National Lottery - Letter to The Times - 6 April 2012

The Government must take legislative action to ensure that the National Lottery and the good causes it funds are not undermined

Sir, Papers have just been lodged at the High Court seeking permission for judicial review of the Gambling Commission’s failure to act in respect of the Health Lottery.

In its 17-year existence the National Lottery has been an outstanding success. It has raised more than £27 billion for good causes and £10 billion for the Treasury in duty. That is why we are gravely concerned about the arrival of the Health Lottery. Our concern is shared by MPs and peers across all parties, as well as by the Association of Chief Executives of Voluntary Organisations (ACEVO) and by the Hospice Lotteries Association. Warning of the potentially damaging consequences for the charitable sector, both organisations were swift to condemn the launch of the Health Lottery.

When the National Lottery legislation was passed in 1993 it was the clear will of Government and Parliament that there should be only one National Lottery. Since its launch in September 2011, the Health Lottery has positioned itself as a direct rival on a national scale. As Jenny Williams (chief executive of the Gambling Commission) has conceded, the Health Lottery was specifically “designed to get around the lottery limits” and the precedent that this sets — if permitted through regulatory or political inaction — will have potentially disastrous consequences for the National Lottery and the good causes which it supports.

The longer the period of regulatory inaction, the more incentive there is for other organisations to set up similar rival lotteries. Clarity from the courts about the lawfulness of the Health Lottery would be welcome. But the Government, too, must stand ready to take prompt legislative action to ensure that the National Lottery and all the good causes it funds are not undermined in this way.

Lord Grade of Yarmouth
Lord Clement-Jones
Lord Faulkner of Worcester
Lord Burns (former chairman of National Lottery Commission)

Gambling Commission: Health Lottery

28 November 2011: Lord Faulkner of Worcester asked Her Majesty's Government what assessment the Gambling Commission has undertaken of the contribution being made to good causes by the Health Lottery.

Baroness Garden of Frognal: My Lords, the Gambling Act 2005 requires that at least 20 per cent of the proceeds of a society lottery go to the good cause that it supports. Each of the 51 society lotteries that are promoted under the umbrella brand of the Health Lottery must comply with this requirement. We understand from the Health Lottery that 20.3 per cent of the proceeds of each individual society lottery will go to the relevant good cause, addressing health inequalities in specific geographic areas of Great Britain.

Lord Faulkner of Worcester: My Lords, may I ask the Minister two questions? First, is she aware of the great concern that has been expressed by the beneficiaries of legally run society lotteries in the health sector, which have benefited immensely from those local society lotteries, about what is seen as the unfair competition from the Health Lottery? Is she aware that the hospice movement is particularly alarmed, because it depends very heavily on society lotteries? In Worcester, for example, our two hospices receive £70,000 a year from the South Worcestershire Hospices Lottery, which pays 50p in the pound-not 20p in the pound-to those good causes.

Secondly, notwithstanding what the Gambling Commission may have decided initially about the Health Lottery's legality, how can it be legal to have 51 community interest companies linked to the Health Lottery which have no independent existence, but which all have the same three directors and all operate out of the same virtual office? How is that legal?
Read Question in full  in Hansard Report

Also article in PoliticsHome where I argue that the introduction of the Health Lottery is negatively impacting the money raised by hospices.

Sport: Cricket

19 October 2010: Lord Williams of Elvel asked Her Majesty's Government what proposals they have to eradicate corruption from international cricket. during the course of the Question..... Lord Faulkner of Worcester: My Lords, I declare an interest as chairman of the all-party inquiry into the effects of betting on sport, which reported in 2005, and to which the noble Lord, Lord Condon, was such a powerful and convincing witness. Is the Minister satisfied with the progress which the Gambling Commission's new unit on sports betting intelligence is making, and is it receiving sufficient co-operation from the betting industry and from sports governing bodies?

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Categories of Casino Regulations 2008

Lord Faulkner of Worcester:

My Lords, I am very pleased to follow the right reverend Prelate. He reminded us of the social dimension that is contained within not only this order but all the provisions of the Gambling Act. Thanks are also due to my noble friend Lord Davies of Oldham for introducing the order. He is getting a rather easier ride with this order than he did in March last year with the order that contained the very controversial proposal for the one regional casino, as well as the 16. The noble Lord, Lord Clement-Jones, could have been a little more gracious in acknowledging that the Government have done what he and the majority of this House voted for in that debate last year.

I do not take the view that the implementation of the 2005 Act is going nearly as badly as other noble Lords suggest. The role of regulation and the work of the Gambling Commission have been exemplary so far. They have tackled the task with vigour and, to begin with, with fairly low resources. The indications I get from talking to people in the industry—I have a number of interests which are on the register related to what they do—is that they are tackling it well and that the quality of the regulation is now substantially greater than it was before the Act came in.

The noble Lord, Lord Howard, was right to refer to some of the problems of he offshore advertising. I have referred in this House on more than one occasion to the difficulties that are caused by the poor standards of regulation in Gibraltar and its reluctance to adopt the same standards as the Gambling Commission and the white-listed authorities. Putting that aside, however, the work on the regulation of online gambling and the other aspects of the industry are working well.

I do not underestimate the scale of problem gambling. The prevalent study indicated to the surprise of many that it had not grown markedly over the past few years. It will be very interesting to see whether those figures are sustained in the next prevalent study after the expansion in gambling can be measured.

I will share with the House details of a visit I paid a couple of weeks ago to Gordon House, the only residential centre for problem gamblers in the West Midlands. The residents of Gordon House are men at probably the very bottom of their lives. I spoke to between a dozen and 15 of them and discussed their problems and addictions. What impressed me was the willingness of the authorities at Gordon House to help these men through their addiction, remove them from gambling altogether and get them back into society. It was also interesting to learn where the men saw the origins of their problem starting. Many first became addicted to gambling in the seaside arcades which they went to as children. I was attracted by the recommendations by the Budd committee which effectively proposed the elimination of gambling by children. I think we are the only country in Europe that allows youngsters to go into arcades and spend money. They are not spending money on the same scale as people do in the adult arcades, but there is considerable evidence that problem gambling starts in childhood and then continues.

By far the worst manifestations of the problems of the residents of Gordon House lay in the fixed-odds betting machines; almost without exception, they admitted that they had become addicted to them. I hope very much that my noble friend will be able to say something about the Government review of the FOBTs, which have effectively created electronic casinos in so many betting shops.

On the casino order, I and a number of colleagues who I can see in the Chamber were members of a joint scrutiny committee. The noble Lord, Lord Clement-Jones, is right that the original proposition was for a free market, which was then slimmed down to eight plus eight plus eight, and then, in the dying days of the previous Session, the eight became one. It was the view of all the members of the joint scrutiny committee that if there were to be only one, the logical and best location for it would be Blackpool. When we visited Blackpool, we were impressed by the strength of support that we found among the local community, the local council and businesses. The only exceptions were a self-seeking organisation that already runs a gambling operation on the seafront which the noble Lord, Lord McNally, knows very well, and, I am afraid, one Liberal Democrat councillor who was fighting a lone crusade.

The joint scrutiny committee took the view that Blackpool had argued the case and had thought through very carefully the way in which regeneration of that very depressed town centre and the surrounding area could be assisted—not created—by the establishment of a regional casino or a resort casino, as we originally called it. That was supported by the evidence from Professor Peter Collins; there was also evidence from Australia that the one place where you avoid having large casinos with attractive machines is in deprived urban areas. It is much better to have an area to which people have to travel as a day trip or for a weekend holiday, such as a seaside resort, not in a city centre. So it was with utter astonishment that I read the report of Professor Crow’s inquiry, which turned down Blackpool and went instead for east Manchester. It seemed almost that he had turned the argument of the joint scrutiny committee completely on its head. He argued that a resort should not be chosen as it would not be possible to measure the social impact because the people going there would be visitors. Those are exactly the sort of whom that one would want in order to avoid the social problems. A consequence was the report of the Merits Committee, to which other speakers have referred, which contributed to the defeat of the order that we debated in this House in March last year.

As is well known, I was one of those who voted against the order with 12 of my noble friends. I have to say that I have not lost a moment’s sleep since. The judgment that we exercised on that day was vindicated very quickly by the announcement by the new Prime Minister that the plans for the regional casino would, first, be put on ice and then, latterly, were killed altogether.

The outcome is the order before us. I still regret that Blackpool is not being given the opportunity to demonstrate whether regeneration can flow from the activity that a regional casino can create. It is unfortunate that the local authority is not one of those named in the order; perhaps it was short-sightedness on its part not—as a sort of each-way bet—to apply for one of the 16 as well. I am sure the noble Lord, Lord McNally, will say have more to say about this, but I hope my noble friend is able to say more about the package of regeneration which is in prospect for Blackpool. A number of promises have been made to that town and it is important that they are fulfilled.

If there is a decline in interest in the number of large and small casinos under this order, the Government could also give an undertaking that, if a local authority does not want to take one of these, an authority such as Blackpool should be able to come forward and take their place. I suspect that may be difficult; perhaps my noble friend can clarify that situation.
I certainly do not intend to vote against the order. It would be extraordinarily perverse of me to do so, having voted the way that I did in March last year. I wish this order well but hope that my noble friend will take on board some of the concerns expressed from all parts of the House.

© Lords Hansard 15 May 2008

Gambling: Gibraltar

Lord Faulkner of Worcester asked Her Majesty’s Government:
What discussion they have had with the Government of Gibraltar about tightening the regulation of online gambling.

Lord Davies of Oldham: My Lords, there have been no formal discussions with Gibraltar on this issue. The Government have had wide-ranging informal discussions with a number of jurisdictions about the regulation of online gambling. For example, in October 2006, we hosted an international summit on remote gambling, which was attended by representatives from Gibraltar and 30 other jurisdictions. The aim of the summit and subsequent discussions was to promote and share best practice in consumer protection.

Lord Faulkner of Worcester: My Lords, I thank my noble friend for that reply, but does he agree that the rigour of gambling regulation in Gibraltar falls well short of that insisted on by the Gambling Commission here and by the white-listed authorities of Alderney and the Isle of Man? May I urge my noble friend to do all that he can to persuade the Gibraltar authorities of the value of information exchange agreements between betting operators and sports governing bodies, so that irregular betting patterns, allegations of improper interference in the running of events and downright cheating are properly investigated? There is strong evidence that, in the case of operators based in Gibraltar, this is not happening.

Lord Davies of Oldham: My Lords, one case has certainly given rise to concern and my noble friend has brought it to the attention of the House in the past. However, we are not greatly exercised by the regime that obtains in Gibraltar with regard to these issues. It is quite clear that Gibraltar wants to reach the standards expected for online gambling in those areas over which we have more direct control, but we could do damage by leaning on the authorities in Gibraltar too greatly in areas where they are jealous of their own authority. However, we have made it clear that our Gambling Act and our Gambling Commission have set very high standards. As far as possible, we want to ensure that other jurisdictions that provide facilities of which British citizens take advantage operate the same high standards.

Baroness Howe of Idlicote: My Lords, if Gibraltar is less rigorous and effective than this country, will the Minister assure us that children will be as well protected, which was the intention of encouraging gambling organisations to register in this country? This is a vital area.

Lord Davies of Oldham: My Lords, that it is an important consideration of our gambling legislation and the Gambling Commission. I assure the noble Baroness that we have no anxieties on that score as far as Gibraltar is concerned. If we did, it might be necessary for additional action to be taken. We should recognise that the Gibraltar authorities have the advantage of someone who is closely connected with the Gambling Commission in this country and who is therefore more than well equipped to advise them on the standards that they need to obtain.

Viscount Falkland: My Lords, following those remarks, does the Minister agree that Gibraltar has self-interest in firm and strong regulation? It is hard to believe that it would not be keen for such regulation, because it derives considerable economic benefit from having these sorts of operations. Can we do anything to encourage Gibraltar to strengthen those areas highlighted by the noble Lord who asked the Question? We can help it with what knowledge we have gathered to maintain its integrity and its tax base, which is pretty irresistible to the companies that want to go there.

Lord Davies of Oldham: My Lords, as I indicated in my original Answer, Gibraltar attended our summit meeting on these issues and therefore was able to participate in proceedings that emphasised the standards that we have set. As the noble Viscount rightly said, Gibraltar has a very small domestic market. Therefore, if it is going to be successful with its gambling regime, it must attract punters from other European states. Obviously there is an affinity as far as the United Kingdom is concerned. Gibraltar is not going to get people using its online gambling facilities if there are doubts about the standards that obtain. It is in its interests that such standards should be as high as possible.

Lord James of Blackheath: My Lords, does the Minister agree that, as there is ample evidence that offshore online bookmakers are not taking steps to validate the age of gamblers applying for credit lines, they should be brought legitimately within the compass of British law, without breaching EC law, by being banned from advertising in the UK markets?

Lord Davies of Oldham: My Lords, only certain online areas are able to advertise in the United Kingdom, so we can to some degree limit that in any case. The noble Lord is right. If we had great anxiety about children being brought within the framework of online gambling and if we thought that the processes did not stand up to proper scrutiny, we would want to explore those issues further. Although online gambling is a significant new development, it still represents a very small percentage of gambling. The Gambling Act and the Gambling Commission have appropriate regulation for this country and we set out to set standards for others who seek to encourage people to gamble from this country.

Baroness Trumpington: My Lords, British bookmakers contribute to and help British racing. Do the profits from gambling in Gibraltar aid British racing in any way?

Lord Davies of Oldham: No, my Lords, I do not think that that is the case. There has been a levy on British-based bookmakers to contribute to racing, which has been an important part of the development of racing in this country for a long time. The noble Baroness will be all too well aware that that arrangement has been the subject of intensive discussion over recent months and the issues are not resolved at this point in time. However, I do not think that I can bring Gibraltar within that framework.

Lord Swinfen: My Lords, are parents and guardians responsible for the debts of underage online gamblers?

Lord Davies of Oldham: My Lords, that is a most interesting point. I asked a series of questions of civil servants, but I did not think of that one. Let me make the point pretty obvious. I should have thought that, if an online provider is not having his debts fulfilled because the person at the other end is not of a legal age to be sued, the obvious conclusion that he would draw is that he had better ensure that there are regulations to make sure that such debts can be fulfilled. From my experience, bookmakers are very careful to make sure that people can honour their commitments.

© Lords Hansard 5 December 2007

Ministers heed FA pleas and target foreign betting sites

Matt Scott writes in the Guardian:

Ministers are to write to Gibraltar's Gambling Regulation Authority amid concerns that its light-touch regulatory regime could provide a back door for corruption in British sport. The move comes after Lord Faulkner demanded action from the Department of Culture, Media and Sport against overseas bookmakers who refuse to implement information-exchange agreements with sporting bodies. These memoranda of understanding are required in the UK under Gambling Commission regulations but some overseas operators have rejected demands to apply them.

"There is no doubt that our rules preventing betting cheats are some of the toughest in the world," said a DCMS spokesman. "We believe it is right that sports bodies and bookmakers should share information."

Faulkner, who chaired an all-party betting and gaming group, made his move after the Football Association asked for his help in its investigations into breaches of its betting rules. The FA's inquiry looked at allegations made last November by a former employee of Victor Chandler International [VCI] who claimed that four Premier League managers had placed significant bets on English matches.

Faulkner raised his concerns with VCI about the apparent breach of FA rule E8, which forbids participants from gambling on competitions in which they are involved. The peer attended a meeting on September 10 involving VCI's chief executive, Michael Carlton, and the FA's director of governance, Jonathan Hall, when Hall asked the bookmaker to sign an information-exchange agreement.

"Football managers are regulated by the FA," said a spokesman for the bookmaker. "It is their job to ensure they abide by FA rules. As far as our business is concerned, we will not tolerate corrupt betting on any sport, football included. We are a highly reputable, well regulated business operating to the highest standards and would do nothing that creates long-term damage to our company or the industry as a whole.

"At that meeting, Mr Carlton explained that our business relies on the company respecting the confidentiality of its clients and indeed they are part of the terms and conditions of VCI. Mr Carlton explained that VCI believe the issues raised should be looked at on an industry-wide basis, not as an agreement with one bookmaker prompted by false allegations based on fabricated evidence."

There is an industry-wide requirement but it is effective only for companies based in the UK. If VCI were located here it would be obliged to volunteer information to the FA under condition 15 of the licence granted by the Gambling Commission. That states: "Licensees who accept bets, or facilitate the making of bets between others ... must also provide the relevant sport governing body with any information the licensee suspects may relate to a breach of a rule applied by the sport governing body."

VCI insisted that it would consider any FA proposal provided it "applies to the industry as a whole" but the FA suspects the company is not interested in helping. Requests to see VCI's integrity team in action in the two months since the meeting have come to naught. Faulkner shares the FA's suspicions. "It is very clear [VCI] has no intention of cooperating unless it is made to do anything to encourage its clients to give up their right to privacy."

There is a "white" list of approved operators from outside the European Economic Area who are permitted to advertise in the UK after proving their integrity credentials to the government. Bookmakers based in jurisdictions such as Netherlands Antilles are not allowed to advertise in the UK after failing to convince government of their regulatory effectiveness.

Faulkner would like to see the advertising ban extended to uncooperative bookmakers in Gibraltar but DCMS considers this unworkable under European law, placing its faith instead in the diplomatic approach.

You might also like to read Matt Scott's Sportblog:
Sporting bodies struggle to match challenge of betting

© The Guardian 30 October 2007

Gambling: Sport

Lord Faulkner of Worcester asked Her Majesty’s Government what guidance they are giving to the Gambling Commission to ensure that the integrity of sport is not compromised by the growth of the betting industry.

The noble Lord said:

My Lords, I express my appreciation to noble Lords who have put down their names to speak in this short debate, particularly the noble Viscount, Lord Falkland, and my noble friend Lady Golding, both of whom were valued members of the Betting and Gaming All-Party Group inquiry into the effects of betting on sport, which I chaired nearly three years ago. I have two interests to declare, one as an adviser to the football pools business, which goes back more than 30 years, and the other as an adviser to the Alderney Gambling Control Commission.

I do not have time today to describe all the alleged incidents of improper or corrupt betting practices about which our inquiry team heard evidence. Generally they involved an expected sporting outcome not happening, such as a favourite in a horserace losing as a result of unexplained behaviour by the jockey. I do not intend to say more about that because a criminal trial is currently under way in which exactly that allegation is at the heart of the prosecution’s case.

We heard a lot about the improper use of inside information that is not available to the normal punter, such as in cricket matches where large sums were won by punters who correctly forecast bizarre events like the number of fielders who wore sun glasses or the number of times the bails were removed in the course of a morning’s play. The noble Lord, Lord Condon, was a particularly valuable witness in this area. He has sent me his apologies for not being here today but welcomes this debate. We also took evidence about a Rugby League match where the winning margin was predicted with great accuracy by two players from one of the teams, who knew that their team was fielding a weakened side.

Some of these incidents may involve straightforward corruption. A football match where it can be proved that a player was bribed to ensure that his team lost or one in which it can be proved that the referee was bribed to produce a particular outcome both involve a clear case of cheating, which could lead to a conviction and prison sentence. But what about the use of inside information? There was a great difference of view between the Jockey Club, which was against the use of inside information for gain, and the bookmakers, who described it in their evidence to us as, “the commerce of the racecourse”.

We asked the Financial Services Authority how it defined inside information in the context of investment in financial services. It told us that, if its market abuse regime were to be applied to the betting and gaming industry, a large part of the information made selectively available to bookmakers and chosen punters would be inadmissible and subject to both the criminal law and the civil law regime set out in the Financial Services and Markets Act 2000.

The most important way of tackling the unfair and potentially corrupt use of inside information is to have information exchange agreements between betting operators and the sports on which they take bets. Here, the betting exchanges have led the way. The Jockey Club told us that it was very keen on them and said that it uses them almost daily because the audit trail that they provide is excellent. Its spokesman told the Racing Post:
“The access we get to jockeys’ and trainers’ telephone accounts has given us powers of investigation we didn’t have before”.

These responsibilities now lie with the British Horseracing Authority, which I visited on Monday to watch its regulatory unit at work—and very impressive it is. It has been given a budget approaching £3 million to do this and is demonstrating a capability to monitor all major online sports betting. Indeed, over the summer the BHA was called in by the Association of Tennis Professionals to investigate allegations of corruption relating to a tennis match in August in the Poland Open tournament, on which Betfair reported that bets totalling $7.3 million had been matched. The favourite, ranked world No. 4, was backed to lose to a player ranked 87th. Despite losing the first set to the favourite, the underdog was still being backed during the second set, which he won. Following that, the favourite suddenly withdrew from the match with a foot injury. There was something wrong there. Betfair very wisely voided all bets and the anti-corruption inquiry continues.

Our report contained a total of 15 recommendations. Some were directed at the Government, a number at the betting industry, several at the sports governing bodies and the most important at the Gambling Commission. What has happened since we published our report? Quite a lot, I am pleased to say. The Gambling Commission has been consulting widely on information sharing, which it rightly regards as being a central element in achieving integrity in sports betting. It has published some helpful papers, one of which contains strong guidance that betting organisations should sign information exchange agreements with sports governing bodies so that irregular betting patterns can be fully investigated. It also agrees with our recommendation that sports governing bodies should be consulted on what sort of bets should be permitted. I take the simple view that no bet should be allowed on the outcome of a sporting event that depends for its success on inside information or on an action or influence by a small number of people.

A central recommendation from our inquiry was that there must be proper rules on who may and may not bet on competitions or events in which they are involved. For example, the Football Association has a rule—Rule E8—that no one involved with a club, as manager, director, player or even office staff, may bet on any match in the same competition. It is difficult for the FA to enforce that without assistance from the betting industry. Press reports appeared a year ago alleging that some Premiership managers were placing enormous bets with bookmakers Victor Chandler contrary to Rule E8.

If there were transparency and openness in the relationship between a sports governing body and betting organisations, based on a proper information exchange agreement, the FA would be able to ask bookmakers for details of the bets and the identity of their clients. I believe that, as far as the onshore betting industry is concerned, this will come, because the Gambling Commission is determined that it should. Indeed, the major sports organisations are working with the commission to ensure that the betting industry understands what the various sports’ rules are and that it is the betting industry’s responsibility to report irregular patterns of betting behaviour. This is central to the integrity of sports betting.

There is obviously a difficulty when it comes to offshore betting organisations, particularly those licensed by more relaxed regulators. Certainly I see little sign yet that Gibraltar, which is where Victor Chandler operates from, is minded to impose the same sort of tough regime that the Gambling Commission is introducing here. The FA has asked this company to give it the opportunity to see the systems that it operates to ensure integrity in sports betting and to explore the signing of an information exchange agreement; the FA is still waiting for a proper reply. The Gambling Commission is moving in the right direction, although I wish that it were more ready to make these additional safeguards a requirement of its licensing conditions.

The Government should continue to give every encouragement to these developments, as I hope that they will. But they must also be prepared to take a much tougher line with foreign jurisdictions that license betting operations aimed at British clients. At the very least, they should insist that Gibraltar and Malta apply the same sorts of standards as those that they have required of the newly white-listed jurisdictions of the Isle of Man and Alderney.

We said in the conclusion to our inquiry that we accepted that the greater part of sports betting is neither corrupt nor unfair to punters. But the growth of the betting exchanges, because they give punters the facility to bet against a result, has increased the potential for corruption.

It would of course be nonsense to argue that no improprieties took place before the advent of the exchanges. This dates back to the early Olympics, with allegations of athletes accepting bribes to lose a competition and city states trying to manipulate the outcome with large amounts of money. I understand that it was also very popular in chariot racing. In more recent times, the betting practices present in cricket in Asia and South Africa, as described to our inquiry by the ICC, had little to do with the exchanges, and the history of a variety of sports in the UK and elsewhere in Europe over the past century is littered with incidents, allegations and, in a few cases, criminal convictions.

However, the advent of the exchanges has brought with it new challenges to sports governing bodies, gambling regulators and government. If the betting industry rises to these challenges, the integrity of sports betting could be improved by the greater transparency and disclosure that the adoption of demanding and meaningful information exchange agreements can create. However, it is necessary for all these arrangements to be tightened up and significantly improved and for risk assessments to be conducted on particular sports betting. I hope to hear from my noble friend today that the Government are encouraging the Gambling Commission to do exactly that.

© Lords Hansard 11 October 2007

Gambling: Casinos

Lord Anderson of Swansea asked Her Majesty’s Government:
Whether, in response to the defeat of the Gambling (Geographical Distribution of Casino Premises Licences) Order 2007 in the House of Lords on 28 March, they will introduce two orders separating the super-casinos from the other proposed casinos.

during the course of the Question....

Lord Faulkner of Worcester:
My Lords, does my noble friend not accept that one of the principal reasons why the House rejected the order on 28 March was precisely because a large number of us, myself included, felt that the process and the conclusions of the Casino Advisory Panel were seriously flawed? It had in effect misdirected itself and ignored the findings of the Joint Scrutiny Committee on the Gambling Bill and the tone that prevailed throughout its subsequent passage. Therefore, is not the most sensible course for the Government to follow the suggestion made by my noble friend Lord Anderson and split the order, at the same time establishing proper parliamentary scrutiny into the case for, and location of, the one regional casino?

© Lords Hansard 22 May 2007

Gambling (Geographical Distribution of Casino Premises Licences) Order 2007

at this point......
Lord Faulkner of Worcester:

My Lords, I apologise for interrupting my noble friend but further to this very important point, which is absolutely critical to the way a number of us will vote at the end of the debate, can my noble friend clarify two things which arise out of the question from the Conservative Front Bench, and from the noble Lords, Lord McNally and Lord Glentoran? First, if we pass the amendment of my noble friend Lady Golding, is my noble friend saying that the casino licence for Manchester will still go ahead regardless of what the deliberations of the Joint Committee may be some time down the track? Is that the position? Secondly, will he also confirm that if the order is thrown out this evening, there is nothing to stop the Government bringing back a new order for the 16 licences over which there is much less controversy and then giving more time for deliberation on the regional casino licence?

later in the debate...

Lord Faulkner of Worcester:

My Lords, before the noble Lord leaves the question of the Noble Organisation, can he confirm that it was actually very keen on the notion of a super-casino in the middle of Blackpool on its own site, but lost interest when it was pointed out to the company that that was not the ideal position for it?

Result of vote on Amendment (No. 1): Contents, 123; Not-Contents, 120
Motion, as amended, agreed to

© Lords Hansard 28 March 2007

See also article from Independent 29 March 2007

Gambling: Overseas Regulation [written answers]

Lord Faulkner of Worcester asked Her Majesty's Government:

How they will ensure that gambling jurisdictions in the European Union and European Economic Area exercise the same degree of regulatory control over online gambling as that envisaged for the United Kingdom by the Gambling Commission. [HL1325]

Lord Davies of Oldham:

The Gambling Act 2005 puts in place the strongest ever regulatory regime for the UK gambling industry. Although it is outside the Government's power to ensure that other jurisdictions exercise the same degree of regulatory control as the UK, we intend to lead the way in raising standards in remote gambling worldwide and in protecting consumers. To this end, on 31 October 2006, the Government hosted an international summit for more than 30 jurisdictions and the process of establishing international standards in now underway. The Gambling Commission will continue to share the UK Government’s approach with their equivalent organisations abroad through its membership of the International Association of Gambling Regulators.

Lord Faulkner of Worcester asked Her Majesty's Government:

Whether they will make representations to the Gambling Commission to hold talks with gambling regulators in Gibraltar and Malta to ensure that the standards of online gambling regulation in those jurisdictions are comparable to those in the United Kingdom. [HL1326]

Lord Davies of Oldham:

The Government work very closely with the Gambling Commission on all issues relating to online gambling. Representatives from both Gibraltar and Malta attended the Government’s international remote gambling summit held on 31 October 2006 where they, along with many other jurisdictions, indicated that they fully support the UK Government's intention to raise standards in online gambling regulation. Following the summit, we will continue to involve Malta and Gibraltar in the process for establishing international standards, which is now underway. The Gambling Commission will also continue to meet representatives of Gibraltar and Malta through their membership of the International Association of Gambling Regulators.


© Lords Hansard 29 January 2007

Gambling: Football

Lord Foulkes of Cumnock asked Her Majesty’s Government:
What recent consideration they have given to representations from Football DataCo Limited on the effect on English and Scottish football of the directive on the legal protection of databases(96/9/EC) and the Copyright and Rights in Databases Regulations 1997 (SI 1997/3032) as interpreted by the European Court of Justice.

During the course of the question.....

Lord Faulkner of Worcester:
My Lords, on a slightly different, but very much related, topic, does my noble friend support the submissions made to the Gambling Commission by the Football Association and other governing bodies that they should be consulted by betting organisations on the sort of bets that are accepted on their matches and fixtures? This is necessary to further the integrity of the sports that they run.


© Lords Hansard 22 January 2007

Gambling: Sport

Lord Faulkner of Worcester asked Her Majesty’s Government:

What discussions they have had with the Gambling Commission about requiring betting organisations to conclude information-sharing agreements with sports governing bodies as a licence condition for accepting bets on those sports.

Lord Davies of Oldham:

My Lords, discussions have taken place over a range of issues relating to sports and the Gambling Act. However, neither the Government nor the commission believe that enforcing a policy of this nature is necessary. The licensing arrangements are primarily for the proper regulation of gambling, not sporting events. Nevertheless, the Government have put in place statutory and non-statutory arrangements which provide protections for both sporting events and the betting product.

Lord Faulkner of Worcester:

My Lords, I thank my noble friend for that reply, which I fear the sports organisations will find rather disappointing. Is he aware that some very serious allegations have been made against four Premiership football managers who, according to the allegations and contrary to the rules of the Football Association, have been placing bets on Premiership matches amounting to millions of pounds with the Gibraltar-based bookmaker, Victor Chandler? The Football Association has attempted to investigate the matter but Victor Chandler flatly refuses to provide the information it needs in order to do so.

Does my noble friend agree that the integrity of sport is being compromised here and that this state of affairs can be dealt with only if the Gambling Commission insists as a licence condition that the betting organisations sign information exchange agreements with sports governing bodies so that there is complete transparency in the sports betting world?

Lord Davies of Oldham:

My Lords, I am grateful to my noble friend, who has identified an issue of some concern. But it is for the Football Association to pursue this issue with rigour. Statutory constraints would be, and are, not only limited but almost negligible as regards offshore betting. As my noble friend identified, the company at present involved in these allegations is based in Gibraltar and outside our jurisdiction.

Lord Clement-Jones:

My Lords, that is precisely the point. Victor Chandler, the Gibraltar-based bookmaker in question, is based oversees and, therefore, there are considerable issues under the Gambling Act in being able to exercise any jurisdiction.

In July, the Sports Minister, Mr Caborn, said:

“While the Gambling Commission has no jurisdiction over betting operators licensed outside Great Britain, it is continuing to build upon its co-operative relationships with overseas gambling regulators”.

[Official Report, Commons,17/07/06, col. 98W.]

Does that mean anything? What is really happening? What is the Sports Minister really doing to try to exercise at lease some kind of informal control over these oversees betting operators?

Lord Davies of Oldham:

My Lords, I am grateful to the noble Lord because he has identified the constructive position that the Government are adopting. With our 10-point plan, we are seeking to ensure that behaviour in this country meets the requirements of disclosure, and we are looking towards co-operation with other Governments and other gambling regulatory authorities to ensure that those based overseas meet the same standards as we expect in this country.

Lord Condon:

My Lords, is the Minister aware that the International Cricket Council, the governing body for world cricket, has memoranda of understanding in place with many betting organisations aroundthe world, including in the UK? Those arrangements have provided valuable information in the fight against match fixing and other corruption in betting in cricket. Will he therefore encourage such arrangements?

Lord Davies of Oldham:

Indeed, my Lords, but cricket has the great benefit of an international governing body that can take up that stance and help the international response. The problem with football is that there is not quite the same degree of co-operation at the international level. We are all aware that abuses in Italy came to light last year and resulted in severe penalties for individuals and clubs. There is no doubt that the Government are wholly committed to the integrity of sport. The overall position is that we have established the 10-point plan for co-operation with the major sporting authorities, which does of course include cricket.

Lord Lyell:

My Lords, the Minister was kind enough to mention integrity in sport. Is he able to give me some advice on one of the better scandals north of the border? It is nothing to do with the Premier League, but concerns the club in which I have an interest, Forfar Athletic, which was made to play Peterhead with about eight sick men. I understand that the sum of £250,000 was placed on fixed-odds betting. Forfar lost 8-0. I am not sure what the payout was, but corruption does not necessarily have to be in the Premier League. Can the Minister give me some advice on what might be done and, above all, on whether the rules apply on both sides of the border?

Lord Davies of Oldham:

My Lords, the noble Lord will recognise that jurisdiction in the affairs of football and football clubs in Scotland is the priority of the Scottish Football Association. We are concerned, and in our 10-point plan, we are seeking to create standards across all sport in the United Kingdom as a whole to ensure that some of these practices are stamped out.

Lord Hoyle:

My Lords, I must declare an interest as chairman of Warrington Wolves, a rugby league club—and we are going to have a good season in 2007. In view of the disquiet that has been expressed here, would it not be as well to take up the suggestion that has been made of discussions between the Gambling Commission and sports, such as rugby league and others, in order to ensure that some of these instances do not arise and that the sports in question are not brought into disrepute?

Lord Davies of Oldham:

My Lords, I am grateful to my noble friend for reminding me of his role with Warrington Wolves. In that role he will recognise that the Government tread warily with regard to the extent to which they impose restrictions on sports organisations that have their own structures for guaranteeing the effective prosecution of sport. I can assure him that rugby league, too, has signed up to the 10-point plan and that we therefore have a framework which deals with these issues within the United Kingdom. However, I recognise that there are particular problems with betting conducted through organisations outside our jurisdiction.

© Lords Hansard 9 January 2007

Integrity in Sports Betting Conference: Speech

Integrity in Sports Betting Conference

Speech: 19 April 2006

[At the first ever anti-cheating summit, the Government, sport and the betting industry joined forces to help close the net on betting cheats.

The Integrity in Sports Betting Conference, hosted by the RFU at Twickenham, saw all the major sports sign up to a Code of Practice that will see unprecedented levels of co-operation between authorities, the industry and sport.]

I am grateful for the opportunity to take part in this important conference, and to share with you my experience of chairing the all-party parliamentary betting and group inquiry into the effects of betting on sport.

The genesis of this inquiry lay in the deliberations of the joint scrutiny committee on the draft gambling bill, chaired by John Greenway MP and on which I served. That committee took a lot of evidence about the integrity of sports betting, with particular concerns raised about the effects of betting exchanges, because of the new opportunities they present to lay a particular event – such as betting on horses or teams not winning.

At the same time as the joint committee deliberated there were a number of well-publicised allegations of betting scams, involving sports as diverse as football, cricket and of course, racing.

The joint committee did not have the chance or the time to go into these matters in any detail, so the all party betting and gaming group asked me to chair an inquiry specifically into these matters.

The terms of reference were:

• To investigate the incidence of, and potential for, irregular and corrupt betting on sports, and the improper use of “inside information”
• To produce a definition of “cheating”
• To propose remedies to be adopted through the Gambling bill.
My inquiry team sat through November and December 2004, taking oral evidence from a wide range of witnesses. They included:

• The Association of British Bookmakers
• The Betting Exchange Trade Association
• The Jockey Club
• The British Horseracing Board
• The British Boxing Board of Control
• The Football Association
• The Rugby Football League
• The Rugby Football Union
• The National Greyhound Racing Club
• The England and Wales Cricket Board
• The International Cricket Council.

We also received written evidence from a variety of organisations.

I do not have time this afternoon to describe all the alleged incidents of improper or corrupt betting practices about which my inquiry team heard evidence. Generally they involved an expected sporting outcome not happening –

• A favourite in a horse race losing as a result of unexplained behaviour by the jockey
• A football match resulting in a final score which no rational person would have predicted.

There were numerous other examples of people being able to win substantial amounts because they had inside information which was not available to the normal punter.

We heard about cricket matches in which large sums of money were won by punters who correctly forecast bizarre events such as the number of fielders who wore sun glasses, or the number of times the bails were removed in a morning.

There was a rugby league match where the winning margin was predicted with great accuracy by two players from one of the teams who knew that their team in question was fielding a weakened side.

We also took evidence about a horse race where the trainer, a farmer and two jockeys allegedly ran a horse they knew to be lame.

Some of these incidents involved straight-forward corruption. A football match where it can be proved that a player was bribed to ensure his team lost, or the referee to produce a particular outcome, is likely to lead to a conviction and a prison sentence.

It is also corrupt if a cricket umpire is bribed by someone to stand in a particular part of the field, so that the person doing the bribing is able to win a bet on it.

Those are examples of cheating, and it is unlikely that there will be any dispute about their impropriety. In its explanatory notes on the gambling bill the government said:

“Cheating may involve actual or attempted deception or interference with the processes involved in the conduct of gambling, or with any other game, race, or other event or process to which gambling relates.”

But what about the use of inside information?

Two rather different views were put to us. Christopher Foster from the Jockey Club offered this definition:

“We would define it as information about horses which is held by owners, trainers and jockeys, maybe stable staff, information about a horse which is not in the public domain. Of itself, there is nothing wrong with inside information, it is information which is privileged to those in the yard or whatever.

“Our concern comes when that information is misused. The misuse of inside information is where we try to regulate the people that we license. I suppose in general terms, what we are against is the use of inside information for gain.”

On the other hand we were told by Tom Kelly, chairman of the ABB, that:
“Information is the commerce of the racecourse, and it is full of it, and you hear rumour, counter-rumour, people telling you that such and such a horse has been catching pigeons or whatever; and some people take advantage of it, and sometimes the horses win and sometimes they do not. I do not see anything wrong with that.

“I believe that horse racing would be poorer if that were not going on. Where you cross the line, in my view, is where someone is actually doing something to change the nature of the race to alter the result in some way, and then betting in a manner that would give them a financial advantage in having done that.”

We asked the Financial Services Authority how they defined inside information in the context of investment in financial services. They told us that if the FSA’s market abuse regime were to be applied to the betting and gaming industry, a large part of the information made selectively available to bookmakers and chosen punters would be inadmissible, and subject to both the criminal law (Criminal Justice Act 1993) and to the civil law regime set out in the Financial Services and Markets Act 2000.

The penalties for breaching either of these – up to seven years imprisonment in the case of insider dealing under Part V of the Criminal Justice Act 1993, for example – are far greater than those envisaged for cheating in the Gambling Act 2005.

Next, our inquiry attempted to answer the question had the problems got worse, and were the betting exchanges to blame?

Not surprisingly the bookmakers and the betting exchanges had rather different views. Tom Kelly told us:

“Reading the Racing Post on a daily basis over the last year, I do not know how many there have been because I have not counted them, but there must have been 20 or 30 stories run about individual horses who allegedly have not been trying, after having been laid on betting exchanges.”

Mark Davies from Betfair told us: “We do not increase corruption in racing or in other sports; what we do is provide the best available means of identifying fraud. Betting exchanges help enforce the rules of racing and enforce the fight against corruption.”

This view was endorsed by Paul Scotney, who said to us: “I use the information from the exchanges almost on a daily basis and the audit trail they provide us at the moment is excellent. It makes my job a whole lot easier because of that.”

And we noted that John Maxse, the Jockey Club’s Director of PR, had said this to the Racing Post:
“The access we get through the memorandum of understanding with [betting] exchanges and also the access we get to jockeys’ and trainers’ telephone accounts have given us powers of investigation we didn’t have before.”

We took a lot of evidence about memorandums of understanding, and were generally impressed with what we were shown. We were convinced that they improve the integrity of sports betting, and increase confidence in the effectiveness of governing bodies to root out corruption.

Accordingly we recommended that all major betting operators – including online and high street bookmakers, as well as the betting exchanges - should sign MoUs with the sports on which they base their business, and that these should be reviewed and approved by the Gambling Commission.

We agreed with Cricket Australia who argued that sport should have a direct involvement in determining the types of bets that should be offered, and that this should be reflected in future MoUs.

We were concerned that sports operate different rules on who may bet on events and games on which they are involved. We found it strange for example that trainers were not prohibited from backing and laying horses in their charge, whereas jockeys are.

The Football Association’s Rule E prevents anyone involved in a club as official, player or manager, match officials, and people involved in running a league or indeed any activity sanctioned by the FA from betting on the result, progress or conduct of a match or competition in which they were participating or had influence.

As an aside, you may be interested to learn that FIFA, the world governing body of football, at the moment has no such rule in place in respect of the World Cup, or indeed of any FIFA-sponsored competition. I have been serving on a working party looking at these matters, and I think I persuaded them that such a rule needs to be in place for this summer.

Our report contained a total of fifteen recommendations. Some of these were directed at the Government, a number at the betting industry, several at the sports governing bodies, and perhaps the most important at the Gambling Commission.

We said in our conclusion that we accepted that the greater part of sports betting is neither corrupt nor unfair to punters. But the growth of the betting exchanges – because they give punters the facility to bet against a result – has increased the potential for corruption.

It is not the case however that no improprieties took place before the advent of the exchanges – the betting practices present in cricket in Asia and South Africa described to us by the ICC had little to do with the exchanges, and the history of a variety of sports in the UK and elsewhere in Europe over the last century are littered with incidents, allegations and, in a few cases, criminal convictions.

But the advent of the exchanges has brought with it new challenges to sports governing bodies, gambling regulators and government.
We said that if the sports bodies rise to these challenges it is possible that the integrity of sports betting could be improved by the greater transparency and disclosure that the adoption of demanding and meaningful memoranda of understanding can create. It is however necessary for all these arrangements to be tightened up and significantly improved.

There are also many difficult issues which all parties involved in sports betting need to face. To summarise, these include: their approaches to the use of inside information, common standards on which participants should be allowed to place bets on the sport in which they are involved, the adoption of a more uniform regime of punishment of wrongdoers, the identification of everyone who backs or lays a bet, the opportunity for sports bodies to be consulted on what sorts of bets should be permitted, and the universal adoption of memoranda of understanding.

19 April 2006

Internet Gambling: Age Verification

Lord Faulkner of Worcester asked Her Majesty's Government:

What discussions they have had with the banking industry to prevent young people from using credit and debit cards to finance Internet activities, especially gambling, from which they should be precluded by reason of their age.

Lord Davies of Oldham:
My Lords, the final responsibility for age verification rests with the online gambling industry. We welcome the Remote Gambling Association's code of practice on social responsibility, which it will make a condition of membership. We are also supportive of the efforts that the industry is making to engage the banking sector on this issue. My noble friend Lord McIntosh, the then Minister for gambling regulation, wrote to the banking sector to encourage its co-operation during the passage of the Gambling Act, and several meetings at official level have since taken place.

Lord Faulkner of Worcester:
My Lords, I declare an interest as a trustee of the charity GamCare and I thank my noble friend for his reply. His comments about the code of practice produced by the Remote Gambling Association will be widely shared throughout the industry and among those concerned with the problem of gambling. However, is he aware that children as young as 11 are able to obtain debit cards such as the Solo card from high street banks which are then used to finance illegal purchases of Internet gambling and other items available on the Internet such as knives? Does he not agree that it is time that the banks themselves took some responsibility for proper proof of age verification before they allow their cards to be used in this irresponsible way?

Lord Davies of Oldham:
My Lords, my noble friend is right to say that there are some problems regarding the issue of credit cards, but he will recognise that when credit cards are used for gambling, which is the concern of my department, it is for the industry to carry out verification checks. I know that the banking industry is anxious about credit cards being misdirected.

Viscount Falkland: My Lords, will the noble Lord take my assurance that the use of credit and debit cards in gambling is carefully policed at least by the major operators in the field? It is in their interest not only to remain squeaky clean in the new betting environment, but also to deal only with the right people because of the risks they run if they do not. But it is not credit cards that are the problem, because they are extremely difficult to get from an online company; rather it is debit cards, which young people can access. Further, is the noble Lord aware that the leading company in the field, with whom I have just spoken, employs six people whose day-to-day job is to ensure that young people do not have access to gambling accounts using their debit cards?

Lord Davies of Oldham:
My Lords, the gambling industry is fully apprised of the implications of the Gambling Act, which has very much toughened up the requirements placed on the industry. As the noble Viscount indicated, the issue of verification is important particularly in relation to children under 16 who seek to place bets. The industry is all too well aware that it needs to show that it has robust systems in place. I think that the House will recognise that the leading companies in the area of gambling via the Internet, a more recent development, also are keen to safeguard their reputations. That is why the code of practice has been introduced.

Lord Forsyth of Drumlean:
My Lords, I seem to recall that when I was a Minister in the Home Office it was not possible to use a credit card to settle a gambling debt. Was it not this Government who liberalised that, and is it not a bit strange that a Government who keep telling us how concerned they are about the exposure of young people to gambling and alcohol have chosen at the same time to liberalise the legislation which has protected them?

Lord Davies of Oldham:
My Lords, it might also seem a little strange to be challenged on liberalisation from the particular source of the noble Lord, Lord Forsyth. I emphasise that the Gambling Act ensures that the industry meets the requirements of the legislation with regard to its operations. As I indicated, the industry is all too well aware of its responsibilities in this area. There is a particular problem about young people getting access to credit through false identification or because, as my noble friend indicated, now and again credit cards are misdirected to juniors. But it is for the gambling organisations to carry out the verification and some very robust systems are in place.

The Lord Bishop of Manchester:
My Lords, in the light of that reply, will the Minister say whether he is now satisfied that the age verification software to block online registration has in fact been sufficiently installed by the gambling industry?

Lord Davies of Oldham:
My Lords, I am grateful for that question. We are not satisfied because there are some weak links and we know of a small number of abuses that have taken place. We are constrained to ensure that the verification systems become both robust and universal. That is why we have been talking with the banks and why we are eager to ensure that the code of conduct reinforces that in the industry.

Baroness Howe of Idlicote:
My Lords, it is up to the banks and other industries to ensure that they undertake responsible lending. However, there is growing concern at the number of children who are able to gamble. I know that the Government do not believe that children and gambling go together. Have they given any further thought to whether Ofcom should be given responsibility for monitoring what is going on in the growing online industry and specific responsibility for reporting back on these matters so that we, the public, know what is happening?

Lord Davies of Oldham:
My Lords, the noble Baroness is absolutely right that the Government want to make sure that gambling is not carried out by children under 16. That is why, for instance, the National Lottery has the most robust system of all on age verification and can point to a considerable record over the years of ensuring that children do not play. There are problems across the wide range of the gambling industry. That is why we introduced the Gambling Act to modernise our capacity for regulation where it is necessary. We expect the industry to respond to this regulation, as it has clearly shown it intends to do, through the code of practice with which every reputable gambling organisation will be expected to comply.

Viscount Astor: My Lords, the Minister said that the industry has a verification process which he agrees works well both electronically and manually. But does he also agree that the great danger at the moment lies with the Treasury? If the Treasury increases the tax rate on Internet gambling organisations based in this country, they will just go abroad. It will then be impossible to verify whether foreign-based operators are behaving as they should.

Lord Davies of Oldham: My Lords, we are concerned about foreign-based gambling facilities, which are quite extensive. British operations on the Internet are in the minority. We are taking steps, for instance, to ensure that unless an organisation complies with the code of practice and meets our standards we will restrict its capacity to advertise its facilities in Europe. We will need a Europe-wide decision on that, but we are fully apprised of the issue to which the noble Viscount rightly draws attention.

© Lords Hansard 29 November 2005

Gambling Bill (committee stage)

Lord Faulkner of Worcester:

There are in the Chamber at this late hour five members of the Joint Scrutiny Committee that looked at the draft gambling Bill. Noble Lords will recall that that Bill is very different from the one that we are approving today.

The committee was completely united on the need for new gambling legislation, the establishment of the Gambling Commission and new regulations to take account of the changes in technology that have occurred since the last occasion on which Parliament reviewed the law on gambling. If the price of getting that legislation is that there must be fewer casinos than the Government would have preferred, it is worth paying.

There was considerable unease in the joint scrutiny committee about the prospect of a free market applying to where the new large regional casinos should be located. One of the ironies of the free market argument was that, if there were to be a significant number of regional casinos elsewhere in the north-west, the one place where one would not finish up was Blackpool. The circle has now turned completely, and it seems very probable that the process that the Government are setting up will come to the logical conclusion that Blackpool is the right place.

I do not intend to repeat the speech made by the noble Lord, Lord Blaker, although I agreed with every word of it. I do not think that the noble Lord, Lord Greaves, is right to say that there is substantial opposition in the town. Certainly, the Joint Scrutiny Committee was satisfied by the strength of support that we found at all levels—from councillors and elsewhere.

It is interesting that the press release put out by the Conservative Party earlier this week in the name of Mr John Whittingdale states:

"We have . . . told the Government that we will accept the establishment of just one regional casino as a prototype, in order to assess its impact. Its location should be a leisure resort where the regeneration potential is greatest. The case for locating such a casino in Blackpool is very strong".

I do not disagree with that. I do not expect my noble friend to comment on it, but I am sure that the team of wise people that he sets up will take account of what the Conservative Party have said, what the leader of the Liberal Democrat Peers said so forcefully earlier and what a number of other Members of this House have said in favour of giving Blackpool the opportunity to prove whether or not regeneration can be achieved through casino development.

The Government are sensible to agree, through the usual channels, to allow that to happen. It is crucial that we pass the Bill tonight. I commend the work that my noble friend Lord McIntosh has done in that respect.

© Lords Hansard 6 April 2005

Gambling Bill (Second reading)

Lord Faulkner of Worcester:

My Lords, I start by thanking my noble friend Lord McIntosh of Haringey for the clear and straightforward way in which he introduced the Bill. Those of us who have been following the subject over recent months or, indeed, years, know that it has not been easy for him or his ministerial colleagues in the Department for Culture, Media and Sport and I certainly pay tribute to him for the way in which he stood up to that criticism and has robustly defended the Bill today.

I cannot recall an issue where there have been so many vested interests at work.

Some are promoting change because they see business opportunities. Others are resisting it because they want to protect their own position from unwelcome competition. The straightforward commercial interests are not the only ones who have been busy. Some authorities see the Bill as an opportunity to regenerate and rebuild. On the other side are legitimate religious organisations, such as the Methodist Church and the Salvation Army, which are uncomfortable with any expansion of gambling opportunities.

As someone who was brought up in the Methodist tradition, I understand and sympathise with that point of view and, indeed, with what the right reverend Prelate said earlier about the dangers of exposing children to risk in amusement arcades.I have one commercial interest that I should declare at the beginning.

For many years before I entered the House, I was an adviser to Littlewood Pools, having been retained initially at the time of the Royal Commission on Gambling under the chairmanship of Lord Rothschild in the late 1970s. I continue to be an adviser to Sportech, the current owners of Littlewoods, although I severed that link when I served on the main inquiry of the joint parliamentary scrutiny committee.

In my view, it would not be appropriate for me to speak about the clauses of the Bill that cover its business this evening, and I shall not.

I also have two unpaid trusteeships that are relevant. One is of the Foundation for Sports and the Arts and the other is of Gamcare. Both are good causes that obtain funds from sections of the gambling industry.

As I said, I served along with four other members who have already spoken in the debate, on the Joint Scrutiny Committee, which I found an enlightening and fascinating experience. We worked together constructively on an entirely non-partisan basis and it is worth putting on record that the Members of this House achieved an impressively high attendance record during our sittings.In the main report we made 139 recommendations, of which the Government, to their credit, accepted 121.

I would not go as far as the leader-writer in the Guardian of 23 September last year, who claimed that the Joint Committee had

"saved her (the Secretary of State) and us (the country) from disaster"because we had "stopped many of the bill's worst features in their tracks".

But it is undeniable that the Bill is very different from the draft Gambling Bill that first saw the light of day in 2003.

Underlying that is the Government's repeated determination—we heard it first from the Secretary of State at the Joint Committee—not to pass legislation that would directly increase the number of problem gamblers in Britain, and to regulate properly and fairly the new aspects of the gambling industry that have grown up over the past 30 years.

I agree with the two noble Lords who spoke from the Liberal Democrat Back Benches that the Joint Committee warned that the Bill in its original form would have added to the number of problem gamblers. But the fact that the Government accepted 121 of the committee's 139 recommendations reduced that risk. The risk was reduced further by the additional changes made in the Standing Committee in the other place, when the scale of the Bill was substantially altered.

The crucial objectives of protecting the vulnerable and children will be assisted by measures in the Bill and are the central reason why the Bill must be enacted before any general election.

They include support for the Responsibility in Gambling Trust, with the reserved powers to impose a levy on the gambling industry if necessary; removing gaming machines from unlicensed premises such as minicab offices and fish-and-chip shops; carrying out a national survey into gambling participation and problem gambling, and reserve powers relating to the admission of children to amusement arcades.

The objectives will also be helped by the decision to reduce the number of new casinos to 24 rather than allow the market to determine the number. At one point we were looking at the possibility of 20 to 40 very large regional casinos. Although the Joint Committee did not recommend a specific number, the approach that the Government adopted in the other place and that is contained in the Bill is very much in line with the committee's view.

The Government's decision to appoint an independent panel to advise on the location of the new casinos also makes a great deal of sense. It is a pity that the committee was not told about that when it was carrying out its scrutiny because I am sure that all our members would have been interested in it and would have welcomed it. I hope very much that the wise people who make up that panel will take seriously the Joint Committee's comments about the need to ensure that regeneration benefits flow from any decisions to approve mega regional casinos. In our first report, starting at paragraph 388, we described what those benefits could include.

I listened with great interest and enjoyment to the remarks of the noble Lord, Lord McNally. The Joint Committee was much impressed with the evidence that it received from Blackpool, which was the only local authority able to demonstrate to us that it had thought seriously about the potential for casino-led regeneration, and had secured the support of its own residents for it. I agree with what the noble Lord, Lord McNally, said on the subject.

The proposal for Blackpool is very different from the dangers, about which we were told, arising from the proliferation of casinos and other high-stake gambling outlets in town centres and on high streets. Even the most cursory examination of Australia's experience with "pokie bars" in pubs, clubs and so-called hotels shows the risks inherent in the easy availability of high-stake gambling of that sort. The closest that we come to the poker machines found in Australia are the fixed-odds betting terminals (FOBTs) now found in virtually every high street betting shop. The Government are right to keep those under review, and the bookmakers, in turn, are wise to maintain limits on stakes and prizes. A lot more work needs to be done on the effect of those machines over the next two to three years.

New technology creates new opportunities for the gambling industry to make money, but it also brings with it new risks for the vulnerable gambler who has a problem. Other noble Lords, including the noble Lord, Lord St John of Bletso, talked about the growth of internet gaming, which is an example of that. The creation of a new regulatory regime administered by a new gambling commission is the most important element in the Bill and the foremost reason why the Bill should be enacted as rapidly as possible. It is central to many of the issues raised in the Bill.

One of the issues that exercised a number of us who are members of the All-Party Group on Betting and Gambling—my noble friend Lady Golding is the chair and other officers include my noble friends Lord Lipsey and the noble Viscount, Lord Falkland—is the effect that the growth of betting opportunities has had on the integrity of certain sports.

The Joint Scrutiny Committee had had drawn to its attention a number of allegations over the integrity of betting and in particular suggestions that the probity of racing could be threatened, partly but certainly not exclusively as a consequence of the establishment and the growth of the betting exchanges.

It was not possible for the scrutiny committee to examine these allegations in detail. The All-Party Group on Betting and Gambling therefore decided to set up its own inquiry to look at the incidence of, and potential for, irregular and corrupt betting on sports and the improper use of inside information. The group came to a number of conclusions and made 15 specific recommendations. There is not time for me this evening to describe these in detail, although copies of the report are available.

I am happy to make them available to your Lordships and the Library of the House also has copies.

I appreciate what my noble friend Lord McIntosh of Haringey said about the report and also the kind words of the noble Lord, Lord Mancroft, and the noble Viscount, Lord Falkland, about the way in which we went about our inquiry.

We accepted that the betting and gaming industry in Britain is one of the most respected and highly regarded in the world, and compares favourably with a number of other countries. We found no evidence of widespread or systematic corruption in any UK-based sport. However it did become clear to us that the public has become concerned about the integrity of betting on certain sports and needs to be reassured that cheats are prevented from prospering at their expense.

The use of inside information is one aspect of that and we took some particularly interesting evidence from the Financial Services Authority, which left us in no doubt that much of the information made available to bookmakers and selected punters would fall foul of their market abuse regime if the rules the FSA applied to spread betting applied equally to the gambling industry as a whole.

These concerns have intensified since the growth of the betting exchanges, mainly because of the opportunities that they offer punters to bet against each other, with one backing and the other laying any given event. It is of course self-evident that it is much easier to ensure that a horse, for example, loses rather than be certain that it is going to win the race.

This takes us into the realm of cheating, which is the subject of two of our recommendations. One is that a better definition is needed, which is already contained within the Bill. The second—and one which is strongly supported by the noble Lord, Lord Condon, whose evidence on tackling corruption in cricket was immensely valuable—was that the penalties need to be greater than those envisaged in the Bill.

I enjoyed what the noble Viscount, Lord Falkland, said about his discovery of corruption in cricket. Indeed one can read the evidence from the International Cricket Council about the sort of bets that were offered in recent Test series, where bets are taken on players who wear jumpers, those who wear shades and the number of times that bails are taken off during the course of an innings—these are the sorts of things on which bets are being laid.

And if the noble Viscount, Lord Falkland, was fielding at longstop and picking daisies, then somebody would probably be betting on the number of daisies that he was picking.

We strongly supported the principle of establishing audit trails in the betting industry. We commended the steps that the betting exchanges had taken to establish those and believe that the online and credit customers of bookmakers should be covered in the same way. We also attached huge importance to the memoranda of understanding signed between sports governing bodies and the betting operators. We feel that these should be extended as widely as possible so that all sports on which betting is conducted should have memoranda of understanding in place with the people who are accepting those bets. We also feel that the sports themselves should have a say on what types of bets should be offered on their sports, again because of the evidence we were receiving from the International Cricket Council.

Processes need to be put in place to identify those responsible for large or unusual bets. When these arrangements are linked to the memoranda of understanding with the sporting bodies it should also be possible to identify those individuals who are breaching their own governing bodies' rules on who may or may not bet and lay in their sports.

Out of our 15 recommendations, eight involve the Gambling Commission, whose role in all these matters will be crucial, in terms of protecting punters and improving the integrity of sports betting. For the commission to be established, it will be necessary for this Bill to be enacted. I close with what the Secretary of State said on Third Reading in another place on 24 January.

She said,

"the Bill is essential because without such legislation, gambling technology is leaving the law in its wake. If we do not modernise, people will not be protected. Without the Bill, there would be no gambling commission with the objective of social responsibility in gambling at its heart, internet gaming would continue to go unregulated, and there would be no powers to deal with roulette machines in bookmakers' shops."

[Official Report, Commons, 24/1/05; col. 127]

That strikes me as a pretty good reason for passing this Bill and I hope that your Lordships will do so.

© Lords Hansard 22 February 2005

All Party Parliamentary Betting and Gaming Group Inquiry

Statement by The Lord Faulkner of Worcester, Chairman of the All Party Group’s inquiry into the effects of betting on sport, at the launch of the inquiry’s report.

I’d like to start by thanking you all very much for coming to this press conference this morning. I have with me around the table a number of my colleagues who sat on the inquiry with me, and I am sure that they will be very happy to answer any questions you’d like to put to them later.

I’d also like to take this opportunity to thank all the organisations and individuals who gave evidence to us. Many of them appeared in front of us in one of the five evidence sessions we held in November and December, and transcripts of those sessions are published in our report. We also received a number of valuable written submissions, and we’ve published those too.

Before summarising our main conclusions, I should explain why the inquiry was conducted. It arose out of the work of the joint parliamentary scrutiny on the draft gambling bill, on which a number of members of this inquiry also sat.

The scrutiny committee had had drawn to its attention a number of allegations over the integrity of betting on a number of sports and in particular suggestions that the probity of racing could be threatened, partly – but certainly not exclusively - as a consequence of the establishment and growth of betting exchanges.

It was obviously not possible for the scrutiny committee to examine these allegations in detail – it had the whole of the draft gambling bill to look at within tight deadlines. The challenge was therefore taken up by the all-party parliamentary group on betting and gaming, which decided to set up this inquiry to look at the incidence of, and potential for irregular and corrupt betting on sports, and the improper use of inside information.

This report is the result of that work. We come to a number of conclusions and make 15 recommendations. We accept that the betting and gaming industry in the UK is one of the most respected and highly regarded in the world, and compares very favourably with that in a number of other countries. We found no evidence of widespread or systematic corruption in any UK-based sport.

However it became clear to us that the public has become concerned about the integrity of betting on certain sports and needs to be reassured that cheats are prevented from prospering at their expense. The use of inside information is one aspect of this.

These concerns have intensified since the growth of the betting exchanges, mainly because of the opportunities that the exchanges offer punters to bet against each other, with one backing and the other laying any given event.

We say therefore that the advent of the exchanges has brought new challenges to sports governing bodies, gambling regulators and government.

Our recommendations are aimed at protecting punters and improving the integrity of sports betting. We support the provisions contained in the current Gambling Bill to establish the Gambling Commission – out of our 15 recommendations, eight involve the Commission.

We recommend that all major betting operators sign memoranda of understanding – that includes online and high street bookmakers, as well as betting exchanges - with the sports on which they base their business. We believe that the betting industry should in due course move towards only accepting bets on those sports with which they have signed MoUs, and we say that sports should be consulted on what types of bets should be offered on their sports.

We strongly support the principle of establishing audit trails in the betting industry. We commend the steps the betting exchanges have taken to do so, and believe that the online and credit customers of bookmakers should also be covered.

We believe it is vital that processes are put in place to identify those responsible for large or unusual bets. When these arrangements are linked to the memoranda of understanding signed with the sporting bodies, it should be possible to identify those individuals who are breaching their own governing bodies’ rules on who may and who may not bet and lay in those sports.

I thank you again for coming, and invite you to put any questions that you may have.