Gaming Machine (Miscellaneous Amendments and Revocation) Regulations 2018 — House of Lords, 2018-12-18
Topic: Domestic Commerce
James Younger (Conservative, Centre-right): My Lords, the Government’s response to their wide-ranging consultation on proposals for changes to gaming machines and social responsibility measures, published in May this year, set out a comprehensive package of measures that will strengthen protections around gaming machines, online gambling, gambling advertising and treatment for problem gamblers. The Government made it clear that their intention in the review was to strike a balance between socially responsible growth and the vital endeavour of ensuring that the most vulnerable, including children, remain protected from gambling-related harm As noble Lords will know, the headline measure in May was the Government’s decision, following consideration of all relevant evidence, to reduce the maximum stake on sub-category B2 gaming machines from £100 to £2. The decision was met with enthusiasm in many quarters. Local authorities, charities, faith groups, interest groups and academics all submitted opinions in favour of a £2 limit. This House was no exception in expressing its emphatic support for the Government’s intentions. We are here today to discuss and debate the regulations that will give effect to that decision Let me turn first to the evidence which led the Government to their conclusions on B2 stakes. Under the Gambling Act 2005, B2 gaming machines have a maximum stake of £100—by far the highest for any gaming machine in Great Britain—and the maximum prize that can be won as a result of a single use is £500. The next-highest limits on the high street are B3 machines, with a maximum stake of £2 and a maximum prize of £500 Almost 14% of players of B2 machines are problem gamblers, currently the highest rate by gambling activity in England. In addition, the highest proportion of those who contact GamCare, the main treatment provider, identify these machines in betting shops as their main form of gambling. Gaming machines in betting shops also account for one of the highest proportions of all those in treatment for gambling addiction In October 2017, the Government published the consultation on proposals for changes to gaming machines and social responsibility measures, which invited views on proposals to reduce the maximum stake for B2 machines. The consultation received more than 7,000 responses and closed in January 2018. The Government published their response on 17 May 2018 and, after giving due consideration to all information and evidence received, they decided that it would be appropriate to reduce the maximum stake for sub-category B2 gaming machines to £2 In comparison to other gaming machines on the high street, B2 machines are an outlier because of the speed at which it is possible to lose large amounts of money. These machines generate a greater proportion and volume of large-scale losses—for example, more than £500 in a session—and the losses are larger and sessions longer for those who bet at the maximum stake of £100 than for those who play at a lower level Even cutting to £10 would have left problem gamblers and those most vulnerable exposed to losses that would cause them and their families significant harm. In particular, the Government noted that more than 170,000 sessions on B2 roulette ended with losses of between £1,000 and £5,000. These sessions persist at average stakes of £5 and £10, but by contrast, none involved average stakes of £2 or below. In addition, the Government considered that the reduction to £2 was more likely to target the greatest proportion of problem gamblers and protect the most vulnerable players, including those in areas of high deprivation Having considered these and other factors, the Government concluded that it would reduce the maximum B2 stake to £2. This was supported by the Gambling Commission’s advice that action on B2s should involve a stake limit of between £2 and £30 if it was to have a significant effect on the potential for players to lose large amounts of money in a short time, with any further decrease a matter of judgment for government. It is fair to say that the date on which these regulations would come into force generated not a little opinion and debate. It was right that those who had strong views and evidence on the issue, including many noble Lords, should have the opportunity to share them. We have said all along that protecting vulnerable consumers is our prime concern, although it has been necessary to take account of the effect that the reduction will have on the gambling industry and those employed by it Having conducted the process of engagement with the industry, the Government announced in November that they would implement the stake reduction on 1 April 2019, a date specified in these regulations and which they consider provides sufficient time to allow for relevant changes to be made by industry. Industry has now known about the Government’s intention to reduce stakes to £2 since May this year, and the date announced last month provides further clarity to allow it to continue its preparations Noble Lords will also know that the draft Finance Bill was amended so that the increase in remote gaming duty, paid for by online operators, comes into effect in April 2019 alongside the reduction in the stake to cover the negative impact on the public finances and protect vital public services I will explain the effect of the draft regulations and the legislative context in which they operate. The Gambling Act 2005 established a new system for the regulation of gambling in Great Britain, with the exception of the National Lottery and spread betting. Section 235(1) of the 2005 Act defines a gaming machine as a, "machine which is designed or adapted for use by individuals to gamble (whether or not it can also be used for other purposes)" The Categories of Gaming Machine Regulations 2007 define four categories of gaming machines, known as categories A, B, C, and D. For the purposes of the 2005 Act, category B machines are divided into sub-categories. These regulations amend the Categories of Gaming Machine Regulations 2007 to reduce the maximum stake permitted for B2 gaming machines from £100 to £2 from, as I said earlier, 1 April 2019. In consequence of this amendment, these regulations also amend the definition of a sub-category B3 gaming machine so that B2 and B3 gaming machines can continue to be distinguished from one another by reference to the different places in which B2 and B3 machines are allowed to be made available The regulations also make consequential changes to other secondary legislation, amending the Gaming Machine (Circumstances of Use) Regulations 2007 and revoking the Gaming Machine (Circumstances of Use) (Amendment) Regulations 2015 to remove requirements that no longer apply as a result of the stake reduction Millions of people enjoy gambling responsibly, and the Government are committed to supporting a healthy industry, but we need the right balance between freedom and protections. As I have said, the Government’s intention in our wide-ranging gambling review was to strike a balance between socially responsible growth and protecting the most vulnerable, including children, from gambling-related harm I want to be very clear that the review and this legislation do not mark the end of government action. We recognise that harm is not about just one product. We will act where there is evidence of harm and we will always keep issues under review, as is our responsibility. We will also continue to work together with colleagues from other departments, such as the Department for Education, to ensure that we are co-ordinated in our approach to young people, and the Department for Health and Social Care, to improve links between gambling treatment and other services. I am proud that the Government are taking forward this decisive measure, and I commend these regulations to the House.