Review of the Gambling Act 2005 Terms of Reference and Call for Evidence - LGA response

• The Local Government Association (LGA) is the national voice of local government. We work with councils to support, promote and improve local government. 
• We are a politically-led, cross party organisation which works on behalf of councils to ensure local government has a strong, credible voice with national government. We aim to influence and set the political agenda on the issues that matter to councils so they are able to deliver local solutions to national problems. 

• The LGA welcomes the review of the Gambling Act 2005 (the Act) given the significant changes to the gambling landscape since the Act was first introduced, most notably with the shift to online or remote gambling from more traditional land-based operations such as high street betting shops. 
• Since the Act came into force there have also been changing trends in the physical presence of gambling in local areas. Betting shop clustering has been a significant concern for councils and the public. Our view is that councils should have greater powers under the Act to determine whether it is appropriate for new gambling premises of any type to open in their areas. 
• Although online gambling is outside the scope of councils’ regulatory role in gambling, it is an issue that councillors and the LGA are concerned about. The LGA would support the introduction of measures to reduce the volume of gambling advertising, particularly where it is seen by children, for example the advertising of sports betting during live sport, as well as greater controls around sponsorship. Past experience has shown that it is possible for sports which are heavily reliant on tobacco sponsorship to continue to thrive without this income, and we believe the same outcome is possible for sporting activity currently closely linked to the gambling industry.
• Harmful gambling is another issue that many local authorities have concerns about. Whilst councils do not have a direct role in treatment, this is a local public health issue and there are several ways in which councils can try to support those individuals and families who are experiencing harm from gambling. The LGA has been supporting councils to develop a better understanding of gambling related harm and the role councils can play to identify and support residents who are affected by it. 
• The LGA has called for the Government to introduce a mandatory levy on the gambling industry to fund research, education and treatment. This view is supported by other organisations, including GambleAware, the charity responsible for minimising gambling-related harm.
  
   

Since the Act was introduced technological developments mean that significant numbers of people now gamble remotely, so it is right that a key focus of the review is on the protection of online gamblers.

Although online gambling is outside the scope of councils’ regulatory role in gambling, it is an issue that a number of LGA members have expressed concern about.

We share concerns that the current system of online protections is not sufficiently effective at preventing gambling harm. There is evidence of gamblers being able to spend very large sums of money which they cannot afford in short spaces of time without effective operator intervention, leading to devastating effects for individuals and their families.

It is apparent that these large losses generate a large proportion of profits for online gambling businesses.  Recent research conducted by the National Centre for Social Research (NatCen) commissioned by GambleAware revealed that the five per cent of online accounts with the highest losses generated a minimum of 70 per cent of Gross Gambling Yield (GGY) in each of betting, virtual casinos, live casinos, and slots.

It is incumbent on the gambling industry to ensure that the wide availability of online gambling is offered in a fair and responsible way. Account based play offers remote operators a firm basis for identifying harmful patterns of play and losses, and therefore to step in and help address it. Recent fines levied by the Gambling Commission indicate that the remote industry is failing to fulfil its obligations in this regard. For example, an assessment of an online gambling operator as part of the Gambling Commission’s ongoing compliance work earlier this year revealed failures in social responsibility procedures meant one customer was able to loose £50,000 in just six hours and another lost £85,000 in just over one hour.

Unlike in land based premises, there are currently no stake limits online and so the review should consider whether stake limits should apply consistently across games played on all gambling platforms, including remote gambling, rather than simply to non-remote gambling premises.

There is also the need for gambling regulation to be flexible enough to respond to emerging technology and new forms of online gambling. There is growing concern that children and young people are being exposed to gambling in new ways, for example through in-game purchases and lootboxes which currently fall outside regulation. We are aware that government has consulted on the experience of video game players and the functioning and potential harm of loot boxes and in-game purchases following a recommendation by the DCMS Select Committee that these products should be regulated. However, there needs to be a mechanism for regulation to quickly respond to new types of gambling in order to protect children from harm.  With this first review of the Gambling Act taking place some fifteen years after the Act was first passed, it is not clear that we have mechanisms in place to respond as quickly as needed.

We support the new regulatory requirement for all online gambling operators to participate in the multi-operator self-exclusion scheme and Government should commit to reviewing progress in this area once GambleAware’s evaluation of the impact of this has concluded.

We also support the use of the Gambling Commission’s Licensing Conditions and Codes of Practice to establish mandatory standards in this area, and encourage the Commission to keep a close eye on the use of promotional offers which can draw people into online gambling.

As with online gambling, while gambling advertising is outside councils’ regulatory role, the volume of gambling advertising is nevertheless an issue that a number of councils feel strongly about. 

The LGA has previously called on Government to take steps to restrict the volume of gambling advertising, particularly where it can be seen by children – for example, during televised or live sport as well for greater control on sponsorship.

While we recognise that there has been a reduction in the number of gambling advert impacts since 2013, the number of gambling advert impacts on children in 2016 remained almost twice as high as in 2007 (when the Gambling Act came into force), and for adults, more than three times as high.

There has also been a shift in focus to advertising online and via social media. Analysis commissioned by GambleAware estimated that in 2017, the gambling industry spent £1.5bn on advertising and marketing, around 80 per cent of which was through online channels. 

In terms of the impact of advertising on vulnerable groups, GambleAware recently commissioned research to look at the impact of gambling advertising and marketing on children, young people and vulnerable adults. The findings of the research were published in March 2020 and showed that gambling is now seen as part of everyday life for these groups. The research also revealed a link between exposure to gambling advertising and attitudes towards the prevalence and acceptability of gambling which increase the likelihood that a child, young person or vulnerable adult will gamble in the future.  The research also found that children are regularly exposed to gambling advertising on social media platforms. 

We welcome the measures around advertising on social media which require operators to comply with the Advertising Codes, administered by the Advertising Standards Authority (ASA) however further evidence about the impact of online advertising on children, young people and those vulnerable to problem gambling should be commissioned and the review should explore how exposure to online advertising, including on social media can be tackled. Our view is that more should be done beyond the promotion of responsible gambling messages. 

Sponsorship is also a significant channel for gambling brand marketing. Betting companies sponsor sports teams and events, including shirt sponsorship and have forged deals with sports bodies and individual clubs. In 2020 half of Premier League clubs and 17 of 24 Championship clubs were sponsored by bookmakers. These commercial arrangements are a significant source of income for British sports and teams, particularly horse racing and football teams. 

Whilst we welcome the 'whistle-to-whistle' ban on gambling advertising from five minutes before to five minutes after a match, this is of limited use when viewers, including children, are exposed to gambling advertising on shirts and on perimeter hoardings. The LGA would support consideration of a ban on gambling sponsorship of sports club shirts and sporting events, similar to the previous introduction of a ban on tobacco sponsorship.

We also urge Government, in relation to both online gambling and online advertising, to look at ways of ensuring that technology and content providers build safeguards into their products to prevent children and young people viewing gambling advertising and accessing gambling sites and apps.

Councils work in partnership with Gambling Commission to regulate gambling and have close relationships including through the Commission’s regional compliance officers, a role which has recently been removed as part of the ongoing restructure.

Compliance officers gave advice and support to councils with the development of local statements of gambling policy, inspections of gambling premises as well as with training. This support was valued by council officers and the Commission must have the resources to continue to support councils in this way.

Government should engage with Trading Standards to discuss any potential changes to consumer redress arrangements.

We have limited evidence about the effectiveness of age controls, protections for young adults, and the age limit for society lotteries. However, the LGA was concerned by widespread evidence of failure to prevent under-18s from playing on category C gaming machines in pubs following a piece of work by the Gambling Commission. This is a marked contrast to the test-purchase pass rate for alcohol and the sector needs to ensure responsibilities for age verification for gaming machines are taken as seriously as for alcohol sales.

Robust measures to prevent illegal underage gambling online are vital. We welcome new requirements introduced by the Gambling Commission for online gambling operators to verify the age and identity of their customers before players can deposit money and access any free to play games which took effect from May 2019. However, the review should look at evidence for how effective these new controls are in preventing young people from accessing age restricted content.

Betting shop clustering has been a significant concern for councils and the public and the LGA has called for additional powers to restrict the opening of new betting shops in areas where there are already clusters.

The statutory aim to permit within the Act has allowed for the clustering of betting shops which has had an adverse impact on the communities and areas in which they are clustered. Evidence shows that clusters are typically located in more deprived areas, where the harm from problem gambling may be exacerbated: ‘areas close to betting shops tend towards higher levels of crime events, resident deprivation, unemployment, and ethnic diversity…[and] players overall tend to live in neighbourhoods with higher levels of resident unemployment, multiple deprivation and economic inactivity.’

Currently licensing authorities have a contradictory mix of powers under the Gambling Act, with the ability to prevent the opening of local casinos, but because of the statutory aim to permit no real power to prevent the opening of other premises even if they feel that they are already saturated with them.

The LGA’s view is that councils do not have the full powers that they need to effectively manage local gambling premises. There should be more local flexibility within the Act for democratically elected councillors to make decisions about the number of local gambling premises if such decisions can be shown to be in the interests of the local economy and community. We would support the ability for councils to control the numbers of premises 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, Adult Gaming Centres (AGCs) or bingo halls.

Whether through a cumulative impact assessment or other tool, the review should consider a new legal power that in specific circumstances can act as a break on the statutory aim to permit to tackle existing clusters of premises. Local statements of principles are a helpful tool to manage local gambling premises, but do not provide this.

The profitability of Fixed Odds Betting Terminals (FOBTs) and restriction to four machines per shop has helped to drive betting shop clustering in some areas. Whilst stake reductions have helped reduce the issue of clustering there is some evidence that councils have seen an increase in the number of new applications for Adult Gaming Centres (AGCs) and bingo premesis which are seeking to take over betting shops.

Rules that link the permitted number of B3 and B4 gaming machines sited on an AGC or bingo premises to 20 per cent of the total number of gaming machines made available for use has meant that in practise these premises can have a much larger number of higher stakes machines than a betting shop could. For example, a recent application for a bingo premises licence in a deprived area of Leeds was made for a bingo hall alongside 38 gaming machines, as well as electronic bingo. Whilst the traditional bingo hall operation would be welcomed as a supervised social outlet the council was concerned about the number of machines on offer but under current legislation were not able to control the number of machines offered or the type of bingo variant on offer. The review should look at whether a proportionate approach to machines in these types of venues is appropriate and whether these should be replaced by specific limits, or limits which councils can determine locally.

We do not agree that the threshold at which local authorities need to individually authorise the number of category D and C gaming machines in alcohol licensed premises should be increased. Children are not permitted to play Category C gaming machines in pubs and staff are expected to stop children playing on the machines however tests on a sample of pubs in England in 2018 indicated that almost 90 per cent failed to prevent children accessing 18+ gaming machines.

Whilst councils do not have a direct role in the provision of treatment for gambling related harm, it is increasingly seen as an issue that requires a public health approach and is something that many of our Members have concerns about. Problem gambling can impact on individuals and their families’ physical, mental and emotional health and wellbeing as well as having a wider impact on society through crime and disorder.

The Health Survey statistics indicate that in 2016, 0.7 per cent of people in England (approximately 300,000 people) identified as problem gamblers, with 3.6 per cent (approximately 1,610,000 people; 6.6 per cent of gamblers) at low or moderate risk based on their gambling. Due to limitations in how this data is collated, it is likely these estimates are conservative, and may not capture some vulnerable population groups such as homeless people and students.

Previous research by Leeds Beckett University for Leeds City Council has concluded that gambling behaviour and problem gambling are not equally distributed across England and that certain areas - such as large urban metropolitan areas - experience higher rates of problem gambling.

The Gambling with Lives charity has also highlighted the link between gambling and suicide, although there is currently a lack of clear evidence to support this.

We are aware that Public Health England (PHE) has been commissioned to undertake a review of evidence on gambling related harm in England including the prevalence, determinants, and harms associated with gambling, and the social and economic burden of gambling-related harms. Evidence from this review should be used to inform government action on gambling related harms. Councils should also have access to data about problem gambling at the local level to inform decision making.

Whilst councils are not responsible for treating gambling addiction, there are several ways in which councils can try to support those individuals and families who are experiencing harm from gambling without taking on responsibility for treatment. This is in addition to their statutory licensing responsibility to try to prevent local gambling premises causing harm through gambling.

The LGA has developed guidance for councils on developing a ‘whole council’ approach to tackling gambling related harm which sets out where councils might be coming into contact with people impacted by problem gambling through a range of services, including housing and homelessness, financial inclusion, children’s services and addiction services. The guidance also explores how councils can work with local partners and build links with support organisations to help develop specific local referral routes and ensure these can be accessed from across the full range of local services.

Councils should ensure that frontline staff are given training, so they recognise potential cases and direct residents to the national treatment network via the National Gambling Helpline. As frontline awareness and identification of harmful gambling develops, councils can develop a better understanding of the extent of the problem, its impacts, and associated costs.

Public health teams can play a role in ensuring that this data, and related data about at-risk groups, is collected and shared. They can also work with local partners and through health and wellbeing boards and clinical commissioning groups to develop a coherent approach to harmful gambling, including focused preventative work.

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. This would help to ensure continuity and security in the funding for these services which would in turn enable planning for the provision of treatment and services. This should be based on the ‘polluter pays’ principle, so those companies and sectors of the market causing the greatest harm should pay the most. While the commitment from a small number of large operators to increase contributions to one per cent is welcome this should be put on a statutory footing. This view is supported by other organisations, including GambleAware, the charity responsible for minimising gambling-related harm.

Rebecca Johnson, Adviser (Regulation)

Email: [email protected]