public posts portray gambling as a fun and harmless activity, where the only downside if potential losing out on the money potentially won, rather than individuals losing the money they bet, in addition to the wider implications of gambling. Also, online communities forming in support of gambling activities (whether this is a group of random connections or peers within the same area) can normalise gambling and see this as a normal part of sports appreciation(19). Further exploration of the influence social media posts have on gambling mind-sets has been explored by the think tank Demos. See the full report here. Gambling and targeted ads: Captive audience Platforms like Facebook, Twitter, YouTube and Instagram are means through which gambling websites or games can be promoted. GambleAware are currently working in conjunction with social media to reduce the promotion of gambling websites, particularly to vulnerable people, including children and young people(20). Currently it is in the control of the user to ‘hide’ advertisements from their social media, but not everyone is aware of how to do this, nor understand why adverts are being targeted at them. Likewise, those who are targeted with gambling adverts may fail to understand the potential severity of engaging with gambling or games online. This lack of information, in conjunction with prominent advertisement of free bets or incentives to sign-up can lead to more serious issues. Advertisements on YouTube often appear before a video starts, or sometimes even part way through. Similar to gambling adverts appearing in the break-time between sports on television, those watching these videos become a captive audience. More often than not, these advertisements are promoting the odds of gambling and the potential winnings, not showing the wider effects of problematic gambling as aforementioned(21).

16.The legal availability of certain forms of commercial gambling to under-18s in Great Britain is unusual by international standards and has been described as a “historical accident”. Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins?

There is a current consultation by the UK Government and the Minister for Sport and Civil Society Mims Davies, looking at whether the minimum age for National Lottery games and products should be raised to 18 years. This is being considered in an effort to protect vulnerable people from forms of gambling that can lead to more problematic habits(22). Providing this notion for consultation has faced backlash with feedback from other MPs and gambling charities stating children should under no means be allowed to gamble.

251

The UK has one of the most liberal gambling policy regimes in the world. Gambling regimes need to change to match the advances in modern technology and the availability of online gambling for children and young people. Through increasing the age of all gambling activities, including scratch cards to 18 years, the mind-set that lotteries are harmless could be diminished.

17.Should children be allowed to play Category D games machines (which include fruit machines, pushers and cranes)?

No. In accordance with the Gambling Commission, the presence of category D games machines are most commonly found in adult gaming centres, family entertainment centres, pubs and travelling fairs. This question can be related back to the legal duty of care establishments should have to ensure their patrons are gambling safely. Likewise, patrons should be aware of the potential normalising of gambling culture, as children seeing gambling as a normal family activity can set a precedence for later life. Under the Gambling Act 2005, there is no age limit on the use of category D games.

252

Bibliography: 1. Doughty I. Road to recovery. Manuf Eng. 1993;72(5):208–10. 2. Commission G. Young people and gambling 2017. 2017;(December):1–49.

Available from: https://www.gamblingcommission.gov.uk/PDF/survey-data/Young-People-and-Gambling-2017-Report.pdf

3. Gambling Commission. Industry statistics [Internet]. Available from: https://www.gamblingcommission.gov.uk/news-action-and-statistics/Statistics-and-research/Statistics/Industry-statistics.aspx

4. Internet World Statistics. Internet growth statistics [Internet]. 2019. Available from: https://www.internetworldstats.com/emarketing.htm

5. Internet World Statistics. Internet in Europe Stats [Internet]. 2019. Available from: https://www.internetworldstats.com/stats4.htm

6. Gambling Commission. Gambling-related harm as a public health issue. 2018.

7. BeGambleAware. How is gambling regulated? [Internet]. 2019. Available from: https://www.begambleaware.org/understanding-gambling/how-is-gambling-regulated/

8. Gambling Commission. New rules to make online gambling in Britain fairer and safer [Internet]. 2019. Available from: https://www.gamblingcommission.gov.uk/news-action-and-statistics/News/new-rules-to-make-online-gambling-in-britain-fairer-and-safer

9. Government U. Contents @ Www.Legislation.Gov.Uk [Internet]. UK Government; 2003. Available from: http://www.legislation.gov.uk/ukpga/2006/45/contents

10. Blake M, Pye J, Mollidor C, Morris L, Wardle H, Reith G. Measuring gambling-related harms among children and young people. 2019;(April).

11. Hancock L, Schellinck T, Schrans T. Gambling and corporate social responsibility (CSR): Re-defining industry and state roles on duty of care, host responsibility and risk management. Policy Soc. 2008;27(1):55–68.

12. Bramley S. Understanding how gambling may impact on migrants and migrant communities in Leeds. Kings College London; 2019.

13. Nagumo W-R, Ghosh B. Healthcare needs assessment online gaming addiction and disorders. 2019.

14. Davies R. Problem gamblers much more likely to attempt suicide - study [Internet]. The Guardian; 2019. Available from: https://www.theguardian.com/society/2019/jul/19/problem-gamblers-much-more-likely-to-attempt-suicide-study

15. Commission G. Gambling participation and problem gambling [Internet]. 2019. Available from: https://www.gamblingcommission.gov.uk/news-action-and-statistics/Statistics-and-research/Levels-of-participation-and-problem-gambling/Gambling-participation-and-problem-gambling.aspx

16. Herstead C. Gambling Ethnograhy [Internet]. 2015. Available from: https://www.slideshare.net/CathyHerstead/gambling-ethnography

17. Zendle D, Cairns P. Loot boxes are again linked to problem gambling: Results of a replication study. PLoS One. 2019;14(3):1–13.

18. McBride J, Derevensky J. Gambling and video game playing among youth. J Gambl Issues. 2016;2016(34):156–78.

19. Miller C, Krasodomski-Jones A, Smith J. Gambling & Social Media. 2016;(February):1–45. Available from: https://www.demos.co.uk/project/gambling-and-social-media/

20. BeGambleAware. Social Media [Internet]. FatMedia; 2019. Available from:

253

https://www.begambleaware.org/safer-gambling/social-media/ 21. Wardle H, Reith G, Langham E, Rogers RD. Gambling and public health: We

need policy action to prevent harm. BMJ [Internet]. 2019;365(May):1–5. Available from: http://dx.doi.org/doi:10.1136/bmj.l1807

22. Department for Digital, Culture M and S, Davies M. National Lottery scratchcard minimum age could be increased to 18 [Internet]. 2019. Available from: https://www.gov.uk/government/news/national-lottery-scratchcard-minimum-age-could-be-increased-to-18

5 September 2019

254

EG (Estates Gazette) – Written evidence (GAM0005)

Mr. James Child, Head of Retail & Industrial Research, EG I am supplying this evidence representing my company, EG, who are a commercial real estate journal. The analysis below is supported using analysis from our commercial property database, Radius Data Exchange, and combining it with data from the MHCLG. Over the past few years I have been engaged in the process of supporting the property industry and government with data and analysis to cure the UKs high streets of its current ills. I have worked with the MHCLG, supporting their High Street Funds programme through evidence based data analysis, and also worked on the Grimsey Review 2, an independent review into the failures of the UK high streets. Regular commentator for the BBC, ITV, Evening Standard and The Times and presenter / speaker at sector specific events such as REVO, Completely Retail and MIPIM UK. ------- The UK’s most deprived high streets will be hit hardest by vacancies caused by the implementation of new rules for fixed-odds betting terminals, according to Radius Data Exchange. Radius Data Exchange figures show that more than half of the nation’s 6,000 bookies are in the UK’s most deprived areas. Analysis of the portfolios of the four biggest UK bookmakers – William Hill, Ladbrokes, Betfred and Paddy Power – shows that their high street operations cover 8.9m sq ft, equivalent to almost three times the size of the Aintree Racecourse. With online gambling on the increase and higher occupational costs, the gambling “boom” born on the high street since the 2008 recession has slowed significantly. In March 2019, William Hill wrote to landlords, asking for rent cuts of up to 50%. The move came ahead of the new FOBT regulations, which lower the maximum bid allowed on fixed-odds betting terminals from £100 to just £2. The bookmaker expects that as many as 900 shops will become loss-making as a result of the changes. They have since announced that they are going to go ahead with some 700 store closures, putting 4,500 jobs at risk. Combining Radius Data Exchange statistics with the Ministry of Housing, Communities & Local Government’s “English Index of Multiple Deprivation”, we can measure just how many high streets in England’s most deprived areas will be affected by potential betting shop closures. Our analysis found that 56% of all the big four’s betting shops are located in the top 30% most deprived areas in England. The indices of deprivation are based on seven different factors. Income, employment, education, health, crime, housing and living environment are all taken into account to rank more than 32,000 areas in England, from most to least deprived. These sub-areas are dissected to indicate the 10% most deprived areas through to the top 10% least deprived areas. In isolation, Paddy Power has the strongest presence in the most deprived areas in the UK. In total, 78% of its stores are found in the top 40% most deprived areas. William Hill has the greatest spread between the deciles, with a 21% spread between least deprived and most deprived destinations in terms of shops. Comparing the portfolio analysis with the latest population estimates from the ONS shows that London, the North West, Yorkshire & Humberside, Scotland and

255

the North East all have a higher percentage of stores when compared with their population. We also know that bunching occurs, with more than 5% of all the big four bookies’ stores sharing postcodes. This implies that almost 700 units will be on the same high streets as other bookmakers. Any vacancies could be hardest felt in these particular towns. Landlord exposure to an impending raft of vacancies will mostly concern private individuals or investors, or possibly local councils. With the majority of stores being located on the high street, betting shops have been an attractive stream of revenue in an increasingly threadbare retail tapestry. According to our database, Radius Data Exchange, the average high street betting shop is around 1,500 sq ft, making them the ideal size for independent retailers should they become empty. The challenge, however, will be to fill those gaps with vibrant and new concepts. In recent years, the real winners of this sort of space have been vape shops, coffee outlets and hairdressers. But, with betting shops falling under the sui generis use class category, this means that the repurposing of any store to A1/A3 would require an application for change of use. 30 July 2019

256

Geraldine Eley – Written evidence (GAM0025)

1. I am a Local Government Licensing Enforcement Officer for a London Borough and have carried out those duties for the last 16 years. I do not submit comments on behalf of that Authority, only on my own part as an Enforcement Officer. Whilst the committee is seeking evidence on the Act, its provisions, and everything that falls within it, there are other issues, created by the Act, that are also gambling and need to be updated and included in the Act to prevent harm to children and, subsequently, our future society and I would like you to consider the following:

2. Sixteen years ago, I sought compliance with the Night Café and

Entertainment Licences which were then transposed into the Licensing Act 2003 and was later joined by the Gambling Act 2005 in 2007.

3. Before the 2005 Act was introduced gaming machines (referred to as fruit

machines or one-armed bandits) were present in take-away premises and taxi offices and all had legislation behind them stating that it was against the law for anyone under the age of 18 to play those machines. I do not recall any complaints to this effect during the years prior to the Act coming into force and, whilst I did not have responsibility for those offences at that time, residents/customers will frequently complain to the Authority regardless of whether they have responsibility or not.

4. Under the Gambling Act 2005 no take-away, café, food shop, minicab or

taxicab office are permitted to have those machines, properly known as Amusement With Prize (AWP) as they cannot qualify for a licence. Some months after the Act came into force we conducted joint operations with Police and HMRC to remove those machines where there were still sited after the owners had been warned.

5. This then gave rise to another machine, known as a Skill With Prize (SWP)

which falls outside of the Gambling Act and is, therefore, legally sited at these premises. As they technically fall outside of the Gambling / Gaming specifications they also have no age limitation and anyone, of any age, can play these machines without hindrance.

6. SWP did exist prior to the Gambling Act and they are commonly found in

pubs and seaside resort facilities and were made up of “Grab a Toy” type machine or “General Knowledge” type quiz machines. I don’t think that there can be any doubt that, under these descriptions, these machines are skill machines, cannot be progressed without skill, and are just a “fun” distraction. However, these machines have now morphed into replicating the AWP, whilst retaining some technical format that classifies them as SWP. Things that “technically” make it different are things like, it must not have a roulette wheel, but it can have a wagon wheel. It cannot say Jackpot, but it can say Prize and it cannot have a “Start” button but has “Go” button instead. The reason it cannot have dice or lucky sevens is that the livery should not “Appear” like its related to gambling. Whilst this sounds alright in black and white you can make your own assessment from the pictures below as to what they appear to be:

257

SWP AWP SWP

7. Whist these machines have limited stakes of 50p or £1 per spin the maximum “prize” is £50 and can be played by any age. As a Mother I know that a £10 prize would be attractive to a 10-year-old, never mind the allure of £50 for one pound of your dinner money.

8. We are allowing children to play these machines and sowing the seeds of

addiction to Gambling Machines for the future. There is no difference between these machines to the average person in the street as my complaint inbox will attest. I now receive complaints from members of the public stating that children are playing the machines illegally and, in every instance, I must visit the premise to ensure they haven’t changed the machine since the last time I was there. Surely this begs the question, if there is no material difference between these types of machines to adults, what difference is there to children?

9. At the commencement of the Gambling Act I was involved in all sorts of

pilot exams and discussions and it was felt that it was inappropriate for this type of machine to be available in these outlets. Today, not only are they sited in these outlets, they are sited without any controls and that is a direct result of this Act.

10.I note that you are seeking to understand issues where concrete evidence

is lacking and whilst I do not have to hand any testimony that an addiction to gambling machines in adulthood was first experienced with these SWPs, there is no doubt, in my mind that what you experience when young remains with you for life, both good and bad.

11.A skill with prize should be, in my opinion, exactly that. General

Knowledge quiz machines and the grabbing type of machine that requires

258

some cerebral or physical skill from you to progress or catch the prize. Not something that is an AWP in all but technicalities. I feel the time has come to reclassify these machines and stop children being able to play them.

12.If the protection of children the future of our society is not sufficient

reason to change the current legislation, then think of the revenue. For every offence of an illegal machine HMRC issued a fine of £5000 for unpaid revenue. These outlets are still operating these machines under a different banner but are they paying the revenue due? They weren’t before, and I suspect that this hasn’t changed. Where a permit or licence is in force there is a revenue stream for Government which is being sidestepped by these venues at present.

13.Under the Gambling Act there are duties to children and the vulnerable

that just don’t exist for these machines, so whilst we may examine the Act as it is, we need to look further to ensure the Act is encompassing all gambling.

5 September 2019

259

English Football League – Written evidence (GAM0082) Overview

1. Formed in 1888 by its twelve founder members, the English Football League (EFL) is the world's original league football competition and provides the template for leagues the world over. It is the largest single body of professional clubs in European football and is responsible for administering and regulating the Sky Bet EFL (which consists of the Sky Bet Championship, Sky Bet League One and Sky Bet League Two), the Carabao Cup and the Leasing.com Trophy, as well as reserve and youth football. It also represents its clubs’ interests within domestic football and the wider political structure, including representation on the FA Board and Council.

2. EFL clubs deliver competitive, exciting professional football in towns and cities throughout England and Wales to a dedicated fan-base of passionate supporters. With over 18m admissions last season, more people watch EFL matches than any other sporting competition in the UK.

3. Professional football clubs are an integral part of the towns and cities from which they take their name and, in many, deliver the biggest single form of communal activity in their local area. They also play an active part in improving the lives of local people through the work of the EFL Trust and club Community Trusts.

4. The EFL Trust is a registered charity that governs, advises and audits the charitable trusts associated with the professional clubs of the EFL, who employ more than 2,500 members of staff including teachers, coaches, professional health and social workers. Using the ‘Power of Football’, The Trust continues to flourish, delivering life improving projects, which engage with over a 1.5 million people per year, focusing on education, sport, community development and health.

5. Traditionally the breeding ground for the stars of the future, the EFL continues to play a key role in identifying and developing the next generation of footballing talent and its clubs invest more than £100m every year in this area. There are more than 8,500 young footballers between the ages of 8 and 18 on the books of EFL clubs.

6. On behalf of its clubs, the EFL generates the commercial revenue that sustains football’s growth through the sale of collective rights, sponsorship, licensing and other commercial activity. EFL matches are beamed into the homes of football supporters in every corner of the globe and are shown in more than 180 countries every week, reaching approximately 290m homes. As a result, clubs generate more than £700m of revenue annually and contribute £300m in taxation to the exchequer.

7. While the EFL is not a gambling operator or a consumer of gambling products, it does nonetheless have a historic and sustained relationship with the gambling industry which today includes a title sponsorship of our

260

competition and partnerships with a number of our clubs. It is therefore appropriate that the EFL responds to this call for evidence on the social and economic impact of the gambling industry by providing responses to questions 6 and 14 specifically.

Question Responses Q 6 - What are the social and economic benefits of gambling? How can they measured and be assessed?

8. At the outset, it is important to acknowledge that gambling is a legitimate form of entertainment that has been a popular pastime in the UK for centuries. Historians suggest that gambling began in its earliest iterations in ancient civilisations of China, Greece and Rome and has taken place around the world for thousands of years. Gambling is always likely to be a feature of any society whether legal, illegal, tolerated or regulated, but in the UK today, the overwhelming majority of people are able to enjoy safe and responsible gambling in one of the most regulated gambling sectors in the world.

9. Football has a long standing relationship with that gambling industry, which for many years has been part of the social landscape of British life. From the Football Pools through to official associations with individual bookmakers, overall, this partnership has been beneficial to both industries, as well as fans, many of whom enjoy putting on a bet as part of their matchday experience.

10.In simple terms, the UK Government enjoys extensive economic contributions from a regulated gambling industry to the tune of billions of pounds to the exchequer. In the football context, similar benefits are derived from the gambling sector in the economic support it provides to clubs – particularly outside the Premier League - to ensure that they can remain economically sustainable organisations, representing the communities in which they are based.

11.Our unique four tier pyramid of professional football clubs is admired worldwide with clubs providing exciting matches week in, week out in front of a total annual audience of more than 30 million attending supporters, with millions more watching matches on television across the globe. Beyond that, EFL clubs play a crucial role in the towns and cities from which they take their name delivering a sense of civic belonging as well as important community work through our network of club community trusts that deliver health, education, inclusion and sports participation initiatives to more than 1.5m people every year, including many from disadvantaged backgrounds.

12.It would be naïve to believe that some of the significant investment currently being made by gambling operators into professional football is not predicated on the ability to activate those commercial partnership by advertising their services to the targeted market of football supporters that watch matches on television, with the demographic of the betting and

261

football audiences being largely similar. Betting is an industry for which sponsorship has to deliver custom as well as brand awareness to be cost effective. Advertising during sporting events is pivotal to this, particularly in terms of promoting ‘in play’ betting opportunities.

13.For our part, the EFL’s league competition consisting of its three divisions of 24 clubs has been sponsored by Sky Bet, an online only UK based gambling operator, in a multi-million pound agreement that is now in its seventh year (of at least eleven). Since 2013/14, Sky Bet has been an excellent partner to football and the EFL. In addition, more than 60 of our clubs also have co-existing official arrangements with competitor betting brands (some including front of shirt sponsorship) and beyond that many carry paid-for advertising on pitchside perimeter boards and in matchday programmes.

14.Outside of the EFL, many other football organisations have similar official partnerships with bookmakers such as William Hill’s partnerships with the Football Supporters’ Association and the Football Writers’ Association, while other sports have similar title sponsorships, for example the Rugby Football League and Betfred. As such, the investment made by the gambling industry into the sport but particularly football is a crucial element of the game’s financial model - the maintenance of which is a key aim for the football authorities.

15.While there is a common perception that football is awash with broadcasting and sponsorship money this is not necessarily the case for many professional clubs, some of whom struggle to remain financially sustainable. As demonstrated by the fact that as of May 2019, 52 of 72 EFL clubs ended the season in deficit, while the collective had a net deficit of £388 million.

16.Therefore the commercial relationships that football clubs have with partners from various industries are critical to their ongoing viability. In the case of the betting industry, while the EFL does not have sight of individual club deals, it would seem reasonable to suggest that its investment into EFL clubs totals around £30m per season, perhaps more. Additionally, professional football receives significant funding from domestic broadcasters who recoup some of their significant outlay through the sale of advertising and sponsorship opportunities to betting companies.

17.As this consultation itself exemplifies, there remains extensive scrutiny about the gambling sector’s relationship with sport and in particular football, but it should not be assumed that the income football receives from the betting industry can easily be replaced by alternative commercial relationships with companies from other industries.

18.The sports sponsorship market is becoming an ever tougher environment for sport governing bodies and competition organisers. In the 2014/15 the FA Cup, a highly attractive property for potential commercial partners, went unsponsored for a whole season. In terms of our own competitions, the EFL Cup (formerly the League Cup) ran for the whole of the 2016/17

262

without a sponsor, the first time this has happened since the competition became the first to carry a sponsors’ name back in 1981 following a ground breaking agreement with the Milk Marketing Board. A period of some 35 years. In seeking to attract a new partner the EFL approached more than 600 brands before finally agreeing a three-year deal that began in 2017/18 with Thai owned energy drink Carabao. The failure to find sponsors for these two competitions for a season apiece cost domestic football a figure in the region of £15m. Money that would otherwise have been distributed throughout the professional game and down into the grassroots game (from both competitions).

Q 14 - Gambling is becoming an integral part of a growing number of sports with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this?

19.As is set out in the above response to question six, the nature of the commercial relationship that exists between professional football and gambling operators is crucial to the economic model of the game.

20.It is also the case that football is a socially responsible industry and the EFL is clear that in establishing links with responsible gambling companies, in no way does it wish to assist the proliferation of problem gambling.

21.As it stands, figures show that at present 0.7% of gamblers are classified as problem gamblers and the EFL is of the view that gambling operators, have a responsibility to ensure that effective mechanisms are in place to firstly identify those with issues and secondly help address problem behaviours and addiction.

22.As part of this, the EFL fully supported the announcement that the UK’s biggest gambling operators including owners of William Hill, Ladbrokes Coral, Paddy Power Betfair, Bet 365 and indeed Sky Bet have committed to increased their voluntary levy on gambling profits from 0.1% to 1% by 2023, which is expected to total a collective contribution of £60m.

23.Having a fully funded, progressive approach to tackling problem gambling is essential to restoring confidence in the betting industry, which is important to bodies like the EFL as we want to have a commercial relationship with bookmakers that is healthy for our clubs and not unhealthy for those fans that choose to gamble.

24.In respect to some calls in Westminster that have suggested shirt sponsorship of football teams and gambling advertising within football should be banned, there is little evidence to suggest that there is a link between gambling advertising and problem gambling. Beyond anecdotal calls, little appears to have changed since Per Binde’s 2014 survey of available evidence, which concluded that the impact of advertising on the prevalence of problem gambling is likely to be “rather relatively small”.

25.Notwithstanding, the EFL does note that the gambling industry has made moves to address levels of exposure of in game betting to young people

263

by introducing a self-imposed “whistle to whistle” ban on gambling adverts being shown on live sport before the 9pm watershed.

26.For its part, the EFL maintains that football should always be able to partner with responsible and licensed operators and believes such moves highlight that the UK gambling industry is taking its duty of care to customers and the wider public seriously. This is a view that is reflected by the EFL fan base. In June 2019, an EFL supporter survey went out to over 27,000 fans, with 71% of fans responding to state that they felt the level of gambling companies’ involvement in the game was acceptable.

27.This is a theme which formed the key part of the extension terms of the EFL’s title sponsorship agreement with Sky Bet which will run until 2023/24. Specifically, it included a commitment to an enhanced Memorandum of Understanding (MoU) between the two organisations.

28.The MoU established an agreed set of commitments that aim to address the wider sporting integrity and societal concerns that often emanate from a commercial partnership between one of football’s competition organisers and a betting company. It included:

a. The arrangements put in place by the football authorities to protect the integrity of competition, such as the monitoring of global betting markets for irregular activity and the complete prohibition of football ‘participants’ betting on football.

b. A commitment from both parties, enshrined in our commercial agreement, that marketing messages aimed at minors will not include reference to Sky Bet.

c. The promotion of responsible gambling messaging, including on sleeve badges worn by all first team players for EFL matches from 2018/19 for at least two seasons.

d. Education delivered to players on a range of personal and social education topics, including gambling.

e. The EFL’s commitment, working in conjunction with the PFA, to support players with addiction issues, including gambling.

29.Significantly, the EFL and Sky Bet’s shared commitment to safer gambling

also included a £1 million pound standalone investment to educate EFL players and staff at clubs about gambling related harm. This programme is underway and is being rolled out at clubs by EPIC Risk Management.

30.The EFL remains steadfast in its desire to work with a well‑regulated,

socially responsible gambling industry and while scrutiny of football’s relationship with gambling continues, we do not believe that there is a need for regulatory change at the current time. However, we have always maintained that should any Government seek to alter the status quo with regard to the rules relating to sports betting that it do so working collaboratively with the EFL to enable us to try and mitigate the effects on our clubs.

11 September 2019

264

265

EPIC Risk Management – Written evidence (GAM0107) www.epicriskmanagement.com / @epicpgc Submitted by Paul Buck, CEO, EPIC Risk Management and recovered pathological gambler. This was on the request of Lord Butler after meeting at a Symposium in London in November 2019, at which Mr Buck spoke on a panel around area of gambling harm prevention. Background: I placed my first bet in 1994 … a £10 each way bet on a horse at 33/1. It had no chance on form but won by 12 lengths. As an 18-year-old just starting university in Leeds, the feeling of Euphoria was immense as I collected the £500 winnings. There wasn’t then a day for 17 years that I didn’t place a bet in some form. It was difficult to bet in 1994. You had to go to a bookmaker’s shop between 9am and 5pm and place bets on horses, dogs or the football pools and do it in cash. By 2001, I had progressed through the Gambling Spectrum to be a pathological gambler. I was no longer in control of what I was doing. Between 2001 and 2011, I transacted £4.8m across 93 separate betting accounts losing a total of £1.3m. I owned two racehorses, sixteen greyhounds and all whilst keeping my gambling disorder completely secret. I was also a member of 14 different VIP schemes. In 2011, following the tragic death of Gary Speed, I went missing for 10 days before returning to work and attempting suicide by hanging in a branch of Santander, the bank that I worked for. I am fortunate to be alive today. The following day I handed myself in to Santander senior management to tell them that I had misappropriated £434,000 which had been spent entirely on gambling transactions as proven by subsequent forensic investigations. On June 29th, 2012, I was sentenced to 2 years 8 months imprisonment for fraud and abuse of position. I served this in HMP Preston and then HMP Kirkham in Lancashire. It was in HMP Kirkham that EPIC was formed (EPIC being Education, Prevention, Identification and Control). Designed to be an organisation that used lived experience to prevent people suffering harms and ending up where I did or worse. EPIC Risk Management: EPIC Risk Management has now built to 20 people and expected to be 30+ by the end of 2020. Several members of my team are recovered / recovering pathological gamblers who between them transacted over £35m in gambling accounts, losing in excess of £10m. We have 2 prison sentences, 4 failed relationships, 2 bankruptcies, 3 suicide attempts and 7 stalled careers. Not normally a great CV, but in this climate, it provides unique authenticity and balance. Everything that we do is committed to prevention of gambling related harms without exception. We also have specialists in risk management, audit, financial crime, learning, development, training and teaching. Some highlights of our work over the last 7 years include:

• We have worked with over 2,500 serving members of the British Army since 2016

• We work in 6 of the toughest prisons in the UK with serving prisoners, prison officers, families of prisoners and probation teams. Our work, if rolled out, would potentially save the country a minimum of £36.2m if scaled nationally.

266

• We work with the high street banks Barclays and Lloyds as well as private bank Ruffers in helping their risk teams identify risks to their finances, reputation, brand and people.

• We worked with 37,500 children aged 15-18 directly in the academic year 2018/19 and that will rise to over 55,000 this academic year. We are an official partner to the Boarding Schools Association and Headmasters and Headmistress Conference working annually with schools such as Harrow, Eton College and Millfield. We are also working with close to 150 schools nationwide in the state sector which include mainstream schools, academy trusts, Pupil Referral Units (PRU) and SEND schools in some of the most underprivileged areas of the country. This state school programme has been funded by GVC and is independently assured and evaluated by UCFB and advised by Cambridge University. Significantly this is the first specific and significant study into the use of lived experience to educate around gambling. We are very keen for there to be no unintended consequences and the early evaluations show this form of delivery to be safe and effective.

• In professional sport we have worked with every elite player in rugby union, rugby league and cricket including England and Ireland Rugby through the RFU, RFL and PCA respectively, England Cricket and the All Blacks. In football we are in the midst of the largest gambling education and awareness programme ever conducted in world sport in partnership with the EFL and its principal sponsor SkyBet. This will see over 15,000 professional footballers of all ages be educated around the risks of out of control gambling plus we will agree further initiatives with the EFL and SkyBet over the coming years to ensure the programme remains relevant, effective and far-reaching. The relationship between sport, and particularly football, and gambling is under intense scrutiny, but this programme is a shining example of the potential merits of collaborative programmes as long as the assurance and evaluation is kept completely independent like in this one. The programme assurance and evaluation is being conducted by UCFB – Etihad, and will evaluate the prevalence of gambling amongst elite sportspeople but also the wider benefits to the community such as social media engagement (up to 14m Twitter followers engaged in Year 1) and people being signposted to treatment at a much improved rate than the general population through current treatment pathways.

EPIC is not anti-gambling in any way, but we are anti problem gambling. On the advice of the Gambling Commission then CEO, in 2017, we started working with the gambling industry. The challenge presented was that every gambler gambles with a gambling operator hence every disordered gambler gambles with a gambling operator. We started working with Kindred Group (Unibet / 32 Red) as they were seen as the standard bearers. This has expanded to two further main partners in Sky Betting and Gaming and most recently, and comprehensively, GVC since December 2018. The sole aim of our work is to make gambling safer and fairer. We work across customer journey, customer interactions, VIP schemes, affordability, key case reviews, internal staff training at all levels including Board, product design, advertising and keeping crime out of gambling. We have also turned a lot of operators and revenue down. We have one simple premise that we will only work with operators who are absolutely committed to preventing gambling related harm, improving standards and changing for the

267

better. We will not be part of a tick box exercise and any initiatives we become involved in must have substance. The regulation and scrutiny around the gambling industry is tightening. We often receive criticism as recovered pathological gamblers for working with the industry but we believe absolutely that there is no value in just telling people they need to improve, or constantly fining them, you have to show them both the WHY and the HOW to improve and that is what we firmly do with any partner we have. Our perspective is perhaps unique. EPIC now work in 14 countries including the USA where gambling is at an earlier intersection of the journey. We are seeing huge engagement in that country and across Europe. In the UK there still needs to be much greater collaboration across the regulator, charities, treatment providers, researchers and other suppliers such as EPIC. There is an age-old establishment and infrastructure that does not encourage innovation or disruptors despite limited success of current methods. The UK is going through a crucial stage of gambling reform and only collaboration of all parties, not just a chosen few, will bring us out of this and lived experience should be at the core. Final thoughts: There is no magic bullet to cure disordered gambling. There is little argument that gambling needs to become safer and fairer for all. Nobody should gamble with time or money that they cannot afford to. I would offer five final observations:

1. There is immense scrutiny on the gambling industry operators at present. It is clear that historically some of the practices and procedures were poor and both my team and I suffered from these. However, I do believe that there is an appetite to improve and the operators should be encouraged to do this, allowed to do this and applauded when they do. Certainly, in Kindred, Sky Betting and Gaming and GVC I see enormous appetite to do as much as they possibly can to make gambling safer and fairer for consumers and learn from past mistakes. The danger is that not all operators are the same and we must find a way of bringing consistency to the sector, something the formation of the Betting and Gaming Council can assist and lead.

2. Banks must be shown that they have a duty of care as well as operators. The ideal would be both working together. Financial services institutions know every gambling transaction; indeed, they charge upwards of £3 each but the FCA do not hold banks to account. Only by banks identifying and intervening effectively can we truly start to tackle problem gambling.

3. Education of our next tech savvy generation is crucial. In a world of social media, advertising, gaming (lootboxes / skins) and technology children must be given the ability and education to make informed decisions. This education must be effective, age appropriate, professionally delivered and without unintended consequence. Gambling should be of equal importance to alcohol, drugs, sex, bullying and stranger danger as it is potentially equally as serious. EPIC, YGAM and Gamcare lead in this field and a co-ordinated approach backed by regulator and all other parties should be agreed for consistency of message and combining of talents.

4. Training of gambling operator staff is crucial and should be fundamental to all licenced businesses. Operators should be able to identify disordered gamblers quickly and intervene quickly and effectively. This training should also include the subtle signs of vulnerability, encourage to interact

268

earlier and in a way that will prevent people from moving along EPIC’s proprietary Gambling Spectrum and promote sustainable and safe levels of play. We have seen such a wide variance of culture in operators and abilities of employees to do this.

5. There should be a review of the Gambling Act of 2005 so that it is brought

into line with the current world of 2020 and beyond. Gambling is fast changing. It changed so much between my first bet in 1994 and 2005 and it has changed even more since with online gambling. The conditions must be set that allow gambling to be entertainment and people only gamble with the time and money they can afford. This should be well considered which is why we welcome this committee.

I thank Lord Butler for his request and the Committee for accepting this late submission. Upon further request from Policy Analyst, Megan Jones on Thursday 20 th February 2020: Having read the submission, I wanted to ask whether you could possibly provide the Committee with additional information about EPIC’s relationship with GVC, SkyBet and Kindred, particularly:

▪ How were these relationships established? ▪ More information about the work undertaken with each of the companies

listed above. ▪ The basis on which this work is undertaken (for example, your agreement

with GVC); and ▪ How much of your income comes from these three companies?

The Committee has heard differing opinions about whether organisations who work tackling gambling-related harms should accept money from the gambling industry (either directly or indirectly), do you have any views on this issue that you might like to share with the Committee? I will take each of your questions in turn. As mentioned in my initial submission I attended a UK Gambling Commission Board Meeting in 2017 and presented the work that EPIC was conducting in high risk sectors. I was challenged by the then CEO, Sarah Harrison, as to why I wasn’t working in the industry that most harm exists – namely the gambling industry. The argument being that everyone who gambles, gambles with a gambling operator hence everyone who is a disordered gambler also gambles with a gambling operator. The challenge was go and make them better at what they do. I initially approached Kindred Group as they were lauded as the most responsible operator and worked with them for a year before starting to work with the Sky Betting and Gaming Board and more recently GVC as partners in their Changing for the Bettor initiative. We have turned many operators down as we only want to work with those who genuinely want to improve standards, improve training of their teams and lead in gambling harm prevention initiatives. We will never be part of a tick box exercise. We have concentrated on the following activity with each of the three operators:

269

Kindred – in house training with all Unibet and 32 Red employees around customer journey, lived experience, psychology of a gambler, identification of a disordered gambler, the EPIC proprietary Gambling Spectrum, effective and appropriate interaction with disordered gamblers, vulnerability, suicide and working with local medical, legal and educational institutions in Malta and Gibraltar. Kindred remain at the forefront of RG measures. Sky Betting and Gaming – in house training with SBG employees around customer journey, lived experience, psychology of a gambler, identification of a disordered gambler, the EPIC proprietary Gambling Spectrum, effective and appropriate interaction with disordered gamblers, vulnerability and suicide. I personally sit on the Safer Gambling Board where I am encouraged by the CEO, COO and other business leaders to challenge them hard on safer gambling initiatives, product designs, advertising, etc. In addition, with SBG, as stated in the main submission, we are currently facilitating the largest and most penetrative gambling education and awareness programme ever conducted in world sport in partnership with the EFL (English Football League). GVC – this caused a stir when we announced that we would be partnering with GVC in their Changing for the Bettor initiative. The misconception being that they had no desire to be leaders in the field of safer gambling. After meeting several of their key leaders it was clear that mistakes had been made but that they now wanted to lead in terms of investment, focus and improvement. Nothing has happened in the last 14 months to change that opinion. In addition to a comprehensive training package for employees, we are also working with them globally on initiatives around safer gambling and they are funding a state school education programme, asking us to help review key cases, advising on tone of tv adverts and also on the dangers attached to new products. In terms of the nature of our relationships with these companies, we are not a charity, so we do not accept donations or handouts. We are a professional services risk management consultancy and we scope and charge a fee for our work appropriately, the same as we do with financial services, professional sport, the armed forces, criminal justice and private schools. We pride ourselves as being a leader in the field of gambling harms prevention. Currently around 25-30% of our income comes from gambling operators but let me be clear by saying that we would still have a commercially sustainable but socially driven business without this income. Our driver to work with operators with genuine desire to improve standards is not financial – it is to improve standards and reduce the amounts of people suffering disordered gambling and the negative effects of such like my team and I suffered like many others. My views on working with the gambling industry are clear. There is far too much disordered gambling and gambling related associated harms in the UK and globally. The Government has been slow in dealing with an outdated Gambling Act and the current commissioning arrangements are flawed and reliant far too much on a small number of organisations. The gambling industry have not been as socially responsible as it should have been historically, and many operators are now committed to a more sustainable industry. They are the ones who are investing in harm prevention initiatives and until a more robust infrastructure is

270

in place then actually their funding is the only way of driving up standards in an under-scrutiny sector. Any proposals made must concentrate on a transparent and fair commissioning process which in our view has been sadly missing for the last decade. The gambling industry are prepared to invest in harm minimisation but want the funds dealt with in an effective, impactful, evidence led way. EPIC will work with any sector who are genuine in wanting to reduce harm. If we can stop one person reaching the depths that many of our team did then it is a job well done. The reality is that we are reaching many more than that. 5 March 2020

271

European Lotto Betting Association – Written evidence (GAM0007) The Gambling Act 2005 1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld? From the perspective of the European Lotto Betting Association (eLBA) the primary aims of the Gambling Act 2005 are being upheld. While we recognise that operators should continuously strive to improve their operations in order to prevent any gambling-related harm, we consider the current state of compliance with the Gambling Act to be satisfactory. 2. What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed? No specific changes to be necessary at the current moment. 3. Is gambling well regulated, including the licensing regime for both on- and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions? As an industry body representing lottery betting operators, who offer their products exclusively online, we consider the existing regulation applicable to online gambling operators to be sufficient and well-designed. Online operators have to comply with a range of sophisticated requirements and regulations, many of which have not been replicated for land-based retail gambling operators. The recently introduced system for age verification of online gamblers is an example of this. In many ways online gaming/gambling regulations and their enforcement are more sophisticated than those applicable to retail operators due to the multiple additional levels of control. This has been demonstrated by previous test purchasing campaigns carried out by Camelot, which showed that nearly one in 10 stores failed to perform appropriate age-verification of customers attempting to purchase gambling product on at least one occasion. 4. Should gambling operators have a legal duty of care to their customers? Gambling operators have a legal responsibility to comply with existing regulatory restrictions and to operate in good faith. This responsibility represents their duty of care for their customers. As gambling operators all eLBA members are aware of the risk to consumers and are committed to complying with all necessary regulation in order to ensure that customers are protected and are playing responsibly. It is important, however, to find a balance between providing sufficient regulatory protection for players and allowing them free choice and access to their preferred gambling product without excessive barriers. 5. What are the social and economic costs of gambling? These might include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost

272

tax receipts; housing costs through statutory homelessness applications; and criminal justice costs. The socio-economic costs of gambling are difficult to determine in isolation due to the close association of problem gambling with a range of other issues including poor mental health and substance abuse amongst others. Attempting to attribute the costs associated with such problematic behaviors to a single industry/set of products is unhelpful and even counterproductive as it often conceals issues of larger scale. As gambling operators eLBA members are dedicated to responsible gambling practices and believe that addressing gambling-related problems requires a comprehensive cross-sector approach, which emphasizes early education and problem detection as well as appropriate mental health services for those who struggle with problem gambling. 6. What are the social and economic benefits of gambling? How can they be measured and assessed? Gambling operators contribute taxes and duties to the national budget like any other industry and provide jobs to a number of employees. Gambling winners also often give back to society through taxes or donations to good causes. Furthermore, gambling operators are often engaged in corporate and social responsibility schemes that aim to provide concrete social benefits such as boosting research capabilities on general addiction issues (e.g. the creation of Centre of Excellence at the University of Gibraltar) or educating the public on relevant issues. When it comes to low-stakes games such as lotteries and small-scale bets, gambling can provide a fun social activity and a tool for team building in workplaces and similar environment. 7. Is the money raised by the levy adequate to meet the current needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons? Evaluating the degree of adequacy of the money raised by the levy is difficult without clarity about the way in which contributions are utilized. As gambling operators eLBA members would like to gain better understanding about the specific ways in which their contributions are spent as well as about the ways in which those spending are determined and overseen. In this context, the Swedish approach could be a useful guideline. The public in Sweden is able to access openly and online comprehensive information about the ways in which the money paid by the gambling industry is being distributed. 8. How might we improve the quality and timeliness of research in the UK? What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons? eLBA recognises the potential risks associated with gambling and is of the firm belief that those should be subject to thorough scientific research and analysis. However, in order to ensure that all potential impacts are well-understood, research on gambling-related issues should seek to explore presumed positive as well as negative consequences of gambling. This should include research into the different risk profiles of various gambling products with a view of differentiating between lower-risk/long-odds products such as betting on lottery offerings and higher-risk/short-odds ones such as

273

casino games. Such an understanding is crucial for the development of efficient knowledge-based public policy on responsible gambling. 9. If, as the Responsible Gambling Strategy Board (RGSB)1 has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation? 1 Now called the Advisory Board for Safer Gambling. More needs to be done in order for protect children and young people from gambling related harm. This has been well-demonstrated by the survey on Young People & Gambling, published in November 2018, which revealed that 14% of the surveyed young people (aged 11-16) admitted to having gambled recently. This rate makes gambling the most prevalent potentially harmful activity amongst young people followed by alcohol consumption (13%) and smoking cigarettes (4%). Any efforts seeking to mitigate this need to be carried out in a comprehensive manner involving various stakeholders including the Department of Education, healthcare authorities and others. In this context, carrying out appropriate research and educational campaigns is crucial. This could include surveying school children on gambling-related topics in order to probe their understanding and behavior and carrying out workshops for educators, children and their families in order to raise awareness of the problematic nature of so called “harmless betting” (bingo, in-built purchases in games etc.). Healthcare centers should provide more information regarding gambling risks to youths and their families. Furthermore, efforts should be made towards removing the taboo surrounding problem gambling/gambling addiction in the society at large in order to facilitate access to information and help for those who might need it. Education 10. Is enough being done to provide effective public education about gambling? If not, what more should be done? Current efforts towards providing public education about gambling are insufficient. This is well demonstrated by the information collected by Lottoland, a member of eLBA, in the context of their P.A.R.E.N.T. campaign. According to the data, 45% of UK parents with children aged 7-16 describe their knowledge of the risks associated with online gaming as poor, extremely poor, or neither poor nor good, and 39% admit the same with regards to online gambling. Furthermore, more than a third (38%) of UK parents admitted to having been forced to pay charged as a result of their children’s online gaming habits despite having had no prior knowledge/understanding of the costs involved. Such statistics demonstrate that the understanding of parents and young people about the risks of gambling is low and needs to be boosted. In an attempt to remedy this issue, the P.A.R.E.N.T programme will launch an educational curriculum on social gaming and the associated risks for schoolchildren in Gibraltar starting in September. Following this example integrating responsible gambling/gaming topics in the school curriculum across the UK would be an important step towards boosting awareness and understanding. Treatment 11. Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help?

274

The main problem with access to treatment for individuals at risk of gambling-related harm is that such treatment is often available at later stages when the harm might already be significant. In order to tackle this, competent authorities should not only provide more options for early detection and treatment but should focus on removing the societal stigma when it comes to those issues. In doing this the Department for Digital, Culture, Media and Sport should work in close cooperation with health and education authorities. Gambling operators should also be involved and cooperate with authorities on raising awareness and providing support. 12. What steps should be taken to better understand any link between suicide and gambling? Further research into mental health issues and intervening factors is necessary step towards the development of more efficient mental health services and suicide prevention. Such research, however, should seek to accomplish a comprehensive understanding about all the factors that might contribute to suicide, including lack of adequate early stage support for people who struggle with mental health, substance abuse and financial problems amongst others. Assuming a direct link between gambling specifically and suicide is a reductionist approach, which overlooks the wide range of circumstances that might contribute to the decision of individuals to end their life. Research into gambling, suicide and related issues in the UK should seek to use the knowledge already accumulated by researchers abroad. Researchers from Sweden, for example, have already made some progress on the topic. To this end the UK competent authorities should seek to establish cross-border cooperation with their counterparts in other countries. Advertising 13. The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” 2 Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons? eLBA members from their perspective as online betting on lottery operators disagree with the notion that currently there are no limitations regarding the exposure of young people to gambling and gambling advertising. In fact, eLBA members find that advertising regulations applicable to them have already introduced considerable and effective restrictions in order to prevent exposure of young people to gambling advertising. Admittedly, eLBA members recognise that this might not necessarily be applicable to other forms of gambling such as sports betting. However, in the case of betting on lottery this statement does not apply. Gambling and sport 14. Gambling is becoming an integral part of a growing number of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this? N/A Gambling by young people and children 15. How are new forms of technology, including social media, affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future?

275

New forms of technology have in some cases facilitated easier access and exposure to gambling-related products/getaway products for children and young people. A good example are social gaming products that allow in-game purchases and/or feature Pay-to-Play or Pay-to-Win elements, whose use and costs is often understood poorly by parents and/or by the children who use them. This has been backed by research carried out in the context of the P.A.R.E.N.T campaign (see above) which showed that 16% of the surveyed parents of children aged 7-16 had no knowledge whatsoever of many terms associated with online gaming, many of which imply the use of real money in exchange of improving the odds of better performance or improving the player experience. Normalisation of the use of real money for the achievement of improved odds/experience (associated with instant gratification) in the digital environment could have potentially problematic consequences for young people’s attitudes towards gambling. 16. The legal availability of certain forms of commercial gambling to under-18s in Great Britain is unusual by international standards and has been described as an ‘historical accident’. Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins? eLBA members believe that the legal age for access to ALL forms of commercial gambling should be 18 and these restrictions should include National Lottery products. 17. Should children be allowed to play Category D games machines (which include fruit machines, pushers and cranes)? 2 https://www.gamblingcommission.gov.uk/PDF/RGSB-Gambling-and-children-and-young-people-2018.pdf, p.12. 3 https://www.gamblingcommission.gov.uk/PDF/RGSB-Gambling-and-children-and-young-people-2018.pdf, p2. 4 Lotteries Children should NOT be provided access to any type of gambling products regardless of their perceived risk profile. There is no such thing as a harmless gambling product. Category D games machines could act as gateway gambling products for young children. Lotteries 18. The restrictions on society lotteries were relaxed by the Gambling Act 2005, and there is concern that some of them are effectively being taken over by larger commercial lotteries. Is this concern well founded? If so, what should be done? No, such concerns are not well-founded. Every consumer should have the right to choose what licensed product they would like to purchase. As long as all applicable competition laws (e.g. those prohibiting the formation of cartels etc.) are respected, there is no need for a return to the restrictions on society lotteries. 19. Should changes be made to the statutory regime governing the National Lottery, to bring it into line with the regime governing operators of other lotteries? The minimum age for playing the National Lottery games should be increased to 18 in order to be in line with the requirements for restricted access to minors to all gambling products. 14 August 2019

276

Evangelical Alliance UK – Written evidence (GAM0072) Background

1. The Evangelical Alliance UK is the largest and oldest body representing the UK’s two million evangelical Christians. Formed in 1846, we currently work across a diverse constituency of 81 denominations, 4,000 churches, 600 organisations and thousands of individual members. Members include those from both denominational and independent churches. Along with other churches and faith groups, the Alliance has been concerned for a long time about the risks associated with gambling and the impact it can have on individuals, families and wider communities.

Response

Q7: Is the money raised by the levy adequate to meet the current needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons?

2. We believe that research, education and treatment are vital concerns. With this in mind, we support a mandatory levy on the gambling industry, to raise the funds that are required for these activities, rather than relying on voluntary contributions. A mandatory levy on all companies would spread the cost more fairly across the industry. It would also raise funds which are in proportion to the profits made. In addition, a guarantee of funding (through a mandatory levy) would remove the prospect of any influence from the industry on those projects which are funded by it.

3. The money gained could be used for research where more is needed, such as on the effect of gambling on young people and the impact of gambling advertising, or on fast-moving areas such as online gambling. On treatment, this funding should also be used to ensure that treatment is equally accessible across the country.

Q10: Is enough being done to provide effective public education about gambling? If not, what more should be done?

4. We support additional investment in digital literacy and teaching on addiction in all its forms (including problem gambling) in schools. At the same time, there must be greater public awareness of the vulnerability of young people to problem gambling in connection with questions around their online safety, such as the dangers of internet and gaming addiction and the increased vulnerability of young people to targeted advertising. These issues were considered, for example, in the House of Lords Communications Committee inquiry: Growing Up with the Internet.197

5. As for how teaching on gambling addiction could be delivered, we suggest

197 https://www.parliament.uk/business/committees/committees-a-z/lords-select/communications-committee/news-parliament-2017/growing-up-with-internet-debate/

277

that the pilot study supported by GambleAware and run by Demos and others, of lessons covering impulse control, assessing risk and spotting manipulative behaviour, is a good case study.198

Q13: The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons?

6. We agree with the caution that the RGSB has expressed on the issue of gambling advertising. We continue to believe that a ban on gambling advertising before the 9pm watershed is justified, and we welcome the recent decision by gambling companies to limit advertising during live sports events, in recognition of the widespread concern at the quantity of this advertising.199 Such advertising contributes to the normalisation of gambling in society, particularly among children and young people. There must now also be discussions around other contexts in which children and young people are exposed to gambling advertising, particularly online.

Q14: Gambling is becoming an integral part of a growing number of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this?

7. We believe that the quantity of gambling advertising in particular has had a detrimental impact on sport (see the answer to question 13 above). In addition, the increasing dominance of gambling in connection with sports has an impact on those players who, for reasons of conscience, do not wish to be complicit in promoting the gambling industry. We therefore urge the Committee to consider ways in which the conscience of these players can be protected and acknowledged.

8. For example, in a report published by the Evangelical Alliance, the Lawyers’ Christian Fellowship and ADF International entitled Christianity in the Workplace, we cited the example of Sonny Bill Williams, the New Zealand Rugby Union player. Sonny Bill is a Muslim, and was allowed an exemption from wearing logos or participating in sponsorship work with companies related to alcohol or gambling. This was a good example of reasonable accommodation and religious literacy on the part of his employer, but also highlights the risk of such clashes arising as gambling becomes more dominant in advertising.

9. Furthermore, quite apart from religious groups, as the harms associated with gambling become more widely known, it is conceivable that players without religious reasons may nonetheless object on ethical grounds to gambling sponsorship. The rights of players in these circumstances should be considered.

198 https://www.demos.co.uk/wp-content/uploads/2018/03/Reducing-the-Odds-an-Education-Pilot-

to-Prevent-Gambling-Harm.pdf 199 https://www.bbc.co.uk/sport/46453954

278

Q16: The legal availability of certain forms of commercial gambling to under-18s in Great Britain is unusual by international standards and has been described as an ‘historical accident’. Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins?

10.Britain has the only regulated gambling market that allows under-18s to participate in commercial gambling. Meanwhile, according to some estimates, 55,000 children and young people are already problem gamblers, with a further 70,000 at risk of harm. We believe that this makes the current arrangements deeply problematic.

11.Access to commercial gambling gives young people the impression that gambling is normal and harmless. It also associates gambling with positive early memories. Alongside ever-increasing exposure to gambling-related advertising (as in question 13), this creates a climate in which gambling is seen as less risky than it actually is.

12.In addition, we know that gambling addiction has a disproportionate impact on young people because of the disruption it causes to their education and relationships. And research suggests that gambling addiction which arises among young people is more severe.200

13.The current position on young people and gambling is also out of step with increasing caution in other areas (such as online) when it comes to the risk and impact of addiction and other problems for young people. In a world in which child safeguarding is – rightly – being taken much more seriously, such anomalies are increasingly hard to justify. For all these reasons, we believe that under 18’s should not have access to commercial gambling.

Q17: Should children be allowed to play Category D games machines (which include fruit machines, pushers and cranes)?

14.We do not believe that children should be allowed to play Category D games machines. For the reasons given in answer to question 16, we do not believe that under 18’s should have access to commercial gambling.

6 September 2019

200 http://about.gambleaware.org/media/1274/1-june-update-children-young-people-literature-review.pdf

279

Federation of Racecourse Bookmakers – Written evidence (GAM0008) Background information

1. The FRB is pleased to respond to the call for evidence published by the Select Committee on the Social and Economic Impact of the Gambling Industry. In order that the response may be read in the correct context, we have outlined below the history of the Federation. This is important as it recognised that the on-course bookmaking industry operates a different business model to those of the off-course and on-line betting industries.

2. The Federation of Racecourse Bookmakers (FRB) was formed in 2003 at the behest of DCMS to ensure that any submissions made by the on-course bookmaking industry are representative of the views of the entire industry. It is the umbrella organisation for The Association of Racecourse Bookmakers, The National Association of Bookmakers and The Rails Bookmakers Association. The FRB’s constituent associations consist mainly of on-course bookmakers, but do have some off-course bookmakers as members.

3. As an unintended consequence of the Gambling Act 2005, a dispute over tenure of list positions developed between bookmakers and The Racecourse Association (RCA). Former Sports Minister Gerry Sutcliffe convened a working party to open discussions between the FRB and RCA which resulted in an agreement incorporating future direct payments to racing from the on-course bookmaking industry.

Gambling and racing

4. There is an intrinsic link between horseracing and gambling and it is essential that this inquiry appreciates that most punters are not addicts and enjoy a day at the races. According to the Gambling Commission, 0.7% of people aged 16+ in Great Britain are classified as problem gamblers.201 For decades, wagering on the outcome of horse races has been a source of the appeal of the sport and is the sole reason horse racing has survived as a major professional sport.

5. Whilst we believe that the research, education and treatment for problem gambling should be funded by the gambling industry, the mechanism and amounts should take into account (a) the relative profitability of the businesses involved , (b) the need for proportionality in light of the administrative and bureaucratic burden and (c) if possible, the relative impact of the different sectors of the gambling industry on problem gambling.

On-course bookmakers’ financial contribution to racing

6. Unlike other sectors of the racing industry, in 2012 the FRB on behalf of its constituent members negotiated and concluded a 40 year commercial deal with racing. The terms of the licence incorporate the right of attendance

201 https://www.gamblingcommission.gov.uk/PDF/survey-data/England-Health-Survey-Findings-2016.pdf

280

by the bookmaker and his staff, the right to trade encompassing all those services and facilities offered on any race day. These licences which include a built-in review mechanism, allow for a direct payment from the bookmakers to the racecourse. Whilst the on-course industry’s payments to racing have increased greatly over the last few years, we are happy to make a sensible and equitable contribution to ensure investment and the continuity of a great British tradition.

7. Racecourses, with our contribution, give support to organisations and charities that support those with gambling addictions. We are of course ready to continue our support via our financial payments to racecourses and our annual contribution to Gamble Aware.

8. We do not believe that a statutory levy should be imposed on the on-course market. In fact the existing contributions made to all aspects of racing by FRB membership should be taken into account as well as the differing business models of stakeholders.

Differences between on-course and off-course / on-line bookmaking

9. Tackling problem gambling should be a priority for all bookmakers. However, on-course bookmakers have always been treated differently to their off-course and on-line counterparts to take into account their commercial arrangements with racecourses and unique business model. Should on-course bookmakers be treated in the same fashion as off-course and on-line bookmakers, it would have a serious impact on their ability to remain viable.

10.On-course bookmakers operate in a fashion that allows for frequent and personal contact. Firstly, there is the interaction between the bookmaker and the punter when placing a bet. Even in the fast pace pre-race betting there is still time for a conversation. As a result, the on-course bookmakers will notice if a member of the public returns frequently to place numerous bets.

11.Secondly, the presence of the Betting Ring Manager, who is supplied by an independent company called AGT, appointed by the racecourses themselves but fully funded by the on-course bookmaker, allows for an extra pair of eyes on these activities. Since the introduction of the Anti-Money Laundering regulations in 2017 the role of the Betting Ring Manager has been augmented to support bookmakers in all aspects of their work, including anti-money laundering policies and tackling under-age betting. The FRB employs the services of Serve Legal to ensure all their members comply with the law in this matter.

12.Thirdly, there are extensive gaps between races, which does not allow for a pattern of gambling akin to the constant input of money into Fixed Odds Betting Terminals. Additionally, it should be recognised that on-course bookmakers only offer one product, not multiple platforms as seen in the off-course and on-line industry.

13.Even at the big race meetings, most bets tend to be in single or double figures. It is suggested that a Lingfield on a mid-week evening, bets tend to be around £9, at Sandown £12 and even on major race days such as Ascot or Cheltenham, bets are unlikely to be above a few hundred pounds – in fact individual bets larger than that would certainly raise suspicion.

14.The Gross Gambling Yield of the on-course industry is a small proportion

281

of all betting revenue. Turnover has been falling since April 2016 indicating that both numbers of gamblers and the size of their bet is reducing.

15.Additionally, our members do not use credit cards to take bets, unlike the business model of other bookmakers. We fully support a ban on the use of credit cards for gambling and will be responding to the current Gambling Commission consultation on this subject.

16.As we operate from racecourses, punters have to pay an entry fee in order to enter the racecourse. This additional payment is most likely to deter those who do not see attendance as an enjoyable past-time, but who prefer to spend all their money on betting. There are no entry fees to high street bookmakers and on-line gambling sites, makes these platforms a more attractive offering to potential problem gamblers.

17.Finally, our business model is not based on incentivisation for increased betting activity. Unlike the off-course and on-line industry, we do not offer bonuses or gimmicks to staff who encourage punters to continuously bet, nor do we advertise.

Conclusion

18.The FRB is fully committed to supporting those who develop a gambling problem, and working with industry partners to prevent consumer habits spiralling out of control. However, solutions to problem gamblers must not take away from the vast majority of the members of the public who wish to enjoy a day at the races and placing bets in a controlled fashion.

19.A statutory Levy is not the solution for the on-course market. The on-course market makes its contribution to Gamble Aware according to their size and business model

20.It is essential that any solution outlines a clear and distinct marker between the contribution of the on-course and the off-course and on-line bookmaking industry.

21.The FRB would be very happy to provide further information to the Committee.

16 August 2019

282

Federation of Racecourse Bookmakers – Supplementary written evidence (GAM0127) Facial Recognition We have asked our software provider to research the potential of developing a facial recognition programme based on a product that is presently available in the USA. Whilst that product is different to our requirements, we are asking if it can be adapted to our needs. We are aware there are some hurdles to over-come but hope that this can be achieved over time. Signage New Think 21 signs will be sent to all on-course bookmakers, which they are being told they should display. Seminars The Federation, along with the Gambling Commission and Serve Legal, will be organising seminars for all bookmakers and their staff to continue educating and advising our members. It has been decided that these will be considerably more effective if done in person rather than virtually, and therefore these will be organised once the Government guidance on gatherings is relaxed. Member communication We are starting regular newsletters to our members. This will ensure that the FRB as a trade association can fulfil its obligations to its membership to remind everyone of Gambling Commission guidance and the importance of the Think 21 Campaign. Working with racecourses The FRB will be requesting that the RCA and all racecourses display prominent signs and displays on their big screens, and within the race cards, emphasising the message to punters that the age requirement for placing a bet is 18 years old. Both the bookmakers and racecourses operate a Think 21 policy. To achieve this all racecourses need to work with us as advertising on their courses is not within our gift. Distribution of literature The FRB will be re-issuing literature to their members, highlighting support available for problem gamblers and how bookmakers can spot a potential problem gambler. Badges Think 21 lapel badges will be distributed to all our members and their staff and we will be strongly encouraging them to wear them in a prominent and visible position. Federation website The FRB’s website will be updated to include information from the Gambling Commission and advice and guidance to help and support our members to spot under age gamblers and problem gamblers. We will endeavour to make this a useful information hub for our members. Training We will encourage all bookmakers and their staff to contact Under Age Sales Ltd with a view to all staff taking the BTEC in Preventing in Under Age Gambling. It is essential that not only the bookmaker but all their staff have training and guidance to be able to spot underage gambling, and what the implications will be if they do take a bet from anyone below the age of 18 years. Staff registration

283

In conjunction with AGT we are amending guidance and introducing a procedure for staff registration. This will give the assurance to the Gambling Commission and racecourses that all members of staff have been trained to adhere to the policies adopted by the bookmaker for whom they work. In conclusion, we are adapting our policies to respond to public need. We operate differently to the off-course and on-line industries - several examples, although not exhaustive, are our opportunities to take bets are restricted to 6 or 7 races per day that are timed 30/35 minutes apart. Also, as we conduct our business at different locations daily over a wide geographical area, the betting trends of any particular customer are difficult if not impossible to monitor, unlike those of a regular betting shop or on-line customer. Nevertheless, a programme of concerted effort will be undertaken for our members and their staff to achieve the standards required for today’s society 1 April 2020

284

Susanna FitzGerald QC – Supplementary written evidence (GAM0093) Answers to further matters arising from Evidence given to the House of Lords Ombudsman I am not in favour of an ombudsman as I feel that that would just add in an extra level of regulation. For gambling companies there is already the appeal route, and I am not convinced that there is much demand from gamblers for one. I am not sure what an ombudsman would add to the regulation that is already there. Advertising As to advertising, I believe that the relaxation of the gambling advertising provisions in the 2005 Gambling Act has generally not been helpful to most of the gambling industry. The flood of gambling advertising on television is nearly all, if not exclusively, for online gambling. My impression from the industry is that they only keep advertising because their competitors are doing so, and therefore the companies feel they have to advertise as well. They make increasingly (for them) expensive offers to potential customers just to keep up with each other. One prominent industry person once told me that this made it a “race to the bottom”, as profits were eaten into. Another downside for the industry is that it does irritate many of the general public who do not gamble at all or not regularly. The main people who benefit are therefore new entrants into the market, and the television companies who broadcast the adverts. However, I agree with Julia Hornle that it is extremely difficult to prevent advertising via social media, and she is better qualified to comment on that than I am. As to whether there should be regulations to deal with advertising, the difficulty is that regulations can be circumvented and better guidance may be more helpful and practical, and certainly can be altered more quickly and easily to deal with situations as they come up. The ASA, and Ofcom are likely to be far better placed to deal with advertising rather than burdening the commission with the regulation of it. 22 September 2019

285

Flutter Entertainment Plc – Written evidence (GAM0055)

Flutter Entertainment plc (“Flutter”) is a FTSE 100 international betting and gaming company comprised of six trading brands. In the UK we operate through our European brands Paddy Power and Betfair. Our board and senior management share the Government’s desire to create a responsible industry that generates employment, enjoyment and investment whilst also protecting young children and the vulnerable from harm. Q.1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld? Yes, licensed gambling in Great Britain is almost entirely free from criminal involvement, the vast majority of gambling is carried out in a fair and transparent fashion, the available data shows that there are very small levels of fraudulent activity and the UK has been relatively successful in protecting children and vulnerable adults. We refer to the submission provided by The Betting and Gaming Council for detail. Q.2. What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed? The 2005 Gambling Act established the Gambling Commission as an industry regulator to uphold the primary aims of the Gambling Act. Through the Licencing Conditions and Codes of Practice (“LCCP’) the Gambling Commission regularly evaluates and regulates new industry developments and emerging evidence on the most effective ways to promote responsible gambling. As the LCCP is continually reviewed and updated, emerging developments are already considered and factored into updates. Given the speed of technological change, new regulation or a new Gambling Act will become quickly out of date and limit our collaboration with supporting partners such as f inancial institutions and payment providers. The industry has also introduced several self-regulatory measures to address societal concerns around gambling. Clear examples include the work done through Senet on the Markers of Harm; our own work around affordability that the rest of the industry is now adopting; and more recently, the industry’s ‘whistle-to-whistle’ pre-watershed TV advertising ban and its voluntary commitment to increase funding toward treatment by £100m by 2023. This level of industry collaboration is significant and we believe it has real potential for effective industry change that can meet new technological challenges and emerging developments about harm. Q.3. Is gambling well regulated, including the licensing regime for both on- and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions

286

including age verification? What might be learned from comparisons with other regulators and jurisdictions? Yes. Gambling is well regulated in Great Britain for both on-shore and off-shore operators, with rules introduced in recent years helping to even the playing field between UK-listed businesses and those operating abroad but targeting a UK customer base. Central to this were the regulations introduced by the UK Gambling Commission in 2014 which included a point of consumption tax (POC) payable on all bets made by UK customers irrespective of where the online operator is located. This has had an impact on operators who had previously moved their operations offshore to territories such as Gibraltar and Malta and were as such exempt from paying betting duties in the UK previously. The Gambling Commission frequently shows that it has the ability and appetite to enforce rules. It issues regular public guidance on the outcomes that should be achieved to identify and intervene with problem gambling. This is having an impact on operator strategy and promoting collaboration in areas such as customer self-exclusion and verification. Regulators in Sweden, Denmark and Spain require customers to register with a national identification card which removes the responsibility of Know Your Customer (KYC) age checks for operators as it relies on national databases. Such a system could be introduced in the UK through the National Insurance scheme but requires the UK national database to be up to date. Instead, recent rule changes by the Gambling Commission require remote licensees to verify, as a minimum, the name, address and date of birth of a customer before allowing them to gamble. Operators are also required to take reasonable steps to ensure that information on their customers’ identities remains accurate. These measures have been welcomed by the industry as they naturally enhance age verification processes, while being commercially viable and in-line with the goals of consumer protectionism. Q.5. What are the social and economic costs of gambling? These might include costs associated with poor health and hospital impatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs. Social and economic costs tend to be the result of several interlinked factors that cannot be easily isolated. We refer to the submission provided by the Betting and Gaming Council for more detail. Q.6. What are the social and economic benefits of gambling? How can they be measured and assessed? Sports betting and gaming is an enjoyable leisure activity enjoyed by millions of people in the UK. It has a symbiotic relationship with certain sports, most notably horse-racing, which plays a significant cultural role as the second most popular spectator sport in the UK (10m people watched the Grand National in 2019) and provides vital employment within rural communities across the country.

287

Our estimates suggest that 16% of UK adults had a bet in the last 12 months, with 8% having a bet in the last month. The average stake size for an online bet is around £11 with the average stake size for a retail sports bet was around £7. Our shops remain popular and show a leading range of live sport, often acting a vital centre of social interaction within communities, many of which have seen a declining trend in pubs and members clubs. In 2018, we paid £203m of UK Gaming, corporation and other taxes (including PAYE) We employ 500 employees in our Hammersmith office, and employ 1700 staff across our retail estate. We are also mindful of our responsibility to make a positive return contribution to the sports we take bets on. We make a significant contribution to British horse-racing and greyhound racing through levy, commercial, sponsorship and charity payments. We have over 75 information sharing agreements to protect sports integrity, and supply our leading in-house monitoring systems to sports free of charge. Q.7. Is the money raised by the levy adequate to meet the current needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons? It is clear that the current voluntary levy system has been ignored by several operators and is not raising the level of funding needed to address societal and political concerns around access to treatment. A suitable framework needs to be developed to accurately deliver increased funding to the front-line. In June 2019 we – the five largest operators in the UK; Flutter, Bet365, William Hill, GVC and Skybet – announced that we would raise our current 0.1% voluntary contribution of Gross Gambling Yield (“GGY”) over the next four years to 1% in 2023 for the research education and treatment of problem gambling. This tenfold increase will reach a contribution of approximately £60 million – a level at which we will maintain in the future. Within this commitment, the five companies will contribute 0.1% of their GGY annually to GambleAware to support its existing treatment commitments and to continue its independent research programme. While this is a self-imposed, voluntary measure, we would welcome participation from other operators and are working with the Government, industry groups and other stakeholders to determine and establish a framework so that the funding is allocated in a constructive and effective manner. Q.8. How might we improve the quality and timeliness of research in the UK? What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons? In order to improve the quality and independence of gambling research in the UK, we would welcome the introduction of an independent academic research

288

body, which is funded in an appropriate manner to avoid accusations of bias. While independence is important in relation to the outputs of research, it does not preclude appropriate inputs from the industry. Operators have valuable insights into the challenges faced in identifying behavioural issues across large and diverse customer bases, as well as experience of what has worked well to date. This knowledge would be of material benefit in identifying opportunities for specific and targeted research to address gambling harm. We also support the Gambling Commission’s ambition to create a data-sharing hub, and we think the industry should play a role in establishing this having spent considerable resources examining customer behaviour and identifying indicators of potential gambling harm. We continually test and evaluate different intervention methods to ensure the highest levels of protection for our customers across our channels. Q.9. If, as the Responsible Gambling Strategy Boards (RGSB) has suggested, there is limited evidence on which to based sound decisions about gambling by children and young people, what steps should be taken to rectify this situation? We support the development of a research strategy to enhance understanding of gambling by children and young people, and we would seek to assist the development of such a strategy in any way we can. We refer to the submission provided by the Betting and Gaming Council for greater detail. Q.10. Is enough being done to provide effective public education about gambling? If not, what more should be done? Education has a key role to play in preventing gambling-related harm and we are fully supportive of a national prevention approach through a greater focus on education and awareness. As with interventions, the industry has knowledge and experience that can help shape effective approaches to education and awareness based on data and analytics. As members of the Senet Group, we created the UK’s first public education TV campaign about gambling called ‘Bad Betty’. Research conducted in 2016 found that ‘over 1/3 of regular gamblers who recall the campaign say it has led them to approach gambling more responsibly’ and that ‘2.3million have reported ly been helped to stop gambling at the right time by the campaign’ 202. More recently we contributed to the Gamble Aware ‘Bet Regret’ campaign which is recognised by ‘54% of the campaign’s target audience’203 School education is also important, but we do not think the industry can comment or be directly involved in educating under 18s about gambling. Like many other gambling operators, we donate to the Young Gamblers Educational

202 https://senetgroup.org.uk/wp-content/uploads/PDF-Docs/the_senet_group_march_2016_report.pdf 203 qna.f iles.parliament.uk/qna.../safer-gambling-campaign-update-june-2019.pdf

289

Trust (YGAM) who provide PSCHE lessons in schools and peer education projects in universities. We are aware there are a number of different education providers such as Demos, GamCare and Fast Forward and recommend a joined-up approach to deliver the most effective and practical advice. Q.11. Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help? While the gambling industry has a key role to play in identifying, supporting and directing customers towards treatment, we believe the Government and NHS is best placed to deliver and evaluate the effectiveness of treatment methods. We hope that the aforementioned announcement regarding a commitment to increase treatment funding for treatment by £100m over the next four years will be able to deliver treatment programme through a suitable public health infrastructure for responsible gambling. As part of this commitment, we and the other four operators will work with Department for Digital, Culture, Media and Sport, and the Department for Health and Social Care and providers of existing services - including the NHS- about the most appropriate framework to determine these additional funds are deployed to support increased provision of counselling and other support services for problem gamblers. Q.12. What steps should be taken better to understand any link between suicide and gambling? We find any case of suicide to be a tragedy and sympathise deeply with anyone who has lost a loved one this way. Samaritans have been chosen as our charity partner from 2019 and we’re working with them to educate and train our staff around the topic of mental health. However, it is dangerous to view suicide and associated mental health as a black and white issue caused by one factor. It’s clear that some people have a specific issue with gambling. We need to make sure there are effective safeguards that protect that minority while ensuring the majority can continue to enjoy the pastime. Q.13. The RGSB has said that by not taking action to limit the exposure to young people to gambling advertising “we are in danger or inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant”. Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons? We fully support efforts to limit the amount of gambling advertising that young people are exposed to. Flutter supports the approach of the UKGC in requiring adherence to the UK Advertising Codes issued by the Committees of Advertising Practice (CAP) and administered by the Advertising Standards Authority (ASA), as well as the

290

advertising code drafted by the Industry Group for Responsible Gambling (IGRG). As mentioned, we are also part of a group that has undertook a voluntary whistle-to-whistle ban on pre-watershed advertising around live sporting events and recently decided to remove Paddy Power and Betfair advertising on perimeter LEDs and interview boards at UK football matches. Our Paddy Power brand also recently launched a campaign to ensure football shirts remain free from sponsorship. The issue of young people being exposed to gambling online is a subset of the broader issues of managing risk to young people across the online world. Social media and telecoms companies are already very focused on this area, and we are exploring opportunities to work with these industries, using new technologies, to address the issue of underage gambling. Q.14. Gambling is becoming an integral part of a growing number of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this? Flutter is deeply committed to the issue of integrity in sports. We have a dedicated Integrity team who constantly monitor markets for any unusual betting activity. We have also pioneered a system of Memoranda of Understanding with Sports Governing Bodies, allowing information to be shared with those governing bodies to ensure match fixing can be tackled. We welcome continuing collaboration by gambling operators and sporting bodies to ensure that public faith in sporting events remains absolute. Q.15. How are new forms of technology, including social media, affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future? Flutter believes this issue requires a cross-industry collaborative approach, as outlined at Question 13. We have strict age verification controls on all our social media accounts which are audited frequently. We regularly discuss with social media platforms and our media buying partners on how to engage with followers over 18. 6 September 2019

291

Flutter Entertainment Plc – Supplementary written evidence (GAM0130) We welcome the opportunity to clarify the difference between NDAs and settlement agreements, which are terms often used interchangeably despite them being very different. An NDA (or a non-disclosure agreement) is an agreement between two or more parties that contains obligations on those parties to keep certain information confidential. NDAs are used widely for many different business reasons and not simply to settle disputes between parties. NDAs also often do not require one party to make a payment to the other. A settlement agreement, on the other hand, is an agreement between two (or more) parties where the purpose is to specifically settle a dispute. Settlement agreements will invariably include confidentiality obligations on the respective parties, which have the primary purpose of stopping fraudulent copy-cat claims.

We would like to place on the record once again that Paddy Power and Betfair do not use NDAs when settling disputes with customers, however we do use settlement agreements. Although our settlement agreements do contain confidentiality provisions, as explained previously, we have never included a provision within any settlement agreement with a customer that would preclude that customer from contacting the Gambling Commission. Furthermore, since February 2019, our settlement agreements have contained an express provision that explicitly states that customers are not precluded from contacting the Gambling Commission, other regulators, the police or a treatment provider.

6 April 2020

292

Forces in Mind Trust – Written evidence (GAM0010) Introduction 1. Forces in Mind Trust (FiMT) was established in 2011 by a £35 million endowment from the Big Lottery Fund. Our vision is for all ex-Service personnel and their families to lead fulfilled civilian lives, and our mission is to enable successful sustainable transition by funding evidence generation and influence activities that help to further our mission. 2. FiMT’s goal is one of successful transition from the UK Armed Forces and this includes the ability of ex-Service personnel to be free from any sort of addictive behaviours such as gambling. Our submission will therefore focus on the research FiMT has funded in this area, together with external evidence which has been provided in the form of a short literature review and can be found at the end of this submission. The literature review has been compiled by the Forces in Mind Trust Research Centre, a UK-based facility which provides easy access to UK and international research on ex-Service personnel and their families for a range of users including academia, the voluntary sector, government and the media. 3. We have summarised the key points from our funded research and the literature review under the relevant headings provided in the call for evidence. If you would like to discuss any of the points in further detail, please let us know. Social and economic impact 4. Previous research has found that problem gambling is one of a number of challenges faced by Service personnel who leave the Armed Forces and struggle with the transition into civilian life204. Several studies highlight the impact of problem gambling in the Armed Forces and the challenges of comorbidity. Research by Wardle in 2012 found that gambling is commonly associated with poor financial management and high-risk behaviours such as substance misuse.205 5. In 2016, research funded by FiMT and conducted by the Centre for Social Justice206, found that gambling addiction may be a contributory factor in family breakdown, with one treatment centre estimating 90% of their patients having seen their marriages collapse. Children of ex-Service personnel with gambling issues have been found to have higher rates of behavioural, emotional and substance abuse issues, and there are also broader societal issues such as increases in criminality and loss of economic productivity due to work absenteeism. The research also highlights the ease of access to gambling through the availability of gambling machines on military bases and the increased use of mobile technology to access gambling websites. To help combat problem gambling, the report recommends:

204 University of Salford (2019). Sanctions, Support & Service Leavers. 205 Wardle (2012). Gambling in Britain: A time of change? Health implications from the British

Gambling Prevalence Survey 2010. 206 Centre for Social Justice (2016). Military families and transition.

293

• The Ministry of Defence mount a campaign to raise awareness of problem gambling among Service personnel and their families.

• The NHS ensures that practitioners treating veterans for alcohol and mental health problems are better informed about problem gambling in the Armed Forces community.

Research 6. Previous studies have highlighted the lack of UK evidence on the prevalence of gambling in the UK Armed Forces community and the Centre for Social Justice report207 recommended that the MOD commissions new research on the topic. In 2016 FiMT awarded funds to Swansea University to carry out a six-month study to investigate gambling behaviour among ex-Service personnel. The research used the 2007 Adult Psychiatric Morbidity Survey to assess any relationships between length of active service and extent of gambling problems, and to explore associations between gambling related problems and comorbidities such as alcohol and family issues208. 7. The study by Swansea University found that veterans were more likely than non-veterans to experience gambling problems and these problems were not explained by prior mental health, addiction or financial concerns. The results of this study are, however, preliminary and should therefore be treated with caution. The report also called for further research on the nature and extent of gambling problems in current and former members of the UK Armed Forces, and in 2018 FiMT funded a further study with Swansea University: Gambling Participation and Financial Management in Serving and ex-Service Personnel of the UK’s Armed Forces. This 30-month project will include the first ever UK survey of gambling participation and attitudes to gambling in ex-Service personnel. The research is due to conclude in February 2021 and we will share the findings with you when they become available. 8. The literature review at the end of this submission provides further details on the available UK and international research on gambling in the Armed Forces community and highlights the associations of gambling with poor mental health conditions. It also highlights promising rehabilitation programmes such as a study of the first year of an overseas US military gambling treatment programme in Japan.209 Final comments 9. While ex-Service personnel are just one group of individuals who can suffer from addictive behaviours such as gambling, at FiMT we believe that it is important that they are brought to the attention of the Select Committee. It is clear that there is a lack of evidence on the prevalence of gambling within the Armed Forces community and we seek to fill that gap with the current research being conducted by Swansea University. While that is underway however, there

207 Centre for Social Justice (2016). Military families and transition. 208 Swansea University (2017). Gambling Problems in UK Armed Forces Veterans: Preliminary

Findings. 209 Kennedy et al. (2005). Review of the first year of an overseas military gambling treatment program.

294

is more that can be done to help those who struggle with gambling and we therefore call for greater education for the Armed Forces community to raise awareness of problem gambling. It is also essential to ensure that health-care professionals and service providers are aware of gambling issues when delivering support to ex-Service personnel and their families who seek help for alcohol misuse and mental health issues. 10. If you have any questions or would like FiMT to give evidence at oral hearings on this matter, please do not hesitate to get in touch. Ray Lock Recommended reports The FiMT response has made reference to a number of reports that would merit further review; these are listed below with references included in the Bibliography as well as access links.

• The Centre for Social Justice (2016): Military Families and Transition.

• Swansea University (2017): Gambling Problems in UK Armed Forces Veterans: Preliminary Findings.

Forces in Mind Trust Research Centre (RC) and Veterans and Families Research Hub (VFR Hub) The aim of the FiMT RC is to manage the Trusts’ Veterans and Families Research Hub (VFR Hub); to provide advice, support, and various research outputs; and to plan an annual conference and awards event to celebrate and present recent research supporting veterans and their families. Further information on the RC, and access to the VFR Hub, can be found here: https://www.vfrhub.com/fimt-research-centre/ Bibliography Centre for Social Justice (2016). Military families and transition. https://www.fim-trust.org/wp-content/uploads/2016/05/MILITARY-FAMILIES.pdf Kennedy, C., Cook, J., Poole. D., Brunson, C. and Jones, D. (2005). Review of the first year of an overseas military gambling treatment program. https://www.vfrhub.com/article/review-of-the-first-year-of-an-overseas-military-gambling-treatment-program/ Swansea University (2017). Gambling in Armed Forces Veterans: Results from the 2007 Adult Psychiatric Morbidity Survey of England. https://www.fim-trust.org/wp-content/uploads/2017/06/Gambling-Report-FINAL.compressed.pdf University of Salford (2019). Sanctions, support and service leavers. https://www.fim-trust.org/wp-content/uploads/2019/06/20190610-FiMT-Final-Report-WEB.pdf

295

Wardle, H., Griffiths, M., Orford, J., Moody, A., and Volberg, R. (2012). Gambling in Britain: A time of change? Health implications from the British Gambling Prevalence Survey 2010. International Journal of Mental Health and Addiction.

296

Literature review to inform the call for evidence: a response to The Select Committee on the Social and Economic Impact of the Gambling Industry Dr Linda Cooper, Forces in Mind Trust Research Centre, August 2019 Introduction This light touch literature review explores the issues surrounding problem gambling among UK veterans. There is a paucity of UK based research that looks specifically at problem gambling in relation to veterans, so this review also covers a brief overview of problem gambling nationally, as well as available international literature. For the purposes of this review, veterans are defined as those who have previously served in Her Majesty’s Armed Forces (AF) for more than one day, whether as a Regular or as a Reservist (Ministry of Defence, 2015). Problem gambling is defined as ‘gambling to a degree that compromises, disrupts or damages family, personal or recreational pursuits’ (NatCen, 2014: 7). The UK landscape A report of problem gambling across the whole of England, Wales and Scotland by the Institute of Public Policy Research (IPPR, 2016) suggests that three quarters of all adults in these nations gamble, in some form, each year. Gambling in general terms, is as diverse as playing the National Lottery once a week, to addictive, problem gambling. Between 0.4 and 1.1% of the British, civilian population are considered to be problem gamblers and associated issues with health, welfare, employment, housing and criminal justice costs the government an estimated £260 million to £1.6 billion per year. Men are five times more likely than women to be problem gamblers, with the highest rates of problem gambling among the younger age groups of 16-24 and 25-34 year-olds. Problem gambling is more prevalent among those with lower incomes and among some ethnic minority groups; those of Asian/Asian British and Black/Black British ethnicity are more likely to experience problem gambling than those identifying as White/White British (IPPR, 2016). The most notable veteran specific studies on problem gambling have been undertaken by Swansea University (Roberts et al., 2017, 2019; Dighton et al., 2018). The Responsible Gambling Strategy Board (RGSB, 2019) and Roberts et al. (2017, 2019) suggest that in the UK, male veterans are significantly more likely than male non-veterans (civilians) to be vulnerable to, or experience, problem gambling (1.4% vs 0.2% respectively). No studies are available that research exclusively UK female veterans and gambling disorders. The reports from Swansea University (Roberts et al., 2017; Dighton et al. 2018) utilised data from the 2007 Adult Psychiatry Morbidity Survey, a national representative survey collecting demographic data (age, gender, socio-economic status, etc.), as well as data on gambling, substance abuse and financial management. Male veterans were more likely than male non-veterans to have experienced a traumatic event, with the potential to lead to risk-taking behaviour. The relationship between problem gambling and veteran status was not explained by variants such as the length of service in the AF, mental health

297

conditions, substance misuse or financial management issues. The findings from Swansea University are being supported by a second phase of research, the UK Armed Forces Veterans’ Health and Gambling Study (Forces in Mind Trust, 2019), which is currently in progress. Their survey is seeking to understand the links with risky behaviours and the use of emergency financial services. The study is also aiming to establish the methods of gambling with which veterans engage (for example, whether in betting shops or online). A report by Scullion et al. (2019) on the experiences of those who leave the AF suggests that problem gambling is one of a number of challenges that are faced by veterans who struggle to make a positive transition into civilian life, as well complex issues such as mental or physical health difficulty, homelessness and drug and alcohol use. Gambling addiction may also be a contributory factor in family breakdown and broader, societal issues such as criminal behaviour, absenteeism from work and the associated loss of productivity (Centre for Social Justice (CSJ), 2016). Poor financial management is commonly associated with problem gambling. Wardle et al. (2012) found that veterans who are caught in cycles of debt are more likely to engage in high-risk behaviours, including drinking excessive amounts of alcohol, substance misuse and problem gambling. In their work on military families and transition, the CSJ (2016) found that some veterans use gambling to attempt to replace the adrenaline rush they once experienced in combat theatre. The CSJ (2016) also recognise the increasing use of online gambling and the use of gambling machines among AF personnel whilst living on base, with the need for further research into the prevalence of this aspect of gambling among serving members of the AF community. International Literature Literature is available on problem gambling for veterans from an international perspective, but as with all research in the areas of military studies, large differences in the number of military personnel, different cultural understandings and vast differences in availability of support (e.g. the NHS and charitable support in the UK in contrast to Veteran Affairs support in the US) suggests that overseas research findings should not be compared directly to a UK context. The United States of America (US) A report undertaken in the US by Whiting et al. (2016), on the risk factors for gambling associated with deployment experiences, suggests that US AF veterans are twice as likely to have gambling issues compared to their civilian counterparts, which is over four times the rate of UK veterans. Further research by Westermeyer et al., (2013) suggests that up to 10% of veterans who are comorbid, that is, seek treatment for other, independent medical conditions, are deemed at-risk of problem gambling.

298

Findings from Edens and Rosenhenk (2012), Westermeyer et al. (2013) and Whiting et al. (2016) suggest that problem gambling among veterans is associated with those diagnosed with post-deployment mental health risk factors such as mood disorders, anxiety, neurotic symptoms, substance abuse, post-traumatic stress disorder (PTSD), panic disorder and depression. These findings of a link with comorbidity are the opposite of those found in UK studies (Roberts et al., 2017, 2019; RGSB, 2019). Problem gambling is associated with several studies exploring veterans and PTSD. Where PTSD is regularly cited as being comorbid with problem gambling, a study by Lusk et al. (2017) suggests that self-destructive behaviours such as excessive gambling are common among trauma-exposed veterans and may even perpetuate PTSD symptoms by the increase in exposure to new, adverse events. Hierholzer, Vu and Mallios (2010) further suggest that serious public health issues are arising from veterans’ problem gambling. Veterans receiving counselling for PTSD who also have gambling addictions are demonstrating issues related to health, finance, divorce and family breakdown and domestic violence. A literature review of problem gambling among US veterans undertaken by Levy and Tracy (2018) suggests that little information exists on the gambling behaviours of veterans from ethnic minorities, although this appears to be a growing proportion of the US military community. Levy and Tracy recommend that future research focuses on screening, prevention and treatment of problem gambling, rather than prevalence. As an example, a review of a gambling treatment programme established as part of a substance abuse rehabilitation programme in a US Naval hospital in Japan (Kennedy et al., 2005) showed effective results in retaining serving members in their programme and preventing suicides. In contrast to findings in the UK population (IPPR, 2016), Ronzitti et al., (2019) and Edens and Rosenhenk (2012) found that female veterans are more likely to suffer from problem gambling than male veterans, with associated issues including attempted suicide, presenting with alcoholism, severe mental illness and homelessness. Australia Research by Biddle et al. (2005) found that 17% of Australian veterans diagnosed with PTSD exhibited signs of problem gambling. The participants in these studies exhibited behaviours in line with the US studies on pathological gambling among veterans with PTSD. Summary Notwithstanding the need for further research in the area of veterans and problem gambling, it should be acknowledged that problem gambling affects a small number of veterans following transition from the Armed Forces. It may be relevant to discuss methods in place in society to tackle problem gambling and explore to what extent they may be applicable to a serving/ex-serving population.

299

References Biddle, D., Hawthorne, G., Forbes, D., & Coman, G. (2005). Problem gambling in Australian PTSD treatment-seeking veterans. Available at: https://www.vfrhub.com/article/problem-gambling-in-australian-ptsd-treatment-seeking-veterans/. [Accessed: 29.07.19]. Centre for Social Justice (2016). Military families and transition. Website available at: https://www.vfrhub.com/person/the-centre-for-social-justice/. [Accessed: 25.07.19]. Cobseo. (2019). UK Armed Forces Veterans Health and Gambling Study. Available at: https://www.cobseo.org.uk/uk-armed-forces-veterans-health-and-gambling-study-launched/. [Accessed: 30.07.19]. Dighton, G., Roberts, E., Hoon, A., and Dymond, S. (2018). Gambling problems and the impact of family in UK armed forces veterans. Available at: https://www.vfrhub.com/article/gambling-problems-and-the-impact-of-family-in-uk-armed-forces-veterans/. [Accessed: 25.07.19]. Edens, E., & Rosenheck, R. (2012). Rates and correlates of pathological gambling among VA mental health service users. https://www.vfrhub.com/article/rates-and-correlates-of-pathological-gambling-among-va-mental-health-service-users/. [Accessed: 29.07.19]. Hierholzer, R., Vu, H., & Mallios, R. (2010). Pathological gambling in combat veterans. Federal Practitioner. 8: 8-15. Institute of Public Policy Research. (2016). Cards on the table: the cost to government associated with people who are problem gamblers in Britain. Available at: https://about.gambleaware.org/media/1367/cards-on-the-table_dec16.pdf. [Accessed: 31.07.19]. Kennedy, C., Cook, J., Poole. D., Brunson, C. and Jones, D. (2005). Review of the first year of an overseas military gambling treatment program. Available at: https://www.vfrhub.com/article/review-of-the-first-year-of-an-overseas-military-gambling-treatment-program/. [Accessed: 29.07.19]. Levy, L., and Tracy, J. (2018). Gambling disorder in veterans: a review of the literature and implications for future research. Available at: https://www.vfrhub.com/article/gambling-disorder-in-veterans-a-review-of-the-literature-and-implications-for-future-research/. [Accessed: 29.07.19]. Lusk, J., Sadeh, N., Wolf, E., and Miller, N. (2017). Reckless self-destructive behaviour and PTSD in veterans: the mediating role of new adverse events. Available at: https://www.vfrhub.com/article/reckless-self%e2%80%90destructive-behavior-and-ptsd-in-veterans-the-mediating-role-of-new-adverse-events/. [Accessed: 30.07.19]. Ministry of Defence (2015). The Armed Forces Covenant. Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/49469/the_armed_forces_covenant.pdf. [Accessed: 25.07.19].

300

NatCen Social Research (2014). Gambling behaviour in England and Scotland: headline findings from the Health Survey for England 2012 and Scottish Health Survey 2012. Available at: https://www.rgsb.org.uk/PDF/Gambling-behaviour-in-England-and-Scotland-2012.pdf. [Accessed: 25.07.19]. National Responsible Strategy Board (2016). The National Responsible Gambling Strategy 2016-2017 to 2018-2019. Available at: https://www.rgsb.org.uk/PDF/Strategy-2016-2019.pdf. [Accessed: 25.07.19]. Roberts, E., Dighton, G., Fossey, M., Hogan, L., Kitchiner, N., Rogers, R., and Dymond, S. (2017). Gambling problems in the UK armed forces veterans: preliminary findings. Available at: https://www.vfrhub.com/article/gambling-problems-uk-armed-forces-veterans-preliminary-findings/. [Accessed: 25.07.19]. Roberts, E., Dighton, G., Fossey, M., Hogan, L., Kitchiner, N., Rogers, R., and Dymond, S. (In press). Gambling problems and military and health related behaviour in UK Armed Forces veterans. Military Behavioral Health. Available at: https://doi.org.10.1080/21635781.2019.1644263. Ronzittti, S., Kraus, S., Decker, S., and Ashrafioun, L. (2019). Clinical characteristics of veterans with gambling disorders seeking pain treatment. https://www.vfrhub.com/article/clinical-characteristics-of-veterans-with-gambling-disorders-seeking-pain-treatment/. [Accessed: 29.07.19]. Scullion, L., Dwyer, P., Jones, K., Martin, P., and Hynes, C. (2019). Sanctions, support and service leavers. Available at: https://www.vfrhub.com/article/sanctions-support-service-leavers/. [Accessed: 25.07.19]. Wardle, H., Griffiths, M., Orford, J., Moody, A., and Volberg, R. (2012). Gambling in Britain: A time of change? Health implications from the British Gambling Prevalence Survey 2010. International Journal of Mental Health and Addiction. 10: 273-277. Westermeyer, J., Canive, J., Thuras, P., Oakes, M., and Spring, M. (2013). Pathological and problem gambling among veterans in clinical care: Prevalence, demography, and clinical correlates. Available at: https://www.vfrhub.com/article/pathological-and-problem-gambling-among-veterans-in-clinical-care-prevalence-demography-and-clinical-correlates/. [Accessed: 29.07.19]. 30 August 2019

301

Professor David Forrest – Written evidence (GAM0123) My name is David Forrest. I am Professor of Economics in the University of Liverpool Management School. For the last twenty years I have pursued research in sports economics and in the economics of gambling behaviour. With my colleague Professor Ian McHale, I have completed and published four research projects funded by GambleAware, related to player behaviour on gaming machines in British casinos, to use of FOB-Ts in licensed betting offices, and to transmission of problem gambling from parents to children. For a fifth and very substantial project, titled Patterns of Play, we are engaged to provide description and analysis of how online gamblers in Great Britain play, based on complete and detailed one year records of 10,000 customers from each of six of the highest impact GB-licenced operators. The data recording the activities of sports bettors (and particularly football bettors) among these 60,000 online gamblers are expected to yield findings highly relevant to the topic of this note. Unfortunately results are unlikely to be available until the Autumn of this year. I have been approached by the Select Committee (March, 2020) to provide answers or comments to a set of specific questions on the relationship between the sport and betting sectors. However, before responding to the specific questions (in so far as I am able), I think it is appropriate to comment more broadly on the nature and significance of the relationship between sport and betting. Although long acknowledged for the case of horse (and also dog) racing, the mutual dependence of sport and betting in the case of other sports has been openly and explicitly discussed only relatively recently.210 From the perspective of sport, there is increasing evidence that it benefits substantially from the existence of associated betting markets, even without considering direct payments from betting companies. Essentially, the sports product becomes more interesting to many potential consumers if they are able to take a stake in the outcome of the event. This was demonstrated in a recent carefully designed laboratory study at Yale University.211 Nearly 2,000 subjects were invited to view a film of a National Hockey League match. Half were randomly assigned to make a compulsory small bet on which team would win (paid out of their fee for joining the experiment). Afterwards, all were asked to rate their enjoyment of viewing the match. Unsurprisingly the highest average level of enjoyment was in the group which had bet and won; but even those who had bet and lost reported higher mean satisfaction than those who had not bet at all. This is formal evidence supporting the common sense proposition that, for many, betting on

210

When organised sport developed in England in the eighteenth century, the connection was very close. Indeed the first rules for boxing, cricket and golf were written by betting interests. However,

the narrative of sport in the twentieth century typically, for a long time, involved distancing itself

from betting. There was even a season in the 1930s when football fixtures were kept secret until it was too late for pools firms to print their coupons or bettors to mail their wagers to the offshore

sector (postal bookmakers in Belgium). On the other hand, football did later accept funding from football pools which, for a few decades, were a prominent feature of British culture. Broadcasts of

match results were invariably accompanied by speculation on how large the week’s pool dividend

would be. 211 Voichek, G. & Novemsky, N. (2019). ‘The unpredictable positive effects of sports gambling:

Affective forecasting errors in wagering’, manuscript, Yale School of Management.

302

the outcome can enhance the experience of viewing sport. If it does, then the demand for viewing sport, live or on television (and consequently the core revenue streams of sport) will benefit from the presence of betting. Research in the USA in the last few years has demonstrated convincingly that media rights values in particular are indeed underpinned to a significant extent by betting interest. In their first paper, Steven Salaga and Scott Tainsky212 examined in-game variation in tv audience figures across several hundred college football matches. Which matches best retained their audience? They were not matches which turned out to be close in terms of actual score. Rather they were matches where the current score was close to the bookmaker spread, i.e. the matches where the outcome of the most popular bet213 was still in the balance. Similarly, considering the second most popular bet, the over/ under wager on total points in the game, they found a step drop in viewing figures once the total had gone beyond the betting market’s total point quote, i.e. a significant number of viewers would switch off once the over/under bet had been decided. These stylised findings imply that betting interest was a decisive motivation for viewing the match for a significant part of the audience, and this in a country where, in nearly all states at that time, betting (and advertising related to betting) was illegal. Research on tv ratings for other sports carried out by the same authors, most recently for NBA basketball214, continues to indicate that a significant proportion of the television audience for an event, and therefore a significant proportion of its value to broadcasters, is related to betting interest. There are, then, grounds for suspecting that sport has been a principal gainer from the explosion of sports betting since the Millennium whether or not in settings where it is able to collaborate with the betting providers. No one knows exactly how much growth there has been in the Global sports betting market because much of it is illegal or unregulated; but one credible series of guesses made by a French consultancy showed estimated Gross Gaming Yield, GGY (bettor stakes minus bettor winnings), from sports betting215 of €6b in 2000, €19b in 2010 and €30b in 2016.216 This remarkable growth was of course powered by technological change: e-commerce offered more accessible betting, its environment was competitive such that value for money improved, and it facilitated the development of a new product, in-play betting. This last innovation accentuated the link between sports and betting because it made watching sport an interactive experience with the viewer able to respond to events on the field as they unfolded. In much of Europe, in-play now accounts for about 70% of sports betting GGY though its market share seems not yet to be quite so large in

212 Salaga, S. & Tainsky, S. (2015). ‘Betting lines and college football television ratings’, Economics

Letters, 132, 112-116.

213 In this bet, the wager is on whether or not the favourite will beat the ‘spread’ announced by the bookmaker, which is the betting market’s implicit forecast of the outcome. For example, Maryland

a strong team, is quoted as favourite by 20 points. If Maryland wins by more than 20 points, bets for Maryland win. If Maryland fails to win by at least 20 points (or loses), bets on its opponent win. 214 Salaga, S., Tainsky, S. & Mondello, M. (2020). ‘Betting market outcomes’, Journal of Sport

Management, 34(2), 161-172. 215 defined to exclude bets on horse racing 216 Institut de Relations Internationales et Strategiques, Paris (2017). Preventing Criminal Risks

Linked to the Sports Betting Market.

303

Great Britain. [Examination of in-play betting is a priority for the Patterns of Play project.] To the extent that allowing viewers to take a stake in a match through betting (particularly where they feel no allegiance to either team) expands the market for sports viewing, sport as a whole may be presumed to have benefitted indirectly but substantially from the growth in popularity of sports betting through impact on existing revenue streams. But the explosion of interest in sports betting has also generated possibilities, where betting is legal, for new or enhanced revenue streams which flow directly from the betting to the sports sector. One of these revenue streams originates with sponsorship of clubs and competitions and other marketing opportunities in the stadium. This is the most visible manifestation of the increasingly close relationship between the two sectors. But it is not the most significant in financial terms. Worldwide, the most important way in which sport extracts revenue from the betting sector is by selling it data, which has proven very lucrative given the emergence of in-play betting. The importance of data to in-play betting is obvious. In-play betting is only possible at all if the bettor is able to watch or follow the game simultaneously with engagement in betting. This requires very fast communication of live data from the sports event both to the bookmaker and to the bettor’s computer (or, increasingly, to his or her mobile ’phone). Data here may refer just to play-by-play information on the event (presented to the bettor in a scoreboard widget or even with stylised animation) or it might include the streaming of pictures to bettors via the bookmaker website. Sports organisers have a unique ability to provide such data reliably since they control the stadium and can impede the activities of self-employed data scouts who may otherwise be engaged by betting companies. Consequently, over the last couple of years, sports organisers, from the most powerful (such as the NBA and Formula One) to the more niche (such as Gaelic Sports in Ireland), have sought to exploit their hold over data by contracting with, or forming their own, specialist firms which purchase their data rights and then sell live coverage and up-to-date scores and game information directly from the stadium to operators’ betting platforms. For example: in 2019, Formula One signed its first data distribution agreement and the NBA signed a $250m contract to supply new legal bookmakers in the USA; 650 European handball fixtures per season are streamed to bookmaker websites; and even local sports like Gaelic Football in Ireland have international contracts. Naturally the highest profile leagues, such as the NBA, achieve the highest absolute values for their data rights; but these income streams are still small relative to their income from broadcasting rights. However, for less high profile competitions, data rights have already become a key part of their business models. For example, the Scottish Football Association until recently sold data for only £3m per annum but this accounted for 8% of its revenue (indeed all betting-related income streams together represented fully 20% of its revenue). Data sales to bookmakers for English and Scottish football are managed through Football DataCo, which has from next season granted its new partner, Betgenius, exclusive rights for supplying hundreds of bookmakers around the World. Sponsorship of clubs and competitions by betting companies represents the most visible means by which sport derives revenue directly from the gambling industry. But the dependence of the most glamorous sports and clubs on gambling sponsorship tends to be low because they can attract higher funding from other sectors. This may be illustrated by reformatting the English Premier

304

League table, substituting club names with the name of the industry from which they draw their principal sponsor. In many weeks “gambling” occupies every place in the bottom half of the table; but at the top the industries represented tend to be luxury goods or financial services. Presumably such brands are interested only in associating with success and their interest is in the club rather than the competition. Further down the league, betting companies are likely buying into the television exposure that the competition automatically gives either in the UK or (more relevant to most of them as operators with little or no presence in the GB market) in their overseas core markets where Premier League broadcasts are widely viewed. In each case, the television audience will be weighted towards groups disproportionately represented among bettors (sports fans, young males). In the Championship, the second tier of English football, betting companies are even more commonly represented on shirt fronts than in the Premier League- again they are buying television exposure (less in volume but purchased at a lower price) and perhaps making a “gamble” on the club being promoted to the Premier League during their contract period. Although the Premier League has the highest value sponsorships, its dependence on this source of income is nevertheless low. For example the typical value of a betting shirt sponsorship in an English Premier League club is only £5m-10m per year (whereas even the weakest club in the division will receive revenue greater than £125m thanks mainly to broadcasting rights income). On the other hand, in the English Football League and in Scottish football, and in less high profile sports and competitions, such as rugby league and snooker, and even in events such as the Netball World Cup held in Liverpool last year, sponsorship is more important and there is little incentive for brands from other sectors to invest: they do not pick up enough exposure to potential customers, in contrast to the betting industry, which has an unusual proportion of customers for its product concentrated in the viewing audience for a sports event. Many of these clubs and competitions would face difficulty in replacing their betting sponsors, compromising the scale at which they could operate and the quality of talent they could attract. It is striking that in jurisdictions which have moved against sponsorship and advertising by the betting sector- Australia and Italy- opposition from the betting industry has been muted but that from sports leagues and broadcasters strong. This may reveal that betting houses themselves perceive their marketing as about brand share rather than extending the market and there would be some advantage to them from the state doing what competition law prevents them from doing for themselves- negotiating away heavy marketing budgets which just cancel each other out. However, sports leagues will typically fight against restrictions because their finances are precarious and they suspect that their next-best sponsors would have significantly lower willingness to pay than betting operators. They will recognise that loss of revenue from betting will tend to reduce pay for athletes and threaten the scale at which they currently operate. For example, English football has the largest structure of professional clubs in the World and shrinkage would likely take the form of fewer towns being served by a professional club. The following questions have been put to me by the Select Committee:

305

1. Gambling is becoming an integral part of a growing number of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this? 2. We understand you have carried out research on the link between gambling-related harm and sports sponsorship, could you provide us with your findings from this work? Countries such as Italy have banned gambling company sponsorship (with France banning sponsorship from alcohol brands), do you believe a ban such as this would make a difference in the gambling-related harm occurring in the UK? 3. Have you undertaken any work on the impact of a partial or full ban on gambling sponsorship in sport on sports clubs and leagues, particularly football? 4. The American approach to sports betting is different to that of the UK, as people bet on the spread, is this approach less likely to result in harm? Similarly, in Australia some states have the power to prevent certain bets, do you believe this power would benefit the UK system as it stands? 5. We have heard oral and written evidence from the gambling industry suggesting more regulation could lead to gamblers using offshore, unregulated operators. What are your views? 6. What do you believe needs to change in order to limit the harm to gamblers resulting from the relationship between gambling and sports? I am not able to comment in detail on all of these but will address each in turn. Gambling is becoming an integral part of a growing number of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this? There is a theoretical integrity risk. For example, a betting operator closely engaged with a club may have access to inside information which it could exploit to its advantage in trading on a match. However, I do not suspect that this has been a problem in practice in GB sports. The Committee will be more interested in the possibility that there will be risks of increased gambling-related harm; and indeed critics of the ‘gamblification’ of sport emphasise the possibility that it will stimulate demand for and interest in sports betting where it may not have existed before, particularly among young people, creating more problem gamblers on the way.217 The channels for this hypothesised effect range from the intangible (e.g. the positive attributes which make sport attractive are transferred to gambling through association, making it seem a socially desirable activity) to the specific (e.g. repeated exposure to gambling during a televised match through sight of shirt front and pitchside advertising will create a desire to participate in betting). There is a lack of reliable evidence to support or refute these hypotheses. However, it would be fair to say that the impact on the size of the pool of problem gamblers from the increased prominence of betting in the world of sport cannot have been dramatic. In Great Britain and worldwide, prevalence of problem gambling has been stable or declining through the period during which sports betting has become much more accessible and visible to the general

217 See, for example, Lopez-Gonzalez, H. & Griffiths, M.D. (2018). ‘Betting, forex trading, and

fantasy gaming sponsorships—A responsible marketing inquiry into the ‘gamblification’ of English football’, International Journal of Mental Health and Addiction, 16, 404–419.

306

population (and other online gaming has also become more accessible). In the case of Great Britain, a number of observation points are provided by the (statistically) ‘gold standard’ British Gambling Prevalence Survey, now discontinued, and latterly by gambling sections included periodically in the Health Surveys for England and Scotland. Because of possible methodological differences between the BGPS and the Health Surveys, I will restrict my illustration of trends to Health Surveys in 2012, 2015, 2016 and 2018. The Problem Gambling Severity Index (PGSI) is an instrument used in the Health Surveys which classifies individuals according to the likelihood that they are currently experiencing harm from gambling. ‘Problem gambling’ describes those whose screen score indicates a very strong probability that they are being harmed by their gambling and that their gambling is out of control. ‘Moderate risk’ does not refer to the risk that an individual will progress to problem gambling but rather to the (moderate) probability that he or she “experiences some negative consequences” from their gambling.218 From the four Health Surveys, PGSI problem gambling prevalence was estimated consecutively as 0.4%, 0.6%, 0.5%, 0.4%. PGSI moderate risk prevalence was estimated consecutively as 1.0%, 1.1%, 1.1% and 0.8%. The fall in moderate risk gambling in the most recent (2018) survey is encouraging but, broadly, it is hard to detect trends and the variation from year to year may just be statistical noise. But certainly one could not conclude that the increase in sports betting has coincided with an ‘epidemic’ of problem gambling. However, measurement of problem gambling prevalence cannot tell the whole story. It is possible for the number of problem gamblers to be unchanged but for many of them to experience even greater harm than before because the link between sports events and wagering supplies more occasions when affected individuals feel the urge to gamble; and such triggers to gamble may make it more difficult for a problem gambler to cut down. This is a plausible scenario and indeed a study which gave a voice to 43 sports bettors who were in treatment for gambling disorder (in Spain) reported that several felt they had to leave the room during breaks in play in televised matches to avoid the betting advertisements which they knew would appear.219 While Per Binde’s survey (for the Responsible Gambling Trust, now Gamble Aware)220 correctly summarised the literature as suggesting that advertising had only a marginal impact on problem gambling, there has been an Australian

218 The Prevalence and Health Surveys also provide data on results from an alternative screen,

DSM-IV. This yields similar prevalence rate estimates. The originators of the PGSI explicitly

designed it to give more weighting to questions which would reveal harm to gamblers whereas DSM-IV is a little more weighted towards questions which reveal psychological addiction. 219 Lopez-Gonzalez, H., Griffiths, M.D., Jimenez-Murcia, S. & Estévez, A. (2019). ‘The perceived influence of sports betting marketing techniques on disordered gamblers in treatment’, European

Sport Management Quarterly, published online, in press for printed version. 220 Binde, P. (2014). Gambling Advertising: A Critical Research Review. Available at: https://about.gambleaware.org/media/1165/binde_rgt_report_gambling_advertising_2014_final_c

olor_115p.pdf The GambleAware website also includes a ‘Bibliographic Update’ summarising and commenting on more recent literature.

307

study221 claiming that existing problem gamblers had high response rates to marketing of betting products embedded within sports broadcasts. There is a problem here in attributing direction of causation but there is nevertheless a risk which it might be prudent to address by regulation and changes of practice. For example, sellers of many online services of all sorts seek to convey urgency and a need for swift action (“three seats left at this price”) but, in the case of gambling, this may be not just exploitative but also dangerous. The language used in in-match marketing therefore needs to be measured and calls to immediate action avoided. Likewise promotions sent to customers during a match might be restricted. Although the Spanish-sports-bettors did not feel at all that advertising and marketing had led them to their present situation, they generally felt that some methods adopted by operators were particularly damaging in respect of their risk of relapse. Based on their experience, personalised messaging online and promotions based on bonuses (such as odds enhancement) were viewed as particularly dangerous. It may be of interest, given that the Committee is interested in the role of sports betting, to reflect on how important this particular activity is in the total amount of harm associated with gambling in Great Britain. Worldwide, nearly all prevalence survey reports present tables showing the proportion of participants in each gambling activity who are classified as problem gamblers. These results are typically used by industry representatives as a basis for claiming that their particular product is relatively safe or by anti-gambling groups to call out particular activities as too dangerous to be permitted to continue. On the basis of this metric, sports betting appears to be at the ‘safe’ end of the spectrum of gambling products. These activity-specific prevalence rates are, however, problematic to use in the context of focusing on minimisation of gambling harm. For example, an activity, such as scratchcards, may have a very high attraction to problem gamblers (and contribute to the harm they experience). The count of problem gamblers is the numerator in the estimated activity-specific prevalence rate. But the denominator includes also the count of non-problem gamblers, who may be so numerous as to dilute the measured prevalence rate to the point where the activity is made to seem innocuous even though many problem gamblers are present in the market and experiencing harm. I would recommend that the Health Surveys and other prevalence surveys worldwide report for each activity not only ‘the probability that a player is a problem gambler’ (prevalence rates by activity) but also ‘the probability that a problem gambler is a player’. For some types of gambling, these two metrics present very different impressions of likely product harm. My colleague, Professor Ian McHale, and I have calculated this new proposed metric for each activity in each prevalence survey in Great Britain between 1999 and 2016. We were unable to perform detailed calculations for the Health Survey, 2018, because the raw data have not yet been deposited in the National Data Archive; but we have no reason to suppose that the figures for 2018 will

221 Hing, N., Lamont, M., Vitartas, P. et al.(2015). ‘Sports-embedded gambling promotions: A study

of exposure, sports betting intention and problem gambling amongst adults’, International Journal of Mental Health and Addiction, 13, 115–135.

308

prove to be very different from those I will now quote from the 2016 Health Survey. Unfortunately, the questionnaire used asks specifically about participation in offline sports betting (and also, separately, about offline horse betting and about offline dog betting) but all online betting activity is grouped together as “betting with an online bookmaker”. This makes it impossible to quote one figure for sports betting (the count of online bettors may include, for example, horse-only customers). The proportion of problem gamblers (so classified by either or both screens administered in the survey) who had participated in offline sports betting was 38.6% and the proportion of problem gamblers who had bet (on anything) at an online bookmaker was 27.3%. Both these figures are appreciably lower than those for some other prominent gambling activities. For example, more than 60% of problem gamblers had played slot machine games and just over half had purchased scratchcards. 46.5% of problem gamblers had bet offline on horse racing. A high figure for this metric implies that the particular gambling activity is played by a large proportion of those who are experiencing harm, presenting both an imperative not to add to their harm by over-stimulating marketing and an opportunity for that sector to reach out to a significant part of the population of problem gamblers through safer gambling messaging. Sports betting appears to have a ‘moderate’ score on this metric and only a minority of problem gamblers participate in this activity. Among problem gamblers who do gamble on sport, it is not yet known how much contribution to the harm they are experiencing stems from their sports betting. Problem gamblers typically engage in a number of different gambling activities and it would be interesting to know whether problem gamblers who bet incur a disproportionate part of their gambling losses from betting (rather than at, say, the casino). In the case of online gambling, some insight into this question is likely to emerge from the Patterns of Play project. For now, the data illustrate that it would be a mistake for any recommendations about regulatory reform to be over-focused on sports betting to the neglect of discussion of other sectors of the gambling industry which appear to appeal to a wider section of the population of problem gamblers, the target group to be protected by any new measures to be introduced. Further, it may be noted that aggregate online/ remote player losses by GB players are greater in other sectors than in football/ sports betting. For example, the latest Industry Statistics from the Gambling Commission indicate losses on football betting of just under £1b whereas online slots accounted for a player losses in excess of £2b. While it cannot be inferred that greater harm is generated by slots play, these data indicate that there is a need to consider the full range of gambling activities regulated in GB rather than focus on one particular sector. This argument is reinforced when one considers that, as one Finnish researcher put it, problem gamblers tend to be ‘omnivores’, i.e. most engage in multiple activities. In turn, this suggests that measures which apply across all sectors, such as the recent ban on use of credit cards to gamble, may yield more results than measures to control only one form of gambling.

309

We understand you have carried out research on the link between gambling-related harm and sports sponsorship, could you provide us with your findings from this work? Countries such as Italy have banned gambling company sponsorship (with France banning sponsorship from alcohol brands), do you believe a ban such as this would make a difference in the gambling-related harm occurring in the UK? I have not in fact carried out primary research on this topic. However, I am familiar with relevant literature. Most studies have been carried out in Australia though there is a recent paper222 applying similar techniques in Great Britain. The papers show for both adults and adolescents widespread awareness of gambling brands which sponsor sports teams, particularly, as is to be expected, among sports fans. The Australian papers report a correlation between awareness of betting brands and intention of adolescents to gamble when they reach the legal age for betting. Authors of these papers refer to the ‘normalisation’ of betting among audiences exposed to betting promotions during sports events and draw the conclusion that such sponsorship should be prohibited. I regard these papers as a group as offering weak evidence, first because they are based on intention to bet rather than actual behaviour and second because there is ambiguity about causation. Those with a pre-existing interest in any product or activity might be expected to notice and remember brands more readily than those with no interest at all. Therefore causation might well run from aspiration to bet to brand awareness rather than predominantly in the other direction. The very strong regulatory action taken in Italy (and Belgium) should provide an opportunity for researchers to test for any effects from such a change in regime. At present it can only be speculated whether there will be positive effects. I tend towards pessimism, partly on the basis of American experience. Until the Supreme Court decision which permitted states to authorise sports betting, this particular gambling product could not be advertised in any way because, except in Nevada, it was supplied entirely by the illegal sector. Nevertheless a credible estimate223 of the (adult) past-year participation rate in sports betting in the USA in 2016 (10%) showed that the activity was at least, if not more. widespread than in Great Britain. Looking back further, in British history, all betting away from racecourses was illegal at the time, and so not advertised, but a 1951 survey for the Royal Commission on Betting, Lotteries and Gaming reported that 11% of respondents had nevertheless placed a bet with a bookmaker in the preceding week, a far higher participation rate than today. One cannot say how much harm was associated with this betting but certainly suppression of

222 Djohari, N., Weston, G., Cassidy, R. et al. (2019). ‘Recall and awareness of gambling

advertising and sponsorship in sport in the UK: A study of young people and adults’, Harm

Reduction Journal, 16, Article Number 24. 223 Reported at: http://www.finchannel.com/index.php/world/america/58913-about-half-of-americans-play-state-lotteries

310

marketing appears not to suppress the activity itself. It does, however, prevent access by sport to a share of the economic surplus sports betting generates.224 The American approach to sports betting is different to that of the UK, as people bet on the spread, is this approach less likely to result in harm? Similarly, in Australia some states have the power to prevent certain bets, do you believe this power would benefit the UK system as it stands? In principle, bets on the margin of victory (above or below the bookmaker quote), known in Britain as ‘handicap betting’, may be less risky than betting on actual outcomes to the extent that returns are less volatile. Traditionally Americans bet against the spread at odds of 10/11, i.e. close to evens, so that a long run of losses was unlikely. At the same time, handicap betting is undoubtedly highly dangerous for sports integrity. Regular scandals have appeared in American sport because of the temptation of athletes to agree to ‘point shaving’- they are willing to accept bribes to ease up so as to win by less than the spread because they do not actually have to lose the match for the corrupt bet to be won. However, it is a dated view to think that Americans mostly bet on the spread. The network of local illegal bookmakers has tended to evolve in the direction of an agent model where agents of offshore operators provide channels whereby American residents can access international markets: agents’ primary role is not to bear risk but to recruit clients and collect the revenue. This change in the model of illegal betting reflects Americans’ increasing desire to engage in the sorts of betting available elsewhere, including in-play betting. This is a worldwide trend in betting demand and imposition of old-style betting on the GB market would likely lead to an increasing trend for bettors to resort to unregulated offshore operators, where they would be less protected from harm. In Australia and France, sports have a betting right and may prevent certain bets being offered. Typically this is exercised to try to suppress bet types with high risk to sport integrity. In terms of gambling-related harm, it might be considered to remove ‘micro bets’, for example bets on what will happen next (e.g. which team will receive the next yellow card). Such bets have been demonstrated in an Australian paper to be particularly attractive to problem gamblers, preying on their tendency to impulsivity.225 It is plausible that they lead to unplanned expenditure in situations where there is an urgency to bet before events move on. However, the market for such bets is relatively very small and the potential benefit of prohibition consequently limited. We have heard oral and written evidence from the gambling industry suggesting more regulation could lead to gamblers using offshore, unregulated operators. What are your views? This is a real and important danger. Throughout the World, legalised sports betting which offers a limited range of bets or poor value for money falls well

224 Legalisation of betting in Great Britain in 1961 was followed by a very substantial increase in the size of the horse racing industry.

225 Russell, A.M.T., Hing, N., Browne, M. et al. ‘Who Bets on Micro Events (Microbets) in Sports?’. Journal of Gambling Studies, 35, 205–223.

311

short of capturing the whole of the market. For example, France was obligated under pressure from the European Union to issue licences to sports betting operators from other member states but its regime dictated low pay-back rates and a restrictive range of bets. The model has been perhaps surprisingly successful in terms of keeping the mass market within its regulated system but there is reported to be significant leakage of the most engaged bettors to international markets. An interesting development in the past year has been a trend in North European jurisdictions to introduce loss or else deposit limits on bettors, defined monthly or annually. This is intended to reduce harm by making extreme losses impossible. How this works out should be studied because it should give an indication of how consumers respond to increased regulation when it is realistic for them to find ways of placing extra-territorial bets to evade the restrictions. In my view, the greatest strength of the 2005 Gambling Act is that it has allowed Great Britain to be more successful than all other countries in avoiding a drift to illegal suppliers. I would caution against the risk of introducing regulatory provisions which would drive bettors offshore. They would then have no protection from the provisions for safer gambling mandated by the LCCP. Further, risks to sport integrity where liquidity shifts from a highly regulated market to an unregulated market are considerably elevated. The ideal betting market for match fixers is one with high liquidity and no effective supervision. What do you believe needs to change in order to limit the harm to gamblers resulting from the relationship between gambling and sports? i) Sports betting is an activity from which sport itself can benefit but, like many other forms of gambling, it carries risk of harm; a significant proportion of problem gamblers bet on sport and there has been growth in participation in the demographic group (young-ish males) which is always and everywhere found to be at highest risk of gambling-related harm. That much of the activity is online presents the opportunity to address harm by close monitoring of individual bettor accounts. The effectiveness of such monitoring is, however, compromised in various ways. First, while I am convinced by the ability of algorithms to detect problematic behaviour, the industry has lost confidence that it is serious about applying them rigorously; in the many regulatory settlement cases involving betting, it is inconceivable that the algorithms failed to flag a cause for concern, so some individuals must have decided not to act; a strong signal to the industry would be sent if the managers involved were identified and deprived of their personal licences. Second, problem bettors tend to use multiple accounts, so the need for ‘a single customer view’, prioritised by the Commission, is obvious if problems are to be detected successfully. Third, while the potential to identify problems is strong, evidence is still needed on what interventions would be effective in modifying behaviour; to date evaluation of industry practices in this regard has been inadequate.

312

ii) Thresholds for triggering intervention should be lower for young bettors. The study of longitudinal data I conducted with Prof. Ian McHale226 found that most 17 year olds who showed signs of gambling harm had ‘recovered’ by age 20 but that problem gambling prevalence nevertheless tripled between these ages: there was a worryingly high incidence of new onset problem gambling after the age when commercial gambling became legally accessible to the young people. Operators should take the greatest care when dealing with this age group. The case for stronger monitoring of this group is similar to that justifying additional regulations imposed on young drivers. iii) The Ipsos Mori Report for GambleAware227 demonstrated that advertising around sports events is not necessarily the principal source for young people of exposure to promotion of gambling. Lottery and scratchcard advertising is likely encountered more often and the example of parents is probably more important.228 However, it is still the case that the audience for sports events includes a significant number of young people and vulnerable adults and codes for promoting sports betting should be strengthened to protect them from exploitation as well as from more general gambling harm. Examples of marketing which may need greater restraint include offering of complex bonuses and emphasis on the need for urgency (and sometimes the two together- bonus on tonight’s match). Ongoing scrutiny in this area needs to cover not only television but also advertising on social media and in shop windows (where displays are often very specific, showing odds for a particular score in a particular match or odds for a particular accumulator where value for money is hard to assess). iv) Sports themselves are not in a position to address gambling harm directly but must still be regarded as having a duty to protect their fans and, if they are to be permitted to continue to benefit fully from association with betting, they should be proactive in assuring themselves, supported by securing appropriate contractual commitments, that betting partners can demonstrate strong compliance with provisions for safer gambling. Sports should also commit themselves to protecting their own employees from gambling harm; even controlling for the peculiar demography of professional athletes (overwhelmingly young men), this occupational group has problem gambling prevalence very substantially above the population average; the risks inherent in their tendency towards heavy engagement with gambling may be aggravated by working in an environment strongly associated with gambling. Sports federations should insist that member clubs and leagues have specific protocols for addressing gambling-related harm among their players and should support player unions in their

226 Forrest, D. & McHale, I.G. (2018). Gambling and Problem Gambling among Young Adults: Insights from a Life-Long Longitudinal Study, GambleAware. Available at:

https://about.gambleaware.org/media/1799/gambling-and-problem-gambling-among-young-adults-revision-10818-final-publish-002.pdf

227 Ipsos Mori (2019) Interim Synthesis Report: The Effect of Gambling Marketing and Advertising

on Children, Young People and Vulnerable Adults, GambleAware. Available at:

https://www.about.gambleaware.org/media/1963/17-067097-01-gambleaware_interim-synthesis-report_080719_final.pdf

228 Indeed, the large-scale surveys of adolescent gambling behaviour commissioned from Ipsos

Mori by the Gambling Commission (and earlier by the National Lottery Commission) invariably

show that young persons’ participation in sports betting and other commercial gambling is typically conducted with the overt cooperation of a parent or guardian.

313

efforts to deal with the problem. On a positive note, Britain already seems ahead of other European countries on this front. 24 March 2020

314

Anthony Franklin – Written evidence (GAM0046) Response to Questions The Gambling Act 2005 1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld? In my opinion the Gambling Act 2005 has always failed to live up to its three primary aims in part because the details were never scoped out and incorporated into the act and were left to interpretation by the Regulator. For example, what is the definition of a ‘vulnerable person’, when does a person become ‘vulnerable’? Further examples: What is the definition of ‘fair and open way’ in the context of the gambling industry? Is it fair even that children are able to play slot machines before they have fully developed cognitive functions? Have the industry been transparent about the dangers of high speed, immersive slot / fruit machines? In my opinion the Regulator has taken a very relaxed approach to its responsibilities and has largely allowed the industry to self-regulate. (Which hasn’t worked) This approach has started to change over the last few years but even so enforcement (usually fines) has largely been focused on extreme cases typically involving criminality. A recent Panorama program focused on online gambling referred to a BeGambleAware study that showed 4% of players contributed 78% of revenue! That is people losing £1000, £10,000s in days, hours and sometimes minutes! How in any way can that be viewed as meeting the Gambling Act 2005 primary aims? 2. What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed? It is my opinion that play of any electronic gambling machine should be subject to account play only with a requirement for ID and authentication before play starts. (Including retail outlets, pubs, amusement arcades etc.) This should include a link to the Gamstop database to ensure that anyone registered as self -excluded is denied access to play. The current position in my opinion is that particularly in relation to online gambling a large proportion of revenue / profit is being made from a player base experiencing significant gambling related harm. Self-regulation is not working and therefore the Government must act. To be incorporated into the Act:

315

- A ban on the use of credit cards for gambling. (also funded via wallets and also overdraft use for gambling)

- Debit card blocking functionality with a 24 hour cooling off period for request to reactivate.

- Affordability check requirement on the operator that has some bearing on the average disposable income in the UK. (figures from Gambling Commission range £125 - £499 monthly) My view would be that in relation to electronic gambling machines it shouldn’t be possible to spend beyond £500 / per month without thorough affordability checks.

3. Is gambling well regulated, including the licensing regime for both on- and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions? I would point to my answer given to Q 2 that the ideal solution would be to have account play requiring authentication (including ID) before play to reduce the likelihood of underage having access to electronic gambling machines. Additional measures could be more unannounced enforcement visits. In Slovakia it is a requirement to present ID to gain access to amusement arcades. 4. Should gambling operators have a legal duty of care to their customers? In my opinion yes. And absolutely unequivocally they should where a request to self-exclude has been made. Social and economic impact 5. What are the social and economic costs of gambling? These might include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs. In the past when I have been able to hold a job down I have had earnings within the higher rate tax bandings. Unfortunately my performance has rarely been consistent because of my constant struggle with gambling addiction. I have lost every job in some way a direct consequence of my gambling addiction. Between each job has often seen a long period of unemployment and reliance on state benefits and with the passage of time it has become harder to put together a compelling CV which possibly combined with other factors such as age, deterioration of mental health has made getting a job increasingly more difficult. Currently I am on ESA, housing benefit, council tax reduction for almost two years. I want to work and be productive in society and actually this is an area within the context of gambling addiction recovery / treatment where very little is being done: programs to help people back into employment. 6. What are the social and economic benefits of gambling? How can they be measured and assessed?

316

In my opinion any social and economic benefits of gambling are dwarfed by the economic costs of gambling that are not properly quantified. Some stated in Question 5 but I would highlight the cash drain from local communities of money spent on gambling of which very little is recycled through the local economy by being spent on other goods and services. A point could be made that a return to a non-machine environment in the bookmakers and bingo halls could serve as a community hub for those looking to meet others, make friends and have conversation. Machines in my view detract from that experience, as the focus becomes rather narrowed, man (woman) and machine. 7. Is the money raised by the levy adequate to meet the current needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons? In my view the voluntary levy is ineffective and has been proven so over the years. The national charity GamCare is London based, with a part-time helpline and counselling services that don’t cover the country. They’ve been established 20 years and they have not considered in my view the dire state that gambling addicts are in when they reach rock bottom. There is no practical assistance available to assist people. I was offered counselling 25 miles away with no way to get there. People need food vouchers, heating tokens, practical help as well as therapy. Consistent with the theme of the voluntary levy has always been the concern of industry interference. Why hasn’t the required research been undertaken? It is my view that we need a statutory levy with an independent commissioner to distribute the funds free of industry interference. The amount of the levy should be at least proportionate to the harm being done which we know to be more than 1% of players. Research 8. How might we improve the quality and timeliness of research in the UK? What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons? It is my view that we need a statutory levy and independent commissioner to distribute funds on the recommendation of a panel of international experts in this field. (People like Professor Samantha Thomas, Janne Nikkinen, Professor Rebecca Cassidy) 9. If, as the Responsible Gambling Strategy Board (RGSB) has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation? Precautionary approach should be considered. I’m not aware of other western countries that allow children to gamble on slot / fruit machines. Also align to alcohol / cigarette policy.

317

Additional research could be commissioned in this area looking at those that identify with gambling addiction and those that don’t to identify if there is a link to early years gambling. Education 10. Is enough being done to provide effective public education about gambling? If not, what more should be done? Probably not but within the current framework of the voluntary levy and monies disbursed to organisations to do this that have close links with the gambling industry I am concerned at this approach. Any education needs to be delivered free of industry interference or perceived industry interference and the best way to achieve that is via a statutory levy and independent commissioner. Treatment 11. Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help? Simply put, no. Gambling addiction needs specialist help, ideally through the NHS mental health services that need to have adequate money ring-fenced via a statutory levy to provide the comprehensive treatment needed. There are often other mental health contributory factors involved in gambling addiction that need dealing with as well. A few counselling sessions, online CBT or a telephone chat for someone who has struggled with gambling addiction their entire life is not sufficient. Consideration also needs to be given as part of treatment to housing, food, heating needs of people who will likely have lost everything at point of treatment. Coming out of treatment people need help with reintegrating back into society. Finding a job and purpose in life, other activities to fill the void. We need a holistic approach which very few seem to have considered. Perhaps Gordon Moody is one of the closest examples of what might be needed and they have a long waiting list and few beds. 12. What steps should be taken better to understand any link between suicide and gambling? The Coroner should have a tick box on his report to indicate suicide where gambling addiction was considered to have been a factor. Rather than the current situation where the Coroner can record in the narrative but the number of gambling related suicides can’t be counted by the ONS. Advertising 13. The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.”2 Do you agree? How should we make

318

decisions about the regulation of gambling advertising? What might be learned from international comparisons? Gambling and sport In my opinion we need to eradicate this nonsense that sport is only fun when you have a bet on. Sport should be enjoyable free of the interference of gambling and the advertising that goes with it. This constant narrative we hear that gambling is fun (and people who win), when we know that the only winners are the operators needs to be stopped. It shouldn’t be constantly promoted and certainly not any time when children would be exposed to it. Research from Australia showed that kids could recite all the big gambling operators when asked. We are creating the next generation of harm by doing nothing. 14. Gambling is becoming an integral part of a growing number of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this? Same answer as provided to Q 13. with the additional comment that the link / association between football heros, e.g. Wayne Rooney and gambling operator 32Red increases the risk of children thinking it is cool to gamble. Gambling by young people and children 15. How are new forms of technology, including social media, affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future? In my view children are being groomed to gamble. Games with in-play purchases where you might get what you want are encouraging children to spend all their money, beg parents for more, and in worse cases steal money to acquire characters, weapons or other perceived value items. (Loot Boxes). These should be reclassified as 18+ games. 16. The legal availability of certain forms of commercial gambling to under-18s in Great Britain is unusual by international standards and has been described as an ‘historical accident’.3 Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins? In my view the national lottery should be 18+ only with scratch cards having some of the same risk characteristics as electronic gambling machines and possibly should be banned. (near misses, risk of chasing losses etc) 17. Should children be allowed to play Category D games machines (which include fruit machines, pushers and cranes)? No. In my view children are not sufficiently well developed cognitively to play fruit machines. There is therefore an increased risk in my view of developing addiction with consequences that will reach in many cases well into adulthood. Lotteries 18. The restrictions on society lotteries were relaxed by the Gambling Act 2005, and there is concern that some of them are effectively being

319

taken over by larger commercial lotteries. Is this concern well founded? If so, what should be done? Yes. All part of contributing to the normalisation of gambling in society. Constant TV adverts showing winners risks introducing vulnerable groups to gambling, some of whom will go on to develop addiction. 19. Should changes be made to the statutory regime governing the National Lottery, to bring it into line with the regime governing operators of other lotteries? I would prefer to see the National Lottery reduced to one draw a week with a company owned by the Government. (set-up similar to premium bonds) 6 September 2019

320

GambleAware – Written evidence (GAM0014)

We are pleased to make the following submission to the above Lords Select Committee focusing on addressing questions relating to the services available for the treatment and support of people who are harmed by gambling, and public education.

GambleAware is an independent charity, registered with and regulated by the Charity Commission for England and Wales and the Scottish Charity Regulator (OSCR), that works to help reduce gambling harms throughout Great Britain.

We are a grant-making body using best-practice aspects of commissioning, including needs assessment, service planning, evaluation and outcome reporting to support effective, evidence-informed, quality assured prevention of gambling harms.

Currently, we have around £44 million of overall funding under active management.

1. Our strategic approach

1.1 We regard gambling as a public health issue and thus reducing gambling harms requires a public health approach taking account of all three aspects of prevention:

• Primary or Universal Prevention - aimed at the whole population to promote a safer environment

• Secondary or Selective Prevention - aimed at groups with a prevalence of suffering gambling harms

• Tertiary or Indicated Prevention - aimed at individuals suffering gambling disorder.229

1.2 Guided by this public health model, we commission integrated prevention services on a national scale and work in partnership with expert organisations and agencies, including the NHS, to commission across three areas of activity:

The National Gambling Treatment Service

1.3 The National Gambling Treatment Service brings together a National Gambling Helpline and a network of locally-based providers across Britain to deliver a range of treatment services, including brief intervention, counselling (delivered either face-to-face or online), residential programmes and psychiatrist-led care.

1.4 The National Gambling Treatment Service includes a psychiatrist-led service provided by the Central and North-West London NHS Foundation Trust that GambleAware has funded for a decade. A second NHS service commissioned by GambleAware has recently opened, delivered by Leeds & York Partnership NHS Foundation Trust in partnership with GamCare. These services are designed to help people with more serious and complex needs, including

229 ‘Problem gamblers’ suffer gambling disorder defined by the World Health Organization (WHO) as

an addictive behaviour with implications for mental health.

321

people receiving NHS treatment for other conditions, and are the only such services currently available.

1.5 In Leeds, we have been working alongside statutory and voluntary sector agencies to support a place-based approach for the local population, and to map care pathways and develop referral routes into treatment, including self-referral.

1.6 We believe this initiative is a concrete example of the right approach, and forms the basis of the commitment in the NHS Mental Health Implementation Plan, 2019-24 (pp 40-41) in which GambleAware is recognised as an NHSE partner in relation to the NHS commitment to opening 15 specialist problem gambling clinics in the next five years.

1.7 Local engagement to develop local care pathways is backed up by national initiatives. For example, GambleAware has funded the Royal Society for Public Health (RSPH) to develop an e-learning module for primary care staff to develop their understanding of gambling disorder and the treatment that is available.

1.8 In the 12 months to 31 March 2019, the National Gambling Treatment Service treated 10,000 people and the Helpline received 30,000 calls and on-line chats. Waiting times are short, and compare favourably to NHS Improving Access to Psychological Therapies (IAPT) mental health services. Routine monitoring and evaluation demonstrates that current treatment is effective.

1.9 All treatment providers use outcome measures to track a person’s progress while they are in treatment and to provide assurance about the effectiveness of the treatment for the cohort.

• PGSI (problem gambling severity index) is the standardised measure of at-risk behaviour in problem gambling. A score of 8 or more on PGSI indicates problem gambling. Across the National Gambling Treatment Service the average PGSI score at the start of treatment is 18.3, and this drops to 4.16 at the end of treatment.

• CORE (clinical outcomes in routine evaluation) measures the overall level of current distress across a range of common mental health problems such as depression and anxiety and is used at each consultation. A score of 10 or more on CORE indicates at least mild psychological distress. Across the National Gambling Treatment Service the average CORE score at the start of treatment is 15.8, and this drops to 6.42 at the end of treatment.

1.10 We are concerned that the average PGSI and CORE scores of people entering treatment are high. It is a priority to promote access to treatment for people so that they can get help before they reach crisis point. This underpins our strategy of a twin-track approach to expand the capacity of the treatment sector and to develop referral routes so that the percentage of problem gamblers who get treatment rises from the current low level of 3%. We are also concerned to support primary care to improve awareness of gambling as a health risk, detection and earlier referral and intervention.

1.11 GambleAware has commissioned a company called ViewIt UK to begin independent collection and analysis of output and outcome data with more granular detail. Data will be validated by checks and procedures similar to those that fulfil that function for the National Drug Treatment Monitoring

322

System on behalf of Public Health England (PHE), and the system made available to the NHS.

1.12 Treatment for gambling disorder is not a regulated activity under the legislation which governs the work of the Care Quality Commission (CQC). In conjunction with the Department of Health & Social Care (DHSC), GambleAware is exploring the scope for an equivalent level of assurance in respect of the treatment offered by the National Gambling Treatment Service.

1.13 Responsibility for planning, agreeing and monitoring the prevention and treatment services funded by GambleAware lies with our Education and Treatment Committee, chaired by Professor Sian Griffiths, who is Associate Non-Executive member of the Board of PHE and a former President of the UK Faculty of Public Health. Other members include Rachel Pearce, Regional Director of Commissioning, NHSE South West, and Saffron Cordery, Deputy Chief Executive, NHS Providers.

1.14 The Grant Agreements that GambleAware has in place with the providers of the National Gambling Treatment Service specify the assurance that is required and set out clearly a framework for both monitoring and addressing concerns about quality, and our expectation that all treatment providers must have, and can evidence, key operational policies including safeguarding processes. Continuous improvement of clinical governance is a priority for us, and we have established processes to ensure that commissioned services are accountable to our trustees, and that safeguarding and risk management is under regular review and, when necessary, relevant issues are responded to promptly and proportionately.

1.15 The National Gambling Treatment Service provides safe, effective treatment, free at the point of use, and at nil cost to the tax-payer. It is an important public service, commissioned by a charity, and delivered by a mix of statutory and voluntary organisations in accordance with Government policy on reducing gambling harms.

1.16 £26 million of funding under active management goes towards this area of our work.

Public health campaigns & practical support to local services

1.17 At the request of Government, GambleAware is leading a national multi-media ‘safer gambling’ campaign that launched in February 2019, under the title Bet Regret. This campaign is targeted at an audience of 2.4m young men aged 16-34 who gamble regularly on sport, and of which 87% regularly watch football230 and 63% believe that there are too many opportunities to bet nowadays.231 Aimed at moderating behaviour, the campaign encourages these young men to think twice about betting when drunk, bored or chasing losses. The campaign has been designed to be a part of a broader public health approach.

1.18 The early indications of the ongoing evaluations are that this is having a positive impact in terms of awareness building and we hope it will lead to measurable behaviour change. The campaign presents opportunities to work with football clubs and supporters’ associations, and reach into local

230 TGI GB Profiles December 2018 – UK Gamblers 18-34 231 Ipsos MORI Baseline Survey Key Findings - 2018

323

communities that are often socially and economically disadvantaged and therefore especially at risk of gambling-related harm.

1.19 All activity is being monitored with an ongoing Tracking Study conducted by Ipsos MORI. Having conducted a baseline survey in November 2018, a second wave of online research was conducted in May 2019 following the first burst of campaign activity. Although it is early days, results to-date are positive; indicating that the campaign is well targeted against those most at risk with good recognition and strong take out of the message. Overall campaign recognition – the number recalling seeing one or more elements of the campaign – is high at 61%. A summary of the results are published on our website and can be found here.

1.20 Although always present online, a second burst of television and radio activity was launched on 17 August to coincide with the start of the new football season, and introduced the line ‘Think Twice or You’ll Bet Regret it’; a simple piece of advice to prompt people to pause and reconsider.

1.21 This second phase of activity is supported by a sponsorship donation from GVC Holdings, including advertising and promotional space at all 42 clubs in the Scottish Football League, Sunderland, West Bromwich Albion, Burnley, Sheffield Wednesday and Sheffield United.

1.22 GambleAware also provides practical support to GP services, debt and other advice agencies, mental health services, prisons, military personnel, professional sports, schools and youth workers.

1.23 Partnerships include working with PHE and RSPH on the Make Every Conversation Count+ (MECC+) initiative, as well as with Citizens Advice on training debt advisers across England and Wales to identify and offer support to people who may be suffering gambling harms.

1.24 Following a successful pilot scheme in secondary schools in England by Demos and the PSHE Association, resources to support PSHE teaching are available on the GambleAware website. In Scotland, another successful pilot project has led GambleAware to commission Fast Forward (a Scottish charity that enables young people to make informed choices about their well-being and to live healthier lifestyles) to provide to every young person in Scotland access to gambling education and prevention opportunities. Our plan is to evaluate this programme in 2020 and, if warranted, subsequently commission similar national programmes in Wales and in England.

1.25 We are funding the RSPH to establish a Gambling Health Alliance to be launched in September to bring together a wide range of professional health-related bodies to promote greater awareness and share perspectives on preventing gambling harms. Elsewhere, we are pleased to be supporting the PHE mental health initiative, Every Mind Matters, and welcome their promotion of information about gambling and where to find help and advice.

1.26 GambleAware also runs the website BeGambleAware.org which helps 4.2 million visitors a year, and signposts to a wide range of support services.

1.27 £13 million of funding under active management goes towards this area of our work.

Commissioning research & evaluation

324

1.28 Our focus is to improve knowledge of what works in prevention, education, treatment and support services including proportionate evaluation of all funded activity.

1.29 GambleAware’s research activity is guided by the Gambling Commission's Research Programme, and supports the National Strategy to Reduce Gambling Harms. Its independence is ensured by the Research Governance and Commissioning Procedure agreed with the Gambling Commission.

1.30 A significant programme of over 40 research projects includes a large-scale evaluation of the National Gambling Treatment Service, a literature review of evidence of effective treatments, a gap analysis and needs assessment for treatment, and further work to promote the voice of people with lived experience.

1.31 Following a successful event for gamblers in recovery to discuss policy issues with the Gambling Commission and DCMS that GambleAware organised in December 2018, planning for further events has been taking place. These will be held on a regional basis and the first of these ‘Lived Experience’ conferences has been scheduled for 15 November 2019 at the University of Central Lancashire.

1.32 GambleAware is an approved National Institute for Health Research (NIHR) non-commercial partner, ensuring appropriate research studies funded by GambleAware are entitled to access NHS support via the NIHR Clinical Research Network.

1.33 All research is peer-reviewed and we follow Research Council policy regarding research ethics, encouraging and funding open access publication in academic journals and data reuse.

1.34 £5 million of funding under active management goes towards this area of our work.

2. Funding

2.1 The current arrangements for prioritising, commissioning, funding and evaluating research, education and treatment were established by an 'assurance and governance framework' agreed between the Gambling Commission and GambleAware in August 2012.232

2.2 Known as the ‘statement of intent’, this document makes clear that GambleAware “will be responsible for fundraising and commissioning activity to deliver the strategy that RGSB advises the Commission should be followed (building in feedback from activity and evidence already evaluated by RGT), subject to the funds available.”

2.3 The Gambling Commission’s License Conditions and Codes of Practice (LCCP) stipulates that all “licensees must make an annual financial contribution to one or more organisation(s) which between them research into the prevention and treatment of gambling-related harm, develop harm prevention

232 https://about.gambleaware.org/media/1211/statement-of-intent-document-final-with-logo-v2.pdf

325

approaches and identify and fund treatment to those harmed by gambling". 233

2.4 However, despite the aforesaid ‘statement of intent’, the Gambling Commission do not stipulate how much any donation ought to be or where it ought to be directed, although GambleAware is identified as a possible recipient on the basis of providing “a clear audit trail detailing your contribution.”234

2.5 The ‘statement of intent’ includes a note that the quantum of funding required is a matter to be advised by the ABSG subject to discussion with GambleAware. The most recent advice was provided by ABSG in January 2017 and identified £9.5 million for 2018/19 plus running costs.235

2.6 In the 12 months to 31 March 2019 we received voluntary donations of £9.6 million plus £7.3 million of ‘regulatory settlements’. Regulatory settlements are payments by gambling businesses in lieu of financial penalties as agreed with the Gambling Commission in accordance with its statement of principles. Specifically, “where payments are made with the aim of addressing gambling-related harm, the presumption is that the money would be paid to GambleAware to be used for specific agreed purposes that accelerate their commissioning plans.” (2.14 vii)236

2.7 Our total expenditure for the same period was circa £15.3 million compared to £8.3 million in 2017/18.237 We anticipate our expenditure to rise in the current year to 31 March 2020 to reach circa £18 million.

2.8 The variations in cash flow from this uncertain funding model represent a significant challenge given that a key function of GambleAware is to provide assurance to funded services about recurrent income streams so that expert clinical teams can be established and sustained to provide treatment and support for those who need help.

3. Our people and organisation

3.1 A substantial element of our ‘added-value’ derives from our collective expertise, experience and knowledge allied to our ability to leverage extensive networks and relationships nationally and internationally, and to broker engagement to affect positive and sustainable change.

3.2 Our Board of trustees is chaired by Kate Lampard CBE, who is lead non-executive director on the Department of Health & Social Care Board and a trustee of the Esmée Fairbairn Foundation. The other directors are:

• Saffron Cordery - Director of Policy & Strategy and Deputy Chief Executive, NHS Providers

233 https://www.gamblingcommission.gov.uk/PDF/LCCP/Licence-conditions-and-codes-of-

practice.pdf 234 https://www.gamblingcommission.gov.uk/for-gambling-businesses/Compliance/General-

compliance/Social-responsibility/Research-education-and-treatment-contributions.aspx 235 https://about.gambleaware.org/media/1932/quantum-of-funding-january-2017.pdf 236 https://www.gamblingcommission.gov.uk/PDF/statement-of-principles-for-determining-

financial-penalties.pdf 237 https://about.gambleaware.org/media/1836/gamble-aware-annual-review-2017-18.pdf

326

• Professor Siân Griffiths OBE - Associate Non-Executive member of the Board of Public Health England and a former President of the UK Faculty of Public Health

• Michelle Highman - Chief Executive, The Money Charity

• Professor Anthony Kessel - Former Director of Global Public Health & Responsible Officer for PHE; Honorary Professor & Co-ordinator of the International Programme for Ethics, Public Health & Human Rights at the London School of Hygiene & Tropical Medicine

• Rachel Pearce – Regional Director of Commissioning, NHSE South West

• Chris Pond - Chair of Money Charity, Equity Release Council Standards Board & Lending Standards Board & Vice-Chair of Financial Inclusion Commission

• Paul Simpson - Chief Finance Officer & Deputy Chief Executive, Surrey & Sussex Healthcare NHS Trust

• Professor Marcantonio Spada - Professor of Addictive Behaviours and Mental Health at London South Bank University & editor-in-chief of the international peer-reviewed journal, Addiction Behaviours.

3.3 The full Board meets quarterly and trustees hold an additional annual strategy review meeting in January. Trustees have established the following five sub-committees: Audit & Risk; Finance, Administration & Remuneration; Stakeholder Engagement; Education & Treatment; and, Research & Evaluation. Membership, terms of reference and minutes of all committees are published on our website.

3.4 As of 1 October 2019, there will be a total of twenty-two staff members organised as per the attached organogram. Further details of the expertise and experience of staff members can be accessed via https://about.gambleaware.org/about/trustees-and-management/.

4. Working across Governments

4.1 GambleAware welcomes its membership of a joint-initiative by DCMS and DHSC to establish a Steering Group to improve co-ordination and promote a sustainable, joined-up approach to prevention, education, treatment and research activity.

4.2 Elsewhere, GambleAware is participating in the National Suicide Prevention Strategy Advisory Group, and is at an early stage of collaboration with the Ministry of Defence in relation to gambling as a health issue for serving military, veterans and their families.

4.3 Also, we have established advisory boards in Wales and Scotland to help guide our future commissioning plans in those nations. The Chief Medical Officer for Wales acknowledges our ongoing work in his annual report 2018/19.238

5. Conclusion

5.1 GambleAware is uniquely positioned within an ecosystem of statutory and voluntary organisations, and is committed to working collaboratively to

238 https://gov.wales/sites/default/files/publications/2019-05/valuing-our-health.pdf

327

promote a coherent and co-ordinated public health approach to preventing gambling harms.

5.2 Ultimately, our success in establishing the National Gambling Treatment Services and the prevention and research activity that supports it will require continued widespread collaboration across various national health agencies, healthcare professionals, treatment providers, charities and local authorities.

5.3 Trustees are determined that this is achieved within a robust framework of best-practice commissioning and transparent evaluation that one would rightly expect of statutory sector health and social care commissioning bodies.

Kate Lampard CBE Chair of Trustees

2 September 2019

Chief Executive

Director of Commissioning

(Treatment)

Commissioning Manager

Commissioning Assistant

Director of Education

Education Manager

Education Assistant

Director of Research

Programme Manager

Research Consultant

Research Manager

Research Manager

Research Manager

Project Support Officer

Director of Communications

Communications Manager

Communications /PA Manager

Chief Finance Officer

Finance Manager HR Manager

Company Secretary

Fundraising Assistant

328

GambleAware – Supplementary written evidence (GAM0101) When I was asked by the Chair whether people can bid unsolicited or unprompted by GambleAware to offer a service that we might be able to fund, and was told it was a Yes or No answer, I replied No. However, I should like to add that our policy with regard to ‘speculative applications’ is set out on our website and states: “GambleAware makes grants in accordance with its Strategic Delivery Plan, which reflects the priorities of the National Strategy to Reduce Gambling harms. We do not offer funding in response to speculative applications, but from time to time do issue open tenders when there is the opportunity to bid for funding for innovative projects within a broader field. We do not therefore offer funding for new business ideas, artistic projects etc. but we are always interested to hear about anything which can help reduce gambling-related harm so we can consider them as part of our longer term plans.” The Lord Bishop of St Albans asked when we would see the first findings on the effectiveness of the treatment being provided, and I replied by saying that it will probably be in the third quarter of next year when we will see the interim findings. I wish to add that GambleAware has commissioned ViewIt UK to independently collect and analyse treatment output and outcome data with more granular detail. Data will be validated by checks and procedures similar to those that fulfil that function for the National Drug Treatment Monitoring System on behalf of Public Health England (PHE), and the system made available to the NHS. 20 November 2019

329

GambleAware – Supplementary written evidence (GAM0128) Following our attendance at the Committee evidence session on Tuesday 29 th October, we are pleased to provide the following further information as requested.

Governance & organisational structure

GambleAware is a wholly independent charity regulated by the Charity Commission for England and Wales, and the Scottish Charity Regulator (OSCR). Our charitable objectives are:

A) The prevention and treatment of gambling harms, understood as matters of health and well-being, for the benefit of the public in Great Britain, in particular for those who are most vulnerable; and,

B) Keeping people safe from gambling harms through the application of a public health model taking into account the following three levels of prevention: Primary – universal promotion of a safer environment; Secondary – selective intervention for those who may be ‘at risk’; and, Tertiary – direct support for those directly or indirectly affected by gambling disorder.

Guided by this public health model, we commission integrated prevention services on a national scale and in partnership with expert organisations and agencies, including the NHS, across three areas of activity:

• Commissioning the National Gambling Treatment Service; • Public health campaigns & practical support to local services; • Commissioning research & evaluation to improve knowledge of what works

in prevention.

Currently, we have around £45 million of funding committed to these activities and a summary of the work we have commissioned can be accessed here. We commission the National Gambling Helpline and are the primary commissioner of treatment services across England, Scotland and Wales. We are working with Citizens Advice, the Royal Society for Public Health and Parent Zone among others to deliver effective prevention activity, and we are funding research in over 30 British universities including five doctoral students. In total we are managing and monitoring around 50 grant agreements and service contracts.

A substantial element of our ‘added-value’ derives from our expertise, experience and knowledge allied to our ability to leverage extensive networks and relationships nationally and internationally, and to broker engagement to affect positive and sustainable change.

GambleAware is governed by a Board of Trustees, whose independence and extensive public health and NHS experience is essential in helping us to fulfil our role in commissioning effective prevention and treatment services, and our research programme.

Chaired by Kate Lampard CBE, who is lead non-executive on the Department of Health & Social Care Board and a trustee of the Esmée Fairbairn Foundation, the Board includes:

330

• Saffron Cordery - Director of Policy and Strategy and Deputy Chief Executive, NHS Providers

• Professor Siân Griffiths OBE - Chair of the Global Health Committee & Associate Non-Executive member of the Board of Public Health England (PHE)

• Michelle Highman - Chief Executive, The Money Charity • Professor Anthony Kessel - Clinical Director at NHS England and NHS

Improvement; Honorary Professor & Co-ordinator of the International Programme for Ethics, Public Health & Human Rights at the London School of Hygiene & Tropical Medicine

• Rachel Pearce - Regional Director Commissioning at NHS England South West

• Paul Simpson - Chief Finance Officer/Deputy Chief Executive, Surrey & Sussex Healthcare NHS Trust

• Professor Marcantonio Spada - Professor of Addictive Behaviours and Mental Health at London South Bank University

As of April 2020, GambleAware employs 23 full and part time staff. The Senior Management Team consists of six roles: Chief Executive Officer; Chief Finance and Corporate Affairs Officer (Interim); Director of Commissioning (Treatment Services); Director of Education; Director of Research & Evaluation; and, Director of Communications and Engagement. Further details about the management team are published on our website here.

As discussed during the evidence session, we have expanded significantly over the last two years in response to a doubling of both funding and commissioning activity:

2019-20 2018-19 2017-18 2016-17 2015-16

Income £14,953,624

£18,441,553

£14,507,455

£8,621,499

£7,632,371

Expenditure

£18,400,000

£15,650,056

£8,299,321

£8,262,328

£6,350,697

Number of staff

23 13 9 7 6

Full details of our annual accounts are published via the Charity Commission and are available here. Please note that the income and expenditure for the 12 months to 31 March 2020 are provisional and unaudited; the final accounts will not be published until January 2021.

Funding agreements with treatment providers

In addition to the information above, I thought it would be helpful to address some of the issues raised during the Committee’s session on the 10 th March, attended by Anna Hemmings (GamCare) and Matthew Hickey (Gordon Moody Association).

Over the course of this inquiry, the Committee will have hopefully gained a sense of the strong commitment to collaborative working that exists throughout the National Gambling Treatment Service. Specific mechanisms have been put in

331

place to support and underpin this collaboration, and a key aspect of GambleAware’s function as commissioner is to lead the development of those tools and processes.

The evidence that GambleAware has already submitted includes information about the work we have commissioned ViewItUK to undertake. ViewItUK expects to be in a position in the autumn to publish validated GB-wide activity data on gambling treatment through the National Gambling Treatment Service. This will allow partner agencies, the public, Parliament, and all stakeholders to better understand in detail the breadth and depth of the treatment that is provided.

Also, it may be helpful to know that GambleAware, the Gambling Commission and the Care Quality Commission (CQC) have agreed a programme of work to develop an inspection regime for gambling treatment service, which CQC is set to carry out. The development phase of this work is being disrupted by COVID-19, but we hope to make a formal announcement of how this will be undertaken as soon as possible. Independent inspection by the CQC will provide us, and all interested parties, with an authoritative assessment of the quality of services.

We also want to make clear that the relationship between provider and commissioner is a wholly collaborative one. It does not involve the former pleading for funding from the latter, as was perhaps suggested during the session (and which we do not feel represents either our aims or work in practice). Co-design runs throughout our work, with provider and commissioner contributing their respective perspectives and insights to initiatives to improve and develop gambling treatment.

The Committee also spent some time discussing the Grant Agreements that GambleAware has with treatment providers, and there seemed to be a concern these agreements are being used to enforce monopsony.

I want to reassure you that this is not the case. As an independent charity, GambleAware needs to be able to account for its expenditure. Trustees would be failing in their duty if GambleAware was giving money to a particular activity that was simultaneously being funded from another source, i.e. ‘double-funded’.

Also, we are keen to ensure that the Grant Agreements do not stifle innovation, or additional investment. This is demonstrated, for example, in the funding from NHS England to support both the Problem Gambling Clinic based at Central & North West London NHS Foundation Trust and the NHS Northern Gambling Service being run by the Leeds and York Partnership NHS Foundation Trust, over and above the pre-existing, continuing funding from GambleAware.

GambleAware is committed to ensuring the success and expansion of the National Gambling Treatment Service and the prevention and research activity supporting it. This will require continued collaboration with treatment providers (alongside national health agencies, local authorities, and others), which continues to be at the heart of our approach.

I hope this is helpful in clarifying our governance and organisational structure, as well as our approach to working with treatment providers.

3 April 2020

332

333

Gambling Commission – Written evidence (GAM0071)

1 Executive summary 1.1 The Gambling Commission (the Commission) regulates commercial

gambling in partnership with local authorities. We also regulate the National Lottery. Whilst taking a risk-based approach to regulation we have become increasingly robust in the action that we take against both licensed operators and the key individuals who work for them.

1.2 The current gambling regulatory framework has been capable of being

flexed to meet new and emerging risks. It is, of course, important to keep that framework under review to ensure that it continues to provide that same responsiveness to future challenges.

1.3 We have a very clear focus on addressing and preventing the harms that

can come from gambling. The National Strategy to Reduce Gambling Harms, that was published in April 2019, provides a roadmap for action over the next three years. It aims to coordinate efforts across a wide range of bodies to focus on those priorities which will have the most impact in reducing gambling harms.

1.4 Protecting children and young people is a particular priority. Gambling

companies offering facilities in Great Britain are subject to stringent age-verification controls underpinned by the potential for regulatory and criminal sanctions. Our continued success in addressing underage gambling faces challenges from outside our statutory remit, as for example the lines between video gaming (which we do not regulate) and gambling become increasingly blurred.

1.5 We understand DCMS, our sponsor department has provided the committee with a detailed overview of the architecture of the regulatory framework and the activity currently being taken to address the Committee’s areas of interest. Much of this draws upon our data and research and so to minimise the risk of duplication we have focused our submission on providing the Commission’s perspective on key issues. We are happy to provide the committee with any additional information it requires.

2 Gambling Act 2005

Gambling regulation 2.1 The Commission regulates commercial gambling in Great Britain in

accordance with the Gambling Act 2005 (the Act). We also regulate the National Lottery under the National Lottery etc. Act 1993. We are an independent public body funded by licence fees paid by the gambling industry, and a grant in aid for the regulation of the National Lottery. Our expenditure for 2018/19 was £27.58m, of which £2.89m related to the regulation of the 3rd National Lottery licence and £4.01m related to the development of the competition for the award of the 4 th National Lottery licence in 2021.

334

2.2 In exercising our functions under the Act, the Commission has a statutory

duty to aim to permit gambling, in so far as we think it reasonably consistent with pursuit of the licensing objectives. The licensing objectives are to prevent gambling being associated with crime, ensure gambling is conducted in a fair and open way, and to protect children and vulnerable persons from being harmed by gambling.

2.3 The ‘aim to permit’ distinguishes the current framework from its predecessor devised in the 1960s, which treated gambling as something to be tolerated but not encouraged. The Act passed by Parliament in 2005 which took effect in 2007, is based on the recommendations of the Gambling Review Body chaired by Sir Alan Budd. It updated and consolidated gambling legislation under an overarching public policy that gambling is a legitimate and mainstream leisure activity, but one which must be licensed and regulated.

2.4 The UK gambling industry is large and diverse with c. 2,800 operating licenses issued to companies who, when combined with the National Lottery operator generated £14.6bn Gross Gambling Yield (GGY) from consumers in 2017/18.

2.5 No regulatory model, including prohibition, can be applied to gambling to completely remove the risk it can pose. The Act creates a system of regulation which seeks to mitigate the inherent risks in a manner which balances the freedom of the 24 million adults who chose to gamble, to continue to do so, whilst protecting the 340k people classed as problem gamblers and further 1.7 million who are at some risk of gambling harm.

2.6 Internationally the UK approach is considered a leading example of modern gambling regulation, with Ireland being the latest jurisdiction to adopt a similar model. Our Corporate Strategy 2018-21 sets out those areas where we are working to ensure the industry is fairer and safer for consumers. Success for the Commission is to have a responsible and responsive market, free from crime where consumers are as far as reasonably possible protected from harm.

2.7 Regulation has evolved, and must continue to evolve, to keep pace with the rapid advances in technology which now means that more than 50% of online gross gambling yield is derived from mobile devices such as tablets or mobile phones. The gambling industry is developing new innovative business models and products which can challenge traditional gambling definitions and risks.

2.8 The Act provides flexibility for Ministers and the Commission to adapt to emerging technologies and risks without necessarily requiring changes to primary legislation. Whilst the overall architecture of the framework and key definitions are enshrined in primary legislation the Act empowers the Secretary-of-State, the Commission and local authorities to use their respective powers to act subject to appropriate safeguards. For the public to retain confidence in the regulation of gambling it is important it continues to evolve to new and emerging risks, and this requires regular review to

335

ensure the powers and resources available to the Commission and others remain appropriate.

2.9 The Gambling (Licensing and Advertising) Act 2014 closed a significant gap in the regulatory framework by addressing the issue of offshore companies providing online gambling to British consumers without requiring a Commission licence. Now any company wishing to transact with consumers in Britain must obtain an operating licence from the Commission, meaning we now regulate 100% of the legal British market.

Unlicensed/illegal gambling

2.10 In addressing the illegal market, the regulatory framework needs to be flexible enough to reflect the changing dynamics of technology and media that unlicensed illegal operators and consumers use. The Commission gives priority to issues based on the level of risk they pose to the licensing objectives, including establishing the number of customers in Great Britain that may be visiting the unlicensed operator. To date, the activities the Commission has undertaken have been effective and we have not seen widespread illegal gambling in the UK.

2.11 That said, we are experiencing increasing volumes of small-scale illegal

gambling offerings via social media such as unlicensed lotteries. We are engaging with social media platforms and payment providers to disrupt such activity.

2.12 We take seriously attempts to offer gambling to children and continue to disrupt those who offer illegal products such as skins gambling. Where we suspect individuals or companies are illegally interacting our initial action is to issue cease and desist demands. Should these not be complied with, we can and have escalated matters by opening a formal criminal investigation and in parallel with use of disruption techniques. Our methods have included utilising our relationships with web hosts, payment providers and social media sites.

2.13 We have a range of investigatory powers available to us, but this type of criminal investigation is challenging, resource intensive and expensive with little case law for precedent. We continue to work with overseas regulators and law enforcement to identify how they manage similar threats and the most effective tools for prevention and disruption. We acknowledge these are global challenges and there are limitations to what can be achieved by individual domestic regulators. Our international partnerships are therefore key to our strength as a national regulator.

2.14 The option to block domains, was discussed in developing The Gambling (Licensing and Advertising) Act 2014. This remains a further option to consider and if necessary, the Commission would engage with DCMS to discuss viability as we would if we identify other techniques being used, which we regard as necessary to remain effective.

Licensing

336

2.15 The Commission uses the full range of regulatory and criminal powers to licence and regulate the gambling industry. Our first line of defence is a robust licensing process to ensure companies and individuals who pose undue risk to the licensing objectives are not able to operate in the UK. Our assessment of applications scrutinises an applicant’s suitability to hold a licence taking into account identity and ownership, finances, integrity, competence and any relevant prior criminality. Applicants must submit policies and procedures as part of the assessment undertaken to evidence how they will uphold the licensing objectives. At present the Commission has approximately 2,800 licensed operators and 20,000 licensed individuals.

2.16 Whilst we have seen a decline in new operating licence applications in recent years, the overall demand on our licensing functions has increased as demonstrated in figure 1, which shows the number of key individual licensing requests handled in each of the last three years. Key individual requests consist of new licence applications, changes in corporate controls and applications to vary licences, for example an operator expanding the scope or scale of their business.

2.17 The Commission’s risk-based approach at application or when a licence is varied (for example, following a change in corporate control) has been praised in the Treasury Report on anti-money laundering.

Figure 1: Number of key individual licensing requests handled annually

Compliance and enforcement

2.18 Once licensed, operators and key personnel are subject to our ongoing

programme of risk-based compliance activity to ensure licence holders understand and are compliant with the law and with the licence conditions and codes of practice (LCCP). We conduct full assessments of the operators

1000

1050

1100

1150

1200

1250

1300

1350

1400

1450

1500

2016/17 2017/18 2018/19

337

we licence as well as targeted and thematic assessments. Our compliance activity is supported by proactive engagement and the sharing of guidance to assist the industry to meet its responsibilities and to raise standards. In 2018/19 we have undertaken approximately 1,200 compliance assessments, 38 corporate evaluations and hosted 21 workshops or webinars for licensees.

2.19 In a limited number of cases where compliance interventions prove insufficient to address identified risks, the Commission has regulatory powers including the ability to issue formal warnings, impose additional conditions on the licence holder, levy financial penalties and suspend or revoke licences from companies or key individuals within companies.

2.20 The Commission deploys its enforcement capability to protect consumers and uphold the Licensing Objectives. We use our enforcement powers in accordance with our published Statement of Principles, the Licensing, Compliance and Enforcement Policy Statement, the Statement of Principles for Determining Financial Penalties and the Indicative Sanctions Guidance.

2.21 Our resources are focused on the areas which have the greatest impact, such as the large-scale review of the online casino sector last year. That work identified significant failings in anti-money laundering and social responsibility controls at several operators, which has so far resulted in nearly £18 million in penalty packages and action being taken against some of the senior management who hold personal management licences. We expect this work will result in a significant and lasting changes for the whole of the online sector.

2.22 We have made effective use of public statements in a number of concluded enforcement cases both as a means of deterring further non-compliance by the licensees involved but more importantly to share learnings as we seek to raise collective standards. Our view is that we cannot simply enforce our way to a safer and fairer gambling industry. Enforcement action is a necessary step where other initiatives led by regulators, industry or third parties are not sufficient to protect the public. Unfortunately, we have in recent years had to resort to an increased use of enforcement powers as demonstrated in figures 2 and 3 which show the increase in incidents or issues subject to internal escalation and the number of occasions where this has resulted in a regulatory or criminal investigation being conducted.

Figure 2: Total number of incidents referred to our Issues Management Group

338

Figure 3: Number of regulatory and criminal investigations conducted

2.23 Working in partnership with other regulators is a key part of our approach.

We work closely with the Advertising Standards Authority on gambling advertising to ensure that marketing is socially responsible. We have also worked with the Competition and Markets Authority on unfair terms and misleading practices in the online sector, and the Information Commissioner’s Office on responsible use of player data. Incorporating key legal requirements into our own licencing requirements has enabled us to act against our licensees following notification of breaches from other regulators who may not have equivalent enforcement powers.

2.24 The Act introduced a co-regulatory system for the licensing and oversight of premises-based gambling. The Commission issues operating and personal licences whilst local licensing authorities license and regulate individual gambling premises and issue permits for gaming machines in pubs and

300

310

320

330

340

350

360

370

380

390

400

2016 2017 2018

0

20

40

60

80

100

120

140

160

180

2016/17 2017/18 2018/19

339

clubs. The fees that local authorities charge to license premises are intended to resource their local regulatory activities. The most recent Licensing Authority Statistics report (April 2017 – March 2018) showed that 259 of the 380 licensing authorities at the time undertook gambling inspections.

2.25 The licensing conditions, codes of practice and accompanying technical requirements which are imposed on Commission licensees create a comprehensive suite of regulatory requirements. These relate to the way facilities for gambling are provided at all stages of the consumer journey including advertising, age-verification, complaint handling and self-exclusion. There are also various monitoring and reporting requirements on operators to ensure the Commission has the necessary information to enable us to assess regulatory risk. Where licensees fail to act in accordance with their licence, the Act allows for regulatory or criminal sanctions to be imposed, including ultimately revocation of licence. Our focus has and will continue to be on evolving those requirements to manage the risk to the licensing objectives.

Consumer redress

2.26 In the civil sphere, licensees have legal duties of care to customers insofar as these are included as part of, for example, generally applicable consumer law or data protection law. Separately, the Commission’s approach in recent times to make greater use of our powers to impose financial penalties (or in the alternative, regulatory settlements which include a requirement for operators to divest profits) has, as well as increasing compliance, drawn the attention of some gamblers to the possibility of obtaining voluntary refunds from the industry upon the threat of a complaint to the Commission.

2.27 The current gambling regulatory framework requires licensees to demonstrate how they take care of the consumers who use their products and services. It imposes a responsibility on licensees to deliver the outcomes we require to uphold the licensing objectives. Our focus has been on making use of our statutory powers to raise standards and protect consumers. We have not committed resource to explore in-depth how imposing further civil duties of care to consumers could operate as we do not consider that the existence or lack of such a civil duty impacts upon our ability to deliver our regulatory objectives.

2.28 We recognise that there isn’t a comprehensive solution for individual consumer redress. We have recently strengthened the rules around Alternative Dispute Resolution which can be used if consumers are not happy with how an operator has handled their complaint. It is a requirement that all gambling companies are signed up with an ADR provider we approve. Whether the introduction of an ombudsman-style organisation in the gambling sector is appropriate is for Government to decide, but we welcome the debate on how that could improve outcomes for consumers and how that might work.

340

2.29 As we seek to improve the way we regulate on behalf of consumers and the wider public it is important we find ways to tap into consumer and public issues to inform action. We are exploring innovative ways to engage with consumers and reflect on the views of those with direct experience of the industry. We also operate an in-house consumer contact centre which manages an increasing number of consumer contacts as demonstrated in figure 4 below which shows that contacts to the Commission have doubled since 2015.

Figure 4: Number of contacts handled by Commission’s Contact Centre

3 Social and economic impact

3.1 The gambling industry provides direct and indirect employment and generates economic activity - In 2018, there were 106,670 direct jobs in the gambling sector, accounting for 0.3% of all UK employment. The HMRC betting and gaming statistics show that in financial year 2018-2019, the gambling sector contributed £2,985m in duties. Primary contributions239 to good causes from The National Lottery were £1,500m (Oct 2017 – Sept 2018) and contributions to good causes from large society lotteries during the same period were £314m.

National Strategy to Reduce Gambling Harms

3.2 In April we launched the National Strategy to Reduce Gambling Harms, which replaced the National Responsible Gambling Strategy published by

239 Primary contributions include returns generated by game sales, but excludes certain other contributions and adjustments, most significantly the payment of unclaimed prizes to good causes.

4000

4500

5000

5500

6000

6500

7000

7500

8000

8500

9000

2015 2016 2017 2018

341

the former Responsible Gambling Strategy Board. Progress under previous strategies had been too slow and so we concluded that it was necessary for us to take on ownership of a national strategy that would identify strategic priorities to inform the use of available resources. By tracking the efforts across a range of bodies it is hoped the strategy will bring a greater focus and identify any gaps on the two strategic priorities of (i) prevention and education (ii) treatment and support. As part of those efforts we can exert direct influence on the gambling industry which has a critical frontline role to play in reducing gambling related harms.

3.3 A key action under the National Strategy to Reduce Gambling Harms is to progress the framework for measuring harms under the Commission’s research programme. Current screening tools that measure the prevalence of people identified as problem gamblers provide a useful insight, and will continue to do so, but they fail to capture the full scale of harms that are caused by gambling.

3.4 We are also working to align this work to that being carried out by others. This includes: the work which has been commenced by Public Health England (PHE) and the National Institute of Health Research (NiHR) to conduct evidence reviews on gambling harms; the work being undertaken in Wales, building on the Annual Report 2016/17 by the Chief Medical Officer for Wales, ‘Gambling with our Health’; and the work in Scotland to scope, develop and implement a whole population approach to prevention and reduction of gambling harms being progressed by the Scottish Public Health Network.

3.5 Earlier this year, we commissioned the London School of Economics (LSE) to recommend suitable metrics and methods to progress this work. They led a team that has surveyed academics from a broad range of countries.

3.6 The team from LSE have recommended an economic assessment incorporating conventions used in assessments for other public health issues, such as quality adjusted life years (QALYs), whilst confirming the need for longitudinal evidence to generate data for harms caused at all levels. Methodologies that deal with the issues of causality are recommended, as is development of a simulation model for calculating long-term costs.

3.7 The report will be made available in late September this year and we will continue to progress this important work to measure harms. This will build on other aspects of the Commission’s research programme such as work to understand the links between suicide and gambling. We will also seek to ensure that our work is aligned to the work which may come out of the PHE and NiHR evidence reviews. In addition, we are progressing and supporting work with partners to further measure harms and identify where prevention activities will have most impact – an example of this is the Howard League’s Commission on Crime and Problem Gambling.

4 Research, prevention and treatment

342

4.1 Further to the oral evidence we provided on 23 July 2019, we have three key messages in relation to research, prevention and treatment:

• Funding is important, but the most critical aspect is coordinated effort,

focusing on priorities to have the most impact - this is why coming together to deliver the National Strategy is key.

• More data and evidence is important and we need to ensure that a

range of agencies collect appropriate data on the impact of gambling, including across the health and criminal justice systems. However, we do know a great deal already, and are learning more from ongoing programmes of research from the Commission, PHE, NiHR, Medical Research Council, and from pilots and evaluations of a range of interventions. We mustn’t allow criticisms of research structures to prevent us from acting now on the current evidence base. Where appropriate we will continue to adopt a precautionary approach when considering new developments and interpreting evidence.

• We have actions in place to improve the structures - we want support

from a range of stakeholders for these five actions which we are progressing- the creation of an independent data repository to support research, effective dissemination of research, coordination of activity, independence of research, prevention and treatment, and sufficient, consistent funding based on need across each of England, Scotland and Wales.

4.2 There have been great strides to improve the research structures, but in the

National Strategy we publicly state that there is a need for further improvements in five areas:

• Streamlining access to data by means of a data repository, which we

are progressing

• Disseminating research effectively and making the links to policy - for this we have partnered with Gambling Research Exchange (GREO), and will use the Strategy website as a means of disseminating research

• Exploring the use of research centres or a link with existing research

centres for effective commissioning • Visibly ensuring independent funding through the voluntary system

(including the new amounts committed by the bookmakers) is applied in a coordinated manner and independent from the industry and others

• Ensuring that there is sufficient, consistent funding through a

voluntary system. It is our view that there would be a case for a statutory levy (for which the necessary legal powers have already been enacted but not activated) if the voluntary arrangements do not swiftly

343

deliver this independent, consistent funding within a joined-up structure under the National Strategy.

5 Advertising 5.1 We share concerns that gambling advertising and marketing, including

sponsorship, could lead to gambling-related harm for children and other vulnerable people but the current evidence is not clear on this matter. This is why we are working with our expert advisors, the Advisory Board for Safer Gambling and GambleAware to gather new evidence to explore these issues further.

5.2 The Gambling Act 2005 removed the previous restrictions, to permit the advertising of gambling products and services provided that it is legal and there are adequate protections in place to prevent such advertisements undermining the licensing objectives.

5.3 The rules for gambling advertising are written by the Committees of Advertising Practice (CAP) and enforced independently by the Advertising Standards Authority (ASA). We can take action, including fining, if there are serious or repeated breaches of the rules. The rules are designed to ensure that gambling advertisements are socially responsible, with particular regard to the need to protect under-18s and other vulnerable persons from being harmed or exploited by advertising that features or promotes gambling. Gambling ads must never appear in children’s media, be directed at children, or contain content which is of particular appeal to them.

5.4 Broadcast Audience Research Board (BARB) statistics show that between 2008 and 2017, children’s exposure to gambling ads on TV increased by 25% from an average in 2008 of 2.2 ads per week (the first full year in which ads for gaming and betting were allowed on TV) to 2.8 ads per week in 2017. In 2013, children’s exposure to gambling ads on TV peaked at an average of 4.5 ads per week. Most TV gambling ads seen by children are for bingo and lottery products.

5.5 We know that children’s media viewing habits are changing though, and the multiplicity of online marketing and advertising methods increases the exposure of children to gambling ads. For example, our statistics show that 12% of 11-16-year-olds follow gambling companies on social media, 59% have seen gambling ads on social media websites and 53% on other websites.

5.6 The interim research report on the volume, exposure and features of gambling advertising, published in July 2019, found no evidence of gambling adverts appearing to be targeted directly at children but that children and young people reported high levels of exposure, and spoke of the ubiquitous nature of gambling advertising, across multiple formats, and at different times of the day. It also found clear evidence of children following and engaging with betting related accounts on Twitter. However, the research also notes that advertising is not the only route of exposure to

344

gambling. Participants noted the role of family and friends in introducing them to gambling, often at a young age.

5.7 A final report, which considers the impact of gambling advertising on children, young people and vulnerable adults, is due to publish by the end of the year. We will continue to work closely with the ASA and CAP, taking account of the research findings to ensure the gambling advertising rules and accompanying regulation are effective.

6 Gambling and sport

6.1 Our official gambling participation statistics show that 7% of adults have

placed a sports-related bet within the past four weeks (and 6% have placed a bet on football, by far the most popular type of sports betting). In addition, recent qualitative research by 2CV on behalf of the Commission explored why people gamble and how gambling fits into their lives. One of the key findings of the research was that whilst most people perceive there to be minimal conscious cross-over between their passions/interests and their gambling behaviour, the primary exception to this is the overlap between gambling and passion for sports betting, which can be powerfully and consciously linked. Some football fans now feel the need or choose to place bets on matches to maximise their enjoyment of the game or feel socially included. Some of the social groups that form around watching football have developed an increasing focus around competitive social gambling.

6.2 The research also demonstrated that consumers see football and gambling as having more touchpoints than ever before, for example through mobile and in-play betting, advertising, sponsorship and social media. Research participants recognised how technological innovation is helping to fuel the rise in sports (and especially football) betting through increased access and expanded product opportunities. Also, gambling advertising in sport was perceived as a problem due to it potentially reinforcing the sense of social acceptability around gambling and nudging risky play behaviour.

6.3 The Gambling Act 2005 permits commercial sponsorship arrangements, but the advertising rules apply meaning the promotion of such arrangements must be socially responsible and must not target or be of particular appeal to u18s. For example, replica sport shirts designed for children must never carry gambling brands, and sponsor logos must never appear on the children section of football club websites.

6.4 We note the concerns expressed about the “gamblification” of sport and the associated risk of excessive exposure to gambling among children and young people. Last year we called for a proper and constructive debate about sponsorship arrangements in sport and warned industry that it would be unwise to ignore the hardening public mood. We therefore welcomed the industry’s decision to introduce a voluntary whistle-to-whistle ban on betting advertising around live sport and highlight shows.

345

6.5 The research project on gambling advertising includes a focus on sport sponsorship. A final report, which considers the impact of gambling advertising, including sponsorship, on children, young people and vulnerable adults, is due to publish by the end of the year. We will work with all interested parties to consider the research findings and reflect on the effectiveness of current controls.

Sports betting integrity

6.6 The Commission is at the heart of Britain’s betting integrity national platform. Working collaboratively across the betting industry, sport, regulators and law enforcement, we protect sport and sports betting from the risks of match fixing and other betting integrity issues.

6.7 The Sports Betting Intelligence Unit240 (SBIU) is the platform’s intelligence hub, with the strategy driven by the Sports Betting Integrity Forum241 (SBIF). Along with managing day to day operational issues, the platform also works together to identify emerging risks, agree on priority actions to mitigate these risks and promote education programmes. It is also responsible for delivery of Britain’s Sport and Sports Betting Integrity Action Plan.

6.8 Operators are obliged under the Licence Conditions and Codes of Practice to report suspicious or irregular activity to the SBIU, who gather intelligence from a number of sources to decide on the most appropriate course of action. This action could include, but is not limited to, a criminal investigation, a sports investigation or passing intelligence onto national and international partners. Figure 5 below shows the volume of reports received by the SBIU for analysis has more than doubled since 2015 reflecting the improved understanding of reporting requirements and also the growth in the number of betting markets offered to British consumers or on British events.

Figure 5: Total reports received by the SBIU

240 Sports Betting Intelligence Unit 241 Sports Betting Integrity Forum

346

6.9 Operators and sport also collaborate directly on cases where the input of the SBIU is not appropriate, such as breaches of a sports betting rules (i.e. many Sports Governing Bodies prohibit participants betting on their sport as part of their terms and conditions). These positive relationships have been developed through the work of both the SBIU and the SBIF.

6.10 We are held in high regard globally and our model is the blueprint for a national platform as set out in the Macolin Convention242.

7 Gambling by young people and children

7.1 The protection of children and young people from being harmed or exploited

by gambling is a cornerstone of the regulatory framework. This is reflected both in the strict licence conditions we impose to prevent underage gambling and the specific criminal offences which are set out in Part 4 of the Act.

7.2 In May 2019 we used our powers to strengthen the age verification requirements for online gambling websites. Licensees are now required to verify the age of customers before allowing them to deposit money, gamble or access play-for-free versions of gambling games.

7.3 The existence of robust age-verification and ‘know your customer’ controls for online gambling means as a sector the licensed gambling industry is better placed to address the challenges the government is currently wrestling with in relation to wider online harms, where anonymity or self-certify age controls present regulatory challenges. Such challenges have been a feature of the work of the Commission and others to effectively tackle the risks associated with new forms of gambling or gambling-like activities associated with video games and social media.

7.4 To help inform the Government’s work we commissioned advice from the ABSG in relation to the White Paper on Reducing Online Harms. This advice

242 The Macolin Convention (The Convention on the Manipulation of Sports Competitions)

0

100

200

300

400

500

600

700

2015 2016 2017 2018

347

made a case for gambling-related harms to be more clearly recognised within the scope of the work that follows and specifically highlighted issues related to:

• Online marketing and advertising – particularly the volume of exposure

created for children and young people. • Loot boxes, skins gambling and social casino gaming. • The prevalent links to gambling within the culture of eSports.

7.5 We support the approach taken by ABSG in this advice to the Commission

and have submitted the advice to Government for further consideration.

7.6 For premises-based gambling, test purchasing is one approach by which the Commission or licensing authorities can test the effectiveness of operator’s controls. In 2018 licensing authorities led on test purchasing exercises to check age verification compliance levels on gaming machines in 61 pubs which resulted in nearly 90% failure rate. Tests by licensing authorities are ongoing whilst we continue to work with the pub sector to improve this situation. A recent joint exercise between the Commission and a licensing authority identified age verification failings by bookmakers at a racetrack and the Commission is taking enforcement action as a consequence.

7.7 Test purchasing is also an effective means by which licensees may seek assurance on the effectiveness of their controls. Since 2015 we have required those licensees who operate the largest number of gambling premises to conduct their own test purchase exercises, whilst trade bodies operate equivalent schemes for smaller businesses.

Category D machines

7.8 The Commission does have concerns about Category D fruit machines which

are typically found in premises catering for children and young people – it is confusing for children and parents when products for children look and feel exactly like those which are limited to adults, and we do not know enough about the long-term impacts.

7.9 This is one of the reasons we asked ABSG to advise us on gambling by children and young people. ABSG considered this issue, and concluded ‘There is, as yet, no conclusive evidence of harm resulting from such play.’ However, they also state that ‘In our view, the precautionary principle should give pause for thought about the continued availability of Category D fruit machines, and possibly other category D products.’

7.10 We responded to that advice agreeing that low stakes should not

automatically lead us to assume that risks associated with these activities are also low. We expect operators selling products to under- 18s, regardless of stake level, to consider what further proportionate actions could be taken to reduce the risk of harm. The Commission will work with the industry and

348

others to identify what activities should be prioritised for piloting and evaluation.

7.11 We will work with industry (including trade bodies such as BACTA) to explore what more they can do to improve standards of player protection – particularly those parts of the industry who (legally) sell their products to under-18s as customers, such as the arcade sector and the National Lottery operator.

7.12 As a result of our work with the industry, BACTA (the trade association for the arcades sector) has recently announced a voluntary commitment that arcades will no longer permit children under 16 to play on Category D cash pay-out fruit machines unless accompanied by an adult. We are monitoring these developments carefully – we see this as an initial step, and it may be that further action on either a voluntary or regulatory basis would be appropriate.

Minimum age - National lottery

7.13 Responsibility for setting the minimum age limits for playing the National

Lottery lies with the Government. In July, DCMS announced plans to hold a consultation on whether the age limit should be raised to 18 for some or all National Lottery products.

8 Lotteries

8.1 In July the Government published its response to the consultation on society lotteries, signalling an intention to raise the society lotteries’ annual sales limit to £50 million, and the maximum per draw prize to £500,000.

8.2 Charities and other good causes acting as society lotteries play a vital role in fundraising through lottery products. By increasing the annual proceeds limit society lotteries will benefit from greater flexibility to raise more funds for good causes.

8.3 Any money generated by ticket sales for society lotteries can only be returned to the good cause, used to pay prizes, or to fund reasonable expenses. Commercial lotteries – those run for commercial or private gain - are not permitted.

8.4 Whilst the fundamental purpose of lotteries is to raise funds, there is a commercial element to the sector. Society lotteries are permitted to employ licensed external lottery managers (ELM) to run all or part of their lotteries. Often ELMs will charge a fee to do so with the society benefiting from the experience of the ELM and often from the economies of scale it can offer. ELM fees form part of the expenses of the lottery. The Commission has issued advice on the role of ELMs, including our expectation that the fees paid remain reasonable. Where we have concerns, this is not the case, we can act.

349

8.5 In making the decision that society lottery limits should be increased, the Government also announced our intention to review the regulation of society lotteries to ensure controls are strengthened where necessary. We will be working with Government to ensure the regulation of society lotteries is consistent with their planned reforms.

8.6 Society lotteries operate under the regulatory framework created by the Gambling Act 2005. The National Lottery operates under a separate statutory regime set by the National Lottery etc Act 1993.

8.7 In respect of the National Lottery our focus (subject to ensuring player protection and all due propriety) is that the current licence holder maximises returns to good causes in accordance with our statutory duties. The current licence runs until 2023.

8.8 We are currently prioritising plans for the competition to award the next licence to operate the National Lottery and do not envisage any short-term desire or motivation in Government to legislate to consolidate the different statutory regimes. We currently apply the different frameworks in pursuit of their respective objectives, and any plans for fundamental legislative change could create uncertainty for potential bidders in the licence competition.

6 September 2019

350

Gambling Commission – Supplementary written evidence (GAM0116) Additional information following our evidence session on 11 February During the session there were a number of issues about which we promised you further information in order to give you and the Committee a clearer picture of gambling regulation and our work. This information is set out below. Fees, our fee structure and resourcing Aside from grant-in-aid funding which is ring-fenced for our role in regulating the National Lottery, we are entirely funded by licence fees which are set by the Secretary of State and paid by businesses and individuals in the gambling industry. We are constrained by the existing regulatory framework on fee setting. The Gambling Act 2005 confers on the Secretary of State the power to amend the Commission’s licence fees by way of statutory instrument. The procedure for changing fees is lengthy and so is not undertaken frequently. Typically, our fees have been reviewed every four or five years, although there is no set period for these reviews. As a result, our fees can soon become out of step with the challenges we face in regulating a fast moving, innovative and growing industry. For the public to retain confidence in regulation it must continue to evolve to tackle new and emerging risks, including keeping pace with rapid advances in a dynamic and tech-led industry. We made it clear in our oral evidence that, while we believe the regulatory framework is largely capable of flexing to meet new risks, the way our licence fees are set presents a challenge. To be clear, this is not simply a case of needing more money to regulate a larger industry. The fees model, which is based largely on the GGY generated by a company, is designed to take account of industry growth, but not flexible enough to address emerging issues. We are increasingly finding that regulation requires us to expend resources in a way that is not directly proportionate to Gross Gambling Yield (GGY). So, while our income has increased as the regulated industry has grown, the costs being incurred in regulating the online sector, in particular, exceed the income rise. There are a number of factors that are driving this increased cost of regulation, and while they are by no means unique to the online and digital gambling market, it is in that sector where they are most pronounced:

• The gambling industry continually capitalises on new technologies and develops innovative business models and products. These challenge traditional gambling definitions and risks.

• Illegal gambling, increasingly digital in nature is resulting in more criminal investigations, which are resource-intensive and expensive.

• Mergers and acquisitions activity results in merged entities paying less than previous constituent operators, despite the volume of gambling staying the same or increasing, and the new entity potentially posing new regulatory challenges.

• An increasingly globalised sector is resulting in complex corporate structures and international ownership arrangements. Typically, these

351

require more scrutiny from the Commission and it can be costly to undertake the required level of due diligence in these circumstances.

While we take every opportunity to flex our resources to move quickly in response to these (and other) challenges, the extent to which we can do that on a strategic scale is limited by the nature of our funding arrangements, which are locked for periods of several years at a time. Leaving the current approach unchanged would mean these issues would continue to be exacerbated. Over time the complexity of the current fees structure has grown bringing with it a lack of certainty over our fee income (e.g. due to licence surrenders or variations which can reduce income). The number of licences and fee categories make the structure more expensive to administer. These issues suggest a need to explore alternative structures that would provide us with more agility in cost recovery to allow for investment in the skills and expertise we require to respond to emerging risks quickly. We agree with the assessment made by the National Audit Office (NAO) of our funding arrangements in their report published at the end of last month. In particular, we agree that the current arrangements are not suff iciently flexible to enable us to deliver our objectives with full value for money. As the NAO analysis shows, this is not least because the current fees structure does not provide us with the flexibility needed to invest in new skills or allocate resources to address emerging risks. Our immediate focus must be on securing the resources we need to continue to regulate effectively and we are developing proposals for revised fees for discussion with DCMS. In addition, we think there is merit in exploring alternative ways of settings fees and recovering costs which would better align with the nature of the work involved in regulating this industry. Alternative approaches already exist and are operated by other regulators. We recognise that such changes would likely require changes to primary legislation but a fees structure that is more flexible and better enables us to adjust fees to reflect additional or reduced costs in regulation is needed to ensure that regulation is effective. Multiple enforcement actions against operators and licence revocations Since the Gambling (Licensing and Advertising) Act 2014 came into force (in November 2014) and the Gambling Commission took on responsibility for regulating all online gambling operators offering facilities for gambling to consumers in Great Britain, several operators have had enforcement action taken against them on more than one occasion. At the time of our appearance before your committee those operators were Flutter, GVC, NRR Entertainment Ltd, Petfre (Gibraltar) Limited trading as Betfred, Rank and Silverbond Enterprises Ltd. Since then, William Hill have joined that list as we recently announced the result of our investigation into one of their subsidiaries, Mr Green. It should be noted of the above that the enforcement actions taken against these companies should be considered in the light of operators and brands having multiple licences and consumer facing brands and that some of these brands may have been part of separate or independent corporate entities at the time of some of the enforcement actions. These cases also often relate to different types

352

of compliance failures and so, although multiple enforcement actions have been taken against the operator, they are often not repetitive failings. As stated to the Committee, we adopted a strategy of escalating enforcement alongside the publication of our Corporate Strategy in 2017. This has made clear to operators that repeated failures will not be tolerated and will lead to escalating penalties. That message, backed up by more than £30 million in penalty packages since 1 April 2018, and our published Enforcement Reports has helped to start to change the culture at the top of Operators. Regarding the number of operating and personal licences revoked, since November 2014 we have revoked:

• 9 operating licences • 9 personal management licences • 59 personal functional licences (these are for operator staff such as

croupiers or cashiers) There have also been a number of occasions when operators or personal management licence holders have surrendered their licences rather than face the prospect of regulatory action by the Commission. Consumer redress, an Ombudsman and a statutory ‘Duty of Care’ As we said to the Committee, we recognise that there isn’t a comprehensive solution for individual consumer redress and whilst any change regarding an Ombudsman or a statutory ‘Duty of Care’ is ultimately a matter for Government, we welcome the debate. The framework for ADR provision in the gambling (and other) sectors was established by Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015. The scope of the Regulations explicitly covers disputes concerning contractual obligations regarding the sale of goods or the provision of services. Aspects of our regulation, such as how and when we would expect companies to interact with consumers who may be gambling beyond their means, are not generally covered by contractual terms and conditions. It is not an aspect of the contract between consumer and gambling company. It is the scope of ADR provision that creates the ‘gap’ we referred to during the Committee session. If we receive complaints about a regulatory issue – such as the example above – we can investigate to see if it warrants enforcement action, but we cannot typically recover money for individual consumers. Such issues are also outside the scope of disputes that can be handled by ADR providers. We are open to exploring with government how this gap in the availability of redress could be filled. The establishment of a gambling ombudsman would likely require a statutory basis. Such a body would need to replace existing ADR providers so that consumers were clear about who to turn to. The current law, for the protection and assurance of gambling customers, subjects gambling operators to a specific and extensive regulatory and licensing

353

regime, derived from the 2005 Act. However, a statutory ‘Duty of Care’ on operators might allow for compensation for affected gambling customers. Whilst we are open to exploring with the government the concept of a specific statutory duty of care on gambling operators, it is ultimately a matter for government. In order to be effective, any decision to legislate on this would need to carefully consider the issues of causation and contributory negligence described in the case of Calvert vs William Hill Credit Ltd [2008] EWHC 454 (Ch) and the following appeal. Consideration would also need to be given to whether or not the introduction of such a duty of care could have unintended consequences. For example, it would important to ensure, so far as possible, that steps designed to improve outcomes for consumers did not encourage some consumers to seek ways to work around protective measures like the self-exclusion system. If the proposed duty of care allows a gambler to self-exclude and then claim back any losses if an operator fails to fully implement the self-exclusion, it could encourage consumers to attempt to defeat self-exclusions in order to achieve “no risk” gambling. Publication of the next round of health surveys The Health Survey England 2020 fieldwork is taking place this calendar year, and the Welsh Problem Gambling Survey (as part of the National Survey for Wales) from April 2020-March 2021. Regrettably, the Scottish Government have not provided space for questions on gambling in the Scotland Health Survey in 2020 but we hope that this will be possible for 2021. At this stage we are not aware of when the NHS in England plans to publish the gambling data from HSE 2020, but if it follows the same pattern as the 2018 HSE release, we could expect this to be published by them around December 2021. The Welsh Government will publish the first tables of National Survey results in June 2021, and the dataset on the UK Data Archive in September 2021. Our response and actions against advertising on illegal websites and by unlicensed operators We have been working with the City of London Police’s Intellectual Property Crime Unit (PIPCU) since 2015 to tackle the issue of adverts for licensed gambling operators appearing on copyright infringing websites. In 2016 we introduced a licence condition requiring that licensees do not place adverts on copyright infringing websites. In 2017 PIPCU credited an 87% drop in adverts placed by gambling operators on such websites to our joint work. They also cite our involvement as a model of collaboration they wish to replicate with other sectors. We investigate and act on receipt of verified intelligence reports from PIPCU. We are working with them to assess the most recent report, including the examples cited by Lord Foster, and will then engage with relevant operators. Copyright infringing websites are mostly hosted overseas and are accessible to global audiences. Adverts are placed on these sites by unlicensed brands, many of which are targeting jurisdictions other than Great Britain (for example, the ads will feature foreign languages, currencies and sites may be geo-blocked in GB). Online gambling operators are required to hold a licence from us to transact with

354

consumers in Great Britain. If we find an unlicensed operator acting illegally, we will take action. The impact of a ban on advertising As we said in our written submission, the regulatory framework governing gambling advertising is complex and multifaceted. We work very closely with the Committees of Advertising Practice and the Advertising Standards Authority to monitor and enforce standards in gambling advertising. We are concerned about the volume of gambling advertising and its potential impact on vulnerable audiences. One of the three challenges we recently issued to industry relates directly to this concern. By April we expect industry to demonstrate tangible progress on a plan to set out new standards for how it will harness ad-tech to target online gambling advertising away from children, young people and those who are vulnerable to harms. We will of course be happy to share progress in this area. With reference to your specific question, the Gambling Act 2005 sets out a very wide definition of advertising which includes anything that encourages a person to take advantage of gambling facilities or the providing of information about gambling facilities with the intention that that will increase the use of those facilities. An advertising ban framed around this definition would have a very significant effect on industry. Licensed gambling businesses would be unable to promote their brand or products in any form or via any media, which would include their own premises, websites and apps. The impact on the National Lottery would also have to be considered. I hope you find this information useful. We look forward to the publication of the Committee’s findings and recommendations later this year. 4 March 2020

355

Gambling Division, Government of Gibraltar – Written evidence (GAM0026)

1. This response is made to the call for evidence by the House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry. It is made on behalf of the Gibraltar Gambling Division which is part of the Government of Gibraltar’s Ministry of Commerce.

2. The response will deal with aspects of the two questions below from the

perspective of an offshore regulator that is nevertheless closely aligned with the UK regulatory model. We propose to confine ourselves to two subject areas, those being the effectiveness of offshore regulation (to include Brexit issues) and research. However, we believe a short exposition of the gambling legislative framework will set matters in context.

• Is gambling well regulated, including the licensing regime for both

on-and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions?

• How might we improve the quality and timeliness of research in the UK? What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons?

Background and Legislative Framework

3. Gibraltar is a British Overseas Territory and the Gibraltar Government consists of Her Majesty, represented in Gibraltar by the Governor, and the elected Government. The elected Government has executive competence for all matters with the exception of those matters for which the Governor has responsibility pursuant to section 47 (1) of the Constitution. These are defence, external affairs and internal security.

4. Other than for those three areas, Gibraltar is entirely self-governing. Gambling is regulated under the Gibraltar Gambling Act 2005 and Gibraltar has been a primary hub for online gambling for over a decade.

5. The Minister acts as Licensing Authority and is advised on regulatory matters by the Gibraltar Gambling Commissioner (“GGC”).

6. The Government operates a selective licensing policy which has resulted in

a number of major UK facing online brands being located in the jurisdiction. These include GVC (Ladbrokes/Coral brands), William Hill Online, 888, Bet Victor, Betfred and others. At the time if writing bet365 is also located in Gibraltar although elements of that business will re-domicile in Malta, as a result of Brexit contingency planning.

7. Due to the presence of these major B2Cs, some 15 B2B (mainly games

suppliers and aggregators) are located and licensed here. Other games suppliers are “sheltered” with existing licensees (being allowed to supply

356

Gibraltar licensees under the control of a current licensed operator) and all software suppliers with whom licensees wish to do business are subject to approval by the Gambling Division.

8. We estimate that at least 75% of UK online betting takes place in or from

Gibraltar with a significant but lesser percentage of UK online gaming taking place.

9. The gambling industry is a very large part of the Gibraltar economy,

contributing around 25% of GDP and employing some 3500 workers. Many of these are cross border workers travelling from Spain into Gibraltar every day to work. Companies based here pay corporation tax, PAYE and a low rate of gaming tax (0.15% of gross gambling yield).

10.That said, and for the avoidance of doubt, these companies pay UK point

of consumption tax on gross gambling yield from UK customers. UK facing operators are also subject to a dual regulatory regime being regulated by the Gambling Commission of Great Britain and the Gibraltar Gambling Division.

11.The Gibraltar regulatory regime requires operators to have social

responsibility measures in place and for operators to comply with the Gibraltar Proceeds of Crime Act 2015. The Gambling Commissioner is the industry regulator for the purposes of anti-money laundering and countering terrorist financing. Gibraltar is currently in the process of updating its gambling legislative framework to include a more flexible enforcement regime with similarities to the UK regime. A compliance based approach will be maintained, with sanctions reserved for the most serious cases of regulatory failure.

12.As mentioned above, Gibraltar sets a high licensing bar and devotes

resources to carrying out robust due diligence on licensees and software suppliers.

13.Through the Joint Ministerial Committee (UK and Gibraltar), Gibraltar is

the only jurisdiction which has secured specific guaranteed access to the UK gambling market in a post Brexit environment.

Offshore Regulation

14.It is our view that a situation where UK facing operators are based in

Gibraltar does not impede effective UK gambling regulation. In fact, there is the capacity, post-Brexit, to enhance the regulatory alignment between the UK and Gibraltar, given the unique constitutional relationship.

15.There is already a Memorandum of Understanding (MOU) in place between

the Gambling Commission of Great Britain (GBGC) and the GGC. This covers policy and cooperation across the wider spectrum of regulation. There is scope for more coordination at a compliance level and in relation to matters of social responsibility.

357

16.One of the main advantages for Gibraltar, in terms of regulation, is the geographical proximity of the regulator to all of the operators. This has aided an understanding of the industry without undermining the integrity of the regulatory regime.

17.Emerging issues can be dealt with quickly and there is scope in a

developed relationship for the GBGC and the GGC to pursue common objectives, including the protection of vulnerable persons, under a regulatory framework that is broadly similar.

18.Gibraltar is in the process of a legislative review that will update both

primary/secondary legislation and the wider regulatory framework. The proposals include adopting some regulatory best practice from the UK.

19.Information sharing between regulators (with consent or statutory

gateways) may reduce regulatory bureaucracy for operators and increase the effectiveness of UK and Gibraltar regulation.

20.With a will to do so, there is also scope for the passporting of licenses and

other regulatory approvals between the two jurisdictions.

21.The tensions that existed between the two jurisdictions during the litigation concerning the imposition of the UK point of consumption tax have all but disappeared and the imposition of that tax did not see a migration of operators away from Gibraltar as predicted by some commentators. Brexit could have a more significant effect.

Brexit Issues

22.The Gambling Commission of Great Britain (GBGC) currently operates a

policy of being neutral on the issue of the location of gambling servers and other key gambling equipment under certain conditionality. The primary condition is that in the event of a regulatory investigation or enquiry that data is unequivocally available for review.

23.Before the vote to leave the European Union, the UK Government, through

the auspices of DCMS was an active participant in the European Commission debate concerning the abolition of the legislative frameworks of individual EU jurisdictions that supported “data localisation”.

24.There was, and still is, a push to create an EU Single Digital Market

strategy, in terms of data transfer, with localisation of data (storage on local servers) only being exempted on national security grounds. The intention of the policy was to support the growth of the European IT data industry where certain jurisdictions (Netherlands, Republic of Ireland, the UK and others) with large server farms may have benefitted economically; with this area expected to grow in the short term to around 5% of European GDP.

25.Ironically Brexit and a potential interruption of services between the EU

and the UK in the event of a no deal (or a goods only deal) may mean that the UK and Gibraltar may be frozen out of the EU data economy with an

358

insistence that if UK or Gibraltar entities wish to provide services into the EU, they will need to be (a) domiciled in the EU (b) store data on servers based in the EU (b) be licensed in the EU.

26.That may also mean that on a reciprocal basis that the UK Government

has the capability to impose similar restrictions. This could mean that gambling operators with technology based in Malta or elsewhere in the EU may not be able to access the UK market (unless licensed in the UK or Gibraltar and with servers in one of those two locations). This would require a change in GB Gambling Commission policy, but that would be a political decision, not a regulatory one. The change would not require primary legislation.

27.A failure by the UK Government to act quickly on this issue, in the event of

“no deal”, could have negative effects on the Gibraltar gambling industry and the Gibraltar economy.

28.The landscape is further complicated by the existence of GDPR and the

fact that transfers of data can only move externally from the EU if the jurisdiction to which the data is transferred in the event the EU Commission designates the jurisdiction as have equivalent levels of data protection (including abiding by the principles of GDPR). Gibraltar has GDPR compliant data protection legislation but, like the UK, can only apply for equivalence after the departure from the EU.

29.It is anticipated that post-31st October European data regulators will start

enforcement proceedings against operators to disrupt the natural flow of data to and from the EU.

30.It is against this background that Gibraltar’s B2C operators, with EU

exposure have been developing and implementing contingency plans. Those that are UK facing are generally less affected, because access to the UK market has been guaranteed.

Research

31.Gibraltar has already publicly supported the UK’s National Harm Reduction

Strategy. Gibraltar based operators are leading on technology developments to identify markers of harm and in commitments around funding and other harm reductions measures.

32.Coordination between online operators is essential in terms of sharing best

practice and discovering what works and what does not. We believe that objective academic research with access to industry data is an essential part of the process.

33.The University of Gibraltar is in the process of setting up an Academic

Chair to lead a faculty on research into problem gambling and provide training on responsible gambling best practice for individuals working in the industry. Operators have provided funding guarantees and

359

commitments in respect of the provision of data which will be made readily available to the wider academic community.

34.Discussions are ongoing with various parties about how this programme

can be integrated into the wider UK harm reduction strategy. This process will not only benefit the UK, but have impact on consumers in the wider gambling markets offered by Gibraltar operators. It would be a wasted opportunity if this level of integration with the UK did not take place.

Andrew Lyman Executive Director, Gambling Division, Government of Gibraltar

5 September 2019

360

Gambling Research Exchange (GREO) – Written evidence (GAM0052) Q5. WHAT ARE THE SOCIAL AND ECONOMIC COSTS OF GAMBLING?

1. Gambling Research Exchange (GREO)243 shares the Committee’s concerns about the social and economic costs of gambling.

2. Studies that determine social and economic impacts of gambling often focus on examining the effectiveness of a new policy or intervention. Among the potential negative impacts are an increase in the number of people who have gambling problems and an increase in gambling-related harm.1 There is mixed evidence regarding the impact on crime, income level, quality of life, and attitude towards gambling.

The difficulty of measuring the social and economic costs of gambling

3. As the inquiry notes, to date there has not been continuous research attention paid to the links between the gambling environment and harmful gambling. This can be partly attributed to the fact that government and industry resources dedicated to reducing harm from gambling have largely focused on the individual, rather than on the community or society.

4. Research on the harms associated with problematic gambling has come mostly from the fields of psychology and public health. Only a small amount of research has been conducted on how problem gambling can affect a local economy. The exception, though, is with respect to social costs. Researchers have attempted to provide monetary estimates of the social costs of gambling. One of the strongest attempts at this measurement estimated the annual social cost for each person who struggles with problematic gambling (in 1997) at about $9,600 USD.2 However, estimates have varied widely, likely due to studies using different methodologies.3

5. Another difficulty with accurately estimating the social costs of gambling is that harmful gambling behaviours are associated with other mental health problems. Studies that have attempted to estimate the social costs of gambling typically do not acknowledge this issue or, if they do, have not found a way to separate social costs from the other problems a disordered gambler may experience.4 As a result, many social cost estimates likely overvalue the actual costs attributable to gambling problems.

6. The impacts of gambling will also vary considerably between jurisdictions and depend on factors such as the type of gambling being introduced, baseline levels of community impoverishment, and the length of time and level that impacts are evaluated.1

243 GREO is working with the Gambling Commission to advance the National Strategy to Reduce gambling Harms.

361

What the evidence shows

7. Despite the limitations that surround the measurement of the social and economic costs of gambling, the evidence from the body of research in this area suggests that:

a. The main negative impact of new gambling opportunities is an increase in problem gambling and its related harms. Harms may be monetary in nature (e.g., debt, bankruptcy, treatment numbers), but there are other, non-monetary harms. These can be difficult to monitor and measure since only a small percentage of people with gambling problems pursue treatment or become involved with police, child welfare, or employment agencies.1

b. Another major predictable negative impact of the introduction of gambling is increases in regulatory and infrastructure costs.1

c. The largest proportion of administrative costs arise from forms of gambling that are more likely to be delivered by governments (e.g. lotteries).1

d. Gambling harm is higher in areas closer to land-based gambling venues.5 Research has also shown strong links between density of electronic gambling machines and disadvantaged socioeconomic regions.6-10

e. Non-destination casinos and electronic gambling machines have the greatest potential to decrease quality of life.1

f. Proximity to casinos can contribute to higher bankruptcy rates.1

g. Continuous forms of gambling (e.g., casino table games, electronic gambling machines, Internet gambling) have greater potential to increase problem gambling, while casinos have the greatest potential to increase crime.1

h. People who have a gambling problem are more likely to engage in crime to finance their gambling. However, whether the introduction of casinos leads to higher crime rates is unclear.11

i. Among adults, non-violent, financially motivated crime is the most common type of crime associated with gambling.12 Included in this category are theft, selling drugs, forgery and embezzlement.13, 14

j. People who experience problem gambling may also engage in crimes with potentially no monetary incentives such as assault, fire setting, carrying a weapon, high-risk speeding, vandalism, and truancy.14-17

362

k. U.S. studies estimate that arrests and corrections costs per individual with problem gambling range from $2,200 to $3000.18, 19 One study estimates life-time costs of arrests to be over $10,000 for those with severe gambling problems.20

l. One of the most successful attempts at measurement estimated the annual social cost per pathological gambler (in 1997) at about $9,600 USD.2 However, monetary estimates have varied greatly, likely due to the fact that methodologies varied among researchers.

m. Adolescents are especially susceptible to problem gambling and crime.16, 21-25

Q6. WHAT ARE THE SOCIAL AND ECONOMIC BENEFITS OF GAMBLING? HOW CAN THEY BE MEASURED AND ASSESSED?

8. Studies on the social and economic benefits of gambling are characterized by the same limitations as costs, as described above. The most common positive impact is an increase in government revenue. There is also evidence for the improvement of public services, infrastructure value, and employment.1

9. Specifically, the evidence shows that:

a. An increase in government revenue is the most reliable positive impact of gambling across all forms.1

b. Forms of gambling that generate the most revenue (e.g., casinos, EGMs) and that are most likely to be delivered by government (e.g., lotteries) have the most reliable positive impacts on government revenue and accompanying public services.1

c. Enhancement of public services (e.g., health, education, social security) can be a reliable benefit of gambling introductions, if revenues aren’t used to avoid raising taxes, reduce government debt, or to just maintain (rather than improve) services.1

d. New gambling venues reliably increase infrastructure value, and often have beneficial impacts on other businesses in the local area.1

e. Overall employment may be improved (if a significant portion of the patron base is from outside the local area).1

f. Introduction of gambling can occasionally contribute to an increase in property values.1

363

g. Gambling venue introductions increase the entertainment options available in a region.1

h. Newly introduced casinos likely have a modestly positive impact on their local and regional economies, especially in more rural counties.26 However, any positive impacts from casinos on labour market growth may be short-term, given that one study found insignificant growth in areas with existing casinos.27

i. Destination casinos have the greatest potential to create broad economic benefits by bringing in revenue from outside the local area and improving the quality of life for impoverished communities.1

References: 1. Williams RJ, Rehm J, Stevens RMG. The social and economic impacts of

gambling. Calgary, AB: Canadian Consortium for Gambling Research; 2011.

Available from:

https://www.uleth.ca/dspace/bitstream/handle/10133/1286/SEIG_FINAL_REPOR

T_2011.pdf.

2. Thompson WN, Gazel R, Rickman D. Social and legal costs of compulsive

gambling. Gaming Law Review. 1997;1(1):81-9.

3. Grinols EL. Gambling in America: costs and benefits.: Cambridge University

Press; 2004.

4. Aarseth E, Bean AM, Boonen H, Carras MC, Coulson M, Das D, et al. Scholars'

open debate paper on the World Health Organization ICD-11 Gaming Disorder

proposal. Journal of Behavioral Addictions. 2017;6(3):267-70.

5. Pearce J, Mason K, Hiscock R, Day P. A national study of neighbourhood

access to gambling opportunities and individual gambling behaviour. Journal of

Epidemiology and Community Health. 2008;62(10):862-8.

6. Xoridas S, Jasny J, Becker T. An ecological approach to electronic gambling

machines and socioeconomic deprivation in Germany. Journal of Gambling Issues

[Internet]. 2016; (33):[21 p.]. Available from:

https://jgi.camh.net/index.php/jgi/article/view/3948/4099.

7. Marshall DC, Baker RGV. Clubs, spades, diamonds and disadvantage: The

geography of electronic gaming machines in Melbourne. Australian Geographical

Studies. 2001;39(1):17-33.

8. Marshall D, Baker R. Unfair odds? Factors influencing the distribution of

electronic gaming machines in Melbourne. Urban Policy and Research.

2001;19(1):77-92.

9. Marshall D. Gambling as a public health issue: The critical role of the local

environment. Journal of Gambling Issues [Internet]. 2009; (23):[66-80 pp.].

Available from: https://doi.org/10.4309/jgi.2009.23.4.

10. Marshall DC, Baker RGV. The evolving market structures of gambling: Case

studies modelling the socioeconomic assignment of gaming machines in

364

Melbourne and Sydney, Australia. Journal of Gambling Studies. 2002;18(3):273-

91.

11. Walker DM. Casinos and crime in the U.S.A: Chapter 17, Handbook on the

economics of crime. Cheltenham, UK: Edward Elgar Publishing; 2010. 488-517 p.

12. Arthur JN, Williams RJ, Belanger YD. The relationship between legal gambling

and crime in Alberta. Canadian Journal of Criminology and Criminal Justice.

2014;56(1):49-83.

13. Lesieur HR, Custer RL. Pathological gambling: roots, phases, and treatment.

The ANNALS of the American Academy of Political and Social Science.

1984;474(1):146-56.

14. McCorkle R, C. Pathological gambling in arrestee populations. Nevada, Las

Vegas: National Institute of Justice, U.S. Department of Justice; 2002.

15. Laursen B, Plauborg R, Ekholm O, Larsen CV, Juel K. Problem gambling

associated with violent and criminal behaviour: a Danish population-based

survey and register study. Journal of Gambling Studies. 2016;32(1):25-34.

16. Husted DS, Gold MS, Frost-Pineda K, Ferguson MA, Yang MCK, Shapira NA. Is

speeding a form of gambling in adolescents? Journal of Gambling Studies.

2006(22):209-19.

17. Cook S, Turner NE, Ballon B, Paglia-Boak A, Murray R, Adlaf EM, et al.

Problem gambling among Ontario students: associations with substance abuse,

mental health problems, suicide attempts, and delinquent behaviours. Journal of

Gambling Studies. 2015;31(4):1121-34.

18. Keith Schwer R, N. Thompson W, Nakamuro D. Beyond the limits of

recreation: social costs of gambling in southern Nevada. Journal of Public

Budgeting, Accounting & Financial Management. 2003;17(1):62-93.

19. Gerstein D, Volberg RA, Toce M, Harwood H, Johnson R, Buie T, et al.

Gambling impact and behavior study: report to the national gambling impact

study commission. Chicago: National Opinion Research Center; 1999. Available

from: http://www.norc.org/PDFs/publications/GIBSFinalReportApril1999.pdf.

20. Gosselt JF, Neefs AK, van Hoof JJ, Wagteveld K. Young poker faces:

compliance with the legal age limit on multiple gambling products in the

Netherlands. Journal of Gambling Studies. 2013;29(4):675-87.

21. Magoon ME, Gupta R, Derevensky J. Juvenile delinquency and adolescent

gambling: implications for the juvenile justice system. Criminal Justice and

Behavior. 2005;32(6):690-713.

22. Magoon ME, Gupta R, J. D. Gambling among youth in detention centres.

Journal for Juvenile Justice Services. 2007(21):17-30.

23. Vitaro F, Brendgen M, Ladouceur R, Tremblay RE. Gambling, delinquency,

and drug use during adolescence: mutual influences and common risk factors.

Journal of Gambling Studies. 2001;17(3):171-90.

24. Goldstein AL, Faulkner B, Cunningham RM, Zimmerman MA, Chermack S,

Walton MA. A latent class analysis of adolescent gambling: application of

resilience theory. International Journal of Mental Health and Addiction.

2013;11(1):13-30.

365

25. Slavin M, Pilver CE, Hoff RA, Krishnan-Sarin S, Steinberg MA, Rugle L, et al.

Serious physical fighting and gambling-related attitudes and behaviors in

adolescents. Journal of Behavioral Addictions. 2013;2(3):167-178.

26. Cotti C. The effect of casinos on local labor markets: a county level analysis.

Journal of Gambling Business and Economics. 2008;2(2):17-41.

27. Humphreys BR, Marchand J. New casinos and local labor markets: evidence

from Canada. Labour Economics. 2013;24:151-60.

6 September 2019

366

Gambling with Lives – Written evidence (GAM0098) Gambling with Lives (GwL) is a charity set up by families bereaved by gambling related suicides. All lost young people aged 18 – 34 who had been addicted to gambling when they were children or adolescents, on machines and in environments that they and their families thought were safe. Apart from this addiction all were happy normal children from loving families. This submission is based on the intensive engagement of this group of experts by experience (EbEs) with legislators, regulators, treatment commissioners and providers, recovering gambling addicts, campaigners, researchers and industry representatives. The trauma of losing their children has motivated families to investigate the subject widely and thoroughly. It has been our experience that other stakeholders tend to assume that families can only express trauma and grief. However, we have not lost our capacity to learn and think along with our children. We are still capable of self-determination and we have refused to be siloed and patronised. Many families report the experience of a growing knowledge providing a growing understanding about what happened to their children – a clarity about the addictive products and predatory practices that their children were exposed to and the lack of information, treatment and failures of regulation that condemned these young people to the ultimate conclusion of this illness. Comments are provided under the broad headings requested. We also ask that the Members of the Committee view the 2 short films on the GwL website (www.gamblingwithlives.org). The films feature some of the GwL families speaking about their own experiences and commenting on what they believe needs to be done to reduce the major harms which are caused by gambling. Many of the comments directly address questions in the Call for Evidence. The Gambling Act 2005 There is a clear need for a new Gambling Act to bring legislation up to date with the rapid developments in technology over the past 15 years. The Act did not anticipate the huge growth in online gambling, in particular the rapid spread of the mobile phone, or the amount of activity which would be conducted off-shore. The fact that the maximum £2 stake which was applied to land based Fixed Odds Betting Terminals could not be extended to cover the same products offered online is evidence of the inadequacy of current legislation. We know that normalisation and availability increase prevalence of gambling disorder so a new Act needs to recognise that the advent and spread of the mobile phone has increased the likelihood and intensity of harm. A new Act should introduce a mandatory levy (see below) to pay for independent research, education and treatment. This will need to be set at around 1% of Gross Gambling Yield, raising around £140m pa. The disbursement of this level of funding requires the reorganisation of existing structures to provide complete independence from the influence currently exerted by the industry due to the discretionary voluntary arrangements and the conflation of collection and disbursement in the same organisations.

367

The new Act should also establish an independent ombudsman with responsibility for protecting the individual consumer and wider public. The current remit of the Gambling Commission to investigate the activities of individual companies in respect of their licensing conditions does not provide adequate protection or redress for individuals whose rights have been violated by a gambling company. It should not be necessary for an individual to have to take legal action, potentially costing thousands of pounds, to seek redress from an individual company. A new Act should include recognition the wider harms that gambling causes to individuals and society – which go beyond “crime and disorder”, “fairness” or “protecting the vulnerable”. It needs to recognise that gambling should be treated as a public health issue, with all the implications that has on product safety, availability, advertising and marketing.

• Product safety requirements need to go further than testing for “fairness” and focus on the addictive qualities of individual products. We should operate a “precautionary principle” so that products must be proved to be safe/non-addictive before they can be marketed.

• Online and physical availability need to be strictly regulated according to public health principles; for example

o local authorities may wish to make licensing decisions for individual premises based on wider social and financial impacts;

o age verification needs to be far stricter for both online and physical gambling

o robust methods for establishing source of funds and affordability checks must be developed and implemented;

o gambling on credit should not be allowed. • It needs to recognise that harms extend far beyond individuals to include

family, friends, employers and the wider community. It needs to recognise that all of these groups need protection and should have the right to challenge the actions of individual companies and seek redress.

Finally, a new Act must curtail advertising and marketing which normalises gambling, addicts while providing false information about fairness and safety, and ramps up addiction by targeting addicts directly. The current massive spend on traditional advertising visible to the public is dwarfed by the spend on direct marketing and targeting. In 2018, GambleAware estimated that the industry spent £1.5bn on marketing, almost half of which was direct marketing, with a further fifth through ‘affiliates’ and 10% on social media. Therefore, the remit of the Advertising Standards Authority does not extend across the vast bulk of gambling marketing. The new Act needs to include authority for all forms of gambling marketing to be regulated. Social and economic impact Current research on the social and economic costs of gambling is basic and inadequate. Harms measured are limited to those which are easily monetised and involve additional measurable costs to the public purse. Therefore, all social and emotional impacts on families, friends and in the workplace are not included. As has been stated directly by one GwL family to the Minister for DCMS, official summaries of harms do not even include the deaths of our families members. Despite our work on summarising the considerable body of research from around

368

the world that links gambling with suicide there are still no official estimates of the numbers of deaths. The authors of the 2016 IPPR report Cards on the Table estimated that the cost to the public purse of gambling was between £260m and £1.2bn but noted that their work was a first step and covered a limited set of costs and suggested some of the actions that would be required to improve and extend these estimates:

Due to limitations in the available data, these findings should not be taken as the excess fiscal cost caused by problem gambling. Instead, they should be taken as an illustrative estimate for the excess fiscal costs incurred by people who are problem gamblers, beyond those that are incurred by otherwise similar members of the population.

The Gambling Commission’s 2018 report Measuring Gambling Related Harms identifies over 50 potential ‘metrics of harm’ but actually used only 9 as a starting point of quantification. While GwL accepts that the quantification of harm is an inevitable part of the public decision making process, we contend that the numbers produced represent only a small fraction of the true impact and that that monetised harms should be only one aspect of decision making on regulating gambling and reducing gambling harms. To focus only on monetised impacts is to render the decision more vulnerable to industry lobbying and treasury interests, as we saw in Philip Hammond’s statement to the Treasury Select Committee in November 2018 over the reduction in FOBT stakes. There is a tendency for quantified (monetised) costs to be accorded a status which cannot be justified by the approaches and assumptions used to achieve them. They inevitably end up being an underestimate of just some of the impacts and totally ignore others. For instance, gambling researchers have identified that 4-10 others are affected by a ‘problem gambler’. However, what this means is that there is an identifiable public monetary cost associated with 4-10 other people, through, for example, increased use of services. The EbE evidence of GwL families and others shows that the impact of one individual’s gambling problem extends to family members, friends, employers and the wider community. Some of these costs may be directly monetised while other impacts may be more hidden (for example loss in productivity). Of course probably the greatest unquantified impact is the harm caused to us all as we live with the pain and distress of seeing much loved family members suffering, their lives permanently ruined or violently ended. Currently they are private costs which should be considered alongside the monetised costs to public services. Together as families we are working to make that private suffering public. We consider further the issue of suicide and gambling under Treatment, below. However, we must note in this section that the UK government still has no official figures or even estimates of the number of gambling related suicides each year in the UK, despite our demands over the past 18 months. While we would not condone putting a “cost per life” figure on an individual death, our own estimates, which are based on international research (see

369

www.gamblingwithlives.org), indicate that there are 250 – 650 gambling related suicides each year in the UK. By any measure this represents a huge cost to the country, both monetary and more widely. It is intolerable that the government has no estimate of suicide numbers and must be rectified immediately, through the commissioning of a dedicated research programme and changes to medical recording and the coronial process. Levy The voluntary levy system does not work in 3 respects: 1. Inadequate levels of funding for research, education and treatment (RET):

The industry has consistently failed to meet the ‘target’ levels which GambleAware have requested. These levels have been totally inadequate – reported as either 0.1% of Gross Gambling Yield (GGY) or £10m. This is reflected in the lack of development of a vibrant and high status research community, the very limited provision of education work, and the staggeringly low quantity and quality of treatment. Less than 3% of those with severe gambling problems receive any treatment compared to 15 – 20% of those with drug or alcohol problems and virtually all are self-referrals. We estimate that a statutory levy of a minimum of 1% of Gross Gambling Yield, which would currently generate around £140m pa, is required. This would see world class research and education services established and NHS commissioned treatment for approximately 20% of those with gambling problems and addiction. A much larger levy would be required for gambling to cover even the lowest estimate of harms calculated in the IPPR report, noted above. In Feb 2018 the Gambling Commission’s Reviewing RET Arrangements put a high-end estimate of £62m pa. We believe that this is far too low. In particular, it assumed that only 10% of those requiring treatment would receive it and that the current mix of provision would continue. It is clear (see Treatment, below) that not only should a higher proportion be seen, but a much higher proportion of treatment must be delivered by NHS staff trained to a much higher level. Further, the Commission’s estimate does not appear to include links with the rest of the NHS and other support services that gamblers, their families and those bereaved by gambling suicide need. Spend at the level of £140m pa would still only bring the UK into line with the levels of spending on RET “per problem gambler” in most provinces in Canada, Australia and New Zealand.

2. Lack of consistency and security of funds Organisations must have security of funding to be able to develop the expertise and resources to achieve world class research, education and treatment services. Realistically only the NHS can commission and deliver nationwide specialist treatment for gambling disorder (see below). This will require substantial investment over a number of years to attract and train specialist staff but also to ensure that there is the necessary training of GPs and other frontline staff (in the NHS and other agencies) to diagnose

370

gambling disorder, make appropriate referrals to specialist services and provide low intensity treatment at primary care level. The gambling research community in the UK is relatively small with very few university departments having a dedicated gambling research team. Currently it is difficult for a new researcher to envisage that they could have an exciting or stable career in gambling research. Further, the field of gambling has attracted few researchers working in related disciplines such as mental health or suicide. To our knowledge, there has been only one independently funded research conference in the UK. This is an extraordinary position given the scale of gambling activity and harms in the UK. To achieve the growth required in the UK research community, it is necessary to provide not only a substantial boost to research spending but a good level of stability in the availability of research funding in order to attract leading gambling researchers to work in the UK and to attract the brightest young researchers into this field.

3. Industry influence over organisations, the research agenda and institutions, education specialists and treatment providers The discretionary nature of the funding enables the gambling industry to exercise a substantial and censoring influence across the research community, education and treatment providers which prevents discussion on addictive products, predatory practices and political lobbying. This influence seems to have silenced even treatment providers from highlighting the scale of the problem, demanding substantial increase in resources and changes of culture. This influence is also evident in the perpetuation of the “responsibilisation agenda” in which all responsibility for curbing gambling is located in the individual with little or no attention to the responsibility of the state or operators. Individuals have usually been addicted to known addictive products while children or adolescents in environments which they and their families were told were safe. They have been enticed into further addiction by predatory and deceptive practices and are then told by the collective culture that they are responsible for their own addiction and are morally and psychologically deficient individuals. We believe that this agenda contributes to the move to completed suicides – this is evident in the suicide notes of our family members. And yet much of the research agenda continues to focus on individuals, whether it is their “genetic predisposition” or identifying patterns of play rather than examining the contribution of environment, products, practices, availability, advertising and marketing and normalisation.

Research As noted above, one of the major concerns about research in this country is the direct and indirect influence that industry has through the voluntary funding regime. These major concerns are summarised in Fair Game (R. Cassidy et. al, Goldsmiths, 2013). We believe that this situation can only be addressed through the introduction of a statutory levy which would be disbursed across research, education and treatment entirely independently of the industry. This will require the establishment of new independent structures and organisations.

371

The GwL families believe that the failure of GambleAware to commission research on the links between gambling and suicide results directly from their reliance on industry funding and the resulting influence on the identification of research topics and overall research agenda. This was never an area that the industry would wish to be highlighted or investigated. Similarly the paucity of research around the addictiveness and dangers of different gambling products or the impact of the marketing and targeting (eg. VIP schemes) of the industry reflect the influence of funding in directing the research agenda. We believe that a national research programme should be developed through joint consultations with government, regulators, treatment providers, EbEs and the research community. This may involve consultation with the industry, but they should have no influence over the final programme. The development of the research programme must also include an emphasis on greater collaboration between researchers from different disciplines, including psychology, economics and the wider social sciences, medicine and neuroscience. Given the historically low level of research funding and lack of wide knowledge about gambling across disciplines, it may be necessary to run a substantial consultative exercise to establish some the parameters of an initial research programme. However, we also believe that significant finance should also be available for individual research organisations to be able to bid to ensure that appropriate innovation remains. As a condition of their licensing, gambling operators should be required to make available complete anonymised play and other data, which should be held in national repositories which are accessible to all bona fide researchers. Further, operators should be required to cooperate in any way that is required within any approved research projects. Reporting of all projects which receive industry funding, directly or through organisations such as GambleAware, or are undertaken by organisations which receive direct or indirect funding from the industry should include a clear statement making clear this association. Education First, it is worth noting that education activities are generally amongst the least effective interventions in terms of preventing the development of problem gambling. Further, some researchers have argued that gambling education might be counterproductive and that it might actually increase the normalisation of gambling. So while education does have a place, it should not be considered as the major preventative measure and should only be considered alongside other initiatives. Currently there are no national standards for the content or delivery of education. This needs to be addressed immediately, ensuring that content is not just about understanding probability, odds and risk, but including clear information on mental health risks, dangers of particular products and awareness of the practices of the industry. Gambling needs to be placed in a social and public health context, alongside drugs and alcohol awareness teaching in PSHE. We are concerned that industry funding for existing education activities mean that an incomplete picture is being delivered. The focus tends to be on

372

understanding the financial and statistical risks of gambling rather than addressing mental health issues, the addictive nature of some products and a realistic view of the practices of the industry. Current education just reinforces the “individual responsibilisation” message which is favoured by the industry. Treatment The experience of the families who have made contact with GwL is that current treatment is both inadequate and ineffective. All the young people who have died attempted to access treatment and were either misdiagnosed or offered inadequate or inappropriate treatment. Gambling disorder is not routinely diagnosed by GPs due to lack of training and there are no NHS treatment pathways or public health strategy. Coronial recording of suicides cannot take account of medical recording of gambling disorder on as would follow suicides with a GP note of drug or alcohol addiction. Deaths after treatment are not investigated and therefore there is no learning from deaths correlated with gambling disorder and no recording of numbers. NHS treatment Gambling disorder was classified as a psychiatric condition in 1995 and further classified as equivalent to drug and alcohol addiction in 2013 (DSM IV 1995 & DSM V 2013). The families of GwL believe that until now there has been a systemic state failure to follow that classification with commissioning and provision of evidence based services delivered to an NHS standard. This failure to provide public health information and effective treatment has resulted in the deaths of our family members. GwL welcomes the first instruction to Public Health England to support DCMS with public health information in March 2018. However, we note that this instruction was not given priority during 2018 and there seems to have been little progress. GwL welcomes the inclusion of clinics in the NHS long term plan of 2019 and the introduction of NHS standards to commissioning of NHS provided clinics. It is now essential to ensure that any partner providers adhere to the same standards of treatment effectiveness, training and service metrics. There is now the potential to introduce NHS standards of efficacy and on the ground service effectiveness to tendering and commissioning decisions. However, the plan currently lacks coordination with other structures in the health service. Primary care is both a key referral point and a potential delivery point for low intensity provision and preventive measures and would have been key to saving the lives of our family members. GP training in gambling disorder is minimal and has no equivalence to drug and alcohol training. There is no routine screening for gambling disorder equivalent to screening for high alcohol intake and there seems to be no plans to introduce this. Current treatment outside the NHS There is a lack of accountability and normal governance scrutiny of the current non-NHS commissioners and providers. The GwL Board includes people with long, senior clinical and commissioning experience in the NHS and we see no evidence of commissioning and provision comparable to NHS best practice as is currently routinely asserted. The lack of appropriate procurement and service improvement at the point of recommissioning is evidenced by the recent decision

373

by GambleAware to award a further £3.9million to GamCare without a procurement commissioning process or collaboration with the NHS. It is essential that EbEs are now included routinely in procurement and commissioning decisions as is now common practice in the NHS and we understand that the Gambling Commission and the NHS providers are beginning to set this in place. Until now our concerns have been systematically ignored. Concerns include:

• Lack of a clear evidence-based clinical and treatment model • Lack of safety and risk management processes • Lack of effective commissioning process dependent on quality standards • Thinly specified services, poor contracting and inadequate quality

monitoring • Clinical governance appears weak with a lack of accountability • Limited understanding of the severity of gambling disorder and the level of

suicide risk • Lack of effective collaboration with the NHS including failure to develop

referral routes from primary care • Refusal to conduct serious incident reviews of suicides following treatment • Discharge of patients who are still suffering from problem gambling (and

possibly gambling disorder) and lack of follow up procedures despite the high risk of suicide on relapse

• Poor recording and reporting on the quality of services

Perhaps most worrying is the 6 month time limit on serious incident reviews on people who have taken their lives after treatment from a GamCare provider. As senior NHS staff we find this refusal to learn from failed care that has led to deaths unconscionable. Gambling and Suicide Until Gambling with Lives was established, the link between gambling and suicide was barely publicly acknowledged by government, regulators, treatment providers or the industry – despite a research literature stretching back decades which showed a clear and consistent link. In our early meetings with stakeholders we were met with blank looks when we talked about the potential scale of the issue. As noted above, it fell to GwL to compile the international research which indicates 250 – 650 gambling related suicides each year in the UK. Research published since we produced those estimates have confirmed the scale of deaths. We recognise that progress has been made in accepting this link – as demonstrated by the fact that the Committee has included an explicit question on gambling and suicide. However, the reality is that GambleAware have commissioned only 2 small scale projects analysing old data sets. These projects confirmed a substantial relationship between gambling and suicide which could not be explained by any other factors. There is the need for a substantial research programme to develop the understanding of the scale and pathways of gambling related suicides.

374

Initially we are calling for a substantial project based on “psychological autopsies” of recent suicides in the UK, similar to the study by Wong et al (2010) in Hong Kong. This should be accompanied by other qualitative work to understand more about the development of addiction and path to suicide. This should include the impact of the “individual responsibilisation” agenda in increasing the suicide risk of individuals. Finally, further work is required to understand the influence of particular gambling products on moving people towards suicidal action. GwL families are available to be involved in these different strands of research. Further, the majority of recovering gambling addicts have acknowledged suicidal thought and attempts. There should be no major barriers to getting a substantial research programme underway. 11 October 2019

375

Gambling with Lives – Supplementary written evidence (GAM0131) The NUMBER OF GAMBLING RELATED SUICIDES EACH YEAR IN THE UK. 3 studies carried out in the UK, Hong Kong and Sweden indicate that there are 250 to 650 gambling related suicides each year in the UK – 4% to 11% of total suicides. There is a long history and substantial research literature showing a robust and consistent link between gambling and high rates of suicidal ideation, suicide attempts and completed suicides. These studies support the rates estimated from the 3 key studies. Studies of Completed Suicides 1. UK study1 (2017) showing 4% of suicides of 20-24 year olds in the UK are

gambling related => 250 gambling related suicides per year in the UK

2. Hong Kong study2 (2010) showing 11% of suicides in Hong Kong are gambling related => 650 gambling related suicides per year in the UK

3. Swedish study3 (2018) showing suicide rate of people with gambling disorder is 15 times that of the general population => 550 gambling related suicides per year in the UK

4. The same Swedish study found that suicide was the most common form of

death of people diagnosed with gambling disorder, accounting for 31% of deaths.

5. Canada Safety Council4 (2005) estimated 200 gambling related suicides per year ~ 5% of all suicides => 300 gambling related suicides per year in the UK

A note on population estimates – a common pushback on estimating population figures from these studies is that studies relate to people diagnosed with gambling disorder and maybe receiving treatment. The implication is that these are a “more severe” group. We are not aware of any evidence to support this assumption. In the UK only 2% of gamblers receive treatment: we know virtually nothing about the other 98%. Only a few of the young men lost by Gambling with Lives families received any treatment; none had a diagnosis of gambling disorder; all took their own lives. This experience suggests that the treatment population is not “the tip of the iceberg” but just “the bit of the elephant that we can see”. Studies of Suicidal Ideation and Attempts

Table 1 - Suicidal ideation rates and suicide attempts (usually gamblers seeking treatment, several countries)

No. of studies Min Max Average

376

Suicidal ideation rate

13 10% 81% 42%

Attempted suicide 17 4% 40% 20%

1. A review of 13 UK and international studies5-16 (1990 – 2019) which

considered suicidal ideation showed that an average of 42% of gamblers seeking treatment had had suicidal thoughts … around 3 times the average18 of the general population.

2. A review of 17 UK and international studies10-16,19-27 (1990 – 2019) which considered attempted suicides showed that an average of 20% of gamblers seeking treatment had attempted suicide … over 3 times the average18 of the general population.

3. The most recent UK study20 (2018) showed that 30% of gamblers entering

treatment in the UK in 2015 had attempted suicide … over 5 times the average of the general population.

Applying this 30% to the approx. 10,000 gamblers receiving treatment28 and using the estimated 10-25 attempts for each completed suicide29 => 120 to 300 gambling related suicides per year in the UK. Arguably we should apply the 30% to a much higher figure of gamblers to reflect the numbers who should be receiving treatment. Gambleaware/GamCare aim to treble the number in treatment => 360 to 900 gambling related suicides per year in the UK.

References

1. Appleby, L. et al. (2017). Suicide by children and young people.

National Confidential Inquiry into Suicide and Homicide by People with Mental Illness (NCISH). Manchester: University of Manchester

2. Wong, P.W.C. et al. (2010) A psychological autopsy study of pathological gamblers who died by suicide. Journal of Affective

Disorders 120, 213-216 3. Karlsson, A., & Hakansson, A. (2018). Gambling Disorder, increased

mortality, suicidality and associated comorbidity: A longitudinal nationwide register study. Journal of Behavioural Addiction 7(4), 1091-1099

4. Canada Safety Council. (2004). Canadian Roulette. www.canadasafetycouncil.org

5. Ronzitti, S., Soldini, E., Smith, N., Potenza, M. N., Clerici, M., & Bowden-Jones, H. (2017). Current suicidal ideation in treatment-

seeking individuals in the United Kingdom with gambling problems. Addictive behaviors, 74, 33-40.

6. Lesieur, H. R., & Blume, S. B. (1990). Characteristics of pathological gamblers identified among patients on a psychiatric admissions service. Psychiatric Services, 41(9), 1009-1012.

7. Ladouceur, R., Dubé, D., & Bujold, A. (1994). Prevalence of pathological gambling and related problems among college students in

377

the Quebec metropolitan area. The Canadian Journal of Psychiatry, 39(5), 289-293.

8. Beaudoin, C. M., & Cox, B. J. (1999). Characteristics of problem

gambling in a Canadian context: A preliminary study using a DSM-IV-based questionnaire. The Canadian Journal of Psychiatry, 44(5), 483-

487. 9. Productivity Commission (1999). Australia’s gambling industries.

Canberra, Australia. 10. Roberts, K. J., Smith, N., Bowden-Jones, H., & Cheeta, S. (2017).

Gambling disorder and suicidality within the UK: an analysis investigating mental health and gambling severity as risk factors to suicidality. International Gambling Studies, 17(1), 51-64.

11. McCormick, R. A., Russo, A. M., Ramirez, L. F., & Taber, J. I. (1984). Affective disorders among pathological gamblers seeking

treatment. The American journal of psychiatry. 12. Schwarz, J., & Lindner, A. (1992). Inpatient treatment of male

pathological gamblers in Germany. Journal of Gambling Studies, 8(1), 93-109.

13. Horodecki, I. (1992). The treatment model of the guidance center for gamblers and their relatives in Vienna/Austria. Journal of gambling Studies, 8(2), 115-129.

14. Petry, N. M., & Kiluk, B. D. (2002). Suicidal ideation and suicide attempts in treatment-seeking pathological gamblers. The Journal of

nervous and mental disease, 190(7), 462. 15. Ledgerwood, D. M., & Petry, N. M. (2004). Gambling and suicidality

in treatment-seeking pathological gamblers. The Journal of nervous and mental disease, 192(10), 711-714.

16. Battersby, M., Tolchard, B., Scurrah, M., & Thomas, L. (2006). Suicide ideation and behaviour in people with pathological gambling attending a treatment service. International journal of mental health

and addiction, 4(3), 233-246. 17. Wardle, H., Dymond, S., John, A., & McManus, S. (2019). Problem

gambling and suicidal thoughts, suicide attempts and non-suicidal self-harm in England: evidence from the Adult Psychiatric Morbidity Survey

2007. GambleAware. https://about.gambleaware.org/media/1975/suicide-report.pdf

18. Windfuhr, K. & Kapur. N. (2011). Suicide and mental illness: a clinical review of 15 years findings from the UK National Confidential

Inquiry into Suicide, British Medical Bulletin, 100(1), 101-121 19. Moran, E. (1969). Taking the final risk. Mental Health, 28(Winter),

21. 20. Sharman, S., Murphy, R., Turner, J. J., & Roberts, A. (2019). Trends

and patterns in UK treatment seeking gamblers: 2000–2015. Addictive behaviors, 89, 51-56.

21. Bland, R. C., Newman, S. C., Orn, H., & Stebelsky, G. (1993). Epidemiology of pathological gambling in Edmonton. The Canadian Journal of Psychiatry, 38(2), 108-112.

378

22. Sullivan, S. (1994). Why compulsive gamblers are a high suicide risk. Community Mental Health in New Zealand.

23. Kausch, O. (2003). Suicide attempts among veterans seeking

treatment for pathological gambling. The Journal of clinical psychiatry. 24. Hodgins, D. C., Mansley, C., & Thygesen, K. (2006). Risk factors for

suicide ideation and attempts among pathological gamblers. The American Journal on Addictions, 15(4), 303-310.

25. Penfold, A., Hatcher, S., Sullivan, S., & Collins, N. (2006). Gambling problems and attempted suicide. Part I. High prevalence amongst

hospital admissions. International Journal of Mental Health and Addiction, 4(3), 265-272.

26. Thon, N. et al. (2014). Prevalence of suicide attempts in

pathological gamblers in a nationwide Austrian treatment sample. General hospital psychiatry, 36(3), 332-336.

27. Cook, S. et al. (2015). Problem gambling among Ontario students: Associations with substance abuse, mental health problems, suicide

attempts, and delinquent behaviours. Journal of Gambling Studies, 31(4), 1121-1134.

28. GambleAware. Annual Review 2017/18. https://about.gambleaware.org/media/1836/gamble-aware-annual-review-2017-18.pdf

29.Mental Health First Aid England. (2016). Adult MHFA Manual. https://mhfaengland.org/

379

GAMBLING – SUICIDAL IDEATION, ATTEMPTS and COMPLETED SUICIDES This summary presents robust evidence on the long established and clear relationship between gambling and suicidal ideation and behaviour. It estimates that 4-11% of suicides in the UK are gambling related – indicating a figure of 250 to 650 completed gambling related suicides each year. It also argues that in many cases gambling is the root cause of suicide. 1. Long established link between gambling and suicide Academic papers have reported the link between gambling disorder and suicide from as long ago as 19351. Since then numerous studies across the world have investigated the link between gambling and suicidal ideation2-14, attempted suicides7-23 and completed suicides24-28. 1.1 Suicidal ideation and attempted suicides The table below demonstrates the very high rates of suicidal thoughts and attempted suicides among problem gamblers seeking treatment.

Table 1. - Suicidal ideation rates and suicide attempts (usually gamblers seeking treatment, several countries)

No. of studies Min Max Average

Suicidal ideation rate 13 10% 81% 42% Attempted suicide 17 4% 40% 20%

(The comparative figures in the general population show that around 16.7% of people have had suicidal thoughts and 5.6% of people have attempted suicide29.) Evidence that gambling is closely associated with high rates of suicidal ideation and attempts is robust and consistent across the studies, although the reported rates of suicidal behaviour may vary due to different demographic samples and measurement scales. The most recent UK study16 found that around 30% of gamblers entering treatment in 2015 had attempted suicide, a figure which had increased over the previous 3 years. This indicates that problem gamblers are over 5 times more likely to attempt suicide than other people. Currently only around 9,000 people a year receive treatment for gambling disorder30 in the UK, but this disguises the scale of the problem with around 340,000 people classified as “problem gamblers” and a further 1.7 million “at risk”31. It is estimated that for every completed suicide there are 10-25 attempts56, so that applying the 30% attempted suicide rate to any of these figures gives a staggeringly high number of attempted suicides 1.2 Completed suicides In most countries the underlying reason(s) why someone took their life is rarely recorded: coroners are required to record only the “when, where and how” of any suicide verdict. Coroners may refer to medical diagnoses where available but very few people are diagnosed with gambling disorder in the UK due to lack of GP training and because treatment is commissioned and provided outside the

380

NHS. This contrasts with the common diagnosis and recording of alcohol and drugs dependencies in medical notes, which can then be referenced by coroners as factors associated with suicide. We have identified three academic studies that have attempted to quantify the number of completed suicides linked to gambling that provide robust evidence of the scale of gambling related suicide. 1.2.1 Gambling disorder, increased mortality, suicidality and associated

comorbidity: A longitudinal nationwide register study. (Sweden, 2018) A recent study from Sweden24 which tracked over 2000 people with a diagnosis of gambling disorder found that this group had a suicide rate 15 times higher than the general population. It also found that suicide was the leading cause of death for 20-74 year olds in the study, accounting for 31% of deaths. Applying this 15 fold rate to the most recent estimate of problem gamblers (above) gives an estimated 550 suicides related to gambling each year in the UK – over 9% of all UK suicides.

1.2.2 Suicide by children and young people. National Confidential Inquiry into Suicide and Homicide by People with Mental Illness. (UK, 2017) This UK study25, which examined the deaths by suicide of just over 100 young people aged 20-24 years in the UK, found that 4% of suicides were related to gambling. The study was based on detailed examination of coroners’ oral reporting and therefore will inevitably be a lowest estimate (see above). Applying the 4% figure to the approximate 6,000 suicides each year in the UK gives a figure of 250 suicides related to gambling each year in the UK.

1.2.3 A psychological autopsy study of pathological gamblers who died by suicide. (Hong Kong, 2010) A study based on psychological autopsies of 150 deaths by suicide and 150 deaths by natural causes in Hong Kong26 found that over 11% of suicides were related to gambling. Applying the 11% figure to the approximate 6,000 suicides each year in the UK gives a figure of over 650 suicides related to gambling each year in the UK.

1.2.4 Other international studies (Canada, 2005 and Australia, 2013) Some provinces in Canada require that coroners comment whether gambling is present when considering suicide cases. In 2005, the Canada Safety Council27 estimated that around 200 suicides each year are related to gambling, equivalent to over 5% of all suicides. An Australian report28 in 2013 based on coroners’ records identified around 2% of suicides related to gambling, though the study acknowledged the weaknesses of using these records (see above) meaning that again this must be a lowest estimate.

Clearly there are issues about extending the results of the studies noted above to try to estimate the number of gambling related suicides in the UK figure each year, but applying them directly gives an estimated 250 to 650 gambling related suicides each year in the UK. A common pushback on estimating population figures from these studies is that they relate to people diagnosed with gambling disorder and maybe receiving treatment. The implication is that these are a “more severe” group. Gambling

381

with Lives is not aware of any evidence to support this assumption. In the UK only 2% of “problem gamblers” receive treatment each year: we know virtually nothing about the other 98%. Only a few of the young men lost by Gambling with Lives families received any treatment; none had a diagnosis of gambling disorder; all took their own lives. This experience suggests that the treatment population is not “the tip of the iceberg” but just “the bit of the elephant that we can currently see”. Some further brief notes about using these studies are appended and a fuller justification for using them can be found on the Gambling with Lives website www.gamblingwithlives.org. In conclusion, we estimate that 4-11% of suicides in the UK are related to gambling. This compares to an estimated 8-17% of suicides where a diagnosis of “alcohol dependence” was recorded and 3-9% for “drug dependence”32. 2. Gambling as the prime cause of suicide It is widely acknowledged that the causes of any individual suicide can be complex, both in terms of the long-term history of the individual and any specific events which might trigger their death. However, there is a substantial research base which indicates that gambling itself can be a prime cause of suicidal behaviour. In particular several studies identify the level of gambling severity as being highly associated with suicidal behaviour11,12,21,35,36,41, as is the early onset of gambling disorder42-45. Some studies even identify particular forms of gambling such as games of pure chance and gambling on electronic gambling machines as being more dangerous in terms of suicidal behaviour46-48. Clearly non-gambling issues may also trigger susceptibility to the development of gambling disorder and suicidal behaviour and there is a reasonable research base exploring co-morbidity across a range of psychological factors11,17,33-36, other substance-related problems37-39, and demographic factors12,35. However, in none of these studies do the other co-morbid factors and demographics ‘explain’ all of the likelihood of gambling disorder or suicidal behaviour. Rather they are themselves contributory factors. Several studies49-52 explicitly identify gambling as a factor associated with suicidal behaviour even after all other factors have been taken into account. Furthermore, some studies indicate that gambling disorder actually precedes, and therefore possibly causes, the onset of psychological, economic or social problems39-40. Indeed it would be very surprising if a long term gambling disorder did not have a wide range of other impacts on an individual’s well-being. Further important evidence that gambling can be both the root and trigger for suicidal behaviours is the lived experience of the Gambling with Lives families. Without exception the young men lost by the families were normal, bright, happy and popular with great futures ahead of them. Their one problem in life was their addiction to gambling. All had started gambling when they were underage, some as young as age 12. While some did die with substantial debts, this was certainly not the case for all. They seemed to share a set of common characteristics. They were all big cheerful characters; people who would ‘light up a room’; they were outgoing; they tended to be people who you could ‘tell your troubles to’. They shared a set of characteristics which would be seen as positive and advantageous in many walks of life – great indicators of success. This chimes with one academic study which found “cheerfulness” as a factor associated with gambling disorder52 – no doubt a proxy for many other positive characteristics not regularly captured in data sets. It seems that the very characteristics which made them successful in

382

the rest of their lives were also the factors that contributed most to their susceptibility to gambling addiction and suicide. Friends and families of these young men attribute the entirety of their deaths to gambling. All were happy and untroubled until gambling entered their lives. It gradually destroyed their self-esteem and undermined their belief in themselves, a position confirmed by research38,39,53. They all seemed to acknowledge their addiction and felt that they would never be able to be free to lead a normal life. Many of them died after many months of being free of gambling and not betting, only to relapse – maybe targeted by an offer of a “free bet”. Their relapses were catastrophic for them, not necessarily financially but mentally and emotionally. Gambling took their lives from them from an early age and then ended their lives tragically early.

383

Appendix – Using the studies to give an estimate of the number of gambling-related suicides in the UK

There are always issues about applying the results of any research study to derive an estimate of the number of gambling-related suicides each year in the UK. This is particularly the case when using international studies because of definitional, methodological and cultural differences between different countries. Ideally, the studies we have identified should be subject to expert epidemiological analysis to derive a robust estimate range. In the absence of that we have proposed a simple and transparent approach while acknowledging some of the main issues below for each of the 3 main studies. Swedish Study24 Criticism: The study is based on a population of people who have been diagnosed with gambling disorder and have received some treatment, so that they are “more severe” than the wider population with undiagnosed gambling problems. Answer: The study refers to people with a diagnosis of gambling disorder, however, it is not clear whether they have received or are receiving significant treatment. The study indicates a total of just over 6,000 hospital admissions or outpatient appointments across the 2,000 individuals. It also notes that for inpatients, only 29% had received a main diagnosis of gambling disorder “at some point” and for outpatients the figures was 66%. Therefore, it is not clear that this is a severe treatment group. Furthermore, there is the implication that a treatment group are more “at risk” of suicide that the wider population defined as suffering from “problem gambling”. Gambling with Lives is not aware of any evidence to support this assumption. In the UK only 2% of gamblers receive treatment each year: we know virtually nothing about the other 98%. Only a few of the young men lost by Gambling with Lives families received any treatment; none had a diagnosis of gambling disorder; all took their own lives. This experience suggests that the treatment population is not necessarily “the tip of the iceberg” but just “the bit of the elephant that we can currently see”. Therefore, we have proxied the relevant population for the UK as the estimated number of problem gamblers identified in surveys. It could be argued that “gambling disorder” is a higher diagnostic threshold than “problem gambler”. The British Gambling Prevalence Survey55 (2010) found that around two thirds of people scoring as “problem gambler” would have fitted the classification of “gambling disorder/pathological gambler”. Criticism: The study reflects the situation in Sweden Answer: It seems that Sweden is more advanced than the UK in recognising and diagnosing gambling disorder. For example, the UK does not have a nationwide register of individuals with a diagnosis of gambling disorder. Sweden also appears to be ahead of the UK in its approach to gambling research: it has had 3 longitudinal studies dating back to 1997/98 whereas the UK has not yet even started a first study. However, the study recognises that only a small proportion of people diagnosed with gambling disorder actually receive treatment, similar to the UK. The state has a much greater role in the delivery of gambling, through the state owned Svenska Spel, but the levels and profile of gambling appears to be similar. Problem gambling rates appear to be slightly higher in Sweden than the

384

UK. However, we do not identify major differences between gambling in the two countries that indicate that the Swedish study should not be used to provide an estimate for the UK. UK Study25 Criticism: The UK study is only of 20-24 year olds, so cannot reflect the whole population. Answer: An Australian study56 found that the mean age of problem gamblers who have taken their lives is around 40, so that the 20-24 year olds figure may be an underestimate. Criticism: It is a small sample size – 100 suicides Answer: True and on its own the result could be treated with some caution. However, the result is in line with UK studies on suicidal ideation and attempts and gives an estimate at the lower end of the range that they would suggest. NOTE: The study is likely to be an underestimate because:

- It is based on coronial evidence which we know has inadequate recording of causes of suicide, in particular gambling

- The study records gambling as a subset of financial issues. The GwL experience shows that deaths by suicide are not necessarily linked to financial problems.

- The team were not looking for ‘gambling’ as an issue connected with the suicides so, similar to coroners themselves, may have missed signs of gambling.

Hong Kong Study26 There is a powerful internal consistency in the study which indicates that pathological gamblers in HK have a suicide rate 17 times that of the general population. This is similar to the 15 times higher rate found in the Swedish study. Criticism: Hong Kong is too different to the UK to be able to use the results. Answer: What are the most important ways that HK and the UK are different that would affect gambling suicide estimates?

- Casinos are much more widely used in HK (in particular Macau) – however, UK figures don’t indicate that casino gambling is more dangerous than playing EGMs in bookmakers or online; and 85% of HK gamblers report that Macau casinos have no influence on their gambling.

- Problem gambling rates are much higher in HK than UK – it is questionable just how different the rates are. The most recent PG rate in HK is 1.4% - comparable with the UK and less than the PG rate for younger age groups in the UK. We also suggest that PG rates are much higher in the UK than official figures show: gamblers spend their lives disguising and hiding their addiction, we question whether they are likely to be honest when answering questions in a survey. Further, the internal consistency of the study showing the suicide rate of pathological gamblers as 15 times that of the general population is completely independent the level of PG.

- Gambling may be seen as being culturally different in HK – but in what way is this likely to affect suicide rates – up or down?

385

Studies of Suicides Attempts 1. The review of 17 UK and international studies (1990 – 2019, see Table 1)

which considered attempted suicides showed that an average of 20% of gamblers seeking treatment had attempted suicide … over 3 times the average of the general population.

2. The most recent UK study16 (2018) showed that 30% of gamblers entering treatment in the UK in 2015 had attempted suicide … over 5 times the average of the general population.

Applying this 30% to the approx. 10,000 gamblers receiving treatment and then using the estimated 10-2557 attempts for each completed suicide => 120 to 300 gambling related suicides per year in the UK. Arguably we should apply the 30% to a much higher figure of gamblers to reflect the numbers who should be receiving treatment. Gambleaware/GamCare aim to treble the number in treatment => 360 to 900 gambling related suicides per year in the UK.

3. A Canadian study23 (2015) reported that problem gamblers were nearly 18 times more likely to report a suicide attempt than non-problem gamblers.

386

References

30. Israeli, N. (1935). Outlook of a depressed patient, interested in

planned gambling, before and after his attempt at suicide. American Journal of Orthopsychiatry, 5(1), 57.

31. Ronzitti, S., Soldini, E., Smith, N., Potenza, M. N., Clerici, M., & Bowden-Jones, H. (2017). Current suicidal ideation in treatment-

seeking individuals in the United Kingdom with gambling problems. Addictive behaviors, 74, 33-40.

32. Lesieur, H. R., & Blume, S. B. (1990). Characteristics of pathological

gamblers identified among patients on a psychiatric admissions service. Psychiatric Services, 41(9), 1009-1012.

33. Ladouceur, R., Dubé, D., & Bujold, A. (1994). Prevalence of pathological gambling and related problems among college students in

the Quebec metropolitan area. The Canadian Journal of Psychiatry, 39(5), 289-293.

34. Beaudoin, C. M., & Cox, B. J. (1999). Characteristics of problem gambling in a Canadian context: A preliminary study using a DSM-IV-based questionnaire. The Canadian Journal of Psychiatry, 44(5), 483-

487. 35. Productivity Commission (1999). Australia’s gambling industries.

Canberra, Australia. 36. Roberts, K. J., Smith, N., Bowden-Jones, H., & Cheeta, S. (2017).

Gambling disorder and suicidality within the UK: an analysis investigating mental health and gambling severity as risk factors to

suicidality. International Gambling Studies, 17(1), 51-64. 37. McCormick, R. A., Russo, A. M., Ramirez, L. F., & Taber, J. I.

(1984). Affective disorders among pathological gamblers seeking

treatment. The American journal of psychiatry. 38. Schwarz, J., & Lindner, A. (1992). Inpatient treatment of male

pathological gamblers in Germany. Journal of Gambling Studies, 8(1), 93-109.

39. Horodecki, I. (1992). The treatment model of the guidance center for gamblers and their relatives in Vienna/Austria. Journal of gambling

Studies, 8(2), 115-129. 40. Petry, N. M., & Kiluk, B. D. (2002). Suicidal ideation and suicide

attempts in treatment-seeking pathological gamblers. The Journal of

nervous and mental disease, 190(7), 462. 41. Ledgerwood, D. M., & Petry, N. M. (2004). Gambling and suicidality

in treatment-seeking pathological gamblers. The Journal of nervous and mental disease, 192(10), 711-714.

42. Battersby, M., Tolchard, B., Scurrah, M., & Thomas, L. (2006). Suicide ideation and behaviour in people with pathological gambling

attending a treatment service. International journal of mental health and addiction, 4(3), 233-246.

43. Wardle, H., Dymond, S., John, A., & McManus, S. (2019). Problem gambling and suicidal thoughts, suicide attempts and non-suicidal self-harm in England: evidence from the Adult Psychiatric Morbidity Survey

387

2007. GambleAware. https://about.gambleaware.org/media/1975/suicide-report.pdf

44. Moran, E. (1969). Taking the final risk. Mental Health, 28(Winter), 21.

45. Sharman, S., Murphy, R., Turner, J. J., & Roberts, A. (2019). Trends and patterns in UK treatment seeking gamblers: 2000–2015. Addictive

behaviors, 89, 51-56. 46. Bland, R. C., Newman, S. C., Orn, H., & Stebelsky, G. (1993).

Epidemiology of pathological gambling in Edmonton. The Canadian

Journal of Psychiatry, 38(2), 108-112. 47. Sullivan, S. (1994). Why compulsive gamblers are a high suicide

risk. Community Mental Health in New Zealand. 48. Kausch, O. (2003). Suicide attempts among veterans seeking

treatment for pathological gambling. The Journal of clinical psychiatry. 49. Hodgins, D. C., Mansley, C., & Thygesen, K. (2006). Risk factors for

suicide ideation and attempts among pathological gamblers. The American Journal on Addictions, 15(4), 303-310.

50. Penfold, A., Hatcher, S., Sullivan, S., & Collins, N. (2006). Gambling

problems and attempted suicide. Part I. High prevalence amongst hospital admissions. International Journal of Mental Health and

Addiction, 4(3), 265-272. 51. Thon, N. et al. (2014). Prevalence of suicide attempts in

pathological gamblers in a nationwide Austrian treatment sample. General hospital psychiatry, 36(3), 332-336.

52. Cook, S. et al. (2015). Problem gambling among Ontario students: Associations with substance abuse, mental health problems, suicide attempts, and delinquent behaviours. Journal of Gambling Studies,

31(4), 1121-1134. 53. Karlsson, A., & Hakansson, A. (2018). Gambling Disorder, increased

mortality, suicidality and associated comorbidity: A longitudinal nationwide register study. Journal of Behavioural Addiction 7(4), 1091-

1099 54. Appleby, L. et al. (2017). Suicide by children and young people.

National Confidential Inquiry into Suicide and Homicide by People with Mental Illness (NCISH). Manchester: University of Manchester

55. Wong, P.W.C. et al. (2010) A psychological autopsy study of

pathological gamblers who died by suicide. Journal of Affective Disorders 120, 213-216

56. Canada Safety Council. (2004). Canadian Roulette. www.canadasafetycouncil.org

57. Coroners Court of Victoria. (2013). Gambling-related suicides, Victoria 2000-2012. www.coronerscourt.vic.gov.au/

58. McManus. S. et al. (2009). Adult psychiatric morbidity in England, 2007. Results of a household survey. Health & Social Information

Centre, Social Care Statistics 2009. 59. GambleAware. Annual Review 2017/18.

https://about.gambleaware.org/media/1836/gamble-aware-annual-review-2017-18.pdf

388

60. Gambling Commission. Gambling participation in 2018, behaviour, awareness and attitudes. https://www.gamblingcommission.gov.uk/PDF/survey-data/Gambling-participation-in-2018-behaviour-awareness-and-attitudes.pdf

61. Windfuhr, K. & Kapur. N. (2011). Suicide and mental illness: a

clinical review of 15 years findings from the UK National Confidential Inquiry into Suicide, British Medical Bulletin, 100(1), 101-121

62. Carr, M. M., Ellis, J. D., & Ledgerwood, D. M. (2018). Suicidality

among gambling helpline callers: A consideration of the role of financial stress and conflict. The American journal on addictions, 27(6), 531-

537. 63. Weinstock, J. et al. (2014). Current suicidal ideation in gamblers

calling a helpline. Addiction Research & Theory. 22(5), 398-406 64. Stein, G. N., Pretorius, A., Stein, D. J., & Sinclair, H. (2016). The

association between pathological gambling and suicidality in treatment-seeking pathological gamblers in South Africa. Annals of clinical psychiatry: official journal of the American Academy of Clinical

Psychiatrists, 28(1), 43-50 65. Frank, M. L., Lester, D., & Wexler, A. (1991). Suicidal behaviour

among members of Gamblers Anonymous. Journal of Gambling Studies, 7(3), 249-254.

66. Grant, J.E. et al. (2014). Suicidality in non-treatment seeking young adults with subsyndromal gambling disorder. Psychiatric quarterly.

85(4), 513-522 67. Kim, H.S. et al. (2016). A dangerous cocktail: Alcohol increases

suicidal ideations among problem gamblers in the general population.

Addictive behaviors. 55, 50-55 68. Winters, K. C. & Anderson, N. (2000) Gambling involvement and

drug use among adolescents. Journal of Gambling Studies 16, 175-198. 69. Gupta, R. & Derevensky, J.L. (1998) An empirical examination of

Jacobs' General Theory of Addictions: Do adolescent gamblers fit the theory? Journal of gambling studies 14, 17-49.

70. Feigelman, W., Gorman, B. S., & Lesieur, H. (2006). Examining the relationship between at-risk gambling and suicidality in a national representative sample of young adults. Suicide and LifeThreatening

Behavior, 36(4), 396-408. 71. Frank, M. L., Lester, D., & Wexler, A. (1991). Suicidal behaviour

among members of Gamblers Anonymous. Journal of Gambling Studies, 7(3), 249-254.

72. Bischof, A., Meyer, C., Bischof, G., John, U., Wurst, F. M., Thon, N., ... & Rumpf, H. J. (2015). Suicidal events among pathological

gamblers: the role of comorbidity of axis I and axis II disorders. Psychiatry research, 225(3), 413-419.

73. Shaffer, H.J., et al. (2010). Towards a paradigm shift in Internet

gambling research: From opinion and self-report to actual behaviour. Addiction Theory & Research. 18, 270-283

389

74. Delfabbro, P., King, D. & Griffiths, M.D. (2014). From Adolescent to Adult Gambling: An Analysis of Longitudinal Gambling Patterns in South Australia. Journal of Gambling Studies. 30, 547-563

75. Bischof, A., Meyer, C., Bischof, G., John, U., Wurst, F. M., Thon, N., ... & Rumpf, H. J. (2016). Type of gambling as an independent risk

factor for suicidal events in pathological gamblers. Psychology of Addictive Behaviors, 30(2), 263.

76. Challét-Bouju, G., Hardouin, J. B., Lagadec, M., Burlacu, S., Valleur, M., Magalon, D., ... & Vénisse, J. L. (2016). Profiles of problem and

non-problem gamblers, depending on their preferred gambling activity. Addiction Research & Theory, 24(3), 209-222.

77. Schull, N. (2005). Digital gambling: The coincidence of desire and

design. The Annals of American Academy of Political and Social Science. 597. 65-81

78. Park, S. et al. (2010). Prevalence, clinical correlations, comorbidities and suicidal tendencies in pathological Korean gamblers: results from

the Korean Epidemiology Catchment Area Study. Social psychiatry and psychiatric epidemiology. 45(6), 621-629

79. Wang, W.Q. et al. (2012) Attempters suicide in people aged 18 and older in Xiamen City. Chinese Mental Health Journal. 26, 332-336

80. Moghaddam, J.F. et al. (2015). Suicidal ideation and suicide

attempts in five groups with different severity of gambling: Findings from the National Epidemiological Survey on Alcohol and Related

Conditions. The American journal on addictions. 24(4), 292-298 81. Wardle, H. et al. (2019) Problem gambling and suicidal thoughts,

suicide attempts and non-suicidal self-harm in England: evidence from the Adult Psychiatric Morbidity Survey 2007, Gambling Commission

82. Gupta, R., Derevensky, J. & Ellenbogen, S. (2006). Personality characteristics and risk-taking tendencies amongst adolescent gamblers. Canadian Journal of Behavioural Science. 38, 201

83. Blaszczynski, A. & Nower, L. (2002). A pathways model of problem and pathological gambling. Addiction (97), 487-499

84. Wardle, H. et al. (2011). British Gambling Prevalence Survey 2010. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/243515/9780108509636.pdf

85. Blascczynski, A., & Farrell, E. (1998). A case series of 44 completed gambling-related suicides. Journal of gambling studies. 14(2), 93-109.

86. Mental Health First Aid England. (2016). Adult MHFA Manual. https://mhfaengland.org/

390

Addictive Gambling Products Supporters of the gambling industry like to focus on apparently low population “problem gambling” rates, enabling them to portray the problem as being about a “few flawed individuals”. This ignores the fact that gambling is not a homogeneous enterprise, but comprises a wide range of products which includes some which are highly addictive and dangerous which should not be available in their current form. Although the gambling industry would avoid the term ‘addictive’ preferring words like “compelling”, “engaging” or “absorbing”, a number of product design elements are generally accepted to contribute to the level of addictiveness. These include: • speed of play/event frequency/continuity of play • stake sizes and prize structures • probability and frequency of winning • a range of design features – free ‘spins’, ‘losses disguised as wins’, lights and

sounds These features can be combined to produce highly addictive high speed electronic products known as: • Electronic Gaming Machines (EGMs)

o Fixed Odds Betting Terminals – with “problem gambling/at risk

rates” over 50% o Online slots and casino games – with “problem gambling/at risk

rates” over 45% There is also increasing concern about new sports betting products being developed to replicate the high speed continuous betting experience of EGMs, known as: • In Game Sports Betting/Microbetting – a recent Australian study found

“problem gambling” rates of 78% for people engaged in microbetting. In 2016, FOBTs were associated with over half of all “problem gambling” in the UK, despite being played by only 3% of the population. FOBTs were the first product that the government acknowledged were too dangerous to be available on the high street. In 2019 the maximum stake was reduced from £100 to £2 which should reduce the amount of money which will be lost. However, nothing was done to slow down speed of play and nothing was done about the equivalent products which are available on line. While more research may be needed to establish the relative importance of different game features, we need to recognise that “we don’t know nothing”. Given the levels of harm arising from gambling disorder, including 250-650 gambling related suicides every year in the UK, we need to establish a “precautionary approach” whereby gambling products – like all other legally available products – should be proven to be safe before they can be marketed.

391

1. Background “Determinants of the decision not to gamble not only include the gambler’s biological and physiological constitution but also the structural characteristics of the gambling activity itself. Such characteristics may be responsible for reinforcement, may satisfy gambler’s needs, and facilitate excessive gambling. Showing the existence of such relationships has great practical importance. Not only could potentially ‘dangerous’ forms of gambling be identified but effective and selective legislation could be formulated. … It is shown that structural characteristics of fruit machines have the potential to induce excessive gambling regardless of individuals' biological and psychological constitution [our emphasis] and that such insights may help in decreasing fruit machine gambling's “addictiveness” potential and help in formulating effective gambling policy.” [1] The above is taken from the abstract of a paper written in 1993, long before the term Fixed Odds Betting Terminal (FOBT) had entered public vocabulary. Instead the paper refers to “fruit machines” which perhaps conjures the image of an apparently harmless seaside attraction. Yet even back then the “addictiveness” of gambling products had been identified and the argument made that these products could addict anyone. It is astonishing that some 25 years later, the Association of British Bookmakers, GambleAware and the Responsible Gambling Strategy Board were still arguing that there was no conclusive evidence that a reduction in the maximum stake size on FOBTs would reduce the harm that they caused! [2] Why significant research had not been conducted in the intervening decades is not the subject of this note, but we would link it to the massive influence that the gambling industry had in setting the research agenda that the gambling industry and which it continues to exercise [3]. Instead the industry has successfully sold a model of “individual responsibility” with a small number of “vulnerable individuals” who just need identifying and treating … once they have developed their addiction. This has meant that there has been a plethora of studies which examine individuals, their characteristics and behaviours, identifying “vulnerable” groups or evaluating individual level interventions to identify and help “problem gamblers”. Meanwhile study of gambling products and the practices of the industry has remained woefully sparse. We acknowledge that this type of research is difficult both practically and ethically. But more crucially it requires the active cooperation and engagement of gambling operators to share the vast amount of data that they hold on individual players across a whole range of products. Until that happens, we need to recognise that “we don’t know nothing”. There is an increasingly common agreement amongst independent researchers about the range of structural characteristics of gambling products which are most important in determining addictiveness. While we may not have perfect information on the relative importance of different factors, we do know enough to be able to highlight particular products which need to be substantially altered

392

or even withdrawn. We need to take a “precautionary approach” where the requirement should be that a product is “proven safe” before it is allowed to be marketed … to bring gambling into line with drugs, medical treatments and indeed any product which is sold to the public. 2. Addictive by Design Gambling has taken place for hundreds, if not thousands of years, whether it has involved games of skill and chance, or betting on the outcome of sporting and other events. It has always been recognised that gambling can lead to serious problems for some people, though the tended to be conceived as being mainly financial which could have a range of other social or health consequences. However, over the past 30 years gambling has changed beyond recognition with the development of high speed electronic games and the explosion of online gambling. So that today it is possible to bet at any time on any event around the world or play in one of thousands of online casinos – and all via the mobile phone in your pocket. It has also been recognised that gambling can have serious impacts of people’s mental health. Gambling disorder was classified as an addictive disorder in 2013 alongside drugs and alcohol addiction. Treatment for gambling disorder is now included in the NHS long term plan with 14 dedicated clinics due to open over the next few years. The development of the modern gambling industry has changed the nature of the relationship between gamblers and gambling operators (who might once have been referred to as “bookmakers”) and has also introduced a range of highly toxic products and practices which have been deliberately designed to draw people into gambling and keep them there as long as possible. “Addiction by Design” is the title of Prof. Natasha Dow Schull’s ground breaking book [4]; “Vicious Games” is the title of Prof. Rebecca Cassidy’s recent book [5]. Both titles are chosen for good reasons. 3. Structural Characteristics Although industry sources and developers tend avoid the term ‘addictive’ preferring words like “compelling”, “engaging” or “absorbing”, a number of product design elements are generally accepted to contribute to the level of addictiveness [6-11]. These include: • speed of play/event frequency/continuity of play – time gap between each

gamble and the time between placing the bet and the result (win/lose) • stake sizes • prize structures – number and value of prizes • probability and frequency of winning • free or bonus ‘spins’ • ‘losses disguised as wins’ – signalling a win which is less than the amount

staked • skill or pseudo-skill elements – which may or may not be real • near misses – results which are perceived as “nearly winning” but which are a

loss

393

• physical design features – lights, colours, sounds, ergonomic features As noted above, it is shocking that there has been so little research, particularly in the UK, to explore the relative importance of each of these features. However, there is substantial agreement that “speed of play/event frequency/continuity of play” are key features in the addictiveness of any gambling product. Certainly considerable effort is devoted by “game” developers to ‘tweak’ the design of their product to keep the customer playing and to extract as much money as possible. There are a set of other important elements of the gambling experience and engagements with the gambling industry which are also deemed important when considering the development of continuation of addiction. These include:

• availability and accessibility – how easy is it to access gambling products and opportunities

• type of environment/establishment – online, high street shop, arcade, casino

• marketing and advertising – increasingly marketing is targeted at individuals based on the huge wealth of information that gambling operators hold on individuals

• free spins and bonuses – used to attract new customers or ‘reward’ existing customers to encourage them the bet more

• VIP schemes – where high spending (losing) customers are assigned a ‘manager’ to develop a faux friendly relationship involving invitations to events, gifts and ‘rewards’ to keep the “VIP” betting

All of these can make gambling more dangerous and prolong gambling. 4. Dangerous Products As noted above “speed of play/event frequency/continuity of play” are highlighted as key features in determining the addictiveness of a gambling product. Therefore, purchasing a National Lottery ticket is generally not regarded as addictive since the customer may have to wait a number of days before getting the result of their gamble. Lottery scratchcards are seen as being more addictive since they are “instant wins” or losses.

a) Electronic Gaming Machines/Fixed Odds Betting Terminals (EGMs/FOBTs)

However, the weight of research generally acknowledges that Electronic Gaming Machines (EGMs), both online and land based, are amongst the most problematic gambling products in terms of addiction and financial harms [7,9,10]. Not only are these products recognised as being addictive, studies have also shown that addiction can set in very quickly [12] and the products themselves are associated with a higher suicide risk [13,14]. In the UK, the most commonly known EGM is the Fixed Odds Betting Terminal (FOBT). The equivalent product in Australia is called a ‘pokie’. Examination of the history of gambling in Australia shows that the growth and widespread

394

availability of ‘pokies’244 drove the huge increase in gambling and the inevitable problem gambling in that country [15]. In April 2019, the addictiveness and harm caused by FOBTs was eventually acknowledged by the government and as a result the maximum stake was reduced from £100 to £2. That change was symbolically important since it was the first time that a gambling product was recognised as being too dangerous to be readily available on the high street in its current form. However, no change was made to the speed of play and no changes at all were made to identical online products. We will have to wait on future evaluation to assess the impact that this limited change will have on the rates of gambling disorder.

b) In-game Sports Betting (Microbetting) At one time sports betting was based around predicting the outcome of a horse race, football match or similar. Technological advances in placing and processing bets allowed gambling operators to identify the opportunity to let a customer bet on any aspect of an event in real time – called in-play or in-game betting or microbetting. Therefore, the customer could bet on the next goal, corner or yellow card in a football match or literally on every point in tennis. This allowed them the replicate the addictive features, such as speed and continuity of play, with bets possible every minute, turning a football match into a 90 minute non-stop gambling experience. There is already some evidence of how addictive and dangerous this form of gambling can be, with “problem gambling” rates amongst Australian micro-better approaching a staggering 80% [16]. Football has been the huge growth area for in-game betting in the UK. This type of gambling likely to appeal to more people who may have no interest in the casino style games (which make up the majority of games on FOBTs) but love the game of football and also believe that their knowledge of the game makes this more of a ‘game of skill’ rather than the random chance of a casino game. Research shows that this is an incorrect belief. [17]. We believe that in-game sport betting will eventually be shown to be as addictive and dangerous as sports betting and that its impact on addiction rates could be even greater because of the wider appeal that it will be possible to generate. However, national statistics on these new products are not available, so the next section of this note focuses on established addictive products – FOBTs and their online equivalents. 5. The Addictiveness of FOBTs and their Online Equivalents Table 1 shows the “problem gambling” and “at risk” rates of a number of different gambling products to demonstrate the degree to which particular products are associated with problem gambling. Supporters of the industry may attempt to argue that “problem gamblers” are attracted to particular products rather than the products themselves causing “problem gambling”. However,

244 ‘Pokies’ are the Australian equivalent of Fixed Odds Betting Terminals and are widely

available throughout Australia.

395

when we consider the range of features which are associated with addictiveness and the different products, that looks a very thin argument. It is also the overwhelming experience of Gambling with Lives families that EGMs were the cause of their children’s addictions. Similarly there is widespread agreement amongst experts by experience of gambling addiction that these machines are both highly addictive and dangerous. Table 1 – “Problem gambling” and “at risk” rates of several gambling products [18] “Problem

gambling” %

“at risk” %

Total Rate %

Any gambling (excl National Lottery draws only)

1.6

8.5

11.1

Horse racing (not online)

3.3 14.1 17.4

Bingo (not online)

3.9 10.4 14.3

Machines in bookmakers (FOBTs)

13.7 39.2 52.9

Online gambling on slots, casino or bingo games

9.2 35.6 44.8

Addiction rates on FOBTs are well over 10%, and over 50% if the “at risk” population is included. The rates for the equivalent games online (but including bingo) are only slightly lower. The basic analysis in Box 1 below indicates that these products are associated with over half of all problem gambling in the UK. Fortunately, historically only a small proportion of the population have accessed these products, e.g. in 2016 only 3% of the population played on FOBTs and similar figures online [18].

396

This indicates that as the accessibility of these products increases with the growth and availability of online gambling, there will be a corresponding increase in the rate of gambling addiction. It is estimated that a 10ppt increase in numbers accessing the very addictive products could lead to a further 1% increase in problem gambling, more than doubling the whole population measure. Unless action is taken to curb their availability and accessibility or to radically alter their design, the impact on problem gambling rates could be catastrophic. Similar regulation needs to be applied to newer highly addictive products such as sports ‘microbetting’. Learning Lessons from (In)action on FOBTs A full account of the story of FOBTs from their introduced into betting shops in 1999 to the implementation of the £2 maximum stake in 2019 is given in a House of Commons Briefing Paper [2]. Almost from the outset concerns were expressed about the association of the machines with “problem gambling”, with GamCare noting in 2003 that there had been an increasing trend in their clients seeking help related to FOBTs. It was even at this early stage that the term “the crack cocaine of gambling” first appeared. The 20 years before the change was introduced was characterised by a vigorous defence of FOBTs by the Association of British Bookmakers (ABB) calling on a range of (subsequently discredited) ‘research’ reports. Given that the reports were commissioned and paid for by the ABB, it is not surprising that they found

Box 1. Calculation of proportion of all “problem gambling” associated with FOBTs

It is possible to do a couple of simple calculations based on the most recent (2016)

gambling behaviour statistics [18] Proportion of population who play FOBTs – 3% Proportion of people playing FOBTs classified as “problem gamblers” (PG) – 13.7%

Proportion of total population who play FOBTs and are PG = 3% x 13.7% = 0.4%

Estimated population PG rate is 0.7%, this means that over half of all PG in the UK is accounted for by people who play FOBTs.

Similarly for online slots, casino and bingo Proportion of population who play online slots, casino and bingo – 3%

Proportion of people playing online slots, casino and bingo classified as “problem gamblers” (PG) – 9.2%

Proportion of total population who play online slots, casino and bingo and are PG = 3% x

9.2% = 0.3%

Clearly there will be an overlap between those who play these products on FOBTs or online, so we cannot just add the figures together. However, it is clear that FOBTs and

their online equivalents account for substantially over half pf all problem gambling in the UK, despite being played by less than 5% of the population.

397

no evidence ‘proving’ that FOBTs were in any way a cause of problem gambling. This ‘evidence’ was deployed within the overall ‘Reno’ model [19], proposed by researchers who undertook substantial research and consultancy work for the industry, which located the issue of “problem gambling” within a small number of individuals who were in some way flawed, but whose “problematic play” could be identified and appropriate interventions or treatments made. The cause of the ABB was helped immeasurably by an apparent belief in the Department for Culture, Media and Sport, the Gambling Commission and the Responsible Gambling Strategy Board that it would be possible to conduct experiments and provide proof that could quantify the addictiveness and damage done by FOBTs. This was accompanied by silence from the Responsible Gambling Trust (now GambleAware) and GamCare, who chose to take a “neutral stance” in relation to the addictiveness of particular products. It is beyond the remit of this paper to explore why these different organisations took the attitudes that they did or why none of them commissioned any significant research which might have given a clear view on addictiveness (but see [20]). However, it is notable that the industry was closely involved with all the organisations and wielded huge influence through their direct funding of organisations and research. And of course the industry could point to the billions of pounds paid in tax. However, also over that time campaigners and independent researchers challenged the power of the industry and questioned the very basis of the ‘Reno’ model [21]. Over time there came to be a wider acceptance of the scope and level of gambling harms, and increasingly gambling came to be seen as a public health issue. However, it is still noteworthy that the introduction of the £2 maximum limit took the resignation of a highly respected and competent Minister, Tracey Crouch. Unlike the regulators and bureaucrats, she was aware of the damage being done which was attributable to FOBTs because she met people with major gambling problems in her weekly surgeries who identified the link. She had representations from people who worked in bookmakers and who reported the impact that these products had on customers. She spoke directly to “problem gamblers” and others who had suffered major harms because of gambling, including families who had been bereaved by gambling related suicides. Over the course of the 20 years that it took to get the change to FOBTs, based on international evidence compiled by Gambling with Lives, it is estimated that some 10,000 people will have died in gambling related suicides. For a high proportion of them FOBTs will have been the prime cause of their initial addiction and for their subsequent catastrophic engagement with gambling. We cannot allow a further mass social experiment and debate to be conducted before we take action on other highly addictive products. We must exercise a “precautionary approach” whereby gambling products must be proven safe before they can be marketed to the public. This would bring gambling into line with other legal products where there is a recognised risk: we would not consider introducing a new drug or car onto the market without it satisfying the most rigorous safety testing.

398

References 1. Griffiths, M. (1993). Fruit machine gambling: The importance of structural

characteristics. Journal of Gambling Studies. 9: 101-120

2. Woodhouse, J. (2019). Fixed odds betting terminals. House of Commons Briefing Paper No. 06946 https://commonslibrary.parliament.uk/research-briefings/sn06946/

3. Cassidy, R. et al. (2013). Fair game: producing gambling research.

Goldsmiths, University of London. https://www.gold.ac.uk/gamblingineurope/report/

4. Schull, N.D. (2012). Addiction by Design: Machine Gambling in Las Vegas. Princeton University Press: Princeton and Oxford

5. Cassidy, R. (2020). Vicious Games: Capitalism and Gambling. Pluto Press.

6. Parke, J. & Griffiths, M. (2007). The Role of Structural Characteristics in

Gambling. In G. Smith, D. Hodgins & R. Williams (Eds.), Research and Measurement Issues in Gambling Studies. pp.211-243. New York: Elsevier.

7. Livingstone, C. & Woolley, R. (2008). The Relevance and Role of Gaming Machines and Game Features in the Play of Problem Gamblers: Report for the Independent Gambling Authority South Australia. https://www.researchgate.net/publication/277870726

8. Parke, A. et al. (2016). Key Issues in Product-Based Harm Minimisation:

Examining theory, evidence and policy issues relevant in Gt Britain. Prepared for the Responsible Gambling Trust (GambleAware) https://about.gambleaware.org/media/1362/pbhm-final-report-december-2016.pdf

9. Yucel, M. et al. (2018). Hooked on gambling: a problem of human or machine

design? The Lancet Psychiatry. 5(1): 20-21 10.Livingston, C. et al (2019). Identifying effective policy interventions to

prevent gambling-related harm. Victorian Responsible Gambling Foundation. Melbourne

11.Gaskell, M. (2019) Gambling products and their impact on the individual.

Online blog: MyPov. https://mypovonline.com/mgaskell12/activity/2449/

12.Breen, R.B. & Zimmerman, M. (2002) Rapid onset of pathological gambling in machine gamblers. Journal of Gambling Studies. 18:31–43.

13.Bischof, A., et al. (2016) Type of gambling as an independent risk factor for

suicidal events in pathological gamblers. Psychology of Addictive Behaviours, 30(2), 263

399

14.Challet-Bouju, G., et al. (2016) Profiles of problem gamblers and non-problem gamblers, depending on their preferred gambling activity. Addiction Research & Theory, 24(3), 209-222

15.Boyce, J. (2019). Australia’s world-beating gambling addiction and the

deception hiding it. The Monthly, June 2019. https://www.themonthly.com.au/issue/2019/june/1559397600/james-boyce/lie-responsible-gambling

16.Russell, A.M.T. et al. (2019) Who bets on micro events (microbets) in sports? Journal of Gambling Studies. 35(1): 205-223

17.Newall, P. (2015) How bookies make your money. Judgement and Decision

Making, 10(3), 225-231

18.NatCen for the Gambling Commission (2018) Gambling behaviour in Great Britain in 2016: Evidence from England, Scotland and Wales. Gambling Commission https://www.gamblingcommission.gov.uk/PDF/survey-data/Gambling-behaviour-in-Great-Britain-2016.pdf

19.Blaszczynski, A., et al. (2004) A science based framework for responsible gambling: The Reno model. Journal of Gambling Studies , 20(3), 301-317

20.Orford, J. (2020). The Gambling Establishment: Challenging the power of the modern gambling industry and its allies. Routledge, London & New York

21.Hancock, L. & Smith, G. (2017) Critiquing the Reno Model I-IV International Influence on Regulators and Governments (2004-2015) – the Distorted Reality of “Responsible Gambling”. Int Journal of Mental Health Addiction, 15, 1151-1176

400

Gambling Disorder – The Inadequacy of Prevalence Measures Summary This note challenges the use of an all-population “problem gambling” figure, typically quoted as “stable” and “under 1%”, as an adequate portrayal of the prevalence of gambling addiction. It suggests that its use supports a focus on identifying and treating individuals rather than adopting a public health approach which requires a wider focus to include regulation on practices of the gambling industry and action on particular highly addictive products. In fact the rate amongst those who gamble245 is actually 1.7%. A better indicator, which reflects the fact that people move into and out of “problem gambling” and are harmed by gambling, shows that at least 10% of people who gamble are likely to suffer “problem gambling” or be harmed at some time246. Even this figure disguises the fact that certain products are associated with extraordinarily high levels of addiction and harm, and that some groups within the population, in particular children, are at greatest risk of developing gambling addiction. Reporting gambling addiction prevalence for the whole population disguises the very high addiction rates for young people, particularly children and young men. A staggering 40% of 11-16 year olds who gamble are either addicted or at risk. The addiction rates for young men aged 25-34 are 4 times the overall population rate. Certain gambling products – essentially Electronic Gaming Machines (EGMs) which underpin Fixed Odds Betting Terminals (FOBTs) and their online casino and slot equivalents – are highly addictive but this is masked by quoting population “problem gambling” rates because of the low proportion (3-6%) who use them. These products have addiction and at risk rates over 50% and are associated with over half of all “problem gambling” in the UK. Combining these findings on young men and specific products, the most conservative estimate of the addiction rate for young men playing EGMs is likely to be between a third and a half. The note also argues that the published estimates derived from population surveys are likely to be a substantial underestimates for a variety of reasons. We suggest that the actual rates of “problem gambling” are likely to 2 to 4 times higher than those quoted publicly. Finally, the note examines the claim that the “problem gambling” rate has been stable since the 2005 Gambling Act. We suggest that it is difficult to produce a definitive statement on the stability of “problem gambling” rates, but that it appears that the problem gambling rate amongst those who gamble has

245 Only 42% of people gamble, excluding people who do not gamble or gamble on the

National Lottery only – see ref [3] 246 Includes people classif ied as “moderate risk” or “low risk”- see ref [3].

401

actually steadily increased by 70% since 2007 with a levelling out only in 2016. This suggests that gambling products and practices of the industry have become more dangerous. Overall, this means that an effective public health policy to tackle gambling addiction must include a focus on the design and availability of some products and address the marketing and promotional practices of the industry. 1. The Problem – the Person or the Product Justifying the gambling regulation status quo often takes the form of quoting a “stable” rate of “problem gamblers”. Currently this is estimated at 0.7% of the whole population [1] who are portrayed as being potentially genetically different and identifiable through “patterns of play”. It is argued that to disrupt the leisure gambling enjoyed by the “responsible” general population by taking wider action is to infringe liberty. Instead, this “tiny minority” can be identified by “algorithms” and directed towards restrictions or treatment interventions which will allow them to “gamble responsibly”. Therefore, it is argued that there is no need to restrict the availability and accessibility of particular products or to address the marketing and upselling practices of the gambling industry. Examination of the history of gambling in Australia shows that the growth and widespread availability of ‘pokies’247 drove the huge increase in gambling and the inevitable problem gambling in that country [2]. Therefore, an alternative view of the data is that the use of overall population figures and the conflation of gambling products mask the fact that some gambling products are highly addictive and that they are associated with over 50% of problem gambling in the UK. The only reason that the overall population “problem gambling” rate remains low is that these products are used by only a small proportion of the population. Their increasing availability through the growth of online gambling and the development of new highly addictive products mean that unless action is taken on product design and availability, overall problem gambling rates will increase substantially. 2. Presenting “problem gambling” rates. Table 1 highlights that using the “stable 0.7% problem gamblers” statistic disguises the underlying problems and issues which need to be identified and addressed if we are to tackle the gambling as a public health issue. Portraying the problem as applying to a small minority of people – though it should be noted that minority still comprises hundreds of thousands of people – disguises the astonishingly high addiction and at risk rates associated with some products and for some groups of people.

247 ‘Pokies’ are the Australian equivalent of Fixed Odds Betting Terminals and are widely

available throughout Australia.

402

Table 1 - Percentage of People Harmed by Gambling [3 and 4]

“Problem Gambler” %

“At Risk” %

TOTAL %

1. All population

0.7 3.5 4.2

2. Gamblers (42% of population)

1.7 8.3 10.0

3a. Children (11 – 16) • All

• Children who gamble (11%)

1.7 15.5

2.7 24.5

4.4 40.0

3b. Young Men (24 – 35) • All

• Young men who gamble (66%)

2.4 3.6

10.5 15.9

12.9 19.5

4. Products • FOBTs

• Online casino/slots/bingo

13.7 9.2

39.2 35.6

52.9 44.8

Some commentary of the different rows in the table are provided below. 1. The overall population vs people who gamble (rows 1 and 2)

Presenting problem gambling prevalence for the whole population is misleading since it includes both people who never gamble and those who use only the weekly National Lottery draw, which is generally accepted as non-addictive. The proportion of the population who gamble (excluding the Lottery) is nearer to 42% [1], so that the rate of problem gambling amongst people who gamble is around 1.7%, not the widely quoted 0.7% for the whole population. Other tables in the report [3] indicate that rates for “regular gamblers” would be around 4 times higher than the population figures. Around 13% of people gamble 2 or more times a week. So it is clear that gambling is a highly dangerous and addictive activity for the substantial number of people who do it on a regular basis.

2. “Problem gamblers” vs at risk gamblers (columns 2,3 and 4)

Population surveys represent a snapshot of a moment in time and the assumption that they indicate a stable estimate of the number of people who

403

suffer from problem gambling is misleading. It is widely recognised that the severity of gambling disorder is episodic and varies substantially over time. An individual who has experienced major gambling problems may not be classified as a problem gambler at the time of a survey but could ‘relapse’ the next day, week, month or year [5,6,7,8]. Some attempts to recognise this are made in population surveys by recording individuals as “moderate risk” or “low risk” gamblers. Typically population surveys classify 5 times more individuals as at risk than addicted, so that it is arguable that a more appropriate estimate of the “problem gambling” prevalence rate is around 10% of those who gamble (6 x 1.7%). Longitudinal studies are required to improve understanding of the development and life course of gambling disorder and enable a more thorough analysis of these numbers. However, a true assessment of the scale of gambling harms should be based on the proportion of people who as classified as “problem gamblers” or “at risk”. 3. Population Subgroups (row 3) There have been a substantial number of research projects which attempt to identify people who are more likely to develop “problem gambling”. Most of these studies are based on data sets which are inadequate for identifying what are the real risk factors. Most contain only basic demographic and health information but nothing about an individual’s history of engagement with gambling (eg. products used, where, when, environment, win history, etc.) or their personality, family circumstances, community relationships, life events, etc. Some studies which have included a wider range of factors have identified “cheerfulness” as a risk factor for developing “problem gambling”! [9] Most of these quantitative studies fail to provide information on how “good” they are at identifying individuals who are most “at risk”. This note is not the place to explore the intricacies of quantitative modelling analysis, but it is important to note although a factor might be identified as “statistically significant” it does not mean that it is important in terms of how much it explains. The few studies which do show how much is explained by the various factors identified still show that the vast majority of what appears to be linked to addiction only explains a tiny proportion. In other words the models are not very good at predicting who might be addicted – rather it could be anyone. Finally, quantitative analysis doesn’t even claim to identify “causality” (as opposed to “association”) or attempt to explain why a particular factor might be important. However, there are some factors which even a basic statistical presentation show should be examined to understand the process of addiction and which also allow some targeted activities and interventions. It is clear that young people (aged 11 to 16) and young men (aged 25-34) are both groups at high risk of developing gambling addiction.

a. For young people aged 11-16 (for whom gambling is actually illegal) the population PG rate is 1.7% [4]. Given that only 11% of young people aged 11-16 gamble, this means that a staggering 15.7% of young people

404

who gamble are “problem gamblers”. Given that a further 2.7% are classified as at risk, 40% of 11-16 year olds who gamble are either addicted or at risk.

b. All surveys identify that problem gambling rates are much higher in younger age groups than the overall population. The most recent estimates for Great Britain [3] show that while the overall population PG rate was 0.7%, the figure for young men aged 24-35 was 2.4% - nearly 4 times the population figure. Around two thirds of this group gamble, so that 3.6% of 24-35 year old men who gamble are “problem gamblers”. This figure increases to nearly 20% if we include the “at risk” group.

4. Products (row 4) People who are not involved with gambling may retain an image of it being based around people “having a flutter” on the horses or betting on who will win a football match in their local bookies, or doing the pools and of course the National Lottery. However, the past 25 years has seen the rapid development and rise of a whole range of new electronic gambling machines (EGMs), the most infamous of which are probably the Fixed Odds Betting Terminals (FOBTs). However, technological advances have also seen the arrival of instant “in play” bets meaning that a gambler can bet on virtually any aspect of any game in any country at any time: this means that a football match anywhere in the world becomes a 90 minute permanent gambling experience. Although industry sources and developers would never use the term ‘addictive’, preferring words like “compelling”, “engaging” or “absorbing”, a number of product design elements are generally accepted to contribute to addictiveness. These include speed of play, continuity of play, stake/prize sizes, ‘losses disguised as wins’ and a range of physical design features. [10,11,12,13] These features and the products involved are discussed in more depth in the Gambling with Lives companion paper Addictive Gambling Products. However, another consequence of quoting population “problem gambling” statistics is that it disguises the fact that gambling is not a single homogenous product and that hidden within the overall product range are some products which appear to be highly addictive. Certainly they are associated with incredibly high rates of addiction and risk.

a. FOBTs were the first gambling product that the government recognised as being too dangerous to be available on the high street in their current form. In recognition of this, in April 2019 the maximum stake was reduced from £100 to £2. This change happened only after many years of campaigning and strenuous attempts by high street bookies to hide the scale of the problem. Row 4 of the table shows the addiction and at risk rate of these products is over 50%. FOBTs have by far the highest simple “problem gambling” rate of any gambling product – more than 4 times the rate for betting on horse races.

405

b. However, the same products remain available online with no limit to stake sizes. The addiction and at risk rate of online casino games and slots is just under 50%.

Analysis presented in the Addictive Gambling Products paper shows that FOBTs are associated with over half of all problem gambling in Great Britain. Fortunately only 3% of people actually used FOBTs, otherwise we could be looking at substantially higher population addiction figures. But it is clear that FOBTs and their online equivalents must be the subject of detailed investigation. Meanwhile, we should take a precautionary approach and introduce further restrictions on their format and availability. At present, published statistics do not show figures for addiction rates for people who use in game betting products, but there are indications that these are likely to be even higher than either land based or online EGMs. [14] 3. Rates are probably much higher than official published estimate. There are other considerable methodological issues in estimating the rate of gambling disorder across a population, which inevitably lead to any figures being underestimates. [2]. In particular:

• gambling addiction is recognised as the “hidden addiction” where addicts hide their disorder from family, friends and themselves, so that the accuracy of tick box self definition is highly questionable

• clinical addiction severity tools requiring a detailed discourse between treatment specialist and patient are not suitable for self-completion or use by a medically unqualified researcher and will underestimate “problem gambling” [15]

• certain key populations with known high problem gambling rates (e.g. prisoners, armed forces, homeless, students) are generally excluded or under-represented

It is also instructive to learn from estimates which have been made in other fields of health and social research. Population estimates of other “hidden” or “socially unacceptable” conditions such as smoking, drugs and eating disorders indicate that actual addiction rates may be 2-4 times higher than population surveys suggest [2,16,17,18]. This ‘multiplier’ rate is useful when considering any of the figures presented in this note. 4. Are “problem gambling” really stable? Supporters of the status quo on gambling regulation are always keen to say that, despite the “liberalisation” of gambling in the 2005 Gambling Act and the increase in the amount and types of gambling that followed, the rate of “problem gambling” has remained stable.

406

In fact it is difficult to assess the truth of this situation – partly because of changes in the approaches used to assess “problem gambling” rates and partly because of the sample sizes involved do not allow statistically significant changes to be confirmed. However, the increasing dangers associated with gambling have also been disguised by the use of the “all population” figures, rather than the rate amongst people who gamble. Table 2 – Problem Gambling Rate for All Population and for Those who Gamble Survey and Year Pop. PG

Rate %

Proportion Gambling %

Gamblers PG Rate %

BGPS • 1997

• 2007

• 2010

0.6 0.5 0.7

46 48 56

1.30 1.04 1.25

Country Health Surveys • 2012

• 2015

• 2016

0.6 0.8 0.7

43 45 42

1.39 1.78 1.67

Estimates of “problem gambling” rates for 1997, 2007 and 2010 were derived from the British Gambling Prevalence Survey (BGPS) [19]. This was a custom designed survey which provided data on participation in all forms of gambling in Great Britain, the prevalence of problem gambling and attitudes to gambling. The survey was abandoned after 2010 and estimates of gambling behaviour have been derived from a more limited set of questions in the annual country health surveys conducted in England, Scotland and Wales. It is widely accepted that substantial changes to data gathering and survey methodology inevitably have consequences on comparability of results over time. Therefore, we have to accept that there is a “data discontinuity” between 2010 and 2012 and that in fact we have two very short time series of comparable data. These both show increases in “problem gambling” rates. Very few of the changes were statistically significant – though it needs to be recognised that testing significance of ‘rare events’ using relatively small samples is tricky methodologically. However, it is also instructive to look at the “problem gambling” rate amongst people who gamble (other than those who gamble on just the National Lottery). It is arguable that this figure gives the clearest indication of how dangerous and addictive gambling products are becoming. The fourth column in table 2 shows that this has increased steadily from 1.04% in 2010 to 1.78% in 2015 - this is an increase of over 70% in an 8 year period. The table shows a drop to 1.67% in 2016, but this still represents an increase of 60% over a 9 year period.

407

Despite the changes in survey methodology, likely problems in accuracy of any estimates (explored in section 3) and issues of statistical significance this simple analysis certainly poses a very substantial question mark over whether “problem gambling” has remained stable since the 2005 Gambling Act.

408

References 22.Gambling Commission (2019). Gambling participation in 2018: behaviour,

awareness and attitudes https://www.gamblingcommission.gov.uk/PDF/survey-data/Gambling-participation-in-2018-behaviour-awareness-and-attitudes.pdf, Gambling Commission

23.Boyce, J. (2019). Australia’s world-beating gambling addiction and the

deception hiding it. The Monthly, June 2019. https://www.themonthly.com.au/issue/2019/june/1559397600/james-boyce/lie-responsible-gambling

24.NatCen for the Gambling Commission (2018) Gambling behaviour in Great

Britain in 2016: Evidence from England, Scotland and Wales. Gambling Commission https://www.gamblingcommission.gov.uk/PDF/survey-data/Gambling-behaviour-in-Great-Britain-2016.pdf

25.Gambling Commission (2019). Young People and Gambling Survey 2019. Ipsos. https://www.gamblingcommission.gov.uk/PDF/Young-People-Gambling-Report-2019.pdf

26.Reith, G. & Dobbie, F. (2013) Gambling careers: a longitudinal qualitative study of gambling behaviour. Addiction Research and Theory. 21(5):376-390

27.Forrest, D. & McHale, I.G. (2018). Gambling and problem gambling among young adults: insights from a longitudinal study of parents and children. GambleAware: London

28.Williams, R.J. et al. (2015). Quinte longitudinal study of gambling and problem gambling. Ontario: Ontario Problem Gambling Research Center.

29.Wardle, H. et al. (2017) Follow up study of loyalty card customers: changes in

gambling behaviour over time. GambleAware: London.

30.Gupta, R., Derevensky, J. & Ellenbogen, S. (2006) Personality characteristics and risk-taking tendencies among adolescent gamblers. Canadian Journal of Behavioural Science/Revue canadienne des sciences du comportement 38, 201.

31.Yucel, M. et al. (2018). Hooked on gambling: a problem of human or machine

design? The Lancet Psychiatry. 5(1): 20-21 32.Livingston, C. et al (2019). Identifying effective policy interventions to

prevent gambling-related harm. Victorian Responsible Gambling Foundation. Melbourne

33.Griffiths, M.D. (2007) Gambling addiction and its treatment within the NHS.

London, British Medical Association

409

34.Gaskell, M. (2019) Gambling products and their impact on the individual. Online blog: MyPov. https://mypovonline.com/mgaskell12/activity/2449/

35.Russell, A.M.T. et al. (2019) Who bets on micro events (microbets) in sports?

Journal of Gambling Studies. 35(1): 205-223

36.Samuelsson, A. et al. (2019). Gamblers’ (mis-)interpretations of Problem Gambling Severity Index items: Ambiguities in qualitative accounts from the Swedish Longitudinal Gambling Study. Nordic Studies on Alcohol and Drugs, 36(2), 140-160

37.Liber, A.C. & Warner, K.E. (2018). Has underreporting of cigarette

consumption changed over time? Estimates derived from US national health surveillance systems between 1965 and 2015. American Journal of Epidemiology. 187(1): 113-119

38.Morral, A. et al. (2000) Hardcore drug users claim to be occasional users:

drug use frequency underreporting. Drug and Alcohol Dependence. 57(3): 193-202

39.Strother, E. et al. (2012). Eating disorders in men: underdiagnosed,

undertreated and misunderstood. Eating Disorders. 20(5):346-355 40.Wardle, H. et al. (2010). British Gambling Prevalence Survey 2010. Nat Cen

for the Gambling Commission https://www.gov.uk/government/publications/british-gambling-prevalence-survey-2010

410

Expanded Answers to Committee Questions House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry (25th February 2020) Liz and Charles Ritchie, and Jo Holloway gave evidence to the HoL Select Committee on Tues 25th February, 2020. The Committee asked for some additional evidence. This has been supplied in a number of notes. This note briefly expands on 2 of the questions which members of the Select Committee asked during the formal evidence session held on 25th February 2020. We ask that the Committee considers this extra information alongside the answers recorded in the transcript. Unfortunately the evidence session was not able to run for the allotted time and on reflection we felt that our answers to these 2 questions were rather hurried and lacked clarity. Q175 The Lord Bishop of St Albans: Where are the gaps in the research that we need to fill? Additional Response: I would like to summarise the key areas of research which need to be addressed. This does not represent a complete picture of research which is required, rather they are some of the key areas that we have identified as directly arising from our work and investigations. 1. Suicide and Gambling – it is clear that there is a long established link

between gambling and suicide (and we have provided an additional note on this). However, to the immense frustration of GwL families, there is still no robust assessment of the number of gambling related suicides each year in the UK.

We believe that one of the greatest contributions that GwL has made to the debate and campaign for better regulation of gambling is that we were the first people to highlight the undeniable link and provide an estimate of the scale of gambling related suicides in the UK (250-650 deaths per year). We also provided proof that these deaths involved “bright, happy, ordinary young people from happy families with great futures ahead of them”. The young people dying did not have a range of mental health or social issues; the deaths did not all involve high levels of debt; all the young people had started gambling as children. The clear message is that gambling can kill anyone. In our earliest meetings with those responsible for gambling regulation, research and treatment providers the link between gambling and suicide seemed to be a revelation and certainly none had any appreciation of the number of deaths. One of our earliest demands of the Gambling Commission and GambleAware was that they should commission a significant quantitative study of gambling and suicide, probably along the lines of the “psychological autopsy” study which formed the basis of the Hong Kong study referenced in our paper. Some 2 years later, the only study on gambling and suicide which has been commissioned was a small scale exercise involving analysis of the 2007 Adult Psychiatric Morbidity Study. While the study confirmed the higher suicidal ideation and attempts associated with “problem gambling” and identified gambling as a factor in suicidal ideation and attempts even after all other factors were accounted for, this is a totally inadequate response to our demands and the need for us all to know the scale of deaths.

411

The lack of progress on commissioning any significant research on quantifying gambling suicides highlights a major concern that many people involved in campaigning for the reform of gambling regulation and gambling researchers: the industry still exercises huge influence on those responsible for regulation, education and treatment. The message that gambling contributes substantially to suicides in the UK would provide a massive impetus for change. In addition to a large scale quantitative study, we would also seek a wider research programme to understand more the motivation and development of suicidal thoughts and attempts which are related to gambling.

2. Products and Practices – we have provided a separate note on which products are most addictive and dangerous. That note explores some of the reasons why there has not been adequate research to understand the addictiveness of some products and what characteristics underlie this. Similarly, there is even less research on the impact of a range of practices of the industry including:

• targeted marketing and advertising • inducements such as free bets/spins and bonuses • VIP schemes • affiliate marketing • lack of affordability checks • deposit limits • time limits • methods for identifying “problematic play” and interventions

This research will require that gambling operators engage fully in the research by providing access to the massive sets of data which they hold on customers. See below requirement for an Independent Data Repository.

3. Longitudinal Studies – there is a desperate need to be able to understand the development and progress over time of gambling disorder. Currently UK studies have to rely on “cross sectional” data sets (ie. surveys taken at a particular point in time). This allows some exploration of links between different factors, but it is virtually impossible to be able to study “cause and effect” without a longitudinal study.

Sweden has a long running longitudinal study which is partly enabled by the fact that gambling disorder is diagnosed within primary care in Sweden so that it is possible to identify a group of people to be able to follow over time. However, it is necessary to conduct longitudinal studies which include people not diagnosed with gambling disorder in order to eb able to understand the development of the disorder. A major problem with longitudinal studies is the cost and length of time that it takes to get any meaningful results. However, we feel that it is essential to establish a substantial population wide study and number of targeted longitudinal studies in order to understand the effectiveness of:

• treatment interventions – there is a lack of rigorous monitoring and follow up of patients receiving treatment for gambling disorder to understand what treatments work and what further support may be required; we have concerns that some treatments may even be “contra-indicated”. (See additional notes provided on treatment).

412

• education interventions – there is a shocking lack of rigorous studies to understand the impact of the very limited set of ‘educational/awareness’ activities which take place with children and adults; programmes are currently being offered with little theoretical basis and no proof of long term impacts and outcomes.

4. Independent Data Repository – gambling operators hold a massive amount of data on all aspects of their customers. This data is a very powerful resource in terms of being able to understand an individual’s engagement with gambling, including the development of serious problems. It also holds the clue to what products are the most dangerous and addictive.

We recognise that this data is both individually and commercially highly sensitive. But we believe that independent researchers should have free access to an anonymised version of this data set in order to be able to undertake a wide and powerful set of studies. We also recognise that it is a substantial undertaking to establish and maintain such a data set. Therefore, we recommend that an Independent Data Repository should be established. We also recommend that gambling companies should be required to supply data to the repository in an agreed format as part of their licensing conditions. We are aware that there has been an initial feasibility study of such a repository, undertaken by at Leeds University. We commend this report to the Committee.

5. Research Structures – in addition to the suggestions for research to be carried out. We believe that changes do need to be made to the basic structures and processes for commissioning gambling research as follows:

• Independent funding of research through a statutory levy on the gambling industry – we believe that the inadequacies of the research programme around gambling is largely due to the influence of the gambling industry in both determining the content and scale of the programme. This must change. The statutory levy should be used to pay for research, education and prevention, and treatment and needs to be administered completely independently of the industry.

• Gambling research centres – the gambling research community in the UK is far too small. This is partly due to the funding and reputation of gambling. We believe that a small number of gambling research centres should be established – probably linked to universities. This would allow both the development of a healthy and diverse gambling research community and access to a pool of expert researchers who could provide ‘immediate’ advice for policy makers, regulators and others.

• Open call for research – however gambling research money is allocated, we believe that one element should be an open call for research proposals. While it is sensible to construct a research programme to meet the identified needs of policy makers, we need to recognise that researchers, experts by experience of gambling harms and others are likely to be able to identify issues for research based on their own detailed knowledge of gambling and gambling harms. We believe that there should be an open call for research ideas against a substantial fund allocated from the statutory levy.

413

Q182 The Chair: Give us your best single recommendation. In addition to Charles Ritchie’s call to say that the industry cannot be left to self-regulation and that it had “demonstrated its inability to implement change without pressure from outside”, he would like to have added: “A key illustration of the industry’s inability to implement change is the example of GAMSTOP. Back in 2013 the development and implementation of GAMSTOP was handed over to “the industry” by DCMS and the Gambling Commission. By a terrible coincidence, on the 23rd November 2017 – the day after our son Jack had taken his own life because of his gambling addiction – Lord Browne had secured a debate in the House of Lords on online gambling. During the debate he referred to the fact that during the debate in 2014 he had been persuaded to withdraw his amendment to require a ‘multi operator self-exclusion scheme’ for online gamblers with the guarantee that this was in hand and that substantial progress would be made in 6 months. In fact development took a further 5½ years. Now in 2020, the Gambling Commission has only just introduced the requirement that online operators must sign up to the resulting product GAMSTOP. There are still concerns about its reliability. It is inconceivable that a multi-billion high tech industry could not develop a self-exclusion tool within months if it had been to their advantage. However, they prevaricated and dragged their feet delaying implementation for 5 years. If they and the Gambling Commission and DCMS had developed GAMSTOP in anything approaching their promised timescale, our son Jack would have been here today. This is not an industry that can be relied upon to “do the right thing” or to do it quickly enough. The days of light touch and inadequate regulation must be consigned to the past. The transcript of the HoL debate on 23/11/17 can be found at: https://hansard.parliament.uk/Lords/2017-11-23/debates/4939B7F6-844C-40C0-A420-38E931AE7DDB/OnlineGambling The key extract is as follows:

“My first engagement with online gambling came in 2014, when I responded to the Gambling (Licensing and Advertising) Act, which was narrowly concerned with online gambling. During the debates on the Bill I argued that online problem gamblers are discriminated against because they cannot access one of the main protections for problem gamblers—self-exclusion—on anything resembling a level playing field with offline problem gamblers.

…

In response to this I proposed, through amendments, multi-operator self-exclusion, whereby the online problem gambler needs to self-exclude only once with the Gambling Commission or its nominated body, and all online sites with a Gambling Commission licence are required to respect the self-exclusion. On Report the Government announced that they were finally persuaded of the need for multi-operator self-exclusion, but explained that they did not want to implement it on a statutory basis. I was asked to withdraw my amendment on the basis that the Government had asked the Gambling Commission to introduce multi-operator self-exclusion and it would make substantial progress towards its realisation in the next six months. Mindful of the Government’s willingness to compromise, I decided to withdraw my amendment. In June this year it was

414

finally announced that the Remote Gambling Association would run multi-operator self-exclusion—or MOSES, as it is now referred to—for the Gambling Commission, and that it would be called GAMSTOP and would be up and running by the end of the year.

As we address this subject nearly four years later, I make the following points. …

First, it is regrettable that nearly four years on from when the commitment was made we still do not have multi-operator self-exclusion up and running. We cannot afford to waste any more time.

415

Gambling with Lives Evidence to the House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry

Gambling Disorder Treatment

This evidence describes expert by experience concerns regarding the treatment system for gambling disorder. The Gambling with Lives (GwL) families, bereaved by gambling related suicide, believe that lost family members who were suffering from gambling disorder would be alive today if they had been provided with appropriate referral and adequate treatment. GwL Trustees include people with Director level experience in NHS commissioning, Consultant NHS clinical (mental health) experience, and senior Civil Service research experience.

Following the deaths the GwL families have been through a process of attempting to learn about the current system and provision. Our standpoint has been to request information from the current commissioners and providers - Gamble Aware, GamCare and the NHS. We aim to collect evidence and to engage in constructive debate in order to improve services and save lives. To date our experience has been one of a systematic refusal to provide answers and documents from GambleAware and GamCare. In contrast the NHS have been collaborative, prompt and informative. However, it is also clear that the NHS and CQC have not had the remit or the political backing to take a systemic overview or to raise concerns about safety.

During the past two years we have raised concerns multiple times with Ministers, the APPGs on Gambling Related Harm and Suicide Prevention, NHS England, the CQC, the Gambling Commission, GambleAware and GamCare. We have become increasingly frustrated with the systematic refusal to listen to bereaved families and the organisational inertia that continues to fail to prevent deaths.

It has also become clear that Gamble Aware and GamCare continue to promote their organisations as “expert” commissioners and providers despite the safety concerns we and others have raised which we believe is inappropriate, undemocratic and clinically unethical.

This paper describes our broad conclusions and recommendations and follows the attempts to find answers. Although this paper details our concerns about the current system, of course as retired senior NHS professionals, we have ideas about solutions to contribute to the debate – but we leave those for a future paper.

Conclusion and recommendations

• At GwL we have come to the conclusion that the current system of treatment of gambling disorder in the UK has been and is still totally inadequate in commissioning, specification and provision and in our view this continues to result in avoidable deaths.

• GwLbelieves that only the NHS can provide the systematic pathway analysis, commissioning and clinical accountability for national treatment for such a prevalent and life-threatening condition. We believe that there is an urgent need for NHS England to set up a pathway working group to

416

provide clear instruction to primary and secondary care about referral pathways and the nature of provision for disorder severity tiers. GwL will be writing to NHS England and DHSC to request that this is done.

• GwL believes that it is inappropriate and unethical for small charities funded by the industry that creates the life-threatening illness that they attempt to treat, to promote themselves as more expert than the NHS in pathway design, service commissioning and provision. We believe that if the NHS had the remit to develop a comprehensive system integrated with the existing robust structures, the true level of harm and need for services would be revealed. It is difficult to avoid the conclusion that there may be vested interests at work in suppressing this information.

GwL believes that the services currently provided by GamCare and its sub-contractors, commissioned by GambleAware, do not meet the needs of people experiencing gambling disorder, and may be contraindicated given that most, possibly all patients currently referring are more than double the threshold for psychiatric diagnosis and treatment. In summary this is because:

• we have not been provided with evidence of assurance procedures, robust governance or adequate clinical quality control systems,

• we have not been provided with evidence that the GamCare Helpline (currently the main referral pathway mechanism) has triage criteria or staff with the competencies and clinical support required to fulfil the specification to screen and triage to appropriate treatment,

• specifications do not offer evidence of a model of gambling disorder that is compatible with the evidence based NHS model and that includes the nature of addiction to gambling, the role of the environment in the creation of the disorder, the need for abstinence or the risk of suicide

• there is evidence that the development of a coherent pathway design could be disrupted by lack of collaboration and that GamCare (currently the most highly funded provider in the system) may be acting as a rival provider to the NHS.

• the reliance on discretionary funding from the gambling industry appears to create an inappropriate dependence on the industry, constraining the charities for fear of losing funding, leading to the failure to be explicit about the full extent of harms, causes of harms and risk to life

1. The NHS

NHS commissioning and provision has been restricted to providing accommodation for one clinic in London until this year. Although specialist clinics are now being commissioned with funding from the NHS Long Term Plan (albeit minimally), this still does not include any systemic pathway plan that covers primary care including a complete failure to include systematic GP training. GP failure to diagnose gambling disorder has directly resulted in deaths and will

417

feature in the inquest for Jack Ritchie for which Article 2 of the Human Rights Act is engaged.

A comprehensive NHS plan from primary to specialist care was indicated by the BMA scientific committee in 2007 (Ref 1). As far as we can see there has been a complete failure to implement these recommendations and this failure has cost many lives – probably thousands – including lives of family members of the GwL families.

The DCMS Consultation on proposals for changes to Gaming Machines and Social Responsibility Measures (October 2017) (Ref 2) presented information about apparently comprehensive provision in primary care (including a GP diagnostic tool), specialised mental health services and local authority addiction services as well as the IAPT programme. As far as we can see this information is not based on evidence of commissioning or service specification by DHSC. This information also seems to be based on a lack of recognition of the specialist requirements of services required to deliver treatment to life-threatening serious psychiatric conditions.

2. Gamble Aware and GamCare

Currently the main commissioning and provision is from the third sector – Gamble Aware and GamCare and in the view of GwL these organisations are not fit for purpose on multiple grounds. These include the following:

2.1 Lack of democratic accountability to the State.

The usual commissioning and governance systems that normally provide assurance on NHS treatment for life threatening conditions are not in place and there is no overview and scrutiny of the current gambling treatment system equivalent to the health service which is accountable to the Secretary of State for Health and Social Care. We have not received evidence that the following mechanisms of scrutiny are in place:

• Open Board meetings and published papers. • Non-executive directors and governing bodies including lay members. • Robust service user groups and voice. • Public sector procurement processes and monitoring and scrutiny from

commissioners. • A Patient Advisory and Liaison Service to consult. • Local Authority and elected members, through defined processes. • Oversight by and accountability to the Care Quality Commission, NHS

Improvement, NHSE, DHSC and ultimately Parliament. • Ombudsman capable of overseeing treatment complaints • An embedded culture of learning from mistakes in the interests of service

improvement

So families who have lost family members have found that it is not clear who is accountable for treatment failures. GamCare is funded by GambleAware, which states it is a quasi-public sector body, following best practice in health and social care commissioning. GamCare states that it is the largest provider of support and treatment for those affected by gambling harms. However, it seems that GamCare is also a secondary commissioner. GambleAware passes money to GamCare, who then commission a variety of ‘partners’ to deliver treatment (it is

418

not demonstrated what value is added by having GambleAware commission GamCare to commission others, what administrative costs this creates, and how accountability works between these two commissioners). That GamCare is not transparent regarding these commissioner and provider relationships and does not publish disaggregated statistics for different providers in its network, gives further concern regarding accountability arrangements. The provider network is extremely opaque with no clarity as to variation between providers in outcomes, quality and access.

In line with the requirements for transparency of public sector bodies Gamble Aware and GamCare should provide documents and data when requested. Instead, engagement with GwL has been characterised by generalised statements of intent, failure to provide evidence and increasingly aggressive defence of the status quo. Despite repeated requests, both organisations have declined to provide any evidence of any of the above mechanisms. We have not seen evidence of quality assurance, continuous improvement processes or involvement of people with lived experience, and there is no external validation of the generalised statements of reassurance provided. It would be helpful if these charities could provide evidence of being learning organisations by providing information on frequency of situations which have resulted in a change to algorithms and processes.

In the experience of families bereaved by suicide, it would appear no one is accountable or considers themselves responsible. Small charities with unreliable funding cannot be expected to provide the appropriate clinical governance and legal assurance necessary for national commissioning and provision on this scale and severity. GwL believes that the continued promotion of these organisations as appropriate and adequate for this task is unethical. It is a fact that you cannot run a national treatment system safety and effectively on c£10 million per annum, and making claims of competence, equivalence, quality and outcomes is at best naïve and dangerous. This is misleading the public and putting lives at risk.

2.2 Gambling Industry influence

Currently all gambling treatment third sector providers are reliant on gambling operator money. GamCare receives industry money from GambleAware and also directly from operators. This kind of discretionary funding leaves the treatment system subject to a lack of stability and creates a dependence and accountability only to the gambling industry.

There seems to be a reluctance to be transparent about the number of GamCare Board members who have links to or who have come from the gambling industry. This is not to disparage the individuals, but simply to note the lack of transparency and acknowledgement of potential conflicts of interest and it is hard not to feel vested interests are being defended at the expense of the people these charities are meant to serve. Currently GamCare has two Board members with a background in addictions, and the other five come from commercial backgrounds. Of course, commercial experience on a Board can be useful to charities particularly those dependent on raising money from industry. However, backgrounds in big business, finance, pharmaceuticals, oil and gas, leisure, alcohol and gambling are likely to influence worldview and consequently decision-making. Importantly, those that defend GamCare’s existence are not

419

suitably qualified to do so, from legal practices to individual consultants making profit themselves from gambling operators.

To be specific about GamCare Board links to the gambling industry:

• John Hagan has been GamCare Deputy Chairman, for 14 years, since 2006. He is a founding partner of the law firm Harris Hagan, whose is business is gambling law, compliance and regulation – for an industry notorious for lack of compliance. The firm’s website provides quotes praising the firm for its ‘understanding’ of the Gambling Commission and what operators want. The website states: ‘We view ourselves as a business within the gambling industry, which happens to be a law firm, rather than external advisors to the gambling industry. Our future success and sustainability is inextricably intertwined with that of the gambling industry’ (Ref 3)

• GamCare chairman Sir Ian Prosser was Chairman and CEO of Bass plc (Ref 4), brewery, hotel and pub business, which owned Coral the bookmakers.

• Dominic Harrison worked for Bass plc ‘before joining Ladbrokes in 2002 as Commercial Director. He spent nearly a decade in the gambling sector becoming CEO of Gala Coral in 2008’. (Ref 4) He worked with Neil Goulden, who was executive chair of Gala Coral, and chair of the Association of British Bookmakers while being chair of GambleAware – at the time the organisation attracted criticism for providing research it claimed did not support a reduction in FOBT stakes.

2.3 The Responsible Gambling Model

In the experience of GwL families GamCare and GambleAware have systematically refused to engage with expert by experience views on the reduction of stigma and the role of the “responsible gambling” model in increasing the risk of suicide. The model of gambling disorder promoted by both charities does not include the role of environment (including product characteristics and availability or industry practices) in initiating and progressing addiction and in triggering relapse. A cursory look at the GamCare website, including messages to those seeking help, information on treatment and training, self-help materials and Safer Gambling Standards for industry, are all within the framework of ‘responsible gambling’.

Addiction is framed as an individual problem related only to personal psychology and relapse is seen as triggered by personal failures of impulse control. GwL families view this “individual responsibility” model as implicated in the deaths of their family members who in their suicide notes took sole responsibility for their addiction although they were addicted as children to products and in environments that they and their families were told were “safe”.

GamCare continues to state publicly that for the organisation to comment on addictive products and predatory practices would be “campaigning”. It is a strange position for a charity to take – to state that it has no comment on that which causes harm to its beneficiaries – no judgement about gambling industry practice and products which cause harm to those the organisation purports to treat and support. We believe that it is disingenuous to characterise this position (which in the past has included a formal Board position of neutrality on FOBTs) as “supportive” to addicts and as an attempt to minimise stigma and encourage people to seek treatment. Our view is that it is an attempt at sleight of hand to place this within the received therapeutic “non-judgemental” standpoint and to

420

refuse to listen to the loud voices of bereaved families and recovering addicts which say that the opposite is the case. We all have attempted to tell these charities that a shared allocation of responsibility with industry and state and understanding of the role of addictive products and predatory practices would go much further to remove stigma and decrease the self-blame that characterises addictive suicidal ideation. Self-evidently gambling companies are accountable only to shareholders and have an ultimate commercial imperative. It is difficult to avoid the conclusion that the inappropriate structure of funding limits the ethos and actions of both charities and makes them unable to speak publicly about the role of addictive products and predatory marketing practices in the creation of the next generation of addicts and the increase in severity of addiction in the already addicted.

We note that the large gambling corporation GVC has funded GamCare and YGam to provide youth education. This education is also in the responsible gambling framework, unchallenging to industry and its extensive investment in normalising gambling, capturing and grooming a younger generation.

2.4 Conflicts of Interest

• GamCare accredits gambling companies with its Safer Gambling Standard. Gambling companies use a GamCare kitemark as endorsement of their ‘safe’ practice, for the very people who go on to be harmed, and then come to GamCare for treatment. It is hard to see how this does not constitute a conflict of interest. It appears GamCare has signed off operators in the past who have received substantial regulatory settlements, while some on the list of those currently accredited are likely to be met with dismay by Experts by Experience. (Ref 5)

• Gamble Aware’s outline specification of gambling treatment services (Ref 6) clearly attempts to outline a National Treatment model containing all levels of treatment that mirror the stepped care model for mental health treatment tiers 2 – 4 while there is no evidence that the organisations have made adequate links into existing NHS systems.

• GwL believes that there is evidence of a clear conflict of interest in allowing GamCare to be commissioned to provide the National Helpline which is the main referral point into the system which now includes the NHS specialist clinics in London, Leeds and Manchester and others proposed as part of the DHSC long term plan. In the absence of a systemic NHS owned pathway and by serving as the primary point of triage and access to gambling treatment services, GamCare determines the triage system, the number of referrals into the partners the organisation commissions and the number of people who are able to access NHS treatment. The service proposal for the Leeds NHS clinic specifies the severity score which indicates psychiatric diagnosis and requires NHS referral. The severity score of service users currently accessing GamCare commissioned services is more than double this threshold. However, the NHS have recently confirmed in a letter to GwL (March 2020) that there have been no referrals into the Leeds clinic from the helpline.

• The apparent failure of GamCare to implement the GambleAware service specification for helpline provision and triage seems to provide further

421

evidence of a conflict of interest surrounding the helpline. Although the Gamble Aware specification references a triage and referral system it seems that the helpline advisors are not qualified or registered which would indicate competence to undertake the clinical steps necessary to screen including assess risk and refer on with appropriate clinical information. There seems to be confusion between the operation of a general helpline (which can be accredited by the Helplines Partnership) (Ref 7) and specialist mental health or clinical triage with crisis operating standards. The NHS runs a health helpline – NHS 111. This is not comparable with the GamCare helpline. NHS 111 has algorithms, follows NICE guidelines and has a pool of clinical advisors and senior clinical advisors. NHS111 is intertwined with the NHS pathway, so clinical decision making is prompt, efficient and responsive to risk, including risk of immediate harm. In conversations with GamCare there also seems to be a worrying confusion between management and clinical escalation and risk management – having a manager on call for helpline operators who are alone at home is not the same as NHS procedures which include at hand cover by senior clinicians.

• GwL have repeatedly asked for the triage criteria used by the helpline, for the suicide protocol used and for the number of referrals to which service. We have had no answers to these questions or evidence that people are getting the right care. GwL are concerned about current statements from GamCare that seem to reframe the triage criteria for referral into NHS service or GamCare commissioned partners as determined by case complexity rather than severity. As far as we are aware the PGSI severity scoring is an internationally researched and well recognised measure and that there is little justification in operating with a different triage process.

• GwL believe that the opaque nature of the helpline and refusal to provide triage criteria and evidence that staff are qualified to operate these is a risk to life.

2.5Inadequate model of Gambling Disorder, failures of commissioning and continuous improvement

There seems to be a systematic refusal to recognise the life-threatening severity of gambling disorder in the commissioning by GambleAware and secondary commissioning and provision by GamCare. This includes:

• A service specification that does not refer to treatment of “addiction” or detail requirements for suicide risk assessment, crisis referral and management. Despite repeated requests in person and by letter GamCare continues to provide generic reassurance regarding safeguarding and suicidality but no assurance evidence of protocols, process or opportunities for learning. There has been a systematic refusal to provide data, for example, on safeguarding incidents, serious incidents, suicidality, complaints, suicide risk assessment tool and training. We have asked and not been provided with information on the number of referrals to emergency services. Given the published research on suicidality (Ref 8) it should be possible to calculate how many of the 30,000 contacts with the helpline should require referral into NHS crisis services which would enable an estimation of the effectiveness of helpline triage and pathway provision.

422

It is difficult not to see the refusal to provide this information as evidence of a refusal to be subjected to service improving scrutiny.

• A treatment model specification that aims for “moderated gambling” that seeks to return addicts to “safe” gambling in contrast to the NHS evidence-based model which works with and aims for abstinence.

• Lack of systems for long term management and follow-up post discharge, which seem to be linked to characterisation of relapse as internally triggered rather than initiated by environmental influence such as advertising and predatory marketing of addictive products.

• Refusal to provide medium and long-term outcome data and failure to provide evidence of follow up procedures and long term case management.

• Failure to monitor deaths post treatment, initiate critical incident reviews and root cause learning from deaths.

It is difficult to avoid the conclusion that it might benefit the gambling industry to have treatment specified, commissioned and provided by charities that systematically fail to monitor the deaths that result from the condition and to recognise the life-threatening severity of the psychiatric condition induced by gambling on industrialised, repetitive, fast paced electronic products and that collude with industry favouring models of the illness.

2.6 Inadequate specification of levels of competence and training

As far as we can tell, there has been no external validation or accreditation of training and registration required for tiered specialist gambling disorder provision or validation of GamCare’s internal induction and training. We understand that treatment practitioners in GamCare provider services have a professional qualification at NVQ 3 level. This is a level down from Improving Access to Psychological Therapies (IAPT), which has clear tiers and skills required for different tiers, and interventions against clinical need, as a national service with a genuinely stepped model. NVQ level 3 also does not indicate competence in the relevant modality. For example, being qualified as a mental health nurse does not mean one is qualified to provide Cognitive Behavioural Therapy (CBT) or other psychosocial interventions, any more than a medical doctor who has worked in paediatrics for ten years is fit to perform heart surgery.

GwL believe that it is essential to commission a specification of client need matched to clinical competence. This must include matching the qualifications and Continuous Professional Development (CPD) of each worker against the PGSI and CORE criteria of their client group.

GamCare have not provided information on training and competence of counsellors in in the providers they commission, or how as commissioner they assure themselves in this area. There is no evidence that a generic person centred counselling training plus minimal internal induction provides competencies to treat the psychiatric condition of gambling disorder with high levels of severity and suicidality.

423

3. Narrative of learning about the system and attempts to alert authorities

3.1 Initial Experts by Experience (EbE) experience

Our concerns were prompted by our families’ reports about the treatment their sons had received, where they had sought help for their addiction to gambling. Broadly, there were two areas of concern – GP response and “specialist” services.

Our experience of the GP response was that GPs uniformly failed to diagnose gambling disorder although diagnostic tools for other addictions were sometimes administered (e.g. alcohol addiction). Occasional referral into IAPT also resulted in failure to diagnose gambling disorder with symptoms of anxiety, depression and suicidal ideation remaining unconnected to gambling activity and treated (unsuccessfully) as separate conditions.

Our families’ experience of services marketed as specialist was generally that the service was poor, with a limited number of sessions offered, no follow up, and little availability. In particular, one lost son’s experience was that the service told him he was cured and that he could return to limited gambling. He was not followed up post treatment. Although a critical incident review has been requested neither the local service nor Gamcare have been willing to undertake this process.

3.2 Attempts to find information and raise concerns

As a result of these concerns, we set about finding out more. We asked questions of GambleAware about how treatment was planned and funded, and asked Gamcare about the specific case referred to above. Although both GambleAware and Gamcare were willing to meet us, we had a limited response to our concerns, and both organisations either didn’t respond or avoided many of our questions, and appeared uncomfortable with the challenges we posed.

The key issues we identified include:

• failure to recognise addiction as a problem, with no evidence that the service considered itself to be treating an addiction and no aim to help patients achieve abstinence

• failure to recognise the risk of suicide associated with gambling addiction, with no evidence of assessment of suicide risk

• staff not required to have experience or training in gambling addiction • a weak service specification • no evidence of quality assurance – such as audit – or accountability in the

service

These concerns were – and are – based on the service specification used by GambleAware to commission the current service (Ref 6), and the guidance GamCare issued to its staff, and its subcontractor staff (no longer available online, GwL have a paper copy). The words “suicide” and “addiction” seem to be absent from these documents.

June 2018 GwL raised a concern and met with the CQC about lack of accountability and regulation of 3rd sector provision of gambling disorder treatment. Although Dr Paul Lelliott (CQC Deputy Inspector & Lead for Mental Health) expressed serious concern, it was clear that the CQC had no remit to

424

raise the issue or the funding to undertake inspections. He wrote to GwL “I would not … want to raise your hope that there is a prospect of bringing such providers into the scope of regulation by CQC.”

July 2018 GwL met with Gamble Aware’s Director of Commissioning. We were not reassured by the response we received, which included a failure to provide information and a failure to implement agreed actions.

September / October 2018 a summary of our concerns (as summarised above) was sent to the Gambling Commission, and which we understand was used in a provider workshop in late 2018. GwL requested but was refused entry to the meeting.

December 2018 / January 2019 the Gambling Commission set up a meeting with GambleAware and Gamcare. Following that meeting we sent a letter summarising the meeting and again raising concerns about safety in detail. GwL received no response, including no provision of the information promised in the meeting (e,g. the suicide protocol and triage criteria)

January 2019 GwL raised a concern with NHS England’s Director of Mental Health, Claire Murdoch by email about the safety of the treatment system and the failure to prevent deaths. GwL included reference to the meeting and communication with the CQC and its lack of remit and funding. We also referred to the lack of response and refusal to engage on the part of GambleAware and GamCare. Ms Murdoch responded with an honest response: “I don’t have easy answers in the short term to some of the concerns you have raised” and directed us to the NHS Long Term Plan promise of specialist clinics. GwL appreciated this honesty but also raised the issue of siting the clinics within the current primary and secondary care NHS infrastructure which necessitates the development of a clear care NHS pathway and clinical training in the diagnosis and tier 2 & 3 treatment of gambling disorder. It was clear that there was no remit or political backing for the NHS to take a strategic view or to undertake due diligence investigations about the partnership with GambleAware and GamCare required by the NHS Long Term Plan. Since this letter we have raised this issue of the development of an NHS Care Pathway both with NHS England and DHSC and as far as we can see there remains no political remit for instructing this vital life saving piece of work.

June 2019 GwL wrote to the Chair of Gamble Aware, to escalate our concerns. In addition to repeating the issues raised in all the correspondence above we included the following concerns about GamCare treatment and services:

• Confused and limited understand of gambling disorder and lack of evidence base for counselling

• Severity of presentation, refusal to supply suicide protocol, triage criteria and care pathways into NHS evidence based treatment with the relevant risk management and governance

• Risk of discharge process and lack of follow-up of particular concern given the volatility of suicide risk and extreme risk of completed suicide on relapse

• Funding of GamCare in May 2019 of a further £3.9 million without a procurement exercise or standards review

425

• Risk that Gamble Aware and GamCare are seeking to compete with the NHS rather than collaborate.

July 2019 The response from the Chair of Gamble Aware was evidence that our concerns are not taken seriously and indeed indicated a thinly veiled hostility to any scrutiny. We received only generalised statements of an intention to collaborate with the NHS, commissioning objectives and a generalised assurance that gambling addiction is taken seriously. The letter did not include any attempt to provide evidence of these statements. The lack of publication of safeguarding procedures was admitted but dismissed as “detail”. Particularly worrying was the apparent lack of understanding that treatment can be contraindicated if it is inappropriate or inadequate and can increase the risk of suicide. That this was followed by an invitation for GwL families to support promotion of GamCare services seemed to indicate a complacent indifference to the suicide risk and particularly the deaths of GwL family members that prompted these questions.

July 2019 We replied indicating our disappointment and restating all our concerns particularly noting again the safety concerns, the apparent rivalry and lack of collaboration with the NHS and the absolute failure to provide evidence of assurance and governance. We received no reply.

September 2019 In response to the evidence submitted to the APPG on Gambling Related Harm, GwL provided evidence of a list of discrepancies between that evidence and the experience of GwL members. We also submitted a list of questions and requests for evidence that the APPG could ask following the Gamble Aware and GamCare’s failure to supply answers to GwL. We have written to the APPG secretariat to request that this evidence could be shared with the Lords enquiry.

January 2020 GwL wrote to the NHS Director of the Northern Gambling Service requesting assurance on safety and clinical models and requesting a response to the same scrutiny directed at Gamble Aware and GamCare.

March 2020 The NHS response was very reassuring about the quality and attention to risk of the NHS delivered services and demonstrates to us that many of the concerns we have raised about GamCare’s services do not apply to the NHS clinics – including the application of NHS clinical quality standards to the service and recognition of the nature of the addiction and the risk of suicide.

However the response also indicates that our initial concerns about GamCare remain valid (through the lack of evidence to the contrary) and we are concerned that the NHS continues to face constraints in current ability to act to resolve the problems. The phrase used in response to each concern about GamCare governance and safety procedures is that the NHS “would expect” these to be in place. We do not think that “expectation” is the appropriate governance mechanism given that lives are at risk. It is difficult to avoid the conclusion that if the NHS had conducted a due diligence process, it would not partner with GamCare due to lack of assurance about service quality and therefore patient safety.

In addition, a new specific concern is raised by the letter – the nature of the partnership with GamCare. It is evident from this letter, and from the specification for the GamCare Gambling Helpline (Ref 6), that there is no capability or expertise for assessment of needs of those who contact it – it is

426

therefore unfit to act as the point where people can be triaged to either GamCare or NHS services. There is also no capability to assess for suicide risk.

The fact that there are no referrals from GamCare to the NHS service raises a further concern that GamCare appear to be acting as a rival provider. Although the presenting referrals are double the threshold for internationally recognised psychiatric diagnosis (with accompanying suicide risk), GamCare continue to refer only into partner 3rd sector providers who are commissioned to provide only generic counselling for mild to moderate severity, rather than co-operating to get people into the right treatment, despite the evident differences in competencies, qualifications and registration plus a remit from DHSC to collaborate.

REFERENCES

1. Gambling addiction and its treatment within the NHS. A guide for healthcare professionals 2007. http://bmaopac.hosted.exlibrisgroup.com/exlibris/aleph/a23_1/apache_media/BK9UCVL5MDYMU1YD6MQ2RM48IAVNXE.pdf

2. DCMS Consultation on proposals for changes to Gaming Machines and Social Responsibility Measures (October 2017) https://www.gov.uk/government/consultations/consultation-on-proposals-for-changes-to-gaming-machines-and-social-responsibility-measures

3. Harris Hagan website: https://www.harrishagan.com/about/

4. GamCare website: https://www.gamcare.org.uk/about-us/board-of-trustees/

5. GamCare Safer Gambling Standard. https://www.safergamblingstandard.org.uk/accredited-businesses/

6. Gamble Aware Problem Gambling Treatment Services. Outline Specification 2017 – 2020 https://about.gambleaware.org/media/1469/gambleaware-treatment-specification-may-2016-final.pdf

7. Helpline Standards. Helpline Partnerships (2015) https://www.safergamblingstandard.org.uk/accredited-businesses/

8. Gambling – Suicidal Ideation, Attempts and Completed Suicides. Gambling with Lives (2020). www.gamblingwithlives.org

7 April 2020

427

GamCare – Written evidence (GAM0063)

Summary of contents:

- Introduction - Education

Risk Reduction Young People

- Treatment National Gambling HelpLine Treatment Services Our Model of Care Treatment Outcomes Expanding Our Provision

- Problem Gambling and Suicide - The Gambling Industry

1. Introduction GamCare is a charity that specialises in the provision of education, support and treatment for those affected by gambling related harm. We have been in existence for 22 years, and have developed extensive expertise in working with this cohort. On this basis we are responding to the call for evidence in respect of these areas of work, as they are the areas where we believe we can add significant value to the select committee process.

2. Education

According to the most recent health survey for Great Britain, (2016), there are up to 450,000 problem gamblers nationally, and up to 2 million ‘at risk’ gamblers, yet only a small proportion of those access help and support each year. GamCare is the leading provider of support and treatment for problem gamblers and their loved ones across England, Scotland and Wales. We operate the National Gambling Helpline, as well as delivering treatment both directly and via a network of partner agencies.

3. We receive around 30,000 calls a year from people seeking support via the HelpLine, and our treatment services saw around 10,000 clients last year. Although these figures are rising year on year, they represent a small proportion of those impacted by gambling problems, notwithstanding ‘at risk’ gamblers, suggesting the need for further public awareness both of the risks associated with gambling, as well as the availability of support and treatment.

4. We have observed that the people who contact our support services tend to present in crisis. This may take the form of significant debts, a relationship breakdown, risk of losing housing or work, and at times even with suicidal thoughts or a plan to take their own life. There is a particular need for wider discussion around the risks posed by isolation when someone is struggling with gambling problems. We hear from many individuals who still feel that there is a sense of shame or stigma which holds them back from speaking openly with their friends and love ones

428

regarding their gambling behaviour. We fully support public awareness and education campaigns which aim to change this.

5. Organisationally, we work across the spectrum of needs, from education and prevention, through to targeted support and treatment services. This is reflected in our three year strategy which can be accessed here: https://www.gamcare.org.uk/news-and-blog/news/gamcares-strategy-for-2018-2021/

Our prevention programmes are described in more detail below.

6. Risk Reduction

We currently focus our risk reduction and education programmes in the following areas, particularly where there is evidence to suggest that particular cohorts may be disproportionately affected by gambling-related harms, or are underrepresented in our services:

7. Supporting women and girls; less than 1% of female problem gamblers access help. We have received funding through the Tampon Tax Fund overseen by DCMS to deliver outreach and training to teams which are already supporting women, so that they can spot signs of gambling-related harms earlier and encourage both female gamblers and those affected by another’s gambling to get the support they need.

8. Reaching those in the criminal justice system; those in the CJS are disproportionately likely to be affected by a gambling problem and it may be the root cause of the crime they committed. Our current work across Hertfordshire is funded by the Police and Crime Commissioner, and seeks to raise awareness of problem gambling across the system as well as to join up identification and support for those affected, ensuring that the right support can be delivered in custody suites, prisons and through probation services. Our work aims to reduce reoffending connected to gambling as well as other gambling-related harms, and ensure early detection of issues related to gambling so that harms do not escalate. One of our partner agencies, Beacon Counselling Trust, has delivered screening across custody suites in Cheshire, a project which identified a higher rate of problem gambling among this cohort than the general population, and won a Howard League Award.

9. Supporting local authority services; problem gambling intersects with the issues local authorities deal with on many levels, such as licencing, community safety, children and families and housing/homelessness. We provide training and outreach to local authorities across Great Britain, as well as providing data from our services to illustrate how gambling impacts on their local services, and we can provide a holistic support service for those who are affected. Again, our training focuses on early detection of issues connected to gambling harms, so that we can prevent these form escalating and ensure individuals, families and communities receive the support they need.

10.Young People

Education delivered to young people across Great Britain, whether in formal or informal settings, is a vital way to increase understanding and

429

strengthen resilience regarding gambling and the risks of gambling-related harms developing in later life.

11.Recent figures from the Gambling Commission (2018) shows that 14% of 11-16-year olds in Britain gambled in the previous week and 1.7% are already classed as problem gamblers. More young people currently participate in gambling behaviour on a weekly basis than drink, smoke or use drugs.

12.International evidence indicates that young people are disproportionately at risk of developing problems with gambling, as well as experiencing harm resulting from the problematic gambling of family or friends (see Valentine, 2016). Despite this heightened risk, only around 1% of callers to the National Gambling HelpLine each year tell us that they are under 18 (where age is disclosed), meaning more needs to be done to reach that cohort and connect them with the appropriate support services.

13.In 2012 GamCare launched a pilot education programme in Bristol and the South West together with our partner agency, ARA. This provided training to the workforce directly supporting young people and ran gambling awareness workshops in schools and FE colleges, inviting young people to think critically about gambling, understand its signs and symptoms of problem gambling, and to know where to go for help. This ran for three years.

14.GamCare commissioned an independent evaluation of this programme in 2016. The evaluation showed that the programme was highly effective in developing young people’s understanding of, and capacity to recognise, problem gambling, as well as professionals’ confidence in interacting with a young person around problem gambling. It also revealed that the programme provided the most extensive reach via its delivery of training to the front-line workforce, of whom each trainee interacted with an average of 11 young people on the subject of problem gambling a year after training.

15.As part of this initial strategy we also launched a youth-specific website, (www.bigdeal.org.uk), where young people can learn more about the risks associated with gambling and the player protection tools available, so that they can make informed choices about gambling. This website is also a repository of information for parents and teachers on how to explore the subject of problem gambling with a young person, and a link to the National Gambling HelpLine if they require help and support. We subsequently relaunched the site in 2017, and more than 36,000 people have used this resource since.

16.Our pilot programmes formed the first initiatives of their kind in the UK, putting gambling awareness and education on the youth agenda, and providing clear and targeted information directly to young people in new and innovative ways. While these programmes have been successful, GamCare is clear in its view that still more needs to be done, and as such we have expanded our programmes into more areas of the UK than ever before.

17.Taking into account the combination of outcomes from our evaluation, international research, anecdotal examples and feedback from market research we conducted with youth charity The Mix, GamCare formulated a

430

strategy to work towards a reduction in gambling related harm for young people, delivering workshops and training directly as well as alongside our partner agencies. We have been responsive to demand, and expanded the programme first to five, and now to eight regions across England, Scotland and Wales. Our programme has so far reached more than 10,000 young people and a further 3,200 youth-facing professionals.

18.The programme has been externally evaluated and we have continued to develop our offer in response to feedback. Outcomes of the work include a reported 97% of professionals feeling the programme had increased their ability to identify the signs and symptoms of a gambling problem as well as their confidence to interact where they saw it at work. Additionally, 93% of young people left sessions with a better understanding of the risk factors associated with gambling and 88% felt more confident in their understanding of the services available to help. The full results of the evaluation are available at https://www.gamcare.org.uk/app/uploads/2019/07/2017-2019-GamCare-Youth-Outreach-Programme-Evaluation-with-LKMco-FINAL.pdf.

19.In the classroom, young people are polarised in their opinions about gambling. On one side, some young people feel gambling is something that is a casual leisure activity that cannot become a problem. They may have gambling highly normalised in their family culture and believe it to be a bit of fun which is not likely to get out of hand. These young people may struggle to appreciate the inherent risks of gambling. Alternatively, some young people we speak to indicate that they see gambling as morally abhorrent or sinful. They may disengage with the facts on the topic because they feel it ‘will never become a problem for them because they will never do it’. Both cases call for balanced education outlining both the availability and the risks of gambling as well as awareness about how to stay safe if one does wish to participate.

20.We firmly believe that each young person aged 11-19 should receive at

least one gambling awareness session (ideally more), and that the youth facing workforce should have access to high quality materials to deliver education on gambling and problem gambling, with clear referral routes to further, age appropriate help and support if needed. Our work also aims to encourage meaningful conversations about gambling between parents and children, particularly as the gambling and gaming landscape in the UK is changing rapidly.

21. Treatment GamCare has provide help and support to people affected by problem gambling for 22 years. GamCare delivers: • The National Gambling HelpLine (over the phone and via live chat),

answering upwards of 30,000 calls per year

• An online Forum for peer support, with over 30,000 registered users

• Daily online chatrooms, which are live peer support groups delivered through text chat

431

• A range of treatment services for problem gamblers and affected others directly across London as well as online and over the phone, with a model of care based on cognitive behavioural therapy (CBT).

22.GamCare is also the Lead Provider for a network of 13 partner agencies (see www.gamcare.org.uk/about-us/our-partner-network/) currently providing treatment in over 120 locations across England, Scotland and Wales, with around 10,000 people per year treated across the system.

23.While we are currently working to expand the locations where we can provide face to face treatment interventions, it is important to note that the range of telephone and online treatment interventions our services provide not only means that can reach individuals where a face-to-face location is not available, but that we can provide greater client choice where these services are preferred.

24.We also have a range of self-help resources available via our website, including a workbook based on our recovery course content, which can be used independently of treatment as well as helping to guide treatment sessions and outcomes.

25.National Gambling HelpLine: Our team of trained Advisers provide a confidential service for both gamblers and their family and friends. We can offer practical information and advice, as well as emotional support and referral to longer-term treatment. We provide both brief and extended brief interventions through the HelpLine, including through call-backs. These are provided where vulnerable callers are reluctant to engage with structured treatment, or as part of the seamless service into structured treatment, or for callers who need less intensive support and would prefer not to be referred to local services.

26.Since 2013, the number of target calls (i.e. calls from people seeking help for themselves or someone else) we have received has increased year on year:

*Figure for 2018/19 does not include the 1,979 outbound calls also made by our Advisers.

22,875

27,05628,231

29,417 28,88929,868*

10,000

15,000

20,000

25,000

30,000

35,000

2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Volume of Target Calls - National Gambling HelpLine

432

27.We have increased the capacity of the HelpLine to answer more calls and chats, however demand continues to grow significantly. From October 2019, we will provide a 24-hour service via the HelpLine, thanks to increased funding from GambleAware. This will help us reach people who may be gambling online overnight, or callers who are feeling in need of support during difficult night hours and wish to talk to someone specifically in relation to their gambling problems.

28.Treatment Services: GamCare provides treatment directly in London and Home Counties, and via 13 partner organisations across the country whom we fund as Lead Provider for the network and train to deliver our model of care in their local area. The benefits of delivering in this way include:

• Localisation of treatment, as locally embedded organisations are used in each area

• Delivery of the same Model of Care nationally, ensuring consistency of provision

• Delivery of an integrated governance structure, so quality can be assured across all providers

• Delivery of clear and integrated care pathways nationally, which are consistent wherever the service user lives

• National collection of the same data set and outcome measures, so we can monitor treatment effectiveness on a national scale

• Regular meetings and forums so information and intelligence can be shared across all partners, and plans to develop the system can be discussed and agreed

29.Our partner network delivers a range of short- and longer-term treatment options, either over the phone, face-to-face or online. Clients may receive one-to-one support, or they may take part in group courses, which gives them an opportunity to connect with others in similar situations and build a support network. This can be incredibly valuable in recovery. Our treatment services are available for anyone affected by problem gambling across England, Scotland and Wales for anyone aged 16 and over.

30.Our practitioners are specially trained and can give clients the safe, confidential space they need to discuss how gambling affects them, and our team work with each client to find strategies to help them move forward in a positive way. Our practitioners provide treatment that is tailored to the individual’s needs and goals for recovery.

31.GamCare and partner network practitioners can help clients understand both their gambling behaviour as well as the thoughts, feelings and circumstances which may have led to it. Our practitioners help clients to develop strategies to deal with difficult situations in ways which don ’t rely on gambling addressing triggers and so that triggers are better understood, and we provide guidance on relapse prevention when motivation to stop gambling may wane.

32.All partners also provide advice and treatment for family members and others who are affected by a loved one’s gambling behaviour, even if the

433

gambler does not wish to seek support yet themselves. This essential treatment focuses on the ‘affected other’ themselves to ensure they are protected and supported first and foremost. From that standpoint, the individual is also better able to support the gambler as and when they seek to take control of their gambling.

33.Our Model of Care Our treatment and support have a recovery focus, which builds on the individual’s strengths, instilling hope that change is possible, and we encourage people to build supportive networks, including others with lived experience, to help them sustain treatment gains.

34.Service User Choice: GamCare and partners ensure that service users can make informed choices regarding the range of options open to them at every step of their treatment journey. The service user’s goals and decisions are central to the care plan. Our aim is to give service users healthier options regarding how they respond to situations and their internal triggers to gambling.

35.Evidence Based Practice: Our interventions are based on the available evidence around what works. Utilising a cognitive behavioural approach, we focus on goal setting, the identification of internal and external triggers, relapse prevention and management and the identification of alternatives to gambling. The use of opportunities to develop and practise skills is integral to this approach.

36.We encourage support from family members, as well as providing support to family members in their own right. All of this is underpinned by a motivational way of working within a recovery model, which is also a specific, evidence-based way of working.

37.Safe, Effective Services: We work within a robust network governance framework to ensure the delivery of safe, effective services. Our priority is the safeguarding of our service users, their families and others who may be vulnerable to harm because of problem gambling. GamCare have been awarded the Helpline’s Partnership accreditation and are organisational members of the British Association for Counselling and Psychotherapy. We also have organisational ISO9001 accreditation and are working with CQC with a view to developing an inspection framework for problem gambling treatment services.

38.All engagement with service users is driven towards helping them to achieve their desired outcomes. Our governance processes define and manage an agreed set of quality indicators and outcome measures against which we benchmark the effectiveness of our services through audit and continuous improvement.

39.Stepped Care: It is important that we provide our service users with the right level of care for their needs. This ensures that we maximize the impact of the

434

resources available to us, and ensures we neither under-treat, nor over-treat.

40.Our service offers both low- and high- intensity courses of treatment through a stepped-care model of service delivery. At the point of delivery, the steps are seamless to the service user. We aim to offer the right service at the right time.

41.Treatment Outcomes Our treatment outcomes are currently assessed against the Problem Gambling Severity Index (PGSI) and Clinical Outcomes in Routine Evaluation 10 (CORE-10) measures. On average, over 70% of clients complete their treatment plans successfully and see a significant reduction in gambling-related harms.

42.The Problem Gambling Severity Index (PGSI) measure has the following guidelines:

Score Indicator

0 Non-problem gambler

0.0

5.0

10.0

15.0

20.0

25.0

2018/19 2017/18 2016/17 2015/16

Average CORE-10 Improvement

CORE-10 at Assessment CORE-10 at Treatment End

0.0

5.0

10.0

15.0

20.0

25.0

2018/19 2017/18 2016/17 2015/16

Average PGSI Improvement

PGSI at Assessment PGSI at Treatment End

435

1-2 Low risk gambler

3-7 Moderate risk gambler 8+ Problem gambler

CORE-10 (Clinical Outcomes in Routine Evaluation) measures wider wellbeing indicators and has the following guidelines: Score Indicator

0 - 5 Healthy

5 - 10 Low-level 10 – 15 Mild

15 – 20 Moderate 20 – 25 Moderate to Severe

25 – 40 Severe CORE-10 specifies: ‘The client must improve by 6.0 or more from pre- to post-therapy to be able to say that they have made reliable improvement’.

43.Expanding our Provision Our face-to-face treatment provision is growing year on year. We had 76% national coverage in 2018/19 year (based on availability of service in each local authority area), rising to over 90% this year as we proactively work to make geographical coverage more equitable across regions, but we are very clear that numbers in treatment need to increase in both the short and long-term, and significantly more investment and awareness would be needed to achieve this.

44.We anticipate that in the current year around 3% of problem gamblers will be seen in treatment. We have developed a clear five-year strategy to increase this to 10%, and hopefully to 15% over the longer term. We have a vision that integrates well with the NHS provision and would deliver integrated, flexible and consistent care. We have costed the model, but currently lack funding to deliver it. Expanding treatment capacity, ensuring this is equitable nationally, and developing a truly national treatment system are our highest priority.

45.Over the last 18 months we have transformed our delivery of treatment across the network and are now well positioned to develop this further. We have a good set of data about current and comparable costs that we can use to do this, and we are working closely with Gordon Moody Association and the National Problem Gambling Clinic to ensure that this takes a whole-system approach. Our vision also includes the much-needed provision of treatment for under 16s who are affected by their own gambling, or someone else’s.

46.We are also seeking to expand our services to people who don’t traditionally seek treatment through the addition of guided online treatment modules (computerised CBT modules), which can be accessed independently or with remote support from a GamCare practitioner. We are also seeking to enhance our provision in ways that help to reduce gambling related harms through supplementary services such as financial

436

wellbeing advice.

47.We have worked with the gambling industry to ensure that, where gambling issues are identified through a customer service team, customers can reach our services quickly and seamlessly via a warm transfer service, without having to hang up and redial. We are also increasing our delivery of training to industry staff and have developed a module which includes expertise in the handling of challenging conversations, as well as skills in Motivational Interviewing to support ambivalent customers to take the next step and reach support.

48.The newly commissioned Leeds Community Gambling Service, working alongside the Leeds and York Partnership NHS Foundation Trust (LYPFT) and our local partner agency NECA, supported by Leeds City Council, will be providing a range of training and prevention services as well as providing a range of treatment interventions. We will be able to refer directly into services provided by LYPFT for those with more complex needs and co-morbid addictions, and LYPFT can likewise refer directly into our services.

49.We are also working closely with the Department for Health and Social Care and we are part of the steering committee working on developing gambling support as part of the NHS Long Term Plan so that third sector and NHS treatment will be fully integrated going forward, including clear treatment pathways for clients with co-morbid conditions so that there is ‘no wrong door’ for someone seeking support.

50.While we are not currently assessed against CQC standards, there is positive collaboration across the whole treatment system to continue to improve governance and due diligence, for example through improved data systems across all services. An evaluation of the treatment system currently being commissioned by GambleAware will give an increased insight into provision nationally. We are also in discussions with CQC in respect of the development of an assessment framework for our services, and would welcome this development in the future.

51.Although the involvement of statutory services (such as the NHS) is both welcome and needed, we believe there is a significant, impactful, value for money role for the voluntary sector in providing education, prevention, support and treatment activities for those affected by gambling-related harms, as demonstrated in treatment systems for other conditions such as mental health, substance misuse, sexual health, learning disabilities and children’s services.

52.We also believe that there is a significant role for peer support to play alongside and after treatment, and we are currently working with a range of stakeholders to design pathfinder programmes which can support this and can be sustainably scaled up across the country. Initially, we are working in partnership with BetKnowMore UK to launch a new peer support service called Peer Aid. The project will provide peer led one to one and group support to people harmed by gambling.

53.Overall, we believe we have undertaken extensive work to develop and deliver increased capacity, greater client choice, and improved governance

437

across our service portfolio. We also have a clear and costed vision for the development of the treatment system over the next five years. We do not, however, have a secure source of funding to deliver this, and the external environment remains uncertain where this is concerned. More work is needed to significantly increase capacity and availability of treatment nationally without delay, and we are keen to progress this work as quickly as possible, alongside the development of NHS services, increased education and research to improve the evidence base in this field.

54. Problem Gambling and Suicide GamCare would support a proposal for Coroners to record instances of suicide relating to problem gambling where an explicit link is established, although we understand that suicide is a complex issue usually involving multiple factors. This would have the potential to improve our understanding of the frequency and circumstances of gambling-related deaths and could also improve communication around available treatment and support services.

55.GamCare and our partners recognise that thoughts of suicide and at times plans to take their life can affect problem gamblers at times due to the mostly hidden and therefore isolating nature of the problem. We are committed to helping people keep safe during times of crisis and develop strategies to overcome difficulties. We will contribute to the emerging evidence base by ensuring that we collect information related to suicidal thoughts and plans, whether disclosed via the National Gambling HelpLine or in national treatment services. The Gambling Industry

56.GamCare delivers training to the gambling industry to enhance the knowledge and confidence of staff to identify and engage meaningfully with those affected by gambling harms. Our experience working with those affected day to day means we are well placed to skill staff for challenging conversations, and to support customers who are ambivalent to take the next step and reach support where it is desirable. We delivered training to over 30 gambling operators and over 1,000 delegates in 2018/19.

57.GamCare has also developed the Safer Gambling Standard, a set of best practice standards for the gambling industry designed to drive up safer gambling practice across the sector. The Standard is comprised of 10 areas, covering everything from organisational culture to simplicity of use of safer gambling tools. The product is grounded in academically evidenced good practice, the Gambling Commission’s Licensing Codes and Conditions of Practice, and the direct experiences of our service users. It has been enhanced by input from the British Standards Institute and GamCare is undertaking an accreditation with the UK Accreditation Service (UKAS). For more information on the Safer Gambling Standard, please see https://www.gamcare.org.uk/our-work/for-gambling-operators/safer-gambling-standard/

438

6 September 2019

439

GamCare – Supplementary written evidence (GAM0124)

Regarding the information we gather on gambling activities used by those who contact our treatment services:

• We publish data from our helpline and treatment services each year – these are made available on our website and are accessible to all: https://www.gamcare.org.uk/about-us/annual-review-and-statistics/

• The number of callers to the National Gambling Helpline reporting that online gambling is problematic for them has increased from 47% in 2014/15 to 55% in 2018/19.

• The number of treatment clients reporting that online gambling is problematic for them has increased from 43% in 2015/16 to 54% in 2018/19.

• ‘Betting’, ‘Casino Games’ and ‘Slots’ are what individuals tell us are the most problematic activities online.

• ‘Betting shops’ are the most often reported offline gambling facility.

Regarding the outcomes and effectiveness of our treatment interventions:

We use validated outcome measures with every client at every session, not only to assess reduction in gambling harms but improvement in quality of life.

As per our last published data set (2018/19):

According to the Problem Gambling Severity Index (PGSI), clients who were gambling problematically when entering treatment showed an average improvement of 16.1 (significantly reduced risk) upon successfully completing their treatment plans.

2015/16

2016/17

2017/18

2018/19

PGSI at Assessment 19.0 19.3 19.6 19.5

PGSI at Treatment End

4.1 3.7 3.6 3.4

PGSI Improvement 14.9 15.7 16.0 16.1

According to Clinical Outcomes in Routine Evaluation (CORE-10), clients showed an average improvement of 12.4 upon successfully completing their treatment plans. CORE-10 specifies: ‘The client must improve by 6.0 or more from pre- to post-therapy to be able to say that they have made reliable improvement’.

440

2015/16

2016/17

2017/18

2018/19

CORE-10 at Assessment 18.2 18.9 19.3 18.5

CORE-10 at Treatment End

6.0 6.1 6.3 6.1

CORE-10 Improvement 12.2 12.8 13.0 12.4

Regarding our Women’s Programme:

GamCare has been awarded funding from the Tampon Tax team in the Department of Digital, Culture, Media and Sport (DCMS) to run a new nationwide programme to increase awareness of gambling-related harms for women, to increase access to support, and to make sure the interests of vulnerable women and girls are properly represented in the gambling treatment sector.

The project is building a nationwide network of local public sector and third sector organisations that work with women, to spread awareness of the problem gambling and its many impacts, and how it relates to other issues that women may face. We are building up our referral network into gambling treatment for women so that we can encourage more women to receive the right help and support, preferably before issues become catastrophic.

We are also working within the gambling treatment sector to upskill all practitioners about the specific issues that affect vulnerable women. We will build on information and learning for the whole treatment sector to ensure that our response to vulnerable women is sensitive and well informed. We will also work with the gambling industry to ensure that they are able to use this learning to improve their safer play and responsible gambling strategies.

Read more about the programme at https://www.gamcare.org.uk/our-work/our-programmes/womens-programme/

Regarding our education work:

Our experience over the last eight years tells us that giving young people the awareness, knowledge and skills to make safer choices, understand impact of gambling problems and know how to access help is one of the key ways that we can reduce harms in the future.

Likewise, increasing the confidence of the youth-facing workforce to understand, interact and signpost around gambling harms is vital in safeguarding future generations.

Over 16,000 young people received education sessions and over 6,000 youth facing professionals received awareness sessions from our Youth Outreach Programme in the last three years, and the programme will soon be expanding in partnership with YGAM.

Our evaluation of this work so far is available online at https://www.gamcare.org.uk/our-work/our-programmes/youth-outreach-programme/

441

GamCare Written Statement and clarifications of points raised by Gambling with Lives On behalf of Ms Anna Hemmings (CEO of GamCare) and GamCare’s Board of Trustees, following their evidence session at: House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry

The note below provides factual clarifications on incorrect or misleading statements made by Ms Ritchie (Gambling with Lives) directly regarding GamCare and its services at the public hearing of House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry on 25th February 2020.

Written Statement GamCare is the largest provider of support and treatment to those affected by gambling related harms.

With over 20 years’ experience, we are committed to providing safe and effective support and treatment for gamblers as well as their loved ones who are impacted.

Our role is to help those affected and work collaboratively with others to minimise the development of harms in the wider population. To do so, we strive to continually improve our treatment, education initiatives and contribute to ongoing research and learning on this under recognised issue.

We are a non-judgemental organisation that seeks to support rather than to campaign. By focusing on treatment support, we hope to minimise stigma, something we see as one of the biggest barriers to people’s engagement with support services.

The campaigning work that Ms Ritchie and Gambling with Lives do is valuable in raising the profile of gambling problems and addiction. We support them in many of their goals for the field, such as striving to grow the resources allocated to treatment and raising awareness of gambling harms.

Clarifications of points raised by Gambling with Lives *It should be noted that quotations are taken from live recordings of the 25 th February session and not the published transcript of the session. This was not available on drafting of this response.

1. “GamCare has got industry people on the Board.” (Ms Ritchie, Gambling With Lives, 25th February 2020)*

GamCare does not have any representatives from gambling operators on its Board. As is considered good practice, we have Board members with a diversity of experience and backgrounds from NHS commissioning and clinical addiction specialists to experienced business leaders.

One Board member has experience of working with the gambling industry in a legal capacity. We consider this vital expertise in both developing and implementing effective services, as well as navigating the existing governance and funding structures within the sector.

442

We completed an external board review in 2017/18 and have implemented the recommendations from this.

2. “[A lot of concerns about GamCare and GamCare counselling]. I was shocked to come across job adverts which actually said that counsellors were given two days training…generic person-centred training then two days training…I have recently come across ads where there is no clinical qualification at all.” (Ms Ritchie, Gambling With Lives, 25th February 2020)*

There is no specialist nationally recognised training programmes in the UK to work in gambling support or treatment. This is something we have been discussing with academic institutions and are aiming to develop over in the future.

There are a variety of levels of clinical qualification required for different roles at GamCare, specifically between Frontline Services Advisers and Treatment Practitioners.

No role at GamCare can be undertaken with two days training – all roles providing support and treatment receive a full week-long induction to our Model of Care as well as ongoing mandatory training in matters such as safeguarding, confidentiality, information governance and self-care as well as regular and ongoing supervision and practice development.

• Frontline Services Advisers must be educated to diploma or equivalent level in a relevant subject, or with considerable experience in a relevant clinical or helpline setting. They receive a full week of training and undergo 3-4 weeks of further helpline specific training prior to taking calls, which includes shadowing experienced staff and latterly beginning to undertake supervised calls themselves. All helpline staff receive regular supervision and practice development, as well as continuous professional development. All calls are recorded and these a routinely reviewed for quality assurance purposes. All helpline staff complete additional mandatory training which is refreshed at regular intervals.

• Staff training on the helpline is in line with other frontline crisis management or helpline roles. Our Helpline is externally accredited by The Helplines Association and has been continuously since 2012.

For a comparative example, please note, NHS 111 Health Advisers are required to “be educated to GCSE level and possess a fundamental level of maths, English and IT skills. You'll have experience of working and communicating with members of the public.” (Source: healthcareers.nhs.uk, Link: https://bit.ly/38oa8Ke)

• GamCare treatment practitioners are required to have significant clinical experience with a Professional qualification in health/social/youth and community care. For example, NVQ Level 3 or above, DipSW, Mental Health Nursing, Counselling, Addiction Studies; or Demonstrable experience of working in the field of addiction with a commitment to complete NVQ Level 3 Health and Social Care. GamCare Treatment is accredited by The British Association of

443

Counselling and Psychotherapy (BACP) which assesses standards independently.

• Treatment practitioners receive 4 days of Model of Care training and complete additional mandatory training, which is refreshed at regular intervals. They receive both individual and group supervision and regular practice development.

• The qualifications required for treatment practitioners are in line with the requirements of other community based addiction services.

3. “GamCare own the only referral point because they run the helpline and because GPs aren’t trained there’s no pathway. [There is a] Conflict of interest, they refer to their own partners…and they don’t refer into the clinics.” (Ms Ritchie, Gambling With Lives, 25 th February 2020)*

We have run the UK’s only national helpline for gambling harms since it’s inception and originated the helpline ourselves in 1997. GamCare is the sole operator of the National Gambling Helpline having been commissioned by GambleAware to supply this service.

Our Helpline signposts to a variety of clinical services, including GamCare partners, the NHS and other providers across the National Gambling Treatment Service commissioned by GambleAware.

We currently make facilitated (digital) referrals to our network of 13 partners nationally, and are working closely with the NHS to ensure we can make secure digital referrals to their services as they develop, in the same way as we currently do to our partners. If we are concerned that an individual has complex needs that would be better served by an NHS service, we refer to the NHS accordingly. This has happened on 47 occasions from April 2019 to date.

GPs can refer directly to our treatment service, any of our partners, NHS services or other treatment commissioned by GambleAware. Though we acknowledge that awareness of GPs is likely to be limited which is why we support the Gambling Commissions work with the Hurley Group of GP’s to jointly deliver their gambling support service and to develop GP awareness and training.

4. “[There is] no proper suicide risk assessment. [There] certainly isn’t at the point of triage or at the point of referral.” (Ms Ritchie, Gambling With Lives, 25th February 2020)*

GamCare has appropriate safeguarding policies, processes and staff training in place across our services, which includes potential for suicidality, we take the potential for suicide among our service users very seriously. Last year alone our Advisers on the National Gambling Helpline called Emergency Services over 30 times in direct response to suicide risk.

We monitor a range of safeguarding indicators on a monthly, quarterly and annual basis and regularly review any safeguarding concerns flagged by our teams, including where we are liaising with other agencies to ensure the safety of our service users and their loved ones.

444

Every member of staff receives annual safeguarding training, and full safeguarding reports are reviewed at our Clinical and Quality Governance Committee as well as by our Senior Management Team. A senior manager is on call every day of the year, 24 hours a day, in order that urgent concerns can be escalated quickly where needed.

We are part of the National Suicide Prevention Alliance and work in partnership with the Samaritans with the aim of reducing the risk of suicide among those harmed by gambling.

30 March 2020

445

Gamesys Group – Supplementary written evidence (GAM0104) Thank you once again for the opportunity to provide oral evidence to committee on Tuesday 5th November 2019 in my capacity as Transition Director and Member of the Board, Gamesys Group. I am writing to you to address the two questions that members of the Committee asked Gamesys Group to provide supplementary written evidence on. In response to the question from the Lord Foster of Bath on what legislation or regulatory changes that we would like to see in our industry, I would firstly like to state that Gamesys Group already goes beyond the minimum regulatory requirements because we believe that it is the right thing to do. As a member of the Betting and Gaming Council (BGC) we are fully committed to responsible gaming and want everyone who registers and plays on our websites to have fun and be entertained in a safe and responsible way. All our websites are fully licensed and regulated ensuring our customers are guaranteed a safe, trusted and fair experience with the highest levels of protection. We have also raised our commitment to funding the research, education and treatment of problem gambling above the voluntary level. We acknowledge that there is still more work that can be done to tackle problem gambling. As an industry we need to better educate our players on the benefits of using the different responsible gambling tools that are available to them, such as self-exclusion, deposit limits and time-outs. Whilst the UK already has a well-regulated gambling sector, as recognised by the DCMS Minister Helen Whately MP, we believe that the Gambling Act needs to be updated. Therefore, we would like to play a constructive role in working together with the Government, the Gambling Commission, and industry colleagues from across the BGC to ensure that the Gambling Act is updated and fit for the digital age that we live in. We would like the principles of any new regulation to consider the following three points:

1. Any future regulation that the Government implements should be transparent, accountable, proportionate and consistent.

2. When drafting future regulation, we would like to see that an analysis of the enjoyment that our customers experience when using our products be considered as well as the assessment of cost and benefits of said legislation.

3. Future legislation should promote a level playing field in the regulation of companies that deliver a similar service and a UK licence being subject to meeting those conditions.

In response to the question by the Baroness Armstrong of Hill Top regarding gambling on credit, during the Committee session I stated that we had already taken steps to take credit cards off one of our brands (Starspins), with the whole aim of learning how to migrate customers on to debit cards.

446

Gamesys Group respects the decision taken by the Gambling Commission following its consultation to announce a ban on gambling on credit effective from 14th April and we will ensure that this is the case across our platforms. We also welcome the changes to licence conditions which will require all online operators to participate in the Gamstop Scheme and offer their players the service from 31st March. This is something that we already do. Thank you for the opportunity to provide this supplementary evidence. On behalf of Gamesys Group, I look forward to reading the Committee’s report and recommendations at the end of March. 27 January 2020

447

Gauselmann Group – Written evidence (GAM0096) The Gauselmann Group is pleased to respond to the House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry’s Call for Evidence. By way of background, the Gauselmann Group is an internationally active family-owned gaming company, committed to providing leisure-time entertainment and gaming fun with small stakes and prizes. Alongside the development, production and sales of amusement and gaming machines and money management systems, the group operates the well-known arcade chain MERKUR Cashino. The Gauselmann Group is also active in many other business segments, such as sports betting, and casinos. The group trades in over 40 countries across the world, and in the UK operates subsidiaries, comprising Blueprint Gaming, Regal Gaming and Leisure, Betcom, as well as Praesepe. As a manufacturer of amusement and gaming machines and an exemplary operator of gaming venues, we are committed to ensuring that our consumers are protected from gambling harm. This is prioritised within all the gaming formats we offer. We understand the importance of a diverse and comprehensive prevention information policy, which allows both those affected, their family members, employees and in particular the public, to openly and freely engage on the topic of gambling related harm. We provide continuous awareness training to enable our staff to detect and deal safely with signs of problem gambling and to offer assistance where it is needed. We welcome the formation of this Committee and its Call for Evidence. The Gambling Act 2005 1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld? We are of the view that the three primary aims of the Gambling Act 2005 are broadly being upheld. That said in recent years there have been developments within the gambling industry that have fallen outside of the regulatory structure put in place by the 1968 Gambling Act which formed the structure and basis for the 2005 Act, and these developments failed to meet the primary aims of the Act. The proliferation and the high maximum stake of £100 on Fixed Odds Betting Terminals (FOBTs) took place outside of this regulatory structure, allowing very hard gambling in easily accessible locations with very low supervision levels. This led to increased incidents of money laundering in bookmakers as activity is largely unsupervised and it is therefore relatively easy for fraudsters to 'clean' their money. A Freedom of Information request to the Gambling Commission in 2015 revealed that the machines were responsible for a 20 per cent rise in crime at betting shops as addicted gamblers often turn violent. In addition, research by GambleAware, showed that around 80% of FOBT gamblers exhibited problem gambling behaviour at stakes in excess of £13 a spin.

448

We welcomed the Government’s decision to reduce the maximum stake on these machines from £100 to £2, from 1 April 2019, bringing them in line with other products available on the high street and striking the correct balance between regulation and player enjoyment. Going forward, it is important to ensure that the basis of this regulatory pyramid is preserved and upheld, with gambling activity taking place within this structure. A further aspect of this question would be to ask, to what extent various stakeholders in the gambling sector are upholding these licensing objectives and to distinguish specifically between Gambling operators and the Gambling Commission. Whilst the answer to the question above refers to issues relating to the upholding of the licensing objectives by the industry, the Gambling Act 2005 places a number of specific statutory duties upon the Gambling Commission. The Gambling Commission is responsible for pursuit of the Licensing Objectives including protection of the vulnerable. As the Gambling Commission has primary statutory duty to advise the Secretary of State regarding Gambling Related Harm, its inability to clearly describe how existing products should be viewed and the way in which those products might be developed, responding for example to consumer choice without causing potential harm to the vulnerable seems to be a fundamental failure. It should also be noted that the Gambling Commission’s duty is specifically defined as one of protection, i.e. anticipating harm and acting before the harm occurs, rather than acting after harm has been experienced. While the Gambling Commission is to be applauded for its recent activities in investigating failures by the remote sector, it must be noted that those failures have occurred on the regulators watch and every player who has not been protected from Gambling Related Harm, must be properly viewed as an instance where the regulators duty to protect has been a demonstration of the regulators inability to carry out its statutory function which clearly must be reviewed. 2. What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed? Over the past decade, there has been an exponential growth in technology across all sectors including the gambling sector. This has given rise to online and mobile gambling. Recent figures published by the Gambling Commission shows that the remote sector is financially the largest sector in the UK gambling industry. The legislation is therefore becoming less reflective of our society. Our legislation is often deemed to be ‘analogue legislation’ for a digital age. By comparison, in 2012 the Australian Government conducted a review of its 2001 Interactive Gambling Act and found that the Act was outdated and therefore both ineffectual and potentially harmful to Australian players. As a result in 2016 the Interactive Gambling Amendment Bill was passed, to better reflect the growth in technology within the sector. Since the Gambling Act 2005 came into effect, there are now more diverse gambling products and experiences on offer than ever before, these include live sports betting, in-play gaming and more recently mobile gaming. These are relatively new products that differ from traditional gambling and there are understandably concerns raised about player safety and protection, particularly on the vulnerable. Current government policy is not encouraging or allowing the ‘plan-ahead’ venues to develop healthily but is instead encouraging impulsive

449

and ‘convenience’ gambling such as online, where far less player protections exist. 3. Is gambling well regulated, including the licensing regime for both on- and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions? Generally, the UK gambling industry is well regulated and the Gambling Commission is often looked to for best practice by other regulatory bodies in other countries. Nonetheless, there are key areas within the UK gambling industry that the Gambling Commission could take a much stronger position to encourage a more responsible and fair industry. For example, there are well established safeguards and controls in the non-remote sector that the Commission have put in place to protect the vulnerable from harm, such as stake and prize limits and software homologation for land-based B1, B2 and B3 games. These measures however have not been put in place for the remote sector which meant that online and mobile operators can develop games without controls that would help to protect the vulnerable and ensure that those games are fair and safe. We would encourage the regulator to review all aspects of the online sector to ensure that there is adequate protection available to customers regardless of the environment in which they are playing and a more consistent approach to gambling regulation. This lack of control in the online sector leaves open to question whether the online industry satisfies two of the main tenets of the Gambling Act ‘to keep gambling fair and protect the vulnerable’. 4. Should gambling operators have a legal duty of care to their customers? Operators should have a duty of care to their customers, but this should not be a legal duty. It would be near impossible to determine the extent of that duty of care and extent of any responsibility and thereafter liability. We submit however that The Act already places a statutory duty on the Gambling Commission, under S22 of The Act:

(a) to pursue, and wherever appropriate to have regard to, the licensing objectives, and

(b) to permit gambling, in so far as the Commission thinks it reasonably consistent with pursuit of the licensing objectives.

It must therefore be reasonably foreseeable that if the Gambling Commission fails to pursue and have regard to the Licensing Objectives because it fails to identify potential harms and take action to prevent those harms by effectively regulating to protect the vulnerable, and the vulnerable are thereby harmed, there is arguably already a direct causal nexus between the harm caused and the failure of the Gambling Commission to act. We therefore strongly submit that while it might be arguable that an operator should have a duty of care to the customer, the duty of care which was intended by Parliament and by The Act is that of the Gambling Commission.

450

It is the Gambling Commission who is responsible for licensing of operators and requires detailed policies and procedures to be in place before such licence is granted. It is the Gambling Commission who is responsible for satisfying itself that the way in which operators carry out their duties is compliant with The Act. It is the Gambling Commission which is responsible for setting out Licence Conditions and Codes of Practice which determine the detail of an operator’s activities. It is also the Gambling Commission who is responsible for monitoring and reviewing as appropriate the activities of the Industry and charge substantial licence fees for doing so. Against such a background, it must be right that the Gambling Commission is held to account as having a legal duty, to customers, the industry and Parliament to ensure that the vulnerable are protected. Social and economic impact 5. What are the social and economic costs of gambling? These might include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs. Currently there is no clear framework to accurately measure and assess the social and economic cost of gambling. 6. What are the social and economic benefits of gambling? How can they be measured and assessed? Traditional and social gambling is capable of delivering significant benefits to society and the UK economy. A 2019 Industry statistics published by the Gambling Commission, showed that the Industry has a total turnover of £14.5bn. The sector employs over 100,000 people directly and thousands more indirectly through its various supply chains. An estimated 9 million people gamble in the UK, and for most it is a social, leisure and entertaining activity. Land-based venues, particularly Adult gaming centres and Bingo clubs offer relatively benign gambling in a safe and highly regulated environment where the stakes and prizes are comparatively low, as befits the High street location. Destination gambling venues contribute to social cohesion and are an integral part of the local community and often serve as community hubs for customers. It is therefore important that the Government implements policies that are appropriate for the sector and address particular areas of concern without stifling the growth of the industry which is an integral part of the wider UK entertainment industry. Levy 7. Is the money raised by the levy adequate to meet the current needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons? Knowledge about the numbers affected by gambling-related harm, the types of harm that individuals experience, and how such numbers change over time, is hampered by the absence of a recent British Gambling Prevalence Survey (the

451

last survey was conducted in 2010) and questions about gambling participation and behaviour not regularly being included in the Health Survey for England (questions were last asked in 2012, 2015 and 2016). Whilst the Gambling Commission collects and publishes statistics about gambling participation and problem gambling, we lack longitudinal data about gambling-related harm in respect of the trajectory of individuals’ gambling participation and behaviour over time, and individuals’ help-seeking behaviours (aside from data collected by GamCare). It is therefore difficult to assess if the money being raised is adequate to meet needs for RET. This is particularly relevant in the wake of the reduction of stakes on B2 Gaming machines which were widely considered to cause at least 50% of problems relating to gambling addiction. A new base line needs to be established for Problem Gambling in the UK and this can only be achieved through a new Prevalence Study linked to a Longitudinal study. The current voluntary levy appears to only be partially working with some operators only paying a partial or minimal contribution. We would support the introduction of a mandatory levy if was a ‘smart levy’ which reflects the relative contribution to gambling related harm associated with different products. It is unreasonable for non-contentious and relatively harmless forms of gambling such as the public health lottery or providers of seaside amusements (such as penny falls machines and teddy bear cranes) or Bingo clubs to pay a levy at the same rate as say on-line casinos or sports betting sites where there is no limit on stakes and prizes. A smart levy could be calculated if a gambling prevalence survey was reconstituted. This could assess how many ‘problem’ or vulnerable gamblers mode of gambling is with a particular sector. Consideration should be given to giving oversight of additional levy payments to a new, third party, organisation which is linked to the skills and expertise of the public health sector and ideally the NHS. Research 8. How might we improve the quality and timeliness of research in the UK? What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons? Given the fundamental change in the gambling landscape in the UK due to the significant reduction in the maximum stake on B2 gaming machines, it would be useful for a new wide-ranging research on the industry to be conducted to get a better understanding of the impact of the reduced stake and also to identify the keys areas of concern. We would also like to see an increase in the number of academics involved in gambling research. In the UK currently there is a small group of researchers who are responsible for a large part of the research carried out. There have also been concerns raised on the lack of transparency around funding and the extent of the industry’s influence on research. We would welcome a more transparent and open system through the introduction of a professional code of conduct. This code of conduct would mean that where relationships exist between researchers and operators, it would be publicly declared and embedded within formal academic structures.

452

9. If, as the Responsible Gambling Strategy Board (RGSB) has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation? The Gambling Commission has reported that 45,000 children aged between 11 and 15 self-report as being ‘problem gamblers’. It is important to highlight that a significant number these children are more than likely involved in ‘gaming’ rather than gambling and the issue is that they are spending money on random loot boxes and so called ‘skin upgrades’ in video games etc. It is therefore essential that the industry is not castigated with headline grabbing statistics without the regulator conceding that some of this is not commercial gambling. There is also a view that much of this ‘gambling’ relates to games played in playgrounds which should if necessary be controlled by teaching staff. We also note that whilst moves have been made to remove gambling companies sponsorship logos from sports shirts sold for children there remain a number of high profile home video games where these logos still appear on players sports shirts within the actual game play. We would suggest that further research is carried out into areas of interest where there is limited evidence and/or research gaps have been identified. As above, the Gambling Prevalence Survey should be reconstituted. Treatment 11. Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help? Notable experts in treatment services such as Dr Henrietta Bowden-Jones have highlighted the need for further funding of these services and also to raise awareness of the availability of these services amongst problem gamblers. We would support these calls. 12. What steps should be taken better to understand any link between suicide and gambling? We would encourage further research into this area. Advertising 13. The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons? There is wide-spread concern about the impact of gambling advertising and marketing on children, young people and vulnerable people, particularly during live sporting events. To address this, we believe that there should be, stronger self-exclusion safeguards that restricts targeted gambling advertising online. We would also like to see the 9pm watershed extended to cover all forms of gambling and limited

453

thereafter. Whilst this may help reduce the volume of advertising to which all generations are exposed, it should not be assumed that this will be sufficient to protect children from exposure to gambling advertising as young people currently consume media online – internet and social media. Therefore we would like to see a mechanism created that allows individuals to block gambling advertisements online. In addition, marketers for large companies, particularly those employed by a third party are often paid on results which can drive aggressive advertising. An awareness of the rules and regulations relating to advertising should be mandatory for third parties and personal management licenses are required for Executives and we would suggest that Marketing Executives should be required to hold PMLs. Gambling and sport 14. Gambling is becoming an integral part of a growing number of sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this? Please see our response above Gambling by young people and children 15. How are new forms of technology, including social media, affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future? Again, please see our response above. As social media is a relatively new phenomenon, we believe that there should be tighter regulations particularly around gambling advertisement online. Furthermore, concerns have been raised about the availability of ‘social gaming’ apps on social media platforms which mimic real-life gambling, and are aimed at children with no age verification or checks offered. We would be interested in seeing extensive research, perhaps a Longitudinal study carried out looking at the effect of social media and other forms of technology, in encouraging gambling behaviour among young people. 16. The legal availability of certain forms of commercial gambling to under-18s in Great Britain is unusual by international standards and has been described as an ‘historical accident’. Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins? We believe that the current age limit on lottery and scratchcards age limit should be raised to 18, in line with all other forms of gambling. Whilst the weekly lottery is relatively low risk, consumers can play high speed scratchcards, on and offline, at up to £10 a go, aged just 16. They can also play these games using a Smart Phone with no structured supervision. The maximum rewards could be up to £1million, in contrast to Pubs/AGCs where Cat C/B3 machines have a maximum prize of £100/£500. Furthermore, the current scratch cards and online games (at up to £10 a game) are not dissimilar to casino games.

454

Although this part of the sector is working to distance its products from gambling, it is important to recognise that the National Lottery website is in many ways now indistinguishable from many other online gambling websites. For example, on the homepage, there are links to Gamestore instant win games such as the £4 million jackpot or the £20 million Cash Spectacular, which anyone 16 or older can play – the only safeguard is a limit that is initially set to “75 Instant Win Games you can play or try in any 24 hour period, and a £350 weekly limit on how much money you can add to your account”. Safer gambling should be promoted in line with the rules for the rest of the gambling industry. 17. Should children be allowed to play Category D games machines (which include fruit machines, pushers and cranes)? Currently, there is no minimum age for players of category D machines and it is indeed legal for under-16s to play on these machines. That said, due to the emerging concerns raised specifically around reel-based Category D machines, BACTA the trade association for the amusement machine industry which includes seaside arcades where these machines are found, has recently put in place a new condition that will require its members to prevent anyone under the age of 16 playing on a cash payout fruit-machine unless accompanied by an adult. We believe that ‘Pusher’ machines and Teddy Bear cranes should now be classified separately to cash payout fruit machines. We would like to see further research carried out exploring the effects of these machines on children and young people. Lotteries 18. The restrictions on society lotteries were relaxed by the Gambling Act 2005, and there is concern that some of them are effectively being taken over by larger commercial lotteries. Is this concern well founded? If so, what should be done? No comment. 19. Should changes be made to the statutory regime governing the National Lottery, to bring it into line with the regime governing operators of other lotteries? No comment. 8 October 2019

455

Gordon Moody Association – Written evidence (GAM0032) Our key purpose is ‘to provide high quality, innovative therapeutic support to those affected by problem gambling including raising awareness of the issues of gambling related harm’. Underpinning our purpose, we developed a core set of values in 2018, which are integral to how we deliver our services: 1. Non-judgemental – ensuring that we listen to people, respect them and

value their beliefs 2. Empowerment – equipping our service users with the knowledge, skills

and abilities to improve and enhance their lives 3. Passion – being dynamic, committed, enthusiastic and caring 4. Honesty – being open and transparent 5. Open to change – evolving our approach, being forward thinking and open

to innovative new ideas We currently provide a range of treatment services as summarised below:

• Specialist residential treatment programme – 2-week assessment followed by 12-week therapeutic programme providing 18 units in the West Midlands and south London based on a Therapeutic Community model

• Halfway House Accommodation and relapse prevention support for up to 14 people for up to 3 months following residential therapeutic treatment

• Outreach support for ex-residents who have moved on. We provide them with face to face, telephone and on-line support

• Mixed Model of Care (MMOC) – offers a retreat programme and counselling providing 3 programmes a year for up to 36 women and 1 programme a year for up to 12 men.

• Gambling Therapy providing on-line support and advice for those problem gamblers outside of Great Britain, supported by our GT App.

1. Gambling Act - We at Gordon Moody see little evidence of crime and disorder other than individual activity perpetrated in the pursuit of feeding an addiction. We reference this below. We have no evidence to say that gambling is being conducted unfairly. However, we do believe that more could be done to educate the young and vulnerable as to the risks of not just gambling, but other risky lifestyle activities including emerging genres such as ‘gaming’.

2. Legislation and regulations need to be revised to reflect the massive shift in how people are gambling and to include the regulation of gaming. Products such as loot boxes need to be taken seriously and the risks that they pose introducing children into the habits and normalisation of taking risks with money or money’s worth. When the 2005 Gambling Act was drafted, there was no ability to gamble on mobile devices as there is today, and despite the best intentions, the 2005 Act has proved unable to keep up or adapt to evolving technology. Whether this is through an extension of the current act or a new act altogether, there needs to be a set of regulations and legislation for the digital age.

456

The table below shows the areas of gambling for those who entered our residential centres in 2017/18 (2018/19 data pending).

3. Regulation - In our experience we have no awareness or examples of

poor regulation, either off-shore or on-shore. We have in the past seen examples of remote operators marketing to problem gamblers, but that practice has been addressed via stricter regulation and operators improving their processes and procedures.

4. Legal duty of care - Whilst all gambling operators have a responsibility to protect their customers from the harm of gambling, we do not believe that they have, or should have a legal duty of care. The issue of gambling addiction is a health related one and should therefore fall under the remit of other statutory bodies who provide that duty of care. In our view, health and social care issues cannot be deemed to be a legal duty for private sector businesses. We do believe however, that more could be done to identify those who’s gambling is out of control and when doing so, provide them with relevant pause for reflection and signposting.

5. Social and economic costs of gambling - The average age range of residents in 2016/17 was 36 for the residential treatment centres and the table shows the ages that most started gambling. (this is self-reported data).

457

Residents who were in treatment with us during 16/17 had gambled £3.6m average for a total of 74 residents. Total debt amongst this group at that time was £1.2m. Between 2011-2017, 319 people reported gambling £12,208,379 between them. The cost to society should not only be counted in terms of the financial cost to an individual. Impact on their loved ones and family members should also be measured in terms of the devastating impact it can have on their own mental health, physical health, family relationships, employment and quality of life - thus demonstrating the wider social impact of problem gambling. However, it should be remembered and recognised that Problem Gambling is rarely a solus condition and is in many instances a symptom of a problem rather than the cause. As mentioned above, problem gambling is a mental health issue which carries much wider implications and complications, as with many, if not most other addictions. It is therefore incorrect to singularly blame gambling in isolation for the entire costs related to every problem gambler and their relationship network. During 2017/18 88 residents told us that they had committed a crime in order to funding their gambling with 28 of them having received a criminal conviction. The average cost per prisoner was estimated by NOMS in 2015/16 to be £35,182. 10 of the28 residents reported they had received custodial sentences with an overall cost to society of some £351,820. The table below shows the employment status of those in treatment with us during 2017/18.

6. Social and economic benefits of gambling - We have no comment to

make on this point as we have no data regarding this. 7. Levy - The Gordon Moody Association (GMA) has been managing a waiting

list for treatment for many years now. Our waiting list is one of the few (if not the only) genuine registers of known problem gamblers as they have been assessed by ourselves as needing treatment. The GMA is physically restricted by the number of bed spaces in its residential treatment facilities, so to be able to address the waiting list for treatment we would need to have the funding to facilitate more bed spaces. We are aware that for several years there has been unallocated funds in the RET resource

458

pool, but our requests to increase capacity for treatment have never been followed through by the commissioners. The GMA does lose contact with many on the waiting list before a vacancy becomes available to them, and we feel that the system is subsequently letting these people (who have asked for our help) down. We would suggest that more RET funding is not the answer. But we would say that the funding that we have available to us collectively already should be spent where it is need by those asking for our help. Any requests for further funding, whatever the mechanism for raising it, should be supported by hard evidence that it is going to make a genuine difference. Far too many people and organisations cast around arbitrary numbers that the Gambling Industry should be contributing to RET without any factual support. This does not help those in genuine need of our help.

8. Research - Research in the UK needs to be better co-ordinated with the impact of that research being used to improve services and to improve the gambling harm minimisation approaches. Far too often over recent years the research that has been carried out only leads to more research and does not produce any outcomes. The closer to actual gambling activity that research can be carried out, the more accurate the results will be, and the more effective the outcomes. Research should be used for everyone’s education and to raise awareness as well as identify what other needs there may be. One clear portal for all gambling related harm should be developed so that any research can be referred to easily.

9. Children and young people - We need to get with the times around how young people now live their lives on-line. It will take time to understand the implications of the on-line world and gambling addiction so research should start now to consider the longer-term impact. We know that ‘gaming’ and ‘gambling’ are often conflated by parents and by school teachers thus skewing our understanding of what is really going on. Education is imperative as part of the education agenda along with other issues that are carried out as part of PHSE in schools. There are surely lessons to be learnt from alcohol and smoking impact campaigns that can be considered along with health and wellbeing input (PHE & NHS).

10. Education - We have not done nearly enough in the area of education over recent years. You will be aware that there is a charity called YGAM whose sole purpose is to facilitate the education of children in ‘digital resilience and awareness’. This education includes gambling and gaming and the internet generally. This charity has not been funded by the RET commissioners for many years now and is an example of where existing unspent funds could have been used to great effect. Public health awareness campaigns explaining the risks (much like the smoking ones) and where to go to get help can only be beneficial. The stigma needs to be broken down and lessons learnt from the mental health field who have been making good progress over recent years to address an issue that has been stigmatised for many years.

11. Treatment - At GMA we have been involved in two pieces of research with the University of Lincoln which look at predictors of treatment drop out and trends and patterns based on 15 years of data relating to those who have been in treatment with us.

459

We believe that our treatment models do work as we see excellent outcomes for those who either come into our residential treatment centres, who access our Retreat and Counselling Programme or our international Gambling Therapy service. Some of the statistics for 2018/19 are below: Residential Treatment

• Residential treatment applications totalling 650 – up by 35% from the previous year

• 74 people entered our 2-week assessment phase in our rehab centres – 89% completed this part of the programme

• 74% completed the residential programme an improvement from 67% last year (substance misuse services are generally around 35% completion rates)

• Service user satisfaction for residential stay – 84% Specialist Women’s programme (renamed Retreat and Counselling Programme)

• 160 referrals for the 3 programmes per year that we run – with 34 taking part

• 76% completion rate for the whole programme • Service user satisfaction of 93%

Men’s pilot

• One cohort per year with 7 attending and 100% completion rate • Service user satisfaction – 88%

Gambling Therapy

• GT Website visits up from £3.4m to £4.7m • GT App downloads 10,732 up from £7041 • Over 60 different countries per month use the on-line chat facility • 9 groups facilitated on-line every week internationally • Increase to 64% using mobile device to access GT

Below are the key findings from the research papers as mentioned above: Paper 1 - Trends and Patterns in UK treatment seeking gamblers: 2000–2015 – Published September 2018 with Science Direct: https://www.sciencedirect.com/science/article/abs/pii/S0306460318308505 Highlights

• Forms of gambling identified as problem forms have changed over time. • Increases in Fixed Odds Betting Terminals, Poker, & Sports Betting. • Decreases in Horse and Dog Racing, and the National Lottery. • Gamblers more likely to have attempted suicide in recent years. • Gamblers more likely to report a co-morbid mental health disorder in

recent years. Paper 2 – Predictors of Dropout in Disordered Gamblers in Residential Treatment - 2000-2015 – currently under peer review pending publication

460

Highlights • Confirmation of high rates of both enforced and voluntary attrition • Clinicians need to be aware of the characteristics of those who are at risk

of termination and make attempts to retain them in treatment • Data spans large time period (15 years) however does not give any

information regarding those who did not seek treatment nor relapse rates • First study to investigate dropout rates among a large group of individuals

attending the only residential in—patient treatment in the UK. 12. Suicide and gambling - Research – coroners need to be recording

suicide relating to gambling addiction in the same way that they do for drugs and alcohol. Better and stronger links with mental health services, Samaritans and GP’s awareness of gambling related harm should be as common as their knowledge of drug and alcohol addiction.

13. Advertising - This is a key area where more empirical evidence is needed so that decisions can be made based on fact rather than hypothesis. Surely, with the wealth of resources put into marketing and advertising research over the years by big conglomerates, there is data out there that will inform any unintended consequence of advertising. If not, then RET funding should be channelled accordingly.

14. Gambling and Sport - This is a key area where more empirical evidence is needed so that decisions can be made based on fact rather than hypothesis. Surely, with the wealth of resources put into marketing and advertising research over the years by big conglomerates, there is data out there that will inform any unintended consequence of advertising. If not, then RET funding should be channelled accordingly.

15. Gambling by young people and children - The GMA has been working with the University of Lincoln on a range of papers including ‘psychological correlates in treatment seeking gamblers’; differences in early age onset gamblers vs later age onset gamblers’ was published in Addictive Behaviours journal here: https://www.sciencedirect.com/science/article/pii/S0306460319300577?dgcid=author.

In summary: • Early age onset gamblers (12 and under) reported increased

gambling severity. • They were more likely to have abused drugs or solvents than the

older age of onset group. • Early age onset gamblers were more likely to have committed an

unreported crime. • They were more likely to have a parent with a gambling

problem. • Age of onset was not associated with treatment completion or

dropout. 16. Lottery - The legal age for the purchase of gambling products should be

raised to 18 years old – the fact that today a 16-year old cannot leave school but can purchase unlimited scratch cards at £5 per go for a £10,000 gamble seems inconceivable.

17. Children - We are not aware of any evidence that playing such machines at the seaside is a gateway to problems in later life. If there is any evidence, then such decisions should be made carefully and based on facts, as many families have enjoyable times and happy memories from interacting with these ‘fun’ products.

461

18. Lotteries - We have no comment to make on this question. 19. Governing the National Lottery - We have no comment to make on this

specific question but, we do believe that National Lottery sales should have to meet the same levels of social responsibility using the same responsible gambling measures as other gambling activities. Particularly in the areas of test purchasing, self-exclusion and making interventions when problematic use is noticed. The vulnerable need protection in this area too.

5 September 2019

462

Gordon Moody Association – Supplementary written evidence (GAM0133) Based on an analysis of our service user records conducted by independent academics our observation is that there has been an increase in the number of individuals admitted to our service who cite online gambling as one of the forms of gambling that they engage in. This rose from approximately 8% of service users in 2001 to approximately 63% of service users in 2015. It was also noted from an analysis of this data that having engaged in online gambling prior to admission was amongst one of several factors that predicted an increased risk of service users leaving the treatment programme before completion. Whilst this analysis has not compared forms of gambling to age groups we can say anecdotally from our experience that it is our younger residents who are most likely to have gambled online prior to admission, and who are also the group most likely to gamble exclusively online, without ever having visited a land based betting shop. We would also comment that online gambling would appear to be more common in female service users as opposed to male services users, although since the majority of our treatment services are male only we have less information on differences based on gender. 27 April 2020

463

Gerald Gouriet QC – Written evidence (GAM0045) Response to consultation: It is some forty years since I was first briefed to apply for a gambling licence. I was subsequently briefed as junior counsel in three different applications for casino licences, on each occasion being led by the then Chairman of the Bar. As my licensing practice became more focused, I appeared before benches of licensing justices up and down the country, the licensing boards in Scotland, the Gaming Board, Crown Courts and the High Court on appeals. Since the 2005 Act came into force I have appeared regularly before licensing authorities and magistrates’ courts, panels of the Gambling Commission, and before the High Court and First Tier Tribunal on appeals. I am joint editor of Smith & Monkcom: The Law of Gambling. I will address the questions asked in the ‘Call for Evidence’ first, and then add some general observations.

Questions The Gambling Act 2005

1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld?

Broadly speaking they are. My concern (touched on below) is that the licensing objectives take insufficient account of – indeed, they disallow consideration of – the views of local communities as expressed through their elected representatives.

2. [no response]

3. Is gambling well regulated, including the licensing regime for both on- and off-shore operations?

The regulation of gambling – which the Gambling Act 2005 intended to simplify – has become excessively complicated and over-prescriptive.

(a) Too much: Licensees and licensing authorities, as well as those merely working in the industry, need to be aware of, and understand the contents of, reams of ‘advice notes’, ‘principles to be applied’ (in a wide variety of scenarios), ever-changing ‘guidance’, ‘licence conditions’ and ‘codes of conduct’ – issued by the Gambling Commission and revised with such frequency that I don’t think any of us is ever fully up-to-date. There are too many publications to list here; but a search for ‘Principles’, ‘Guidance’, ‘Advice’, ‘Technical Standards’, ‘Codes of Conduct’ and ‘Licence Conditions’ on the Commission’s website will give a f lavour of things.

(b) Over-protective: When, as children going into a seaside penny-arcade on the pier, even before we were ten years old we took it

464

as a given that the machines were rigged against us. We played them with our eyes wide open and enjoyed trying to outsmart the rogues who we believed made the silver-coloured balls too large to fit into the small prize-winning cups towards which we flipped them. I sometimes wonder whether the acuteness of children, and of adults too, is underestimated in the many and complex layers of protection it has been thought necessary to give them.

(c) Over-prescriptive: We are approaching a point where everything undesirable is made criminal and everything desirable is mandatory. This is regrettable, not least because it substitutes ‘tick-box compliance’ for personal responsibility. Instead of the industry deciding what is the right thing to do in a given situation, it is steered away from responsible decision-making towards a routine, almost mechanical attention to rules, codes, guidance, etc.

Of the many over-prescriptive codes, I single out just one: that where gambling is permitted in premises which sell alcohol the operator must ensure that there is a “pleasant atmosphere”. It is not that an unpleasant atmosphere is prohibited – there is a positive obligation to ensure a pleasant one. Quite apart from the issue of who is to judge what is or is not pleasant, and by what criteria, I am doubtful that Parliament envisaged micro-control being exercised to this extent when it empowered the Gambling Commission to issue codes of conduct.

(d) Over-zealous: The conduct of hearings before Gambling Commission panels has become far too adversarial, and the decisions of the panel can be excessively penal. I believe that as a consequence the regulator is becoming the enemy of the regulated, whereas the two should be working in partnership. There are worrying reports of employees of large operators having been involved (unknown to senior management) in serious breaches of money laundering regulations – such as allowing a high-rolling customer to continue gaming with what are suspected to be the proceeds of crime. Instead of going to the Gambling Commission, cards on table, telling the Commission what has been discovered, who has been sacked, and what else has been done to put things right and make sure nothing of the like kind happens again, some operators appear to be paying compensation (subject to non-disclosure agreements: effectively ‘hush-money’) to the victims of the gambler’s crimes. It is regrettable that the rigours of regulatory enforcement should have become so draconian that an otherwise responsible operator makes that choice.

4. Should gambling operators have a legal duty of care to their customers?

No.

Social and economic impact

5. What are the social and economic costs of gambling?

I have called innumerable witnesses over the years, both for and against new gambling establishments – betting shops, casinos,

465

amusement arcades, bingo clubs. It has too obviously been the case, and it has sometimes been the evidence, that many gamblers cannot afford their losses; and that others believe that success in gambling is their only way out of poverty – only to gamble and sink deeper into it.

How that translates into ‘social and economic costs’ is for others to say. But I cannot brush to one side the accounts I have heard from the mouths of gamblers themselves (and sometimes their partners) as though they were immaterial.

[Questions 6-12: no response]

Advertising

13. How should we make decisions about the regulation of gambling advertising?

I do not understand why the previous restrictions on advertising were repealed. Little is calculated to increase the identified harms consequent upon gambling more than the current inescapable saturation TV advertising.

For any child who turns on the television when he/she gets home from school, and for the rest of us at any time of day, there is no shortage of advertisements for on-line gambling opportunities. And there are free lotteries (“text xxx to win £xxx”) topping and tailing a miscellany of television programs, not just in the evening

The relentless thrust of much television advertising is that gambling is simply a ‘fun’ leisure activity, to be enjoyed without adverse social and economic consequences. I think that is a misleading and potentially damaging message. I take no moral stance whatsoever against gambling, but when considering whether we permit the product to be advertised, and if so to what extent, I think there needs to be a more realistic – indeed, a more honest – recognition of what the product is and what it does.

14.[no response]

Gambling by young people and children

[Questions 15-16: no response]

17. Should children be allowed to play Category D games machines (which

include fruit machines, pushers and cranes)?

I doubt that what is perceived as necessary for the protection of children is really so nuanced that it requires eight different categories of ‘gaming machine’, each with its own rules. I can understand the need for high, medium and low staking machines – but eight categories?

My objectivity may be conditioned by the ‘fruit machines’ I played as a child in fish and chip shops, railway buffets and even public houses, or the jackpot machines to which I had unlawful access in the occasional

466

golf club bar; but I have reservations about the fussily over-protective measures in place regarding gaming machines and children.

Lotteries

18.[no response]

19.Should changes be made to the statutory regime governing the National Lottery, to bring it into line with the regime governing operators of other lotteries?

The National Lottery began life innocently enough as a weekly event, with a stake of £1. Now there is a draw of one kind or another six days a week, with stakes (per line) up to £2.50; there are many satellite games, for further payment, such as ‘Thunderball’, “Quickpicks” and “Hotpicks”; and for someone who enters the National Lottery on line, there are innumerable pages of scratch cards to gamble on, at up to £10 a time.

The hard-sell of its products on the National Lottery website is by no means counter-balanced by limp reminders to gamble responsibly.

I cannot see any good reason why the National Lottery should not be governed in the same way as is any other operator.

General observations Local Licensing Control

1. It is something of a myth that giving the licensing function to local authorities has resulted in ‘local licensing control’. The control that most licensing authorities would like to exercise is the refusal of a licence for a betting shop or adult gaming centre on the simple ground: “the local community doesn’t want it”. Licensing authorities do not have that power – although licensing justices under the repealed legislation did. Even if (as is frequently the case) substantial numbers of local people strongly object to the grant of a new licence for gambling premises on the perfectly rational ground that the high street already has enough of them and the local community doesn’t want any more, that is not a lawful ground for rejecting an application made in accordance with the 2005 Act.

2. There is an understandable frustration in licensing authorities at not being allowed to refuse a licence on the ground that nobody – except the operator – wants it. The sense of powerlessness has led many authorities to bend (or even ignore) the law in order to achieve what they clearly believe to be a greater good. One’s sympathies may well lie with their motives, but it is highly unsatisfactory – for a lawyer, at least – to have to go through a charade loosely based on the licensing objectives in order that the licensing authority can establish a platform for refusal, which everyone knows is a fiction. Examples I have encountered include -

a. That children from a nearby school will be exposed to gambling if a further betting office or adult gaming centre is licensed. This sounds laudable but it doesn’t bear inspection. If the same children go into the nearest convenience store to buy sweets, they are likely to be

467

met by a battery of lottery scratch cards offering high rewards for affordable stakes. Cigarettes may be hidden from their view, but gambling products are often more prominent than anything else at the counter. Television advertising and ‘free lotteries’ have already been mentioned. It is frankly absurd to argue that the mere site of the frontage of an adult gaming centre will expose a child to gambling any more than he/she is exposed already – not least by the National Lottery.

b. That the application is for premises situated in a ‘crime hotspot’. The crimes may not, and frequently do not, have any connection with gambling. I have known a betting shop objected to on the ground that a woman had been sexually assaulted on the upper deck of a passing bus.

Conclusions

3. The 2005 Act brought about many changes, which no doubt will be the subject of discussion by others. In summary, and as a matter of impression rather than detailed analysis (albeit impressions formed over many years), I feel that gambling is less responsibly operated nowadays and less effectively regulated than it was under the repealed regimes. Moreover, there is a culture of gambling in Great Britain which I never observed before the National Lottery, the Internet and the Gambling Act made their cumulative impacts on society. It is not simply the sheer numbers of people for whom gambling has become a humdrum everyday activity; it is that so many of them seem to be gambling not as a recreation but as a means hopefully to better their lives.

4. Those who are rightly concerned about the potential adverse social consequences of gambling may not fully appreciate the extent to which they were ushered in by the 2005 Act. Under the legislation it repealed there could be “no more betting offices than are really required by demand” (Lord Parker CJ in Ex parte Thomas), and the advertising of facilities for gaming was all-but prohibited.

5. I do not think there is anything worthy the description ‘local licensing control’ if licensing authorities do not have the power to refuse licences on the ground that the community it represents does not want them – subject to the caveat that a licence ought not, perhaps, to be refused (all other things being equal) if there is significant unstimulated demand, in excess of supply, for gambling of the kind for which application is made.

6. The experiment of local control subject to statutory guidance has failed: guidance has become so detailed and prescriptive that little is left for local decision-making.

7. I think that the over-regulation of gambling has been counterproductive. Paradoxically there is a sense of the provision of gambling in Great Britain being ‘out of control’, despite the ever-more-pervasive control mechanisms being adopted by the Gambling Commission.

22 September 2019

468

469

Gerald Gouriet QC – Supplementary written evidence (GAM0114) Supplementary response to consultation:

1. I have been asked to send a supplementary response to the Committee amplifying my short answer to consultation question number 4. That question was: Should gambling operators have a legal duty of care to their customers? – to which I answered “no”.

2. My single-word answer assumed the question to refer to a broad duty of care in gambling operators, the existence of which has been rejected by the courts. In Calvert v William Hill248 Briggs J said that “recognition of a [broad] common law duty to protect a problem gambler from self-inflicted gambling losses would involve a journey to the outermost reaches of the tort of negligence in the realm of the truly exceptional.”

3. There is a narrower question, however, which perhaps has a different answer: “Would it be unreasonable to create by statute a duty of care to cover a deliberate or negligent failure to give effect to a self-exclusion agreement?” An immediate, but incomplete, answer is that the common law has the matter covered, and there is no need for statutory intervention. The case of Calvert established a duty of care in an operator, William Hill, who had assumed responsibility to exclude a problem gambler from telephone gambling with them, but had failed to do so.

4. The problem is that the existence of a duty of care may give scant protection to the problem gambler. It didn’t avail the claimant in Calvert, because the judge found that he would have lost his money with some other operator even if William Hill had honoured the self-exclusion requested. The judge held that although William Hill were in breach of their duty of care, there was insufficient causal link between the breach and the claimant’s gambling losses. He said: “William Hill’s negligence may have been a sine qua non for his particular gambling losses, but would not have been the effective cause of his ruin.”

5. Furthermore, an operator’s self-exclusion policies may be designed (and they usually are) in such a way that a gambler embarking upon self-exclusion is required to sign an express disclaimer of liability in the operator for the consequences of any gambling by him while excluded. It may be that operators would take their responsibilities more seriously than the recent spate of self-exclusion breaches published by the Gambling Commission would seem to indicate, if such disclaimers of liability were impermissible or statutorily of limited effect. The difficulty is finding a fair balance: self-excluded problem gamblers who gamble while excluded and win tend not to kick up too much of a fuss. A scenario might unfairly be created in favour of the self-excluded

248 [2008] EWHC 454 (Ch)

470

gambler, in which he can recover his losses in an action of negligence against one operator - whilst holding onto his winnings from another.

6. I have also been asked to expand my responses under the following headings:

Jurisdiction

7. I don’t think that the jurisdiction over the grant/refusal of premises licences should go – sideways, as it were – to planning committees of local authorities. Previous criticisms made of local authorities in their determination of alcohol & entertainment premises licences249 apply equally to local authority committees deciding applications for gambling licences.

8. The only advantage (and it would be substantial) of planning committees deciding applications for gambling premises would be that appeals would go to the planning inspectorate rather than to magistrates’ courts – which, for the most part, are wholly unsuited to deciding the legal and commercial issues arising in contested applications.

Demand

9. The undercurrent to my first submission, put bluntly, is that I think that the 2005 Act liberalisation of gambling has impacted negatively on society far more than it has positively - ‘employment’ and ‘regeneration’ are exaggerated benefits, often cynically deployed by applicants for licences. I fear that commerce has tempted a blind eye to be turned to the damage that gambling can do. I have no doubt that gambling should be permitted, and facilities for gambling should be readily available to the public, in the interests of our having the freedom to conduct our lives however unwisely we want to: but I think that it was reasonable and sensible of the repealed law to limit the opportunities for gambling by reference to genuine demand for them.

Advertising

10. There can be no doubt that people are not simply permitted to gamble these days: they are encouraged to. And I think that is a bad thing.

23 February 2020

249 “The Licensing Act 2003: post legislative scrutiny”: April 2017

471

GVC Holdings Plc – Written evidence (GAM0042) 1. We are pleased to respond to the House of Lords Select Committee’s inquiry

on the social and economic impact of the gambling industry. We would like to thank the House of Lords for allowing us the opportunity to set out our new measures in the area of safer gambling.

2. We support the submission from the Betting and Gaming Council (BGC) and

provide this submission to highlight the additional work GVC is contributing to in the area of safer gambling, through our industry leading ‘Changing for the Bettor’, global safer gambling strategy.

About GVC 3. GVC is one of the world’s largest sports-betting and gaming groups,

operating both online and in the retail sector. We own two of the UK’s oldest and most well-known brands - Ladbrokes and Coral - and are one of the top 20 UK taxpayers. We employ over 15,000 colleagues in the UK, and welcome more customers each year than the National Trust has members.

4. Millions of customers around the world bet with us every year. They like the excitement of a small flutter and the thrill of winning. Betting is an enjoyable, sociable and memorable way to spend time; that's why it continues to be so popular. Our hardworking staff, ensure that community based service remains a long standing tradition in the sector, and our contributions to the fantastic sports we support as an industry, such as racing, means they can thrive and continue to provide entertainment for people from all walks of life.

5. However, unfortunately, for a small percentage of people, gambling ceases to

be entertainment and can cause personal, social, financial and health problems.

6. It is our responsibility, as one of the largest betting operators, to help our

customers gamble in a safe and responsible manner, reduce the risk of harm and help people who need treatment to get it.

7. This is where our new global strategy, 'Changing for the Bettor' originates.

Through this strategy, launched in January 2019, we are making safer gambling a non-negotiable cornerstone of the way we do business and we are fully committed to minimising gambling related harm.

Changing for the Bettor 8. Problem gambling is a complex and multifaceted issue. In order to tackle this

issue, we must adopt a holistic and comprehensive approach that is evidence led.

9. The guiding principle of our safer gambling campaign is to be the most

trusted and enjoyable betting operator in the world. This is based around 7 pillars of action; 1) Understanding the problem and best solutions.

472

• We have announced a 5 year, multi-million dollar project with the Division on Addiction, Cambridge Health Alliance, a Harvard Medical School teaching hospital to look at the issue of problem gambling and related areas.

2) Educating our key stakeholders. • We are supporting the national roll out of the Big Deal youth education

programme with the charity GamCare – the largest project of its kind in the UK.

• Additionally, we are trialling a state-school awareness campaign on harm minimisation with EPIC Risk Management, which will be fully evaluated by a UK University.

3) Promoting responsible attitudes. • Leading the industry in recently agreeing a ban on pre-watershed

gambling adverts on television, during live sports. • Developing specific TV adverts that promote safer gambling and use of

our account management tools. • Unilaterally ending all shirt sponsorship deals with UK football teams

and banning match-side hoarding adverts. 4) Empowering customers.

• Rolling out the ‘markers of harm’ algorithms to all UK facing parts of the business to detect problematic play.

• Providing Gamban blocking software, free of charge, to help those customers that are struggling with their gambling, to block gambling websites and applications.

• We are also conducting a full review of our safer gambling tools and making these more visible, easier to use and a more important part of our customer experience.

5) Funding treatment for those in need. • Increasing our donation to research, education and treatment on

problem gambling ten-fold to 1% of Gross Gambling Yield (GGY) by 2022.

6) Championing responsible product design. • Developing more responsible product design principles.

7) Drive cultural change within our business. • Ensuring that a safer gambling approach underpins all aspects of our

business, with refreshed mandatory training for all colleagues. • In addition, we partner with EPIC Risk Management to ensure we

communicate with our customers more effectively and that safer gambling is a key consideration of our strategic decisions in all parts of our business.

10. Behind each pillar are real, tangible measures we are taking, both internally

as a company and externally, to expand our knowledge of the signs of problem gambling and create a safer betting environment for our customers.

11. Our strategy has been independently reviewed by EPIC Risk Management

with whom we have created a new partnership with. EPIC is the leading independent harm minimisation consultancy in the UK and Ireland, with a proven track record of minimising harms across the highest risk sectors including professional sport, financial services, the armed forces, the criminal justice system and education. GVC are working with EPIC in a committed

473

long-term contract to drive culture change, review and improve processes and ensure sustainability and consumer protection in all channels.

12. We support the BGC submission fully, however we would like to add some

additional detail to the steps GVC individually is taking with regards to questions 7 – 14. Namely on the subjects of the levy, research, education, treatment, advertising and the relationship between gambling and sport.

Levy Q7: Is the money raised by the levy adequate to meet the current needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons? 13. As an operator, we recognise that along with increased customer interaction,

we need to ensure that support is available for those who need it. We recognise the need to invest more and that is why, in 2019, GVC doubled our donation to UK problem gambling Research, Education and Treatment from £2m to £4m a year - 0.1% to 0.2% of GGY. Furthermore, in April, GVC were the first operator to commit to increase this to 1% of GGY by 2022. Since then, GVC, working with the other big 4 operators, has led this call and the big 5 operators have now all committed to increase their RET donations to 1% by 2023. This will see a total of approximately £100 million donated over the next four years, and approximately £60 million annually thereafter.

14. We are pleased that the industry is moving decisively to implement this

increase to 1% of GGY voluntarily. The quickest means to put support in place is on a voluntary basis. Industry led initiatives enable a variety of approaches to be trialled to allow us to all learn more about how to tackle problem gambling in the quickest, most effective and most innovative manner with a range of partners.

15. Whilst we will maintain our commitment to fund GambleAware in the UK, the

rest of our donations will be spent on projects that fit with our guiding principles. These include, but are not limited to, projects with charities and organisations such as GamCare, YGAM, the Safer Online Gambling Group (SOGG) and EPIC Risk Management. We will also work with the Government and independent stakeholders that assess the need for additional provisions for treating problem gambling.

Research Q8. How might we improve the quality and timeliness of research in the UK? What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons?

Q9. If, as the Responsible Gambling Strategy Board (RGSB)1 has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation?

474

16. We will answer Q8 and Q9 together. We believe that more research, in a

variety of areas is needed to better understand the scale of problem gambling, and to identify the most effective way of reducing this. That is why key to underpinning our flagship Safer Gambling strategy, is a new partnership between GVC and Harvard University to produce cutting edge research on problem gambling.

17. This 5-year partnership will see us invest $5 million with Harvard's specialised

Division on Addiction, providing them with access to our anonymised data sets, for independent and robust scrutiny, and to evaluate the effectiveness of our current systems and procedures. From this Harvard will provide advice and suggest modifications on how these can be improved to identify and more quickly respond to customers at risk of harm.

18. These data sets will also be open sourced so that other academics and

research institutions can utilise them for similar purposes. We are keen to extend the benefits of this collaboration with the rest of the industry, sharing our learnings and knowledge from the partnership.

19. In addition, we are also scoping a series of literature reviews and new

research reports with Harvard on a variety of subject areas. Reviewing existing research pieces, along with learnings from international markets on best practice, will provide us with the knowledge to ensure our commercial decisions do not have unintended consequences that negatively affect vulnerable customers.

Education Q10. Is enough being done to provide effective public education about gambling? If not, what more should be done? 20. We know that prevention is key to reducing the impact of gambling-related

harm, and that is why we are investing in a variety of awareness and harm minimisation educational programmes in the UK. These include the following:

21. Working with the charity GamCare: To fund a youth outreach programme

nationwide – called the Big Deal. The project focuses on raising awareness among young people, and professionals working with young people, about the problems associated with gambling and the signs of harm. The pilot project delivered programmes to 2,500 young people, and was independently evaluated by LKMco, an education and youth ‘think and action-tank’. This found that 91% of those taking part in the sessions were able to spot the signs and symptoms of problem gambling by the end of the sessions. Our partnership will enable GamCare to expand this programme and roll it out nationally, delivering workshops to 8,000 young people and train 8,000 professionals.

22. Developing and funding a new pilot project with EPIC Risk Management: To

educate students in state-schools on the signs of problem gambling. EPIC Risk Management will lead a new state-school pilot initiative, working with schools and their students to raise awareness to prevent gambling related

475

harm amongst young people. Using their lived experience, the aim is to present awareness raising and harm-minimisation education seminars to Years 9, 10 and 11 (ages 13-16) on the risks of problem gambling. This will be independently evaluated through a leading UK University before it is expanded.

23. Supporting YGAM University Digital Champions Programme: GVC and YGAM

are working together on a project that will see specially trained ‘digital champions’ in Universities throughout the UK, who will raise awareness of the risks around gambling. They will provide independent advice to those students who need support, and help them to build digital resilience at a time when they may be vulnerable whilst away from home.

24. We want to ensure that when children turn 18, and can consider betting, they

are making fully informed decisions about gambling, and they can recognise the signs of gambling getting out of control, whether amongst themselves or their friends and family.

25. Driving and embedding cultural change within our business: We want to

ensure that all colleagues in all teams have safer gambling at the forefront of their mind when making day to day decisions at work. We have introduced new mandatory colleague training on safer gambling measures, with specific modules and face-to face sessions for our customer facing teams. In addition, EPIC Risk Management are also advising us on the most appropriate language to use when talking to customers who shows signs of problem gambling.

Treatment Q11. Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help?

26. We believe that current treatment provision in the UK should be expanded. That is why we were the first operator to commit to increasing our donations to RET to 1% (by 2022), with the rest of the big 5 operators now all committing to this figure by 2023. As part of this agreement, representatives from the big 5 have asked Lord Chadlington, a vocal campaigner on safer gambling, to chair an independent committee that will recommend how best to administer funds committed to safer gambling initiatives, including the treatment of problem gambling. Membership of the committee will be announced in September 2019 and it will publish its recommendations before the end of the year.

27. We are also pursuing additional avenues of support with external partners.

GVC are funding a private treatment facility in Manchester - Leon House - which prioritises spaces for at-risk groups, such as armed forces personnel and blue light workers. The clinic is set up in partnership with Cognacity, who are one of the UK’s leading providers of private mental health services. All patients will receive an independent psychiatric assessment on referral and

476

will be recommended a bespoke recovery and treatment plan to fit around their specific needs and lifestyle.

28. We are also funding, and exclusively working with the Safer Online Gambling

Group (SOGG) to support them in developing a digital therapy app. Using their expertise and lived experience, the SOGG are creating a digital therapy app as a new and innovative way of identifying potential problematic behaviour, resulting in earlier intervention. This new medium also provides a different type of support and ensures that if someone is seeking help, there are a variety of avenues they could take.

Q12. What steps should be taken better to understand any link between suicide and gambling?

29. Suicide and self-harm are incredibly important issues and ones that as a

business we take very seriously. We believe this is an area that is relatively under-researched and that it is only by evaluating the evidence that we can begin to understand how best to combat it. We support the increased focus and efforts to have more research in this area, to better understand the link between suicide and gambling, and how we can better support customers at risk. In addition, working with independent organisations and charities we are looking at how we can improve our procedures to ensure that customers at risk get the support they need quickly.

Advertising Q13. The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.”2 Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons? 30. In 2018, GVC was the first company to call for a pre-watershed advert ban

during live sports. Earlier this year, an industry wide ‘Whistle to Whistle’ ban on UK TV adverts around live sports, pre 9pm, was agreed, beginning August 2019. Since then, GVC has called for a full TV Ad ban around live sports (except horseracing), and for the tone and volume of advertising to be addressed, suggesting there should be responsible gambling adverts only, and only one per advertising break.

31. In addition, GVC have designed RG adverts for both the Ladbrokes and Coral

brands that began airing during the launch of the new football season. These adverts only feature content that raises awareness of our account management tools and encourages customers to gamble safely.

Gambling and Sport Q14. Gambling is becoming an integral part of a growing number of sports, with increasingly close relationship between operators and sports clubs, leagues and broadcasters. What are the risks attached to this?

477

32. Gambling and sport share many links, which, as with racing, can complement

each other. However, at GVC, we recognise that there are certain sports where the link between gambling and sport has become of concern, especially for children and younger fans. Football is an example of this. The safety of our customers and the integrity of sports is of paramount importance to GVC, and that is why earlier this year we were the first operator to unilaterally end all football shirt sponsorship deals with UK teams and ban perimeter board advertising at football grounds. This will allow sporting fans to watch their favourite teams without seeing any incentives to bet. To honour all existing agreements, we are donating our previous advertising space to either white label responsible gambling messaging, such as with our SPFL sponsorship, or messaging of our charitable partner - Children with Cancer - such as with our sponsorship of Sunderland and Charlton football teams.

Conclusion 33. Changing for the Bettor is an acknowledgement from GVC that we can and

should do more to support problem gamblers and those at risk. 34. We see Changing for the Bettor as an evolving strategy, that will advance as

new initiatives and actions come to light, and we learn from best practices across the industry and elsewhere. There are a variety of pieces of ongoing work, and we hope this submission has highlighted our very real commitment to tackle problem gambling in a safe and measured way.

35. From research, to workshops and internal changes within our business, we

are committed to addressing the complex issue of problem gambling, and continue to work in all areas to tackle this from all angles. We can see there is a challenge ahead, and know the impact of these initiatives will not be felt instantly, but we believe that these pillars provide a strong foundation for real change within GVC, and strive to be industry leading in this important area.

36. We thank you for this opportunity to engage and we await the outcome of

your inquiry with interest.

6 September 2019

478

GVC Holdings Plc – Supplementary written evidence (GAM0117) Re: Use of Settlement Agreements Following the evidence session on 4th February, at which our Chief Executive, Mr Kenny Alexander gave evidence, you have requested further information in respect of “NDAs” used by GVC. At GVC, we do not use “NDAs” per-se in relation to the settlement of customer disputes. We use “Settlement Agreements”; which include a number of provisions and which since February 2019 have been based on our precedent settlement agreement. This was voluntarily drafted by GVC with the assistance of external counsel to ensure that the terms were in plain English and that the confidentiality provisions explicitly state that all parties retain the right to discuss the issues and dispute with regulators. Usually, Settlement Agreements involve us paying a financial sum to the relevant customer. However, we would not offer to pay someone more money in return for signing a settlement agreement. The settlement agreement is a document which gives legal effect to whatever agreement we have reached but the payments are determined by other criteria. We can set conditions, for example sometimes, the customer is required to close their account and/or not transact with us in the future. This is particularly the case where the complaint or dispute relates to responsible gambling issues. We would like to stress that Settlement Agreements are used for all types of dispute, not only those relating to responsible gambling complaints. Other examples would include disputes in respect of alleged personal data breaches, bet settlement disputes, applicability of our customer terms and conditions etc. Confidentiality clauses are commonplace in most, if not all Settlement Agreements, across all industries, where threatened or actual litigation is settled. It is normal to document the terms of settlement in a customer dispute enabling each party to have clarity and protect their interests. For the customer, they obtain a simple and rapid remedy for their complaint without the need to go through the time and expense of a litigation or Court process. For the operator, it achieves finality on the complaint and, with confidentiality, prevents exploitation by other third parties and copycat claims. There is therefore a clear mutual benefit in every case. Similarly, ADR providers and mediators such as the Small Claims Mediation Service and In Place of Strife require confidentiality for both the mediation process and for any subsequent Settlement Agreement. Customers are not forced into agreeing the terms. Since August 2019, all unrepresented customers are advised to consider taking independent legal advice on the terms of the Settlement Agreement before signature. They are referred to the free advice available from the Citizen’s Advice Bureau. Where appropriate, customers are always referred to relevant responsible gambling help and advice available as part of the initial response to their complaint and on provision of the Settlement Agreement.

479

Against that backdrop, it is important to stress that GVC does not, in any way, use Settlement Agreements to undermine the regulatory framework and reporting requirements set by the Gambling Commission. GVC always notifies the Commission of any failings in accordance with its reporting obligations regardless of any confidentiality provision in Settlement Agreements. It is also worth noting that customers often “offer” to sign up to confidentiality provisions and specifically state that they will not complain to the Commission in return for an increased settlement sum. GVC treats such demands akin to blackmail and will only settle disputes at a value which reflects litigation or commercial risk, not ‘regulatory’ risk. GVC also makes it clear to those customers that GVC is under a regulatory requirement of self-notification which cannot be overridden by paying an increased settlement sum.

2 March 2020

480

GVC Holdings Plc – Supplementary written evidence (GAM0126) Following our letter of 2nd March and your follow up questions of 13th March, you asked for some additional information on the use of Settlement Agreements, and specifically disclosure to the Gambling Commission. Settlement Agreements are commonplace for many businesses across the United Kingdom and can be entered into for a variety of reasons. There is no general requirement in the Licence Conditions and Codes of Practice (LCCP) for operators to notify the Gambling Commission when a settlement agreement is signed, and as such, the Gambling Commission will not be notified every time an operator enters into a new settlement agreement with an individual. Of the 28 settlement agreements referred to by Mr Alexander at the session on 4th February, the Gambling Commission are specifically aware of 4 complaints which have involved the use of a settlement agreement in the last 12 months. Those complaints relate to key event notifications and/or matters arising from the Public Announcement made by the Gambling Commission in respect of GVC in July 2019. Where a key event notification is made, GVC generally confirms at that time whether any divestment or payment is to be considered to a customer or a third party. If the settlement agreement is to be used as part of that process, this will usually be confirmed at the same time for information purposes only. Where requested, GVC will provide a copy of any agreement to the Gambling Commission (as envisaged by the terms of the agreement itself). In addition, the relevant complaints which lead to settlement agreements would also have been notified to the Gambling Commission (in terms of numbers) with GVC’s quarterly regulatory returns. The other disputes involving the use of a settlement agreement in the last 12 months relate to one of the following, for which there is no requirement for disclosure of the settlement agreement to the Gambling Commission:

• Betting return disputes • Complaints in other jurisdictions • Commercial third-party disputes (i.e. supplier disputes) • Small claims litigation

The important position that Mr Alexander was seeking to highlight was that of the 28 agreements, where there is a requirement to inform the Gambling Commission of the underlying facts, we have in the last 12 months complied with this and will continue to do so, and that none of the agreements prevented the customer or third party from speaking to any regulator, including the Gambling Commission about the underlying dispute or the agreement itself. 27 March 2020

481

Hippodrome Casino Limited – Written evidence (GAM0070) Executive summary We welcome this review of gambling and gambling legislation in Great Britain. In the absence of regular governmental reviews, a number of issues in relation to the gambling market has accumulated. We hope that this wide-ranging, independent and balanced parliamentary review will restore some clarity to matters of gambling policy. We have explored the questions posed in some detail in the attached submission. In summary: - In general, the objectives of the Gambling Act 2005 are being achieved in Great Britain. Levels of problem gambling are low in relation to participation and to other international markets – and they appear to have been fairly stable. There is very little criminal involvement in gambling. A tightening regulatory framework has served to raise standards of fairness and transparency (particularly since the mandatory licensing of remote gambling in late 2014). - Gambling is generally well-regulated - particularly since November 2014 when it became a requirement for remote operators to be licensed by the Gambling Commission. - Modernisation of our gambling laws is overdue. In particular, we observe that the laws and regulations governing land-based casino gaming have not been updated to reflect societal changes, customer demand and the significant changes brought about by the expansion of remote gambling; moreover, in not bringing forward necessary reforms, successive Governments have has failed to follow official policy. Specifically, we would like to see the following:

• Completion of the Government’s evaluation of the trial of regulatory modernisation for casinos. This evaluation was due to have been published in 2014.

• Greater choice for casino customers with respect to gaming machines, electronic casino games and sports betting (subject to controls and harm prevention measures).

- In common with most consumer activities, gambling involves both benefits and costs. There is no standard or universally agreed methodology for assessing benefits and costs – and all attempts to do so are subject to considerations of selection and measurement. Current political discourse tends to focus almost exclusively on costs, yet our examination of the research literature indicates that consumer benefits are likely to outweigh costs. We believe that more needs to be done to understand the nature of both costs and benefits through a structured and longitudinal programme of research. - Greater funding than has been available in the past may be required for the purposes of problem gambling treatment, research and preventative education. At the same time, we note that the voluntary system of funding has in recent years proved effective in raising the level of funds identified by the Responsible Gambling Strategy Board and the Gambling Commission. There has been considerable conjecture on this subject in recent years (with a range of proposals made) without any scientific attempts to quantify how much money is required nor any comprehensive review of the most appropriate funding mechanism. We hope that the committee finds our submission useful and we will be pleased to participate further in the process of inquiry should that be helpful. Simon Thomas, Chief Executive Officer, The Hippodrome Casino Ltd

482

Hippodrome Casino – detailed responses – 6th September 2019 This submission is made by the Hippodrome Casino, which is licensed in Great Britain by the Gambling Commission. The Hippodrome was opened in 2012 and is one of the most popular (in terms of visitation) gaming venues in Europe. Every month, we receive more than150,000 visits from customers to play table games, electronic gaming machines, peer-to-peer card games; to dine in our award-winning restaurant; and to watch live entertainment, including our Magic Mike Live show. The Hippodrome is a good example of what was envisaged by the Gambling Act 2005 – regeneration, renovation, job creation, tourism. It is an entertainment-based destination casino, very popular with customers and providing gambling in a closely supervised environment with large numbers of highly trained staff. With relatively modest changes in casino regulation, there could be more Hippodrome-style destination venues in Great Britain, delivering exciting casino led entertainment venues that people like, with high levels of protection and supervision; and bringing local employment and amenity benefits and inward investment. The Gambling Act 2005 1. Are the three primary aims of the Gambling Act 2005 being upheld? Based upon the evidence available, it would seem that the primary aims are – to a large extent - being upheld. We consider evidence in relation to the three objectives below: 1.1 - preventing gambling from being a source of crime or disorder. There is limited direct evidence available on the incidence of crime in relation to gambling. On the basis of the present data, we consider that gambling in Great Britain is almost entirely free from criminal involvement from an operational or ownership perspective. The extent to which gambling may be a source of criminal activity, or used by criminal elements for recreational purposes (‘bad money’), is more difficult to assess due to poor availability of data and complexities involved in establishing cause. However, based upon what we do know and given the scale of the industry, gambling does not seem to be a major cause of crime. Moreover, there is no evidence that gambling-related crimes have increased since the passing of the Gambling Act in 2005. Banks and Waugh (2018) propose a four-tier taxonomy for classifying gambling-related crime250, which may be helpful in addressing this question:

• Illegal and unlicensed gambling - “Where either the type of gambling is prohibited by law or where the party is not licensed within the jurisdiction to offer the relevant gambling services.”

• Non-compliance - “Where the provider of gambling is licensed by the relevant authority but – either by design or negligence – transgresses the law.”

• Gambling-centred crime - “Where the provision of gambling attracts crime. This includes, but is not limited to, betting shop robberies, theft from patrons, money laundering, and bribery of officials to obtain licensing consents.”

• Criminogenic gambling - “Where the act of gambling causes individuals or organizations to commit crime. This includes, but is not limited to, theft in order to fund a gambling addiction, abuse arising from disordered

250 Banks & Waugh 2018, p.8

483

gambling, violence against family members and in order to collect gambling debts.”

1.1.1 - illegal and unlicensed gambling. Great Britain has been highly successful in suppressing the development of a black market for gambling. This is likely to be the result of relatively liberal laws to permit the betting and gaming products that consumers wish to play; the maintenance of taxes (with some exceptions) at reasonably modest levels; and by effective enforcement by the Gambling Commission and other relevant authorities. The main source of quantitative evidence in this area relates to offences under the Gambling Act 2005. Official data shows that in 2016, 140 defendants were proceeded against at magistrates courts for offences under the 2005 Act (down from 208 in 2012). This represents 0.01% of the total number of cases received by magistrates courts in England And Wales. The overwhelming majority of these (129) were for the unlicensed supply of gambling facilities251. Separately, in 2018/19, the Gambling Commission took action against 31 unlicensed remote operators. 1.1.2 - non-compliance. The Gambling Commission adopts a highly vigorous approach to ensuring regulatory compliance. In 2018/19, the regulator carried out 1,200 compliance assessments on licensees. During the same period, a total of £19m of divestments by gambling companies were made in relation to regulatory investigations. This reflects an increasingly stringent approach to enforcement by the regulator. In the year to April 2019, the Gambling Commission revoked five operating licences and issued warnings or conditions to a further eight companies. The regulator also revoked 20 personal licences and issued warnings to a further eight personal licence holders. These data indicate that Britain’s licensed operators are generally compliant with gambling law and regulation. Where breaches are detected, the Gambling Commission takes a robust approach to enforcement and the encouragement of all licensees to learn from individual operator failings252. 1.1.3 - gambling-centred crime. According to the 2015 National Risk Assessment (‘NRA’) by HM Treasury and the Home Office, gambling is classified as a “low risk” activity in terms of facilitating money-laundering253. We note that since the time of the assessment, licensees are considered to have been increasingly diligent in reporting suspicious activity to the Gambling Commission and other relevant authorities. It should also be noted that enhanced Social Responsibility measures and capabilities, especially around customer due diligence and affordability, further strengthen licensee capabilities in this area. Land based casinos – unlike most other sectors of the gambling industry - are subject to anti-money laundering regulations. This provides an additional level of assurance that casino gaming is not being used for the purposes of financial crime. Another area of concern of gambling-centred crime is robbery or armed robbery of licensed gambling premises – where the presence of money attracts acquisitive (and sometimes violent) crime. In this respect, gambling premises are no different to other businesses (such as banks and petrol stations) where criminals are attracted by the presence of cash. The casino sector has a long history of working with law enforcement to minimise risks in this area. As Banks (2016) notes, “there is little evidence to suggest that the introduction of

251 Parliament.uk 2017 252 It should be noted that the vast majority of Gambling Commission enforcement actions are not

related to actions that might be classified as criminal 253 HM Treasury & Home Office 2017, p.76

484

legalised gambling establishments has a significant impact on the overall crime rate in the jurisdictions in which they are located.”254 1.1.4 - criminogenic gambling. A minority of people with gambling disorder may steal or commit fraudulent acts in order to fund their gambling – but the overwhelming majority do not. For this reason, in 2013, the American Psychiatric Association removed criminality as a diagnostic criterion for disordered gambling within its DSM-5 derived screen. The Gambling Commission has powers to investigate cases where the proceeds of crime are used for the purposes of gambling – and in recent years has agreed a number of regulatory settlements (involving substantial divestments and penalties) for failings by a small number of licensees in this area. 1.2 - ensuring that gambling is conducted in a fair and open way. The vast majority of gambling activity in Great Britain is carried out in a fair and transparent fashion. Government and Gambling Commission data shows very small levels of fraudulent activity; and most people who gamble in this country do so with companies licensed by the regulator. 1.2.1 – Competition and Markets Authority investigation. An investigation into online gambling initiated in 2016 by the Competition and Markets Authority (‘CMA’) in association with the Gambling Commission highlighted a number of concerns in relation to “inadequate or unclear information”; “potentially unfair rules that restrict certain play strategies, on which firms rely to deny customers a pay-out when they come to claim their winnings”; restrictions on withdrawals; and account dormancy charges. As a result of the investigation, a number of large licensees gave undertakings to amend practices and guidance was issued to all licensees (including land based casinos) to ensure high standards across the industry. In April 2019, the CMA and Gambling Commission announced that the investigation had closed but that practices would continue to be monitored. We believe that the investigation has been successful in raising standards of fairness and transparency in the remote sector. While similar concerns of fairness have not been raised in respect of land based casinos, the CMA investigation has generated a number of useful insights. 1.2.2 – public perceptions and revealed attitudes. The Gambling Commission has been conducting quarterly surveys of attitudes and perceptions towards gambling since 2008. In 2018, 30% of survey respondents who agreed that gambling was carried out in a fair and trusted way; 34% of survey respondents who had gambled in the past year agreed with the statement. These figures were markedly lower than in 2008. While the survey findings are a source of concern, we note that they are based upon relatively small samples and on self-report. We also observe that public trust levels in a large number of large institutions have fallen significantly since the financial crisis (effectively, the period covered by the survey series). Comparing the Gambling Commission findings with the broader Edelman Trust Barometer, indicates that gambling is trusted only somewhat less than business in general and higher than social media companies. The Gambling Commission survey data does not distinguish between different sectors of the gambling industry; nor does it identify the reasons for changes in levels of trust. 1.2.3 – fairness and customer perceptions at the Hippodrome Casino. At the Hippodrome we carry out regular surveys of customer willingness to recommend (using the Net Promoter Score or ‘NPS’) which we consider to be an

254 Banks 2017, p.231

485

important measure of trust. Our most recent NPS was 84%, which is considered “world class” according to the designers of the NPS. We also score highly on the consumer review site, TripAdvisor (see our response to Question 6 for more information on customer attitudes towards the Hippodrome Casino). 1.3 - protecting children and other vulnerable persons from being harmed or exploited. Based upon available data, we consider that Great Britain has been relatively successful in protecting children and vulnerable adults – particularly when one considers the significant changes that have taken place since the passing of the 2005 Act (some of which could not have been foreseen by legislators). 1.3.1 – youth gambling. According to official estimates, 39% of 11-to-16-year-olds are likely to have gambled at least once in 2018. While this is relatively high (the adult population estimate of gambling participation is 59%), the overwhelming majority of gambling by children appears to be legal – private betting or gaming (e.g. card games) with family and friends; National Lottery products; and low-stake gaming machines in arcades. Reported rates of gambling by children have declined significantly in recent years. Between 2011 and 2017, past-week gambling by 11-to-15-year-olds fell from 23% to 12%255. Gambling by children on age-restricted products appears to be relatively low – much lower for example than for consuming alcohol256. Between 2011 and 2017, past-week gambling on age-restricted products fell from 14% to 6%. These patterns were observed across each age and gender cohort. Past-year participation in (non-lottery) online gambling is around 4%. According to survey data, the majority of this underage online gambling (three-quarters) takes place using the account of a parent or guardian; and around half of underage online gambling takes place with the consent of the parent or guardian (suggesting that educating parents about the risks of underage gambling may be a useful area to focus on in the future). While the absolute number of children participating in gambling and age-restricted gambling may be a cause for concern, prevalence does at least appear to be in decline. 1.3.2 – casinos and youth gambling. Casinos have the highest entry controls in the industry and Gambling Commission data (from regulatory returns) indicates very low levels of underage gambling. The National Casino Forum carries out annual mystery shopper surveys (based upon a ‘Think 21’ policy). In 2018, 96% of casinos passed the test (with all casinos passing on re-test). The Hippodrome Casino has passed these tests in every year that they have been conducted at the venue. According to most recent data from the Gambling Commission, in the 12 months to September 2018, there were 52 incidences in casinos where individuals were unable to verify their age after having gambled; and it seems likely that in some (but not necessarily all) of these cases the individuals may have been under the age of 18. While, we strive to ensure that no underage gambling takes place in casinos, we observe that this figure equates to 0.3 incidents per casino per year. Britain’s casinos receive around 20 million customer visits per year so these incidents represent around 0.0002% of total attendance. We note too that casinos have the lowest number of such incidents across the gambling industry.

255 We estimate that in 2018, 10.9% of 11-to-15-year-olds participated in gambling on a past-week

basis. 256 Past-week alcohol consumption by 11-15-year-olds was estimated at 10% in 2016

486

1.3.3 - problem gambling among children. Estimates of problem gambling among 11-to-15-year-olds (using the DSM-IV-MR-J screen, designed for use with children) have been published since 2014. The reported rate of problem gambling in this age group was 0.7% in 2014; 0.6% in 2015 and 2016; and 0.9% in 2017. It is categorically not the case – as some have claimed – that there was a three-fold or four-fold increase in problem gambling amongst children between 2016 and 2018. Indeed, the Gambling Commission’s report makes it clear on a number of occasions that due to a number of changes in sampling (notably the inclusion of 16-year-olds in the 2017 and 2018 surveys but not in the earlier surveys) and survey methodology, the 2016 and 2018 data are “not directly comparable”. 1.3.4 – issues with measurement (children) - Caution should be exercised in attempting to draw conclusions about changes in problem gambling rates between surveys. Over the course of the five surveys where problem gambling has been measured, the mean number of respondents identified as problem gamblers is less than 20 per year. Care should be taken when attempting to extrapolate from such small numbers to arrive at population-level estimates. Attempts to assess problem gambling rates among children have been criticised within the academic research community. For instance, Professor Jeff Derevensky (McGill University, Canada), a leading authority on high-risk behaviour by children and adolescents, has challenged reported rates in global research – and in particular the accuracy of the DSM-IV-MR-J screen, stating “there are common scoring errors in certain instruments‚ in particular the DSM-IV-J‚ which have resulted in over-estimates‚ and current screening instruments for youth lack sufficient construct validity257.” 1.3.5 - problem gambling among adults. The rate of problem gambling among adults in Great Britain has – according to official estimates – remained broadly stable over the course of the last two decades. The first major household survey to assess problem gambling rates in Great Britain – the British Gambling Prevalence Survey 1999 – reported a problem gambling rate of 0.6% of the population (16-years and above). The most recent estimate – from the combined Health Surveys 2016 – also reported a rate of 0.6%258. The highest rate of problem gambling was recorded in 2010 (0.9%) and the lowest in 2012 (0.5%). In 2016 (the most recent year for which we have data from a major household survey), the central estimate of the number of people in Great Britain with problem gambling (using the DSM-IV) was 290,000 (0.6% of the population above 16 years). If those identified as problem gamblers under the Problem Gambling Severity Index are added, the central estimate rises to 340,000. This is a large absolute number of people but a relatively small percentage of both the population and the gambling population. 1.3.6 – problem gambling and casinos. The rate of problem gambling for those who play table games in a casino has also been relatively stable despite a significant increase in casino visitation during the period. In 1999, the problem gambling rate for players of table games was 5.6% and in 2016 it was 7.1%. It should be noted that these data indicate correlation rather than causation – they do not indicate the extent to which casino gambling may or may not be the cause of any problems. By comparison with other forms of betting and gaming,

257 Derevensky et al., 2003, p.410 258 Problem gambling estimate according to the DSM-IV screen which was used across all three British Gambling Prevalence Surveys and all three combined Health Surveys

487

casino gambling would appear to be a middle-ranking activity in terms of problem gambling prevalence. 1.3.7 – issues with measurement (general). The use of self-report surveys to identify gambling-related harms is not perfect. Some critics argue that problem gamblers are likely to be under-represented and that accuracy of recall (or even dishonesty) may depress reporting. On the other hand, some researchers contend that problem gambling prevalence surveys produce a high proportion of false-positives and have poor validity when compared with clinical screening – and that these factors result in exaggerated levels of problem gambling. 1.3.8 – international comparisons. Caution should be exercised in comparing of problem gambling rates between international jurisdictions, given the capacity for methodological and cultural differences to affect comparisons. However, so far as we can tell, the rate of problem gambling in Britain is relatively low by international standards259. 2. What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed? The timing of the last comprehensive review of gambling in Great Britain (the Gambling Review Body of 2000 to 2001) and the last major restructuring of our gambling laws (the Gambling Act 2005) predated a number of profound changes to market supply – including the emergence of mobile gambling. The Gambling Review Body (whose 2001 report strongly influenced the Gambling Act 2005) estimated that around £100m was spent on remote gambling in 2001 – compared with around £5.5bn in 2018. As a consequence of this – and the British Government’s decision to abdicate responsibility for remote licensing prior to November 2014 – our gambling laws were not designed to consider these significant alterations in market supply. While there has been a number of changes to the way that remote gambling is regulated and taxed in this country, there have so far been no attempts to modernise the law for traditional, land based licensees to reflect the altered state of the market. As a result, casino operators have been held back in their attempts to meet customer expectations by a series of antiquated and anti-competitive regulations. We outline these below. 2.1 – the need for legislative modernisation for casinos. From a casino’s perspective, a number of changes are required to gambling legislation in Great Britain. These changes reflect societal changes, customer demand and the fact that the development of remote gambling has fundamentally changed the nature of gambling market supply – to the extent that anachronistic restrictions are not simply anti-competitive but also work against the best interests of consumers. 2.1.1 - revision of machine gaming entitlements to better match consumer interests. At present, the majority of casinos (145 out of 152 currently operating) in Great Britain are restricted to just 20 gaming machines, regardless of size or the volume of customer visits. The limit is entirely arbitrary and has resulted in a situation where less than 2% of the total number of gaming machines in land-based premises (i.e. excluding the almost universal availability of slots-style games available on millions of smartphones and internet devices)

259 Significantly higher rates of problem gambling have for example been observed in Australia,

Hong Kong, Macau, South Africa and The United States of America. The reported rates of problem gambling in Great Britain have been similar to those observed elsewhere in western Europe.

488

are found in casinos – in spite of the fact that these venues typically feature high levels of entry control and supervision. The present situation, where seven casinos are entitled to offer a higher number of machines260 but the remaining 145 are restricted to just 20 is the result of the British Government’s failure to adhere to its own policy. The Government had planned to use the opening of new casinos under the Gambling Act 2005 as a trial for the wider modernisation of casino regulations. This was confirmed in July 2008 by the then Parliamentary Under-secretary for Culture, Media and Sport, Gerry Sutcliffe who indicated that an assessment was scheduled for 2014261: The first of the new casinos opened in 2010, in the London Borough of Newham and since then a further six have opened. We are now more than nine years on from the first opening and more than five years on from the scheduled Government assessment. In that time, there have been no suggestions that the wider availability and choice of machine gaming in these casinos has negatively affected the licensing objectives contained within the Gambling Act. As a consequence of this legislative paralysis, the British Government has pursued an approach of permitting machines proliferation in convenience locations while imposing heavy restrictions on destination venues. This is at odds with regulatory orthodoxy in gambling markets262. Indeed, in some jurisdictions in the world (e.g. France and Western Australia) gaming machines are only permitted within casinos. 2.1.2 – impact on consumers. At the Hippodrome Casino, we typically host between 4,000 and 8,000 customers a day (and at peak times have around 1,600 customers on our premises); yet we are able to offer them just 20 gaming machines. This creates a “restriction effect” which the economist, Professor Douglas Walker (of the College of Charleston, USA) observes is a type of harm to the consumer263 (where the consumer is harmed through being prevented from engaging in mutually beneficial transactions264 and from having freedom of choice curtailed). Consumers also suffer from a lack of choice as the casino machines supply market in Great Britain is insufficiently large to support more than a handful of suppliers. Thus, many popular games available in other jurisdictions (or indeed online in Britain) are unavailable to patrons of British casinos. Analysis provided by the European Casino Association (the ‘ECA’) has shown that British casinos derive the second-lowest proportion of revenue from gaming machines of any of the 25 European nations included in the ECA’s membership. Casinos also derive the lowest proportion of revenue from machines of any sector of the British gambling market (c20% in 2017/18) as well as the lowest absolute quantum of revenue. There are also some indications that current restrictions may result in unintended harm to consumers by discouraging breaks in play (for fear of losing one’s place at a machine) and encouraging persistence – something that was highlighted as a concern by the Department of Digital, Culture, Media and Sport in 2018. It also deters operators from being able to offer the normal full range of entertainments usually found in a modern casino by making investment economically unviable.

260 The four ‘Large’ 2005 Act casinos currently operational may offer up to 150 machines; the three

‘Small’ 2005 Act casinos currently operational may offer up to 80 machines 261 Hansard, HC Deb, 16 July 2008, c435W 262 See Eadington & Collins, 2009 263Walker, 2015, p.189 264 For more on restriction effects, see our answer to Question 6 (below)

489

Source: European Casino Association/ GamblingCompliance

2.1.3 – consequences of reform. An increase in the number of machines permitted in casinos from 20 to a maximum of 80265 (which has been discussed at length with the DCMS over the course of the last four years and agreed in principle) would result in more positive experiences for consumers; while any concerns around problematic gambling might be addressed through measures to ensure that high levels of play supervision are maintained266. We estimate that this change would result, over time, in the addition of around 2,500 machines in casinos nationwide (a further 17 per casino on average). The consequence of such a change would be a gradual and relatively modest increase in the total number of machines in casinos that would be more than offset by the anticipated reduction in machine numbers in other venues (notably licensed betting offices where around 12,000 machines are expected to disappear as a result of closures). An independent evaluation of the effects of changes would allow for regulatory recalibration or change if concerns were identif ied. In 2018, the Government acknowledged the problems posed by current restrictions and indicated that, should improvements to social responsibility be made267, the sector’s requests for regulatory modernisation might be approved. Given the progress achieved by casinos in a number of areas – and in particular play tracking and limit-setting – we would like to see the reform of machine allocations brought forward. We note that our proposals are consistent with the views of both the Gambling Review Body (2000 to 2001) and the Culture, Media and Sport Select Committee inquiry of 2012. 2.1.4 – electronic casino games. Under current regulations, it is difficult to offer casino customers a full range of opportunities to play electronic versions of casino table games. This is because the law requires electronic table games to be based on actual physical events (such as the spin of a roulette wheel or the turn of a card) rather than the use of a random number generator (as is the case in most international markets). As a result, casinos have been largely restricted to

265 Excluding the four ‘Large’ casinos which are currently permitted to deploy up to 150 machines

(and the four ‘Large’ casinos which have yet to be developed) 266 It should be noted that prior to 2007, casinos were able to deploy an unlimited number of Section 21 gaming machines (which had lower jackpots than traditional casino machines). There is

no evidence that the availability of these machines resulted in any adverse consequences – or that any benefits accrued from their removal. We note too that while the decision to ban these

machines in other venues (bingo clubs and arcades) has since been effectively overturned, no such

action has been taken in respect of casinos. 267 Department for Digital, Culture, Media and Sport, 2018, p.22

0%20%40%60%80%

100%

Luxem

bo

…

Fra

nce

Est

onia

Swit

zerl

and

Po

rtugal

Slo

venia

Germ

any

Fin

land

Aust

ria

Hunga

ry

Gre

ece

Ital

y

Sweden

Slo

vakia

Belg

ium

Neth

erl

a…

Czec

h…

Serb

ia

Po

land

Spain

Lit

huan

ia

Denm

ark

Gre

at…

Ro

man

ia

Chart 1: European casinos - revenue analysis (2013)

Tables Machines

490

being able to offer electronic roulette (where outcomes from an automatically spun physical wheel are relayed to electronic terminals) while electronic versions of blackjack, three-card poker or player-to-player poker have been rendered impractical by the need to use physical playing cards. We are unaware of any policy objective underpinning this restriction. As far as the consumer is concerned, it is irrelevant whether an electronic game is determined by a physical event or a random number generator. In terms of social responsibility, we are unaware of any reason why electronic casino games should not be made more readily available to consumers within a controlled casino environment (so long as appropriate technical standards are in place and that levels of supervision are maintained at high levels). We would like to be able to offer a wider range of Gambling Commission approved casino games via electronic terminals. This would involve the use of a random number generator to determine outcomes. We do not envisage that this change would necessarily lead to any significant expansion in the number of terminals in casinos – simply greater choice for consumers on existing units. One negative consequence of the current restriction is that – in general – customers wishing to play casino card games are required to play at physical tables where minimum staking levels are typically much higher (reflecting the high costs of operating manned tables). The consumer may thus be harmed through restriction of choice and a higher cost of play. We consider that there may be wider social responsibility issues in relation to this restriction. 2.1.5 – sports betting. Under current regulations, only a handful of Britain’s casinos (seven out of 152) are able to offer sports betting, despite the fact that many casino customers enjoy a bet on sports. Once again, this approach is at odds with international regulatory practice. Indeed, in some jurisdictions sports betting is only permitted within casinos. We would like all casinos to be able to offer sports betting to customers under appropriate levels of supervision – particularly as observational evidence indicates that many casino customers are already betting online while watching sports within casinos. Permitting casinos to offer sports betting would have only a very minor effect on the supply of sports betting in land-based venues (there are currently 152 casinos and more than 8,000 betting shops in Britain). Indeed, given the planned closures of several thousands of betting shops, this provision would only minimally offset a large anticipated decline – and may result in the preservation of customer choice in certain markets. In terms of social responsibility, we note that sports betting has consistently had a relatively low level of problem gambling in British prevalence surveys; and that in the handful of casinos where it has been available (since 2010), no negative issues have been reported. 2.1.6 – positive change yields positive outcomes. The implementation of these relatively modest areas of legislative modernisation will lead to stepped up investment in casinos (including the expansion of non-gaming amenities), enhanced customer enjoyment and increased employment. In 2016, EY estimated that machine regulation changes alone (see 2.1.1) alone would yield £90m of capital investment, create 975 new jobs and increase in taxation of £65m. Changes to regulations covering electronic casino games and sports betting would trigger further investment and additional jobs and taxation. More importantly, they would result in the development of casinos as more broad-based entertainment venues, of higher value to the communities where situated

491

and with higher economic and social benefits268. The Hippodrome Casino has developed plans to invest a further £2m in its premises should regulatory modernisation be approved. This is part of the casino’s £6m three-year capital investment package and in addition to the initial investment of around than £45m. 2.1.7 – addressing concerns. While we consider that the areas for modernisation outlined above are critical in order to “put the customer at the heart” of gambling policy, we are also aware that any increase in gambling opportunities are likely to cause concern. In addition to the fact that our requests are relatively modest (and are likely to only marginally offset declines in machines, electronic casino games and sports betting as a result of betting shop closures), we are investing in a range of initiatives to raise yet higher our standards of safe gambling. These measures are in addition to existing high standards and include enhanced employee training, play tracking, the development of diagnostic analytics, enhanced supervision and testing of biometric technologies. We believe that our actions are more than adequate to address concerns but are also keen to understand other ways to ensure that we may raise levels of consumer enjoyment 2.2 – taxation. Casinos in Great Britain – and in London in particular - are subject to high levels of duty that discourage investment and hinder their ability to compete in an international market (which in turn negatively affects tourism). Uniquely for retail, leisure and entertainment, casino games are taxed on a sliding scale of duty. The scale starts at 15% of gaming revenue (gross gaming yield) and ends at 50%. As a result, the effective rate across the casino sector is around 26%. At the Hippodrome, our effective rate of duty in 2018 was around 40%.269 Britain’s casinos (which generate less than 10% of gross gambling yield in Great Britain) pay almost 13% of the total duties collected from the industry270. In the fiscal year 2018/19, the casino sector paid £266m in duty – an excess of at least £86m compared with what it would have contributed under VAT271. The Hippodrome Casino alone paid more than £24m in gaming duties - £14m more than would have been the vase under VAT. The Hippodrome’s total tax footprint (including VAT on non-gaming products, PAYE and business rates) was more than £32m. Such high levels of taxation fail to recognise the business risks involved in operating a casino and penalise the consumer. In a major review of gambling taxation in Europe (commissioned by the Netherlands Bureau for Economic Policy Analysis), the economist, Professor David Forrest found that “high taxes are likely to hurt recreational consumers badly while not necessarily mitigating problem play272”. Professor Forrest argued that the application of elevated rates of taxation for gambling is regressive and observes “the evidence is virtually unanimous that gambling taxes add to the unfairness of the tax system273”. A flattening of the duty regime would result in renewed investment in Britain’s casinos, triggering growth in consumer surplus, employment and taxation and supporting tourism.

268 Consistent with the cost-benefit framework established by Eadington & Collins (2009) attached

within the appendix 269 Some high-end London casinos pay even higher rates of duty 270 Excluding lotteries 271This is before adjusting for VAT recoverability which further widens the gap between tax on

casino revenue and tax on other forms of leisure. 272 Cnossen et al. (2009), p.69 273 Ibid., p.88

492

3. Is gambling well regulated? Britain has (so far as we can tell) low levels of illegal gambling; relatively low levels of problem gambling by international standards; low levels of cheating; and a generally compliant industry. This is despite fairly profound changes in market supply (notably the rise of remote gambling). The Gambling Commission only gained comprehensive oversight of the remote industry late in 2014 – two decades after the launch of the first online casino. While there are clearly some issues in relation to the regulation of remote gambling in Great Britain, these may be explained (at least in part) as legacy effects from the Government’s former ‘point of consumption’ approach to licensing. Over the last four-and-a-half years, the Commission has progressively raised standards in the regulation of remote gambling – particularly in the area of harm prevention. Standards of age verification are high within casinos (see section 9.2). We note too that recent changes to the Licensing Conditions and Codes of Practice have brought the remote sector into line with the industry at large by requiring age verification prior to play. 4. Should gambling operators have a legal duty of care to their customers? Casinos – in common with the broader licensed gambling market – already have an ethical, legal and regulatory responsibility to implement measures in order to protect vulnerable people. This requirement is enshrined in the Gambling Act 2005 – to ensure fairness and to protect against harm. This also applies to the Government and to the Gambling Commission – to legislate and regulate in accordance with these objectives. Gambling consumers also need to accept a level of responsibility for their own actions and behaviours. The autonomy of the consumer – alongside appropriate regulatory and licensee measures - is a critical component of harm prevention. Blaszczynski (2017) emphasises the importance of personal responsibility to the process of overcoming gambling disorder, writing that “it is a fundamental understanding in clinical psychology and psychiatry that people do not change their behaviour unless they are fully motivated”274. 5. What are the social and economic costs of gambling? As we explore in 5.1 (below), estimating social and economic costs related to gambling is typically controversial and highly subjective. Some of the illustrative examples offered in the question may not meet the definition of “social and economic costs” under classical welfare economics. They may, however, qualify under the much broader classification of gambling-related harms (as proposed by Wardle et al., 2018). The absence of a systematic framework to measure costs or harms has resulted in a dearth of reliable data and the generation of some questionable research studies. 5.1 – Defining social costs. The research literature on the measurement of social and economic costs related to gambling reveals what Professor David Forrest (Management School, University of Liverpool; member of the Advisory Board for Safer Gambling) has described in his ‘An Economic and Social Review of Gambling in Great Britain’ as “a striking lack of consensus over methodology that suggests caution in taking any purported estimates of social cost too literally.”275 This, he argues has given researchers “considerable scope…to

274 Blaszczynski, 2017, p.167 275 Forrest, 2013, p.21

493

exercise judgement in constructing their measure of social cost, with the risk that their own ideological perspectives may drive the results they report.” The economist, Professor Douglas Walker of the College of Charleston has defined a social cost as “a reduction in social real wealth…[which] refers to whatever is valued by individuals”. He goes on to state that “A change in the state of the world that simply redistributes wealth from some persons to others without changing the sum of wealth for all individuals taken together would produce neither a social cost nor a social benefit…This neutrality of wealth transfers in welfare applies even when the transfers are involuntary”276. Using this definition, Walker has set out a framework for what he considers are “legitimate social costs”277 (see table 1). Table 1: Legitimate social costs of gambling (Walker, 2015)

Social cost

Description

Legal costs

“some individuals face legal problems as a result of their disordered... This activity can lead to social costs because the resources expended on police, courts and incarceration could have been spent on other goods or services. Importantly, the money stolen or any awards in civil court decisions are not social costs because they represent wealth transfers. “For legal costs of police, courts, and incarceration to be fully attributed to pathological gambling, there are two requirements First, the costs must be borne by others, not the pathological gambler. Second, pathological gambling must be the sole cause of the behaviour (that is, the primary disorder.”

Treatment costs

“As with legal costs, we can consider this a social cost only if someone other than the treated individual pays for it.278”

Psychic costs

“Emotional harm, to the extent that it is caused by the pathological affliction, is a social cost because it can be considered a negative technological externality when relevant arguments are included in a utility function”

Restriction effects

“A significant cost can occur as a result of government restriction of…gambling. The fact that gambling is not universally available means that government prevents mutually beneficial voluntary transfers from occurring…When individuals are prevented from making what they see as mutually beneficial, voluntary transactions, they are harmed…We must consider the social costs of banning products that consumers would like to consume.”

Lobbying “The effort by opponents and proponents of legalized gambling to influence government policy constitutes a social cost because resources would have been used to produce goods and services.279”

276 Walker, 2015, p.156 277 Walker identifies the following as “items improperly defined as social costs”: wealth transfers,

bad debts, bailout costs, government welfare expenditures, productivity losses and theft 278 Under this definition, it may be that hypothecated taxation to provide treatment services or

voluntary levies would not be counted as legitimate costs as they would be paid for by gamblers. 279279 Walker, 2015, pp.163-167

494

What Walker’s framework makes clear is that some of the social costs are in opposition to one another. For example, an expansion of treatment services would represent an increase in treatment costs but would be expected to alleviate psychic costs. It also indicates just how difficult it can be to measure costs. 5.2 - The IPPR Study. In 2016, the Institute for Public Policy Research (‘IPPR’) published a report (commissioned by the Responsible Gambling Trust280). The report (entitled ‘Cards on the Table281’) considered costs to the state related to gambling disorder, based upon four areas:

• Health: primary care (mental health) services; secondary mental health services; and hospital inpatient services

• welfare and employment: Job Seekers Allowance (‘JSA’) claimant costs and lost labour tax receipts

• housing: statutory homelessness applications • criminal justice: incarcerations

The authors of the study defined fiscal costs as “a transfer from a government entity to a non-government entity: in this case an individual, or else the sum of individuals, who are problem gamblers.” They concluded that, based upon this definition, the excess cost to the state of people who were problem gamblers was likely to fall within the range of £260m to £1.16bn. It is important to note that the study was not designed to capture social costs. Indeed, under a social costs framework, a number of the costs reviewed would not be admissible. As we note below, the British Government’s Regulatory Policy Committee has criticised the IPPR’s report. As the authors of the report acknowledge themselves, they were required to construct their estimates using imperfect data; and we consider that there may be a number of methodological flaws used within the calculation. Importantly, the study attempts to provide estimates of excess costs related to problem gambling; it does not comment (and cannot comment) on costs arising as a result of problem gambling. The authors are very clear on this point282. In April 2019. the British Government’s Regulatory Policy Committee (‘RPC’) criticised the IPPR report (along with a separate study by the Centre for Economics and Business Research) within the context of the DCMS Impact Assessment on stake reduction on B2 machines in licensed betting offices. The RPC commented on “limitations in the available data”, noting that the Government had been “unable to replicate the analysis, or to critique or test all of the assumptions that underpin the calculations and outputs283”. 5.3 – harm reporting. The harm reporting framework proposed by Wardle et al. (2018) may be useful in guiding future operational, healthcare and regulatory policies. It is unlikely however to be able to provide a reliable assessment of social costs related to gambling. However, as Walker (2015) notes, there may be practical value in simply acknowledging their existence (rather than trying to apply arbitrary monetary values to them). While welcoming recent advances in research of gambling-related harms, Delfabbro & King (2017 and 2019) raise a number of concerns with respect to how such information should be interpreted and used. In particular they note that setting a low threshold of what is considered “harmful” is likely to result in problems distinguishing between

280 The Responsible Gambling Trust has since been renamed GambleAware 281 Thorley, Stirling & Huyhn, 2016 282 Thorley et al. (2016), p.42 283 Regulatory policy Committee (2019), pp.4-5

495

genuine harm and opportunity cost. They also highlight the difficulties in establishing whether specific harms are caused by excessive gambling or simply correlated. They observe that “in the National Co-morbidity Survey Replication in the US (Kessler, 2008), 96.3% [of] individuals with pathological gambling had a lifetime history of at least one other psychiatric disorder with the other disorder occurring first in about 75% of cases.” 5.4 – social costs and casinos. We note that – in terms of harm prevention – there is a number of inherent characteristics that put casinos in a relatively strong position. As Professor William Eadington and Professor Peter Collins observed in their 2009 paper on costs and benefits (which has strong policy implications for gambling in Britain and is worth reading in full), from different modes of gambling284 the destination nature of casinos means that they are less likely to attract impulsive gambling; while their scale also gives them an “ability to implement more effective and pro-active responsible gambling programs and strategies”. Casinos in Great Britain benefit from a number of aspects that are likely to reduce the potential for harmful play:

• Mandatory entry supervision; • A range of additional entry controls (including the use of facial recognition

technologies and ID scanning systems); • High levels of manual supervision by trained (and licensed) employees; • High levels of supervision via CCTV; • Play tracking through anti-money laundering provisions (mandatory) and

player cards (voluntary); • The presence of positive inducements to take breaks in play – such as

enjoying a meal or watching live (non-gaming) entertainment.

In addition, casinos typically offer highly social environments, which as Thompson et al (2009) suggest itself acts as a risk mitigant: “Social restraints were seen as key to tackling problem gambling tendencies. It was widely felt that social relationships could enable problem gambling to be identified, monitored and addressed.”285 The researchers contended that relationships between customers and between customers and employees served to moderate gambling behaviour: “Members of staff and fellow customers at gambling venues were seen as better positioned to identify gamblers who were exhibiting problematic behaviour.”286 6. What are the social and economic benefits of gambling? As with estimating social and economic costs, the process of identifying and measuring benefits is fraught with issues of selection and attribution. Men and women have been gambling in some form or other for several millennia – and in every part of the world and in every major culture. As Jan McMillen (the former chair of the Australian Institute of Gambling Research) has written, “Gambling is one of the few social activities that occurs in nearly all cultures and in every period of time: in this respect it can be said to be virtually a universal phenomenon in human societies.”287 Given that gambling appears to be an enduringly human pastime, it ought therefore to be self-evident that it involves a range of benefits for those who participate in it and others. 6.1 - consumer enjoyment. As Ross et al. (2008) observes, the principal social and economic benefit of the gambling industry is to allow adults to engage in

284 Eadington & Collins, 2009 285 Thompson et al., 2009, p.39 286 Ibid. 287 McMillen, (1996), p.6

496

pursuits that they wish to do and find enjoyable. Casinos exist as a direct response to consumer needs, providing a structured and trusted mechanism for consumers to play the games that they enjoy in a social and supervised setting288. Walker adds that, “there can be no greater benefit from legalized casino gambling than the enjoyment the consumers achieve from the activity289.” 6.1.1 – customer enjoyment at the Hippodrome Casino. The Hippodrome Casino surveys customers every month to record willingness to recommend (net promoter score or ‘NPS’). Our NPS currently stands at 84%, which according to Bain (who developed the NPS) is considered to be “world class”. At present, 60% of our ratings (n=1,182) on TripAdvisor are “excellent” and 22% “very good”. These scores put us above other entertainment and tourism venues such as Alton Towers (43% excellent) and the London Eye (55% excellent); and only slightly below the Tower of London (67% excellent). In addition, 64% of TripAdvisor ratings for our Heliot Steakhouse (n=1,778) are “excellent” and 18% are “very good”; while customer reviews of our Magic Mike show (n=328) are 58% “excellent” and 11% “very good”. Our combined TripAdvisor score (based upon “excellent” or “very good” reviews for the casino, our restaurant and the Magic Mike show) is currently 81%290.

Table 2: Hippodrome Casino – customer enjoyment measures (2019)

Net Promoter Score 84%

Combined TripAdvisor Score (excellence / very good)

81%

6.1.2 - consumer surplus. Economists traditionally measure consumption benefit by estimating consumer surplus. Consumer surplus describes the difference between the value that consumers ascribe to a product or service and the price that they pay to obtain it. Forrest (2013) observes that while no rigorous assessment of consumer surplus in relation to gambling in Great Britain has been carried out, his “rough calculations” (based upon the approach to calculating consumer surplus used by the Australian Productivity Commission) showed “a consumption value for Britain” in 2011-2012 of £1.9bn. This, he wrote was the “’value of fun’ equivalent in terms of benefits to individuals of giving household in the country extra untaxed income of about £75 per year”291. We note that the gambling market has grown in value by almost one-quarter since that point (in absolute terms). It therefore seems likely that consumer surplus may also have increased materially; although by how much is difficult to estimate. We believe that a conservative estimate of consumer surplus from gambling in 2018/19 would put the value in excess of £2bn. This indicates that casinos are likely to generate consumer surplus in the range of £200m to £250m a year and that the Hippodrome Casino may generate consumer surplus of £12m to £18m a year. Indeed, if we consider Eadington and Collins (2009) analysis of costs and benefits (which found that casinos generate the highest ratio of benefits to costs), these figures are likely to be under-estimates.

288 Ross et al. 2008, pp.21 to 22 289 Ibid. 290 TripAdvisor scores correct at 28th August 2019 291 Forrest, 2013, p.11

497

6.1.3 - well-being and happiness. There has been a limited number of studies in recent years to understand well-being or happiness in relation to gambling. In studying data from the BGPS 2010, Forrest (2013) found that among men, “results indicate a statistically significant increase of just under 0.2 points on the happiness scale if the subject is a recreational gambler rather than a non-gambler”; and that “this is a non-trivial effect, close to that predicted by the model if the individual is moved from the mid- to the top-tercile in the income distribution”292. This finding was consistent with a later study a study by Blackman et al. (2019) that found not only higher levels of well-being among recreational gamblers than non-gamblers but also found that well-being increased with gambling engagement – except in those cases where problem gambling occurred293. There has been a number of studies of self-reported happiness and gambling among elderly people in care homes294. These studies have consistently demonstrated higher levels of happiness among those who gambled regularly and higher levels of happiness while gambling by all participants. Some studies have found that participation in certain gambling activities may increase mental acuity. 6.2 – social and economic benefits of casinos. We consider the social and economic benefits of casinos specifically. According to Eadington and Collins (2009), gambling in destination casino venues results in high levels of benefits (as well as lower levels of costs, as identified above). These benefits are driven by the following factors:

• The ability to attract customers from outside the local community (including tourists);

• High levels of capital investment (including infrastructure spending); • The offering of a wide range of amenities (including dining and non-

gaming entertainment).

The potential for casinos to support investment and tourism are likely to become increasingly important in the future, given the United Kingdom’s planned exit from the European Union. In addition, we note that casinos in Great Britain employ more than 14,100 people – often in highly skilled positions (a large number hold personal licences from the Gambling Commission). 6.2.1 – tourism. International research indicates that casinos have significant potential for encouraging tourism. Eadington (1999) observed that “the form of legal gambling that is most associated with tourism is casino gaming295”. Casinos, particularly large entertainment-led casinos and high-end London casinos play an important role in supporting British tourism. With the support of the Government (to permit greater choice of games as described in 2.1), the casino sector has the potential to play an even greater role in stimulating visitation and expenditure by overseas visitors (see section 6.1). At the same time, the failure to modernise casino regulations may be the cause of an outflow of economic value as both international visitors and British citizens switch their consumption to casinos in overseas jurisdictions (both existing markets such as

292 Ibid., p.14 293 both studies found that problem gambling predicted significant deficits in self-reported well-being 294 Dixon et al., 2010 295 Eadington, 1999, p. 1

498

Las Vegas296 and new markets such as the integrated resort casinos under development in Cyprus and Spain). 6.2.2 – community benefits. In addition to the consumer and employment benefits, other advantages are bestowed on consumers by the local licensing of casinos. For example, casinos typically offer the use (without charge) of facilities to community groups. Since its opening in 2012, the Hippodrome Casino has provided a home for London’s Chinese Community Centre at an estimated cost of £150,000 per year. The casino is an active supporter of London’s Chinatown community and participates in cultural events throughout the year. The Hippodrome also provides support, meeting rooms and refreshments for a range of other groups, including charities, local business groups and even the Metropolitan Police. The annual value of these donated goods and services is more than £40,000. 6.3 – casinos – how revenue is distributed. The economic effects of casinos flow to a wide range of parties, including the Government, casino employees and their families, and other businesses. In 2018/19, the Hippodrome paid £32.3m in taxation, representing around 42% of business income. To illustrate how casino revenue is distributed, we can consider the average (mean) expenditure on a visit to the Hippodrome Casino of £44.68 (broadly commensurate with expenditure on other leisure activities in central London). Of this consumer expenditure, Her Majesty’s Revenue and Customs receives £19.55; £9.51 is paid to employees of the casino in wages and benefits; £13.16 is paid to other businesses (property costs and the supply of goods and services; £0.47 is paid in loan interest. Ultimately, just £0.77 is retained by the casino as profit (a modest reward given business risks).

It is clear from this illustration (see Chart 2, above) that consumer expenditure on casino gaming provides high levels of income to the Government and benefits a wider range of stakeholders who help to drive economic activity in Great Britain. If anything, the rewards (in terms of retained earnings) to owners of casinos (who risk capital to establish and operate them) are very low –

296 Britons are already the largest non-American visitor group to Las Vegas – something that

reflects revealed choice for casinos and may reflect the anachronistic nature of British regulations which restrict consumer choice

£19.55

£9.91

£13.98

£0.47 £0.77

Chart 2: Hippodrome Casino - revenue distribution

HMRC Employment Other costs Interest Retained

499

something that needs to be taken into consideration when assessing matters of regulatory and fiscal change. 6.4 – summary of benefits from casinos. Tables 3 and 4 (below) summarise some of the beneficial effects of Britain’s casinos and the Hippodrome Casino in particular.

Table 3: Casinos – selected benefits

Benefit Estimated annual value

Consumer surplus £200m to £250m

Gambling duties £266m

Other taxes (VAT, corporation tax, PAYE. National Insurance, business rates)

Not disclosed but considerable

Contributions to good causes Not disclosed but likely to be considerable

Other

Direct employment 14,156 people

Table 4: Hippodrome Casino – selected benefits

Benefit Estimated annual value

Consumer surplus £12m to £18m

Gambling duties £24m

Other tax (VAT, corporation tax, PAYE, NI, business rates)

£8m

Contributions to good causes (charitable donations and fundraising) and community support

£275,000

Other

Direct employment 775 people

7. Is the money raised by the levy adequate to meet the current needs for research, education and treatment? The Hippodrome is a long-standing supporter of research, education and treatment. We have provided financial and non-financial support for a wide range of organisations, including GamCare, GambleAware and YGAM. In addition, we have sponsored research into problematic gambling on casino products. The question of funding adequacy assumes that there is a clear understanding of a) how much is raised at present in relation to section 3.1.1 of the Licence Conditions and Codes of Practice; and b) how much is required for research, education and treatment. We examine these below: 7.1 - how much is currently raised? There has been a tendency in policy debates to focus exclusively on funding provided to GambleAware; yet this does not represent the sum total of contributions to research, education and treatment (‘RET’) and is only a fraction of industry funding for harm prevention

500

more widely. We can however make assessments of funds raised in relation to the three-year National Responsible Gambling Strategy (or the ‘NRGS’) which set out the official approach to RET. Under the NRGS, the Responsible Gambling Strategy Board, the Gambling Commission and GambleAware agreed how much would be required for GambleAware to fulfil its responsibilities. It does not include expenditure by the Gambling Commission in pursuit of its responsibilities under the strategy (which is funded by the industry through licence fees297) nor by the industry (for example in the establishment and operation of multi-operator self-exclusion schemes). Table 5: Funding targets and funds raised for the National Responsible Gambling Strategy 2016-2019

Year Budget* Contributions Settlements** Total % of budget

2018/19 £9.5m £9.6m £7.3m £16.9m 178%

2017/18 £9.3m £9.5m £5.0m £14.5m 156%

2016/17 Not disclosed

£8.2m £0.3m £8.5m n/a

* Excludes GambleAware running costs ** Excludes funds from settlements allocated elsewhere Source: ABSG; GambleAware

In recent years therefore, voluntary contributions from licensees to GambleAware in relation to the NRGS have been closely aligned to the budget set (excluding GambleAware operating costs of c£1m per annum). Including funds made available to GambleAware via voluntary regulatory settlements, a large surplus to budget has been achieved. If we are considering whether sufficient funds have been made available by the industry to meet the RET requirements identified by the RGSB/ABSG, then the answer would appear to be emphatically positive. It may be that greater funding is required than has been identified in the past; and we examine this question below. However, in recent years, it is difficult to avoid the conclusion that the voluntary system of donations has been relatively successful in achieving funding targets. Clearly, there can be no reliance on funds arising from regulatory settlements in the future. However, we would observe that a) there is a sizeable reserve of unallocated funds currently available to achieve the aims of the National Strategy to Reduce Harms; and b) the voluntary levy system has been moderately successful in raising funds sufficient to meet official requirements in the past. It seems plausible that with better engagement of licensees as part of the NRGS/NSRGH, a voluntary system could meet funding requirements. The recent commitment of five operators to increase RET funding to £60m per annum by

297 In 2018, the Gambling Commission received £19m in licence fees

501

2023 strongly suggests that it should be possible to achieve even the RGSB’s implied upper estimate of required funding (of £76m per annum)298. 7.2 - how much is required? In 2018, the Gambling Commission published estimates for future funding indicating a range from £21.5m to £67m. However, official estimates have been arrived at using only very high-level analysis – including comparisons with other jurisdictions (e.g. Canada, New Zealand, some US states) and other domains (e.g. alcohol harm). Such comparisons may help frame the debate but are not directly germane to the question of how much should be invested in Great Britain. For example, there is no law of parity when it comes to treating health disorders (alcohol disorder may typically involve significant detriment to physical health as well as mental health – leading to different approaches to treatment). At present however, there is no funding guidance under the National Strategy to Reduce Harms (the ‘NSRH’) equivalent to that disclosed in the NRGS. This is unhelpful and we hope that it may be provided soon. We consider that it would be useful for a robust needs assessment to take place in order to determine what RET services are required, how they should be provided and how much they might be expected to cost. 7.3 - do we need a mandatory levy? The idea of a mandatory levy is of course not without merit. In theory, it offers a high degree of transparency and funding stability; and it is perhaps more equitable than a purely voluntary arrangement. However, we believe that this proposal requires far more thorough examination than has heretofore been the case. In particular, we would wish to understand the costs (to the state and to industry) of running a scheme; the governance arrangements that would be put in place; how funding levels would be calculated (including contributions from the National Lottery); how funds would be collected and by whom; the basis for distribution of funds; how funds would be ring-fenced; how the scheme would be enforced; and what sanctions would be employed for late payment or non-payment. In addition, we note that attention should be paid to possible unintended negative consequences arising from a mandatory scheme. In particular, the shift from a voluntary scheme to a mandatory one may result in a diminution of engagement and interest between the industry and organisations carrying out work in research, education and treatment (which we observe anecdotally appears to have happened in certain jurisdictions where statutory schemes are in place). In short, there may be advantages to a system built on intrinsic motivation rather than coercion. 7.4 - who should pay? It seems to be a generally accepted principle that funding for RET should be borne by the gambling industry under a “polluter pays” principle. This view appears to be at odds with broader public health approaches where RET is funded from general taxation; and also requires an understanding, not yet sufficiently clear, of the source of “pollution”. We observe that the gambling industry already contribute around £3bn a year in duties299 around £2bn of which relates to non-lottery products. We estimate that if these gambling expenditures were subject to VAT at the standard rate then Her Majesty’s Revenue and Customs would receive at least £200m less in taxation each year. As we have set out above (in response to Question 2), casinos contribute an excess of at least £84m a year; and the Hippodrome Casino generates an excess of £14m a year. If we assume that gambling duties are set

298 In April 2019, the chair of the Gambling Commission, Bill Moyes indicated that £70m a year

may be required although no basis of calculation was provided 299 This is just a part of the industry’s tax ‘footprint’ which includes corporation tax, VAT, business rates, PAYE and National Insurance Contributions.

502

higher than the standard rate of VAT because there is an appreciation of social and economic harms, then it seems logical that the excess tax revenue might be allocated towards addressing those harms. Those operators paying very high levels of gambling duties (for example, London casino operators, some of whom pay more than 40% of their revenue to HMRC in gaming duty) might reasonably ask why such tax receipts are not allocated to treatment services. In addition, we highlight that the “polluter pays” principle makes an assumption of causation. We should always bear in mind that gambling-related harms are not necessarily the same as harms caused by gambling. We do not dispute the fact that excessive gambling can lead to some very severe harms; but it ought to be recognised that excessive gambling can also be the result of pre-existing harms. There is also the matter of comorbidity with other disorders (such as alcohol or substance misuse). The gambling industry has provided funding – almost entirely exclusively - for RET for 17 years; and we will continue to do so into the future. We are not seeking to avoid our social responsibilities; nor are we opposed in principle to a mandatory system. However, we do consider that any review of RET funding (and in particular any structural changes to the current system) should at least consider why it is considered inappropriate to use public finances (and in particular excess taxation) for this purpose. 8. How might we improve the quality and timeliness of research in the UK? 8.1 – a long-term and inclusive strategy. We consider that a more expansive, pragmatic and coordinated approach to research would be more effective in guiding operational, regulatory, prevention and treatment policies. First, we consider that there should be a greater focus on applied research to assess the effectiveness of different operator prevention and support mechanisms. This would involve evaluation of sector or major industry-wide initiatives (such as the assessment of multi-operator self-exclusion schemes) but also smaller projects to compare different approaches to common problems by different operators. It would also involve a more collaborative approach to research, built upon greater trust. We are aware of criticism of industry participation in research but contend that the involvement of licensees involves a number of benefits (including better access to consumers and consumer data and greater engagement in harm reduction). Moreover, we note the results of a recent large-scale study by Shaffer et al (2019) of 720 research papers produced between 2008 and 2018. The authors found that the evidence did “not support the hypothesis that gambling research methodological quality or study outcomes is biased by funding source”300. They also observed that industry-funded research tended to be more transparent than supposedly “independent” studies, with “conflicts of interest statements…more likely to be included among studies funded by the gambling industry compared to other funding sources”301. We would like to see the development of a proper research strategy, involving longitudinal studies of gambling and problem gambling behaviour and prevalence alongside applied research conducted in association with operators and treatment providers. As part of this approach, attempts should be made to synthesise findings and identify practical consequences. 8.2 – evaluating legislative change. In addition, changes to regulation and legislation should be assessed. This recommendation was included in the

300 Shaffer et al. (2019), p.883 301 Ibid.

503

Gambling Review Body in 2001 and yet, with a small number of exceptions, this has been largely ignored over the last 18 years. We consider that where regulatory relaxation or tightening are concerned, it may be worth considering limited trials. In this way, the consequences of restrictions could be better understood before full enactment. It might also make it easier for the Government to make positive changes to legislation in the interests of consumer enjoyment by being able to identify and address concerns. As we have observed above, the British Government committed to an evaluation (due in 2014) of the trial of casino reforms with some casinos having larger numbers of gaming machines but this has not yet transpired. 8.4 – understanding positive play. We support the recommendation made in the Report of the Gambling Review Body in 2001 (the ‘Budd Report’) that the benefits of gambling should be studied in addition to harms. This is critical for using research to divine balanced, sound policy that “puts the customer at the heart” (as the Gambling Commission has urged). We also believe that in focusing on healthy attitudes and behaviours we may be better able to identify the behaviours that we should encourage (rather than simply those behaviours that we should discourage). It might also help to guide more responsible product and service innovation. To date, there has been almost no official research carried out on consumer benefits and positive play; and it has been indicated that there is no official appetite to conduct such work under RET arrangements (even with a substantial increase in funding). This contravenes the description of “a public health approach” as articulated by Latvala et al. (2019): “In a public health approach, the impacts of gambling, negative and positive, are assessed”; and “in a public health approach, the positive effects associated with gambling are recognized”302. 9. If, as the Responsible Gambling Strategy Board (RGSB) has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation? 9.1 – research. Undertaking research where children are concerned poses specific challenges and ethical concerns. For one thing, where children are gambling on age-restricted products, it is by definition impossible to track and monitor their behaviour. Where self-report studies of gambling by children are concerned, there are specific issues of interpretation and recall. At present the Gambling Commission’s annual survey of gambling by 11-to-16-year-olds is the principal research vehicle for understanding gambling – and problem gambling – behaviour by children. As we have noted earlier, a high degree of caution is required when attempting to draw conclusions from this data – including interpretation and sample sizes. We suggest that this survey be continued but that thought be given to using a larger survey sample and that the research methodology be independently reviewed in the light of latest research into youth studies. We note too that the Avon Longitudinal Study of Parents and Children (‘ALSPAC’) has provided some useful information about gambling by young people and, in particular, how gambling attitudes and behaviours change as children grow up. There has also been a number of studies of gambling by children and young people. However, there appears to be an absence of coordination between these projects. We recommend that consideration be given to developing a research strategy to enhance understanding of gambling by children and young people.

302 Latvala et al., 2019, p.2

504

10. Is enough being done to provide effective public education about gambling? If not, what more should be done? Public education about the risks of gambling is still relatively undeveloped in Great Britain, although in recent years substantial sums have been invested in this area – most prominently through the Senet Group’s ‘When the Fun Stops Stop’ and ‘Bad Betty’ campaigns; and more recently through GambleAware’s ‘Bet Regret’ campaign. There has also been a number of schools-based initiatives through organisations such as GamCare, YGAM, Demos and Fast Forward. In order to assess effectiveness, it is important to understand – prior to commencement - the aims that the public education programme is designed to achieve. For example, research has shown that public education programmes may be successful in raising awareness of risks but have little positive effect on behaviour (and sometimes may result in unintended negative consequences). This is particularly likely to be the case for campaigns aimed at children. At present, there is little coordination between public health campaigns (to raise awareness of risks at a population level), operator-led campaigns (to encourage moderation and play management by their customers) and treatment campaigns (to encourage help-seeking). It is likely that an overarching strategy may be required to link each of these elements. We believe that public education should be a focus of any strategy to reduce harms – but that simply increasing scope of current initiatives without attempting to gauge effects and recalibrate may not be a good use of resources. There is likely to be merit in understanding what lessons may be learned from other jurisdictions (notably Canada, which has pioneered education campaigns in relation to gambling) and other domains (e.g. alcohol). 11. Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? 11.1 – current provision. There is a number of reasons to believe that the current range of treatment services in Great Britain requires expansion. Gambling disorder is a highly complex and heterogeneous disorder. The behaviours, root issues, symptoms, consequences and severity may vary significantly between diagnosed individuals. Thus, it is unlikely that all problem gamblers require the same treatment. Second, very little is currently known about the effectiveness of different treatment services. Third, very little is known about the current use of problem gambling treatment services beyond those funded directly by GambleAware. Based upon the recent pledge by five of Britain’s largest operators to commit £100m for treatment services between 2019 and 2023 as well as plans published under the NHS Long-Term Plan, it seems likely that the resources necessary to achieve a substantial expansion of treatment and support is required. The critical challenge is to ensure that funds are spent wisely to support those in greatest need (including affected others). 11.2 – improvement of services. There is little research currently available into the effectiveness of treatment services in Britain. There has also been no systematic attempt to understand the full extent of treatment provision across the country (outside services funded by GambleAware). With these factors in mind, we advise that care is taken when expanding services not to focus exclusively on numbers of people receiving treatment. Importantly, it should be noted that not everyone with a gambling disorder will need treatment303. While it is commonly stated that only 2% to 3% of problem gamblers receive treatment,

303 See Blaszczynski, 2017, pp.124 & 125

505

these estimates ignore therapy services provided by Gamblers Anonymous, by private organisations, by the National Problem Gambling Helpline and by community and health groups. It also ignores findings from the AMPS 2007304 that a high proportion of problem gamblers access non-gambling-specific mental health services. The ambition should be to provide treatment and support based around the needs of the individuals concerned. Research has indicated that, for some, helplines can be effective in achieving moderated behaviour and/or abstinence. The value of such services for people with lower severity gambling disorder should not be discounted. Research indicates that most problem gamblers correct their behaviour without recourse to formal treatment services; and that relapse is a significant factor in sustaining levels of problem gambling. It is likely that efforts to improve long-term effectiveness of treatment services may be more effective than simply increasing the number of people accessing such services. 11.3 – encouraging greater use of treatment services. A major US study of help-seeking amongst those with alcohol disorder 305 has indicated that the biggest reasons for not obtaining professional support help are the beliefs that formal help is not needed to address problems; and that the problems will resolve themselves naturally. It seems likely that these findings may be applicable to gambling disorder also. Blaszczynski (2017) notes that, “some gamblers are reluctant to seek treatment because they believe that they can overcome their problems on their own and consequently do not need outside help”306. Given high levels of self-correction, this may be a rational point of view for some – but certainly not all – problem gamblers. In an earlier work, Blaszczynski (2015) notes that “very few people seek help for gambling problems because so few experience the rare and critical events that often compel people to seek help”. We should at least consider the possibility that low rates of help-seeking reflect low levels of interest and perceived relevance amongst the target population (of people with a gambling disorder). The clear suggestion is that there may be benefits in formally recognising that different people will have different needs in terms of support and in encouraging those at risk of harm to receive (lower level) help before serious problem occur. Such an approach appears at odds with the more simplistic but oft cited suggestion that we should be striving for an increase in the number of people accessing existing services. Blaszczynski (2017) observes that “the stigma associated with gambling is [a] deterrent to seeking help”307. We suggest that taking steps to destigmatise help-seeking may help. A better understanding of pathways to problem gambling and stronger links between specialist treatment services (e.g. GamCare and its partners) and operators, healthcare providers (GPs or other mental health services for example), homelessness services, the criminal justice and penal system may increase use of treatment. Given concerns in relation to relapse, thought should be given to improving levels of follow-up care, ensuring that the issues underlying the problematic gambling are addressed and helping those who have experienced severe harm (e.g. loss of employment) to rebuild their lives. 12. What steps should be taken better to understand any link between suicide and gambling? Suicide is a complex and emotionally charged issue and the examination of any links to gambling or disordered gambling requires care and sensitivity. The

304 Cowlishaw & Kessler, 2016 305 Chartier & Caetano, 2011 306 Blaszczynski, 2017, p. 113 307 Blaszczynski 2017, p. 114

506

Samaritans advises that “Over-simplification of the causes or perceived ‘triggers’ for a suicide can be misleading and is unlikely to reflect accurately the complexity of suicide. For example, [we should] avoid the suggestion that a single incident, such as loss of a job, relationship breakdown or bereavement, was the cause.”308 We suggest that a collaborative and careful approach to understanding linkages is required. The aim of research should be to explore what is clearly a difficult subject and provide pragmatic solutions rather than to promote specific ideologies. The first stage, in our view should be a scoping study. We support in principle the proposal contained within Wardle et al. (2018) for coroners to actively consider the involvement of gambling in suicides but suggest that this should be accompanied by consideration of how this might be achieved in an appropriately scientific fashion (for example by ensuring that coroners are suitably equipped to identify the presence of gambling disorder and assess it influence alongside other factors). We note that great care needs to be taken when assessing and reporting on gambling-related suicide. We are aware of a number of scientifically weak attempts to estimate gambling-related suicides in Great Britain. Where gambling disorder is identified as having involvement, care should be taken not to attribute direct causation without appropriate examination. Some problem gamblers do die by suicide; but it should not be automatically assumed that gambling disorder is a motivational (or solely motivational factor) in each of these cases. As Latvala et al. (2019) points out, “the interaction between suicide and gambling is complex, and it would be an oversimplification to assert that gambling causes suicides.309” Where research is carried out, it is important that findings are treated scientifically and with due sensitivity. We are concerned that some members of the press and the political community (and even some researchers) have ignored guidelines on suicide reporting provided by the Samaritans. In particular, we would advise that care needs to be taken not to encourage over-simplification, over-identification and imitation (for example by suggesting that suicide is a common choice for those with gambling disorder); and melodramatic or sensational reporting. We hope that serious attempts are made to adhere to these guidelines. If not, then it seems plausible that any attempts to understand linkages through research may have unintended negative consequences and that useful insights may be lost in distorted reporting. 13. The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” Do you agree? In respect of this question, we wish to observe only that prior to 2007, land based casinos were subject to outdated and draconian restrictions on advertising. Since the full implementation of the Gambling Act in 2007, casinos have made relatively modest use of greater freedom to advertise. We do not believe that current concerns in relation to advertising have anything to do with the activities of traditional, land based casinos. It is therefore important to consider precisely the nature of concerns in this space and to address them in a targeted fashion in order to guard against negative unintended consequences. We have elected not to respond to questions 14, 15, 16, 17, 18 and 19 as all of our gambling products are for those aged 18 years and older; and we do not operate a lottery.

308 Samaritans, 2019 309 Latvala et al., 2019, p.8

507

Appendix References Banks. J. (2017) Gambling, Crime and Society. Palgrave MacMillan Banks, J. & Waugh, D. (2018) A taxonomy of gambling-related crime. International Gambling Studies Blackman, A., Browne, M., Rockloff, M., Hing, N., Russell, A. (2019) Contrasting Effects of Gambling Consumption and Gambling Problems on Subjective Wellbeing. Journal of Gambling Studies Blaszczynski, A (2017) Overcoming Gambling Addiction: A self-help guide using cognitive behavioural techniques. Robinson Chartier, K., Caetano, R. (2011) Trends in Alcohol Services Utilization from 1991–1992 to 2001–2002: Ethnic Group Differences in the U.S. Population. Alcoholism: Clinical and Experimental Research Conolly, A. (2017) Gambling behaviour in Great Britain in 2015. Evidence from England, Scotland and Wales. Gambling Commission (Birmingham) Conolly, A., Davies, B., Fuller, E., Heinze, N., Wardle, H. (2018) Gambling Behaviour in Great Britain in 2016: Evidence from England, Scotland and Wales. Gambling Commission (Birmingham) Cowlishaw, S. & Kessler, A. (2016) Problem gambling in the UK: implications for health, psychosocial adjustment and health care utilization. European Addiction Research Dixon, M., Nastally, B., Waterman, A. (2010) The Effect of Gambling Activities on Happiness Levels of Nursing Home Residents. Journal of Applied Behavior Analysis Eadington, W. (1999) The Spread of Casinos and Their Role in Tourism Development. Contemporary Issues in Tourism Development. Routledge Eadington, W. & Collins, P. (2009) Managing the Social Costs Associated with Casinos: Destination Resorts in Comparison to Other Types of Casino-Style Gaming Forrest, D. (2013) An Economic and Social Review of Gambling in Great Britain. The Journal of Gambling Business and Economics Forrest, D. & McHale, I. (2018) Gambling and Problem Gambling Among Young Adults: Insights from a Longitudinal Study of Parents and Children. GambleAware (London) Hing, N. & Hronis, A. (2017) What Behaviours and Cognitions Support Responsible Consumption of Gambling? Results from an Expert Survey. International Journal of Mental Health and Addiction Latvala, T., Lintonen, T., Konu, A. (2019) Public health effects of gambling – debate on a conceptual mode. BMC Public Health Ladouceur, R., Shaffer, P., Blaszczynski, A., Shaffer, H. (2017) Responsible gambling: a synthesis of the empirical evidence. Addiction Research and Theory McMillen, J. (1996) Understanding Gambling: History, concepts and theories. Gambling Cultures: Studies in history and interpretation. Routledge Shaffer, P., Ladouceur, R., Williams, P., Wiley, R., Blaszczynski, A., Shaffer, H. (2019) Gambling Research and Funding Biases. Journal of Gambling Studies Sproston, K., Erens, B., Orford, J. (2000) Gambling Behaviour in Britain: Results from the British Gambling Prevalence Survey Thorley, C., Stirling, A., Huynh, E. (2016) Cards on the Table: the Costs to Government Associated with People who are Problem Gamblers. Institute for Public Policy Research (London) Walker, D. (2015) Casinonomics: The Socioeconomic Impacts of the Casino Industry. Springer

508

Wardle, H., Sproston, K., Orford, J., Erens, B., Griffiths, M., Constantine, R., Pigott, S. (2008) British Gambling Prevalence Survey 2007. Wardle, H., Moody, A., Spence, S., Orford, J., Volberg, R., Jotangia, D., Griffiths, M., Hussey, D., Dobbie, F. (2011) British Gambling Prevalence Survey 2010. Wardle, H. (2018) Trends in children’s gambling 2011-2017. Wellcome Trust / London School of Hygiene and Tropical Medicine Department for Digital, Culture, Media and Sport (2018) Government response to the consultation on proposals for changes to Gaming Machines and Social Responsibility Measures. HM Treasury & Home Office (2017) National risk assessment of money laundering and terrorist financing 2017 Regulatory Policy Committee (2019) Gaming machines and social responsibility measures RPC rating: fit for purpose Samaritans (2019) Best Practice Suicide Reporting Tips. Retrieved from https://www.samaritans.org/about-samaritans/media-guidelines/best-practice-suicide-reporting-tips/ 6 September 2019

509

Hippodrome Casino Limited and Rank Group Plc – Supplementary written evidence (GAM0102)

On behalf of Mr John O’Reilly (Rank Group) & Mr Simon Thomas

(Hippodrome), subsequent to their joint appearance (Tuesday 5

November 2019) in front of the:

House of Lords Select Committee on the Social and Economic Impact of

the Gambling Industry

FOOTNOTE 2 (page 6):

To clarify this point, Rank has been a funder of research, education and treatment since the inception of the first fund in 2002. We will continue to fund third-parties engaged in harm prevention work. However, we consider that a full review of funding should be undertaken in order to establish need and to examine funding mechanisms. We believe that a National Treatment Service for problem gamblers ought to be funded by industry, but this should not become a hypothecated tax for the National Health Service.

FOOTNOTE 3 (page 7):

We accept that all gambling businesses are likely to receive some level of

revenue from problem gambling. The point intended here is that problem

gambling may be inimical with sustainable business.

FOOTNOTE 4 (page 7):

This description was intended to refer to those with a more severe gambling

disorder rather than a general comment about gambling disorder.

FOOTNOTE 6 (page 13):

The figure of £404,000 appears in the 2018/19 Rank Assurance Statement. This

figure is over and above the 0.1% figure paid to GambleAware which is included

in our regulatory returns. It includes group-wide SG training, dedicated RG

Manager and data scientist costs, spend on developing the Focal Research ALeRT

system and trial, development of machine tools for Grosvenor and Mecca and

their costs for evaluation. Rank’s voluntary contribution/pledge to GambleAware

for 2018/19 was c.£605,000.

FOOTNOTE 7 (page 13):

510

The figure of £331,586 appears in the 2018/19 Hippodrome Assurance

Statement. The Hippodrome’s total figure for investment in safer gambling, as

per the Assurance Statement, was 1.4%.

FOOTNOTE 8 (page 13):

Lord Foster may have been referring to the absence of clarity about total

industry funding for both research, education and treatment (via third-parties)

and total expenditure on harm prevention (including internal expenditure). In

common with all licensees, we include RET contributions within our regulatory

returns; and both within our Assurance Statement (which must be submitted

annually by the largest licensees in Great Britain). We are not aware why it has

not been possible to produce aggregate estimates from these mechanisms.

FOOTNOTE 9 (page 14):

For table games, we show margin as the ‘house edge’; for gaming machines, we

show it as ‘return to player’. Please find below an explanation of both of these

terms and how we are seeking to improve clarity of communications.

Communicating pricing information to customers in Britain’s casinos

Customers playing games in casinos are advised of pricing information in terms

of both the price to play and also the statistical margin on those games. Indeed,

operators are required to provide this information (as well as guides on how to

play the different games) as part of their Licence Conditions and Codes of

Practice.

The margin is displayed in different ways for different products, reflecting the

design characteristics and evolution of those products.

Casino gaming machines display information regarding the ‘return to player’

(or ‘RTP’). The RTP represents the statistical expected return from each spin

expressed as a percentage of stake (typically around 94% for Category B1

machines typically offered in casinos). The RTP is statistically correct over a large

number (many thousands) of spins but will vary significantly between player

sessions (with the result that some sessions result in players finishing with net

gains and a somewhat higher proportion ending with net losses). All machines

display the RTP.

For casino table games (such as blackjack and roulette), information is

provided on the ‘house edge’. This represents the difference between the odds

offered on any bet within the game and the true probability of that event

occurring (for example, in roulette, the true odds of a winning single number bet

511

is 36-to-1 but the offered odds are 35-to-1, providing a statistical advantage or

‘edge’ to the house of 2.7% on every spin). The house edge is different from the

casino’s ‘win margin’ which is calculated as the amount retained by the casino as

a percentage of the money exchanged by the customer for chips (and so reflects

the net effect of both winning and losing bets and the fact that customers may

‘recycle’ their winning bets to place further bets). In Great Britain, the win

margin on table games is typically around 15%.

While casinos are highly transparent in communicating both RTP and house edge,

it is not always clear how useful this information is for customers. For example,

while the RTP on a gaming machine is something that is statistically correct over

a long time, it may be of limited value to customers as they play for short

periods. Regular machine players tend to understand the RTP rate as a guide to

pricing relative to other machines (which may have higher or lower RTPs) rather

than an absolute guide to expected outcomes.

In recent years, casinos in Great Britain have worked with gaming equipment suppliers to test different ways of conveying pricing information – but this remains a complex area. The important thing to us is that customers feel they get good value for money or they are unlikely to not come back. FOOTNOTE 12 (page 20): A crucial argument that we would like to put onto the record is why we believe it is safer for ATMs to be within casinos/bingo halls rather than outside: a) Consumer safety may be imperilled if customers are forced to leave the premises to obtain money - for example women leaving bingo clubs at night (possibly some distance from the nearest ATM); or customers leaving a casino to access an ATM late at night. b) It may result in customers bringing with them a substantial surplus in cash so that they have a buffer. This may result in them subsequently spending more than intended and may also result in safety issues (if they are known to be arriving and leaving with large quantities of cash). c) Given the restrictions on electronic payments, an ATM ban would be a source of serious inconvenience to recreational (non-gambling) customers - while those with gambling disorder (c3% of bingo club customers for example) are likely to adapt and find ways around it. FOOTNOTE 13 (page 22): I (JO’R) would have liked to have elaborated by adding that since the 2005 Act came in, this area is now much clearer, on the basis that a contract more clearly exists between the two parties. Because it is clearer, there are inevitably more disputes, not least a relatively high-profile case involving bet365 and a student called Megan McCann which was resolved earlier this year. More generally, I believe consumers are fairly well protected in this space, firstly because it is a licence condition that operators provide an ADR (alternate dispute resolution) provider (such as IBAS which is both free to the consumer and also binding), and also because the reputational risks to operators who find themselves in dispute are often considerable.

512

8 January 2020

513

HM Government – Written evidence (GAM0090)

The Gambling Act 2005

The Gambling Commission’s remit, as set out in the Gambling Act 2005 (‘the 2005 Act’), is to permit gambling in so far as it is consistent with the licensing objectives: keeping gambling free from crime, keeping it fair and open and protecting children and vulnerable people from being harmed and exploited. These principles aim to ensure that the interest of society as a whole, customers, and those particularly vulnerable to harm, including children, are all protected and continue to be the focus of the Commission’s work. The Act, as well as establishing a range of criminal offences linked to gambling, gives the Commission broad and flexible powers to set and enforce licence conditions.

The Gambling Commission and local authorities share responsibility for licensing land-based gambling. The 2005 Act provides scope for the Commission to set an overall direction at national level, while leaving local authorities in the lead locally, with appropriate support from the Commission. This includes issuing guidance to local authorities on how to apply the principles of the 2005 Act. Local authorities are responsible for licensing premises, but if there are serious failures or widespread vulnerabilities in an operator’s policies or procedures to prevent underage gambling, the Gambling Commission may take formal regulatory action in addition to any action being taken on premises licences.

The growth of the internet and mobile technology has changed many aspects of our lives. The Gambling Commission acts to ensure its regulation keeps pace with technological change and responds to changes in the market. A major development to our regulatory system was made in 2014, with the Gambling (Licensing and Advertising) Act. The 2014 Act provided for a switch from a ‘point of sale’ to ‘point of consumption’ model; meaning that any operator providing gambling services to people in Britain, including offshore online operators, must be licensed by the Commission and comply with its Licence Conditions and Codes of Practice (LCCP). Great Britain was one of the first jurisdictions to bring all online gambling within the remit of its gambling regulator and our regulatory system is still considered as a model by many countries, with the Commission receiving many requests for advice from overseas.

The Commission recently announced it will be strengthening requirements for operators to interact with customers who may be at risk of harm, and it has already taken action to tighten rules around identity and age verification, which came into force in May 2019. Online also offers an opportunity for strong protections. All online gambling is account-based and the accessibility of data can help operators and the regulator to understand customers, detect vulnerabilities and intervene. Additionally, for people in need of support, there are also digital tools that make it easier to take control, seek help or stop gambling. For example, the multi-operator online self-exclusion scheme GAMSTOP allows individuals to sign up to be self-excluded from all of the operators on the scheme simultaneously, which now covers over 90% of the market. The Government is clear that the risk of harm should not be affected by whether individuals are gambling online or in land-based venues.

514

In recent years the Commission has taken an increasingly firm enforcement approach, with financial penalties rising from £1.7million in 2016/17 to £19.6m in 2018/19. It has a range of powers to enforce licence conditions, including fines and, where appropriate, suspending or revoking a licence, and bringing criminal prosecutions where relevant. In many cases the Commission agrees a settlement with an operator who has admitted fault, payable to a charity for socially responsible purposes, including to address gambling related harm or in some way promote one or more of the licensing objectives. It can also impose individual as well as general conditions on a licence where necessary to protect the licensing objectives.

In terms of a legal duty of care, gambling operators are already subject to a specific and extensive regulatory and licensing regime, deriving from the 2005 Act, which offers a range of protections and assurances to customers. As mentioned above, the Gambling Commission has a broad range of regulatory sanctions available, which include financial penalties, divestment of money voluntarily to victims and the power in section 336 of the Act to void bets and order repayment of any money paid in relation to a bet. In addition, the courts also recognise that a common law duty of care can arise as between a gambling operator and a particular customer or class of customers.

Social and economic impact

Information on problem gambling rates in Great Britain has been collected at intervals over the last twenty years, drawn from British Gambling Prevalence Surveys (BGPS) in 1999, 2007 and 2010 and questions about gambling participation and the experience of gambling problems in national health surveys since then. The 2012, 2015 and 2016 Health Surveys for England and Scotland as well as the Problem Gambling Survey Wales 2015 and Wales Omnibus in 2016 have been used to assess rates of problem gambling.

The most recent Health Survey figures, based on the 2016 survey, estimate that 0.7% of the adult population, or approximately 340,000 individuals, are problem gamblers. Men were more likely to be problem gamblers than women. As problem gambling is relatively rare, confidence intervals are relatively broad, but we can be 95% confident that the actual figure is between 250,000 and 460,000 adults. Rates of problem gambling have been relatively stable at under 1% for many years. The 2015 Health Survey figures showed a problem gambling rate of 0.8%, but the fall between 2015 and 2016 is not statistically significant.

The Health Surveys include two problem gambling screens, the Diagnostic and Statistical Manual of Mental Disorders IV (DSM-IV) and Problem Gambling Severity Index (PGSI), the results of which are combined to come up with the most robust figure. This mirrors the approach taken in the British Gambling Prevalence Surveys. They are large scale surveys: 14,765 people answered questions about gambling across the three nations in 2016. For comparison, the BGPS had 9003 participants in 2007 and 7,756 in 2010. The Health Surveys, like the BGPS, only include adults living in private households, so groups such as people serving in the armed forces, students in halls of residence, people in care homes and prisoners are not included.

515

Problem gambling screens ask about a wide range of harms, including whether someone has risked a relationship, job or education opportunities because of gambling, has become restless or irritable when trying to stop gambling or committed a crime to finance gambling. However, this does not go as far as measuring the wider costs on society.

There have been attempts in recent years to generate information about the cost of problem gambling to wider society. The Institute of Public Policy Research’s Cards on the Table, commissioned by GambleAware in 2016, looked at excess fiscal cost associated with problem gamblers and estimated a range of £250m to £1.16bn per year. The report characterised the estimate as ‘the first step along the journey to understanding the total cost to government of problem gambling in Great Britain, and the starting point for future estimates as more data is collected’. This was largely due to the difficulty of isolating problem gambling from other comorbidities. Health Survey figures show a link between problem gambling and a range of other issues. Problem gambling prevalence was higher among those with probable mental ill health (2.2%) than those with no evidence of mental ill health (0.2%). Associations between problem gambling and different types of costs were also estimated from different data sources, meaning they were not directly comparable.

Work is underway to broaden understanding of the wider impact of gambling related harm.

The Advisory Board for Safer Gambling and the Gambling Commission published Measuring Gambling Related Harm: A Framework for Action in July 2018 setting out a framework for how gambling-related harm might be measured. The report defined gambling-related harms as adverse impacts from gambling on the health and wellbeing of individuals, families, communities and society. These harms affect resources, relationships and health. The report proposed that the following areas could be used to measure the cost of gambling-related harms:

● Loss of employment ● Experience of bankruptcy and/or debt ● Loss of housing/homelessness ● Crime associated with gambling ● Relationship breakdowns/problems ● Health-related problems ● Suicide and suicidality

The Gambling Commission has commissioned the London School of Economics and the Personal Social Services Research Unit to scope and recommend different methodologies for estimating the social costs of gambling-related harms.

Public Health England (PHE) has been commissioned by government to undertake a comprehensive independent evidence review on the public health harms of gambling (see under the section on Treatment).

Benefits

516

Gambling gives pleasure and enjoyment to many people as a leisure activity, although as with the costs of gambling, this is very hard to quantify. The 2016 Health Survey figures showed gambling participation was lower among participants with the lowest well-being scores (52%, compared with 58% of other participants), although 2.6% of those with the lowest well-being scores were classified as problem gamblers, compared to 0.5% of other respondents.

Last year, Gambling Commission’s participation figures show 46% of the population had gambled in the last four weeks, 32% if people who only played the National Lottery are excluded. A report by GambleAware in 2016 looking at potential issues in bingo reported 84% of surveyed bingo players stated that it was the social aspect which attracted them, with 58% reporting that it provided intellectual stimulation and 51% that it staved off boredom. Research conducted at Southampton University found bingo players were faster and more accurate than non-bingo players on tests measuring mental speed, the ability to scan for information, and memory.

There are also economic benefits: the gambling industry employs more than 106,000 people, last year it paid £3bn to the exchequer in gambling duties and the National Lottery gave £1.64bn for good causes. The trade association BACTA’s (British Amusement Catering Trade Association) response to the Lord’s Select Committee on Regenerating Seaside Towns and Communities argued that Family Entertainment Centres are vital to the economy of many seaside towns, generating £242 million in revenue and employing almost 5,000 people310 It also said that Family Entertainment Centres play a considerable role in extending visits to coastal towns and in boosting local businesses reliant on tourism footfall (e.g. renovation of Weston-Super-Mare pier).

British racing contributes £3.5bn in GDP and supports rural communities, employing around 17,000 people and consistently draws huge crowds across the UK. Around 6 million people attend race meetings every year, with many millions more watching live racing on ITV. Horseracing is Britain’s second largest sport in terms of employment and revenues generated annually. It is also a significant soft power asset to the UK and is at the forefront of international horseracing.

Funding for Research, Education and Treatment

Most dedicated research, education and treatment for gambling addiction is currently commissioned and provided by the third sector, funded from industry donations. Government does not determine the levels of contribution or direct how the voluntary funding donated by industry should be spent. The commissioning of services is currently governed by the arrangements set out in a Statement of Intent311 between the Gambling Commission, its expert advisers

310 BACTA response to the Lord’s Select Committee on Regenerating Seaside Towns and

Communities, October 2018 311 https://www.rgsb.org.uk/About-us/Governance/Statement-of-intent.pdf

517

(then the Responsible Gambling Strategy Board, RGSB, and now the Advisory Board for Safer Gambling, ABSG), and the charity GambleAware.

In addition, mental health services commissioned by the NHS and specialist substance misuse provision commissioned by local authorities are likely to be in contact with and treating individuals for whom gambling is an associated problem. Although numbers are not centrally recorded, in some cases this treatment for associated conditions may also help address the gambling problem and services may also screen and refer to specialised gambling treatment. GambleAware funds two specialist NHS clinics which treat the most severe and complex cases of gambling addiction and NHS England recently announced that it plans to create up to fourteen new clinics as part of its Long Term Plan.

The Gambling Commission requires licensed operators to make an annual financial donation to an organisation that contributes to research, prevention and education, or treatment. Most opt to give funding to the charity GambleAware who in turn suggest operators should give a sum equivalent to 0.1% of their gross gambling yield (GGY), the money taken in bets or stakes minus the money paid out in prizes or winnings. GambleAware’s Board of Trustees is wholly independent of the gambling industry and involves a range of experienced NHS and public health professionals.

The RGSB measured progress against previous two strategies, and found that despite positive developments, it had been slower than hoped, although due to the way the priorities were framed it was hard to determine when an objective had been met. In particular it highlighted the need for a better understanding of what works in harm prevention and treatment, and a focus on evaluation. GambleAware commissions independent evaluation for all the activities and services it commissions, including a large-scale evaluation of its treatment services. The National Institute for Health Research (NIHR) is also carrying out an evidence review to evaluate the effectiveness of interventions, which is due to report in spring 2020. The Gambling Commission published a harm reduction strategy in April and will publish a plan for measuring progress.

In 2018 the RGSB estimated that the cost to GambleAware of delivering its part of the strategy would be £9.3m in 2017/18 and £9.5m in 2018/19, plus its administrative costs, or roughly £10 million312. GambleAware has recommended a voluntary donation of 0.1% of an operator’s GGY to cover this. GambleAware raised £9.6 million of its £10 million target in 2018/19. However, it was fully funded for its £16 million budget, with voluntary donations being supplemented by payments from regulatory settlements made by operators following Gambling Commission enforcement action. We know operators also sometimes give to organisations other than GambleAware.

Government explored the arrangements for research, education and treatment, including funding, as part of the Review of Gaming Machines and Social Responsibility Measures. It noted that introducing a mandatory levy, as provided for in s.123 of the 2005 Act, would be one option if industry failed to provide the necessary funding.

The Review recognised that the system for delivering research, prevention and treatment needs to be sustainable and transparent, and that funds must be

312 https://live-rgsb-gamblecom.cloud.contensis.com/PDF/Quantum-of-funding-January-2017.pdf

518

spent in the most effective and cost-effective way. It set out a range of measures by the regulator, health bodies and third sector partners, to strengthen the current system. The Gambling Commission will make clear which bodies it considers appropriate recipients of donations and improve transparency, as part of its commitment to strengthen the voluntary system for funding support.

Work is underway to build evidence of treatment needs and effectiveness, and evidence reviews by PHE and the NIHR will report in spring 2020. GambleAware has commissioned research on treatment needs and gap analysis within the services it commissions, due to report later this year. In advance of that, the Gambling Commission has not yet costed its strategy, but five of the largest gambling operators have already agreed to increase financial support for safer gambling ten-fold, raising the current 0.1% voluntary contribution of their Gross Gambling Yield (GGY) from the UK over the next four years to 1% in 2023. This tenfold increase will reach a contribution of approximately £60 million from the five companies in 2023 and be maintained at that level in future years. As part of this funding commitment, the five companies will spend a cumulative £100 million on treatment over the next four years.

A statutory levy created by the current power in the 2005 Act would have to be paid to the Gambling Commission, the industry regulator, to provide financial assistance to projects related to gambling addiction, other forms of harm or addiction related to gambling, or any of the licensing objectives. It would not be the only way in which support could be funded from industry taxation; in fact hypothecated taxes are not a usual way of funding public services as they risk raising too much or too little for the purposes for which they are intended. Treatment services for alcohol and tobacco addiction are not funded in this way; products are taxed in recognition of their social costs and support services are funded from general taxation, according to need. The gambling industry currently pays £3 billion per year in gambling taxes.

Research

The Government funds public research through research councils and NIHR, which focuses on research in the health and social care field. Last year, NIHR put out a call for proposals for research into which interventions are most effective at reducing or preventing gambling-related harm. One was approved for funding: ‘Football Fans and Betting: piloting an intervention to reduce gambling involvement among male football fans’. NIHR is also carrying out a review of the effectiveness and cost-effectiveness of existing policies and interventions for reducing gambling-related harms.

The Gambling Commission produces its own reports into gambling participation, behaviour, awareness and attitudes in Great Britain, including a report on gambling and young people, some of which form official statistics. Gambling prevalence and problem gambling are measured through the Health Surveys, which provide insights into the link to demographic characteristics and other issues like alcohol, mental health, and the rate of problem gambling by activity. The Gambling Commission’s annual participation and attitudes report, based on quarterly phone surveys, includes how people gamble online.

519

GambleAware commissions research specific to gambling using funds made available through the voluntary system, and extensive governance processes are in place around commissioning of this research. Within the research programme, the Gambling Commission sets the research agenda and the research questions taking into account the advice from the ABSG. Priorities are set in the Research Strategy and then commissioned by GambleAware, which has no industry trustees.

The Gambling Commission published the most recent research programme in December 2018, setting out the priorities for research to be commissioned in the period from April 2017 to March 2019. This sets out six core areas, including building understanding of gambling-related harms, changes in gambling over time, and what works in treatment. It also defines overarching factors which should be considered when research is commissioned and delivered.

One of these themes is ensuring the perspectives of children and young people, including how they interact with gambling and experience harms, are taken into consideration when research is commissioned. Under the previous research strategy, GambleAware had a programme of research dedicated to improving understanding of gambling in relation to children and young people.

One of the research programme priorities is the change in gambling behaviour over time, with the aim of understanding the factors that cause people to start, continue and stop gambling at different points in their lives. NatCen has been commissioned to scope and recommend different methods and approaches to help to better understand changes in gambling behaviour over time, including the determinants of change. This will lead to the development of a brief for commissioning a longitudinal study by the Gambling Commission.

There are plans to increase accessibility of data. Work is underway to make both industry data and survey datasets more openly available to researchers and GambleAware has been scoping the development of a national data repository.

Education

We believe that many of the factors that cause gambling addiction or are a consequence of gambling are already addressed in the school curriculum. The curriculum includes developing young people’s financial literacy through subjects such as Citizenship and mathematics. These subjects cover topics on the importance of personal budgeting, money management, credit and debt, and the need to understand financial risk. The DfE is also working with the Money and Pensions Service and HMT to explore ways in which we can continue to support financial education for young people.

The new subject of Health Education, which will be mandatory in all state-funded schools from September 2020, alongside Relationships Education (primary) and Relationships and Sex Education (secondary), will include teaching young people about the risks relating to gambling including the accumulation of debt. The statutory guidance was published June 2019. Through Health Education, pupils

520

will also be taught how to recognise the early signs of mental wellbeing concerns, including common types of mental ill health (e.g. anxiety and depression).

We expect many schools will deliver the new subjects as part of their existing Personal, Social, Health and Economic (PSHE) education. Schools are free to cover issues around gambling in their PSHE provision. We know that many schools draw on the programmes and support available from subject associations and experts such as the PSHE Association. The PSHE Association’s non-statutory programme of study includes teaching about gambling including its psychological and financial impact.

The DfE has also published in June 2019 “Teaching online safety in schools” - new non-statutory guidance which aims to support schools in teaching pupils how to stay safe online within new and existing school subjects, such as Relationships Education, Relationships and Sex Education, Health Education, Citizenship and Computing. The guidance addresses many of the online issues that are linked to gambling and online advertising e.g. teaching could include that age verification exists and why some sites require a user to verify their age, on sites such as online gambling sites.

The DfE is currently working with schools and teachers to develop a programme of support for the implementation of the new subjects. This will focus on tools that improve schools’ practice, such as an implementation guide, support for staff training and easy access to high-quality resources across the teaching requirements, including on gambling.

There are several activities underway by third-sector organisations to complement the statutory school-based education on gambling-related risks.

GambleAware’s delivery plan for 2018-20 includes plans to develop and promote a ‘knowledge hub’ of resources and guidance for teachers and those who work with young people, as well as working with agencies that support young people’s mental health and supporting parents to have conversations with children.

GambleAware is working with the PSHE Association to develop a programme of work to improve the delivery of school based preventative gambling education, including resources for schools to help ensure the safe and effective delivery of gambling harm education by those with lived experience, and resources for primary school aged children.

GambleAware has commissioned Fast Forward, a Scottish education charity, to further develop its work promoting youth gambling education and prevention across Scotland. It will deliver a nationwide programme of training support for teachers and youth workers designed to reach young people in formal and informal education settings. This will be evaluated in 2020 and, depending on the outcome, there are plans to subsequently commission similar national programmes in Wales and in England.

Building a better understanding the attitudes and needs of young and particularly vulnerable people in relation to gambling will help GambleAware and others deliver targeted services and campaigns and better engage with these audiences. GambleAware has commissioned the Royal Society for Public Health (RSPH) to produce a report on gambling and young people, with a particular focus on how those aged 13-24 years understand gambling and what impact this can have on young people’s emotional health and wellbeing. Separately, a report on the views

521

and attitudes towards gambling of children and young people (aged 9 - 24 years) from BAME communities is due to be published shortly.

Treatment

The NHS Long Term Plan includes a commitment to expand geographical coverage of NHS services for people with serious gambling problems, and work with partners to tackle the problem at source. As set out in the Long Term Plan Implementation Framework, NHS England and Improvement (NHSE/I) has allocated up to £1m for gambling harm services in 2019/20. This includes targeted funding to develop a hub and spoke model for problem gambling from 2019/20. This hub and spoke model will comprise of central clinics which have satellite clinics in neighbouring populations. Specialist face-to-face NHS treatment for gambling addiction has only been available in London but the Long Term Plan is making treatment available across the country. Up to 15 NHS clinics are being opened by 2023/24. There is a need for a comprehensive needs assessment/ prevalence survey to determine geographical coverage of need and prevalence of gambling related harm. This is essential if we are to base the expansion of NHS specialist treatment on need. Existing datasets do not provide comprehensive information at a local level. The support available for gambling related harm must be considered as an integrated system wide approach. There should be clear clinical oversight and a robust referral / assessment process to ensure the right care is delivered at the right time. The government is also committed to creating a better understanding of gambling-related harms so it can determine how best to prevent harms from occurring and support those negatively impacted by gambling-related harms. Public Health England (PHE) has been commissioned by government to undertake a comprehensive independent evidence review on the public health harms of gambling. This is the first ever review of evidence on the public health harms relating to gambling in England. A progress report outlining the scope of the PHE evidence review in more detail will be submitted to the committee in a separate submission. In addition, the National Institute for Health Research (NIHR) has commissioned a complementary review of the effectiveness and cost-effectiveness of existing policies and interventions for reducing gambling-related harms. Both reviews will provide an independent review of the existing research in this area to establish what is known, where there are clear gaps in the evidence, and to provide the best available evidence to support national and local policy and decision making in addressing gambling-related harms. The NIHR full evidence review is expected to report alongside the PHE review in March 2020.

522

We know that there may be wider lifestyle factors associated with gambling addiction that may link to poor mental health, and that gambling addiction can create a cycle of debt that can also have a significant impact on mental health and wellbeing. In extreme cases it may lead to thoughts of suicide. We also know that young men are often more susceptible to gambling addiction - yet men are far less likely to talk about mental health problems or reach out for help and support. The Government committed to addressing suicide risk and gambling in the latest progress report to the National Suicide Prevention Strategy and the Cross-Government Suicide Prevention Workplan, which was published in January 2019. There is currently no reliable estimate of the number of suicides linked to gambling addiction or problem gambling in the UK. Addressing the gap in the evidence to increasing our understanding of the link between suicide and gambling is a cross-government priority. GambleAware has commissioned some preliminary research into gambling-related suicide, which was published in July 2019. The Department of Health and Social Care has invited GambleAware to return to the National Suicide Prevention Strategy Advisory Group to discuss the research findings and what further research may be needed in this area. We will continue to work with GambleAware and other stakeholders as data is developed.

Gambling Advertising

Protections around gambling advertising were considered as part of the Gambling Review, alongside available evidence on the impact of advertising and levels of exposure. There were already strong protections in place; for example, the content and targeting of gambling advertising. The Review did not find evidence to suggest that gambling advertising was harmful as long as it complies with the rules, and concluded that the current evidence did not support legislative action. Instead, it set out a package of measures to strengthen existing protections and fill gaps in the evidence base.

Measures in the Review included tough new guidance on interpretation of the rules to protect vulnerable people and children and a multi-million pound safer gambling advertising campaign aimed at reducing risky and impulsive gambling. GambleAware commissioned major new research on advertising, part of which has already been published with the remainder due this year, and the Gambling Commission has brought in new rules meaning it can take tougher action if operators break the advertising rules.

Gambling operators who advertise in the UK must comply with the advertising codes. These are written by the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) and enforced by the Advertising Standards Authority (ASA), the UK's independent regulator of advertising across all media. The BCAP Code applies to all advertisements on radio and television services licensed by Ofcom. The CAP Code applies to non-broadcast advertisements and promotions, including online and social media. Adverts that breach the Codes have to be amended or withdrawn. If serious or repeated breaches occur, the ASA can refer advertisers to the Gambling Commission and broadcasters to Ofcom.

523

A wide range of provisions in the codes are designed to protect children and vulnerable adults from harm. Adverts must not condone or encourage gambling behaviour that is socially irresponsible or could lead to financial, social or emotional harm, and advertisers must not play on people’s financial concerns, or encourage specific risk factors in problem gambling. As part of the package of measures in the Review, guidance on interpretation of the rules has been reviewed and strengthened twice over the past 18 months. In April 2018 stricter guidance was introduced around protecting people who might be vulnerable to harm, restricting adverts that create an inappropriate sense of urgency and preventing approaches that give an erroneous perception of the risk or the extent of a gambler’s control.

Gambling adverts must not be targeted at children, or appeal particularly to children or young people. In April this year, tighter new standards were brought in to protect children and young people. These build on existing rules preventing children being targeted by gambling advertising, and giving further examples of types of content, including certain types of animated characters, licensed characters and celebrities, that are likely to be of particular appeal to children and is therefore unacceptable.

The current evidence on gambling advertising shows a relatively small effect on problem gambling. This is largely based on a large study of evidence by Per Binde in 2014, which identified advertising as one factor among many which make up the environment, although it identified areas for further research. GambleAware commissioned research to assess the nature and impact of gambling marketing on children, young people and vulnerable groups. The first tranche, published in July, looked at tone, content and volume. The second, looking at impact, should be published in autumn.

Although figures show that television gambling advertising impacts for children and 16-24 year olds rose until 2013 and have declined each year since. Children saw on average 2.8 gambling adverts on TV per week in 2017. During a period when gambling has become more visible and advertising volumes have grown, under-age participation has been in a trend of decline since 2007.

We recognise that technology has changed the nature of advertising and marketing across most industries, including gambling, where the vast majority of marketing spend is now online. It is more difficult to monitor impressions online than impacts from TV adverts, but two recent studies using avatars found no evidence that children and young people are being deliberately targeted online.

Technology brings challenges, but also opportunities for greater protections. The ASA has made clear that operators advertising on social media platforms must use data to target adverts away from customers whose online behaviour implies they might be under 18. There have been several recent rulings where the ASA ordered operators to remove adverts that had not used interest-based data when developing targeting strategies.

Five operators recently agreed to take this further and where technology exists that can identify a user showing problem gambling behaviours, and then target gambling adverts away from that person, they will use it.

524

Gambling and Sport

There has long been a relationship between sports and betting. Early football pools were introduced in 1923 and grew in popularity from the 1960s as a popular and social aspect to betting on the outcome of matches. Sport remains outcome based, which makes it attractive to people to place a bet to predict that outcome. Betting on sport remains a popular pastime with the Gambling Commission’s recent industry statistics for “gambling participation in 2018: behaviour, awareness and attitudes” pointing to the fact that betting on sport (6.7%) is the third most popular activity for participants behind betting on the National Lottery draws (28%) and scratchcards and other lotteries (both 11%).

Despite the popularity of betting on sport, the evidence does not suggest that gambling has become an integral part of sport or that sporting fans are turning away from attending and enjoying live games in preference to betting solely on the sporting result. For example, live occupancy in English Premier League club stadiums stands at 96%. Similarly, the English Football League (EFL) recorded its highest cumulative attendances for almost 60 years in 2016-17, with more than 18 million fans attending matches. Live attendance and demand to see live sports such as cricket, rugby, tennis are similarly impressive: over 3 million people attended Rugby Union games in the 2017/2018 season and 1.6 million went to cricket matches in 2018.

Gambling companies are legitimate and visible sponsors of sport, and through this provide an important revenue stream for sport, but sponsorship is not the biggest contributor to sport financially with most sports reliant on revenues from broadcasters to grow the sport at all levels. In the case of the English Premier League, broadcasting rights are the most significant revenue stream for top-tier football clubs, and within that overseas markets are a significant contributor: 46% of all the League’s broadcasting revenue now comes from overseas.

Research from GambleAware found that betting companies have tended to advertise heavily around sport. There are protections around gambling advertising and sponsorship designed to ensure that an association with sport does not make gambling harmful to children. Both advertising and sponsorship arrangements must be socially responsible and must never be targeted at children. Operators’ logos must not appear on any commercial merchandising which is designed for children, including replica football shirts in children’s sizes.

In response to concerns over the amount of sports betting advertising that takes place on television, the gambling industry has also introduced a whistle to whistle ban which will prevent advertising from five minutes before a match or other daytime live sporting event begins to five minutes after it ends, substantially reducing the numbers of gambling adverts seen around sport.

Sponsorship rules are not enforced by the Advertising Standards Authority (ASA). However, advertising guidance prohibits the use of sportspersons under age 25 in gambling adverts, and the ASA plans to engage with other regulators about concerns regarding the links between sport and gambling in the minds of children. The Gambling Act 2005 includes sponsorship in its definition of advertising and the Gambling Commission requires operators to be socially responsible in their sponsorship arrangements as they are in advertising.

525

A major safer gambling advertising campaign, Bet Regret, was launched in February. The first phase of the campaign is targeted at young men aged 16-34 who gamble regularly on sport, mainly online. The campaign is funded by industry as part of the commitments made in the Gambling Review last year. Development has been led by GambleAware, with expert advice from academics and Public Health England.

The Gambling Commission’s Sports Betting Integrity Unit works closely with the betting industry and with sports governing bodies to understand potential threats and help protect the integrity of sport and betting.

Young People and Children

The Gambling Review looked at the impact of gambling on children in a number of aspects, including the impact of category D gaming machines, age verification for online gambling and the impact of advertising (as outlined above).

As a consequence, in May this year the Gambling Commission tightened age and identity verification requirements online. Under the new rules, operators must verify the age and identity of a customer before they are able to deposit money and gamble. The change also means that age must be verified before free-to-play demo games can be accessed on operators’ websites. The decision was also taken not to raise stake and prize limits on category D machines without further evidence of the impact on children and proposals on how to strengthen already existing protections.

The Gambling Commission has a statutory licensing objective to protect children. Operators offering gambling services to people in Great Britain must have a licence from the Gambling Commission and must have effective policies and procedures designed to prevent underage gambling. Where there is a failure to prevent underage gambling, the Gambling Commission has a range of powers to act, including regulatory and/or criminal action.

For the most part, commercial gambling in Great Britain is legal only for those aged 18 and over. The exceptions are 16 year olds being permitted to legally purchase National Lottery, including scratchcards, society lottery products, and bet in football pools, and young people of any age playing category D games, which include fruit machines as well as pushers and cranes.

The RGSB provided advice to the Gambling Commission on children, young people and gambling last year313. It set out principles that should be applied in order to keep children safe, and recommended actions by different bodies to achieve this. The first principle was that commercial gambling should be regarded primarily as an activity for adults, which included looking at whether it was appropriate that children could access gambling activities legally under 18 years old.

313 Gambling and Children and Young People. Advisory Board for Safer Gambling, June 2018

https://live-rgsb-gamblecom.cloud.contensis.com/PDF/Gambling-and-children-and-young-people-2018.pdf

526

The paper found that the balance of argument did not support a recommendation that Category D machines should be restricted to use by adults, but it did stress that operators need to make sure customers are not harmed, even with the small stakes and prizes involved.

In response314, the Gambling Commission committed to working with industry to explore what more they can do to improve player protection standards, particularly in areas of the industry where there are opportunities for children to gamble, like the arcade sector and the National Lottery.

Since then, BACTA have responded to concerns that children are more vulnerable to harm from complex category D machines (slots) and are currently trialing age restrictions, with a view to making them part of their Code of Conduct later this year.

The government is also considering the framework for the National Lottery and has launched a 12 week consultation on the minimum age for playing National Lottery games. The consultation considers whether 16 is still an appropriate minimum age for playing National Lottery games ahead of the competition to run the 4th National Lottery licence.

There are three options presented in the consultation: to retain the minimum age of 16 for all National Lottery games; to raise the minimum age to 18 for National Lottery instant win games (i.e. scratchcards and online instant win games); and to raise the minimum age to 18 for all National Lottery games.

The government wish to adopt a proportionate, precautionary approach with a view to protect 16 and 17 year olds from possible or future harm. Our initial position, based on the evidence examined in the consultation, is to raise the minimum age to 18 for instant win games (scratchcards and online instant win games) and maintain the 16 limit for draw-based games, but we welcome views on this approach in the consultation.’

The Gambling Commission is also alive to emerging risks, especially around any crossover between video games and gambling. In 2016, they published a position paper on virtual currencies, esports and social casino gaming.315 In response to the advice from RGSB, the Commission committed to continuing to make progress in this area and to work with international regulators to tackle common risks.

In September 2018, the Gambling Commission, along with 15 other regulators from Europe and the USA signed a declaration which outlined common concerns around gaming and gambling. The regulators agreed to work together to monitor the characteristics of video games and social gaming, and to raise parental and consumer awareness.

314 Gambling Commission response to advice from RGSB on Children, Young People and Gambling. Gambling Commission, June 2018. https://www.gamblingcommission.gov.uk/PDF/Gambling-and-

children-and-young-people-response-2018.pdf 315 https://www.gamblingcommission.gov.uk/PDF/Virtual-currencies-eSports-and-social-casino-gaming.pdf

527

The Gambling Commission’s Young and Gambling Report 2018 found that 31% of 11-16 year olds surveyed had opened a loot box, and 13% had ever played a social casino game.

Where loot boxes are offered in games, these do not fall under British gambling law where the items received cannot readily be cashed out and are confined for use within the game. However, loot boxes are subject to Consumer Protection Regulations which protect against misleading or aggressive marketing. Last year the Video Standards Council Rating Board and PEGI introduced a new label for video games to warn parents where these include the opportunity to make in-game purchases, including loot boxes.

Where in-game items, known as skins are traded or are tradeable, they can act as a virtual currency. Where facilities for gambling with these skins, are offered, this is caught by gambling legislation. The Gambling Commission has shown that it will take action and prosecute unlicensed gambling with skins. In 2017 it successfully prosecuted the operators of the website FutGalaxy for illegally offering skins gambling, making it the first regulator in the world to bring such an action.

The ASA expects gambling operators to advertise in a socially responsible way, and this includes ensuring that gambling adverts online are targeted away from children. It has ruled that gambling-like video games or games that feature elements of gambling related activity should not be used to promote real money gambling products. More generally, marketers are required to avoid the use of themes or content associated with youth culture when advertising gambling. GambleAware has commissioned further research on the impact of marketing and advertising on children, young people and other vulnerable people. The first tranche of this has been published, and made a number of recommendations on advertising on social media and advertising esports.

Society Lotteries

Society lotteries are fundraising tools run for the benefit of charities and other non- commercial organisations, such as sports clubs and local authorities. In total, society lotteries raised £314 million for good causes in the year to September 2018. The Gambling Act 2005 set limits on the level of proceeds a society lottery can raise per draw and annually, and also caps the maximum prize that can be offered. There are currently around 500 societies holding around 850 Gambling Commission licences to operate lotteries (due to many societies holding both remote and non-remote licences), and is estimated that there are over 50,000 small societies registered with local authorities.

Since 2005, the lottery market has become increasingly diverse, with the increased use of lotteries by major charities as a fundraising tool, and the promotion of large-scale ‘umbrella’ lotteries. The growth of the internet has enabled societies to sell more tickets remotely through their websites and reach greater numbers of potential players. Umbrella schemes - where an External Lottery Manager, a society lottery operator or a collective of society lottery operators, promote multiple society lotteries under a single brand (for example,

528

the Health Lottery and People’s Postcode Lottery) - can provide marketing efficiencies, driving ticket sales and in turn prizes. Umbrella lotteries are not separately defined or recognised in the Gambling Act 2005, but they are entirely legal - each society within the umbrella brand is licensed individually by the Gambling Commission.

The Government consulted on reforms to society lotteries limits in 2018 and announced a package of increased limits in July 2019, with the aim of ensuring that there is an appropriate regulatory framework for lotteries, and that both society lotteries and the National Lottery are able to thrive. The package of reforms is intended to enable society lotteries to continue to grow, while maintaining the unique position of the National Lottery.

Between December 2014 and March 2015, DCMS ran a Call for Evidence, informed by market assessment provided by the Gambling Commission, which invited views on the changing lottery landscape, and in particular whether the current regulatory regime maintained an appropriate balance between the National Lottery and the wider gambling and lottery market. In March 2015, the DCMS Select Committee held an enquiry on society lotteries. The Committee’s report made a number of recommendations, including reviewing sales and prize limits. It also asked us to consider legislating for a separate class of lotteries (umbrella lotteries), with its own set of limits on individual draws, annual sales and prizes. Following advice from the Gambling Commission, which was published alongside the reform consultation in 2018, Ministers decided not to pursue this.

A formal consultation was held between June and September 2018 and over 1,600 responses were received. This was followed up with further engagement with the society lotteries sector, Camelot as the current operator and the National Lottery distributing bodies. Subject to amending secondary legislation, the following changes to the limits for large society lotteries were announced on 16 July 2019:

● Per draw sales limit will increase from £4 million to £5 million;

● Per draw maximum prize will increase from £400k to £500k;

(retaining the rule that the top prize should be no more than 10% of sales);

● Annual sales limit will increase from £10 million to £50 million, with the ambition of running another consultation in the future to consider what regulatory requirements may accompany a higher £100 million annual limit.

As a result of increasing sales limits for society lotteries, we expect to see returns to good causes increase across the sector, especially by the largest umbrella lotteries, and we will monitor this carefully. The announcement included an ambition to increase the limits further in the future, following careful monitoring of the potential effects of the new limits on the wider lotteries market. The rule that the top prize should be no more than 10% of sales has been maintained, because we are seeking to balance the opportunity for society

529

lotteries to grow with preserving the distinct space the National Lottery operates in, with a key feature being the offer of life-changing prizes. Changes will require affirmative secondary legislation. Question 18 refers to lotteries being “taken over by larger commercial lotteries”. Umbrella lotteries are not considered commercial because by definition they are not-for-profit organisations and raise money for good causes. Some charities utilise the expertise of External Lottery Managers (ELMs) to operate their lotteries to maximise returns to good causes. ELMs are private companies and pay Corporation Tax in the usual manner.

The National Lottery and society lotteries operate within separate legislative frameworks. The current National Lottery licence expires in 2023. Work is underway between DCMS and the Gambling Commission to look at policy and licence design issues for the next (4th) licence, and engagement with the market has begun. Bidding criteria have not yet been set.

In the conclusions of the Government’s Gambling Review in 2018, the Government committed to considering whether 16 remained an appropriate age limit to play all National Lottery products, including scratchcards, as part of work on the next licence competition. A consultation on this issue was launched in July 2019.

6 September 2019

530

HM Government – Supplementary written evidence (GAM0135) Ministers for the Department for Digital, Culture, Media and Sport, the Department for Education, and the Department of Health and Social Care were due to appear before the Committee on 17th March 2020. This session was cancelled and the government has been asked to provide a written response to the Committee’s questions. This document gives a short overview of the government’s approach to minimising gambling-related harms before setting out our response to each of the Committee’s questions. Millions of people enjoy gambling without experiencing problems, but it does carry risks. It is important that the freedom to enjoy gambling as a leisure activity is balanced against the need to protect the vulnerable. That is why gambling is licensed and regulated by the Gambling Commission, an independent statutory regulator. The Commission has broad powers to keep gambling fair, open, and crime free, while ensuring that there are protections in place for children and vulnerable people.

Rates of problem gambling have been steady at below 1% for twenty years and the government continues to work hard to reduce gambling harms. Since the beginning of 2019 we have strengthened protections by legislating to cut the maximum stake on B2 gaming machines from £100 to £2, and the Gambling Commission has tightened the rules on the age and identity checks operators must do before allowing someone to gamble, banned gambling on credit cards, and made it mandatory for online operators to be signed up to GAMSTOP (the national online self-exclusion scheme). We also committed in our manifesto to review the Gambling Act 2005 to make sure it is fit for the digital age. Further details will be announced in due course but this committee’s report will undoubtedly be an important point of reference in that process.

Alongside these regulatory measures, the government is committed to making sure those who do experience problems with their gambling are able to access the help they need, and that young people are supported to properly understand the risks of gambling.

Significant steps have been taken in the health and care system to support those needing treatment. As announced in the NHS Long-Term Plan, we have introduced specialist clinics to expand geographical coverage of NHS services for people with serious gambling problems. Up to 15 clinics will open throughout the country by 2023/24, including the now open children and young person’s service operating out of the national problem gambling clinic in London. We also know that for some people gambling addiction can create a cycle of debt that can impact on mental health and wellbeing and in extreme cases may lead to thoughts of suicide. The government committed to addressing suicide risk and gambling in the latest progress report on the National Suicide Prevention Strategy and the Cross-Government Suicide Prevention Workplan (both published in January 2019), and we will continue work to improve our understanding of the link between suicide and gambling.

We are also ensuring that there is a strong research and evidence base to inform our wider policies. Public Health England are producing an independent evidence review on gambling harms, and the National Institute of Health Research has

531

commissioned a review of the effectiveness of policies and interventions to reduce gambling-related harms. Both reviews were due to report this year but Public Health England’s resources have been impacted by Covid 19 and their timeline for publication has shifted as a result. They hope to publish later in 2020 or early 2021.

Protecting children from gambling-related harm is a priority for the government. No young person should face the challenges of a gambling addiction alone and we want to ensure that schools are able to support young people in making positive choices in their lives.

However, while education has an important role to play in equipping young people to understand the risks of gambling, it is not the sole answer and it is helpful to see the breadth of expert advice and evidence that the committee has sought as part of this inquiry, particularly from those directly affected. The government appreciates that there is a need to develop the evidence base of what works to reduce gambling-related harms amongst children.

Schools already teach a broad and balanced curriculum to prepare pupils for adult life. The national curriculum provides a gold standard with Computing and Maths developing relevant foundational knowledge such as teaching about online safety. The Citizenship curriculum also covers financial education, which addresses debt. The government wants to ensure all pupils know how to manage their academic, personal and social lives in a positive way. Good education and excellent teaching in these areas helps to develop young people’s decision-making capacity.

From September 2020 we are making Health Education compulsory in all state-funded schools in England, alongside making Relationships Education (in all primary schools) and Relationships and Sex Education (in all secondary schools) compulsory. This means that for the first time, from September, teaching young people about the risks relating to online gambling will be a requirement for all secondary-aged pupils. To support schools, the government is investing in a central package to help all schools to deliver these subjects. We are currently developing a new online service featuring training materials, case studies and support to access curriculum resources. The government is pleased that these online modules will also include how teachers teach about the risks related to online gambling.

The impact of Covid 19 and the measures necessary to curb the spread of the virus have brought significant changes in recent months, including to the gambling sector. All betting shops, casinos and other land-based betting establishments – which accounted for approximately 50% of all non-lottery gross gambling yield last year – are now closed, and the cancellation of major sporting fixtures has significantly limited the market for online betting (a further 20% of non-lottery gross gambling yield last year). Indicative data suggests that while fewer people are gambling and overall gambling spend is down, some people have shifted to online gaming, or are trying previously unused products. The government is acutely aware of concerns around this shift and the risk that the anxiety and isolation some people are experiencing as a result of the virus and social distancing may make them more vulnerable to gambling-related harms.

532

The government has taken a proactive approach. The Minister for Sport, Tourism and Heritage has written to operators to make clear that they must act responsibly during this time and to seek specific player protection measures. He is in regular contact with industry leaders, trade bodies and treatment providers to ensure we have an accurate understanding of the gambling landscape at this time of potentially heightened risks. The Gambling Commission has also instructed operators to step up their monitoring of player activities to identify signs that a customer may be at risk of harm, and the Advertising Standards Authority has written on the importance of complying with the existing advertising codes and not exploiting the situation. We are monitoring the situation closely, will hold operators to account for any failures, and will not hesitate to take further action if that becomes necessary.

We look forward to reading the committee’s report and will consider its findings and recommendations carefully.

533

1. There is growing consensus that disordered gambling should be treated as a public health issue, and that responsibility for gambling should be transferred from the DCMS to the DHSC. Does the Government consider disordered gambling to be a public health issue? If so, why is the Government reluctant to transfer responsibility to DHSC?

The Department for Digital, Culture, Media and Sport is the lead department for a range of creative industries and leisure activities, including gambling, but tackling problem gambling is a cross-government issue and requires a number of government departments to work together. The Department for Digital, Culture, Media and Sport is responsible for industry regulation, which is a key aspect of harm prevention. The Department for Education looks at where information about the risks of gambling can be given to pupils in schools. The Home Office leads on any matters to do with gambling-related crime, and the Treasury sets and monitors gambling duties. Problem gambling is indeed a health issue, which is why the Department of Health and Social Care leads on providing access to NHS treatment and advice, and developing the research and evidence base. This is also how services work at a local level. For example, the Northern Gambling Clinic works closely with a range of people and organisations including GPs, local councils, NHS trusts, national and local charities, Citizens’ Advice, the criminal justice system, debt agencies, substance misuse services and homeless agencies. We need to mirror that approach at a national level. The Department for Digital, Culture, Media and Sport and the Department of Health and Social Care co-chair a quarterly cross-government and third sector official-level steering group to coordinate and share activities on research, education and treatment. In order to strengthen cross-government working further, we have undertaken to publish a UK-wide cross-government addiction strategy to include problem gambling. The scope of the strategy is being considered and we will have more to say on this in due course.

534

2. The NHS has opened gambling clinics in Leeds, Manchester and

Sunderland, and committed to opening a total of 14 new clinics by 2023/24. What do you believe to be the respective roles of the NHS and charities in providing accessible and effective treatment for disordered gambling? How will these new clinics enhance and compliment the treatment services already available?

Evidence given to this committee by GambleAware, GamCare, the Gordon Moody Association, YGAM and others, has outlined the considerable work contributed by the third sector to the prevention and treatment of gambling-related harms. The charity sector plays an important role providing care and support in society. The NHS has a long and established history of working with voluntary organisations; they are vital. The NHS clinics are funded by NHS England and part of a wider gambling treatment pathway, which is commissioned by GambleAware and provided by GamCare. GamCare provides advice through a national helpline, and face-to-face support where needed. This has allowed the NHS to focus on delivering treatment and service to those in most need and to manage the most complex cases.

The NHS will continue to work with the charity sector going forward, as it opens more clinics to meet its NHS long-term plan commitment of up to 15 specialist clinics. What is important is that the NHS and charity sector work together, learning and sharing information to make the best use of resources and to realise the benefits of delivering aligned and complementary services.

535

3. The UK Government is planning on reviewing the Gambling Act 2005. When will this review take place and what will be its scope? Will the review reconsider the underlying regulatory approach to gambling introduced by the 2005 Act?

The government has committed to review the Gambling Act 2005 to make sure it is fit for the digital age. We will announce further details in due course, including on the scope of the Review. We will ensure everyone has a chance to contribute their views, and particularly look forward to the findings from this committee.

536

4. When the Gambling Act 2005 came into force in 2007, few could have

foreseen the scale of future growth in online gambling. How will you ensure that any legislative or regulatory changes will be sufficiently flexible to deal with future developments in online gambling and rapid developments in the technology underpinning online gambling?

It is true that, like many aspects of daily life, gambling is increasingly an online activity. 21% of people gambled online in 2019, a rise of 6% since 2015.316 As Sir Alan Budd noted in his evidence to this committee, it would have been difficult to foresee the nature of these changes. However, the Act gives very broad powers to the regulator to impose whatever licence conditions are needed to keep gambling fair and open, free from crime, and to protect children and vulnerable people. In order to deal with the growth of online gambling, the Act was amended in 2014. The Gambling Commission’s broad powers now apply equally to online gambling as to any other form of commercial gambling. The Secretary of State may also impose conditions on licences through secondary legislation if necessary. Until 2014 operators based offshore were not regulated by the Gambling Commission, but the Gambling (Licensing and Advertising) Act 2014 amended the 2005 Act so that all operators serving customers in Great Britain must abide by the licence conditions and codes of practice set by the Commission. This was an immensely important step in protecting people who gamble in this country. Before then, much online gambling by British customers was regulated by the country in which the operator was based rather than by the Gambling Commission. There has undoubtedly been a rise in online gambling; the gross gambling yield from this sector (amount staked minus winnings paid out) grew 18% between 2015/16 – the first year for which we have full figures – and 2018/19, or from £4.5 bn to £5.3 bn. However, much of this represents a channel shift from land-based to online gambling: gross gambling yield from commercial gambling (i.e. excluding the National Lottery and society lotteries) grew just 4% in that period, from £10.3 to £10.7bn.317 We have not seen overall participation rates rise as online gambling has become more popular. Past month participation has remained broadly stable at between 45-48% for the past five years. Problem gambling rates have also remained stable at below 1% over the same period, as they have done for twenty years. As the Chair and CEO of the Gambling Commission explained in their appearance before your committee, the Commission’s broad and flexible powers allow it to adapt regulation relatively quickly to respond to market and technological developments. For example, using credit cards to gamble online has recently been banned via a change to the licence conditions and codes of practice without the need for the government to legislate. Neil McArthur, the CEO, was also clear

316 Gambling Commission, Gambling participation in 2019: behaviour, awareness and attitudes,

February 2019. 317 National Audit Office, Gambling Regulation: problem gambling and protecting vulnerable people, February 2020. Figures adjusted for inflation by the National Audit Office.

537

in his evidence to the committee that the current legislation does not prevent the Commission doing what it considers necessary to meet its aims. The government has committed to review the Gambling Act 2005 in recognition of the changes that have occurred since the Act came into force, and in the expectation that this evolution will continue. The review will be an opportunity to further future-proof regulation. Flexibility and the ability to respond to change will continue to be essential to regulation of gambling in this country.

538

5. The National Audit Office has stated that “gambling regulation lags behind the industry” and recommended that the Government should review the way the Gambling Commission is funded. What are the Government’s views? And what steps will you take to ensure that the Gambling Commission has the expertise and resources to keep up with the gambling industry’s constant technological developments?

The government welcomes the report by the National Audit Office and is considering its recommendations carefully. The Department for Digital, Culture, Media and Sport is working with the Gambling Commission to make sure its funding continues to enable it to properly regulate the industry and to respond to new areas of risk effectively. The Gambling Commission is funded by licence fees paid by operators. Fees are set at a level whereby the Commission can reasonably recover the cost of regulating the market in accordance with its statutory functions. The Gambling Act 2005 gives power to the Secretary of State to set the fees requirement through secondary legislation. In April 2017, the fees system was changed to calculate fees based on gross gambling yield for all gambling operators (rather than for online only) following proposals submitted by the Gambling Commission to the Secretary of State. Fees are set to recover the cost of regulation from operators proportionately according to risk. We see this as the correct approach as it is right that industry should bear the costs of regulation rather than the taxpayer. The Commission can, and does, call on expertise from within the industry itself to help find the most effective solutions to technological challenges. For example, it tasked a working group of senior industry leaders with creating an industry code for responsible product and game design that will set out how the gambling industry can produce safer products in the future. It can also call on industry expertise to find ways to harness technology to increase protections, as it did when it issued a challenge to industry to find ways of using advertising technology to reduce the amount of gambling advertising seen by children, young and vulnerable people. Industry has proved willing to offer its time and expertise in response to Gambling Commission requests but the Gambling Commission has the power to compel unwilling operators to do so, and to enforce improvements where it is dissatisfied. Beyond industry, the Gambling Commission can call on its Digital Advisory Panel of experienced experts drawn from the fields of technology, gambling and social media. The panel was established to advise the Commission on emerging trends that may impact the gambling market, operators and customers. It also works closely with regulators of other jurisdictions to share learnings and best practice, for instance on issues of criminality and in emerging risk areas like the convergence between video games and gambling.

539

6. The Committee has heard from those with lived experience of gambling-

related harms that the Gambling Commission offers “no support, no feedback and no help” to individuals in dispute with operators. What are your views on the suggestion that an ombudsman should be established to deal with individual complaints?

It is a licence condition that operators must nominate a Gambling Commission approved provider of alternative dispute resolution services that they will work with. Operators must signpost customers dissatisfied with the outcome of their complaint through the operator’s in-house procedures to their nominated alternative dispute resolution provider. These services are provided free of charge to customers, and their rulings are binding on operators in cases with a value below £10,000. However, alternative dispute resolution providers are not generally able to accept and rule on cases that relate to an operator’s failings against the social responsibility code or licence conditions set by the Gambling Commission, as these fall within the remit of the Gambling Commission’s role as regulator. The Independent Betting Adjudication Service, the alternative dispute resolution provider that deals with the largest number of disputes involving gambling operators, had 5,235 disputes referred to it in the year to September 2019. It refused to accept 684 of those cases because it considered them matters of regulation.318 However, the Gambling Commission’s regulatory activities provide important and significant protections for individuals against operators. While the Commission does not typically involve itself in individual disputes, it does take a regulatory approach with clear expectations placed on all operators and firm action against those that breach the conditions of their licence, including in relation to their interaction with individual customers. For example, it was announced in March 2020 that an operator had agreed to pay an £11.6m regulatory settlement in lieu of a fine for social responsibility and money laundering failures. A large proportion of this money will be returned to victims of crimes that had been committed to fund gambling. The National Audit Office has recommended that the government consider reviewing the effectiveness of existing mechanisms for individual redress, and we are considering this recommendation carefully.

318 Comparative Annual Statistics Reporting 2017-2019, Independent Betting Adjudication Service, September 2019

540

7. The Children Commissioner recommended that the Government should take immediate action to amend the definition of gaming in the Gambling Act to regulate loot boxes as gambling. Do you believe that products such as loot boxes, player packs and skins should be regulated by the Gambling Commission?

Skins gambling is already regulated under the current legislation. There are currently no licensed gambling operators who offer skins gambling. Any unlicensed operators offering skins gambling to British consumers can be prosecuted for illegally offering gambling services. In 2017 the Commission prosecuted the operators of FutGalaxy for offering unlicensed skin gambling to children, becoming the first gambling regulator in the world to do so, and it continues to monitor this area closely.

Regarding loot boxes – and player packs, which are a form of loot box – we announced in the Queen’s Speech in December 2019 our intention to review the Gambling Act 2005, with particular focus on issues around loot boxes. It is important that gambling legislation is applied to activities in a proportionate manner, and any change should be informed by evidence and after a full consideration of the unintended consequences that may result. Our plans to address this issue will be set out in the government’s response to the Digital, Culture, Media and Sport Committee’s report on immersive and addictive technologies, which will be published as soon as possible.

While each country’s regulatory framework is different, we’re pleased that the Gambling Commission has also been cooperating extensively with counterparts across Europe and the rest of the world on this issue, including through the Gaming Regulators European Forum which released its synthesis report in October last year. We are also pleased that the video games industry has taken concerns seriously. We welcome PEGI’s creation of a ‘paid random items’ content label to warn consumers where games contain such mechanics, and also welcome the platforms’ and publishers’ August 2019 commitment to disclose the odds of getting certain items.319 Evidence given to this committee by Dr David Zendle highlighted the fact that loot boxes are just one of the ways that children may be encouraged to spend money online. It is important that children are well equipped to make informed and sensible decisions. ParentZone has produced resources to help parents have conversations with children about risks – financial and otherwise – that they may encounter when gaming online. Schools have the flexibility to address issues such as loot boxes. For example, this could be covered when pupils are taught the risks related to online gambling in Health Education. There is also a strong focus within Health Education on pupils being taught more broadly about self-regulation, as well as how to manage risk. Pupils will also be taught how to be discerning consumers of information online and the risks of excessive use of electronic devices.

The computing curriculum is also sufficiently broad to allow for teaching about these types of products, throughout primary and secondary school, as part of its e-safety content. Teachers may choose to highlight the dangers of online

319 https://pegi.info/news/pegi-introduces-feature-notice, and https://www.isfe.eu/news/video-game-industry-commitments-to-further-inform-consumer-purchase/

541

gambling, and other less obvious ways in which young people are encouraged to spend money whilst using digital platforms, such as loot boxes.

542

8. In oral evidence to the Committee, gambling operators suggested that affiliates should be regulated by the Gambling Commission. What are your views? Will you consider such a regulatory amendment of the 2005 Act?

In October 2018 the Gambling Commission made a change to its licence conditions to make absolutely clear that operators are liable for the actions of affiliates they have engaged. This change was made in response to evidence that some affiliates were misleading potential customers, and means that the Gambling Commission can take action against operators for poor behaviour on the part of their affiliates. It is right that operators should take responsibility for ensuring that all of their marketing activities, however these are delivered, are socially responsible and face consequences if they fail to do so.

543

9. The Government has the power to introduce a mandatory levy on the gambling industry, but has so far declined to do so. Can you explain the reasons for this?

The Gambling Act 2005 includes a provision for the creation of a mandatory levy payable to the Gambling Commission. The Act states that funds collected through such a levy are to be used by the Commission to fund projects related to addiction to gambling, other forms of harm or exploitation associated with gambling, or any of the Commission’s licensing objectives. It is unusual for a regulator to be the commissioner of support services and we are concerned that placing such a responsibility on the Gambling Commission risks broadening its remit too far. Funding for the Commission’s licensing objectives are provided by licence fees without the need for a separate levy on operators (see q5 for more detail about licence fees). Our focus to date with regard to gambling addiction treatment has been on ensuring that we have the right level and forms of support available for those who need it, rather than the mechanism by which this provision is funded. The Gambling Commission requires operators to support research, prevention, and treatment of problem gambling and in January 2020 it amended this rule to specify the organisations that it considers suitable recipients for these donations. The Commission plans to begin publishing the value of these donations on its website. During the 2018/19 financial year the gambling industry gave £9.6m to the charity GambleAware, which commissions research, education, the National Gambling helpline, and a network of treatment services. Industry group the Betting and Gaming Council estimates that a further £9.7m was given to other charities.320 In July 2019 five major operators also committed to increase their donations tenfold, from 0.1% to 1% of gross gambling yield over the next four years. This included a commitment to spend a cumulative £100m on treatment over those four years. We welcome this commitment and will monitor progress against it closely. A mandatory levy on operators would also be a hypothecated tax. Public services are not usually funded by such taxes as they risk raising too much or too little for the purposes for which they are intended. As Lord Smith of Hindhead observed in his question to Sir Alan Budd on 3rd September 2019, ‘the drinks industry does not specifically have to pay for liver disease treatment; the smoking industry does not specifically have to pay for lung disease treatment; the motor vehicle industry does not specifically have to pay for car accident treatment.’ Alcohol and tobacco products are taxed in recognition of their social costs and support services are funded from general taxation, according to need. The upscaling of NHS treatment for problem gambling under the NHS long-term plan is primarily funded through this route. We are working on building the evidence base to inform our understanding of the treatment need, which will in turn inform decisions on funding need. In the Government Response to Proposals for Changes to Gaming Machines and Social

320 Industry Facts & Figures, Betting and Gaming Council, 2019

544

Responsibility published in May 2018, it was announced that Public Health England would undertake an evidence review of the prevalence of gambling, its associated health harms and their economic and social burden. This study by Public Health England is complemented by an evidence review conducted by the National Institute of Health Research that aims to establish which interventions are effective and cost-effective in preventing or reducing gambling-related harm. The National Institute of Health Research will publish its report in the coming months, while pressures resulting from Covid 19 have delayed the likely publication date of Public Health England’s review until later in 2020 or early 2021. Work is also underway to scope a cross-government addiction strategy that will include gambling.

545

10. The Gambling Commission has stated that “effective use of account-based

data can be used to protect players” online. If operators fail to use account-based data to protect their players, would the Government consider introducing online limits on stakes and prizes to mirror those in land-based bookmakers?

As the CEO of the Gambling Commission set out in his evidence to the committee, online gaming and betting is entirely account-based. This allows operators to track the activities of their customers, and gives them large amounts of data that can be used to monitor and understand their customers’ playing patterns and habits. This is in contrast to land-based gaming machines where most players remain anonymous. Online account data can, and must, be used to identify in real time behaviours that may indicate a customer is at risk of suffering harm related to gambling. The Gambling Commission requires operators to intervene where they see evidence that harm may be occurring. This committee has heard evidence from operators on what they consider to be ‘markers of harm’, which includes behaviours such as increasing stake sizes, increasing length of gambling sessions, or chasing losses. Operators must evaluate the effectiveness of interventions in preventing harm. In principle, this allows them to tailor protections to each individual’s circumstances and behaviour, rather than apply a blanket measure. If operators fail in this regard, the Gambling Commission has shown that it will take action. For instance, it was announced in February 2020 that an operator would pay £3m in lieu of a fine because it had not intervened where there was evidence that customers were at risk of suffering harm, and subsequent enforcement cases have involved the suspension of operating licences. The government has committed to review the Gambling Act 2005 to make sure we have the right protections in place for the digital age. However, the work of the government and the Gambling Commission to protect children and vulnerable people will continue throughout the review process. We will continue to press industry to improve its social responsibility measures and practices. Gambling operators serving the British market have the expertise, resources and opportunity to develop world leading player protection measures and we expect them to do so. If they fail, the government and the Commission will take whatever further action is needed, including introducing limits on stakes and prizes if the evidence shows these are required to protect players.

546

11. The Committee has received considerable evidence which questions the value of education, and states that it is one of the weakest interventions to prevent problem gambling. What are your views? Have you undertaken any evaluation of education as a prevention tool?

It is often difficult to prove the direct impact of these lessons, as there are many factors that contribute to pupils’ well-being and behaviour and many of these lie outside of the school environment. These subjects have a strong focus on supporting pupils to make healthy, informed choices, now and in the future.

Many of the wider lifestyle factors associated with gambling addiction may be linked to poor mental health, and gambling addiction can create a cycle of debt.

These subjects have a broader focus than teaching solely about gambling. Ultimately the strength of this approach is that it enables young people to make informed decisions and consider all aspects of their relationships, health and well-being, which ultimately supports prevention. Throughout these subjects there is also a clear emphasis on ensuring young people know how and when to ask for support.

These subjects complement teaching through other curriculum subjects, such as citizenship, mathematics and computing, which can also, if necessary, address online gambling and its dangers.

547

12.The Committee has heard serious concerns about GambleAware, its role, relationship with key stakeholders and the impact of its work. If treatment is a matter for the NHS, education is a matter for the Department for Education and specialist charities, and there are serious concerns about the current system for commissioning research, what is the role of GambleAware? And does it remain fit for purpose?

A good deal of the criticism that GambleAware faces relates to a perception that industry funding undermines its independence. However, GambleAware is a fully independent charity which has had no industry representation on its board since 2018. GambleAware plays an important commissioning role in the system of provision of research, education and treatment related to gambling and gambling addiction. As Kate Lampard, chair of GambleAware, noted in her evidence to this committee, the role of a commissioning body is an established one that is seen in many well developed health systems because it makes for a robust and accountable system. By coordinating the activities of providers, it is able to minimise duplication and scale up provision where it identifies a gap. This commissioning role allows it to monitor and ensure the quality of a range of services across all three areas. It also allows it to evaluate the effectiveness of the projects and work it funds. It is working with the Care Quality Commission to have its treatment services quality assured, and the research it commissions is peer reviewed. GambleAware commissions research which supports a programme set by the Gambling Commission and its advisory group (the Advisory Board for Safer Gambling), with the aim of building the evidence base required to inform developments in regulation and industry practice. This research is commissioned according to principles set out in their governance procedures. These dictate that research priorities must be transparent and subject to consultation, that projects must have a clear and publicly available brief, that the process and criteria for assessing responses to briefs must be publicly available, and that there must be a transparent process for identifying and managing conflicts of interest.321 GambleAware’s wide range of commissioned treatment services particularly complement the treatment work of governmental and statutory bodies. As part of the expansion of NHS clinics, NHS England are working closely with GambleAware and their treatment partner GamCare to better understand treatment referral pathways and ensure NHS expertise is used to support those with a mental health need. The National Gambling Helpline, commissioned by GambleAware and provided by GamCare, operates 24 hours a day, seven days a week and ensures that help is always available for those who need it. GambleAware also commissions programmes that give training to those working with children, and creates resources for teachers to help them educate children about the risks of gambling. Schools have flexibility over how they deliver Health Education, so they can develop an approach that is sensitive to the needs and backgrounds of their pupils. Many schools draw on the work of subject

321 Research Commissioning and Governance Procedure, Gambling Commission and GambleAware, 2018

548

associations when choosing resources; for example, the PSHE Association, which has worked with GambleAware to produce materials on gambling. Their quality assurance process includes working with teachers and external experts to ensure materials are fit for purpose. The statutory guidance for Relationships, Sex and Health Education sets out clear advice on choosing resources. The guidance advises that schools should assess each resource they propose to use to ensure it is appropriate for the age and maturity of pupils, and factually accurate. The guidance also sets clear parameters for schools such as encouraging the use of quality-assured resources. Schools may choose to work with external organisations who can enhance delivery of these subjects, bringing in specialist knowledge and different ways of engaging with young people.

The Department for Education is continuing to work with trusted organisations through the RSHE working group. The Department will also be including advice on choosing resources in our implementation guide, which will be published as part of our school support package.

549

13.The Committee has heard repeated concerns about the relationship

between the gambling industry and gambling research. The Committee has heard various suggestions for the future of gambling research including handing responsibility to the Economic and Social Research Council. Do you believe that the current commissioning system is effective? What are your views on the proposal to involve the ESRC?

Problem gambling is a complex issue and it is important that we have the right evidence to help us tackle it. The Gambling Commission produces reliable statistics on participation and attitudes towards gambling in both adults and children at regular intervals, and the Health Surveys provide detailed statistics on participation and rates of problem gambling. Public Health England and the National Institute of Health Research are soon to report on major evidence reviews on prevalence, impact and interventions for gambling harms. In addition to the Gambling Commission’s research to support its regulatory work, GambleAware commissions research in line with the priorities identified by the Gambling Commission’s Advisory Board for Safer Gambling. All of this research is commissioned and conducted independently of industry and without industry influence over subject or findings.

The government will always welcome an increase in high-quality research that enriches the evidence base around gambling and problem gambling. Researchers are free to direct proposals for gambling-focussed research to the research councils, as they are for all other areas of inquiry. The Economic and Social Research Council and the Medical Research Council have funded research into gambling in the past and we would welcome them funding more such projects in the future. Department for Digital, Culture, Media and Sport officials are looking to meet with both councils to understand how this might best be facilitated.

550

14.There has been some confusion in both the oral and written evidence received about the duty of care, if any, owed by a gambling operator to its clients. What are your views on amending the law to clarify that gambling operators owe a duty of care in tort to individual gamblers in certain circumstances, such as where an operator has failed to undertake affordability checks or failed to give effect to a request for self-exclusion?

It is our understanding that a duty of care can already exist in law. The courts have previously indicated that such a duty can arise where there is a special relationship between operator and customer, for example where a customer has requested to self-exclude, and that an operator which fails to uphold self-exclusion where it has been requested may be in breach of such a duty of care. Thus far, to our knowledge, the courts have declined to award compensation where such a duty of care exists and has been breached, as it could not be demonstrated that a customer had suffered financial harm as a direct result of an operator’s failure to uphold a self-exclusion. A key reason why has been that gamblers found it hard to prove that they would not have gambled and lost money with a different operator from which they had not self-excluded. However, customers are now able to self-exclude from all licensed online operators by registering with GAMSTOP, which may make it more difficult for operators to successfully argue that their customer’s financial harm was not a direct result of their failing in such cases.

Gambling operators are already subject to a specific and extensive regulatory and licensing regime, deriving from the Gambling Act 2005, which offers a range of protections and assurances to customers. The Gambling Commission has a broad range of regulatory sanctions available, which include financial penalties, divestment of money voluntarily to victims as part of the regulatory settlement process, and the power in section 336 of the Act to void bets and order repayment of any money paid in relation to a bet. This licensing regime allows the Gambling Commission to carry the burden of ensuring operators do not exploit or mistreat customers, rather than requiring customers to incur significant costs pursuing operators through the courts.

551

15.In 2019, the Government consulted on the minimum age for purchasing National Lottery products. Many witnesses have suggested that the minimum age for all gambling products, including Category D machines, should be 18. What are your views?

The consultation on the minimum age to play National Lottery games closed in October 2019. Responses are being analysed and we will publish a formal response in due course. Protecting children and young people from gambling harms is a priority for the government and the Gambling Commission. As part of the Government Response to Proposals for Changes to Gaming Machines and Social Responsibility we strengthened rules to require online operators to verify the age of customers before they can deposit money or gamble. The Gambling Commission’s Responsible Gambling Strategy Board (now the Advisory Board for Safer Gambling) looked at the question of whether Category D machines and other forms of gambling that are currently available to under-18s should be restricted to adults. It concluded that the balance of the argument did not support such a decision because there was no conclusive evidence of harm resulting from these forms of play.322 While noting the small evidence base to draw on, the Responsible Gambling Strategy Board pointed to a 2012 study which found that while gambling participation rates are generally higher in coastal areas, where seaside arcades are popular destinations for families and children, these areas did not have higher child problem gambling rates.323 Data collected by the Gambling Commission shows that children’s participation in gambling is declining. In 2011 23% of 11-16 year olds had gambled in the past week but by 2019 this rate had fallen to 11%. The most popular forms of gambling amongst those age groups are private betting (5%) and playing on fruit machines (4%). While 16 and 17 year olds are legally allowed to play football pools, lotteries and scratchcards, their levels of participation in these activities is low. We know that the majority (67%) of children who gamble do so when they are with their parents, and that over half of children (53%) see their parents as their first port of call for help if they were to become concerned about their gambling.324 All forms of gambling carry a degree of risk and parents have an important role to play in ensuring that when children do gamble, they do so safely.

322 Children, young people and gambling: A case for action, Responsible Gambling Strategy Board, 2018 323 Gaming and Problem Gambling Among Adolescents in Great Britain, Forrest and McHale, Journal

of Gambling Studies, 2012 324 Young People and Gambling Survey 2019, Gambling Commission, October 2019

552

16.The Secretary of State has power to make regulations to regulate gambling advertising, and the Committee has heard that the Gambling Commission should have greater powers over gambling advertising, rather than the current system of co-regulation. What are your views on using the powers in the Act to delegate the responsibility for gambling advertising to the Gambling Commission?

The existing system of co-regulation of advertising works well for gambling advertising. It allows the Advertising Standards Authority, the Committee of Advertising Practice, and the Broadcast Committee of Advertising Practice, as the experts at advertising regulation, to issue considered and practicable rules and guidelines for operators to follow in their advertising content and placement. If serious or repeated breaches occur, the Advertising Standards Authority can refer advertisers to the Gambling Commission and broadcasters to Ofcom. The Gambling Commission, with its powers to issue fines and sanctions, requires compliance with the codes as a social responsibility condition. This enables it to support the enforcement efforts of the Advertising Standards Authority and take action against those who refuse to follow the rules and guidelines.325 The benefits of the Gambling Commission taking sole responsibility for regulating all gambling advertising are not clear, especially as they have limited knowledge of the wider advertising landscape. It is important to note that the Gambling Commission remains able to intervene to direct operators to improve their behaviour related to advertising. The Commission issued a challenge to operators to find ways of using advertising technology to reduce the amount of advertising seen by children, young and vulnerable people. This has resulted in a number of commitments in this area, including measures to ensure that adverts are not inadvertently targeted at those seeking information about how to self-exclude from gambling.

17.Witnesses, including gambling operators, have agreed that gambling advertising is far too prevalent. What are your views on the suggestion that all gambling advertising should be prohibited, or all gambling advertising related to sport?

The Gambling Act 2005 permits licensed operators to advertise in a socially responsible manner. Gambling companies in Britain operate in a competitive market and advertising is one of the ways that they are able to compete for market share. It is also one of the primary advantages that licensed and regulated operators have over the black market. Prohibiting all gambling advertising would undermine our ability to keep those who choose to gamble safe when doing so.

325See for instance: https://www.gamblingcommission.gov.uk/news-action-and-

statistics/News/lottoland-to-pay-150000-for-advertising-failings,

https://www.gamblingcommission.gov.uk/news-action-and-statistics/News/gambling-business-fined-350000-for-advertising-failures

553

Gambling adverts are not allowed to target children or portray, condone or encourage gambling behaviour that is socially irresponsible or could lead to financial, social or emotional harm. The Gambling Commission can take action to sanction operators whose advertising breaks these rules. An industry voluntary ban on advertising on television before 9pm, except for bingo and lotteries, was extended in August 2019 to include advertising around daytime live sport. This ‘whistle-to-whistle’ ban prohibits betting adverts being shown from five minutes before the match starts to five minutes after the match ends, and applies even where the match runs across the watershed to end after 9pm. A responsible gambling message must appear on screen throughout all TV adverts.

The Commission expects operators to target their online advertising away from children and vulnerable people where possible. In response to a challenge from the Gambling Commission to make better use of advertising technology, the industry has recently committed to develop a comprehensive list of search terms commonly used by those looking for information about how to self exclude from gambling, in order to ensure that these searches do not result in gambling ads being served. Industry has also committed to age-gate operator Youtube channels and content, to make consistent and effective use of customer data to limit ads being served to vulnerable people on social media, and to implement +25 age targeting on social media where platforms allow. Industry has committed to implement these measures by July 2020 and the Gambling Commission will be monitoring its progress.

We have seen spend on advertising increase during the past decade. Research commissioned by GambleAware estimated that spend on off-line advertising increased by 24% between 2015-18.326 This increased spend does not seem to have created a sharp increase in the numbers of those who gamble as gambling participation rates hovered between 45% and 48% during that time. Problem gambling rates also remained steady during that period at below 1%.327 We have not seen evidence that demonstrates a causal link between advertising and gambling harms amongst the general population but we continue to monitor the situation closely.

Recently published research into the effect of advertising and marketing on children, young and vulnerable people found that while there was some indication that exposure to advertising was associated with an openness to gamble in the future amongst children and young people aged 11-24 who did not currently gamble, there were other factors that correlated more closely with current gambling behaviour amongst those groups. For instance, those with a close friend who gambled were six times more likely to gamble themselves, and those with a parent who gambled were twice as likely to gamble. While advertising and marketing undoubtedly makes children and young people more likely to be aware of the existence of opportunities to gamble, and may make them more likely to consider gambling in the future, other factors seem to be of

326 The effect of gambling advertising and marketing on children, young people and vulnerable adults, Ipsos Mori, 2020 327 Gambling participation in 2019: behaviour, awareness and attitudes, Gambling Commission, 2020

554

greater significance in leading that child or young person to gamble and in shaping their gambling behaviours.328

This research would seem to suggest that while it is important that there are proper protections in place to ensure that advertising and marketing does not target or exploit children and vulnerable groups, a simple ban on advertising would not be a proportionate or particularly effective means of limiting gambling harms. Instead, gambling advertising is subject to strict rules on content and targeting, with these controls working as part of a broader package of protections that ensure children and young people understand the risks of gambling, are prevented from participating in age-restricted forms of gambling, and are able to access treatment and support if they are experiencing gambling harms.

The government understands that advertising around sport is a particular matter of concern for some people. We have been clear with both gambling operators and sporting bodies that sponsorship and related marketing activities must always be done in a socially responsible way, and that they must consider their responsibility to the welfare of fans and supporters when entering into commercial arrangements. Gambling logos must not feature on merchandise targeted at children, for example shirts in children’s sizes, and the Betting and Gaming Council has committed to produce a further code of conduct for sponsorship activities that will be published this year.

It should be noted that even before the whistle to whistle ban, adverts for sports betting accounted for a small proportion of the gambling advertising seen by children (0.7 ads per week, from a total of 3.2 gambling ads per week seen on average by children in 2018),329 and that problem gambling rates amongst those who bet online (2.5%) are amongst the lowest for any gambling activity other than lotteries, while rates amongst those who place bets on sports in person are relatively low (5.1%) compared to other forms of gambling e.g. playing machines in bookmakers (13.7%).330 Figures giving an indication about the impact of the whistle to whistle ban are due to be published by the Advertising Standards Authority in the coming months.

29 April 2020

328 The effect of gambling advertising and marketing on children, young people and vulnerable

adults, Ipsos Mori, 2020 329 Children’s exposure to age-restricted TV ads: 2018 updates, Advertising Standards Authority,

2019 330 Gambling behaviour in Great Britain in 2016: evidence from England, Scotland and Wales , NatCen, 2018

555

HM Treasury – Written evidence (GAM0080) 1. HM Treasury welcomes the opportunity to submit written evidence to the

Committee on the Social and Economic Impact of the Gambling Industry.

2. The Committee submitted the following questions relating to the amount of revenue raised from the gambling industry:

How much revenue does the Treasury derive each year from taxes on the gambling industry and from other taxes associated with gambling? 3. The total revenue raised from gambling duties in 2018/19 was around

£3.0bn*. This represented c.0.4% of the total annual tax take. This is forecast to rise to £3.2bn by 2019/20.

4. It might be helpful to explain that the gambling tax regime is made up of seven different duties. Apart from Lottery Duty, gambling duties are generally levied on gambling operators’ gross profits – i.e. the value of stakes received minus prizes paid out. For gambling from which the operator’s profit is in the form of a commission or fee (e.g. poker and other peer-to-peer gambling, betting exchanges, pool betting) the effect of the legislation is to tax the commission or fee. The seven gambling duties and rates are set out in more detail in the table at annex A.

5. Almost all gambling activities are exempt from value added tax (VAT), the exception being gaming machines that offer non-cash prizes. However, gambling operators are liable to VAT on their non-gambling activities such as advertising, food and alcohol sales. A separate breakdown for VAT is not available.

How much revenue does the Treasury estimate it will lose as a result of the reduction in the maximum stake for Fixed Odds Betting Terminals from £100 to £2? 6. As a result of the reduction of the maximum stake for Fixed Odds Betting

Terminals from £100 to £2 in April 2019, the Office of Budget Responsibility estimated in its Economic and Fiscal Outlook report in March 2018331 that revenue would reduce by around £300m per year over the forecast period. To offset this, the Government increased Remote Gaming duty to 21% from April 2019.

331 Box 4.2 OBR Economic and fiscal outlook - March 2018

556

Annex A

*Figures are Provisional 9 September 2019

Duty Who pays? Rate 2018-19 Revenue (£m) *

General Betting Duty

Bookmakers 15% of gross profit (general bets); 10% of gross profit (sports spread betting); 3% of gross profit (financial spread betting)

619

Pool Betting Duty

Bookmakers 15% of gross profit (e.g. commission)

6

Lottery Duty

National Lottery operator

12% of ticket value (i.e. ‘stakes’)

853

Gaming Duty

Casinos (gaming tables)

15-50% of gross gaming yield (banded by marginal profit)

222

Remote Gaming Duty

Remote (online) casinos, slots and bingo sites

21% of gross profit 531

Machine Games Duty

Gaming machine operators (bookies, casinos, arcades, bingo halls)

5% of gross profit (lower rate); 20% of gross profit (standard rate); 25% of gross profit (higher rate)

720

Bingo Duty

Bingo halls 10% of gross profit 33

557

HM Treasury – Supplementary written evidence (GAM0134)

What would be the impact on the Treasury of transferring the National Lottery from the current lottery duty to a gross profits tax model?

HMRC analyses indicated there would be risks to the Exchequer and money to good causes as revenue would be reliant on significant ticket sales growth. In addition there would be IT systems costs associated with transferring the National Lottery from the current lottery duty to a gross profits tax model. A change to a gross profits tax model would also have knock-on effects that would require a complete overhaul of the way that earnings are distributed between retailers, the operator, good causes and the Exchequer.

How much more or less would the Treasury receive from the National Lottery if it was subject to gross profits tax?

The amount the Treasury would receive from the National Lottery if it was subject to gross profits tax would depend on the tax rate set. There are a number of uncertainties in regards to the Exchequer impact, and the Treasury is mindful of non-economic impacts that may result from moving to a gross profits tax.

29 April 2020

558

Peter Holloway – Written evidence (GAM0081)

This is my own personal work and therefore submitted in an ‘individual’ capacity. The attached is part of a 48 page paper that has been re-formatted to 15 pages. Paragraphs have been numbered for the purposes of reference. In summary, there are three parts to this submission:

1. The role of ‘Governance’. Governance being the role of our Legislators, Commissions, Boards, Advisors and Regulators, when dealing with online gambling, and it’s online gambling that is on a very fast upward trajectory. How well equipped is Governance to monitor, control and regulate ‘today’s’ online gambling technology? This paper examines the question.

2. Speed Times Repetition: Reports on the dangers of (excessive) speed x

repetition and examines the question “How has a modern enlightened society been turned inside out, by permitting practices which, at today’s computer speeds would not be tolerated in the workplace because of ‘harms caused’, but are now acceptable as a leisure activity?”

3. Prevention…Not Intervention: The whole concept of intervention is

designed to rely on players ‘personal’ responsibility, as though they were in a logical state of mind. Clearly the very player we want to reach; the player the policy is designed for, is not at the point of need in a logical receptive mind-set. This paper argues the point.

Background information: I have an interest in the structure of business, business practices and especially Business Information Systems. I also suffer the tragedy of my stepson’s suicide; a victim of gambling. Within th is context I have written two papers on this subject which offer (my) solutions on how to change the Gambling Industry practices and games content to reduce, if not eradicate, the harms currently caused to 430,000 to 600,000 of our UK citizens. I confirm that this work has not been published, but it has been distributed to certain interested parties as my own thoughts and opinions based on my personal perceptions. 1 Gambling – where are we and how did we get there?

1.1) Should we ban gambling – No! Should we ban many of the current practices that surround gambling – Yes, definitely yes!

1.2) The history of humanity is inextricably linked with the history of gambling. The earliest evidence of gambling comes from Ancient China in 2,300BC where small tiles were unearthed which appeared to have been used for a rudimentary game of chance. There is also evidence, as early as 200BC, to suggest that some sort of lottery was used to fund state works; possibly including the Great Wall of China.

1.3) Now, fast forward time to ‘todays’ VR Headsets, which will make virtual reality technology a commercial proposition for every day usage, ‘tomorrow’.

559

1.4) The big question therefore, is not ‘should’ we ban gambling, but ‘could’ we ban gambling? Gambling is so inborn, so intrinsic to mankind’s DNA that if we were to ban it, it would just go underground; ‘warts an all’. There is no doubt however, that ‘todays’ gambling products, and some of the practices that surround them, cause harm to a significant number (430,000 to 600,000) of our UK citizens. Harm not only to the Problem/Addicted Gambler but in addition, harm to family and friends, and the ‘knock-on’ consequences to employment and society in general. Harm so severe that it can, and does, sometimes end in suicide.

1.5) As we know, there has been gambling in every generation for hundreds and hundreds of years; winners and losers, and undoubtedly, problem gamblers. Until recently (in relative terms) gambling was local; that is local people betting and gambling with other people in the local vicinity. This meant, winners or losers, money simply changed hands, but it stayed in the local community to be circulated through local business and commerce. This of course, is not true today.

1.6) Gambling in general, and problem gamblers in particular, have never been in such prominence in society as they are in modern times and more specifically, in the current generation. Why is this, and more to the point ‘why on our watch’?

1.7) The question ‘why on our watch’ (say the last 20 years) makes it fairly and squarely our generation’s problem, therefore it is incumbent on us to accept responsibility and to resolve to make gambling safe and enjoyable for our children. So, what has happened over the last 20 years? Like most problems of this nature, there is no ‘one’ single answer, but a number of significant ‘things’ have come together to create synergy; a negative synergy that creates a vicious cycle, a chain of events that reinforce themselves through a feedback loop.

1.8) I will start with the ‘Gambling Act of 2005’, which was rolled out by Tony Blair’s Government and came into action in September 2007. Before that, the country had stricter gambling legislation. The only Gambling advertising allowed on TV channels was for the National Lottery, bingo and the football pools. The implementation of the 2005 gambling Act offered a much more relaxed regime which allowed Gambling Advertising to be at a level we see today.

1.9) Looking back, most of us would judge the relaxing of rules brought about by the ‘Gambling Act of 2005’ a mistake, but can we blame all our current ills on this one piece of legislation? No, of course not. Let us remember that in 2005, it would be a further 5years before the iPad was launched, and that was in the US. Let us also remember, that in 2010 the iPad was revolutionary and a wonderful piece of kit for its time, but it was obviously not the version of the iPad that we know today. In those early days you were ‘special’ if you owned an iPad. Likewise, mobile phones in 2005 were not the phones of today. The speed of research, development and production, of remote telecommunication products has been breath taking in just the last few years; the number of manufacturers in todays market place has increased competition in technical excellence. Today, each of us is a ’self contained island’, fed by remote telecommunications.

1.10) It is in this vacuum, the space between the ‘Gambling Act of 2005’ and the advent of modern telecommunications, that the Gambling Industry has been able to grow and flourish and they, the Gambling Industry, have taken full advantage.

560

1.11) What has society learnt from this, or more to the point, what have our Legislators learnt from this?

1.12) Up to now, writing in general terms and not referring specifically to gambling, an Act of Parliament could, and would, stay on the statute books for years, serving the purpose intended. However, the process and progress of modern life is getting faster and faster almost by the year, fuelled by the ever increasing pace of modern technology. This is particularly true in the example above; the Gambling Act of 2005 did not come into action until 2007 and within 3years new technology was bringing gambling to our finger tips, where ever we are, who ever we are. Young and old; twenty-four hours a day, seven days a week, and three hundred and sixty-five days a year.

1.13) So, our Legislators should understand that even relatively recent Acts of Parliament must be constantly reviewed to ensure that new technologies and practices have not altered or watered down the function that the legislation first intended. Our Legislators will have to be even more vigilant and understanding of the impact that modern practices and technology has on our existing laws of governance. Review, review, and act swiftly and precisely when necessary, to amend or bring in new legislation. The country’s health and wellbeing depend on it.

1.14) Moving on. My next point still concerns Governance. As well as Legislators, I now include Commissions, Boards, Advisors and Regulators. This again is a general point; in other words, it is not Gambling specific, but as will be seen, Gambling is very much part of it.

1.15) Governance is happy with something that ‘it can see, touch, feel, squeeze, weigh and measure’; they know that ‘it’ can be monitored, controlled and regulated. Now, what is the situation when we can ‘see it’ but we cannot touch, feel, squeeze, weigh and measure it? How well equipped is Governance to monitor, control and regulate?

1.16) To expand the point. Up to recent years ‘things’ have, in the main, been ‘physical’. From the largest passenger plane or ship to the smallest child’s toy; our breakfast cereal, orange juice, wine and livestock. All of these ‘physical’ things have been tested, graded, monitored, regulated and awarded a ‘Kitemark’… of safety, quality and reliability, and if they are found to be sub-standard, they are rejected at source. Once out in the public arena, we have Monitoring Agencies, Standards Agencies and Inspectors, with the power to keep us safe. A strictly binding Health and Safety policy applies to virtually every facet of modern life regarding physical entities. Contrast this with computerised output (the internet) for our entertainment and social activities. Do we have the expertise and the tools to award a ‘Kitemark’ for safety, quality and reliability and can we protect our young and vulnerable (from the internet) with a strictly binding Health and Safety policy?

1.17) The problem is that the internet as we know it today, particularly concerning our entertainment and social media is, in relative terms, ‘new’. Its development over the last 10 years, and more specifically the last 5 years, has been spectacular, and now accelerated change is to be expected year on year. The truth is that we, society in general and Legislators in particular, have not as yet gained the experience or mastered the expertise to be in control. We can operate it, use it, but can we control it? So, how do we take control? We need to change our

561

thinking regarding personal online interactive data, from the way we do things now! This will of course include online Gambling.

1.18) First, I will take ‘physical things’ to make the point. If it is a new product, we need Research and Development, specifications (checked against legislation), we need jigs and moulds, we need to source materials, tool up the factory floor and train and skill the workforce. Likewise, Farm to plate will go through many physical processes, as will drink. The point being, all this takes time, often considerable time depending on the product. Time and opportunity to ensure that standards, as laid down, are met before the product goes into the public domain. Once in the public arena we have (as stated earlier) Monitoring Agencies, Standards Agencies and Inspectors, with the power to keep us safe. Now contrast that with the products and practices of todays online personal entertainment and social media.

1.19) To be clear; this next section is about what is commonly referred to as the ‘e-commerce’ industry. An e-commerce company is a company that does most of its business through a website on the internet. This therefore, will include the online sector of the Gambling Industry, the largest and the fastest growing sector.

1.20) E-commerce companies operate in significantly different business environments than traditional industry sectors. Unlike manufacturing and commodity based products (as described above) they use online technology to create new products and services at a rate that traditional manufacturing cannot match. They use online technology to provide cheaper, faster and more efficient distribution for their products and services; 24hours a day, 7days a week.

1.21) Online gambling is one of e-commerce biggest success stories; the sector has gone from strength to strength. One of the crucial factors of this success is how quickly and effectively the Operators have adapted to online technology. They have a creative community of talented developers who can create new product in time scales unknown to most traditional manufacturing sectors. Operators are very adept at producing highly targeted marketing campaigns and personalised offers and promotions. The format and presentation of these personalised offers and promotions can be marketing ideas one day –that Eureka moment – and (figuratively speaking), in the player’s computer ‘in’ box the next day; so quick is the turn round.

1.22) The point being made, is to recognise the complete contrast between so called ’traditional’ industries producing ‘physical’ things that can be touched and examined, and the e-commerce industries that produce ‘read only’ and ‘visual’ output, at the touch of a button. More to the point; the main question is, how well does Governance currently monitor, regulate and control ‘read only’ and ‘visual’ output, to keep us the public, safe from harm? Keeping the public ‘safe from harm’, being of course the main duty of governance. The answer is, not very well! Governance, as stated earlier, has not as yet gained the experience or mastered the expertise to take control; they are caught in a ‘computer trap’.

1.23) The trap is, that the processing speed of modern computers can propel society forward at an ever increasing rate, but at the same time leave a ‘ton’ of data in its wake. When you have data, the natural tendency is to want, or need, to analyse and evaluate it, and this takes time, often considerable time; and there lies the problem – ‘time’. The ever

562

increasing ‘time gap’ between the forward momentum of progress, and the analytical results from the wake; and it is in this ‘time gap’ where things can, and do go wrong… often seriously wrong.

1.24) Over the last few years it has become the trend for our Legislators, Governors and Regulators to become more and more dependent on detailed analysis to provide ‘evidence’ based decision making. Inching forward, bit by bit, little by little, toward decision making based on, what is very often third party analysis and research. The research chosen can often be challenged by detractors, which in turn can delay a final decision. This policy is understandably favoured by our Legislators, Governors and Regulators, as they have to be accountable. They are after all, using public money, and they have to retain public confidence in their decision making.

1.25) How often have we heard the call for more and more ‘research’ to prove wrongdoing? We seem to have become preoccupied in using research at ‘any’ time in the action cycle. The word ‘research’ is synonymous with the word ‘development’; ‘Research and Development’. Research must be used at the front end of the development cycle; not at the back end… ‘to prove the horse has bolted’. This policy therefore, does not work for e-commerce!

1.26) Whereas ‘traditional’ industry output is tested and regulated on ‘evidence’ based criteria, the same should not be true when dealing with e-commerce output, because of the ‘time gap’ issues, as stated above.

1.27) It should be noted; the Gambling Industry is an industry that can cut across the divide, in so much that some Operators are both retail and online, whereas other Operators are online only.

1.28) We, Legislators, Governors, Regulators, e-commerce industries, and yes we the public, must have a different way of thinking, when it comes to the regulation of e-commerce companies. We need to adopt the classical, tried and tested, ‘Duck’ principal: “if it looks wrong…sounds wrong…feels wrong…then, it is wrong!”

1.29) Regulators need to exercise the ‘on the spot’ power and control that we see and expect from sports referees and umpires; the ability to use the yellow card, red card and yes, if necessary, the ‘sin bin’. They should have the backing and support of Legislators and Governors and the understanding of the public at large. Decision making is in accordance with their knowledge of the industry and their skill and judgement. Where and when it is possible to obtain ‘quick evidence’ to support their decision making, similar to ‘video refereeing’ in sport, they should of course do so, but they should not delay decision making. Every day costs financial and physical ‘hardship’ to thousands of our citizens.

1.30) To be clear; our aim is to eradicate harm in all its guises, therefore I am advocating quick and decisive regulation, based on the ‘Duck’ principle and administered by Regulators acting like sports referees, to regulate across ‘all’ e-commerce, regardless of industry type. Therefore, this does not single out any particular industry or company; I work on the principle, ‘if the cap fits, wear it’. This requires new thinking and acceptance from across all parts of society, but society will be all the better for it.

1.31) Moving on, but still keeping with ‘regulation’. There is a misconception, particularly in some quarters of the public, regarding regulation and standards. It should be understood that Regulators do not ‘raise’ standards, rather they ‘maintain’ standards.

563

They maintain standards to what becomes a ‘bottom line’ or indeed a ‘regulatory line’, to which enforceable standards of good practice should not drop. In the Gambling Industry for instance, we need to look to individual Operators to raise standards and practices.

1.32) A good example has recently been set in the Banking Industry. A few months ago two new Challenger Banks, Starling Bank and Monzo Bank, became the first banks to introduce a ‘gambling blocker’, enabling gambling customers with addiction problems to block betting payments from their accounts. What is just as important, is they combine this with customer care features and advice to gamblers at a standard of practice not seen before. As a result of their bold move, they were lauded by the popular press, radio and TV, charities and many interested parties. Their reward being a huge influx of new customers at the expense of their High Street competitors; a case of competition at its best. The term ‘Challenger Bank’, is used to describe any bank that challenges the big four in Britain; Barclays, Lloyds Banking Group, HSBC and RBS Group. The big four were on the back foot and forced to respond. Barclays have recently become the first UK High Street Bank to adopt payment blocking on gambling and some other retail services. Three more UK High Street Banks, Lloyds, Santander and RBS are about to follow suit.

1.33) The illustration above proves that standards are raised from within. So, the big question is, can we replicate the example of the banking industry to the gambling industry? The answer of course is yes! There are few, if any, industries larger than the banking industry.

1.34) The objective is to ‘Eradicate Harm from Online Gambling’. The challenge is to do it quickly!

1.35) Two things need to happen: First; it will take one Operator, one brave Operator, small or large, new or established, to make that first bold move. An Operator with the desire to make new and exciting online products; exciting to play and designed to protect any potentially susceptible player from ‘all’ harm. Products augmented by high standards of marketing and advertising. An Operator with purpose, commitment and determination can achieve this, and must be encouraged to achieve this. This Operator must work very closely with the Regulator, and to exacting standards of technical excellence. In turn the Regulator must have complete understanding of all aspects of the products, for reasons that will soon become apparent. The boldness of such a move must be appreciated; the willingness to break from the pack and to take risks and act innovatively, takes courage. That Operator, will incur extra development costs that the ‘do nothing’ brigade of Operators will not. That Operator will raise standards of quality and levels of propriety that may result in a loss of a certain type of player. The type of player that would naturally gravitate to, what then would be, the lower standards of the ‘do nothing’ Operator. In other words, the ‘do nothing’ Operators gain extra custom and revenue from, ‘doing nothing’, at the expense of the ‘good guys’. That has to be addressed.

1.36) Second; if, and only if, the Regulator is convinced that the Operator, or indeed more than one Operator, has achieved the highest level of excellence, they should be rewarded, and awarded the equivalent of a ‘Michelin Star’. The award will be reviewed and published annually. The newspapers, radio, TV and commentators in general, should be encouraged to laud the achievement of a ‘Michelin Star’ awarded Operator.

564

This of course being in stark contrast to the normal, and generally justified, media coverage of the Gambling Industry today. When a company, in any industry, breaks ranks by raising standards substantially, competitors follow (in time) in an effort to regain lost footfall. The reward for the first company is the huge influx of new customers at the expense of their competitors, generated in the interim (time) before the competition has caught up. At this point, the Regulator moves the ‘regulatory line’ upward to close the gap between top and bottom. This is how we raise standards, from within. I can understand that many people will be surprised that I am even considering, let alone advocating, that we should ‘laud’ an Operator, regardless of ‘how good they are’.

1.37) My argument is: as a society we are either brave enough to ban gambling, ‘lock stock and barrel’ and make it illegal, or we accept that it is legal and like any other industry we encourage and praise the ‘good guys’ and criticize and demonise the bad; albeit that even the bad have to be up to regulatory standard. The very worst thing to do, is to allow it to be legal, and then ‘stick our heads in the sand’ and pretend it isn’t there. The challenge is; if, or as, gambling is legal, we have a duty to raise the standard of care within the product and the marketing that surrounds it, and the best way is to follow the example of Starling Bank and Monzo Bank, and the effect they had on the banking industry. The blue-print is there…’why try to reinvent the wheel’?

1.38) The other argument, on issues of ‘prevention’ and ‘harms caused’ is, “if

you publicise it, surely you are going to encourage more and more people to try it”? This can be true, and it is part of the, ‘stick our heads in the sand and pretend it isn’t there’, viewpoint. This point of view is valid if there are only a relatively small number of people affected, but of course there is always a ‘tipping point’, and 430,000 to 600,000 Problem/Addicted Gamblers in the UK, not to mention the gambling related suicides, is well over the ‘tipping point’!

1.39) The attitude has to be, as with all prevention programmes, “well, if you do insist on gambling, at least promise that you will do it with the company that has the highest award for safety and standards”. I am sure we can all relate to similar well meaning comments from family and friends, on other ‘prevention’ subjects!

2 Speed Times Repetition – the largest single cause of harm! 2.1) It is my belief that ‘Speed times Repetition’ is the largest single cause of

online Gambling related harm, today! 2.2) Speed is virtue, speed is money. It is difficult to overstate the importance

of speed in business; when you are slow, your rivals will overtake you. Computers in the workplace do repetitive and boring jobs speedily and accurately with constantly reliable outcomes. They can be relied on to perform at great speed and precisely the same way, time after time, after time. If left to humans, the use of repetitive behaviour in the work place, at speed, can tip over into Obsessive Compulsive Disorder, where more and more repetitions of more and more actions come to dominate a person’s life. Computers are the ideal business ‘workhorse’. They do jobs and tasks at speeds that would cause ‘harm’ to humans, leaving humans

565

to do what they do best; Analyse, Rationalise, Contemplate and make Strategic Decisions, in comfort.

2.3) How then, has a modern enlightened society been turned inside out, by permitting practices which, at todays computer speeds, would not be tolerated in the workplace because of ‘harms caused’, but are now acceptable as a ‘leisure activity’? I am certain that, for the average person, we are now reaching the limits of ‘Speed times Repetition’ that the brain can safely absorb without causing ‘temporary’ lapses in concentration. A temporary loss of reality will trigger ‘temporary’ irrational decision making when ‘in play’ gambling, and it only takes seconds to loose hard earned money whilst in that state of mind.

2.4) Let me be perfectly clear; it is the speed of modern devices, desk tops, lap tops, tablets and mobiles that have increased exponentially in the last two or three years alone. Games content that might have been acceptable with slower speeds of a few years ago, should not be allowed, when combined with todays computer speeds.

2.5) I wrote earlier in this paper; “the problem is that the internet as we know it today, particularly concerning entertainment and social media is, in relative terms, ‘new’. The truth is that we, society in general and Legislators in particular, have not as yet gained the experience or mastered the expertise to be in control”. Speed, or rather ‘speed of output’ is another example where ‘we’ need to take control.

2.6) We ‘now’ need to recognise and then manage, a clear division of computer tasks that I will describe as ‘Full-Speed Production’, and ‘visual’ output that I will describe as, ‘Interacting with Humans’. Examples of ‘Full-Speed Production’ would be; number crunching, downloads and streaming, or tedious computer background jobs. These types of jobs must of course benefit from the full range of speed, and the technology of modern computers.

2.7) Contrast that with certain types of ‘output’ that is produced and designed to interact with us humans, particularly entertainment and social media, and more especially, ‘visuals’. It is essential that we have regulation that limits the speed of visual display to ‘something’ that can ‘safely’ interact with us humans. So, what do we use to define and measure that ‘something’? Movies! We use Movies; we use the shutter speed of a Feature Film, as the maximum speed of online ‘visuals’. We watch Feature Films, TV and YouTube at a speed that mirrors the speed of real life, as experienced by us Humans; its just natural. Film makers have been able to perfect the ideal filming techniques using a traditional shutter angle of 180 degrees, film is exposed for 1/48th of a second at 24 frames per second; so I am sure that experts can devise a meaningful measurement standard (if one does not exist at the moment) to replicate the same result. Visual online output should not exceed this speed for entertainment and leisure activities, if we are serious about either reducing online harm, or indeed trying to eradicate online harm. This particularly applies to online gambling where currently, visuals are often ‘speeded up’ to a point that can cause susceptible players to turn into Problem/addicted Gamblers…and there are estimates of 430,000 to 600,000 Problem/Addicted Gamblers today and the figure grows day on day.

566

2.8) I started this section on ‘Speed’ by writing, “It is my belief that ‘Speed times Repetition’ is the largest single cause of online gambling related harm”…and that is true. However, the conundrum for the Gambling Operators is; if, as I advocate, visual speed is kept inline with Feature Films, TV etc., therefore taking ‘excessive’ speed out of the equation, then certain current games are just left with ‘repetition’…and as we all know, “there is nothing more boring in life, than straight forward ‘repetition’, especially when it is supposed to be a ‘leisure’ activity. We need to ‘ditch’ speed times repetition as the focus of interest and replace it with ‘drama’; we need to build adventure, excitement and ‘drama’.

3 Prevention…Not Intervention – and here is the reason why? 3.1) The challenge!

How, in the same product, do we provide an incredible and enjoyable experience to all, whilst at the same time protecting the vulnerable from harm? The most credible answer is real time computer software Prevention or Intervention, whilst ‘in play’. As can be safely deduced from the title above, I favour ‘Prevention’…and here is the reason why!

3.2) First, the case ‘against’ Intervention: Advocates for Intervention make the point, and quite rightly, that stored data derived from ‘in play’ history can determine and predict a player’s playing habits and character. In other words, their playing psychology. Therefore, it is feasible to intervene at the right time in the playing cycle, with (the right) Warnings, Advice and Reality Checks; and that is true.

3.3) To make my point, it is necessary to examine the likely processes that would create such Warnings, Advice and Reality Checks, in a timely manner; these are what I call, ‘Interventions’.

3.4) Experts will be chosen to form a Study Group or Think Tank. From their deliberations, Statement and Question text will be agreed. This will be done ‘in the cold light of day, based on logic, derived from logical people’. Next, Experts will decide the timings, duration and placement of each piece of (Intervention) text to be displayed. Again, ‘the cold light of day – based on logic – logical people’. Naturally, both critics and defenders of the policy will debate and defend their views based on ‘logic’. Logic, is the only logical thing that logical people, in a rational state of mind, have to debate. The common denominator being, “cold light of day”, “logic” and “logical people”.

3.5) The point is; ‘the Problem/Addicted gambler is in a state of mind, temporary or otherwise, that creates the inability to stop when suffering harm, whereas a person in a rational state of mind, would stop’.

3.6) Clearly, the very player we want to reach; the player the policy is designed for is not, at the point of need, in a logical and receptive mind-set. At best, in this state of mind they will ignore the ‘Intervention’, and at worst, ‘drive a coach and horses’ through it. The policy of ‘in play’ Intervention, if adopted by Operators, will look good, caring and responsible, and can be defended on the grounds of logic, but in reality, it will not reach the people (player/gambler) in need.

3.7) Still on the subject of Intervention: another very important point for the Operator to consider is, that unlike prevention which I will discuss later, Intervention can be never ending, taking on a life of its own. After the

567

Study Group/Think Tank has done its job and policy has been implemented into product; that is not the end of it, because people never stop thinking. It’s that ‘Eureka’ moment that can happen at any time – when driving the car, walking the dog, or of course…when taking a bath. The Eureka moment is; ‘seeing we have already done ‘that, ‘that’ and ‘that’ (Interventions) surely it would make sense to add ‘this’, and later on ‘this’ and ‘this’. Of course, out of every ten new ideas, two or three of them will be good ones and on merit should be implemented, and there is the dilemma; ‘adding’ needs resources, and resources cost money!

3.8) My next point on the subject of Intervention is this: “obviously many people engage in gambling activities at various times in their lives. Most do not develop any significant problems or difficulties. On the other hand, many do”. Therefore, to develop the point, let me give an example of an online Operator with ‘one million’ customers. How do we identify, on a player by player basis, which of those one million customers is ‘going’ to develop problems or difficulties? Of these, ‘when’ are they going to develop their problem; today, tomorrow, next month, next year – when? There can be more questions in the same genre, but the reality is, we just do not know, ‘who’ and ‘when’. If we are going to ‘Intervene’ therefore, it would be necessary to keep exactly the same detailed ‘playing habit data’ on all one million customers, day after day after day, albeit that we know that for most customers it will never be needed, as they are in control of their gambling. This is a lot of redundant data, and redundant data is a cost against the Operators ‘bottom line’. What about data processing? Even the simplest Intervention needs dynamic data (the here and now), historic data, and ‘comparison’ between the dynamic and historic, plus ‘the message’ output.

3.9) Often than not, if we are serious in our need to protect the

player/customer from harm, the level, standard and importance of the Interventions will create more complex data processing. This brings me ‘full circle’ back to a point made in the last paragraph – “another very important point for the Operator to consider is, that unlike Prevention which I will discuss later, Intervention can be never ending, taking on a life of its own; that ‘Eureka’ moment”

3.10) My final and most important consideration concerning the policy of Intervention is taken from the last paragraph…’the level, standard and importance of Interventions” …or rather the data needed to create those Interventions, highlights the realization of the ‘significance’ of the data held. I refer to ‘security’.

3.11) With the number of data breaches growing year on year, and its predicted that a quarter of the world’s population will be affected by the year 2020 (not long now), they are now a huge issue for all organisations. A breach can, and does, have a catastrophic effect on a company’s reputation. The seriousness and repercussions can be dependent on the type of data stolen. It is bad enough when personal and financial details are breached as this can lead to identity theft but, however bad (and it is bad) identity theft can be, it is repairable over time.

3.12) Money can be repaid and reputations restored, on the other hand lets think of the data needed for Interventions and by Interventions we mean Warnings, Advice and Reality Checks. Let’s think how we capture that data. In fact, the answer has already been identified earlier, when I

568

said…” stored data derived from ‘in play’ history can determine and predict a player’s playing habits and character. In other words, their playing psychology”. Their playing ‘psychology’... their mind-set, their mental processes, character, temperament, behaviour under pressure. Their highs and lows – their very ‘psyche’.

3.13) Yes, we can recover from what is generally referred to as identity theft but

‘this’ is real identity theft because we will never change our innermost character, its in our DNA. A breach of this data, is like ‘gold dust’ to the perpetrator. Once you ‘own’ somebody’s ‘psyche’ you will know their attitude to risk and how they will act, and react, to various situations, for the rest of their life.

3.14) For the reasons stated, I can foresee that Gambling Operators could, and would, become prime targets for large and very sophisticated data breaches in the not too distant future. Preventions however, do not require the same ‘detail’ of vast levels of ‘psyche’ data, as Interventions, therefore lessening the value to a (prospective) perpetrator and for that reason, reducing the occurrence of an attempted or successful data breach, back in line with other organisations in different business fields.

3.15) Interventions: the whole concept is designed to rely on ‘personal responsibility’ – the player’s personal responsibility. It is up to the player to set personal limits, playing parameters and exercise control in general. Beyond that the (Operator’s) system will analyse and compare each and every player’s playing style and habits for the current and all previous (or as many as practical) playing sessions. If and when, the current playing pattern goes beyond the norm, or out of kilter to previous trends, the system will intervene at the right time in the playing cycle, with the appropriate Warnings, Advice and Reality Checks for the occasion.

3.16) In the ‘cold light of day’ this is an admirable and logical policy and one that can be defended against detractors on the grounds of logic and reasoning. It puts the player ‘in control’ and in a world full of rules and regulations, this is a welcome change; or it would be in (nearly) every other industry, but this. We know that there are at least 430,000 to 600,000 Problem/Addicted gamblers in the UK. These people are not in ‘control’, in fact some are close to suicide. These figures are far too high to ignore or make excuses for, and the consequences are too extreme, therefore they must be factored as a major consideration in the product/games design. This, of all industries is not the one to champion ’self control’, albeit with Interventions.

3.17) This industry has to be proactive – clever in product design and content, but proactive in eradicating harm.

3.18) The case ‘for’ Prevention:

Prevention; ‘the action of stopping something from happening or arising’ – so what is the case for ‘prevention’ in relation to product/games design? Prevention has a set boundary or framework and the ‘games’ activity works and resides inside that boundary or framework. It does not ‘warn’ the player when they overstep the boundary; it ‘stops’ the player.

3.19) Note: I enclose an ADDENDUM on the last pag, which has an example of Prevention and Intervention.

3.20) On the face of it, this is very authoritarian, repressive and therefore (probably) regarded as unacceptable…or is it? To make my point; let me

569

take a situation, which is indeed a very real problem, and that is the Player that spends far to long on continuous sessions. Let us assume that the Player has been playing continuously for 3- hours. Let us also assume that the games ‘system’ has sent two or three courteous and helpful Intervention ‘Warnings’ or Advice or Reality Check’ messages since the 2- hour mark. If the Player is one of the 430,000 to 600,000 Problem/Addicted Gamblers, they will probably continue to ignore the warnings, as indeed (in this scenario) they have ignored the warnings for the past hour. However courteous, inoffensive and well meaning these warnings have been, it is probable, and indeed likely, that the Player’s (temporary) state of mind will regard even these interventions as ‘authoritarian’ and ‘repressive’, and ignore them simply because they can…

3.21) But does this person have ‘dual expectations’? Let us now suppose that the ‘same’ Gambler/Player, is also a football player or supporter. They know and accept without question that all playing activity will be concluded and the result determined in 90 minutes playing time (or extra time where applicable). Likewise, the result of a boxing match will be decided within a pre-set number of rounds. All sport has known and accepted ‘time’ rules. In fact, ‘time’ is an accepted condition and constraint in all facets of our daily life. To illustrate the point further, most of our ‘light entertainment’ television programmes are built around two main concepts, ‘competition’ and ‘time’. Quiz Show answers in 30 seconds; our favourite Dance or Talent Shows – 90 seconds between anonymity and progression towards fame and fortune. Likewise, 2 hours to cook or bake that perfect dish – the prize, progression, progression, progression.

3.22) To repeat our principal challenge: “How, in the same product, do we provide an incredible and enjoyable experience to all, whilst at the same time protecting the vulnerable from harm”? First, we need to accept that Intervention i.e. ‘Warnings’, will not work when Problem/Addicted Gamblers are in a state of mind, temporary or otherwise, that creates the inability to stop, when suffering harm…and there are 430,000 to 600,000 of them. Far too many to ignore!

3.23) We need to change our thinking; we want to design and build a Hybrid of Feature Film and inter-active Gambling Game with new and exiting content which has Prevention at its core. Where Prevention is part of the games infrastructure, Part of the ‘challenge’ in playing the game and therefore part of the appeal…the desire to want to play.

3.24) We need to design new product, in other words inter-active games, built on the concept that Prevention (when the playing action tries to go beyond the boundary or framework of the games design) is part of the games rules and rules are to be expected, in fact welcomed, as they create ‘challenge’ and challenge generates a competitive nature to play to the rules. With clever and imaginative (games) design they will become part of the ‘want’ and ‘desire’ to play the game. With all this in mind I am convinced that Operators can ‘build in’ Preventions to limit games to a set period of play, similar to the thinking behind the ‘time’ examples above. They can provide better and effective ‘money management’ and as a result, more realistic expectations. The game should also monitor the player’s heart rate to ensure they are ‘fit for duty’ within the context of the game, but in the real world, the heart rate will establish if the are ‘fit and stable’ to take the next gamble. To be clear; a momentary or temporary

570

extended heart rate does not STOP the game but ‘defers’ the next gamble within the game. The game then creates an interesting and realistic scenario designed to reduce the heart rate to a level ‘fit for duty’. In other words, the player is fit to continue gambling within the context of the game.

3.25) To achieve these objectives requires the desire and inclination to ‘think outside the box.

571

ADDENDUM 3.26) I include this Addendum in the hope that it makes clear to the reader how

I think of, system built ‘boundaries and frameworks’ (system ‘Preventions’) and ‘demarcation lines of good sense’ (system ‘Interventions’).

3.27) Think of a large lawn children’s play area enclosed by a high brick wall.

Inside the enclosed perimeter is everything needed to play; materials to build a den, climbing frames and slides, cricket bat, ball and wickets, football and junior goals. Everything to make play interesting, exciting and entertaining. The wall is of sufficient height that a ball will not go over. However, the wall itself can be used for play; think of games like Squash or Indoor Football, where bouncing the ball off the wall is an integral part of play.

3.28) There is no need to give Warnings, Advice or Reality Checks of dangers beyond the wall, as play is always confined inside. This is how I think about ‘Prevention’.

3.29) Now think of the exact same scenario, but without the high brick wall. In other words, there is no boundary or demarcation line. It relies on each child’s individual concept of ‘good sense’.

3.30) Let us now think that to the North of this play area is a dangerous road. To the South, a fast flowing river. To the East, a railway line and to the West, a dangerous bog.

3.31) With the high brick wall, none of these dangers matter, they are irrelevant and play goes on regardless. Contrast this with what happens ‘without’ the brick wall. What happens when that favourite and very special ball is hit or kicked beyond the ‘demarcation line of good sense’ toward one of the dangers? We would need to monitor the path and degree of progression away from the ‘line of good sense’ and give Advice when necessary, still further on, Warnings and finally, Reality Checks. Now we are relying on an individual sense of danger and more to the point, a personal sense of when to ‘Stop’; when to stop chasing the ball or indeed, when to stop the temptation of ‘chasing the game’.

3.32) To me, this is ‘Intervention’. 3.33) To be clear; these scenarios are to illustrate the way I think about

Prevention (system boundaries) and Intervention (the demarcation point of good sense). It is not to suggest, in any way, shape or form, that children are gamblers. However, it does make the point, that like children, Problem and Addicted Gamblers are someone’s loved ones; they need to be protected from harm, they too can chase the game and often do not know when to ‘STOP’.

9 September 2019

572

Roger Horbay – Written evidence (GAM0067) Summary 1. This is a personal submission and is based on my 30 years of personal

experience, research and knowledge of how Electronic Gaming Machines (EGMs) slot machine-type games operate and from my experience as a problem gambling clinician. These video slot machine-type games are sometimes referred to as “line-games” or “slot games”. I will refer to them as “slot games” in this submission. Similar games are offered online and on betting terminal in the UK and are regulated by the UK Gambling Commission. This submission is also based in-part on a previously unpublished paper I co-authored in 2006 with Tim Falkiner, Barrister-At-Law and former Commercial/Legal Officer, Victorian Casino Control Authority, Australia. This original paper is available upon request.

2. Although the original focus of the above mentioned paper was on games on Australian gaming machines, sometimes called “Pokies”, these slot games are basically almost identical in their operations from jurisdiction to jurisdiction. Therefore, references to Australian Machines in this submission are certainly applicable to UK online and terminal slot games.

3. EGM games, especially slot games have gained a notorious reputation for generating problems with those who play them. This submission notes that EGM slot games developed separately from table games. It examines the standards applicable to table games and carnival games and the gaffs (cheating methods) used by crooked casinos and carnival grifters. It considers historical and modern slot games in the context of these standards and cheating methods.

4. Bringing online and terminal slot games and technical standards for fairness and honesty into line with consumer protection standards and principals that are applied to other regulated gambling games, including but not limited to table games and even carnival games would make them safer and fairer for the players.

5. It’s important to note that these regulatory deficiencies are not unique to the UK, but have evolved over decades to be considered “best practices” for EGM game fairness and honesty among gambling regulators worldwide. Essentially, allowing and approving EGMs games that use techniques and features that would be considered “cheating at play” if used by other regulated gambling games or even carnival games has become “normalized” and acceptable by gambling regulators worldwide. This submission hopes to illuminate how slot games use cheating techniques and the regulatory failures that allow for their continued concealment from politicians and the public.

Introduction

6. Not only do slot games fascinate the player; they are a fascinating study in themselves. Present slot games are the culmination of over one hundred years of development. They combine a powerful blend of mathematics and psychology. Slot games online and on gaming machines or terminals have enjoyed a spectacular success. They have spread throughout the world at a rapid rate. The gaming machine industry and their regulators, worldwide, see them as a legitimate form of entertainment, providing a safe form of gambling for the vast majority of players.

573

7. Others, however, have taken a contrary view. In many jurisdictions, politicians and the population are alarmed at the high amount of problem gambling being generated by slot games. What is it about slot games that make them so potent in generating problems with those who play them? What is it about these games that, in a short period of time, now accounts for the majority of problem gamblers?

8. These question obliges us to take a close look at slot games in the context of other forms of casino gambling, namely, table games.

Separate Lineage from Table Games

9. The first thing to note about slot games is that they developed along separate paths from table games and other traditional gambling games.

Table games arose out of private gambling

10.Table games arose out of private gambling which was a legal activity. Before casinos, card and dice games were played between individual players. This still happens in the case of poker rooms where players play against each other and pay a fee or percentage to the operator who simply provides the gambling facilities.

11.The rules of card games and dice games were thus developed by the players themselves. These rules were fair because they applied to all those who had a stake in the game. Even with a banking game such as chemin de fer (forerunner of baccarat) the bank was passed around.

12.That is not to say there was not a lot of cheating. There was. But the rules themselves were fair and cheating involved breaches of those rules.

13.When legal casinos such as Monte Carlo were set up, they adapted the private games. They also adopted high standards of fairness towards the players. For example during the run on the Kursaal Casino at Homburg by Prince Charles Bonaparte in 1852 the only action taken by the casino was to reduce the maximum stake on the even-money bets and apply to the government to change some of the gambling rules (Barnhart 1983, pp 142 – 144). When, at Monte Carlo, a Yorkshire mechanic named Jaggers won 40,000 pounds by tracking natural bias in the roulette wheels, the casino moved the wheels around then had new, more accurate wheels installed (Ludovici 1962, p. 160.

14.The card game chemin de fer, which was played with the players taking turns to be banker, was translated into baccarat, with the casino, the house, acting as permanent banker. But even then the players could play either with or against the banker so there was no advantage to the banker in stacking the deck.

Legalised casinos adopted equipment and adapted games

15.Scarne (Scarne 1974, p. 241) describes the introduction of two new games to the USA casinos: “About 1915 the sawdust joints [low-class casinos] began banking two new games: Fading Craps and Blackjack. These were both popular private games and they met with immediate favour among players. About 1917 a version of Fading Craps called Bank craps entered the picture although some gamblers objected at first, not liking the rule that all bets at Bank Craps must be made against the bank.” Thus, when legalized gambling started up in Nevada in the middle of last century, the casino games were adapted from European casino

574

games and local games. Nevada gambling was conducted honestly (Puzo 1976, pp. 137 – 170) (Scarne 1974, p. 245).

16.The reasons given by Puzo that the casinos were honest (which would have applied equally to the large European casinos) were:

(a) large operators knew they could rely on the mathematics; they knew they did not have to cheat

(b) governments had tough laws and policing (c) investment in licences and buildings etc. were too valuable

to risk with loss of licence (d) risk of blackmail (e) difficulty of a large organization cheating – too many people

have to be in the know (f) no need to pay off corrupt police and politicians (g) loss of customer confidence.

17.Certainly the State authority policed it but one of the main reasons for the

honesty of the games was that the casinos did not want to earn a bad reputation which would cost them business. Interestingly, many of the early casino operators had run “honest” illegal casinos in other states; the Nevada regulators took them because nobody else had the skills. Scarne (Scarne 1976, p 244) notes the comment of one Strip operator, “Who did the Senate Committee expect to find running the games here in Vegas? Father Flannagan?” The situation is best illustrated by Benny Binion who ran the Horseshoe Casino. Binion’s past included boot-legging, bribing government officials, two homicides, running an illegal numbers game and running illegal casinos. Binion observed, “I’d cheat people if it would make me one more dollar – but it won’t. You always make more money with an honest game” (Johnson 1992, p. 31).

18.In most jurisdictions, the casino table games copy the high standards of the European and Nevada casinos. Nevada standards are the touchstone of the gambling industries.

Rules and equipment known

19.There was, and is now, never any question of a large legal casino using anything but a correct deck of cards, an unbiased wheel or straight dice. It just would not be worth the suspension of the casino licence.

20.The equipment was simple and it could be checked. A deck of cards had 4 suits of thirteen cards with one or two jokers. Dice had six sides numbered one to six with each two opposing sides adding to seven. Roulette wheels had eighteen red pockets, eighteen black pockets and, depending on the country, one or two green pockets.

21.The gamblers knew the equipment and they knew the rules. Even most children are familiar with the characteristics of decks of cards and dice.

Gaming machine games developed very differently from table games

22.Slot games were not designed by the gamblers themselves. The gamblers never had any involvement in the development of either the equipment or the rules.

23.The gaming machines with video screen slot games originally started in soda bars and pubs. They were either illegal or on the fringe of the law. They

575

were not regarded as serious gambling but rather as amusement machines. They were for small play by unsophisticated players.

24.From the very start, the gamblers played against the house. Certainly, most casino gambling is a house (or banking) game. But, as pointed out above, these games, like blackjack and craps, were originally designed as, or evolved from, non-house games and the rules and equipment are transparent and known to players. Roulette may never have been a banking game but here the rules and odds are laid out with elegant simplicity for all to see.

25.Unlike all table games, the mechanism was concealed in a box with the rules (apart from pay outs) known only to the manufacturer. What are the rules of a game? The rules of a game include a description of the equipment, how the equipment is to be used to generate randomness and how payment is to be made. (Stripped to its basics, gambling is the staking of money on a random number generator. Take a set of numbers, randomize them and pay out on the result. The rules of a game include what numbers are to be taken, how they are to be randomized and how payment is to be made on the outcome.)

26.If you imagine a reel as a deck of cards with symbols on, the player does not know how many cards there are in the deck, how many cards of each symbol there are in the deck or how the cards are dealt.

27.The fact that the players do not know the rules makes slot games and other electronic gambling games unique amongst gambling games.

28.Not only are the players ignorant of the rules but the rules can vary from machine to machine, game to game and the gambling industry steadfastly refuses to disclose them. Put simply, the standards applicable to slot games are totally out of step with all other forms of gaming.

Gaffs and Cheating

Ascertaining Acceptable Standards by Examining Cheating Methods

29.In order to gauge whether online and gaming machine standards for slot games measure up to those applicable to other games it is necessary to ascertain the standards applicable to other games. The standards applicable to games can be discovered by examining what constitutes cheating at those games. We are particularly concerned with house cheating methods, that is, cheating methods employed by crooked casinos and carnival stall operators.

30.In carnival terminology, a cheating mechanism is known as a “gaff”: Gaff, G or Gimmick – any secret device or method that accomplishes the cheating. A gaff or G-joint is a game that can be operated dishonestly” (Scarne 1974, p. 559). And a game that embodies a cheating mechanism is described as “gaffed”.

31.What is cheating? Cheating is described in Webster’s Dictionary of Synonyms (Webster 1978) as follows: “Cheat vb – to obtain something and especially money … from an advantage over another by dishonesty and trickery … Cheat suggests deceit and usually, tricks that escape or are intended to escape the observation of others <cheat at cards>”.

John Scarne

32.A leading authority on cheating methods was John Scarne. The foremost authority of his day on games, gambling and methods of cheating, Scarne had an encyclopedic knowledge of gambling and acted as consultant to many casinos. He was retained by the Hilton International Hotel chain to oversee their global casino operations. He was called into consultation as an expert

576

on games and gambling by the US Senate, the Federal Bureau of Investigation, the British Home office and other government regulatory authorities. Scarne was an expert on cheating practices; in the words of General Cap Arnold, the commanding general of the US Army Air Corps, “John Scarne’s one-man crusade against crooked gambling in the armed forces during World War II saved servicemen tens of millions of dollars a month in potential gambling losses when he practically cleaned up crooked gambling in the armed forces single handed” (Scarne 1974, p. xix).

The Gaffed Milk Bottle Game

33.Scarne examined a wide range of gaffs including one of the oldest gaffs, the carnival milk bottle game. This game involves knocking over a stack of five or six wooden milk bottles with a ball. It looks easy.

But it is not as easy as it looks.

No matter how hard you try, you just cannot knock over all the bottles.

577

This is what different set-ups of a straight milk bottle game would look like.

This is how it is really set up.

The heavier bottles are harder to knock over.

34.Now it is the bottles on the left and centre that are harder to knock over. Sometimes a heavy bottle will fall if hit directly.

578

35.Scarne wrote about the milk bottle game: “It looks easy, but it’s another two-way store. Three of the bottles are heavy, three are light.” (Scarne 1974, pp. 611 - 613). Similarly, in the case of the cat rack game where balls are thrown at stuffed cats on a shelf: “The cat rack game can be gaffed in many ways. The commonest is to use two light and two heavy cats, the latter being weighted at the bottom.” (Scarne 1974, pp. 612 - 613).

36.Now there are five things to bear in mind about the milk bottle game. First, it is simple. (Scarne admired simple gaffs. In the case of cards with pictures on the back, where a crooked player could line up all the pictures with the high cards one way and, if suspected, reverse one half of the deck and shuffle, destroying any evidence, Scarne wrote, “I know it sounds obvious, but card cheats know from experience that the obvious device is sometimes the one least likely to be detected.”) (Scarne 1974, p. 663).

37.Secondly, the gaffed bottles keep moving around so the player does not “get wise”. The operator keeps moving the heavy bottles around and may even put one on the top row to give the mark a better chance. (Carnival operators who identified a chump would mark him on the back with chalk for the benefit of the other operators.) If the mark complains the game cannot be won, the operator can throw the ball and knock all the bottles down, having first put the two weighted bottles on top.

38.Thirdly, sometimes even the weighted milk bottles will be knocked over, just less often.

39.Fourthly, a crooked operator will not let the player examine the bottles. 40.Finally, it is very exciting playing gaffed games because they look easy and

the player gets very frustrated when the game just seems to be defying the rules. Scarne gives excellent accounts of the player’s excitement and anguish playing three-card monte (Scarne 1974, pp. 619 - 623) or razzle dazzle (Scarne 1974, pp. 582 - 588), both gaffed games. Crooked Dice

41.There are basically two types of false dice: busters and percentage dice. 42.“Busters”, also known as “tops”, “T’s” and “misspots” rely on the fact that

players cannot see more that three sides of the dice at once. The mirrors on craps tables are no doubt put there to make busters more easily identifiable. (Note that slot game players can only see a small part of each reel at once.) Busters usually have only three different numbers, each of which is repeated on the opposite sides of the dice. Some busters are numbered so as to avoid seven and are known as “hits”, other are designed to avoid odd or even numbers and are known as “misses”.

43.The device is elegantly simple and extremely effective. Of course, the dice have to be switched in and out of the game without the player noticing. As

579

Scarne writes, if “you hear someone ask, “Where’s Buster Brown?” you will know that somebody’s baby is going to get new shoes – but it won’t be yours” (Scarne 1974, pp. 614 - 615). This is the signal for the bust-out man to bust in.

44.Scarne advises how to try and detect busters. One way is to take a mental note of the six numbers you can see on the dice when they stop rolling and note if any number from one to six does not appear after several rolls. (Bear this in mind with slot game reels.)

45.The other type of crooked dice are percentage dice. Percentage dice are, in Scarne’s words, “gaffed in such a way that some numbers will come up more than probability predicts. … The dice cheat merely makes his bets according to the bias of the dice and usually shows a profit on every game.”

46.There are two ways of gaffing percentage dice. “Outside work” involves shaping them and these dice are known as shapes: “flats” are slightly brick-shaped, “bevels” have one or more faces slightly rounded and “cut-edges” do not have their bevels all at the same angle. The second way, “inside work” is by weighting them and these are known as “loads”, or “loaded dice”.

47.These technique are not new, Cotton (1674, p. 13) writes, “ … the old ways are by drilling them and loading them with Quicksilver … others have made them by filing and rounding …” The advantage with percentage dice is they can be left in the game and they do not need an expert bust-out man to work them. They still generate all combinations but they favour one or some more than probability would predict in the case of straight dice. “Strong” dice have a heavy bias.

580

48.Scarne (1974, p. 310) mentions that the percentage dice cheat, to mask or obfuscate his style of play and constant winning, can have a confederate and the two can take turns at having small losses and big wins. One of the hallmarks of a good gaff, if it is to last, is something which breaks up the pattern which would draw attention to the gaff.

49.(There is a hybrid form of crooked dice. These are known as “percentage tops and bottoms”. These are mis-spotted dice but only one of the numbers on the two dice, or at most, one number on each of the dice is changed – this makes them harder to detect than traditional busters. Unlike traditional busters these do not guarantee a particular result but create a bias of, say, from 13% to 25% (Scarne 1974, pp. 320 & 321). Given the house percentage on a pass/don’t pass bet is 1.414%, this advantage is enormous.)

50.Crooked Blackjack Decks

51.Scarne writes, “The most common method used in crooked casinos when making use of four decks (208 cards) is to remove a number of ten-count cards and to replace them with five count cards.” (Scarne 1974, p. 388).

52.In Blackjack the dealer sits on 17 and above so the dealer must draw on 16. Having more fives and less ten-count cards reduces the chance of the dealer busting and increases the casino’s percentage.

53.This is a percentage gaff. Like percentage dice it requires no skill on the part of the person cheating and the gaff remains in place indefinitely.

54.Both percentage dice and crooked Blackjack decks still embody randomness. The cheating arises out of the fact that the randomness is biased.

581

Early Examples of Gaffed Slot Games

Ten-stop machine

Mechanical near-miss machines were used prior to 1940. They worked very simply. They were known as “ten-stop machines”. Each reel had twenty symbols.

However, each reel only had ten stops; that is, they only stopped on every

second symbol. 55.Accordingly, the alternate, dummy, symbols were rich in winning symbols and

players would often get winning combinations above or below the pay line (Scarne 1974, pp. 437 & 438). Scarne considered the ten-stop machines as gaffed and noted that at the time of writing his book (1974) the “modern

582

machines are all 20-stop machines and no longer gaffed in this way” (Scarne 1974, p. 439). The near miss machine gave players a false expectation of their chances of winning. A player who sees combinations of winning symbols or even high-paying symbols above or below the centre line gains a mistaken impression that he has just missed out on a payout or that it is easier to win a payout than it really is. This is a trick, a deception, intended to escape the observation of the gambler and intended to keep him playing so as to obtain more money from him.

Computerized ten-stop machine variation

56.A modern-day variation of the ten-stop machine is to be found in some overseas jurisdictions where the computer allocates different probabilities to different stops being selected for the pay line so that winning symbols are less likely to appear on the pay line.

583

This is perhaps rationalized on the basis that there are no dummy symbols that never stop.

57.The ten-stop machines were like busters in that, as far as the second line was concerned it was all or nothing – and it was nothing. These computer-driven

machines, with their biased, weighted symbols, share much in common with percentage dice. With dice, the player assumes that each face of the dice has an equal chance of coming up. If the dice are shapes or loads, this is not so and this false impression enables the innocent dice player to be cheated. Mario Puzo writes: “If the casinos wanted to cheat, here’s how they could do it. At the dice table it would be simple enough. They could just run in loaded or angled dice. A lot of this was done in the gambling hells of England in the 1700s and onward.” But it is certainly no answer to a casino charged with using loaded dice that the loaded dice are still, up to a point, random; the use of loaded dice is a very serious offence for a casino.

58.Cotton (1674) at pages 13 and 14 regarded the practice with fury, “They are sold in many places about the Town [London]; price current (by the help of a friend) eight shillings, whereas an ordinary Bale is sold for six pence; for my part I shall tell you plainly, I would have those Bales of false Dice to be sold at the price of the ears of such destructive Knaves that made them.”

59.As Puzo pointed out: “If a player sneaks a loaded pair of dice onto the crap table and the Gaming Commission finds them in play, the casino gets its licence suspended. Even though it is a victim, the casino is responsible.” (Puzo 1976, 165)

60.In Australia, the gaming regulators do not allow reels with biased symbols. Each symbol must have the same weighting; if there are 25 symbols on the reel, for example, each symbol must have a 1 in 25 chance of stopping on the centre line (Australian and New Zealand Gaming Machine National Standard version 7.01 clause 3.9.62).

584

“Japanese” machines

61.With the advent of computer-generated screen machines, one machine pushed technology to its limits; this was known as the “Japanese” machine, I believe, because it was developed by a Japanese corporation.

62.These machines were designed to emulate the mechanical near-miss feature by, having determined that a losing combination was selected on the pay-line, performing a second calculation - getting different symbols to display above or below the pay-line to make it look to the player that he had just missed out on a winning combination. (This type of near-miss machine is obviously incompatible with multiple pay-lines. If the player has selected three lines: the centre line and the lines above and below it, programming winning combinations above or below the centre line will result in big payouts.)

Slot Game Design

63.Let us now look at the design of typical slot games.

585

Conceptually the slot game works like this. Imagine five reels each with, say, 35 symbols. The computer notionally spins each of the reels independently and, using a random number generator, chooses the centre-line symbol. The reel is then displayed on the screen with the selected symbol in the

centre and its neighbouring symbols above and below. The content and order of symbols on each reel is fixed. This avoids the “Japanese machine” gimmick of selecting near misses from a separate program.

Traditionally, slot games pay out on the centre line reading the symbols from left to right.

586

Modern slot games allow multiple pay lines, not only horizontal but also diagonal with combinations of over 20 paylines. The spinning reel should, on the screen, emulate what would occur if the reel were a physical reel.

Slot Games - Unbalanced Reels

Glaring omission in slot game standards

64.In the case of slot game standards there is one glaring omission. There is no standard requiring balanced (symmetrical) reels. Put another way, there is no requirement that each type of symbol appear at the same frequency on each reel.

65.A standard for balanced, or symmetrical, reels has never been a requirement for modern, computer-driven slot games. But, as has been pointed out, there were never any standards for slot games in the first place. By the time they were starting to make big money for the casinos their basic design had been fixed for thirty or forty years.

66.The above diagram shows just how critical symbol distribution can be. This

machine is full of high paying symbols, only five types of symbol and each reel full of them. And it would not pay a cent.

67.However, a subtler version, for example, starving each of the three left hand reels of one type of winning symbol which is more plentiful on the others would give somebody playing the machine in the expectation the reels were identical the impression that their chances were much better than they really were.

587

Take the situation here. The player gets nines on reels 1 and 3. He says, “I just missed three nines!” Did he really? The player assumes that the chance of getting a Nine on reel 2, is the same as getting a Nine on reels 1 and 3.

Let us suppose this machine is a thirty-five stop machine with six Nines on reel 1 and six on reel 3. There is no rule whatever to say that reel 2 might not have only two Nines. If that were the case the player did not have an equal chance of getting the third nine – he only had one-third of the chance.

588

It is like trying to deal a 4-5-6-7-8 straight out of a deck with two of the sixes removed.

68.The virtual decks of cards on draw poker machines have to be genuine and the same standard should be applied to slot games. Crevelt (1991, p. 25) writes that USA regulators took action when it was discovered one manufacturer was programming its machines to avoid royal flushes. Why do we impose normal gambling standards for video poker yet abandon these standards for reel machines? In both cases, unlike with table games, the customer is powerless when it comes to verifying the design parameters of the game; the games should be designed to play in accordance with the natural appearance of the games and the expectations of the ingenuous gamblers who play them.

69.On one analysis the unbalanced reel slot gams generate “vertical near misses”, near misses but in the vertical rather than the horizontal plane. (As explained above, horizontal near-miss gaffs would not work anyway in today’s multi-line machines.)

Gaming standards and player expectations

70.Casinos are fastidious about the regularity of their gaming equipment. Any casino would be outraged if it was alleged that it was using shaved dice or stacked decks.

71.Imagine what would happen if the Nevada casinos announced they were developing a new craps game. The casino could re-calculate all the odds and the dice would be loaded, some weak and some strong but the casino did not have to say how much because the uncertainty would make the game more exciting. Or suppose the Nevada casinos were allowed to alter their Blackjack decks by adding varying numbers of fives and taking out varying numbers of ten-count cards. The gamblers would be running for the doors.

72.Gamblers have come to expect that casino equipment is of the highest quality and that things that look the same, act the same. Gamblers expect a dice to have six numbers, to be a near-perfect cube and, statistically have an equal chance of producing any of the six numbers. Gamblers, seeing a deck of cards in a casino, assume that there are fifty-two cards made up of four suits of thirteen cards from Ace through to King.

73.And the government reinforces this belief in standards. Because the government knows that if gamblers lose faith in the integrity of the equipment, they will stop playing. Not only the casino will lose but also the government will lose its tax stream.

589

74.Look at these dice.

You can only see one side of these dice, just as you can only see part of the reel on a gaming machine. But that should not matter because you assume that everything is regular, everything is the same.

These are the same dice looking from the side. They are not the same – and neither are slot game reels. But no government regulator would allow a casino to use dice like these! The point is that players expect the reels to be the same. Just as a dice player expects the dice to be numbered from one to six and a blackjack player expects the dealer to be drawing from a properly constituted 52-card deck and the player at the carnival expects the milk bottles to be the same weight – so the slot game player assumes the reels are equal. Conversations with problem gamblers and treatment providers confirm the slot game gambler assumes the reels are symmetrical. One woman I know who played the machines to two and three o’clock in the morning and who lost hundreds of thousands of dollars turned to me exclaiming, “What! Are you saying the reels aren’t the same?”

Australian Gaming Machine Manufacturers Association (AGMMA) description of Australian machines

75.The Australian gaming industry states it uses unbalanced reels. The design concept of the reel machines used in Australia (including Victoria) is described in the Australian Gaming Machines Player Information Booklet published by the industry body, AGMMA, at http://www.agmma.com/pdf/playerinfo.pdf. The relevant part is at pages 15 and 16 which is set out below. The underlining is mine.

76.“The computer program within the machine uses a sophisticated random process to determine the outcomes of each game. How it does this is important in understanding how CHANCE, and CHANCE alone, determines whether winning or losing combinations appear for each game played. Suppose that a machine has five reels and there are 35 possible stopping positions on each reel. The symbols assigned to each of these possible 35 stopping positions are programmed into the game. That is, if there is a “King” symbol assigned to positions 1,4,13,18,22 and 31, that assignment is permanent - it does not change from game to game. In this example, then, there are 6 “King” symbols placed on the first reel in the positions mentioned. Other symbols are assigned to other positions on the reel so that all 35 stopping positions have a symbol assigned.

590

It may be, and this is often the case, that the ‘Jackpot’ symbol is only assigned to one stopping position on the reel. The important thing to remember is that once the symbols are programmed on to the stopping positions, they remain programmed to those stopping positions. [In other words, symbols above and below the centre line are not manipulated as is the case with the “Japanese machine”.] For each game played, one of those stopping positions is selected by the Random Number Generator to stop on the centre line at the end of the reel spin. Each of the 35 stopping positions on the first reel, as in this example, has an EQUAL chance of being selected by the RNG as the chosen symbol to stop on the centre line of the display. [This means that there is no biasing of stops as occurs in the modern-day ten-stop machine variation.] The second, third, fourth, and fifth reels may have the same number of stopping positions with symbols assigned. In almost all instances, the symbols will be assigned differently to the first reel. For example, there may be only two “Kings” on reel 2 on stopping positions 15 and 19. The number of particular symbols placed on each reel, and the stopping position to which they are assigned is determined by the mathematical design requirements of the game.”

77.The above description makes it clear that the machines do not use any variation of the ten-stop machine gaff or the second-calculation near-miss gaff (the Japanese machine device). However, it is clear the machines described are unbalanced (or asymmetric) reel machines.

78.The misleading effect of unbalanced reels is mentioned by Weaver (1964, pp. 157 – 160). Weaver considered the reels (which he calls dials) and payout table on a “typical slot machine” and made the comment,

“You can see what a clever arrangement this is, dial 1 comes to rest first and there are only three chances out of twenty that it shows a lemon so that your hopes immediately vanish. There are five chances out of twenty that dial 1 will show a plum [a high scoring character] but with a plum on dial 1 you have to get a plum on dial 2 to stay in business and the chances of getting that is only one in twenty …”

Examining a Hypothetical Slot Game

79.In order to see what can be done with unbalanced reels let us imagine a theoretical machine which we can call the “Cat God of Sidi Barani” machine. For the record, Sidi Barani is a town in Egypt noted for its remote location and lack of tourist activity or historical curiosities.

Its reels look like this:

591

80.The first column shows the symbols. The next five columns represent the reels and show the numbers of each symbol on each reel. The “Total” column shows the total number of each symbol by totalling the number of that symbol on the five reels.

For our purposes say the payout is:

• Nine pays on 2 and above

• All others pay on 3 and above

• Pyramid and Isis big payers

592

Starving, Puffing and Dithering

81.We need to introduce some terms: Starving severely limiting the number of symbols on a reel, particularly reels 1, 2 and 3 Puffing associated with starving, putting large numbers of symbols next to starved reels Dithering mixing up the pattern of starving; fuzzing it to make it less obvious

My analysis of the Cat God machine is as follows.

Starving

82.All 9, 10, J, Q and K are starved on one of the first three reels – 9 and 10 on 1, J and K on 2 and Q on 3. Queens would be the most frequent two-line

593

symbol but the starving of reel 3 would mean it did not pay. It need hardly be pointed out that because payouts read from left to right, the starving of reels on the left side of the machine severely limits payouts.

Puffing

J and K are puffed on reel 1. The 9 is puffed on reel 3 before reel 4 is starved limiting combinations of four and above. Scarab and Pyramid are puffed on reel 2 and Pyramid on reel 4.

Dithering

83.The starving is dithered: two on reel 1, two on reel 2 and one on reel 3. Queens, not the lower cards are the most frequent reels 1+2 symbol (but require 1+2+3 for a

payout). Pyramid is puffed on line 4. Making starved reels less discoverable

Starving of reels is masked by a number of factors: • the player does not expect it and so does not look for it – the

expectancy of the player that the equipment is regular has been discussed above

• just as a dice player cannot see the numbers on the opposite side of a dice, the gaming machine player cannot see the concealed symbols on the reel,

• even the starved reels do generate the starved character, just less often – this resembles percentage dice or the crooked Blackjack deck

• the starving is dithered; different reels are starved of different characters – the pattern is obfuscated – this is like the percentage dice cheat who varies his pattern of play

• the player’s attention is continually being diverted from one symbol to another - in the gaffed milk bottle or cat rack game, the operator keeps moving the weighted bottles or cats around so the customer will not twig to the difference – this is similar to the gaffed milk bottles and gaffed cats.

594

84.Notwithstanding these factors, it would make sense to switch the starved reels around as much as possible to avoid the player either consciously or unconsciously discerning the pattern.

Switching starved reels between machines/coins/lines played

85.There is nothing to stop the different versions of this machine having a different allocation of starved reels which would enable switching starved reels between individual machines which have the same external appearance – another application similar to the gaffed milk bottle/cat technique. If permitted by the regulator, it would be possible for switching to occur where different reel design/payout tables were activated depending on the number of coins or lines chosen by the player.

Dynamic switching may be coming or is occurring

86.If technology is installed to enable reconfiguration of machines by remote instruction over the Internet or through virtual private networks, starved reels could be rearranged at will. This in a physical reel machine would be akin to a mechanic coming in and swapping reels on the machine between button pushes without the player being aware of it.

Unbalanced Design Automatically Limiting Combinations

87.Not only does starving left-hand reels drastically restrict winning combinations but unbalanced (asymmetric) design has another effect, quite fascinating in its simplicity.

595

Asymmetric design automatically limits combinations of characters by the operation of simple arithmetic.

To take an example from the machine, symbol Nine is distributed 1, 4 and 7 on reels 1 to 3 respectively. This gives 28 combinations – ways of winning.

596

88.If symbol Nine were distributed evenly, as 4, 4, 4 instead of 1, 4, 7 there would be 64 ways of getting three instead of only 28 and 16 ways of getting two instead of 4.

It is little wonder that players who unconsciously assume the reels are identical feel they should be winning. If the numbers of symbols were symmetrically distributed the machines would be paying out heavily in favour of the player. This effect is in addition to misplaced excitement at the “vertical near misses” caused by starved reels.

Combinations and Perceived Combinations

In the table above, the column C shows the number of combinations possible for each symbol. With the Jack, there are 6x1x5x4x4 = 480 ways of getting five symbols.

89.The column PC stands for “perceived combinations” and is a calculation of the number of combinations possible where the symbols are distributed amongst the reels equally. This is done by taking the number of each symbol, dividing by five and raising to the power five. Once again, to take the Jack, with twenty symbols that would be 20 divided by 5 equals four and thus

597

4x4x4x4x4 = 1024 ways of getting five symbols. (Decimals are used where the number of symbols is not a multiple of five.)

Asymmetric design even radically affects the big prizes

Even with the Pyramid, if the four Pyramids on reel 4 were redistributed to even up reels 3, 4 and 5 and one of the Pyramids on reel 2 was given to reel 1, the ways of getting a Pyramid would increase from 1x3x1x4x1 = 12 to 2x2x2x2x2 = 32. Given this is a large prize, even puffing/starving reels on the right hand side can have a significant effect on the larger payouts.

Need for Uniform Standards

Similar to gaffed milk bottles, cat rack, percentage dice, filleted decks

90.The average slot game player who either consciously or unconsciously assumes the reels are identical is in a position akin to the player of a gaffed milk bottle or cat rack game in that the game is made to look much easier than it is because things that look the same are not: the reels in the case of slot games and the weighted milk bottles or cats in the carnival games. A carnival game operator is regarded as cheating if he weights his milk bottles or cats differently. A casino operator is cheating if it uses percentage dice or filleted Blackjack decks. The same standard should be applied to slot games.

Unacceptable risk

91.The failure of regulatory authorities to apply the strict standards applicable to other gambling games to slot games exposes players to a totally unacceptable risk. Unbalanced reel design enables slot games to present to the player screens which are rich in symbols but which are designed to limit winning combinations in a manner incommensurate with the appearance of the screen.

598

Problem Gambling

Major factor in maintenance of problem gambling behaviour

92.Unbalanced reel design is a major factor, if not the major factor, in the maintenance of problem gambling principally because the gambler unconsciously believes he cannot lose – and he would be quite correct if the reels were not unbalanced.

93.If the reels were not unbalanced these slot games would, looking at the example above, be paying out in the order of 100% to the player – instead of taking 10% to 13%. That is, for every $100 put in the player would get back about $200. Put another way, the machines would be returning about 200% instead of about 90%. This is calculated by comparing the actual numbers of winning combinations with the numbers of winning combinations which would occur if the symbols were evenly distributed over the reels – as shown in the “C” and “PC” columns. To this would be added the additional effect of the placement of starved reels in the left hand columns.

Problem gambling slot game players are victims

94.Unbalanced reels slot games give players false perceptions of the chance of winning. In a sense, the treatment providers have been wrong and the problem gamblers have been right. The treatment providers are saying to the problem gamblers, “You can’t win!” and the problem gamblers are sitting there saying to themselves, “I’ve seen the reels – and I can!” And the problem gambler’s judgment is correct, or would be if the symbols on the reels were balanced. But they’re being misled. The treatment providers and researchers have been treating the problem gamblers unfairly and assuming that there is something wrong with the problem gamblers’ cognitive skills. Problem gamblers are accused of holding “irrational beliefs”. The problem gambling treatment and research sectors have failed to recognize and acknowledge the cheating techniques in slot games. This has led to ongoing victim-blaming and has stifled needed regulatory changes. Their ignorance and/or silence have contributed to the harm being caused by slot games. Slot game players must be first recognized as victims of “cheating at play” instead of being stigmatized and shamed as “problem” or “irresponsible” gamblers.

Lowest Standards – Highest Problem Gambler Numbers

95.Government gambling regulators are applying widely disparate standards to table games and slot games. Slot reels, like honest milk bottles, cats, decks of cards and dice must exhibit uniformity and reel design must be transparent to the player. It cannot be emphasized enough that the slot game, which has the lowest standards, also has the worst reputation for generating problem gamblers. As mentioned above, slot games are now responsible for the majority of problem gamblers.

96.Slot games, if they are to remain a legal form of gambling, should equal or exceed the standards of casino games and carnival games because:

• They have an infamous reputation • Problem gambling data demonstrates their hazard • They are played by the most ingenuous players.

599

Because slot games are legal and regulated does not mean they do not cheat

97.Gambling regulators are tasked with determining which games are legal and thus approved. Regulators follow each other’s “best practices”. Unfortunately, in the case of slot games they diverged and knowingly or not have approved slot games that are inherently misleading, deceptive, misrepresent and distort one’s perceptions of the probability of winning, and conceal vital game information that would make it apparent the games use cheating techniques, as described above. This colossal regulatory failure by slot game regulators must be fixed. Consumer protection standards and laws must be applied to slot games and other electronic gambling games that may have similar cheating techniques. Most jurisdictions have separate regulatory regimes governing slot games, so do not apply their consumer protection laws or other relevant laws to gambling games. I argue that whichever laws or regulations best protect the players should be applied. In the case of slot games, if consumer protection standards and laws were applied to slot games they never would have been approved in the first place.

98.However, these historically unregulated, cheating games were approved without proper due diligence by the first gambling regulators to approve them. Unfortunately, all gambling regulators to follow, including the UK Gambling Commission, simply followed these so-called “best practices” for electronic game fairness and honesty, also without due diligence to ascertain if these slot games contravened their own laws, other than their new gambling laws and regulations, including criminal and consumer protection laws.

99.The subtle degradation of gambling regulatory standards has led to a passive acceptable of cheating techniques in slot games.

Possible Remedies

100. Electronic gambling in the UK is not being conducted in a fair and open way. At least not with slot games and other electronic gambling games. Not only are vulnerable players being exploited, but everyone who plays slot games and potentially other electronic games in the UK are being exploited because cheating techniques in the inner working of slot games is being concealed and passively condoned by the regulator. Lack of transparency and concealing how slot games and other electronic games work has prevented players and the public from scrutinizing slot games like they can with other regulated gambling games. No one can question these techniques because their inner workings are concealed. Players naturally, maybe naively trust the regulator would not approve nor condom cheating gambling game. This sacred trust has been broken and the concealment of cheating techniques continues.

101. The complexities of these games make them difficult for most to understand, including most regulators. Everyone simply trusts that because they are regulated and approved that all must be fair and legal. There needs to be a thorough investigation into the features and techniques raised in this submission, along with others not raised here, to determine if they breach other laws other than the Gambling Act. Can the Gambling Commission make legal, games that would otherwise be considered illegal under criminal or consumer protection laws? These techniques have been approved without question by regulators for years, so there needs to be independent analysis by consumer protection experts, maybe law enforcement too, to determine

600

their legality. Also, let the public and players scrutinize the inner working of the games, so they can at least make an inform decision to play or not. Right now players must rely on trusting the regulator won’t allow cheating.

102. One glaring omission in the standards for electronic gaming is that they do not need to disclose the probability of each and every prize that is available on the game. But, every other gambling game must disclose the odds of winning each and every prize. I’m told that disclosure of the odds of slot games would reveal trade secrets. Well, a good cheat never reveals his tricks.

103. The regulators do broadly disclose “return to player” or “payback percentages”, but that tells you nothing about your chances of winning any prize on a slot game. In fact, the terms, “return to player” (RTP) and “payback percentage” are misleading. It would be more accurate to disclose the “hold percentage”, which is the flip-side of the payback percentage. If the game has, say, a 95% payback percentage, this means it has a 5% “hold” percentage. So, on average, you’ll be losing 5% of each wager. Yes, you have ups and downs while playing slot games, but on average, over the long-term, you’ll be losing 5% of each wager. This is cumulative. This means in reality you’ll eventually lose all that you wager on these games, over time. There is no practical “return to player” or “payback”, over time. The math of the games ensures you’ll lose all that you wager, in the long-term. The games are designed to take all your money, over time. The public and players have a right to clearly know these facts.

104. Disclosing your chances of winning any prize is a basis consumer protection right that has been ignored by gambling regulators since the first computer-driven slot game. The true reason not to reveal the odds is because winning top prizes on most of these games is worse than winning a major UK lottery game. At least on lottery games, they disclose the odds of winning each prize, so the player can make an informed decision which game they want to play. With slot games, informed decision-making is impossible. In fact, identical games may well have different pay structures, odds and payback percentages. Players simply don’t know, so cannot make informed-decisions.

105. In conclusion, carnival games are better regulated for game fairness, honesty and integrity than are modern slot games and other electronic gambling games. Slots games should abide by the same game fair and honesty standards that other gambling games have historically been held to. Slot games and other electronic gambling games should have to abide by basic consumer protection standards and laws. They certainly should not be allowed to contravene laws that prohibit deception and fraud.

106. This can only happen by exposing the inner workings of these games publicly and acknowledging that cheating techniques have subtly been allowed for decades now, mostly through regulators turning a blind eye to these cheating techniques or not even realizing they are cheating techniques. Approval of games with cheating techniques has been “normalized” and their game fairness standards are considered “best practices”. Well, the “best” of no protection is still no protection.

107. Lastly, when problems arise, cheating should be considered as a source of the problems first, instead of re-victimizing players by stigmatizing and blaming them as the source of the problems.

601

108. REFERENCES Australian and New Zealand Gaming Machine National Standard version 8.0 (2005) downloaded 25 May 2006 from site: http://www.treasury.tas.gov.au/ (gaming home page/casino gaming) Barnhart, Russell T. “Gamblers of Yesteryear” Gamblers Book Club Press Crevelt D. & L. (1991) Video Poker Mania Gollehon 1991 Cotton, Charles (1674) The Compleat Gamester Cornmarket Reprints 1972 Department of Human Services, Victoria (2001). Analysis of Clients Presenting to Problem Gambling Counselling Services July 2001 downloaded 25 May 2006 Web site: http://www.justice.vic.gov.au (gaming and racing/research) Department of Justice, Victoria (2005) (Loved Ones). Experience of Problem Gamblers, Their Loved Ones and Service Providers downloaded 25 May 2006 Web site: http://www.justice.vic.gov.au (gaming and racing/research) Department of Justice, Victoria (2005) (Vic/WA Study) Community Impacts of Electronic Gaming Machine Gambling s downloaded 25 May 2006 Web site: http://www.justice.vic.gov.au (gaming and racing/research) Johnston, David (1992) Temples of Chance Doubleday Ludovici, L. J. (1962) The Itch for Play Jarrolds Puzo, Mario Inside Las Vegas (1976) Grossett & Dunlap State Electoral Office South Australia (2006). Results and Outcomes – State Election 18 March 2006, South Australia downloaded 25 May 2006 Web site: http://www.seo.sa.gov.au/election2006/pdf/Results_and_Outcomes_Booklet3.pdf Weaver, Warren (1964) Lady Luck – The Theory of Probability Heinemann, London Scarne, John (1974) Scarne’s New Complete Guide to Gambling Simon & Schuster Webster (1978) Webster’s New Dictionary of Synonyms G & C Merriam & Co 6 September 2019

602

Professor Dr Julia Hörnle – Written evidence (GAM0034) How harmful is gambling, and what can be done? Executive Summary The evidence indicates that the Gambling Act 2005 is out-of-date and should be revised in line with recent technological developments. The Gambling Commission must be given the relevant know-how and resources to effectively regulated online gambling. The regulatory strategy is linked to the Online Harms White Paper. Gambling advertising and e-sports, mobile and in-game betting have provided new challenges. The regulation of advertising needs to be overhauled. The current co-regulatory system based on Codes of Practice does not work well for advertising of online gambling. Targeted gambling advertising based on an online profile risks to be unethical and user-generated content contains undisclosed advertising. It should be considered whether online advertising of gambling should be prohibited and social media companies should monitor their platforms for undisclosed, user-generated advertising. One of the key measures of responsible gambling would be for operators to identify gamblers who are developing problem gambling issues and to advise them, or at some stage, bar them from further playing. In practice of course high-spending customers frequently receive VIP treatment and interaction encouraging them to play further (free games/bets or credit). This practice has to stop, especially online, because of the greater immersion, accessibility and isolation of players online. The Gambling Act should be revised to impose red flag requirements, and taking action, including barring customers, and make them mandatory. Clearer and mandatory requirements would give legal certainty to operators and how they should balance monitoring obligations with data protection. It would prevent operators who implement ethical practices from being at a competitive disadvantage. Finally it would prevent operators from profiting financially from abusing vulnerable customers. This is an area where technology can support effective regulatory intervention. Different types of artificial intelligence can be used to spot a customer developing problem gambling and which could be used to provide the requisite red flags. My recommendation is that the Gambling Act 2005 should be revised to include mandatory provisions in the LCCP on identifying problem gamblers and specifying the action to be taken. In respect of unlicensed offshore operators, website and app blocking (removal from app stores) should be considered as a regulatory tool in Great Britain during a revision of the Gambling Act, as it would send a clear signal. Background 1. This is an individual response by Prof Dr Julia Hörnle, Centre for Commercial Law Studies, Queen Mary University of London. My professional background is that I teach and research matters relating to the regulation of the internet. Accordingly, my expertise mainly relates to online gambling, social media and internet advertising of gambling.

603

2. I would like to thank the Lord Chairman for inviting me to present the evidence based on the results of our online gambling research conducted here at QMUL. 3. Our most recent research is an EU-Commission funded Study332. This Study examined regulatory tools for the enforcement of gambling regulation online and the effectiveness of such enforcement across the EU and EEA States. 4. In Great Britain, the Gambling Act 2005 introduced a detailed framework for regulation, but it liberalised the sector, and recognized gambling as a legitimate form of business and entertainment, and in my view, this conflicts with effective risk management, especially the third licensing objective in Article 1 (c) of the Act, the protection of children and the vulnerable. The balance is tilted too far towards the business interests of the industry and does not sufficiently protect children, does not sufficiently limit risky behaviours, and does not prevent harm to health.333 5. The Gambling Act 2005 is 14 years old and many technology developments did not exist when its passage was debated (iPhone (2007), Youtube (2005), Facebook (2004)). It is simply not up-to-date with modern technology. While technology increases the need for regulation and enforcement, it may also be effectively deployed for regulation (see paragraphs 18-24 below). The Gambling Commission must be given the relevant know-how and resources to effectively regulated online gambling. The regulatory strategy is linked to the Online Harms White Paper.334 Gambling Advertising 6. Online advertising is fundamentally different from traditional advertising in print media, offline media sites (such as billboards) and broadcasting. The overall trend in advertising is a move away from advertising on traditional mass media like TV and radio, to interactive online advertising and even more recently, to social media advertising by influencers. The growth of social media usage has created an opportunity for online advertising to exploit ways of advertising, which are only beginning to be understood fully and receive regulatory attention. They exploit current regulatory loopholes. We have identified two fundamental issues in respect of online advertising. 335 7. The first issue is the potential for unethical gambling advertising inadvertently targeted at vulnerable users. The fundamental difference to offline advertising is

332 Commissioned by the European Commission’s Expert Group composed of representatives from

the regulatory authorities across the EU. The Study “Evaluation of Regulatory Tools for Enforcing Online Gambling Rules and Channelling Demand Towards Controlled Offers”, was published on 29.

January 2019 and can be found at https://ec.europa.eu/growth/content/evaluation-regulatory-tools-enforcing-online-gambling-rules-and-channelling-demand-towards-1_en 333 See MA Carran, J Hörnle “A Sieve that Does Hold a Little Water – Gambling Advertising and

Protection of the Vulnerable in the UK” (2018) 38 (4) Legal Studies 529-548, earlier version at

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2858977 334 April 2019 https://www.gov.uk/government/consultations/online-harms-white-paper 335 See in more detail our Article “Regulating Online Advertising for Gambling- Once the Genie Is

Out of the Bottle…” (forthcoming in Information and Communications Technology Law), earlier version available from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3389996

604

the dynamic and automatic nature of the placement of online advertising through real-time bidding on ad-exchanges. Interactive internet advertising such as banner advertising, advertising on social media posts, or search engine results are based on tracking users browsing patterns and online profiling through data brokers. This has created a complex and somewhat opaque advertising eco-system which is largely automatic, based on algorithms and machine learning with the goal that advertising is targeted in such a way that users click on the link. 8. This placement is purely about likelihood and does not contain ethical considerations. Thus, the question must be asked: is it more likely that someone who has visited information in relation to indebtedness and unemployment, clicks on an ad for an online casino? Surely the answer is yes. This may mean that they are a target for gambling advertising. It is important to prevent the exploitation of the vulnerable and the undermining of social responsibility requirements by the economic models for targeted advertising for gambling on the internet. Therefore social responsibility requirements must be incorporated into the algorithms themselves as a regulatory requirement. 9. The second issue is influencer and affiliate marketing.336 Users use their network of connections to place advertising in the shape of user-generated content. Social media websites provide ample opportunities for peer-to-peer marketing between users, thus blurring the lines between advertising and user-generated content. How can gambling advertising be restricted if it is not distinguishable as such? The Committee of Advertising Practices has recognized this problem and issued relevant guidance for users to mark posts as “ads”.337 However, arguably that form of regulation is too weak, as most users will overlook the word “ad”. The law should state that influencer advertising should be clearly separated from user-generated content. Furthermore, the posting should clearly reveal who the advertiser is. An obligation should be imposed on the social media provider to police their platforms in respect of undisclosed gambling advertising and such monitoring could be automated. 10. The co-regulatory system of advertising through the Codes of Advertising Practices for broadcast and non-broadcast media is based on engagement between industry and other stakeholders and has generally achieved a balanced and well-respected system of regulation. However it does not work very well in respect of gambling advertising. While the scope of the measures is extensive in terms of gambling advertising, there are concerns about the clarity and complexity of multi-layers of regulation and overlap between different regulators.

338 At the moment, responsibilities are divided between CAP/ASA, Ofcom, CMA, Information Commissioner’s Office and the Gambling Commission. The Gambling Commission should be solely responsible for gambling advertising and enforce the law in this area. Detailed regulations on advertising standards are envisaged

336 See in more detail our Article “Regulating Online Advertising for Gambling- Once the Genie Is

Out of the Bottle…” (forthcoming in Information and Communications Technology Law), earlier

version available from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3389996 337 Committee of Advertising Practice, Competition & Markets Authority, “An Influencer’s Guide to

Making Clear that Ads are Ads” 338 MA Carran, J Hörnle “A Sieve that Does Hold a Little Water – Gambling Advertising and

Protection of the

Vulnerable in the UK” (2018) 38 (4) Legal Studies 529-548, earlier version at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2858977

605

under the reserve power in s.328 with the objective of protecting vulnerable persons from being harmed or exploited, but no such Regulations currently exist. Such regulations should be introduced to restrict advertising and reduce exposure. 11. Gambling as an activity by its inherent nature appeals to irrational risk-taking and appeals to consumer who are not risk-averse. Therefore regulating the gambling advertising message to prevent irresponsible behaviour is bound to have no (or at best minimal) effect. As far as measures to regulate the content of the advertising message are concerned, they have limited effectiveness since the assessment of what constitutes a breach is highly subjective (e.g. what appeals to children) and there is a fine dividing line between what constitutes a breach (e.g. risky behaviours/irrational beliefs) and what constitutes creative and attractive advertising for example showing the desirable attributes of gambling, such as excitement and glamour.339 The complexity of the rules regulating the gambling advertising message340 gives the illusion that gambling advertising is “safe” and highly regulated, when this is not the case. 12. Furthermore, much advertising regulation is based on “zoning”, keeping some gambling advertising away from children’s eyes and ears, such as the watershed for TV or the rules on content appealing to children. This is unrealistic more than ever now, where children are more tech-savvy than their parents, where children are as enthusiastic about sports and share sports betting with parents, in the age of e-sports online and have their own devices in the bedroom.341 Therefore advertising regulation is complex and not effective. 13. More protection should be given, not just to young persons and children, but more generally to (adult) problem gamblers and those at risk of problem gambling. For example there should be a prohibition to advertise to anyone who has self-excluded at any point in time (even if the self-exclusion was ten years ago). 14. Therefore advertising should be more restricted than it is now. Given the concerns raised by research, a political call should be made to completely prohibit online advertising of gambling, including sign-up offers such as free bets. Onshore and Offshore Online Gambling 15. It is important to make a distinction between harms stemming from illegal, unlicensed online gambling offered by foreign operators and harms stemming from Great Britain licensed online gambling. A foreign gambling operator providing gambling facilities to punters in Great Britain though remote

339 MA Carran, J Hörnle “A Sieve that Does Hold a Little Water – Gambling Advertising and

Protection of the Vulnerable in the UK” (2018) 38 (4) Legal Studies 529-548, earlier version at

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2858977 340 These are contained in the CAP and BCAP, co-regulatory codes with detailed rules on advertising

content: https://www.asa.org.uk/codes-and-rulings/advertising-codes.html 341 MA Carran, J Hörnle “A Sieve that Does Hold a Little Water – Gambling Advertising and Protection of the

Vulnerable in the UK” (2018) 38 (4) Legal Studies 529-548, earlier version at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2858977

606

communication on the internet commits a criminal offence.342 As far as I am aware however, no prosecutions have been brought against foreign remote operators and in practice it may well be impossible to enforce this criminal offence extra-territorially. The extent of foreign unlicensed gambling by punters in Great Britain is unknown and therefore its impact (in terms of harmful effects) is unknown. Licensed Onshore Gambling, Harm Prevention and Affordability 16. The main mechanism for regulation are the License Conditions and Code of Practice (LCCP).343 Given that the Act’s purpose was to liberalise gambling and was based on co-regulation, the implementation of social responsibility requirements was largely left to industry. This philosophy behind the Act continues to be present in the LCCP, even though in recent years the social responsibility requirements have been beefed up, for example through a national multi-operator self-exclusion scheme and the age-verification requirements (operators now have to age-verify before deposits in a gambling account, before offering free play or free bets344). 17. However one of the key measures of responsible gambling would be for operators to identify gamblers who are developing problem gambling issues and to advise them, or at some stage, bar them from further playing. In practice of course high-spending customers frequently receive VIP treatment and interaction encouraging them to play further (free games/bets or credit). This practice has to stop, especially online, because of the greater immersion, accessibility and isolation of players online. 18. The LCCP contain a requirement to interact with high spending customers or those showing risk behaviours, and assess them.345 However, there are no clear red flags imposed on operators, nor what the consequences are (just speaking to the gambler; or suspending them, for how long?). In practice it seems that the Gambling Commission does not wish to step on operators’ toes to better control and restrict their high spending VIP customers. But this trend has been turning: very high fines in the last two years may indicate that the current Gambling Commission mandates operators to be more proactive in this area.346 19. This is insufficient. The Gambling Commission imposes fines once an operator has experienced customers who have spent large sums or even committed criminal offences such as fraud, but had inadequate social interaction. But much more could be done and should be done at an earlier stage before customers are allowed to ruin themselves. 20. The Gambling Commission should produce clear and detailed rules as part of the LCCP which stipulate the indicators and factors showing that a customer is developing risky behaviours (red flags) and stipulate what operators need to do at which stage, including suspending customers and/or permanently barring them. Since the gambling industry is likely to oppose such requirements, which

342 Sections 33, 36 of the Act 343 Latest version of May 2019 https://www.gamblingcommission.gov.uk/PDF/LCCP/Licence-conditions-and-codes-of-practice.pdf 344 LCCP 3.2.11 345 LCCP 3.4.1 346 For example Ladbrokes-Coral Group was fined £5.9 million in July 2019

607

might hit their bottom line, co-regulation is somewhat ineffective here. Therefore the Gambling Act should be revised to impose such red flag requirements, including barring customers, and make them mandatory. Clearer and mandatory requirements would give legal certainty to operators and how they should balance monitoring obligations with data protection. It would prevent operators who implement ethical practices from being at a competitive disadvantage. Finally it would prevent operators from profiting financially from abusing vulnerable customers. 21. This is an area where technology can support effective regulatory intervention. Different types of artificial intelligence can be used to spot a customer developing problem gambling and which could be used to provide the requisite red flags. Regulators should play a role, together with industry in developing such monitoring technology (including funding, research and implementation). 22. Protecting gamblers through interaction, advice, suspension and barring cannot solely be based on how much they spent in a given timeframe and/or how long they play. Therefore affordability criteria need to be developed, matching spending with disposable income. However, affordability cannot be the only factor or indicator. More important is understanding the nature of problem gambling and assessing risky behaviours (such as chasing losses or obsessive, uninterrupted play) which manifest in online data trails (through data mining) in addition to affordability. A sophisticated model needs to be developed. This is difficult and controversial, but necessary. 23. While gambling operators should have such monitoring obligations, the question arises whether banks, credit issuers and payment providers should have a role to play here. Clearly banks know about customers’ spending and income and could also spot gambling problems. I am aware that several banks are considering monitoring their customer’s gambling spent and taking action. 24. The use of such technologies have, of course, an impact on gamblers’ privacy and autonomy. They have to be built in a data protection compliant way. Ethical issues may arise and information security will be important to protect highly sensitive confidential information. But these are not insurmountable challenges, albeit that they need to be addressed. 25. One of the key questions for understanding social responsibility, is the question of which percentage of gamblers falls under the category of problem gambler or at risk gambler, especially as far as high spending gamblers are concerned. This is data which the gambling operators have, but the Gambling Commission does not have access to. The Gambling Commission should have access to this type of (anonymized) data. Duty of Care 26. In Calvert v William Hill347 the Court addressed the question whether a bookmaker was liable in Negligence (tort liability) towards a gambler after the latter had requested to be excluded from gambling, but the bookmaker omitted to implement the self-exclusion, contrary to its stated policy. Calvert had several

347 [2008] EWCA Civ 1427 (Court of Appeal, 16. December 2008)

608

telephone betting accounts, including with William Hill and he became a compulsive gambler, which led to his financial ruin. He had repeatedly requested self-exclusion and was told that he would be excluded for six months, but subsequently continued to gamble. The Court held that the bookmaker owes no general duty of care to identify and prevent problem gambling. However it owed a limited duty of care where it had promised the gambler to include him on the self-exclusion scheme and thereby assumed voluntary responsibility. However, the claim failed on causation. The Court held that the claimant, as a compulsive gambler, would have sustained substantial losses even if the self-exclusion had been correctly implemented, as he had several remote telephone accounts with other bookmakers or could have engaged in internet betting. Even if the claim had not failed on causation the claimant’s damages would have been reduced because of contributory Negligence, since he could have made a further request for self-exclusion and taken other steps to deal with his addiction. 27. The law has changed since and as discussed the LCCP now contain a general obligation on gambling operators to interact with customers and a national multi-operator self-exclusion scheme. Thus arguably a case like Calvert would not now348 fail on causation (although this depends on the facts). It should be noted that the provisions of the LCCP may be taken into account in civil proceedings.349 28. However currently the extent of operators’ obligations in spotting problem gambling and taking action are not clearly defined. As discussed the LCCP are vague in this respect. Recent cases on gamblers claiming damages for loss based on duty of care argument have failed.350 29. My recommendation is that the Gambling Act 2005 should be revised to include mandatory provisions in the LCCP on identifying problem gamblers and the action to be taken. If the Gambling Act is changed to contain such statutory obligations, it is likely that civil liability would follow in cases where these obligations have been breached (and causation can be shown). Unlicensed, Illegal Gambling Offered by Offshore Operators Remotely 30. Our EU Study examined regulatory tools such as website blocking, blocking of payment by payment intermediaries (such as banks, credit card companies and digital wallets), sanctions and advertising restrictions.351 31. Given that website blocking can be easily circumvented, it could be thought that this is an ineffective regulatory tool against offshore unlicensed online gambling. However the great majority of regulators in the EU/EEA use website blocking (60%) and our interviews with regulators across the EU/EEA indicated that they consider it an effective tool. Many gamblers are not aware that their gambling is illegal in their home country and if their access is blocked the information on the landing page (appearing in response to the block) may steer

348 The case took place before the Gambling Act 2005 had entered into force 349 Sections 24 (8) and (9) 350 Hillside v Baasland [2010] EWHC 3336 (Comm)- summary judgment; Ritz Hotel Casino v Daher

[2014] EWHC 2847 (QB) 351 The Study “Evaluation of Regulatory Tools for Enforcing Online Gambling Rules and Channelling

Demand Towards Controlled Offers”, was published on 29. January 2019 and can be found at

https://ec.europa.eu/growth/content/evaluation-regulatory-tools-enforcing-online-gambling-rules-and-channelling-demand-towards-1_en

609

them away from the illegal offer. Furthermore the use of a landing page allowed the regulator to assess the internet traffic (where did the punter come from, where did they go next). Blocking is not effective in respect of gambling apps- they need to be blocked from the relevant app store. 32. Website and app blocking should be considered as a regulatory tool in Great Britain during a revision of the Gambling Act, as it would send a clear signal to illegal, unlicensed operators. 5 September 2019

610

Independent Betting Adjudication Service (IBAS) – Written evidence (GAM0048) Championing Fair Play Introduction IBAS was founded in 1998 to provide a service that could be used by consumers to raise grievances about the way that betting transactions were settled by bookmakers. Before the introduction of the 2005 Gambling Act the law provided no protection to bettors. Bookmakers decided individually whether to become registered with IBAS, which meant agreeing to be bound by the decisions of our adjudication panel. Since 2015, licensed gambling operators in this country have been required by the Gambling Commission to offer Alternative Dispute Resolution (ADR) to their customers. IBAS is one of a number of ADR services which have been approved by the Gambling Commission. Recent estimates have indicated that IBAS receives and processes approximately 90% of complaints from gamblers across all sectors of gambling. We have received over 70,000 requests for adjudication since we were established and 6,386 in 2018.

Ombudsman Ambition IBAS is a ‘Complaint Handler’ member of the Ombudsman Association of Great Britain and Ireland and it is our stated ambition to grow and evolve into an ‘Ombudsman’ member, becoming in the process the first Gambling Ombudsman. We believe that a single, gambling ombudsman would be in the best interests of clarity and consistency in decision making, as well as reducing potential confusion for consumers.

0

1000

2000

3000

4000

5000

6000

7000

8000

Annual Requests for Adjudication

611

We also anticipate that having a single gambling ombudsman would provide a more solid platform for developing the most constructive working relationship with the Gambling Commission. Current and Future Scope of ADR in Gambling In October 2018 the Gambling Commission published new Standards and Guidance for ADR Providers (in the gambling sector). Part of the purpose of the standards was to define which types of complaints should be considered by ADR providers and which should be referred to the Gambling Commission as a regulatory issue. Complaints falling into the latter category were typically those that related to an alleged breach of the Licence Conditions and Codes of Practice (LCCP) by a gambling operator. The divide is the Standards and Guidance is logical; in essence, ADR providers examine ‘disputes’, complaints that individual bets, games, or offers have been handled incorrectly, mistakenly, unfairly or unreasonably. The Gambling Commission handles complaints that companies are acting in a less transaction-specific, more generally unfair manner or are breaking the law (e.g. by permitting gambling by those aged under 18). The Gambling Commission also handles complaints that a company has breached the codes of conduct which govern ‘responsible gambling’, i.e. that a company has acted irresponsibly in allowing an individual to gamble, either at all, or to have gambled excessively and in a way that was likely to be unaffordable to the affected person over a period of time. When someone contacts IBAS with a complaint that ought to be referred to the Gambling Commission we direct the complainant appropriately. It is not unusual though to receive further contact from the same person, typically because they become aware that the Gambling Commission’s investigation will not result in the receipt of a case or customer specific decision. This has prompted calls for a change in how certain types of complaints and disputes are handled. Complaints Relating to Potential Gambling Harms Among the typical complaints that are referred to the Gambling Commission are:

- ‘A gambling operator allowed me to lose more than I could afford without conducting proper checks’

- ‘A gambling operator allowed me to gamble further after I had asked to be excluded from their websites/premises’

- ‘I received emails about special offers and promotions from a gambling company even after my self-exclusion agreement had been processed’

The majority of those whose complaints are of this type contact us because they believe they should be entitled to either a full or part refund of money they lost, or compensation for the distress and difficulty that they have been caused. By way of balance, we also receive less frequent complaints along the lines of:

- ‘A gambling company’s “safety limits” unfairly prevent me from trying to win back money I have lost’

- ‘A gambling company has closed my account which they say is for my own good, but this should be my decision and not theirs’

612

Growth in Social Responsibility/Gambling Harms Complaints When IBAS was launched and in its first 10 years, complaints of the nature outlined above were extremely infrequent, typically fewer than 10 such complaints each year. Reporting Year

Social Responsibility Complaints Received

2015/16 228 (3.5% of all complaints to IBAS)

2016/17 322 (5.5%) 2017/18 396 (7.6%)

It is unclear whether the growth in complaints reflects a worsening of the problem, a development of the debate and understanding around gambling harms, or a combination of the two. Complex and Challenging Whichever agency handles complaints of this nature in the future, it is unlikely to be a straightforward task. Throughout the world, relatively few complaints of a gambling company accepting business irresponsibly have been heard in courts of a higher standing. As a result it would be difficult for ADR providers, which typically look to the High Courts for legal precedents/equivalents to reach decisions. I would anticipate our adjudicators to immediately raise questions such as:

- How should the amount that a person can afford to lose be measured? - To what extent should reassurances from a customer that they are in

control of their gambling direct a company’s decision whether to continue to accept their business?

- Should gambling operators be expected to share data to measure the extent of an individuals total gambling losses?

- Is it unfair to refund the losses from a bet or series of bets which the counterparty to the bet would have had to honour those bets had they been successful? Does that create a consumer-biased unfairness or is that just the price of trading ‘irresponsibly’?

- How can an ADR provider practically assess a claim that a person’s gambling was affected by other factors such as mental illness?

- What level and timing of intervention from a gambling operator should we expect?

IBAS Responses to Questions in the Call For Evidence The Gambling Act 2005 1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld? Our view is that the objectives of the Gambling Act are largely being upheld. We believe that IBAS has played a meaningful role in supporting the ‘fair and open’ objective, not simply in adjudicating on disputes but by providing feedback to operators and the Gambling Commission about persistent problems and potential solutions to avoid them resurfacing repeatedly.

613

However, we believe that despite considerable improvements in the services available to help people control their gambling, the increased access to gambling (particularly online) fuelled largely by developments in technology and mobile connectivity have undermined efforts to protect those most vulnerable to gambling addictions. Additionally, we have observed that increased promotion of gambling, introduction of games that may be attractive to children and young people which include elements of gambling (often unregulated e.g. loot boxes) plus the sale of lottery tickets and scratch cards to those aged 16 and above have led to normalisation of gambling outside of licensed premises and without advisory communication warning of potential hazards there are limited protections. 2.What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed? Given that the development of technology continues, it would seem to us best to use regulations rather than legislation to manage change in the gambling sector. In terms of gambling harm, we believe that all consumers of gambling products should be clearly signposted to both how they can complain and seek help. We support the current principle that all licensed businesses need to be registered with an Alternative Dispute Resolution service and promote access to that service on their website and in their customer-facing literature. IBAS continues to give consideration to whether it would be appropriate for complaints relating to gambling harms to be considered by ADR providers, on the basis that clear rules and parameters are provided to the ADR providers about how those complaints should be assessed. 3.Is gambling well regulated, including the licensing regime for both on-and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions? On the question of whether gambling is well-regulated, our insight into consumer complaints and the responses received from gambling operators illustrates that regulation of gambling is far from straightforward. New products and technologies are developed at great speed and consumer expectations are high. In the background, it must not be forgotten what lies at the heart of gambling – the hope to win money. In our view, it is inevitable that some people (sometimes operators but more frequently consumers) will push the boundaries of reasonable behaviour to seek financial gain. Our relationship with the Gambling Commission is evolving and improving, but historically we have been frustrated by communication issues, including:

- The Commission has indicated that it wants more from ADR providers to help it tackle particular problems, but relatively little example-supported guidance has been provided by the Gambling Commission to ADR providers about what they consider to be acceptable and unacceptable practice.

614

- Some of our feedback has helped to influence the development of regulations but other persistent problems (e.g. that there is limited information to help betting shop customers establish whether they have placed late bets, or that there are no tools to prevent customers who have accepted bonus credit from placing bets which breach the terms of the bonuses) have been overlooked or ignored, sometimes missing the chance to reduce the impact of poor practice by early intervention.

- Investigations into problems identified by IBAS have generated little if any feedback to us so we do not know whether the Gambling Commission shared our concerns, acted on them or disagreed with them – this has included instances where gambling operators have advised us that they have objected to IBAS decisions, either on the basis that they are ‘wrong’ or on issues outside of our remit.

Our working relationship with the Gambling Commission has grown closer in the last two years, but we believe that it can be much more productive and that more use can be made of the substantial complaint case history and data capture that IBAS can draw upon. 4. Should gambling operators have a legal duty of care to their customers? This point was considered carefully in the findings of Mr Justice Briggs in Calvert vs. William Hill Credit. We believe that gambling operators have a limited duty of care that extends to offering their customers accessible and practical tools to control or limit their gambling and in ensuring as far as practically possible that they are applied successfully where requested. We also believe that gambling companies have a duty to monitor the gambling behaviour of their customers and to intervene when potentially problematic patterns of play are detected. We recognise that there are practical difficulties on this latter point. Anecdotal evidence suggests that many people who are gambling do not want to be interrupted or ‘badgered’ with questions about the affordability of their betting. Arguably, this creates a potential competitive business advantage to companies which intervene less often. It may be that regulation needs to be substantially more prescriptive in order to satisfy all businesses operating in the market that acting responsibly is not simply driving potential profit to their competitors. However, we also believe that customers are ultimately responsible for the decision to gamble. It is up to wider society and to government to determine what the safety net should be for people who have gambled, or been permitted to gamble, more money than they could reasonably have afforded to lose. It is up to regulators to intervene decisively when there is evidence that particular gambling operators are not taking seriously their responsibilities towards their customers. Social and economic impact 5. What are the social and economic costs of gambling? These might include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs.

615

We anticipate that others, including those with lived experience of gambling harms and organisations which help to support these people will be better placed to answer these questions than ourselves. 6. What are the social and economic benefits of gambling? How can they be measured and assessed? Similarly, we believe that these points will be best answered by gambling operators, as well as those for whom gambling has proven to have a positive effect on their lives. Levy 7. Is the money raised by the levy adequate to meet the current needs for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons? The voluntary levy has been effective to a certain extent but has allowed certain gambling companies to shirk responsibility and diverted some of the efforts and energy of GambleAware into fundraising which might be better used for distribution of funds. A statutory levy could raise more funds and could be distributed through the current GambleAware organisation. This would enable GambleAware to be seen as entirely independent of the gambling industry, reporting into the relevant government department. The income raised should be spent on prevention (research and education) and treatment as well as the new Ombudsman service, should one be introduced. Education 10.Is enough being done to provide effective public education about gambling? If not, what more should be done? We do receive a number of complaints which indicate a lack of understanding of gambling, particularly in relation to how probability can be applied to automated games (“I’ve lost x times and so now I should be due a win”) and on the meaning of statistics such as ‘Return to Player’ (RTP) percentages. We are inclined to leave the specific recommendations about what can be done to those with more experience in education, though we suggest that more funds should be required to be spent by gambling companies to highlight the potential risks of gambling alongside the money they spend on promoting their gambling products. Treatment 11. Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help?

616

The move to provide NHS treatment centres across the UK is welcomed and a recognition of problem gambling as a major health issue which allows individuals to present at GPs and seek referral for treatment will be a major improvement on the current situation. The provision of residential treatment could be expanded to provide more bed spaces. 12. What steps should be taken better to understand any link between suicide and gambling? Further research into the effect of gambling as a contributory factor to suicide as well as the collection of statistics recognising when gambling is a cause of ill health and criminal behaviour will increase understanding of the impact of gambling on individuals and wider society. Advertising 13.The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” Do you agree? How should we make dec isions about the regulation of gambling advertising? What might be learned from international comparisons? There could be benefit in spending more money highlighting the potential risks to counterbalance the high levels of advertising promoting gambling as a fun leisure pursuit. 19.Should changes be made to the statutory regime governing the National Lottery, to bring it into line with the regime governing operators of other lotteries? It seems anomalous that one of the most heavily promoted forms of gambling in the UK is available to customers aged 16. It also weakens the argument for the protection of young people from the harmful influences of gambling if we accept at the same time that it is acceptable for those aged 16 to gamble for substantial prizes in only certain forms. 6 September 2019

617

Information Commissioner’s Office – Written evidence (GAM0119) The Information Commissioner’s response to an inquiry on the Social and Economic Impact of the Gambling Industry from the House of Lords Gambling Industry Committee 1. The Information Commissioner has responsibility for promoting and

enforcing the EU General Data Protection Regulation (GDPR), the Data Protection Act 2018 (DPA18), the Freedom of Information Act 2000 (FOIA), the Environmental Information Regulations 2004 (EIR); the Privacy and Electronic Communications Regulations 2003 (PECR); the INSPIRE Regulations; eIDAS Regulations; Re-use of Public Sector Information Regulations; and the NIS Regulations.

2. The Information Commissioner is independent of government and upholds

information rights in the public interest, promoting transparency and accountability by public bodies and organisations and protecting individuals’ privacy and information access rights.

Introduction 3. The Gambling Industry Committee have opened an inquiry into the social

and economic impact of the gambling industry. A number of issues have been raised during the evidence sessions for this inquiry and data protection legislation has been one of them. Gambling operators have said that they hold a significant amount of data on their online customers and a large amount of information on play but they are not able to share this data with other operators because the GDPR prevents this.

4. The Committee has asked the ICO if the General Data Protection Regulation

(GDPR) prevents gambling operators from the sharing of personal data of vulnerable gamblers with other gambling operators and what would need to be changed to allow operators to do this.

5. Data protection law does not prevent gambling operators from sharing the personal data of vulnerable gamblers. We believe that there are ways to do this that are compliant with data protection legislation.

Does the GDPR prevent gambling operators sharing vulnerable gamblers personal data? 6. It is important that people who may be vulnerable receive the help they

need. Data sharing can be possible if an effective risk assessment is undertaken. A Data Protection Impact Assessment (DPIA) should be produced for any scheme within the gambling industry around the sharing or use of personal data to this effect. This can enable a full assessment of necessity and proportionality.

7. GDPR will require operators to have a lawful basis for processing and that the processing is fair and proportionate. Consideration will need to be given as to whether sharing can met the ‘protect the vital interests of a data subject’ basis in Article 6 GDPR. There may also be other lawful bases that

618

can be considered under Art 6.

8. It will be important to address the transparency of how the data will be collected and used. For example, current privacy notices for new and existing customers would need to be addressed. A customer would reasonably expect ID checks and anti-money laundering checks, but may not expect the details of accounts with one operator to be shared with another operator. As one gambler may have multiple accounts with different operators, the desire to increase sharing is understandable if vulnerability is to be addressed. If they are categorised as being someone who is vulnerable to harm it vital that transparency is considered from the outset.

9. The gambling operators also need to ensure the purpose limitation principle is addressed. They should ensure that the processes they put in place do not use the data they are sharing or receiving for any purposes beyond the original intended purpose, e.g. for commercial services.

10. Another important principle the gambling operators will need to work to is data minimisation. They need to consider what data they would need to identify vulnerability. Once that data is collected they then need to think about what the minimum amount of personal data they need to share is and who they need to share what data with in order to achieve their purpose. Appropriate technical solutions should promote data protection by design and by default. These might include techniques which minimise the sharing and exposure of customer data, such as multi-party computation. This is a cryptographic technique which enables data from multiple sources to be calculated without revealing data to those sources. A calculation is made, revealing only the result. This means no one submitting data sees anyone else’s data, but they get to know the outcome.

What needs to be changed to allow gambling operators to share the personal data of vulnerable gamblers? 11. We recognise there may be issues with the availability of data about

vulnerable users. Collection of new data must be necessary and proportionate to the aim of protecting the users.

12. They also need to establish whether their intended interventions using data will work effectively. More research and piloting needs to be done into what they will do once they have identified a vulnerable user and shared their information with third parties. An evidence base should be available to support the case for further collection and use of data, this can be recorded in the data protection impact assessment.

13. We acknowledge that the Gambling Act 2005 will require further

consideration as it was written before smart phones became a frictionless method of gambling. We understand the reference to vulnerability in the current Gambling Act has never been used for interventions of this kind before and the industry will need reassurance to consider these steps. The ICO is willing to work with the Gambling Commission on this issue.

619

14. The ICO has various ways in which organisations can seek advice and help in relation to questions like these. For example, The ICO has established an Innovation Hub whose remit is to consider GDPR implications of data driven technologies and novel uses of personal data. The ICO sandbox352 which helps organisations develop genuinely innovative and viable data protection products with a potential for delivering real benefit to the UK public. There is also the ICO grants programme353 which has been running since 2017 and has funded a number of privacy and data protection initiatives that have practical applications and will have a public benefit. Also, the ICO helpline354 and our website provide general guidance on compliance with data protection legislation355.

The Data Sharing Code 15. In considering how they might resolve the issue around the sharing of

personal data between gambling operators (and others where necessary) the gambling operators will find the upcoming updated ICO Data Sharing Code useful. Last summer the ICO consulted356 on an updated version of the Code and published the responses357 we received, along with our comments on those responses. The Code is now in its final stages of drafting and we will submit to government to lay in Parliament later in 2020.

Conclusion

16. Our key message is that data protection legislation does not prevent gambling operators from sharing the personal data of their vulnerable users. Operators will need to ensure that they share data fairly and proportionately and consider particular elements of GDPR such as the lawful basis to enable the sharing.

16 March 2020

352 https://ico.org.uk/for-organisations/the-guide-to-the-sandbox-beta-phase/ 353 https://ico.org.uk/global/privacy-notice/apply-for-an-ico-grant/ 354 https://ico.org.uk/global/privacy-notice/how-you-can-contact-us/ 355 https://ico.org.uk/for-organisations/guide-to-data-protection/ 356 https://ico.org.uk/about-the-ico/ico-and-stakeholder-consultations/ico-consultation-on-the-

draft-data-sharing-code-of-practice/ 357 https://ico.org.uk/about-the-ico/responses-to-the-call-for-views-on-updating-the-data-sharing-code-of-practice/

620

Institute of Licensing – Written evidence (GAM0054) Summary 1. The Institute of Licensing (IoL) is the professional body for licensing

practitioners in the UK. Membership encompasses industry, private practice, local government and police practitioners. IoL members have been surveyed to gather views to inform the IoL response to the call for evidence, and while only 33 responses were received (26 from local authority / police practitioners), this response broadly reflects the views submitted as a result.

2. Inevitably, IoL survey responses show a variety of views about gambling

regulation and the questions posed within the Select Committee call for evidence. There are consistent themes concerning online gambling, advertising, and the difficulties of identifying and subsequent provision of support for problem gambling.

3. Industry operators play a valuable role in supervising activities within licensed

premises, and there is a definite need for industry practitioners to be aware of the signs to identify problem gambling and vulnerability, as well as being equipped to offer support and signposting.

4. Gambling on licensed premises provides a social hub and a controlled

(supervised) environment. This is completely lacking in online gambling, and there are concerns around advertising and accessibility of gambling online to all ages and vulnerabilities.

5. The questions set out in the call for evidence are below with survey responses

summarised.

Gambling Act 2005 Q1. Are the three primary aims of the Gambling Act 2005 (to prevent

gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld?

6. There are concerns that online gambling and excessive advertising undermine

the protection of children and vulnerable persons.

Q2 What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed?

7. Most responses to this question cite the need for better control of online

gambling and restrictions on advertising.

Q3. Is gambling well regulated, including the licensing regime for both on- and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with

621

other regulators and jurisdictions? 8. With regards enforcement of conditions / age verification, survey respondents

refer to a lack of complaints about underage gambling, with a majority considering that regulation is adequate (66%).

Q4. Should gambling operators have a legal duty of care to their customers?

9. Survey responses show support for operators having a duty of care to

customers, to an extent. Noted that this has limitations, and that operators cannot be wholly responsible for a customer’s wellbeing, and also that, generally speaking, individuals have a responsibility for their own behaviour.

10.There is a concern that the creation of a legal duty of care will lead to an

increase in the number of speculative and unjustified claims made against operators. Such claims already exist but in relatively small numbers. A new form of potential litigation will inevitably see an increase in spurious claims which will have an impact on operators and the judicial system.

11.IoL Director Susanna FitzGerald QC opposes a legal duty of care, and illustrates the difficulties:

12.How does the gambler (John) prove that it was establishment X that caused his problems rather than establishment Y? What is he suing for? Just normal losses? Breach of the Commission’s rules? (Why should he get his money back on those grounds) Because he is a problem gambler?? Not always easy to prove. (See my comments on William Hill v. Calvert below).

13.Civil actions are expensive and very slow, and the company is almost

definitely going to fight it, which will mean it will be drawn out and although this is good for the lawyers, it is not so good for John.

14.If he gets his money back as a result, if he is a problem gambler, it is likely

that he will carry on gambling with the money In addition, if John or any other gambler, knows that he can potentially get his money back, it may make him/her less responsible in his/her gambling. It is important that there is a sense of responsibility engendered in gamblers: if you lose the money, it is lost, so be careful. Obviously, that does not work with addicted gamblers, but hopefully it does with others.

15.However, if there is no duty of care, (unless the gambling establishment assumes one, as it did in the William Hill V Calvert case in 2008 when Hills failed to exclude Mr Calvert after he asked to be excluded and so he was able to carry on gambling-in that case, although Hills had breached their duty of care, the court refused Mr Calvert any damages because the court said that he would have ruined himself anyway), he can complain to the company, who may repay something, although I understand that it might be to John’s debtors rather than to John. Alternatively, the Commission, on a review, may impose a financial penalty on the company that they divest themselves of any profit they have made, and again pay off the gambler’s debts with it, debts incurred to further his gambling e.g. to his employers that he stole from to fuel his addiction.

622

Social and economic impact

Q5. What are the social and economic costs of gambling? These might include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs.

16.Problem gambling has a severe personal impact affecting all aspects of life,

and in many cases can lead to loss of employment, broken homes, crippling debt, social embarrassment and mental health issues.

17.This in turn will have a wider impact in relation to health, housing and benefit services, loss of tax income, and potentially criminal justice costs.

Q6. What are the social and economic benefits of gambling? How can they be measured and assessed?

18.There are definite social benefits for gambling on licensed premises which

provide social networking opportunities. Gambling is also a feature of many community events (bingo etc), and charity fundraising (lotteries etc).

19.Economic benefits are derived through employment and business tax income, and licensed premises add to the overall infrastructure and vibrancies of both day and night-time economies.

Levy Q7. Is the money raised by the levy adequate to meet the current needs for

research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons?

20.No definitive or evidenced responses to this although respondents express

doubt that there is sufficient revenue to cover research, education and treatment. A mandatory levy would clearly be more effective than any voluntary levy, although this increases the burden on industry operators, some of who are already struggling. Alternatively, the industry should be encouraged to provide the funds necessary. It would help considerably if the industry were provided with information about how much is needed, why and exactly what it will be used for. In other words, this research into this issue, rather than just “research”. Some of the larger companies have already agreed to provide more funds on a voluntary basis.

21.Income from the levy should be used to fund better research and support for problem gambling, and better education about gambling (including at school stage).

22.International comparisons may assist in identifying successful models for research, education and support services.

623

Research Q8. How might we improve the quality and timeliness of research in the UK?

What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons?

23.International comparisons on gambling research may be invaluable to inform

UK research methodology.

Q9. If, as the Responsible Gambling Strategy Board (RGSB)1 has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation?

24.There is a need to fully understand the extent of the ‘problem’ and this

requires better research and ongoing monitoring.

25.Addressing the problem links to the provision and accessibility of support, education services and social attitudes to gambling.

Education Q10. Is enough being done to provide effective public education about

gambling? If not, what more should be done?

26.A strong feeling that much more work is needed in educating children (and parents) and the public about gambling.

27.This ties in as well to the concerns over the extent of advertising and sponsorship of popular programmes which is considered by some to normalise gambling.

Treatment Q11. Are the services available for the treatment and support of people at risk

of being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help?

Q12. What steps should be taken better to understand any link between

suicide and gambling?

28.This is clearly a very difficult area. Mental health issues associated with problem gambling are potentially far reaching and extremely difficult to identify unless help is sought.

29.Licensed premises are the only option for supervised gambling with

opportunities for engagement where problems are suspected.

624

30.If we can better understand the link between mental health and gambling and find ways to identify issues at an early stage, through public awareness and education, this would reduce the potential for suicides linked to problem gambling.

31.Public attitude to gambling addiction should also be addressed. The reactions

to mental health problems have altered enormously in the last decade, to the benefit of both sufferers and society as a whole. The same must happen for those affected by gambling.

Advertising

Q13. The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons?

32.Advertising and online gambling are strong themes of concern within our

survey responses. The concerns are that gambling is being normalised or even glamorised, and that gambling is too accessible, particularly online and via social media.

33.Combined with a lack of education for children and parents, the dangers are obvious. There is a clear need to curtail advertising, with a possible exception for limited advertising for a newcomer into the market. Curtailment / limitation of advertising will be extremely difficult because of social media, but it is a significant cause for concern and should be addressed accordingly.

34.International comparisons should be made to identify best approaches for control of advertising and online gambling.

Gambling and sport Q14 Gambling is becoming an integral part of a growing number of sports,

with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this?

35.The normalisation / glorification of gambling. This is strongly linked to

advertising and stricter controls are essential.

Gambling by young people and children

Q15 How are new forms of technology, including social media, affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future?

36.It makes it available, everywhere, all the time.

Q16 The legal availability of certain forms of commercial gambling to under-

625

18s in Great Britain is unusual by international standards and has been described as an ‘historical accident’. 3 Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins?

Q17 Should children be allowed to play Category D games machines (which

include fruit machines, pushers and cranes)?

37.Very split opinions on this – if there is evidence that this leads to further problems then it should be stopped.

38.Education remains key. Children (and parents) should know and understand odds and risks plus potential harms.

Lotteries

Q18 The restrictions on society lotteries were relaxed by the Gambling Act 2005, and there is concern that some of them are effectively being taken over by larger commercial lotteries. Is this concern well founded? If so, what should be done?

Q19 Should changes be made to the statutory regime governing the National

Lottery, to bring it into line with the regime governing operators of other lotteries?

39.No strong views are expressed in relation to lotteries.

6 September 2019

626

Ipsos MORI, Professor Agnes Nairn and Josh Smith – Written evidence (GAM0069) 1. This is a submission from Ipsos MORI, Professor Agnes Nairn (University of

Bristol) and Josh Smith (Chief Technical Officer, Demos). Our responses to these questions are based on recent research we conducted for GambleAware on the impact of gambling advertising on children, young people and vulnerable adults, which can be found on the following links:

o https://about.gambleaware.org/media/1965/17-067097-01-gambleaware_interim-synthesis-report_090719_final.pdf

o https://about.gambleaware.org/media/1988/biddable-youth.pdf 2. For the purposes of our research children and young people were those aged

11 to 24, and vulnerable adults were defined as people living in constrained economic circumstances, people with limited capacity to understand information, people already experiencing problems with gambling, and people with experience of mental health problems.

3. The results of the second part of the research will be published later this year, and will include a quantitative survey as well as an effort to indicate the impact of gambling advertising on children, young people and vulnerable adults.

The Gambling Act 2005 4. Q1: Are the three primary aims of the Gambling Act 2005 (to prevent

gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld? Our report shows that there are serious concerns related to gambling advertising, particularly on social media and for eSports betting. On Twitter, 68% of traditional sports and 74% of eSports adverts were perceived by the researchers to violate at least one of the advertising regulations put in place to protect children and the vulnerable. Thus, there is evidence that the aim of protecting children is not necessarily being upheld.

5. Q2: What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed? In response to question 2: Ipsos MORI’s synthesis report on the impact of gambling advertising and the report by University of Bristol and Demos on Twitter advertising recommended that new technology could be utilised to minimise the risk of children and young people’s exposure to gambling advertising. Advertising technology exists that can target very specific online profiles with certain advertisements. For example, in our research using avatar358 technology, both Gala Bingo and GamBan359 used highly targeted strategies to reach young gambler profiles and those with gambling problems respectively. This same technology could therefore certainly be used to stop gambling adverts being shown to online profiles that

358 Online avatars are created using Audience Panel Simulation’, which generates users that are referred to as avatars. Each of these avatars had a specific personality. These personalities were

developed through normal browsing activity, akin to the behaviours of a real online user. 359 N.B This is not a gambling company but is a tool designed to block gambling adverts online and in apps

627

appear to belong to children or the vulnerable. It is particularly likely that children, young people and vulnerable groups will be exposed to gambling advertising if they are sports fans. Many adverts were served to the avatars on sports sites and were related to sports/event betting. We recommend that blocking or screening technology should be assiduously applied in the context of sports or eSports.

6. Q3: Is gambling well regulated, including the licensing regime for both on- and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions? Our research aimed to examine how well gambling advertising operated as opposed to how well the licencing regime works. However, as noted above, the advertising regulations are also relevant in this regard as they are designed to protect children and the vulnerable from exposure to enticements to gamble. We identified many instances in which, in our view, the advertising regulations on gambling had been flouted. This was particularly the case for eSports adverts and on Twitter. Indeed, 68% of traditional sports gambling adverts and 74% of eSports gambling adverts appeared to violate at least one of the advertising regulations put in place to protect children and the vulnerable. We suggested that the advertising regulators should investigate these instances of poor compliance and beyond this, investigate whether current regulations are fit for purpose. Regulatory breaches identified for attention included:

o the use of individuals under 25 in gambling adverts; o lack of labelling of ads on social media; o the lack of or limited prominence of consumer protection messages -

such as safe gambling messages, age limit warnings and terms and conditions;

o over complex or misleading financial incentives such as matched betting or “free” bets that exploit the credulity or lack of understanding among children, young people and vulnerable adults;

o messages that minimise the risk of betting; o presenting gambling as an alternative income source; o encouragement to gamble late at night when cognitive defences are

depleted; and o time pressure to bet.

6.1. A core part of the current advertising regulations relates to whether or not particular advertising content has “particular appeal” to children. When this is deemed to be the case, the advert is not allowed. Examples of themes or features that may be deemed to have particular appeal include the use of cartoon characters or animated style, bright colours or depiction of young people (i.e. under the age of 25). Our research found that children were attracted to a wide variety of themes and features within advertising, for example, humour and contemporary cultural references. These features may appeal to adults as much as to children, but of course does not diminish the appeal to children. Given this we question whether it makes sense to base regulations on the premise of “particular appeal”.

628

6.2. We also recommended that, as eSports is a growing industry, it is important that the Gambling Commission continues to rigorously pursue related betting organisations licensed in Great Britain. Our research estimated that 41,000 UK followers of gambling related accounts were likely to be under 16, and that children make up 17% of followers of accounts focused on eSports gambling.

6.3. We also found that there is a need to maintain careful oversight over unlicensed operators online, particularly in relation to eSports. The unlicensed remote eSports betting market requires close scrutiny to ensure that it is not contravening British law by allowing consumers in Great Britain to access its gambling facilities. This is particularly important as the research found evidence of children being exposed to, and interacting with, Twitter accounts advertising unlicensed eSports betting. The regulator should maintain a robust approach in deterring and combating unlawful gambling activities.

Research 7. Q8 How might we improve the quality and timeliness of research in

the UK? What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons? The Gambling Commission Advisory Board for Safer Gambling has convened a meeting of academics in the UK on 13th November to address this issue.

8. Q9 If, as the Responsible Gambling Strategy Board (RGSB)1 has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation? Our research identified a research gap in understanding the motivations and behaviours of 16-18 year olds and, in particular, 17 year olds as they move towards the legal age to gamble. To help address this gap, a longitudinal study would allow for a more robust assessment of the impact of gambling advertising on children and young people, and the impact of gambling more generally. Disentangling cause and effect is extremely difficult in this type of research, but longitudinal research would increase the robustness of examining this.

Education 9. Q10 Is enough being done to provide effective public education about

gambling? If not, what more should be done? Our research highlighted that more could be done to educate children, young people, their parents and teachers on the risks of gambling. Many participants reported exposure to gambling activity, often in informal settings at a young age, and being encouraged to take part by family and friends, as well as a feeling that gambling had become normalised. Moreover, participants reported mixed understanding of risk and felt more could be done to emphasise the risks of gambling over the sense of enjoyment and fun. Education initiatives therefore could include content for both parents and young people to promote a better understanding of gambling-related harms and risks, and of odds and financial offers stated in marketing.

629

Advertising 10.Q13 The RGSB has said that by not taking action to limit the exposure

of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.”2 Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons? Yes, this was the focus of our research. Our research so far into impact of gambling advertising on children, young people and vulnerable adults provided some evidence for:

o revisiting or clarifying regulation around gambling advertising (these recommendations were discussed in our response to question 3);

o using technology to prevent children from being served online gambling ads (see response to question 2);

o monitoring advertising on social media such as Twitter; and o monitoring gambling advertising for eSports that are both played by

(professionally) and watched by children. 10.1. It was too early for us to judge the measurable impact of exposure

to gambling advertising and marketing on children, young people and vulnerable adults within our Interim Synthesis report. And, indeed, this is a complex measurement to make. However, the qualitative research does suggest that impact should be considered in terms of both short term and long term outcomes. Thus we should consider whether, on the one hand, a particular advert impels an individual to place a bet straight away and/or whether the sheer volume of gambling advertising and marketing normalises and legitimates gambling as an ongoing habit. Though our findings cannot be generalised to a wider population, our primary qualitative research certainly found evidence of individual ads prompting gambling behaviour that hadn’t already been intended or considered by participants. Yet it was also clear that advertising is more nuanced than this. Vakratas and Amber (1999), for example, set out a taxonomy of how advertising works, noting that sometimes (though not very often) the objective of an advert is to elicit direct or sometimes immediate purchase or action. Much more often the impact is indirect, with the advertising intentionally having an effect on beliefs and emotions, which may or may not in time lead to action by the consumer. It is important to consider this when thinking about the regulation of gambling advertising.

10.2. These findings will be assessed alongside findings from the forthcoming survey research that considers the role of other factors in influencing gambling attitudes and behaviours. These more complex relationships between advertising and emotions, as well as beliefs and attitudes towards gambling will be explored further in the Full Synthesis report. We are working to publish this report in early 2020, and it may be that the findings from this lead to further suggestions on how we should look to regulate gambling advertising.

10.3. It is also worth considering the complex nature of potential impact. Gambling and sport 11.Q14 Gambling is becoming an integral part of a growing number of

sports, with increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached

630

to this? Sport is an important context in which exposure to gambling advertising is likely to occur. This was demonstrated in the media analysis section of research by: i) spikes in spend on gambling advertising within traditional media, and spikes in social media activity across key sporting events (such as Cheltenham Gold Cup and the World Cup), ii) by the compounded rate of exposure to sponsorship whilst watching certain live sporting events on TV, and iii) by the prevalence of sports/event betting as the most common form of online advertising within the online avatars’ research. However, we found that this association was not universal across all sports – for example, the sports sponsorship analysis found heavy gambling advertising in boxing and around football where the teams were already sponsored by betting companies, but very few references to gambling within live broadcasting of rugby and tennis sample matches, and no references within Formula 1. 11.1. The qualitative research found that gambling was also closely

related to sports routines and interests. Awareness of, exposure to and participation in gambling activity increased around watching or attending matches. When watching sport on TV, particularly football, participants noticed the wide variety of types of marketing, including shirt and team sponsorship, pitch-side ads, and adverts during commercial breaks. Many participants felt gambling marketing was omnipresent in sport, particularly within football, including sponsorships of teams, in stadiums and surrounding the pitch. For some, gambling had become embedded within a social routine, and was a regular and important part of the sporting experience: for example, placing accumulator bets ahead of a weekend of fixtures, or betting online or at a match. Gambling within sport was also linked to a perceived sense of skill over luck. A number of sports fans, including those identified as problem gamblers, believed that it was possible to win if you had the relevant knowledge and expertise. Some young people felt there was a pressure to gamble from friends during big events, whilst others felt this was less intense than peer pressure to take part in other activities including consuming alcohol and smoking.

11.2. ESports represents the largest growth opportunity for sports gambling and presents a particular worry as its players and spectators are young. 15% of internet users are eSports fans, 38% of fans are aged 16-24 and 1 in 3 are aged 20 to 24. 23% of UK males aged 16-24 have watched eSports in the last month (this compares with 39% in China and 9% in Japan) 360. Our research on Twitter gambling advertising showed that 74% of eSports gambling adverts were perceived by the researchers to contravene current advertising regulations. In particular, eSports professionals (such as 15 year old Fortnite champion Jaden Ashman) are under 25 and cannot, according to the regulations, appear in gambling adverts. However, this was repeatedly flouted. ESports take place in fantasy worlds, which use animated styles that appeal to children. Again the regulation not to use content that appeals to children was repeatedly flouted. Meanwhile, many tournaments take place in China and USA, which results in young people watching and being encouraged to bet late at night in the UK when cognitive defences are depleted.

360 https://cdn2.hubspot.net/hubfs/304927/Downloads/ESports-report.pdf?t=1528372092399

631

11.3. Our literature review highlighted young men as a group at particular risk from problem gambling. This is the group who make up a significant part of the eSports spectator (and therefore potential gambling) market. This requires particular attention from the regulators.

Gambling by young people and children 12.Q15 How are new forms of technology, including social media,

affecting children’s experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future? As discussed above and in our written reports361362, our research showed that children and young people are interacting with gambling online. There was clear evidence of children following and engaging with betting related accounts on Twitter. It was estimated that 41,000 UK followers of gambling related accounts are likely to be under 16, and that children make up 6% of followers of ‘traditional’ gambling related accounts - this rises to 17% of accounts focused on eSports gambling. 28% of those responding to eSports Tweets are children. And although exposure to gambling advertising didn’t always translate into reported engagement in the qualitative research, there is likely to be wider impact in terms of raising awareness of and normalising gambling.

6 September 2019

361 https://about.gambleaware.org/media/1965/17-067097-01-gambleaware_interim-synthesis-

report_090719_final.pdf 362 067097-01-gambleaware_interim-synthesis-report_090719_final.pdf

632

Professor Bev John and Professor Gareth Roderique-Davies – Written evidence (GAM0023)

1. We are submitting this evidence in an individual capacity based on our professional expertise and experience. We are HCPC-Registered Health Psychologists and we co-lead the Addictions Research Group at the University of South Wales. We are invited observers of the Cross-Party Group on Problem Gambling at the National Assembly for Wales and sit on the “Beat the Odds” steering group that is run by Cais Ltd. We have received funding to undertake research into the social impact of gambling in Wales from the personal research budgets of the following Assembly Members: Mick Antoniw, AM; Jayne Bryant, AM; Lesley Griffiths, AM; Jane Hutt, AM; Jenny Rathbone, AM and Ken Skates, AM. We declare that we have no conflicts of interest in providing this written evidence.

2. The Gambling Act 2005 (Question 1). It is our opinion that the Gambling Act 2005 aim to protect children and other vulnerable persons from being harmed or exploited by gambling is not being upheld. Evidence from both the UK363 and Australia364 suggests that gambling advertising on television and social media captures the attention of young people and has an impact on their behaviour. It was recently reported that in Great Britain, 14% of children aged 11-16 have gambled in the past week, with around 55 000 reporting problems from their gambling behaviour365.

3. The Gambling Act 2005 (Question 1). Our research366 has identified the indirect impact on children of having parents with gambling problems, including financial hardship and living with the threat of homelessness, and also early initiation into the gambling world.

4. Social and Economic Impact (Question 5). Our research4 identified the negative social and health impacts of gambling from a number of personal accounts provided. These include personal struggles and despair, family breakdown, poverty and growing up with the threat of homelessness.

5. Social and Economic Impact (Question 5). Our research4 identified that gambling is a hidden problem in a number of ways: It carries stigma for both the gambler and family. Individuals are very reluctant to admit to gambling problems. The majority of people gamble alone, and the exponential increase in access to gambling via websites, as well as phone and tablet apps increases the solitary nature of gambling, and the

363 Djohari, N. et al (2019). Recall and awareness of gambling advertising and sponsorship in sport

in the UK: a study of young people and adults. Harm Reduction Journal, 16(24), pp. 1-12 364 Thomas, S. L. et al. (2016). Child and parent recall of gambling sponsorship in Australian sport. Victorian responsible gambling foundation; Nyemcsok, C. et al. (2018). Young people’s recall and

perceptions of gambling advertising and intentions to gamble on sport. Journal of Behavioural

Addictions, 7(4), 1068-1078. 365 Wardle, H., et al. (2019). Gambling and public health: we need policy action to prevent harm

BMJ, 365: l1807. 366 John et al (2017). An Investigation of the social impact of problem gambling in Wales. Welsh

Assembly Members Consortium / USW

(https://www.southwales.ac.uk/documents/776/An_Investigation_of_the_Social_Impact_of_Problem_Gambling_in_Wales_-_Final.pdf)

633

difficulties in computing actual prevalence. Alcohol consumption appears to exacerbate these factors. The lack of specialist services means that there are no databases of individuals with problem and dependent gambling. Proxy services where these individuals may present (e.g. debt and addiction services) do not, for the most part, screen for gambling problems and there is no systematic identification of need.

6. Levy (Question 7). The voluntary levy is not adequate to meet current needs for research, education and treatment for a number of reasons. Firstly, there is a paucity of treatment services for what is a growing public health problem. Our research4 indicates that problem gamblers present at non-gambling services (for example related to financial difficulties). Service providers tend to pick up on gambling problems ‘intuitively’ rather than systematically. These come to light when discussing individuals’ budgeting plans, and when discrepancies can be seen between income, outgoings and debt problems. Where gambling problems are identified, service providers are unsure to whom to refer clients.

7. Levy (Question 7). Secondly, the majority of gambling-related research funding is provided by GambleAware. There is a perception (rightly or wrongly) amongst many academic researchers that the organisation is not truly independent and as such will not apply for funding.

8. Levy (Question 7). Thirdly, significant concerns remain given the voluntary nature of the levy. Since gambling companies are not told how much to contribute or even to which organisation they contribute, voluntary donations can be perceived as both good marketing where it does occur and also as having strings attached. The voluntary nature of the Levy, and as such the uncertainty over income, does not facilitate the long-term planning of treatment, research or educational programmes.

9. Levy (Question 7). Recommendation: A public-health approach should

be adopted. Research, education and treatment funding should be met by a mandatory and industry-wide tax or levy. Research and Education funding should be administered by an independent organisation free from industry and political influence. Funds allocated to treatment should be distributed via the NHS.

10.Research (Question 8). Recommendation: The quality of research can be improved by the administration of funding by an independent organisation as referred to in paragraph 9. Funding should be distributed in accordance with a national strategy (devised by an independent board) according to standards that are shared by all academic research (e.g. competitive calls, academic rigour and accountability, impact and public engagement, input from experts by experience, implementation and dissemination, open access publishing).

11.Research (Question 9). The situation can be addressed by an independent funding organisation ring-fencing funding for this purpose in line with the principles outlined in paragraph 10.

12.Advertising (Question 13). We agree with the statement that by taking

no action to limit the exposure of young people to gambling advertising

634

“we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” In addition to the studies referred to in paragraph 2 suggesting that gambling advertising on television and social media captures the attention of young people and has an impact on their behaviour1,2, our research uncovered negative perceptions of respondents to gambling advertising. Perceptions in relation to exploitation, manipulation and anger were expressed at what is seen as a deliberate targeting of the poor both in making gambling accessible, and through aspirational advertising that creates false hope4.

13.Advertising (Question 13). Our research suggests that students appear to be a vulnerable population with two broad groups of students particularly susceptible to developing gambling problems. These are students studying for sports qualifications and students who struggle socially, and have difficulty developing friendship groups4. The observation was made by a student services advisor that sports students tend to bet more on sporting events: ‘I have noticed that sports students are particularly at risk. A lot of ads… target them…we’ve noticed it’s quite prolific in sports students.’

14.Gambling and sport (Question 14). The association between gambling and sport mirrors strategies previously implemented by both the tobacco and alcohol industries. We have recently found evidence that embedded gambling advertising (such as shirt sponsorship) increases the urge to gamble367 and, following on from paragraph 14, that sports students are more susceptible to this. We suggest that this is a consequence of the integral nature of sport and gambling such that gambling is seen as a part of sport rather than an adjunct.

15.Gambling and sport (Question 14). While we are seeing attempts to curtail the negative impact of gambling advertising upon young and vulnerable audiences during televised sports (such as the “whistle-to-whistle” ban on gambling advertising), this does not encompass more nuanced forms of advertising such as embedded promotion. Critics of embedded promotion suggest that it is a subtle and deceptive assimilation into live screen-time368. Recommendation: That gambling advertising and promotion be subject to similar legislative restrictions to tobacco in relation to sport.

16.Lotteries (Question 19). Our research4 has found that the most

common form of gambling activity reported by respondents were National Lottery games. However, there was a disparity between individuals reporting that they played National Lottery games and reporting that they gambled, which indicated that many consumers did not consider National Lottery games to be a form of gambling. Recommendation: Any changes to the statutory regime governing the National Lottery and other lotteries

367 Roderique-Davies, G. et al (unpublished) Embedded Gambling Promotion in Football: An Explorative Study of Cue-Exposure and Urge to Gamble. Currently under review in an academic

journal. 368 Castrén, S., et al (2018). Association between gambling harms and game types: Finnish population study. International Gambling Studies, 18(1), 124-142.

635

should ensure that their status as gambling activities is clear to consumers.

5 September 2019

636

Martin Jones – Written evidence (GAM0115) Background My son Joshua took his own life in 2015 at the age of 23 after a six year struggle with gambling addiction. My evidence is based on 6 years of attempting to support and encourage him to beat his addiction, and the following 5 years thinking about what might have prevented this tragedy. This evidence is submitted in my individual capacity as an “expert by experience” in areas where I believe I have some insight. Statutory Duty of Care The Gambling Act was misguided. There is a need to revise the Act to change the primary role of the Gambling Commission from “promoting gambling” to “preventing harm”. In reality the Government, the Gambling Commission and the Gambling Industry are jointly and severally responsible not only for the death of my son, but of many others. The Gambling Commission states that 340,000 people are being harmed by gambling. It seems to me to be hugely complacent to accept this as somehow inevitable collateral damage. The way to correct this approach is to include a Statutory Duty of Care in a revised Gambling Act. If 340,000 people were being harmed in the workplace, the Health and Safety Executive would prosecute the employers responsible and seek to impose significant fines and even custodial sentences. If 340,000 people were harmed by drinking tap water, the Drinking Water Inspectorate and Ofwat would prosecute the water supplier responsible and that water supplier might be put out of business. Why should the gambling industry not be regulated to achieve “zero harm” as every other business would expect to be? In 1974 when the Health and Safety at Work Act was first passed, it was founded on two key principles:

• That those who created the risk were best able to manage it • That employers “should do everything reasonably practicable to prevent

harm”

In 1974 there were 651 deaths in the workplace. Today, that figure has reduced to around 150. Still too many, but undoubtedly a testament to a successful piece of legislation. The requirement to do everything reasonably practicable to prevent harm is a powerful incentive. Anyone deciding that the cost of removing a risk was too high would have to do so in the full knowledge that they might have to defend that decision in a court of law. That in itself promoted decisions which erred on the side of caution. Tragic accidents have widened the scope of risk analysis to include things that should have been considered in the first place but which were overlooked originally. In my experience in the water industry I can think of incidents at Carsington, Abbeystead and Camelford which had a major impact across the whole industry. All of these resulted in step changes in the mindset and rigor with which the duty of care was applied. Even lesser incidents can have a sobering effect. If you have ever worked with a colleague who has been invited to give an “interview under caution” with the Health and Safety Executive, you can be sure that you will actively review all your safety risk assessments and decisions to make doubly sure that they are as they should be. But this beneficial effect only comes from the existence of a Statutory Duty of Care, and one which is enforced by an independent external body.

637

The Gambling Industry and the Gambling Commission should both be subject to a Statutory Duty of Care, enforced by an independent body (a Safe Gambling Executive similar to the Health and Safety Executive). The suggestions made by both industry and the Gambling Commission that this is not necessary because they already have its equivalent simply isn’t credible. It is the existence of the independent enforcement body that will create the reality check needed to drive the harm reductions that are needed. The cosy status quo hasn’t worked to date, and will not work in future. The failure to learn the lessons from so many gambling related suicides only serves to underline this point. Affordability Had an affordability test been in operation in 2015, then perhaps my son might still be alive. Today there is something of a precedent from the Financial Conduct Authority (FCA) for an affordability check: in 2019 the FCA issued rules designed to prevent harm to investors in the peer-to-peer sector and to allow firms to operate in a sustainable manner. The FCA placed a limit on investments in peer-to-peer agreements, for retail customers new to the sector, of 10% of investable assets. As they stated “This is an important means of ensuring that they do not over-expose themselves to risk”. It is self-evident that a similar approach would prevent harm in the gambling industry. The introduction of an affordability test will need two stages:

a. measures that can be introduced today; b. measures that can be introduced after the availability of an industry wide

platform to keep track of a customer’s bets across all gambling companies

Today “know your client” data from the client and credit agencies should be able to confirm income, outgoings and total discretionary disposable income. Following the lead set by FCA it is not unreasonable to set a limit of 10% of discretionary disposable income as the maximum a customer should be permitted to bet with (per month, per week and per day as appropriate). All that is needed is to determine what percentage of the 10% discretionary disposable income should be spent with any given gambling company. In the absence of other information, a precautionary principle approach should be taken. The gambling industry have suggested that there is no level that would be safe since there could be over two hundred competing companies with whom the customer might bet. This might be a genuine concern. Or it might be an excuse to do nothing and keep on taking unsustainable bets. As an initial approach, a level of 5% of the 10% discretionary disposable income per company might be fixed. This could be considered a maximum per company, who could always decide to take a smaller percentage if they felt it was too high. If and when an industry wide platform was available, the 5% could be converted to a flexible factor between 0% and 10% depending on the customers status at any given time. The gambling industry should have all the data they need to introduce an affordability test today which could be refined over time. Given that they say they are fully committed to preventing harm, why delay? An affordability check will ease the financial stress and anxiety on hundreds of thousands of addicts. It should put a stop to bank accounts being emptied time and time again, and whole term’s grants being lost in the first week at university. It is unlikely that the gambling industry will take such a step voluntarily for fear of putting

638

themselves at a commercial disadvantage to their competitors. This is a clear opportunity for the Gambling Commission to take the lead and set the ground rules. It may be that in the application of an affordability test, individual companies may close an individuals account over concerns of affordability and gambling harm. It would be sensible for “closed account” information to be shared across the whole industry. Treatment Treatment provision is deficient in both quantity and quality. The NHS is the only organisation with the scale and capacity to manage treatment for gambling. The NHS Long Term Plan does contain provision for the treatment of gambling

2.36. We will invest in expanding NHS specialist clinics to help more people with serious gambling problems. Over 400,000 people in England are problem gamblers and two million people are at risk, but current treatment only reaches a small number through one national clinic. We will therefore expand geographical coverage of NHS services for people with serious gambling problems, and work with partners to tackle the problem at source.

This is only 5 lines in a 136-page document. A much fuller strategy statement is needed detailing how the backlog of 340,000 adults and 55,000 children being significantly harmed, together with 2 million being moderately harmed, needs to be set out. And the ongoing issue on new gambling addict numbers needs to be included as well. This will certainly exceed the current intention of providing 14 new clinics. In addition:

• A full set of NICE Guidelines for gambling addiction treatment needs to be developed. Although a proposed project was identified on 24/7/18, it didn’t make the long list, it didn’t make the short list, and did not get actioned. This key statement of “best practice” is a fundamental shortcoming in health policy and is long overdue.

• The quality of treatment needs to be improved. At present cognitive behavioural therapy (CBT) is considered to be “best in class”. However, the London Problem Gambling Clinic uses this approach and believes that its success rate is only 70% twelve months after completion of the course. Indeed, my son’s experience serves to confirm this. He received CBT counselling at University, at the London Problem Gambling Clinic, and in Harley Street. And yet his gambling addiction killed him. I am not a clinician, but I am aware that there is a concern that CBT should be delivered by a professionally qualified psychologist specialising in gambling rather than a generalist in all addictions. This could be an essential ingredient in the effective treatment of gambling addiction. To my knowledge no-one is highlighting this as a treatment essential. NICE Guidelines and routine measurement of success rates over time for all treatment approaches are urgently needed to confirm how best to provide treatment and to make a significant improvement in overall success rates.

• If the “best in class” success rate is only 70%, what does this say for other methods of treatment? Are they deluding themselves and others about its

639

effectiveness? If it is less effective, does that not flag the urgency to undertake prevention measures?

• GambleAware and GamCare need to acknowledge that they are only small charities who are not able to provide an overarching strategy to reduce the number of problem gamblers. Any strategy needs to be able to halve the number of problem gamblers in 3 years at most. This message that they are small charities unable to address the whole problem needs to be understood clearly by those responsible for the commissioning of regulation and treatment. All too often GambleAware and GamCare are involved in public relations exercises with politicians which purport to demonstrate that treatment provision on the ground is satisfactory and sufficient. It is not.

Where is the evidence? The gambling establishment hides behind “lack of evidence” while steadfastly avoiding the commissioning of the necessary research to provide it. When I asked my son’s university counsellor over 10 years ago what were the potential worst case outcomes of gambling addiction he replied:

• Suicide • Going to prison for theft or fraud to fund gambling • Homelessness and living on the streets

This is not rocket science, and one might have hoped that the Gambling Commission would have researched these simple indicators of harm. Sadly this is not the case. However, here are some pieces of evidence which ought to be sufficient to prompt urgent action:

5821 Number of suicides recorded by ONS in 2017 6507 Number of suicides recorded by ONS in 2018, an

increase of 11.4% on previous year

250 to 650 Best estimate of gambling related suicides based on 2017 data

279 to 726 Best estimate of gambling related suicides based on 2018 data

5% Percentage of gambling addicts who had attempted suicide in the previous year (based on desk study published by Gambling Commission on 19/7/19, in turn based on a 2007 study)

17,000 Number of gambling addicts who attempted suicide in the previous year IF 5% (current best estimate from 2007 study) is applied to 340,000

19% Percentage of self-referred clients under 25 at the London Problem Gambling Clinic who had attempted suicide in the previous year to start of treatment.

19% Percentage of gambling addicts who had thought about suicide in the previous year (based on a study published by the Gambling Commission on 19/7/19, in turn based on a 2007 study)

119,000 Number of self exclusions under GamStop (tbc)

340,000 People being severely harmed by gambling

640

55,000 Children and young people being severely harmed by gambling

2,000,000 People at being moderately harmed by gambling

651 (in 1974) reduced to less than 150 (today)

Reduction in annual workplace deaths following Statutory Duty of Care imposed by Health and Safety at Work Act 1974

None of the evidence is as comprehensively solid as one would wish. However, there are no contra-indicators and every single metric is consistent with the following statements:

• Hundreds of suicides are gambling related • Hundreds of thousands are being harmed by gambling

Is it reasonable to defer urgent action to reduce and eliminate these harms pending “perfect” evidence? I suggest not. The precautionary principle should apply and every sensible measure to reduce or eliminate harm should be deployed now. Other issues The following issues are important, but I will not duplicate arguments which I am sure you will hear from others:

• The need for a minimum 1% mandatory levy on gambling company turnover

• The need to focus on prevention not cure • The need to develop public health education messages similar to anti-

tobacco campaigns • The need to ban advertising in the same way as tobacco to enable public

health messages to be heard • The need to undertake safety assessments to remove “toxic and addictive”

products • The need to develop educational programmes for PHSE schools’

curriculums • The need to collate information on gambling related suicides • The need to exclude non-UK regulated online gambling sites from the UK

market

It’s not about the money…. Finally, I need to comment about the role of money in gambling related suicides. The press and the media routinely seek to quote the largest amount of debt associated with the suicide. This in my understanding has little or no effect on the final decision to take your own life. To a gambling addict whether he is in debt for £100 or £1,000,000 means much the same – he simple has no money left. I can conceptualise two mechanisms: a) That there is some element of damage accumulation in repeated episodes of gambling until completely wiped out. Ultimately this wears down an individual who can see no prospect of ever getting free of his addiction. The associated shame and embarrassment of having to admit that he has lost control yet again finally push him to take his life. The final loss may be comparatively small, as low

641

as a month’s salary in the case of my son. The threshold at which interventions are needed is therefore specific to the individual and could easily be a loss in hundreds not thousands of pounds. b) That the gambling addiction erodes a part of the brain, with the gambling addict unable to stop the gambling episodes. With no hope of ever getting back in control they take their own life. Perhaps (a) and (b) amount to the same thing. I can find no better words than those of Lewis Keogh who took his life in 2013: “Gambling is cruel. I need some peace….” 24 February 2020

642

Landman Economics – Written evidence (GAM0039) Written by Howard Reed (Director, Landman Economics) Introduction Landman Economics is pleased to submit this response to the call of evidence issued by the House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry. Since 2013 Landman Economics has conducted research for the Campaign for Fairer Gambling on the social and economic costs of gambling, focusing initially on the impact of Fixed Odds Betting Terminals (FOBTs – also known as B2 gaming machines) and, more recently, online gambling. This submission summarises our main findings, and is particularly relevant to Questions 5 (“what are the social and economic costs of gambling?”) and 6 (“what are the social and economic benefits of gambling?” in the call for evidence. With reference to these questions, this submission focuses on specific aspects of the economic impact of gambling, as follows:

1. the links between gambling activity and measures of economic prosperity (household income and deprivation);

2. The relationship between the location of LBOs (licensed betting outlets – i.e. betting shops) and deprivation by local area;

3. The wider economic impact of FOBTs and online gambling – in particular the impact on employment and tax receipts.

4. The proportion of profits from the online gambling sector which arise from gambling activity by players who are defined as ‘problem gamblers’ or ‘at-risk gamblers’.

At the end of the submission I also address Question 8 (“how might we improve the quality and timeliness of research in the UK?”) Page 10 of this submission is a one-page summary of the main findings. It should be noted that all of the research findings in this submission are based on data that was collected before the recent reduction in maximum stake for FOBTs from £100 to £2 per play in April 2019. Response to Questions 5 and 6 1 Gambling, income and deprivation 1. The 2016 Health Survey for England contains data on household incomes

(adjusted for family size) and on the extent of deprivation in the area which each respondent lives in (using the Index of Multiple Deprivation, which is a measure of the extent of deprivation in each local area in England)369. Table 1 below uses data from the Health Survey for England 2016 to show the proportions of problem gamblers (both for any kind of gambling and separately for those who participated in online and FOBT gambers) according to the quintile of the household disposable income distribution (from the poorest 20 per cent to the richest 20 per cent of households, adjusting incomes to take account of family size). Table 2 shows the same information

369 Ministry of Housing, Communities and Local Government (2015) gives more details on how the Index of Multiple Deprivation is constructed.

643

for respondents broken down by quintile of IMD (Index of Multiple Deprivation) from the most deprived areas up to the least deprived areas.

2. Tables 1 and 2 show that there is a ‘household income gradient’ as well as a ‘deprivation gradient’, in that poorer households are more likely to contain problem gamblers than richer households, and households in more deprived areas are more likely to contain problem gamblers than households in less deprived areas. The gradient is steeper for deprivation than for income: Table 2 shows that 1.5 per cent of survey respondents in the most deprived quintile are problem gamblers compared to 0.2% in the least deprived quintile. This means that adults in households in the most deprived quintile are more than seven times more likely to be problem gamblers than adults in households in the least deprived quintile. For problem gamblers who play FOBTs, the difference between the most and least deprived households is even more stark; adults in the most deprived quintile are ten times more likely to be problem gamblers than adults in the least deprived quintile. For online gambling the deprivation gradient is not as severe but people in the most deprived quintile are still four times more likely to be problem online gamblers than people in the least deprived quintile.

3. The analysis by disposable income quintiles in Table 1 shows that adults in the poorest quintile are around four times more likely to be problem gamblers than adults in the richest quintile (1.3 per cent compared to 0.4 per cent). Again, there is more of a gradient for FOBT players than for online gamblers; in fact, there is no obvious income gradient for online gamblers, with adults in the richest quintile being just as likely to be problem gamblers as adults in the poorest quintile.

Table 1. Proportion of problem gamblers by household income quintile in England, 2016 Proportion of problem gamblers: Income quintile Any gambling

activity FOBT players Online gamblers

1st (poorest) 1.3% 1.0% 0.2% 2nd 0.5% 0.2% 0.1% 3rd 0.6% 0.3% 0.2% 4th 0.5% 0.3% 0.3% 5th (richest) 0.4% 0.2% 0.2%

Source: Health Survey for England, 2016

644

Table 2. Proportion of problem gamblers by Index of Multiple Deprivation in England, 2016 Proportion of problem gamblers: IMD quintile Any gambling

activity FOBT players Online gamblers

1st (most deprived)

1.5% 1.0% 0.4%

2nd 0.5% 0.3% 0.4% 3rd 0.7% 0.3% 0.3% 4th 0.3% 0.1% 0.1% 5th (least deprived)

0.2% 0.1% 0.1%

Source: Health Survey for England, 2016

4. These findings align with previous research by Landman Economics using the

Living Costs and Food Survey (the main source of data on household expenditure by category of goods and services in the UK) which showed that gambling expenditure is a much higher share of household disposable income (3.1 percent) for households in the lowest income quartile than for households in the highest income quartile (0.6 percent). (Reed 2014a, pp8-9)

2 The relationship between location of LBOs and deprivation 5. Research by Landman Economics and Geofutures for the Campaign for Fairer

Gambling has found a clear positive relationship between the extent of deprivation in local areas and the number of betting shops in those areas (Reed 2014, pp2-7). Landman Economics has also found similar patterns in the relationship between betting shop location and deprivation for Scotland (Reed, 2016).

3 The wider economic impact of FOBTs 6. Gambling industry representatives and other supporters of the current

regulatory framework for FOBTs and online gambling often claim that the gambling industry makes a positive contribution to the economy, and that increased regulation of the sector would have an adverse economic impact. For example, the Association of British Bookmakers has claimed repeatedly that increased regulation of FOBTs would lead to substantial job losses in the betting sector (e.g. ABB 2013). However, this view does not take account of the overall impact of a shift in consumer spending towards FOBTs and away from other goods and services. Each pound which a consumer spends on FOBTs (net of winnings) is by definition a pound which is not spent elsewhere in the economy. In its November 2015 report on the economic impact of FOBTs, Landman Economics estimated the amount of employment supported by a certain quantity of expenditure on FOBTs compared with the employment supported by the same quantity of consumer expenditure on other goods and services in the economy. (Reed 2015, pp10-15).

645

7. The calculations from the November 2015 Landman Economics report have been updated for this submission using the latest data (details are contained in the Appendix to the submission). Because expenditure on FOBTs supports relatively little employment compared with consumer expenditure elsewhere in the economy, the analysis concluded that £1bn of “average” consumer expenditure supports around 20,000 jobs across the UK as a whole, whereas £1bn of expenditure on FOBTs supports only around 5,000 jobs in the UK gambling sector. This implies that, other things being equal, an increase of £1bn in consumer spending on FOBTs destroys around 15,000 jobs in the UK. The results from the Landman Economics analysis suggest that, if current rates of growth of FOBT expenditure are maintained:

• Gross industry revenues from FOBTs will increase by around 40 per

cent over the next ten years, resulting in a gain of around 3,000 jobs for the gambling sector by 2028/29 but a reduction of around 13,000 jobs for the economy as a whole – a net loss of 10,000 jobs.

• At the end of the ten year period, the total annual wage bill in areas where FOBTs are established will be around £360 million lower (in today’s prices) than if FOBT use remained at its 2018 level.

8. At the end of the ten year period net tax receipts will also be around £80 million per year less due to the expansion of FOBTs. Revenue from Machine Games Duty is forecast to increase by around £180 million but this is more than offset by reduced receipts from income tax and National Insurance contributions (due to lower employment) and reduced VAT receipts (due to lower consumer spending on other goods and services).

4 The economic impact of online gambling compared to FOBTs 9. Evidence from statistics published by the Gambling Commission shows that

the Gross Gambling Yield370 (GGY) for FOBTs grew from around £1.3 billion to around £1.9 billion (measured in real terms) between 2008-09 and 2016-17 – an increase of just under 50 per cent in eight years. In 2017-18 the GGY for FOBTs fell to around £1.7bn. Over the same time period, the online gambling market almost trebled in size in real terms – growing from just under £1.9bn in 2008-09 to just over £5.3bn. The online gambling sector, measured using a definition which includes all online gambling activities, is now over three times the size of the FOBT sector in terms of GGY (Gambling Commission, 2018).

10.Analysis of the relationship between GGY and employment in the online

gambling sector compared to betting shops, using Gambling Commission statistics, shows that the amount of employment in the online gambling sector supported per billion pounds of GGY is only around one-tenth that of the amount of employment supported by betting shops. This reflects the relatively low overheads of the online gambling sector – not having to maintain betting shops as a physical presence on the high street, it can generate GGY with far fewer employees.

370 The GGY is defined as the amount retained by operators after the payment of winnings but before the deduction of costs of the operation

646

11.While the 2015 Landman Economics analysis and the updated figures featured in Section 3 above only include the impact of an increase in consumer spending on FOBTs and do not consider online gambling expenditure, it is likely that an increase in expenditure on online gambling destroys even more jobs than the equivalent-sized increase in expenditure on FOBTs. This is because, as explained above, online gambling expenditure supports only around one-tenth the number of jobs that the FOBTs sector does for the same amount of Gross Gambling Yield. This implies that £1bn of expenditure on online gambling supports less than 500 jobs in the UK gambling sector. Using a similar calculation to the one made for FOBTs in the Appendix to this submission, the implication is that an increase of £1bn in consumer spending on online gambling destroys over 20,000 jobs in the UK. Full details of this calculation are contained in the appendix to this submission.

5 Problem and at-risk gamblers and the breakdown of profits from online gambling 12.This section presents estimates of the proportion of profits in the online

gambling industry which come from ‘problem’ or ‘at risk’ gamblers. “Problem gambling” is typically defined as gambling to a degree that compromises, disrupts or damages family, personal or recreational pursuits (NatCen, 2018). Gamblers can be classified using the Problem Gambling Severity Index, which is based on gamblers’ responses to a set of nine questions regarding various aspects of problem gambling (NatCen 2018, p65). Each item is assessed on a four-point scale: never, sometimes, most of the time, almost always. Responses to each item are given the following scores: never=0; sometimes=1; most of the time=2; almost always=3. When the scores for each item are summed, a total score ranging from 0 to 27 is possible. Based on the PGSI score, gamblers are classified into four categories:

• Problem gamblers (PGSI score of 8 or more); • Moderate risk gamblers (PGSI score of 3-7); • Low risk gamblers (PGSI score of 1 or 2); • Not at risk gambers (PGSI score of zero).

13.Research by NatCen (2018) uses survey data for England, Scotland and Wales

to classify gamblers according to problem/at-risk status using the schema above, and then analyses the extent to which different risk categories of gambler participate in different gambling activities, including online casino gaming and online betting. Landman Economics has combined the data from the NatCen analysis with evidence from a recent PWC report on the on the overall composition of online bets placed by problem gambler status to produce an estimate of the proportion of industry profits which arise from at-risk or problem gamblers371. Table 3 below shows the calculations used in producing this estimate. Our overall finding is that 54 percent of the online gambling industry come from problem or at-risk gamblers (with 20 percent being from problem gamblers, 17 per cent from moderate risk gamblers and 17 per cent from low-risk gamblers). Given that only around a third of online gamblers are classified as problem or at-risk according to the data analysed

371 Note that because PWC (2017) covered online (remote) gambling only rather than onsite

gambling in bookmakers or other venues, we were unable to produce equivalent estimates for the percentage of total profits from FOBTs by gambler risk status

647

by NatCen, this is a significant finding, and shows the extent to which the online gambling industry is reliant on problem and at-risk gamblers for a majority of its profits. This is another crucial – and worrying – aspect of the economic impact of gambling.

Table 3. Proportion of online gambling industry profits from problem or at-risk gamblers

Percentage of online gambling activity by risk category:

Risk Category

Total annual online gambling expenditure (£)

online casino

online betting

average profitability

Percentage of total online profits from gamblers by risk category

Not at risk 1,092 25% 75% 6.8% 46%

Low-risk 2,024 39% 61% 6.2% 17%

Medium risk 4,644 41% 59% 6.1% 17% Problem gamblers 9,310 65% 35% 5.1% 20%

Notes: Total annual online gambling expenditure calculated from PWC (2017) Table 13, p43 Percentage of online gambling activity by risk category calculated by Landman Economics using Health Survey for England 2016 data. Calculation of average profitability uses Gambling Commission (2019) statistics to calculate GGY as a percentage of turnover for online casino and online betting activities. Results show profitability of 3.5% for online casino gaming and 7.9% for online betting activity. Data from the HSE (2016) indicate that there approximately 2.3 times as many gamblers participating in online betting activity compared to online casino activity. Response to Question 8 6 Priorities for research on gambling behaviour 14.The fact that Landman Economics had to combine evidence from two different

studies – PWC (2017) and NatCen (2018) – to produce the first available estimates (to our knowledge) of the proportion of online gambling industry profits arising from problem and at-risk gamblers, seems to indicate that the focus of current research activity is misplaced. I would recommend that future research focuses more on the economic and social costs arising from problem and at-risk gambling. For example, it would be useful for the Gambling Commission to commission in-depth research on the extent to which the gambling industry – both online and in betting shops and other outlets – relies on problem and at-risk gamblers to drive its business model

648

and provide a large proportion of its profits. This would help supplement and extend the initial findings which I present in Section 5 of this submission.

Summary and conclusions 15.The empirical evidence presented in this submission demonstrates that high

rates of problem gambling among FOBT users and online gamblers impose significant economic and social costs on Britain, with the largest impacts being on the poorest and most deprived parts of society. Four findings stand out in particular. Firstly, there are clear links between problem gambling and deprivation and problem gambling and income. Poorer households are more likely to contain problem gamblers than richer households, and households in more deprived areas of England are more likely to contain problem gamblers than households in less deprived areas. The income and deprivation gradients are especially strong for FOBTs. Secondly, there is a clear positive relationship between the extent of deprivation in local areas and the number of LBOs in those areas. Thirdly, there is a negative impact of FOBTs and online gambling on the wider economy through reduced employment and tax receipts because FOBTs and online gambling expenditure do not support as many jobs as most other forms of consumer spending. The estimated negative impact of online gambing is bigger than for FOBTs because the online gambling industry employs far less people per pound of Gross Gambling Yield than Licensed Betting Outlets do. Finally, calculations by Landman Economics based on previously published research by PWC and NatCen suggest that the online gambling industry is reliant on problem and at-risk gamblers for more than half of its total profits.

References Association of British Bookmakers (2013), The Truth about Betting Shops and Gaming Machines, submission to the DCMS Triennial Review, April 2013 Gambling Commission (2018), Industry Statistics, November 2018. Gambling Commission (2019), Industry Statistics, May 2019. https://www.gamblingcommission.gov.uk/news-action-and-statistics/Statistics-and-research/Statistics/Industry-statistics.aspx Ministry of Housing, Communities and Local Government (2015), “English indices of deprivation 2015”. https://www.gov.uk/government/statistics/english-indices-of-deprivation-2015 NatCen (2018), Gambling behaviour in Great Britain in 2016: Evidence from England, Scotland and Wales. PWC (2017), Remote Gambling Research: Interim Report on Phase II. GambleAware. Reed H (2014a), Fixed Odds Betting Terminals, Problem Gambling and Deprivation: A Review of Recent Evidence from the ABB. Landman Economics. Reed H (2014b), “A review of the Local Data Company’s report An independent analysis of betting shops and their relationship to deprivation along with their profile relative to other high street business occupiers, Landman Economics. Reed H (2015), The economic impact of Fixed Odds Betting Terminals: 2015 Update. Landman Economics.

649

Reed, H (2016), “The relationship between location of betting shops and deprivation in Scottish local authorities”, Landman Economics. Responsible Gambling Strategy Board (2017), Advice in relation to the DCMS review of gaming machines and social responsibility measures, https://www.rgsb.org.uk/PDF/Advice-in-relation-to-the-DCMS-review-of-gaming-machines-and-social-responsibility-measures.pdf

Appendix: New calculations of the economic impact of FOBTs compared to other economic activity 16.This Appendix presents new estimates of the overall economic impact of

increased expenditure on FOBTs on economic conditions in the localities where the FOBTs are located. The results here are an updated version of Chapter 3 of the Landman Economics report The Economic Impact of Fixed Odds Betting Terminals: 2015 Update (Reed 2015).

A.1 The impact on jobs and economic output 17.The growth in the FOBTs sector over the last two decades has led industry

representatives to lobby against greater controls on FOBTs (for example, a reduction in the maximum stake, currently £100 for B2 machines but being reduced to £2 from April 2019) on the grounds that restrictions on FOBTs would reduce growth and lead to job losses in the industry (see for example ABB 2013; ABB 2015).

18.However, it makes no sense, economically speaking, to consider the impact of increased expenditure on FOBTs on the betting sector in isolation from the rest of the economy. Each pound which a consumer spends on FOBTs (net of winnings) is, by definition a pound which is not spent elsewhere in the economy. Hence the question of whether increased expenditure on FOBTs generate increased economic activity or not is really a question about whether each pound spent on FOBTs supports more economic activity than a pound spent elsewhere in the economy.

19.The basic approach taken in this Appendix to calculating the impact of FOBTs on the economy is to estimate the amount of employment supported by a certain quantity of consumer expenditure on FOBTs compared with the employment supported by the same quantity of consumer expenditure on a weighted basket of other goods and other services in the economy. Thus, rather than asking the question “how much economic activity is created by Fixed Odds Betting Terminals?” the analysis here asks, “what is the change in economic activity if consumer expenditure shifts from other goods and services to FOBTs?” In terms of the aggregate economic impacts of FOBTs on the UK economy, the latter question is much more appropriate than the former.

20.Note that the focus here is explicitly on local economies; the analysis draws a distinction between expenditure on wages, which (if betting shop employees live reasonably locally) is likely to be “re-circulated” into the local economy via consumers spending a proportion of what they earn, and profits for the betting industry, which (given that most betting shops are owned by large-scale national chains) are not likely to be re-spent in the local economy.

650

21.The analysis in this Appendix proceeds by attempting to calculate what proportion of Gross Value Added (GVA - a measure of economic output used by the UK Office for National Statistics – essentially equal to net industry revenue after subtracting costs of production) from FOBTs is accounted for by wage costs. This “share of wages in GVA for FOBTs” is compared with the proportion of GVA from consumer expenditure in the UK economy as a whole which is accounted for by wage costs (the “share of wages in GVA for overall consumer expenditure”). To the extent that £1 of expenditure on FOBTs supports fewer jobs than the “average” £1 of consumer expenditure, an increase in spending on FOBTs will reduce overall employment and economic activity.

22.The following assumptions are made about the amount of employment supported by Fixed Odds Betting Terminals:

• It is assumed that each set of 4 FOBTs supports one full-time job at the average hourly wage rate for people working in the gambling industry on an hourly rate (rather than a salaried basis). According to the 2017 Annual Survey of Hours and Earnings372, the median annual salary for full-time employees in the gambling industry is £21,100. In practice is likely that FOBTs, as a completely automated gambling format, support less employment than this, but given that there is a maximum of 4 FOBTs per betting shop it seemed reasonable to apportion at least some cleaning and maintenance time for each shop to maintain the FOBTs and the environment around them, as well as allowing for some of the tasks undertaken by counter staff in betting shops to support FOBT play (e.g. use of debit cards rather than cash to fund play, “selling” the machines to customers by offering free play sessions and tournaments as marketing tools, and so on.)373

• Gross Value Added from FOBTs is estimated by using a statistic for GVA for the entire gambling industry (including bookmaking, casinos, betting and online gambling) from the DCMS publication DCMS Sector Economic Estimates (DCMS, 2018b) and apportioning GVA in line with the share of total gross revenue from FOBTs as a share of total revenue for LBOs374.

23. Table A.1 shows the calculation of the share of wages in Gross Value Added for the Fixed Odds Betting Terminals industry and compares this with

372 Based on SIC 2-digit code 92, "Gambling and betting activities." The Annual Survey of Hours and Earnings is the largest survey of pay in the UK, based on a 1% sample of the entire working

population. See https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/dat

asets/annualsurveyofhoursandearningsasheguidetotables for more details. 373 This is consistent with the ABB's Code for Responsible Gambling and Player Protection in

Licensed Betting Offices in Great Britain which recommends that "all shop staff will be trained, in

consultation with providers of responsible gambling expertise, to recognise a wider range of problem gambling indicators and will aim to identify those customers at risk of developing a

gambling problem", and that "all shop staff will be actively encouraged to 'walk the shop floor' as part and parcel of an enhanced customer engagement role, including initiating customer interaction

in response to specific customer behaviour which needs to be addressed." (ABB 2013b, p 9)

However, these initiatives are being implemented against a backdrop of low and falling levels of employment in betting shops. 374 Statistics from Gambling Commission (2018) show that FOBTs account for approximately 58% of total gross revenue for betting shops.

651

the share of wages in GVA across UK private sector industries excluding financial services375.

Table A.1. Share of wages in Gross Value Added for FOBTs compared with average across UK private sector industries Industrial sector

Gross Value Added (£bn)

Employment costs (£bn)

Share of wages in GVA (%)

FOBTs 1.66 0.17 10.5 Entire UK private sector (excluding financial services)

1,196.75 582.72 48.7

Notes: FOBTs GVA calculation based on DCMS’s estimate of GVA for the gambling sector in 2017 (DCMS 2018b), allocated pro-rata to FOBTs on the basis of data from Gambling Commission (2018) showing that betting shop activities (including OTC betting and FOBTs but excluding online betting) account for approximately 28% of total gross revenue for the gambling industry, while FOBTs account for 58% of gross revenue from betting shops. Employment costs for FOBTs calculated assuming one full-time employee per set of 4 FOBTs at annual wage of £21,100. Entire UK private sector GVA and employment costs calculations calculation based on data from 2017 ONS Annual Business Survey data for SIC2007 industries B (mining), C (manufacturing), D (electricity and gas), E (water), F (construction), G (wholesale and retail trade), H (transport and storage), I (accommodation and food services), J (information and communication), K (finance and insurance), L (real estate), M (professional scientific and technical activities), N (administration), R (arts and entertainment) and S (other service activities) summed together. Industry K (finance and insurance) is currently excluded from the ABS dataset due to concerns regarding data quality. 24.Table A.1 shows that the total share of wages in Gross Value Added for Fixed

Odds Betting Terminals, under our assumptions, is 10.5 percent – much lower than the share of wages in Gross Value Added for the UK private sector (excluding financial services) overall, which is approximately 49 percent. The implication of these figures is that consumer expenditure on FOBTs supports very little employment compared with an average basket of consumer spending on goods and services. If one pound of consumer spending is diverted from other goods and services to FOBTs, it is likely to support only just over one-fifth as much employment as it would have done, on average, if that pound had been used to buy other goods and services. The corollary of this finding is that FOBTs deliver particularly high profits for bookmaking firms because wage costs required to support FOBTs are so low relative to the amount of revenue that they generate.

25.In terms of overall employment generation, what is the impact on local economies of a shift of consumer spending into FOBTs? Taking into account average wages in the betting sector compared to average wages across the

375 The UK public sector – principally health and education – has been excluded from the analysis

because most of what the sector produces is not sold at market prices and hence is not an relevant destination for consumer expenditure.

652

UK private sector, this analysis finds that £1bn of “average” consumer expenditure supports around 20,000 jobs across the UK as a whole, whereas £1bn of expenditure on FOBTs supports only around 5,000 jobs in the UK betting sector. This implies that, other things being equal, an increase of £1bn in consumer spending on FOBTs destroys just over 15,000 jobs in the UK. Furthermore, the jobs created in the UK betting sector are on average lower paid (average full-time annual salary around £21,000) than jobs created by consumer expenditure on other goods and services (average full-time annual salary around £37,000376).

26.This is important in terms of the likely expansion of the FOBTs industry over the next decade, if rules governing maximum stakes stay as they currently are. Table A.2 extrapolates the trend in Gross Gambling Yield from the period 2008/09 to 2014/15 to provide estimates of total gambling yield from FOBTs in 2015/16 (the current financial year) and 2025/26 (ten years from now). The Table shows the implied growth in GGY from 2015/16 onwards, and the implied loss of jobs across the economy as a whole resulting from this expansion of FOBTs in the betting sector.

Table A.2. Implied growth in FOBTs business and economic impact at current rates of growth Year Total

annual GGY from FOBTs (£bn)

Growth since 2015/16 (£bn)

Number of extra jobs in betting sector

Number of jobs lost in other sectors

Overall jobs impact (UK economy)

2018/19 1.7 2028/29 2.4 0.7 3,000 -13,000 -10,000

Notes: all figures at April 2018 prices. Source: author’s own calculations 27.Table B.2 suggests that Gross Gambling Yield from FOBTs will increase from

£1.7 billion to £2.4 billion over the next ten years, resulting in a gain of around 3,000 jobs in the betting sector but a loss of around 13,000 jobs elsewhere in the economy, leading to an overall net reduction of around 10,000 jobs for the economy as a whole by 2028/29.

28.Over the ten year period, the impact of the expansion of FOBTs in terms of reduced wage payments to people working in the local economies where FOBTs are established is to reduce the total wage bill in these areas by around £400 million by 2028/29. This is due to a combination of two factors: (a) the reduction in the total number of jobs supported by consumer spending as a result of switching spending from other goods and services into FOBTs, and (b) the fact that jobs arising as a result of the expansion of FOBTs are relatively low-wage compared with jobs supported by other types of consumer spending.

376 Source: comparison of data from Annual Survey of Hours and Earnings 2017 for average gross

weekly full time earnings in the gambling sector (SIC2007=92) with average gross weekly full-time earnings across all industries.

653

A.2 Impact of increased FOBTs on tax receipts 29.One important aspect of the economic impact of increased numbers of FOBTs

is their impact on tax revenues. This report models three main revenue impacts of a shift in consumer expenditure towards FOBTs: (1) Increased receipts of Machine Games Duty (MGD) – this is paid at a rate

of 25% on gross revenues from category B2 gaming machines (following an increase from the previous rate of 20% in March 2015).

(2) Reductions in VAT receipts arising from reduced consumption on goods and services elsewhere in the economy, the majority of which attracts VAT at the standard rate of 20%377.

(3) Reductions in income tax and National Insurance Contributions (NICs) arising from reduced overall employment in the UK economy (as explained above), meaning that there are fewer people in work to pay income tax and NICs to the UK Exchequer.

30.Table A.3 adds these tax revenue impacts together to calculate the total impact of the expansion of FOBTs on tax revenue over a 10-year period (up to 2028/29).

Table A.3. Impact of increase in FOBTs on per-year tax revenues over a 10-year period Change in tax revenue 2028/29 (£m) Machine Games Duty +181 Income tax and NICs -152 VAT -106 Total -77

Notes: Machine Games Duty revenues calculated as 25% of the increase in Gross Gambling Yield over 10 years using GGY figures in Table B.2. Income tax and NICs revenues calculated assuming that the average full-time weekly wage of additional workers taken on in the betting sector is £21,100 per year, whereas the average wage of workers made redundant in other sectors of the economy is £36,600 per year. Reduced VAT revenue calculated on the basis that 52 percent of consumer expenditure shifted from other goods and services to VAT would have attracted VAT at the standard rate of 20% (House of Commons Library, 2012). 31.Table A.3 shows that although the expansion in FOBTs over the next decade

is estimated to lead to increased MGD revenue of around £180m, this is accompanied by a reduction in income tax and NICs revenue of around £150m and reduced VAT revenue of around £105m, meaning that total tax revenue decreases by just under £80m.

6 September 2019

377 The House of Commons Library (2012) reports that approximately 52 percent of overall

consumer expenditure is subject to the standard rate of VAT of 20%. This assumption has been

used in the calculations in Table 3. Note that gambling expenditure on FOBTs does not attract VAT as it is subject to Machine Games Duty instead.

654

Erika Langham, Professor Gerda Reith, Professor Robert D Rogers and Dr Heather Wardle – Written evidence (GAM0043) All views are the authors own. Introduction 1. We are delighted to have the opportunity to contribute evidence to the House

of Lords Select Committee Inquiry on the Social and Economic Impact of the Gambling Industry. We focus on three key elements:

a. The need to prevent harms from occurring in the first place b. Presenting evidence that supports the need for action c. The need for a mandatory levy to be introduced to support effective

prevention, treatment and research activities.

“Prevention is better than cure” 2. The harms from gambling are profound, impacting people’s resources,

relationships and health. Gambling harms can also be enduring, persisting long beyond when gambling has ceased and undermining people’s well-being (Wardle et al 2018; Browne et al, 2016). Whilst problem gambling rates in Britain have tended to be stable, evidence suggests that a good proportion of affected individuals move in and out of problem gambling (see Appendix). This high level of ‘churn’, particularly movement into problem gambling, highlights the need for resources be dedicated to preventing harms from occurring in the first place.

3. Review of other public health issues suggests that effective prevention should include a range of measures including those targeted at individuals engaging in a particular activity (c.f health warning messages on cigarette packets as a parallel), interventions which aim to support people to reduce their gambling (c.f. smoking cessation programmes as a parallel) and, critically, broader measures that place greater restrictions on the access and availability of gambling and/or place restrictions on certain products (c.f. SmokeFree legislation or under the counter sales of cigarettes as a parallel).

4. A full range of different activities needs to be strategically planned, implemented and monitored with the overarching aim of preventing gambling harms from occurring in the first place. Whilst the Gambling Commission’s National Strategy for Reducing Gambling Harms recognises prevention as important, the Gambling Commission, as the industry regulator, does not have sufficient resources or expertise to be able to realise these objectives. This is one reason we support the introduction of a mandatory levy and also advocate that policy responsibility for gambling be moved from the Department for Digital, Culture, Media and Sport to the Department of Health and Social Care (Wardle et al, 2019).

Harms are occurring now – and we have evidence to take action 5. As noted in the Appendix to this document, the number of people harmed

from gambling is very likely to be far higher than the number of people who are categorised as problem gamblers. As outlined in the Appendix, we know that problem gamblers experience a range of adverse consequences: they have significantly poorer levels of wellbeing, poorer mental and physical

655

health and far higher rates of suicidality than others. Reports from treatment providers shows people citing relationship breakdown and severe financial difficulties as a result of gambling as further evidence of harms (GamCare, 2018).

6. In other jurisdictions, where the prevalence of gambling problems is similar despite different provision of gambling opportunities, gambling harms are estimated to be of greater magnitude than osteo and rheumatoid arthritis, diabetes mellitus, or chronic obstructive pulmonary disease (COPD). Annual population level harm from gambling are around two thirds of that of alcohol or major depressive disorder (Browne et al, 2016). These findings, generated in Australia, have been replicated in New Zealand giving greater confidence in their veracity (Browne et al, 2017).

7. Whilst there is more to learn about the extent and nature of harms in a British

context, there is already much that we do know (see Appendix) and it is unlikely that the same harms found elsewhere do not occur widely here in the United Kingdom. Therefore, we do not believe that action to prevent harms should be put on hold until we learn more. Action should be taken now. In keeping with other public health issues, we strongly advocate implementing a precautionary approach to address gambling harms. Any actions taken should be supported with sound evaluation and piloting to better learn what works in the context of gambling-harm prevention.

We need different structures to effectively reduce harms 8. To effectively reduce harms requires a step change in how we approach,

understand and fund gambling harms. The existing system by which voluntary contributions are raised from the industry and spent (mainly) through GambleAware does not raise enough money to implement the type of prevention strategy we advocate nor does it give many stakeholders confidence that the money is spent free from industry influence (van Schalkwyk et al, 2019).

9. We believe that only a mandatory levy on industry is capable of a) generating the level of sustainable resources needed to deliver a fully implemented prevention and treatment strategy and b) provide sufficient levels of independence and transparency needed for all parties to have confidence in the system.

10.We note that some operators have recently announced increasing their

voluntary contributions to £60 million a year over the course of five years. We have significant concerns about relying on this funding for gambling-harms prevention and treatment.

11.First, there are, as yet, few details about how this will be administered or the

governance arrangements that will be put in place. Concerns about industry influence have not abated and industry statements about how this money will be spent have not been reassuring – with statements that the money will be directed to treatment, advertising, data sharing, transparency (Gallagher, 2019) Notably, prevention is missing from this list. This does little to dispel the sense that industry will exert influence either overtly or covertly on how this money is spent.

656

12.Second, this offer is made on a voluntary basis, meaning there is no

mandatory requirement for this level of funding to actually be provided or provided consistently over a number of years. This is a major concern given that industry have consistently failed to meet GambleAware’s targets over a number of years. Sustainable levels of funding known and guaranteed over a period of years are needed if this funding is to be used to set up new treatment infrastructure or to contribute sustainably to the reduction of harms. Only a mandatory levy can provide this level of certainty.

13.Third, whilst £60 million per annum is an increase, it is insufficient to address existing need and is inequitable in the context of the profits made by industry. The industry generates over £14 billion per year in Gross Gambling Yield (GGY) (Gambling Commission, 2019). Gross Gambling Yield is the income retained by industry after bets have been paid out. Problem and moderate risk gamblers make up 3% of gamblers, meaning that at least £420 million of annual Gross Gambling Yield will be generated from problem or moderate risk gamblers. This is likely to be a conservative estimate, as evidence shows that problem gamblers spend more than non-problem gamblers (Orford et al 2011). A return of just £60 million per year (0.4% of Gross Gambling Yield) to deal with gambling harms is highly inequitable. This inequity means that gambling companies are disproportionately profiting from moderate risk and problem gamblers.

14.For these reasons, we advocate implementing a mandatory levy on industry to support the reduction of gambling harms. A levy would require new systems to be established to spend this money well (Reith et al, 2019). With respect to research, we support the idea that some funding be distributed through the pre-existing UK Research and Innovation infrastructure. This could include open calls for research but should also include investment in a research infrastructure that allows flexible, agile and responsive work to be undertaken quickly to respond to emerging policy issues or new concerns (especially relating to technology). We would strongly recommend that models such as the Public Health Research Consortium or the NIHR-funded Policy Research Units be considered as part of this.

Conclusion 15.We believe the harms from gambling have been under-estimated. There is a

critical need to invest in the systematic prevention of gambling-harms and in a high quality and accessible infrastructure for treatment. We have sufficient evidence to do this now. This needs to be led by a central government department with the will, experience and expertise to drive forward this agenda, the Department of Health and Social Care, and funded by a mandatory and independent levy on industry.

About the authors Heather Wardle is a Wellcome Humanities and Social Science Research Fellow based in the Faculty of Public Health and Policy at the London School of Hygiene and Tropical Medicine. She is Deputy Chair of the Advisory Board on Safer Gambling, which provides advice on gambling policy to the Gambling Commission. She previously worked at NatCen Social Research (2002-2015), where she led their programme of gambling research. She runs a research

657

consultancy for public and third sector bodies and leads the Gambling & Place Research Hub at Geofutures. She does not provide research or consultancy services for the gambling industry. She has worked on a variety of projects for GambleAware and has been funded by the ESRC, Wellcome, MRC and NIHR. Gerda Reith is a Professor of Social Sciences at the University of Glasgow. Her work focuses on the sociology of consumption, with a specialism in gambling. She is a Commissioner of the Howard League for Penal Reform’s Commission on Problem Gambling and Crime. Her research has been funded by NIHR, the MRC, the ARC and the ESRC. She was a member of the Responsible Gambling Strategy Board from 2008 to 2012. In 2018, she worked on a project at the University of Stirling that was funded by GambleAware. Robert D. Rogers is a Professor of Psychology at Bangor University, North Wales. His has published widely on the psychological and neurobiological aspects of gambling, gambling problems and broader health impacts. He is an Associate Editor for the journal, International Gambling Studies. His work has been funded by the BBSRC, ESRC and MRC. Previously, he has received funding for two projects from GambleAware. Rogers also served on the Research Panel that previously advised the Responsible Gambling Strategy Board (now the Advisory Board on Safer Gambling). He was elected a Fellow of the Learned Society of Wales in 2016. Erika Langham is a Lecturer in Health Promotion at Central Queensland University, Australia. She has undertaken gambling research centred on measuring and understanding the experience of harm from gambling; the influence of jackpots on EGM play; the influence of gambling environments; the impact of innovation of gambling products; and the development of a scale to measure the effect of stigma associated with gambling. Erika has received research funds from the Victorian Responsible Gambling Foundation, Gambling Research Australia, Department of Human Services, New Zealand Ministry of Health, Australia’s National Research Organisation for Women’s Safety and the Australian National Health and Medical Research Council.

658

Appendix: Evidence overview This evidence overview updates one provided to the House of Lords Select Committee on August 28th, which was requested by the Committee during Dr Wardle’s oral evidence presentation on July 23rd. The original letter provided to the Committee only considered evidence generated in Britain. This appendix supplements this with evidence generated internationally, where appropriate. What evidence do we have that people are being harmed by gambling? Data from the Health Surveys for England and Scotland 2016 show that around 0.7% of the British population are problem gamblers. This equates to around 340,000 people. Furthermore, 1.1% are moderate risk gamblers (550,000 people) which means that they are experiencing some difficulties with their gambling now (Connolly et al, 2018). These are conservative estimates. First, prevalence rates of problem gambling are generated from a household survey which excludes people living in institutions, such as student halls of residence or prisons – both likely to have higher rates of gambling problems among their resident populations. Second, they are measuring problem gambling in terms of clinical symptoms and behaviours rather than the harms (and distress) experienced among the wider population. Gambling harms are the adverse impacts from gambling on the health and wellbeing of individuals, families, communities and society, affecting people’s resources, family and social relationships, occupational and educational opportunities and physical and mental health (Wardle et al, 2018). Review of problem gambling screening instruments show they do not capture this broader range of harms simply because they do not ask about them all. National surveys of problem gambling use two instruments to measure gambling problems: the DSM-IV problem gambling screen and the Problem Gambling Severity Index (PGSI). The DSM-IV problem gambling screen includes just one question asking if participants have risked a relationship, job or work opportunity because of gambling, and one other question about committing crime because of gambling. It does not capture health problems as a result of gambling. The PGSI includes a single question on the health consequences of gambling and one on gambling causing financial problems. It does not capture any information about relationship problems. Neither screen capture data on the full range of financial or emotional difficulties to which gambling can contribute nor the impact of gambling upon other people – the partners, children and friends of gamblers. Gerda Reith’s work on gamblers in Glasgow, along with evidence from those seeking treatment, demonstrate the range and depth of harms associated with gambling which are simply not represented in standardised problem gambling screens (Reith et al, 2013; GamCare, 2018). Furthermore, the harms from gambling can be long-lasting (e.g. the lasting impact of severe financial difficulties, relationship breakdown or poor health), persisting beyond engagement in gambling itself. It is very likely that people continue to experience a range of adverse impacts long after they have stopped gambling. For these reasons, the number of problem gamblers in Britain should not be considered a robust measure of the total number of people harmed by gambling and could conceivably be viewed as only representing the minimum number of people affected.

659

Internationally, there is a wealth of evidence on the harms from gambling. Globally recognised burden of disease approaches have been applied to gambling harms allowing the calculation of population level measures of impact comparable to other health conditions (Browne et al 2016; Browne et al 2017). These studies have provided insights into the loss of health-related quality of life for individuals at different gambling severity levels, the loss of health utility for their family members, and the impact at the population level. These studies have identified the loss of health-related quality of life ranges from 13% loss for a low risk gambler to 44% loss for a problem gambler. Because these analyses have used standardised methodologies these health-related quality of life losses can be compared with other major health outcomes at both the individual and population level, and robust economic costs of this loss can be calculated. This shows that gambling harms are estimated to be of greater magnitude than osteo and rheumatoid arthritis, diabetes mellitus, or chronic obstructive pulmonary disease (COPD). Annual population level harm from gambling are around two thirds of that of alcohol or major depressive disorder (Browne et al, 2016). When looking at harms across the whole population, the majority of lost health actually occurs among low risk gamblers due to the greater prevalence of low risk gambling. Essentially, lower-level harms for many people adds up to great amount harms in aggregate. This highlights the need for more strategies aimed at prevention and early intervention. Robust costing of these harms has also demonstrated that gambling operates at a net cost to the community, despite the industry generating some employment and other economic surpluses. What do we know about the incidence of problem gambling? The data collected by the Health Surveys for England and Scotland shows the prevalence of problem gambling. That is, how many people at a single point in time are problem gamblers. What it does not tell us is how many of these people are ‘new’ cases (incidence). It is possible to have static problem gambling prevalence rates but have very high incidence because of high levels of movement in and out of problematic behaviour. It is important to know the incidence of problem gambling. If many people are becoming problem gamblers, then resources should be focused on prevention – that is preventing these people from becoming problematic gamblers in the first place. If the incidence rate is very low then resources may be best focused on treatment, ensuring those who are problem gamblers recover. Longitudinal data is needed to measure incidence rates. Whilst, sadly, we do not yet have a national longitudinal study of gambling behaviour in Great Britain, there are three separate studies which suggest, as observed in jurisdictions like Australia, New Zealand and Canada, that the incidence rate for problem gambling in Britain is likely to be high.

1) Gerda Reith’s (2013) longitudinal study of gambling behaviour among Glaswegians found that over a five-year period patterns of stable gambling behaviour were not the norm and that people moved in and out of problem gambling as their levels of gambling engagement increased and decreased. She concluded that gambling problems were episodic in nature.

660

2) Forrest and McHale (2018) studied a cohort of 17-year olds living in the South West of England and followed them up three years later when they were aged 20. The prevalence of moderate harm or problem gambling among this group tripled in this three-year period (rising from 1.4% to 4.6%) and the incidence was very high: 84% of those experiencing moderate harm or problem gambling at age 20 had not done so at age 17.

3) Wardle et al (2017) looked at changes in problem gambling between 2014 and 2016 among British gamblers holding loyalty cards for certain bookmakers. This showed that around 30% of those classified as problem gamblers in 2016 were new cases; that is they were not classified as problem gamblers when interviewed in 2014. In both 2014 and 2016, the prevalence of problem gambling was similar (20% in 2014; 19% in 2016). This demonstrates how static prevalence rates can mask a great deal of churn in behaviour and as such, are a poor basis for policy development.

These studies suggest that the occurrence of new cases of problem gambling (incidence) in Great Britain is likely to be high, despite having relatively stable problem gambling prevalence rates. It should also be noted that those moving out of problem gambling will not just be because they have recovered but may also be because they have moved into institutions (such as prisons) or because of higher mortality among this group. As well as knowing how many people become problem gamblers, we also need to better understand why people stop being problem gamblers. The British evidence above is consistent with that from other jurisdictions which have used longitudinal data to look at the incidence of problem gambling and have repeatedly found the incidence rate to be high. In a review of 14 longitudinal studies, Williams et al (2015) noted that less than half of problem gamblers remained so in the next reporting period. This means that the number of new cases identified over time by these studies is high. This includes Victoria, Australia where approximately 50% of problem gamblers identified at follow-up were new cases; Sweden, where over three quarters of moderate risk/problem gamblers were new cases; and a further Australian study of 17-24 year olds where over 60% of problem gamblers identified at follow-up were new cases (with authors stating that new incidence was the most prevalent behaviour) (Scholes-Balog et al, 2016). Given the strength of the international evidence, we have little reason to suppose this would be different in Great Britain. What do we know about gambling behaviour among children? Data about gambling among children in Britain comes from the Gambling Commission’s annual survey of young people. This is a robust, nationally representative survey of those aged 11-16. The study uses a very similar methodology to studies which provide national statistics on smoking, drinking and drug use. The most recent data from 2018 shows that 14% of children aged 11-16 had gambled in the past week and 39% had gambled in the past year. This includes gambling with family and friends but also gambling on commercial forms of gambling, with playing slot machines, buying lottery tickets and scratch cards being the most popular forms. Around 5% of 11-16 year olds had gambled online

661

in the past year and 1% had gambled online in the past week (Gambling Commission, 2018). This makes gambling more prevalent among children than smoking cigarettes, drinking alcohol or using drugs. Gambling is also more popular than activities like playing hockey, going ten pin bowling or swimming (Wardle, 2018). Like most other risky behaviours, gambling has declined among those aged 11-16, falling from 23% to 14% in 2018. The majority of this decline can be explained by falling engagement in lotteries and private gambling. However, half of all gambling among children is still on what should be age-restricted forms. Furthermore, in 2018 around 55,000 (1.7%) children were categorised as problem gamblers. The likelihood of being a problem gambler among children was higher among those who had gambled online (Wardle, 2019). We also know that children also engage in gambling-like activities in the context of video/online gaming, such as paying to open Loot Boxes and gambling with skins.378 Those who gambled skins and also engaged in other forms of gambling were more likely to be problem gamblers than those who either gambled skins alone or gambled on other forms of activities alone (Wardle, 2019). There is increasing interest in the intersection between gambling-like activities within video games and more traditional forms of gambling. Concern has been raised that practices like loot boxes exploit children or that they prime children to engage in risky, gambling-like activities. Is there a relationship between gambling and suicide in Great Britain? Yes. Three separate British studies have shown a strong association between suicidal ideation and suicide attempts and problem gambling. Sharman et al (2018) showed that in 2015 one third of people in residential treatment for problem gambling had attempted suicide, rising from 15% in 2001 and that around 80-90% had thought about taking their lives. Ronzitti et al (2019) showed that 46% of people attending an NHS clinic for problem gambling had thought about taking their lives in the previous 12 months. The odds of current suicidal ideation increased as problem gambling severity increased and this relationship persisted once experience of depression and substance abuse was taken into account. Wardle et al (2019) showed similar patterns among problem gamblers living in the general population. Problem gamblers were more likely to report thinking about taking their lives (19.7%) and to have attempted suicide (4.7%) in the past year than those who were not problem or at-risk gamblers (4.1% and 0.6% respectively). This relationship persisted when co-occurring common mental disorder and substance abuse/misuse was taken into account. The evidence observed in Great Britain is supported with evidence from a range of other jurisdictions. A strong relationship between gambling and suicidality among those seeking treatment has been noted in Spain, France, Sweden and the USA (Guillou-Landreat et al, 2016; Mallorqui-Bague et al, 2018; Karlsson &

378 Skins are decorative in-games items that can be bought or won within video games. They have no bearing on the outcome of the game.

662

Hakasson, 2018; Ledgerwood & Petry, 2004). Studies from USA and Canada have also highlighted the same association among problem gamblers living in the community (Newman & Thompson, 2003;2007; Moghaddam et al, 2015). In Sweden, a study found that the risk of suicide mortality among those with a diagnosis of disordered gambling was 15 times higher than others (Karlsson & Hakasson, 2018). These studies have given various explanations for this relationship. Some have argued that this association is driven by other mental ill-health (Newman & Thompson, 2003; Hodgins et al, 2006) whilst others have shown that this relationship persists once mental health is taken into account (Newman & Thompson, 2007; Wardle et al 2019) and highlighted familial discord, social conflict and financial problems as other factors which confer risk for suicidality among problem gamblers (Carr et al, 2018). Whilst more work is needed to understand theses associations, it is clear that problem gamblers in Britain, regardless of whether they are seeking treatment or not, should be viewed as a high-risk group for suicidality. British evidence conducted to date suggests that this relationship is not fully explained by the existence of other common mental health disorders among problem gamblers. What is known about the impact of gambling on health and wellbeing? Problem gamblers have very low levels of wellbeing, are more likely to be in poor physical health and to have probable mental ill-health. These associations have been demonstrated in analysis of both the British Gambling Prevalence Survey (BGPS) 2010 and also the Health Survey series, which have used slightly different measures but found the same results. The BGPS 2010 analysis found wellbeing (measured by the Office of National Statistics standardised question on happiness) decreased as problem gambling scores increased, with the authors concluding that gambling problems, including gambling at sub-clinical thresholds, is negatively associated with wellbeing (Farrell, 2018). Forrest’s analysis of the same data concluded that the magnitude of this association was such that problem gamblers experience similar levels of low wellbeing to those with very serious physical illnesses. Forrest also showed that those with close relatives who have gambling problems also have significantly lower rates of wellbeing than the general population (Forrest, 2014). Looking at the Health Survey series, analysis showed the odds of being a problem gambler were 7 times higher among those with the lowest levels of wellbeing (measured by the Warwick-Edinburgh Mental Wellbeing Score). Likewise, those with probable mental ill-health problems (including psychological distress, depression, anxiety and somatic symptoms (as measured by the GHQ-12) are more likely to be problem gamblers than those with no mental-ill health (Wardle et al, 2014; Connolly et al, 2018). The Health Surveys data also showed the odds of problem gambling were higher among those with high blood pressure (even after age was taken into account), demonstrating a relationship with poor physical health as well as mental health (Wardle et al, 2014). Using data from the 2007 Adult Psychiatric Morbidity Survey 2007, Cowlishaw and Kessler demonstrated strong associations between problem and at-risk gambling and anxiety, neurotic symptoms (such as sleep problems, fatigue and irritability) and substance use/misuse (Cowlishaw & Kessler, 2015).

663

A wealth of international evidence supports that problem gambling is associated with a range of health consequences, it is beyond the scope of this submission to review this full extant literature here. Recent analysis from two studies in Australia supports British evidence in showing that personal wellbeing declined with increasing gambling problems (Blackman et al, 2018). This analysis, like that of Forrest (2014), also noted that those who gamble without any problems have elevated rates of wellbeing compared with those who do not gamble. However, the authors stated that the negative contribution to wellbeing of gambling problems is larger than the positive contribution of gambling engagement (Blackman et al, 2018). What is the relationship between gambling advertising and marketing and gambling behaviour? The Gambling Commission’s Youth Gambling Study has repeatedly demonstrated a relationship between exposure to gambling advertising and intentions to gamble. In 2018, 7% of children aged 11 to 16 who had seen gambling advertisements or sponsorships said that it prompted them to gamble when they would not have done so otherwise. This represent about 5% of children aged 11-16 overall. This means that approximately 200,000 children aged 11-16 gambled as a result of advertising, marketing or sponsorship exposure. Measuring the impact of advertising upon gambling behaviours is difficult. A recent review noted that there was very little evidence available in a British context (Newall et al, 2019). Whilst highlighting this evidence gap, the authors noted evidence from two recent Australian studies showing that gambling advertising prompts greater frequency of gambling and higher risk bets to be placed (Newall et al, 2019). Another recent review of youth gambling behaviour noted how several studies demonstrated that advertising and marketing influenced the normative environment for gambling, making it seem like gambling was something that everyone does and should do, and encourages some youth to want to gamble (Wardle, 2018). What is the relationship between online gambling and gambling harms? Health survey data indicate that those who gamble on online slots, casino or bingo games consistently have higher rates of problem gamblers among their player base than most other activities. Strikingly, other survey data from a broadly UK-based sample show that individuals who play online slots and casino games (as well as betting on sports online) reported elevated rates of depressive symptoms, anxiety, alcohol and substance misuse and past year use of major illicit and psychotropic drugs, as well as self-harm as a result of their gambling (Lloyd et al, 2010) These same individuals were more likely to have sought help for addiction and report higher rates of mood-disturbance including sleeplessness (an obvious risk factor for hazardous online gambling) than other types of online gambler. (Lloyd et al, 2010). The levels of moderate risk and problem gambling among online slot/casino/bingo players seen in the Health Surveys are like those who played Fixed-Odd Betting Terminals (see Table 1). This is of concern as online gambling is the largest growth sector for the industry in terms of Gross Gambling Yield (Gambling Commission, 2019). Rates of moderate risk and problem gambling

664

among those who bet on sports tend to be lower than those who gambling online on slot/casino and bingo games and are like those who gamble on fruit/slot machines. The Health Surveys do not ask about how people place their sports bets and so there is limited evidence about the relationship between in-play sports betting and problem gambling. However, the Health Surveys do show that people who gamble more frequently are more likely to be problem gamblers, with problem gambling prevalence rising to 5% among those who gamble at least twice a week from around 1% for those who gamble less often than this (Connolly et al, 2018). As in-play betting encourages fast-pace, repeated betting this may be likely to be associated with more problematic play (Russell et al, 2019). Table 1: problem gambling and moderate risk gambling rates among people who took part in different types of activities: Health Surveys

2016 Health Surveys 2015

Health Surveys 2012

Moderate risk gambling

Problem gambling

Moderate risk gambling

Problem gambling

Moderate risk gambling

Problem gambling

Online gambling casino, slots or bingo

13.7% 9.2% 13.4% 10.4% 11.2% 6.3%

Fixed Odd Betting Terminals

13.5% 13.7% 8.2% 11.5% 14.7% 7.2%

Online betting on sports etc

8.4% 2.5% 6.5% 5.4% 6.3% 3.8%

Slot machines

7.2% 6.4% 6.2% 5.7% 6.5% 2.6%

Similarly, a survey of online gamblers showed that 6% were problem gamblers and a further 23% were experiencing moderate harms (PWC, 2017). This study also showed that problem gamblers were more likely to use their mobile phones as their main device to gamble online than non-problem gamblers and spent more time per week gambling than non-problem gamblers (PWC, 2017). This is notable as ease of access and availability of gambling products have been key concerns with online gambling. The odds of being an at-risk or problem gambler among children aged 11-16 were 8.4 times higher among those who had gambled online on a monthly basis than those who had not (Wardle, 2019). References Blackman et al. 2019. Contrasting Effects of Gambling Consumption and Gambling Problems on Subjective Wellbeing. Journal of Gambling Studies. 35(3):773-792.

665

Browne et al. 2016. Assessing gambling-related harm in Victoria: a public health perspective. Victorian Responsible Gambling Foundation. Browne et al. 2017. Measuring the burden of gambling harm in New Zealand. Ministry of Health. Carr et al. 2018. Suicidality Among Gambling Helpline Callers: A Consideration of the Role of Financial Stress and Conflict. American Journal on Addictions. 27: 531-537.

Connolly et al. 2018. Gambling behaviour in Great Britain 2016: evidence from England, Scotland and Wales. Gambling Commission: Birmingham. Connolly et al. 2017. Gambling behaviour in Great Britain 2015: evidence from England, Scotland and Wales. Gambling Commission: Birmingham. Cowlishaw & Kessler. 2016. Problem gambling in the UK. Implications for health, psychosocial adjustment and healthcare utilisation. European Addiction Research. 22: 90-8. Farrell. 2018. Understanding the relationship between subjective wellbeing and gambling behaviour. Journal of Gambling Studies. 34: 55-71. Forrest. 2014. Wellbeing, gambling and problem gambling. Presentation at the Alberta Gambling Research Institute conference. Banff. Forrest & McHale. 2018. Gambling and problem gambling among young adults: insights from a longitudinal study of parents and children. GambleAware: London. Gallagher, E. 2019. Lord Chadlington to lead independent commission on safer gambling. Affiliate Insider. Available at: https://affiliateinsider.com/news/general-news/lord-chadlington-to-lead-independent-committee-on-safer-gambling/. Gambling Commission. 2019. Industry Statistics. April 2016 – September 2018. Gambling Commission: Birmingham. Gambling Commission. 2018. Young People and Gambling. A research study among 11-16 year olds in Great Britain. Gambling Commission: Birmingham. GamCare. 2018. GamCare Annual Statistics 2017-18. GamCare: London. Available at: https://www.gamcare.org.uk/app/uploads/2019/03/GamCare-Annual-Statistics-2017-18.pdf Guillou-Landreat et al. (2016) Factors associated with suicidal risk among a French cohort of problem gamblers treatment. Psychiatry Research. 240:11-18.

Hodgins et al. 2006. Risk factors for suicide ideation and attempts among pathological gamblers. American Journal on Addictions. 15: 303-310.

Karlsson &. Hakansson. 2018. Gambling disorder, increased mortality, suicidality, and associated comorbidity: A longitudinal nationwide register study. Journal of Behavioural Addictions. 7(4):1091-1099.

666

Ledgerwood &, Petry. 2004. Gambling and Suicidality among treatment seeking pathological gamblers. Journal of Nervous and Mental Disease. 192(10): 711-714. Lloyd et al. 2010. Internet gamblers: a latent class analysis of their behaviours and health experiences. Journal of Gambling Studies 26(3):387-99. Mallorqui-Bague et al. 2018. Suicidal ideation and history of suicide attempts in treatment-seeking patients with gambling disorder: The role of emotion dysregulation and high trait impulsivity. Journal of Behavioural Addictions. 7(4): 1112-1121.

Moghaddam et al. 2015. Suicidal Ideation and Suicide Attempts in Five Groups With Different Severities of Gambling: Findings From the National Epidemiologic Survey on Alcohol and Related Conditions. American Journal on Addictions. 24: 292-298.

Newman & Thompson. 2007. The association between pathological gambling and attempted suicide: findings from a national survey in Canada. Canadian Journal of Psychiatry. 52(9):605-12. Newman & Thompson. 2003. A Population-Based Study of the Association Between Pathological Gambling and Attempted Suicide. Suicide and Life Threatening Behaviour. 33(1): 80-87. Newall et al. 2019. Gambling Marketing from 2014 to 2018: a literature review. Current Addiction Reports. 6: 49-56. Orford et al. 2013. What proportion of gambling is problem gambling? Estimates from the 2010 British Gambling Prevalence Survey. International Gambling Studies. 13(1): 4-18. PWC. 2017. Remote gambling research. Interim report on phase 2. GambleAware: London Reith & Dobbie. 2013. Gambling careers: a longitudinal qualitative study of gambling behaviour. Addiction Research and Theory. 21 (5): 376-390. Reith et al. 2019. New gambling tax is moving up the agenda – here’s how it needs to work. The Conversation. Available at: https://theconversation.com/new-gambling-tax-is-moving-up-the-agenda-heres-how-it-needs-to-work-118648. Ronzitti et al. 2019. Current suicidal ideation in treatment-seeking individuals in the United Kingdom with gambling problems. Addictive Behaviours. 74:33-40. Russell et al. 2019. Who bets on micro events (microbets) in sports? Journal of Gambling Studies. 35(1): 205-223. Scholes-Balog et al. 2016. Problem gambling patterns among Australian young adults: Associations with prospective risk and protective factors and adult adjustment. Addictive Behaviours. 55:38-45. Sharman et al. 2019. Trends and patterns in UK treatment seeking gamblers:

667

2000–2015. Addictive Behaviours. 89:51-56. Exact figures provided by personal correspondence with Dr Sharman. Williams et al. 2015. Quinte longitudinal study of gambling and problem gambling. Ontario: Ontario Problem Gambling Research Center. Wardle et al, 2014. Gambling behaviour in England and Scotland. Findings from the Health Survey for England 2014 and Scottish Health Survey 2014. Gambling Commission: Birmingham. Wardle et al. 2017. Follow up study of loyalty card customer: changes in gambling behaviour over time. GambleAware: London. Wardle. 2018. Trends in children’s gambling 2011-2017. Responsible Gamble Strategy Board: Birmingham Wardle et al. 2018. Measuring gambling-related harms: a framework for action. Gambling Commission: Birmingham. Wardle. 2019. The Same or Different? Convergence of Skin Gambling and Other Gambling Among Children. Journal of Gambling Studies. doi: 10.1007/s10899-019-09840-5. Wardle et al. 2019a. Gambling and public health: we need action to prevent harm. BMJ, 365: l1807 Wardle et al. 2019b. Problem gambling and suicidal thoughts, suicide attempts and non-suicidal self-harm in England: evidence from the Adult Psychiatric Morbidity Survey 2007. London: GambleAware. van Schalkwyk et al. 2019. Gambling Control: in support of a public health response to gambling, Lancet, 393(10182):1680-1681. 6 September 2019

668

Leeds City Council – Written evidence (GAM0038) This is the response to the Call for Evidence from Leeds City Council, licensing authority for the Leeds district. It was prepared in conjunction with Financial Inclusion and Public Health and ratified by the Chair of Licensing Committee as the response of Leeds City Council to this Call for Evidence. The Gambling Act 2005 1. Are the three primary aims of the Gambling Act 2005 (to prevent gambling

from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld?

Of the three licensing objectives, the Council is primarily concerned with the third – protection of children and other vulnerable people from being harmed or exploited by gambling. Research commissioned by Leeds City Council and undertaken by Leeds Beckett University in 2016 into problem gambling in Leeds defined problem gambling as gambling to a degree that compromises, disrupts or damages family, personal or recreational pursuits. “At risk” generally refers to people who are experiencing some difficulties with their gambling behaviour but are not considered to be problem gamblers. The research estimated that there are approximately 10,000 problem gamblers in Leeds (1.8% of the adult population) and a further 30,000 people (5/6% of adult population) who may be at risk of harm from gambling. The research also highlighted that whilst problem gambling can affect anyone at any time, there are certain groups are more vulnerable to gambling related harm;

• Young people (including students) • Adults living in constrained economic circumstances • Certain minority ethnic groups • Homeless people • Those living in areas of greatest deprivation • Adults with mental health issues • People with poorer intellectual functioning and learning disabilities • Those who have been through the criminal justice process • Immigrants

The study interviewed a small cross-section of problem gamblers, those at risk and others post-treatment, drawn from a range of activities and circumstances. Their stories revealed how losses were funded through overdrafts, family loans and informal borrowing, and, for one individual, a loan shark. Gambling behaviour commonly affected relationships amongst friends and family, and for some was seen to have underpinned relationship breakdowns. Some of the

669

participants reported health and wellbeing impacts, often with depression associated with an inability to cope, anxiety and shame. The finding of the research highlighted the extent to which a wide range of Council services and partner organisations may be impacted and could better respond to people who are impacted by gambling related harm. These include public health, housing, children’s services, social care, council tax, debt and money advice services, welfare rights, and community safety. 2. What changes, if any, are required to bring the Act up to date with new

technology and the latest knowledge about how gambling harm is distributed? The Council is concerned about the risk of at risk and problem gambling amongst children and young people. This group is engaged with new technology. It appears that the gambling industry is developing new technology faster than the legislation and Gambling Commission can act. However this is not an area the Council has researched and can provide evidence based information. YGAM is a national charity specialising in at risk and problem gambling amongst young people. https://www.ygam.org/social-impact/youth-gambling 3. Is gambling well regulated, including the licensing regime for both on- and

off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions including age verification? What might be learned from comparisons with other regulators and jurisdictions?

Gambling is highly regulated, with the Gambling Commission and local authorities able to enforce licensing conditions. However the current practice of the Gambling Commission to work with the gambling industry to self-police age verification undermines the work local authorities undertake. Similarly the Gambling Commission’s hands off approach to support local authorities in their control of the spread of gambling premises undermines local authorities. For example, the Council recently sought to control a new bingo operation which appeared to be a blatant exploitation of the gaming machine allowances. However the Gambling Commission had previously approved the bingo variant being proposed which effectively removed the decision from the local authority to refuse the application, and advised the Council to grant with conditions. The Council would welcome more control, such as the ability to control numbers in a given area, for example in the same way as cumulative impact areas work for the Licensing Act 2003. This would prevent the proliferation of any single type of gambling premises in an area – such as betting shops, AGCs or bingo halls, which not only have an impact on the local high street but also seem to accumulate in deprived areas. The Council would also welcome the ability to incorporate local conditions and requirements into the Statement of Licensing Policy to control matters such as single staffing, window displays, visibility of gaming and gambling machines, etc. to promote the protection of children and vulnerable people.

670

4. Should gambling operators have a legal duty of care to their customers? Yes, this would support the objective to protect children and other vulnerable persons from being harmed or exploited by gambling. Social and economic impact 5. What are the social and economic costs of gambling? These might include

costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs.

Research commissioned by Leeds City Council and undertaken by Leeds Beckett University in 2016 into problem gambling in Leeds defined problem gambling as gambling to a degree that compromises, disrupts or damages family, personal or recreational pursuits. “At risk” generally refers to people who are experiencing some difficulties with their gambling behaviour but are not considered to be problem gamblers. The research estimated that there are approximately 10,000 problem gamblers in Leeds (1.8% of the adult population) and a further 30,000 people (5/6% of adult population) who may be at risk of harm from gambling. The research also highlighted that whilst problem gambling can affect anyone at any time, there are certain groups are more vulnerable to gambling related harm;

• Young people (including students) • Adults living in constrained economic circumstances • Certain minority ethnic groups • Homeless people • Those living in areas of greatest deprivation • Adults with mental health issues • People with poorer intellectual functioning and learning disabilities • Those who have been through the criminal justice process • Immigrants

The study interviewed a small cross-section of problem gamblers, those at risk and others post-treatment, drawn from a range of activities and circumstances. Their stories revealed how losses were funded through overdrafts, family loans and informal borrowing, and, for one individual, a loan shark. Gambling behaviour commonly affected relationships amongst friends and family, and for some was seen to have underpinned relationship breakdowns. Some of the participants reported health and wellbeing impacts, often with depression associated with an inability to cope, anxiety and shame. The finding of the research highlighted the extent to which a wide range of Council services and partner organisations may be impacted and could better respond to people who are impacted by gambling related harm. These include public health, housing, children’s services, social care, council tax, debt and money advice services, welfare rights, and community safety.

671

6. What are the social and economic benefits of gambling? How can they be measured and assessed?

Any perceived social and economic benefits of gambling (such as employment) could be achieved by alternative sources of employment and do not outweigh the risks. Levy 7. Is the money raised by the levy adequate to meet the current needs for

research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons?

The Council is supportive of a mandatory levy on the industry. Latest statistics show that the industry made £14.5bn in gross gaming yield in 2017-18 yet contributions to GambleAware have remained just under £8m which is less than 0.1% of this profit. A mandatory levy would allow longer term and more sustainable approach to Research, Education and Treatment to be adopted. As research indicates, problem gambling is a hidden addiction and general awareness of the problem in society is currently low. This was evidenced in the research undertaken for Leeds City Council by Leeds Beckett University on the extent of problem gambling. The research found that not only is there a lack of support available in the city for those with a gambling problem but also that there general lack of awareness of the issue amongst existing support organisations. We know that problem gamblers are more likely to have a debt problem, have a relationship breakdown, suffer mental ill health and have a co-existing addiction. It is very likely that problem gamblers may already be accessing services commissioned by the local authorities and the NHS, but may never divulge their gambling addiction. As a result we are undertaking work to increase awareness of problem gambling and gambling related harm through a wide spread communications campaign and through training our frontline staff to spot signs and symptoms of problem gambling. We believe that eventually greater awareness will lead to more people seeking support and treatment and we are in discussions with GambleAware on how this demand can be met. An increasing number of local authorities are starting to look at the issue, greater engagement and discussion on the issue can only lead to an increase in demand for a range of support options, which need to be sufficiently funded by the industry. Research 8. How might we improve the quality and timeliness of research in the UK? What

changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons?

672

9. If, as the Responsible Gambling Strategy Board (RGSB) has suggested, there

is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation?

Steps should be taken to include questions on gambling in school surveys on a national scale. The My Health, My School survey is a Leeds based pupil perception survey which asks children and young people a range of questions on the 4 topics of Personal, Social and Health Education (PSHE), Social, Emotional and Mental Health (SEMH), Healthy Eating and Physical Activity which are tailored age-appropriately for each year group. The Leeds survey is available to years 5, 6, 7, 9 & 11 and Post 16. This ensures a large and valid sample of the voice of young people. This data set can be compared year on year, as well as to the local authority area as a whole, and can also be compared between year groups and genders, with resources available to action plan for improvements to the data in certain areas. Last year’s (2017/18) My Health, My School Survey had 17,176 responses from 170 schools, equating to 40% of the available population of Children and Young People in Leeds in years 5, 6, 7, 9 and 11. This provides a vast and representative sample of the health and wellbeing of children and young people in Leeds. In Leeds, questions on gambling were included in the My Health, My School Survey for the first time in 2019, to years 7, 9 & 11. The survey closed in July and full results will be available from September 2019. Education 10.Is enough being done to provide effective public education about gambling? If

not, what more should be done? YGAM is a national charity specialising in at risk and problem gambling amongst young people. https://www.ygam.org/social-impact/youth-gambling. Their experience in education with young people could provide valuable insight into educating the wider public. Treatment 11.Are the services available for the treatment and support of people at risk of

being harmed by gambling sufficient and effective? How might they be improved? What steps might be taken to improve the uptake of treatment, particularly among groups who are most likely to experience harm from gambling and least likely to seek help?

A lot of work has been happening in Leeds to improve access and awareness of support and treatment. In order to get to the stage of offering effective treatment and support, Leeds has gone through an evidence led process and

673

established a need to reduce the stigma around problem gambling through campaigning, awareness raising and engagement with the advice sector to encourage clients to talk about their gambling habits and then work collaboratively with the advice sector to screen, signpost and refer clients appropriately to available support. Whilst work to address financial exclusion and poverty is well developed and coordinated in the city, less was known about problem gambling and gambling related harm. For this reason in 2016 Leeds City Council commissioned Leeds Beckett University to conduct a study into the prevalence of problem gambling in Leeds, key statistics are outlined in question 5 above. The aim was to provide a baseline and guide funding of projects to prevent, and mitigate adverse effects of problem gambling. Part of the study involved gamblers in Leeds taking part in in-depth interviews about their gambling behaviour and the impacts it has. These in-depth profiles, exploring behaviours and experiences of harm on a one to one basis provided a number of common themes: Three in four participants interviewed started gambling early; often very early having been socialised into gambling environments and practice through other family members who gambled. This is similar to wider research demonstrating the family legacy affect where children exposed to gambling early in life take-up gambling independently in later life. Some of the participants of this study first gambled, using their own money, when under the legal age for gambling Participants typically engaged in different gambling activities during their lifetime; although the diversity of gambling experiences was not necessarily an indicator of the levels of harm experienced. For many this diversity was a feature of current behaviours with multiple engagement often across different segments of the land-based gambling market; combining online gambling with land-based operations was common place Motivations to gamble were highly varied. Social factors and socialising were important common influences, intensification of other interests were also involved (e.g. betting on sporting events) and, for some, escaping boredom. Impacts of problem gambling across the participants, and those around them, were equally diverse but also relative. Losses were funded through overdrafts, family loans and informal borrowing, and, for one individual, a loan shark Gambling behaviour commonly affected relationships amongst friends and family, and for some was seen to have underpinned relationship breakdowns. Some of the participants reported health and wellbeing impacts, often with depression associated with an inability to cope, anxiety and shame Some of these gamblers felt that more could be done locally and nationally to improve support for gamblers; including more intensive or accessible Gamble Responsibly notification in venues and on line, notifications and advice sheets in different languages, 24 hour free Help-lines, television advertisements about the downsides of gambling, and machine and on-line ‘pop-ups’ for time and money spent. Some called for a more robust self-exclusion mechanism which

674

accommodated all Adult Gaming Centres and casinos (betting shops were not mentioned) so that a single branch exclusion affected all premises. Among those who had experience of treatment and specialist counselling it was felt that a more flexible approach, and aftercare, would better support those with more intensive needs with the option for more counselling sessions. The research was disseminated at a national conference held in Leeds in March 2017. Subsequently the Leeds Problem Gambling Project Group was formed, with representation from across the Council, Public Health, advice partners, GambleAware, Gamcare, NECA, the Industry and the NHS. The aim is to raise awareness of how to recognise, help, signpost and support those suffering from or at risk of gambling related harm. Discussions within the Project Group have led to the following work areas: Beat The Odds Marketing and Communications Campaign. The local campaign aims to raise awareness as well as reducing the stigma associated with problem gambling. The first campaign was launched on 16th October 2017 to coincide with the national industry-led “Responsible Gambling Week”. It was a high profile campaign using advertising on social media, bus shelters, pubs, garage forecourts, and publicity material in various Council and Health public-facing buildings. In the absence of a local helpline and limited specialist provision in Leeds, we encouraged people to contact the national gambling helpline (0808 8020 133) and go to www.talkgamblingleeds.org.uk which re-directs to the Leeds Money Information Centre webpage www.leedsmic.org.uk and also importantly links into other local services providers who are primarily focused on money and debt advice and affordable financial services. The campaign has developed over the last two years and has included specific campaigns for the 2018 FIFA World Cup which particularly targeted young men and primarily using football imagery. The campaign used digital and social media in order to better engage the target group, was run throughout June and July 2018. The Beat the Odds campaign for the Cricket World Cup in summer 2019, has just come to an end. This campaign offered the opportunity to reach a wider and more ethnically diverse audience. Training and awareness sessions In order to start to raise the profile and understanding of problem gambling, training and awareness sessions for frontline workers are being undertaken. The sessions have been delivered by a number of different organisations including Newport Citizens Advice Bureau, Gamcare, YGAM, Leeds and York NHS Partnership Foundation Trust, Public Health and the Financial Inclusion team. The sessions have ranged from a full day’s training to much shorter briefings at team meetings and staff development days.

675

In addition members from the Council’s Financial Inclusion and Public Health teams have been asked to speak at a number of events across the country about the work being undertaken in the city. Including those hosted by the Local Government Association, the Gambling Commission and Birmingham City Council. Improving the provision of support in the city. On the strength of the proactive partnership approach adopted by Leeds City Council to address gambling related harm, in November 2018 GambleAware (the national charity that funds research, education and treatment) announced funding for the establishment of a Leeds based NHS Northern Gambling Service led by Leeds and York Partnership NHS Foundation Trust, and Leeds Community Gambling Service - led by Gamcare. The services will begin to be delivered in Leeds from September 2019, with up to £1.2 million being invested on an annual basis. The service represents a new innovation in delivery of prevention, education and treatment for gambling-related harm. Collaboration between the NHS and Gamcare will ensure that clients accessing the service will always receive treatment specific to their needs. Additionally, in Leeds, the service will integrate with the broad network of partners across the third sector and Leeds City Council. This will ensure that the message about available support is well known amongst communities and professionals alike. 12.What steps should be taken better to understand any link between suicide

and gambling? Advertising 13.The RGSB has said that by not taking action to limit the exposure of young

people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” Do you agree? How should we make decisions about the regulation of gambling advertising? What might be learned from international comparisons?

The council would agree that exposure and normalisation of gambling advertising to young people needs better regulation and limitations. Annual figures released by the Gambling Commission reveals a rise in participation in gambling activities for young people year on year. Interim results from the first 5,280 responses to the Leeds school survey (see answer to Question 9) from School years 7, 9 & 11 revealed that when asked about gambling habits, ‘placing a bet’, ‘bingo’ and ‘skin betting’ were the top 3 answers. When asked if their parents are aware of their gambling, only 5% of respondents have stated their parents don’t know. The Gambling Commission’s report also revealed that only 19% of children said their parents had set strict rules about gambling.

676

The Leeds School Survey results echo findings from the Gambling Commission in suggesting that a lot of gambling activity is normalised and with the consent of parents. The Gambling Commission reported that the most common gambling activities that children are engaging in are often outside of the Gambling Commission's direct regulatory control - such as bets between friends, lottery scratch cards purchased by parents and playing of fruit machines in pubs. It highlights that the need for advertising and sponsorship of gambling to be limited and for campaigns to alert parents about the dangers of normalising gambling to children. Gambling and sport 14.Gambling is becoming an integral part of a growing number of sports, with

increasingly close relationships between operators and sports clubs, leagues and broadcasters. What are the risks attached to this?

The risk in seeing gambling associated with sports is the exposure and normalisation of the activity. This was evident in the Leeds City Council commissioned the 2016 research into the prevalence of problem gambling in the city. BBC research last year found that 95% of British football matches on TV featured at least one gambling commercial during ad breaks. The research looked at 25 games involving British teams broadcast that season, from the build-up through to the post-match chat on BT Sport, Sky Sports and ITV. In these matches there was a total of 1,324 commercials and sponsorship indents, and of these, 272 were for gambling. For some games the rate of gambling adverts was even higher. Companies in the sector have agreed to submit to a “whistle-to-whistle” ban on adverts beginning five minutes before pre-watershed live sport events and ending five minutes after. The curbs include other sports such as Cricket and Golf, but will exclude horse and greyhound racing, which are seen as intrinsically linked to gambling. Although the industry have agreed to ban advertising during sporting events, marketing spend online is five times the amount spent on television. Gambling by young people and children 15.How are new forms of technology, including social media, affecting children’s

experiences of gambling? How are these experiences affecting gambling behaviour now, and how might they affect behaviour in the future?

Children are being exposed to gambling adverts through the normalisation of gambling in the adult environment. Games played by children on smart phones and tablets also embed gambling elements into the gaming experience. 16.The legal availability of certain forms of commercial gambling to under-18s in

Great Britain is unusual by international standards and has been described as

677

an ‘historical accident’. Should young people between 16 and 18 be able to purchase National Lottery products, including draw-based games, scratch cards and online instant wins?

No, this should be in line with other gambling restrictions. 17.Should children be allowed to play Category D games machines (which

include fruit machines, pushers and cranes)? No, this should be in line with other gambling restrictions. Lotteries 18.The restrictions on society lotteries were relaxed by the Gambling Act 2005,

and there is concern that some of them are effectively being taken over by larger commercial lotteries. Is this concern well founded? If so, what should be done?

19.Should changes be made to the statutory regime governing the National

Lottery, to bring it into line with the regime governing operators of other lotteries?

6 September 2019

678

Associate Professor Charles Livingstone – Written evidence (GAM0108) Associate Professor Charles Livingstone, PhD. MEc. School of Public Health and Preventive medicine Monash University

Australia

1. In layman’s terms, what goes on in our brains when we gamble? Is it useful to compare gambling with taking drugs, for example?

The current understanding of the mechanism for operant and classical conditioning (the behavioural phenomena associated with habitual and addictive gambling) is that these phenomena trigger a dopamine response. This is a response by the brain to the perception of a reward, or in anticipation of a reward. In particular, the unpredictable nature of gambling rewards is a further stimulus to the dopamine system. Those experiencing stressful circumstances or a stressful life situation may find this reward relieving and pleasurable, and become very devoted to achieving it. This is likely the cause of the experience of intense engagement in gambling activities as an experience of ‘the zone’, as related by many intense and addicted gamblers (Yucel et al 2018). The International Classification of Disease-11 (WHO 2018) and the Diagnostic & Statistical Manual Version V (APA 2013) now recognise gambling as a behavioural addiction, consistent with addiction to substances. Schüll (2012) argues that this style of addiction is a ‘purer’ form of addiction than other addictions.

Note: Operant conditioning is the development of habituation to an activity by provision of an irregular, unpredictable reward, as demonstrated by B.F. Skinner and others from the 1950s. Classical conditioning is the tendency to associate a specific reward (e.g., food) with another stimulus (for example, a bell or metronome) as demonstrated by I. Petrov and others from the 19th Century. Electronic gambling machines (EGMs) in particular combine these two principles to great effect (Livingstone 2017).

2. What is gambling addiction and what are its causes? Are some individuals or groups of people at greater risk of developing an addiction to gambling?

As noted above, it appears that there is a greater predisposition towards gambling addiction amongst those experiencing stressful circumstances or life situations. This may take many forms, ranging from financial stress to social

679

exclusion, relationship problems, work stress, mental health issues, or a host of other social stressors. However, socio-economic disadvantage appears to be a consistent predictor of high gambling accessibility and subsequent high rates of average gambling expenditure. The mechanism via which stress acts as predictor for gambling harm is likely to be associated with the positive feelings associated with release of neurochemicals, in particular dopamine. The regular references gamblers make about being ‘in the zone’ and thus being distracted from or oblivious to quotidian problems or stresses is consistent with this (Schüll 2012).

3. Can you explain how certain products are designed to exploit people’s biases in order to keep them playing? Can you explain how these design features affect addicts in particular? Do you have any concerns that these features transgress the licensing objective that gambling in the UK is ‘conducted in a fair and open way’?

Gambling types differ in their addictive potential (Livingstone et al 2019). Forms of gambling with high event frequencies (i.e., the ability to bet rapidly and repeatedly) are generally more addictive than those with lower event frequencies. For example, EGMs with an event frequency of 5 seconds or less are more likely to be addictive in nature than a weekly lottery. Note that increasing frequency of wagering events and opportunities (especially but not exclusively with online or mobile devices) is likely to significantly increase event frequency, especially with spot bets or other within game wagering opportunities. Electronic gambling forms are very easily amenable to rapid operation and thus increased event frequency (Livingstone 2017).

Further, specific characteristics of some games provide repeated reinforcement (both classical and operant) Again, this is particularly so with EGMs. For example, some EGMs incorporate deliberately engineered ‘near misses’, which appear to provide reinforcement, along with ‘losses disguised as wins’ (an event where the ‘pay-out’ is less than the amount wagered). When incorporated in EGMs, these characteristics significantly increase the reinforcement effects, and are likely to increase the addictive nature of the device (Dixon et al 2010). Further, they do so without increasing the cost to the operator. Other characteristics encourage erroneous beliefs about gambling – for example, the practice of displaying the history of results for specific games (e.g., with roulette, or in the case of lotteries the location from which a winning ticket was purchased). In a random event, the game or its inputs should have no memory, so such displays encourage the so-called ‘gamblers’ fallacy’, the belief that if a certain outcome has not been achieved for some time, it must be due soon. A lack of understanding of game rules and of probability contributes to this, but education is not particularly effective in overcoming such beliefs, especially when encouraged by game design or practices surrounding the game (Productivity Commission 2010).

680

Note also that the environments in which games are used (including online) can be (and are) constructed to encourage continued utilisation (Rintoul & Deblaquiere 2019).

4. Are some gambling products more addictive than others? If so, what are the most harmful products in the UK? We have heard evidence about betting in-play, and we are aware that it is banned in Australia, along with online casinos. What is your view about these products?

As noted above the most ‘addictive’ products are those with high event frequencies and high bet limits. For example, EGMs are generally in this category. Where casino games are automated, and particularly where they allow rapid betting (e.g., 20 seconds between game events) these also become more likely to be associated with harmful use. FOBTs fall into this category. Reducing the maximum bet will almost certainly reduce the harm experienced by users. However, substitution of FOBTs with Australian style EGM games (even with relatively low stakes) may cause higher levels of harm. Online games that permit high stakes and rapid events are likely to be associated with increased addiction and significant harm. The event frequency of wagering can be increased by in-play betting so that users can be induced to bet very rapidly during an event. This can also be increased by allowing betting on multiple events simultaneously, whether by operating an automated table game with multiple roulette wheels, or a combination of games that can be operated from one terminal or in an app or online.

It is also clear that in-play betting is associated with corruption of sport, often because corrupt events are easier to arrange (e.g., the number of no balls in a specific over). From a harm prevention perspective, gambling products with slower event frequencies are likely to be less addictive, but this cannot be separated from the structural characteristics of specific games as discussed above.

5. The Gambling Commission recommended a trial of mandatory tracked play on electronic gaming machines in 2017. They are also investigating the effectiveness of affordability checks online. What would be the most effective way to reduce and prevent gambling related harm in the UK?

The use of ‘registered’ gambling systems is likely to have a very positive influence on gambling harm. Registering an account that is used across multiple forms of gambling (as is the case in Norway) will allow users to better understand their own gambling expenditure and behaviour in total, and permits

681

the utilisation of algorithms that allow early identification of signs of emerging gambling harm. However, this is not a panacea. The accessibility of gambling, its normalisation via advertising and marketing, and its ubiquitous sponsorship activities mean that children and others are constantly being urged to take up gambling as a ‘fun’ way to participate in sport, for example. Serious consideration needs to be given to severely restricting the extent to which gambling operators can sponsor sporting and other organisations and advertise their products on mass platforms, whether ‘free to air’ or streamed via the internet or otherwise (e.g., on players’ uniforms or at sporting grounds on advertising displays). Better control of accessibility is also important, especially given the generally regressive distribution of terrestrial gambling opportunities. Local authorities and public health agencies could arguably have a much greater discretion into decisions around the licensing of gambling outlets in specific local areas based on harms and the circumstances of that local area (Rintoul & Deblaquiere 2019). Note also that contemporary research has identified multiple strategies, derived from other areas of public health expertise, that may be effective in reducing gambling harm. Current definitions of ‘evidence’ need to be amended to reflect ‘best available evidence’ derived from cognate research sources (Livingstone et al 2019).

6. The new Gambling Act set to come into force in the Netherlands next year requires online operators to exercise a duty of care to prevent underage gambling and to safeguard players against the risks posed by ‘excessive’ gambling. Should gambling operators licensed in the UK have a legal duty of care to their customers?

The advantages of a specific duty of care are that the possibility of disciplinary action or other legal redress is available where absence of this can be demonstrated. This reforms the regulatory system around gambling significantly. Gambling operators who do not exercise this duty will be open to legal and regulatory action beyond that currently available in most systems of gambling regulation globally. It is not uncommon in European jurisdictions for gamblers to be approached if they show signs of excess gambling activity (broadly defined) and asked to demonstrate an ability to pay for the losses incurred, or to ensure that they or their dependents are not experiencing gambling harm. Requiring a formal duty of care is an extension of this. Note that such preventive measures are consistent with public health approaches which seek to prevent development of harm rather than treat its consequences. The latter represents the current ‘responsible gambling’ practice, which is ameliorative, at best.

Note also that Swedish regulators require gambling operators licensed to operate in Sweden to exercise a duty of care to their patrons, and has taken action against at least one operator for failing to do so. The licence of this operator was revoked following an audit of 10 customer accounts (Rintoul 2019).

682

7. Are the aims and priorities set out in the Gambling Act still appropriate given new knowledge about addiction and the distribution of gambling harm? Is the ‘aim to permit’ clause and a risk based approach to regulation compatible with the Gambling Commission’s National Strategy to Reduce Gambling Harms?

The ‘aim to permit’ provision of the Act appears to establish a ‘right’ for gambling operators to provide gambling services, without particular regard to the well-being of the community in which the services are offered. It also fails to consider harm beyond that extending to children and other ‘vulnerable persons’. The concept of harm is not well discussed or contemplated and the purpose of preventing or minimising harm from gambling is not stated. Further, the statement of principles refers to ‘problem gambling’ rather than to gambling harm. Thus, rather than addressing issues associated with harm caused by gambling (which will certainly extend beyond those categorised as ‘problem gamblers’. It is also oriented towards a ‘risk based’ approach to regulation and the reduction of unnecessary administrative burdens.

Given what is now known about gambling harm (Browne et al 2016, 2017) these principles are inadequate to the task of preventing or reducing harm. I would suggest that the ‘aim to permit’ provision be replaced by a provision which establishes the requirement for gambling operators to demonstrate how they will meet the licensing objectives, and the licensing objectives be amended, replacing the current objective1(c), in relation to protection of children and vulnerable persons, with an objective along the following lines:

(c) ensuring that gambling harm is prevented or minimised to the greatest possible extent.

Further, ‘gambling harm’ should be defined in the Act along the following lines:

Gambling harm is any harm (including harm or damage to financial, personal, or emotional resources, or to psychological or physical health, or as a result of crime) experienced by a person as a result of the use of gambling services, or a dependent of such a person, or any person affected by the use of gambling services by another person.

The above definition appears consistent with the harms framework developed for the current National Strategy to Reduce Gambling Harms. However, it should be an explicit objective of the Act. Note that many others are affected by gambling harm, rather than simply gamblers (Goodwin et al 2017).

The ‘risk based approach’ may be a suitable regulatory apparatus for industries that do not rely on revenue derived from that significant proportion of their customers who are harmed by engaging in the services offered by that industry. It is now well established that gambling businesses rely heavily on revenue from a group of customers who experience significant harm, and a further significant proportion from those who experience harm at lesser, but still significant, levels. In such a set of circumstances, a risk based approach is unlikely to be effective. It should be replaced by a system of regular compliance checking, consistent

683

with imposition of a duty of care being required for gambling operators towards their clients.

References

American Psychiatric Association.2013. Diagnostic and Statistical Manual of Mental Disorders. 5th ed. Arlington, VA: American Psychiatric Association.

Browne M, Langham E, Rawat V, Greer N, Li E, Rose J, et al. 2016 Assessing gambling-related harm in Victoria: a public health perspective Melbourne: Victorian Responsible Gambling Foundation.

Browne, M, Greer, N, Armstrong, T, Doran, C, Kinchin, I, Langham, E & Rockloff, M 2017, The social cost of gambling to Victoria, Victorian Responsible Gambling Foundation, Melbourne

Dixon MJ1, Harrigan KA, Sandhu R, Collins K, Fugelsang JA. 2010. Losses disguised as wins in modern multi-line video slot machines Addiction. 105(10):1819-24

Goodwin BC, Browne M, Rockloff M, Rose J. 2017. A typical problem gambler affects six others.

International Gambling Studies. 17(2):276-289.

Livingstone C, Rintoul A, de Lacy-Vawdon C, Borland R, Dietze P, Jenkinson R, et al. 2019. Identifying effective policy interventions to prevent gambling-related harm. Melbourne: Victorian Responsible Gambling Foundation.

Livingstone C. 2017. How electronic gambling machines work. AGRC Discussion Paper 8. Melbourne: Australian Gambling Research Centre.

Productivity Commission Australia. 2010. Gambling. Inquiry Report, PC Canberra. https://www.pc.gov.au/inquiries/completed/gambling-2010/report

Rintoul A, Deblaquiere J. 2019. Gambling in Suburban Australia: Study report. Melbourne: Australian Gambling Research Centre

Rintoul A. 2019 Modernising harm prevention for gambling in Australia: International lessons for public health policy and improved regulation of gambling. Canberra: Winston Churchill Memorial Trust.

Schüll ND. 2012 Addiction by design: Machine gambling in Las Vegas: Princeton University Press.

World Health Organisation. 2018 ICD-11 for Mortality and Morbidity Statistics (ICD-11 MMS) 2018 version; https://icd.who.int/browse11/l-m/en

Yücel, M., Carter, A., Harrigan, K., van Holst, R.J. Livingstone, C. 2018. Hooked on gambling: a problem of human or machine design The Lancet Psychiatry 5(1), Jan: 20-21

21 February 2020

684

685

Lloyds Banking Group – Written evidence (GAM0120) About Lloyds Banking Group Lloyds Banking Group is a leading UK based financial services group providing a wide range of banking and financial services, focused on personal and commercial customers. The Group operates the UK’s largest retail bank and has the largest branch network in the UK. Group brands include Lloyds Bank, Halifax, Bank of Scotland, MBNA and Scottish Widows. Introductory remarks We welcome the Committee’s interest in this topic and are pleased to contribute to your important work. Given the very real human cost of problem gambling, we take the issue seriously and are committed to working with partners to alleviate gambling related harm for our customers. Our experience and considerable research in this area has led us to conclude that simply banning gambling via a credit card is not the silver bullet, and could prove to be counter-productive. Instead, there needs to be a more holistic response to what is a multi-faceted behavioural issue. We have put in place a range of measures and tools over the past few years designed to tackle the challenge and help protect our customers from harm, including our industry-leading card controls on gambling transactions. We recognise however that there are further steps that the industry can take. At the same time, we are mindful of our regulatory obligations and the danger of potentially being seen to police our customers’ financial activities; we see our role as helping and supporting customers by providing them with the tools to manage their money and how they spend it. We are open to cooperating with gambling operators, the Gambling Commission and other partners to tackle this issue. AREAS OF INTEREST IDENTIFIED BY THE COMMITTEE Routine analysis of customer spending on gambling We undertake two levels of analysis. First, we look at our entire customer base – around 26 million customers – to understand relevant trends and the impact that gambling activity might be having on our customers’ finances. This is all part of our efforts to understand our customers better and meet their needs. Secondly, we look at the account transactional data for individual customers as we monitor transactions for fraud and for credit risk reasons. While this does not look specifically at the risks arising from problem gambling, we do look carefully at extreme cases or where we have received feedback from customers. We are mindful, however, about being seen to make value judgements about how customers choose to spend their money. We do not see our role as, in effect, policing customers’ spending habits and behaviours. Instead, we aim to provide customers with the tools to manage and track their spending so they can make informed choices; and we encourage customers to engage with us if they need support with their finances.

686

We have done a lot of research with external research organisations, including Ipsos MORI and the universities of Warwick and Bristol, to help us shape our approach to problem gambling and ensure that we are working in the right areas. This has included focus group sessions with people impacted by gambling. Our ongoing work with Warwick University is aiming to develop analytical research based on longitudinal data – unlike other research in this area, it is based on actual transaction data for 26 million customers, and is not reliant on surveys or self-reporting. For example, last year we undertook research in order to better understand our customers’ expectations in terms of potential support from us on gambling. We received mixed views from customers in terms of monitoring – and possibly intervening – with concerns raised about privacy and causing offence by suggesting a potential problem. As a result, our focus has been to develop a range of support and tools for customers across a spectrum of potential problem gambling. It is worth bearing in mind that for people who consider they are experiencing gambling related harm, if this isn’t evidenced in their accounts – i.e. they are well managed and up to date with payments and not exceeding limits – and they do not contact their bank about it, it will be difficult for their bank to identify. Supporting our customers We have introduced a range of measures over the past few years to support our customers in relation to gambling, including those set out below. Customer support on-line: We have launched new support pages on our websites379 providing customers with information around what support we can offer and signposting customers to specialist external support. Card controls: We implemented card controls on both credit and debit cards for our customers in Q4 2019. These controls provide customers with the ability to apply a block on all identifiable gambling transactions (i.e. those with licensed operators). Critically, we apply a 48-hour ‘cooling-off’ period for removal of the spending block. This is a major differentiator compared to many of our competitors since it provides an appropriate level of friction in the unblocking process. This is in order to prevent the risk of a customer impulsively removing the block and gambling further without time to reflect on their desire to gamble. Gambling is just one of the controls we have introduced along with online transactions, in store and overseas transaction blocks. Colleague training: In association with GambleAware, we have developed enhanced colleague training to aid their understanding of issues related to problem gambling and outline methods to better identify and support customers. This includes signposting to external sources of support for those that need extra support. The training has been rolled out to 18,000 frontline colleagues across our various brands.

379 e.g. https://www.lloydsbank.com/help-guidance/customer-support/help-with-gambling.html

687

Blocking software: We are currently developing a pilot that offers customers access to Gamban software that blocks gambling sites from users’ devices. The software uses a live database of gambling sites and currently has c70,000 users across the UK. During the pilot phase, customers will be offered free access to this software for three months. Money management: We are developing tools to help customers manage their money better, but helping them to understand where their weekly or monthly spend is going – categorising the spend. As part of a holistic money management approach we envisage that gambling activity will be one such category of spend. This will likely include the use of push notifications (alerts) to help customers influence their own behaviours. Impact of the card controls So far, over 124,000 customers have activated the card controls that block gambling transactions. 5,000 (4%) of these customers have subsequently removed the gambling block from their card. Customers applying the blocks are more likely to fall into the higher annual gambling spend bands and higher frequency segments when compared to the total gambling population as a whole. Our analysis shows that customers who activate the card controls have done so from a range of different starting positions; from regular gambling through to those who have not gambled before. The cooling off period is a critical feature, adding friction and time to reflect for our customers on an impulse gambling purchase. We introduced this feature following research with Gamble Aware and a review of best practice controls implemented in other markets such as in Australasia. It is premature to draw firm conclusions about the impact of the card controls given thy have not been in operation for very long, but we intend to study the data alongside additional customer research as we evolve our approach to supporting affected customers. Affordability checks on gambling customers We are not aware of any direct contact from gambling operators in relation to undertaking affordability checks, but we are open to having such discussions. It is an area we have previously discussed with the Gambling Commission. We are aware that there is work underway to develop a ‘single customer view’ across gambling operators and leveraging the expertise of credit reference bureaux. Consistency across operators is needed so that there are agreed common standards, protocol and markers of harm shared across all operators. There will be data sharing and data protection challenges to work through as part of efforts to enable a single view of a customer can be shared across gambling operators. We would also be willing to act as brokers for wider conversations between gambling operators and the credit reference bureaux, such as Experian. The bureaux are an important part of this equation, pulling lending data from a wide source across financial services providers and enriching it with other payment trends and behaviours for individuals, giving a holistic assessment of individuals’ affordability on a monthly basis that is shared across financial services providers today.

688

Affordability assessments are integral to lending decisions We have a range of general credit and affordability checks in place when making individual lending decisions to (potential) customers, whether this is applications for credit cards, overdrafts, unsecured personal loans or secured loans (i.e. mortgages). These will consider, among other things, existing levels of debt, other borrowing and transactional behaviour together with an individual’s income. In addition, as part of a pilot in 2019 we have introduced specific checks in relation to gambling activity. These checks specifically consider the extent of gambling activity on an account by customers in relation to their income, when considering whether any new lending should be offered or extended. Having said that, it should be recognised that all these checks are at the point of application for new lending when the affordability assessment is completed. They do not happen at the point that existing lending is actually used by customers, which could be at a later point. We established an internal working party in 2019 to assess this issue, as well as to consider past cases where we have received feedback from customers, discussions with external support organisations or other relevant experience. We want to learn from these previous experiences so that we improve the support we provide our customers in the future. Gaming transactions The card controls discussed above only apply to identifiable gambling transactions, which relies on information provided via the industry payment systems and how different merchants are categorised, which in the case of gambling merchants is relatively ‘clean’ as there are a limited number of merchant codes used for licensed operators. As a result, other transaction types – including gaming – are not currently considered. It is conceptually feasible that the blocks could be extended to other activity types, including gaming. However, you do potentially run into challenges about how precisely different merchant categories are defined in the payment systems. The blocks could inadvertently catch spend on non-targeted activities. There are other controls that could be applied by customers – including blocking all remote transactions where the card is not present, which would have the same effect, albeit there is no 48 hour cooling off period. The problem is that this would also block many other transactions that the customer may wish to continue. As part of our ongoing work in this area, we are developing analysis that considers the potential connection between these sort of gaming transactions and how that might develop over time into gambling transactions – especially in young people. Unlicensed gambling operators

689

We are not aware of any requests, from the Gambling Commission or other relevant authorities, to us in our role as issuers of cards to block unlicensed gambling operators. We would consider such a request from the authorities, albeit we would need to satisfy ourselves that in preventing such a payment requested by a customer, that we would not be in breach of our regulatory obligations to customers under relevant rules from the Financial Conduct Authority and Payment Systems Regulator, among others. It is standard practice when deciding whether to accept a payment request from a customer that we check whether it is within the customer’s facilities – their credit limit – and that there are no fraud flags triggered. The Gambling Commission could in the first instance work with the unlicensed operator’s merchant bank, who are requesting the payment, or the payment platform the merchant is using to process payments. In addition, the Gambling Commission could also work with MasterCard and Visa as payment network providers. Daily spending limit on gambling transactions We believe that the card controls we have introduced, with a 48 hour cooling off period, provide the appropriate level of friction in the customer journey to ensure there is time to reflect on impulse purchases. This was the approach taken in the Australasian market, informed by substantial customer research, and was defined as industry-leading. There is a strong argument that such cooling off period should be adopted across the banking industry and given time to take effect, along with other measures to address problem gambling. In terms of proposed limits on gambling transactions, our initial assessment is that while they are conceptually feasible, the facility does not currently exist. It would require considerable efforts across the banking and payments system given the many different players involved. This leads to another – arguably faster and better – approach which would be for the gambling operators to make this type of functionality available to their customers, if they haven’t already done so. This would, in effect, tackle the problem at source. It would likely require data to be shared across operators, and there is an existing initiative looking at this as discussed above. It would in all likelihood prove to be a more effective solution than a banking-led approach. Issues arising from credit card ban on gambling transactions In our response to the Gambling Commission’s consultation in 2019, we highlighted the risk of gamblers turning to other forms of borrowing, such as overdrafts and payday loans and emphasised the need for a more holistic solution to provide different levels of support for this behavioural issue. Having said that, we understand the Gambling Commission’s reasoning behind their decision to take action on the use of credit cards by either banning or restricting their use for online gambling. We support a restriction rather than a ban as we believe that credit cards represent only a small proportion of the sources of gambling-related harm and an outright ban could lead to a number of potential unintended consequences:

690

• A ban would limit the ability for providers to track usage, identify issues and provide support to customers.

• There are complexities that need to be considered that would impact the effectiveness of a ban – e.g. cash can be withdrawn from a credit card and paid into a current account, losing the ability to recognise that a credit card is being used for gambling. It would also not restrict the ability for customers to gamble online with their credit card via an e-wallet which continue to be a more popular way to pay.

• For the small proportion of customers at risk of problem gambling from credit cards, a ban is unlikely to reduce the demand for gambling as their behaviour can lead to addiction. A ban could drive customers towards other high cost credit methods, such as payday loans and the issue could remain hidden with a lack of visibility and direct linking to a gambling transaction.

• The Gambling Commission believes 0.7% of gamblers in the UK are considered to be problem gamblers and this suggests that a ban is likely to impact the majority of non-problem gamblers by reducing the range of payment methods available to them.

It is also our view that research undertaken by the Gambling Commission that presents credit cards as the largest source of borrowing associated with gambling, does not accurately reflect the level of gambling present with other financial products given that these are inherently harder to trace. With this in mind, we will ensure careful monitoring and tracking is in place to understand changes in behaviour as the ban is implemented in April 2020 and we will work with the Gambling Commission to understand any risks as they arise. 19 March 2020

691

Local Government Association – Written evidence (GAM0057) 1. About the Local Government Association

1.1. The Local Government Association (LGA) is the national voice of local government. We are a politically-led, cross-party membership organisation, representing councils from England and Wales.

1.2. Our role is to support, promote and improve local government, and raise national awareness of the work of councils. Our ultimate ambition is to support councils to deliver local solutions to national problems.

2. Summary

1.3. Since the introduction of the Gambling Act (2005), gambling habits

have changed significantly. While the primary aims of the Act are broadly being upheld, there is scope to review and strengthen the Act to allow it to better respond to changing technology and gambling patterns.

1.4. The national response to reduce the £100 million maximum B2 machine stake exemplifies the LGA’s concerns. Reform was not implemented promptly enough, increasing the scope for harm caused by high stakes machines.

1.5. Effective oversight requires regulatory frameworks that are flexible and responsive to local need. The Act should allow for councils to make decisions in the interests of their economy and community. This should be underpinned by a statutory mechanism for review and a default precautionary approach for licensing authorities and national regulators. This would allow regulators to act quickly to respond to concerns and ensure people are protected from harm as soon as possible, rather than having to wait for concerns to be addressed as happened with B2 stakes.

1.6. Councils already play a variety of roles in relation to gambling:

• As licensing authorities (district and unitary councils), they are directly responsible for licensing and regulating local gambling premises.

• As planning authorities, councils have a role in overseeing the planning framework as it effects gambling premises.

1.7. Licensing authorities currently have a contradictory mix of powers under the Act, being able to block the opening of some premises (for example casinos) but with very limited powers to refuse others (for example high street betting shops). This is due to the statutory ‘aim to permit’ which means councils must grant licences when prescribed requirements are met.

2.1. Although councils are not responsible for providing treatment for problem

gamblers, there is increasing recognition of the role that councils can

692

play in helping identify those experiencing harm from gambling, and in signposting them to support. In 2018, the LGA working with Public Health England, produced guidance for councils on ‘Tackling gambling related harm’.380

2.2. The LGA supports the introduction of a mandatory levy on gambling

firms, to help fund a significant expansion of treatment and support for those experiencing gambling related harm throughout the country.

2.3. Council’s regulatory role relates to non-remote gambling in local

premises but councils are increasingly concerned about the blanket availability of remote gambling and online advertising. Preventing under-age gambling and ensuring self-exclusion processes are effective across all forms of gambling is vital to ensuring gambling is effectively regulated.

2.4. Regulatory services are under increasing pressure as a result of cuts to

local government funding. Licensing fee income makes an important contribution but teams which have wide ranging duties beyond just gambling are over-extended and inevitably are required to prioritise.

2.5. Government must ensure councils are properly and sustainably funded to

enable regulatory services to deliver on their legal duties.

2.6. The LGA has previously raised concerns about the volume of gambling advertising, particularly linked to football and televised sport, where advertising is routinely seen by children. We welcome the Safer Gambling Campaign however there is still a need to reduce the volume of gambling advertising and sponsorship.

The Gambling Act 2005 3. Are the three primary aims of the Gambling Act 2005 (to prevent

gambling from being a source of crime or disorder, to ensure that gambling is conducted in a fair and open way, and to protect children and other vulnerable persons from being harmed or exploited by gambling) being upheld?

4. What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed? 4.1. While the primary aims of the Gambling Act are broadly being

upheld, there is scope to strengthen the Act to allow it to respond to changing technology and gambling patterns. Effective oversight of new forms of gambling requires regulatory frameworks that are flexible, responsive and localised.

380 Local Government Association (2018) Tackling Gambling Related Harm: A whole council

approach

https://www.local.gov.uk/sites/default/files/documents/10.28%20GUIDANCE%20ON%20PROBLEM%20GAMBLING_07.pdf

693

4.2. Since the Act was introduced, the gambling landscape has changed significantly. While concerns about the Act originally focused on casinos, in practice it has been betting shop clustering and B2 gaming machines (FOBTs) which have generated the most public concern, with research showing that rates of problem gambling are higher in areas with clusters of betting shops381. Additionally, technological developments mean that significant numbers of people gamble online without entering a gambling premises.

4.3. Over the last decade, local government has frequently raised these concerns and the LGA and the London Borough of Newham council played leading roles in the campaign to reduce B2 machine stakes.

4.4. Although B2 stakes have now been reduced, the issues of clustering

and B2 stakes highlighted the limitations of the gambling licensing framework. Due to the statutory ‘aim to permit’, licensing authorities are unable to prevent the opening of certain gambling premises in their areas even if they feel that they are already saturated with them.

4.5. There should be more local flexibility within the Act for democratically elected councillors to make such decisions if they can be shown to be in the interests of the local economy and community. As it stands, licensing authorities have a contradictory mix of powers under the Gambling Act; with the ability to bar the opening of local casinos, but no real power to prevent the opening of other premises.

4.6. As the betting shop sector responds to the reduction in maximum

B2 machine stakes, and the wider industry continues to evolve, particularly in the online space, regulation will need to adapt with it. We are concerned that it took too long to respond to concerns about B2 machine stakes. Future concerns should be addressed more quickly, with a precautionary policy making approach taken as a default, and there should be a mechanism for regular reviews and updates of the regulatory approach.

4.7. The licensing objectives are a relatively narrow set of considerations

and do not reflect many of the concerns associated with modern gambling, such as the lower-level nuisance or disorder that may be associated with premises in some areas. There is a strong case for consistency of core objectives across different licensing regimes, and the LGA has called for the addition of new Gambling Act objectives relating to the prevention of public nuisance (equivalent to the Licensing Act 2003), and for a health objective in both the Licensing Act and Gambling Act.

5. Is gambling well regulated, including the licensing regime for both

on- and off-shore operations? How successfully do the Gambling Commission, local authorities and others enforce licensing conditions

381 The Responsible Gambling Trust (2016)

http://about.gambleaware.org/media/1260/geofutures-secondary-analysis-of-machines-data-final.pdf

694

including age verification? What might be learned from comparisons with other regulators and jurisdictions?

5.1. The regime is working well despite regulatory services as a whole

being under increasing pressure following reductions to local government funding which has impacted on councils capacity to undertake proactive work.

5.2. Licensing fees make an important contribution to supporting this work but teams with wide ranging licensing and enforcement duties beyond just gambling are extremely over-extended and are inevitably required to prioritise their efforts.

5.3. Government must ensure councils are properly and sustainably funded to

enable regulatory services to deliver on their legal duties. 6. Should gambling operators have a legal duty of care to their

customers? 6.1. Protecting children and vulnerable people from being harmed or

exploited by gambling is already one of the three licensing objectives. Introducing a legal duty of care for operators could be a way to ensure operators do everything they can to prevent gambling harm. There are examples of some operators being fined for not protecting their customers against harm.382

Social and economic impact 7. What are the social and economic costs of gambling? These might

include costs associated with poor health and hospital inpatient services; welfare and employment costs; the cost of benefit claims; lost tax receipts; housing costs through statutory homelessness applications; and criminal justice costs. 7.1. There is a continued need to fill gaps in the available evidence base

on the impact of problem gambling. Many of the costs may go unrecognised since problem gamblers often present with other issues rather than a gambling addiction.

7.2. At the council level, work is being undertaken to better understand the scale and nature of gambling, and the harms and costs, that are directly associated with this. Leeds City Council for example commissioned research into problem gambling in the city which showed it to be roughly twice the national average 383. In response to this research the council has worked hard to raise awareness around problem gambling through a publicity campaign and training for frontline staff to help them

382 http://www.gamblingcommission.gov.uk/news-action-and-statistics/News/gamesys-to-pay-

12m-for-social-responsibility-and-money-laundering-failures

383 Leeds Beckett University (2016) http://eprints.leedsbeckett.ac.uk/3945/1/Problem%20Gambling%20Report.pdf

695

identify people who have potential problem gambling issues, and where to signpost them for support.

7.3. Research commissioned from the Institute for Public Policy Research

in 2016 estimated that the cost to government associated with people who are problem gamblers in Britain was between £260 million – £1.16 billion (based on problem gambling rates ranging from 0.4 to 1.1 per cent of the adult population).384 This was based on six identified specific costs covering primary and secondary health costs, hospital inpatient services, welfare and employment costs, housing costs and criminal justice costs.

7.4. The Centre for Economic and Business Research385 estimated that the welfare cost to problem gamblers and people linked to them are more than one billion pounds, in terms of the disruption to health, employment, financial stability and family relationships.

Levy 8. Is the money raised by the levy adequate to meet the current needs

for research, education and treatment? How effective is the voluntary levy? Would a mandatory levy or other alternative arrangement be more productive and effective? How should income raised by a levy be spent, and how should the outcome be monitored? What might be learned from international comparisons? 8.1. Government should introduce a mandatory levy on the gambling

industry to fund research, education and treatment, with the aim of extending the support available to those experiencing harm from gambling. This view is supported by other organisations, including GambleAware. Levy contributions should continue to be used to fund prevention, treatment and research and there should be a transparent structure for the distribution of funds raised.

Research 9. How might we improve the quality and timeliness of research in the

UK? What changes, if any, should be made to the current arrangements for funding, commissioning and evaluating research in the UK? What might be learned from international comparisons?

10. If, as the Responsible Gambling Strategy Board (RGSB) has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation?

10.1. There is a need to increase the evidence base about the impact of gambling, and related trends such as gaming, on children and young people. Organisations involved in supporting people with gambling

384 Institute for Public Policy Research (2016) https://www.ippr.org/publications/cards-on-the-table 385 https://bacta.org.uk/2018/02/01/cebr-report-assessing-potential-impacts-max-stake-b2/