Lords speech on FOBTs Friday 25th March 2016

Gambling (Categorisation and use of B2 Gaming Machines) Bill (HL) on 11 March 2016

Lord Lipsey (Lab): My Lords, for safety’s sake, I declare a rather remote interest as a member of the Starting Price Regulatory Commission.

For most of my life, I have been the customer whom most bookmakers most want to see walk through their door. And if the House will forgive me, I will do a bit of bragging about the annus mirabilis that has just gone by. First, there was Many Clouds in the Grand National at 33:1. Secondly, there was the Lib Dems to get fewer than 10 seats at the general election—combining business with pleasure there, I landed the bet at 16:1. Thirdly, there was Jeremy Corbyn for Labour leader—I have to say that that was combining displeasure with businesses, and, again, was a 16:1 shot. Finally, there was the spectacular victory of Fearless Fantasy, owned by Mr Matt Engel and me, in the maiden at Didmarton last Saturday at a very tasty 9:1. The House will understand that I am not anti-gambling.

I worry about some of the people who support this Bill today. We all know and love the noble Lord, Lord Clement-Jones, but he is a Lib Dem and the Lib Dems have been going on about gambling since the 19th century, so it is nothing new for them—good on them for keeping going. However, the puritan spirt that encapsulates it may be part of the reason why I won my bet on them doing badly at the general election. Anyway, next week, the noble Lord, Lord Clement-Jones, will doubtless be introducing a Bill to reduce the strength of beer to below 3%, and I wish him good luck in pursuing Lib Dem causes.

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On a slightly more serious note, some of the lobbying that we have had does deserve a closer look. Take, for example, CARE. If the name Christian Action Research and Education rings a bell in this House, it may be because in the debate last year on mitochondrial transfer it produced the most disgraceful polling, conducted by the firm ComRes, which the Minister the noble Earl, Lord Howe, rightly demolished at the Dispatch Box. I have made an official complaint to the Market Research Society about that polling and that is still being debated. I am very glad that CARE has, this time, used the reputable pollsters YouGov to conduct its research. However, you have to worry about these ideologically committed groups.

Even worse, I am afraid, is the Campaign for Fairer Gambling. Much of its work is very good, well researched and has contributed to debate, but the House needs to know that it is largely funded by a man called Derek Webb, a former casino games inventor who lives, I think, in Las Vegas, and who has been involved in a commercial dispute with the British betting industry over the machines that he invented. When you have that kind of background, you have to watch it a bit before you take the moral high ground in debates of this kind.

I have also noticed the swelling press opinion. I take my hat off to whoever invented the phrase “the crack cocaine of gambling”, because not an editor in the country can resist it, but we get some very strange stories. The Guardian this week claimed that bookmakers are targeting ethnic minorities with these machines. But the facts are these: of course bookmakers set up betting shops in areas that are less prosperous—I wonder whether anyone in this House has played an FOBT; Members of this House do not go into betting shops but bet on the phone or online—because betting shops are a pastime that is most common in deprived areas. There are more ethnic-minority people in deprived areas. If bookmakers open more betting shops in deprived areas, that is a perfectly sensible commercial decision. It is nothing to do with targeting people from ethnic minorities, and it is a grotesque distortion of the facts to complain otherwise.

Noble Lords can therefore see that my disposition is to reject this Bill and the thinking behind it and to claim that all is well—but I cannot. Most reluctantly, I cannot. I am persuaded that the regime for FOBTs is too liberal, that the £100 stake limit—£50 without human interaction—is too high, that the bookmaking industry has been defending the indefensible and that the Government have acted with the energy of a hibernating sloth. The bookmakers should have seen this coming and done something off their own bat, but greed stopped them doing it. I am wearied, too, by this constant repetition in their propaganda that they are waiting for the evidence.

I perhaps do know a bit about evidence in this field because I have been a visiting professor in quantitative gambling at a reputable British university and read more of this research than many of your Lordships have had hot dinners, though much of it is a great deal less digestible than the hot dinners that you will have eaten. I have to say that this is a very hard field to research. We can all find out what the number of

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betting shops is—whether it is going up, going down or whatever—but this is about human behaviour and human motivation in an area where people have all sorts of motivations to keep things secret and where, to be truthful, the bookmakers have been very reluctant to make available the commercial evidence that they have at their disposal. It is very hard to come to firm conclusions, and you can find an evidence-based way of backing any case that you cared to argue, which is why they keep coming back to it. There will never be enough evidence. The only thing I would say is that, if anyone is in any doubt, they should go into a betting shop—something I do on occasion—watch the people putting the money into the FOBTs and see whether this is an activity that they feel wholly comfortable with on the scale with which it is conducted. It really is not very pretty.

I would not stop people—I am against stopping people wherever possible—but I think that a degree of restraint is justified. If anyone had any doubt, they should study the case that was in the newspapers this week of the Paddy Power customer who the staff warned had a real gambling problem and higher management forced them to try to make him continue to bet. It has paid £280,000 in a fine for that. That was two years ago and I am prepared to believe that Paddy Power, which is my bookmaker, has tightened up since, but that shows a depth of cynicism and a willingness to wreck human lives that devalues the whole case that the bookmakers are making. I do not know if £2 is the right limit; I should be inclined to settle for something higher, particularly if it could be done by consensus rather than as a result of disputes between the extremists on either side.

I have two quick points to conclude. Lower limits will hit bookmakers’ profits, and they have been hit already by the increase in gaming machine tax. Coral’s recent results show an extra £50 million a year in tax; for Hill it was £87 million. Now we understand that the Government are going to levy a sort of tax on bookmakers—or, rather, on poor punters—to subsidise horseracing and rich owners like myself. George Osborne has been egged on in this by Matt Hancock, who is not only a former BIS Minister but the Member for Newmarket. I think we are going to hear something in the Budget speech this year, as we did last year, though the racing right canvassed there went away. Well, I call this “Hancock’s Half-minute” and I hope it will go very quickly, because if the bookmakers put in more and more money to subsidise me, they will not have the spare resources to cut down on the use of FOBTs by sensible restraint. I am not sure whether this stuff will survive European scrutiny under state aid, but I think it has to be taken account of and taken into proportion.

This is not, and should not be, a puritan campaign. Many of us in this House, I am sure, have pictures of betting shops—I go in, as I say, probably more than most of those present—as sordid places of iniquity. There is an element of that, but there is much more an element of them as places of cheap entertainment. Actual socialising takes place in betting shops, of which we have far too little in our community. I fear that if the proposals of the noble Lord, Lord Clement-Jones, were adopted, there would be many more people

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doing this online, in the privacy of their own homes, with no social interaction and not having the pleasures that go with it. Betting shops also create—it is not a negligible point—thousands and thousands of jobs in areas where jobs are very scarce on the ground. They are not just jobs; they are jobs where people can learn skills and grow. To be a betting shop manager is to be a wonderful retail manager and these are great opportunities. We do not want to kill the bookmaking industry. We want to cut off the worst aspects of it while preserving those aspects of it that we should either tolerate or welcome. More restraint of FOBTs, yes; destroy the bookmaking industry, no.

10.36 am


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