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Statutory Gambling Levy
07 June 2022
Lead MP
Carolyn Harris
Neath and Swansea East
Lab
Responding Minister
Nigel Huddleston
Tags
Justice & CourtsNHSEducationNorthern IrelandForeign AffairsCulture, Media & SportParliamentary ProcedureStandards & Ethics
Word Count: 12353
Other Contributors: 10
At a Glance
Carolyn Harris raised concerns about statutory gambling levy in Westminster Hall. A government minister responded.
Key Requests to Government:
The Government should use existing powers to require gambling operators to pay an annual statutory levy of 1% on industry revenue, providing £130 million annually. This would improve research, education, and treatment for gambling-related harm. Mr Cowan asks the Minister to publish the gambling review White Paper immediately so it can be scrutinised before the summer recess. He also questions why section 123 of the Gambling Act has never been implemented and calls for a statutory levy now, arguing that it would address transparency, independence, equity, sustainability, and public confidence.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
The current voluntary system is inadequate, lacking consistency, transparency, and accountability. More than 55,000 children aged between 11 and 16 are gambling addicts, and the gambling industry spends over £1.5 billion annually on advertising. Only 0.1% of GGY goes to GambleAware, totaling around £10 million per year, which is insufficient compared to other nations' spending levels (Australia: £368 per gambler, Canada: £329, New Zealand: £413). The voluntary levy does not provide long-term certainty for funding and allows operators too much control over the availability and destination of funds. Mr Cowan is concerned about the lack of progress on implementing a statutory levy for gambling. He mentions that the Gambling Act 2005 allows for such a levy under section 123 but it has never been commenced by the Government. Mr Cowan cites a September 2020 paper from the Advisory Board for Safer Gambling which stated that the current voluntary funding system is no longer fit for purpose, and notes that GambleAware calls for a mandatory levy of 1% of gross gambling yield to raise £140 million annually.
Craig Whittaker
Con
Halifax
Expressed concern about the growth of black market gambling, particularly over WhatsApp, and asked how a statutory levy could be enforced against illegal betting. Cited evidence from the Asian Racing Federation report that 61% of online gambling is unregulated. My hon. Friend inquired about the impact an additional levy on the horse-racing sector might have on jobs and the industry itself.
Gerald Jones
Lab
Merthyr Tydfil and Aberdare
Mr Jones highlighted the detrimental impact of gambling-related harm on society, particularly in his constituency. He criticised the voluntary system for its lack of integration with NHS services, inconsistent funding decisions, and insufficient oversight of research into harms. Mr Jones emphasised that a mandatory levy is necessary to generate funds for prevention and treatment services, free from industry influence.
Chingford and Woodford Green
Mr Iain Duncan Smith emphasised the importance of addressing gambling harms without opposing legal activities. He criticised colleagues for repeating arguments that a statutory levy would drive people into illegal markets, arguing such extreme views weaken their case. He supported his colleague's stance on the levy and highlighted the need to ring-fence funds for tackling issues related to gambling addiction. Duncan Smith advocated for common sense in debates and urged the industry to face its problems rather than run away from them. Asked Jeff Smith to clarify what he means by 'coming weeks' regarding the publication of the White Paper, questioning when a coming week would no longer be considered as such.
Jeff Smith
Lab
Manchester Withington
Reforming gambling regulations is long overdue, as the current system is not fit for the digital age. The annual economic burden of harmful gambling is £1.27 billion, with significant direct and societal costs. The delay in addressing this issue is costing money and lives. A statutory levy on the gambling industry to fund research, protection, treatment, and education could raise approximately £140 million annually. The Government must take this proposal seriously and outline its consideration of such a levy in the upcoming White Paper.
Jim Shannon
DUP
Strangford
Mr Shannon highlighted the significant public health issue of gambling addiction in Northern Ireland, citing local and national examples. He emphasized the need for a statutory levy to address the problem and support treatment systems. With only 2% to 3% of those with gambling problems entering treatment, Mr Shannon argued that this is insufficient and must be improved. He proposed a 1% smart levy on industry revenues could provide £130 million annually, significantly more than current funding levels. Additionally, he raised the issue of higher participation rates in Northern Ireland compared to other UK regions and questioned what discussions had taken place with counterparts in Northern Ireland regarding gambling addiction.
John Spellar
Lab
Warley
Asked the hon. Member what should be done with billions of pounds put into the Treasury through taxation by the gambling industry, and questioned whether she wanted to close down gambling or acknowledge its enjoyment by millions. He intervened to caution against underestimating illegal activities within the sub-economy, suggesting this could be a risk with over-regulation of gambling.
Paul Blomfield
Lab
Sheffield Central
Recalled his involvement in regulating payday lending and suggested that similar arguments about black market threats could be used by the gambling industry to avoid regulation. The hon. Gentleman questioned the progress of the current system, pointing out that National Gambling Treatment Service statistics from GambleAware show 49% of users remain at risk after treatment. Paul Blomfield highlighted the case of Jack Ritchie, who took his life due to gambling addiction without being diagnosed. He emphasised that treatment for gambling addiction is insufficient and ineffective, with 49% of users still at risk after completing their treatment. Blomfield cited research showing 0.5% of adults are likely to have a gambling addiction, and an estimated 55,000 children under 15 suffer from gambling addiction. He called for a statutory levy to fund necessary NHS services and prevent harm.
Philip Davies
Constitutional Conservative
Shipley
Agreed with the principle of a statutory levy but expressed concern about potential endless increase in rates, asking for a fixed figure to prevent this arms race.
Ronnie Cowan
SNP
East Renfrewshire
The hon. Member suggested that the difficulty for the NHS in implementing its plan for 15 clinics is due to a lack of guaranteed funding, which a statutory levy could address. Inquired about section 123 of the Gambling Act, expressing confusion over why it has not been enacted.
Scott Benton
Con
High Peak
Warned that a statutory levy could harm land-based gambling companies, potentially leading to loss of taxation revenue and jobs in communities. Proposed an alternative levy rate for such businesses. He stated that the current voluntary levy system for funding RET is effective and argued against a statutory levy, suggesting it would disproportionately affect land-based gambling businesses. He mentioned that the rates of problem gambling in the UK are lower compared to other European countries and cited figures from GambleAware.
Government Response
Nigel Huddleston
Government Response
Thank you, Mr Betts. It is a pleasure, as always, to serve under your chairmanship and I will ensure that there is time at the end for the hon. Member for Swansea East (Carolyn Harris) to reply. I thank her for securing the debate and thank all those who have contributed today, articulating a variety of views in a genuinely constructive manner. She has been a staunch campaigner for gambling reform for a very long time and I thank her and other parliamentarians for the many meetings that they have had with DCMS Ministers over recent months and years. As has been mentioned, I am not the responsible Minister for gambling: the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Croydon South (Chris Philp), is unavoidably detained in a Bill Committee but I will ensure that he gets a full read-out of today's debate.
It has been 17 years since the Gambling Act 2005 was passed and it is clear that the risks around harm and the opportunities to prevent it are different now from when that legislation was introduced. We must act to recognise that our regulatory framework needs to change. In recent years, the Government and the Gambling Commission have introduced a wide range of reforms to help protect, support and treat people who are experiencing gambling harms. The protections include the ban on credit card gambling, the fixed odds betting terminal stake reduction and reform to VIP schemes, as well as ongoing work to improve and expand treatment provision through the NHS and third sector.
The review is an opportunity to build on those changes and ensure that we have the right protections in place to prevent harm. As the hon. Member for Swansea East will appreciate, I cannot pre-announce what will be published in the White Paper, which we are finalising, nor can I comment on speculation in the media and elsewhere about its contents. However, I can say that I absolutely recognise the importance of sufficient and transparent funding for research to strengthen our evidence base, as well as for treatment to help those who need support.
As part of the wide-ranging scope of the review––it is widely recognised as being wide-ranging––we called for evidence on the best way to recoup the regulatory and societal costs of gambling. We have been clear for several years that, should the existing system of taxation and voluntary contributions fail to deliver what is needed, we would look at a number of options for reform including, but not limited to, a statutory levy.
As hon. Members know, when the Gambling Act was introduced, the gambling industry agreed to provide financial support for tackling problem gambling, and the Gambling Commission requires operators to make an annual contribution to approved organisations, which deliver or support research on the prevention and treatment of gambling-related harms, as a licence condition. We considered that issue closely in 2018 as part of the previous gambling review, when much of the debate centred on the quantity of funding provided by the industry. Since then, there have been a number of changes to how much is given and how it is managed.
Since 2018 the Gambling Commission has improved transparency around the amount given by the industry to research, education and treatment, and which bodies it is paid to, and required operators to donate to organisations approved by the commission. Most donate to GambleAware, an independent charity with no industry involvement in commissioning decisions, and the funding in the system has also increased substantially. In 2019, the four largest operators committed themselves to increasing their contributions tenfold, including £100 million for treatment over the following four years. I think the hon. Member for Manchester, Withington (Jeff Smith) mentioned that contributions under the voluntary system were indeed £34 million last year, and they are due to reach £70 million by 2024. By way of context, £34 million is about 0.3% of GGY, which is about £10.2 billion.
Alongside that, the Department of Health and Social Care and the NHS are taking forward work to improve and expand treatment provision. The 2019 NHS long-term plan gave a commitment to expand the coverage of NHS services for people with serious gambling problems and announced the creation of 15 specialist gambling clinics by 2023-24, with £15 million of funding over the same period.
The hon. Member for Sheffield Central (Paul Blomfield) again raised the tragic case of Jack Ritchie. In March, the hon. Gentleman secured an Adjournment debate on the coroner's finding that gambling contributed to Jack's tragic death. As the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Croydon South, said then, the findings are an important call to action for our Department, the Department of Health and Social Care and the Department for Education.
As we said in our response to the coroner, the Government are committed to building on the reforms made since 2017 and addressing the concerns identified in the prevention of future deaths report. The coroner's report and lessons arising from Jack's tragic death are important inputs to our considerations and the review of the Gambling Act. I can assure hon. Members that, overall, the voice of people with personal or lived experience of harm was thoroughly represented among the submissions to our call for evidence, and I and my successors leading the review have met a number of people who have suffered because of their addictions or those of the people they love. I thank them for their contribution to the debate and the evidence gathering.
As part of the review, we are looking closely at the barriers to high-quality research, which were mentioned by many hon. Members, and how we can overcome those barriers. Building the evidence base to deepen our understanding of gambling can involve the input of a range of groups, including the Gambling Commission, researchers and the third sector. A good example is the research commissioned by GambleAware on the impacts of marketing and advertising on children and young people.
The research showed the impact that certain aspects of gambling advertising can have on young people, including depictions of the association between football and gambling, which I know is a hot topic. That pointed to the need for change to ensure that the UK advertising codes continue to provide effective protection from gambling advertising-related harms. The research has led to the Committee of Advertising Practice announcing stronger protections, which will be backed by the enforcement powers of the Gambling Commission. Those include banning content with strong appeal to children from gambling advertisements, as well as further changes to protect vulnerable people.
Research on gambling, like any other subject, is funded by the research councils, and we want to encourage more researchers from a wide variety of disciplines to work in this area. We will say more about that in the White Paper.
I will briefly mention a few other points raised by hon. Members during the debate. The Gambling Commission has piloted a new methodology to measure problem gambling, and that is being worked on. The hon. Member for Strangford (Jim Shannon) mentioned gambling in Northern Ireland. Gambling is a devolved matter in Northern Ireland, but I believe new legislation is being brought forward there. I can confirm that officials have met to share experiences regarding the Great British legislation and regulations, so the conversations are ongoing.
On the effectiveness of GambleAware services, 70% of people who started treatment as problem gamblers were no longer defined as such on the problem gambling severity index at the end of treatment, and 92% saw their score reduced, so there is evidence of some impact.
Several Members raised the important role of the gambling sector's tax contribution to the economy and the fact that those tax revenues are then used to fund our public services, including the NHS. Everybody has recognised, today or previously, that gambling can be performed safely by millions of people every year. Again, a very clear message from Members today is that nobody is advocating a complete ban on gambling. Of course, any changes must be proportionate and evidence-based, and where possible they must avoid unintended consequences.
The Government have an important responsibility to get reform right. We will build on the many strong aspects of our existing gambling regulatory system to make sure it is right for the digital age and the future. The White Paper is a priority for the Department and we will publish it in the coming weeks, which is precisely the wording that the hon. Member for Manchester, Withington asked for.
I thank all hon. Members for their contributions to today's debate.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.