HoC 85mm(Green).tif

Culture, Media and Sport Committee

Oral evidence: Gambling regulation, HC 1010

Tuesday 5 September 2023

Ordered by the House of Commons to be published on 5 September 2023.

Watch the meeting 

Members present: Dame Caroline Dinenage (Chair); Kevin Brennan; Steve Brine; Julie Elliott; Damian Green; Dr Rupa Huq; Simon Jupp; Jane Stevenson; Giles Watling.

Health and Social Care Committee Member present: Paul Blomfield

Questions 269 - 392

Witnesses

I: Andrew Rhodes, Chief Executive, Gambling Commission; Tim Miller, Executive Director for Research and Policy, Gambling Commission; and Sarah Gardner, Deputy Chief Executive, Gambling Commission.

II: Rt Hon Stuart Andrew MP, Minister for Sport, Gambling and Civil Society, Department for Culture, Media and Sport; and Ben Dean, Director, Sport and Gambling, Department for Culture, Media and Sport.


Examination of witnesses

Witnesses: Andrew Rhodes, Tim Miller and Sarah Gardner.

Q269       Chair: Welcome to this morning’s meeting of the Culture, Media and Sport Select Committee for our final evidence session on our inquiry into gambling regulation. We are joined again by Paul Blomfield, who is our celebrity guest star from the Health and Social Care Select Committee. He is taking part in these sessions by our invitation to look at the public health implications that have been raised by quite a lot of the evidence that we have taken along the lines of this inquiry.

Our first panel today is with the Gambling Commission. We are joined by Andrew Rhodes, the Chief Executive, Sarah Gardner, the Deputy Chief Executive and Tim Miller, the Executive Director for Research and Policy. Thank you for joining us this morning.

The Committee will declare any interests as we go along. I will start because I have accepted hospitality from the Betting and Gaming Council over the years.

Can you update our Committee on the progress of the White Paper consultations that the commission has been leading on?

Andrew Rhodes: Certainly. I should explain what the Gambling Commission’s role is. We are the statutory advisers to the Government on gambling. We are a licensing authority and we license the gambling industry in Great Britain, but not Northern Ireland aside from the National Lottery. We are implementing the Government’s White Paper. It is Government policy and I am sure we will touch on that later.

Broadly, three things are happening as a result of the White Paper. First, there will be legislative change made by the Department itself. The Gambling Commission is not a legislative authority. It is making changes to primary and secondary legislation; things like the statutory levy, credit in casinos, and so on.

The second group comprises voluntary arrangements, for example, the industry being charged with designing an ombudsman voluntarily or, for example, the Premier League around sponsorship on the front of shirts.

The third group, which is where the commission’s main focus will be, will be concerned with changes to our licensing requirements, the LCCP, which is enforced by us. We need to make sure that we consult on any changes that we make to that document. We have around 68 workstreams or thereaboutsI am sure Tim will correct me if I am a little out there—and we are involved in about 80-plus workstreams overall.

Our current consultations are live. They have been out for several weeks. I think four of them are live at the moment, which I am sure Tim will go into. We have had around 1,500 responses to the consultations thus far. Most of those, if not nearly all of them, were in the area of financial risk checks, which I would say is the most challenging part of what we are doing at the moment. It is the most debated part and some very strong views are being expressed about it. We still have about six or seven weeks remaining in the consultation. Perhaps, Tim, you could explain which consultations are out and where we are with them.

Tim Miller: The first tranche of consultations covered four topics. One is financial risk and vulnerability, which I believe the Committee will want to go into in a bit more detail later on, but there are some other important topics in there as well. Remote game design features in there, and building in greater protections for consumers in the way that games are designed. Improving consumer choice on direct marketing is important as well, giving consumers much greater say over the type of marketing they get, particularly in the space of cross-selling.

That would mean if you sign up, for example, to place £10 on the Grand National, you will not automatically receive marketing for that same company’s online slots offer without directly opting into it.

The final area is strengthening age verification in premises. Those consultations all close on 18 October.

We will then be fairly quickly moving to the next tranche of consultations, which will be published in the winter but the Secretary of State gave a very clear steer that she wanted to see the White Paper implemented at speed. I think it is fair to say that we were quick out of the blocks in getting that first set of consultations out there.

Andrew Rhodes: One thing, if I could add to that, is in order for us to do our jobs correctly the consultation has to be a meaningful one. We cannot simply have the illusion of a consultation. If we did we would leave ourselves open, quite rightly, to legal challenge and further delay to the implementation. The consultation will be what it will be. We already know from some of the lobbying, from some of the letters we received most recently, that there will be some very precise issues that people will object to and we will need to work through them and make sure we cover those things off properly.

It is difficult for us to say exactly when everything will be implemented because we need to go through the consultation properly. But I am pleased that we got those out exactly when we said we would and we are progressing through them, and now we will see what we receive.

I think the detailed responses will come normally at the end when all the different parties have had more time to consider. They will want to submit evidence, they will have done research, and we will need to see what that says.

Q270       Chair: Mr Rhodes, it is a significant amount of consultation that you are conducting at the moment. Given that the commission’s fees are not expected to be reviewed until next year, are you satisfied that you are adequately resourced in the interim for the amount of work that you are being encouraged to do?

Andrew Rhodes: Yes, I am in terms of all the consultation work. You are quite right that our fees are not set to rise yet so I will touch on fees in just a moment.

We have built a programme within Tim’s area. Tim is the SRO for the White Paper programme. We have a programme manager and we have seconded a large number of people into that team. That is why we were able to get all of our planned consultations out and we have done the work, not just on the next round but on a number of areas that are not consultation matters. I am very confident that we are in a strong place there.

Where resources will become more important will be later on when we get results out of further consultation. For example, the data pilot work that we are doing at the moment with some of those results will come this month and next month. That will lead us to some investment decisions around what we do with data, and that will come at a cost.

I am pleased that the Government committed in the White Paper to a fees review for the commission early on in the implementation. Fees for the commission did rise recently but they had been deflationary for a long time so our fees now, excluding the recent increases in inflation, remain well below where they would have been comparatively. I am pleased that we had a recent fees uplift. That has allowed us to make a number of investments in areas, which I am sure we will touch on later, such as illegal gambling and data.

I am quite comfortable with the resources we have now but that means that we do need to go through the consultations in a sensible order. However, I do not think that the industry or any other group of stakeholders could absorb all the changes at once. A lot of them have very complicated tax stacks and a lot of them are made up over a series of mergers and acquisitions.

The industry will also need time to ready itself for the changes to make sure it implements them in the right way. I think we are going about it in the right order and we have the right resources at the moment to do that.

Q271       Chair: You have enough resources at the moment but, looking forward, are you satisfied that the proposed funding regime will sufficiently cover you to implement the changes that are going to be brought forward?

Andrew Rhodes: The commitment is to a fees consultation. It is not a commitment to a fees uplift, and I think that is the right way of describing it and that is how Government should go about it. Our fees do not increase with inflation or anything else or with demand. If we are dealing with more and more complicated issues, our funding does not rise with that. What I am pleased by in the White Paper is the commitment to that future funding. That allows the commission to make longer-term investment decisions.

We are not taxpayer funded. We are funded entirely through fees set by Ministers or, for the National Lottery, we recover some money from the National Lottery for the cost of regulating it. Long term, yes, we will need to make sure that the funding is appropriate.

We are an organisation of 351 people. We are not a large regulator and we regulate the largest online gambling industry in the world. If we are going to do more complicated things around regulation, it will require resources to do it but I am very comfortable with our current position. In the longer term, however, we will need to invest more money and have more people with different skills.

Q272       Paul Blomfield: I want to ask a question about the powers you need to ensure regulatory compliance. First, I ought to acknowledge the fact that you picked up on a point I made at a previous session in a letter to the Chair. I think you are probably right, that I should have clarified that I was talking about addiction and at-risk rates in relation to Luke Ashton’s inquest, but it does raise a general question about data. I understand the figures we depend on from the Gambling Commission are based on a quarterly telephone poll of 1,000 people. Do you think that is enough for what you are thinking about doing to improve data collection so that we have a firm evidence base on which to make decisions?

Andrew Rhodes: I think I will have to hold Tim back in a second if I do not let him talk about what we are doing in this area. What you said there is partially true. We do have the quarterly telephone survey but we also have access to a great deal of research elsewhere. Things such as the patterns of play research, which covered a huge number of gambling accounts, are very informative to us in terms of how people behave, why they gamble, how they gamble and the impacts on them.

We have access to a lot of other research too but I think it is probably best if Tim describes the upcoming Gambling Survey of Great Britain and some of our other research. I think last year we produced more research than at any time in the commission’s history but Tim can talk about the research area.

Tim Miller: The quarterly survey you talk about is a relatively small sample size but we use that primarily to track what is going on in slightly more real time. The authoritative source of data historically has been the health survey carried out in each of the three nations. For a long time, that was seen as the gold standard but I think over recent years we have increasingly seen challenges with it giving us the information we need. One is because health is a devolved issue. Obviously it is carried out in slightly different ways in each of the three nations and has sometimes been in a fairly inconsistent way.

The second challenge around it is because it is run by the NHS, it has to go through NHS Digital. We often do not get the data until perhaps a couple of years after the fieldwork has been done, and in such a fast-moving industry we can no longer be relying upon data from a couple of years ago.

We have been doing a significant piece of work over the last year or so to take ownership of that data and research ourselves and we will, over the coming months, be launching what will be the largest survey of its type into prevalence and participation of gambling anywhere in the world. We think that will give us much more accurate information, importantly much more timely information and information for as the gambling regulator and we will have much greater control over how that is run.

Certainly, I recognise some of the challenges with the data that we have, and we have invested a lot of time and energy in ensuring that we are going to have a much more effective way over the coming months.

Q273       Paul Blomfield: One piece of data we do have, and which I assume you would accept, is the Office for Health Improvement and Disparities assessment of gambling suicides, which they did obviously extensive work on, which you will recognise, and it concluded that between 117 and 496 additional suicides where gambling addiction was the primary factor took place. How does the commission learn from gambling deaths?

Andrew Rhodes: If I might say something about that first—this is a very sensitive and difficult area. There is nothing that I or anyone else can say to someone who has lost a loved one, who has taken their own life. It is an exceptionally difficult topic and understandably emotive.

When we are informed that someone has taken their life and gambling may have been a factor in their life, we will look at their gambling behaviour. We will contact all operators to determine if that person has gambled with any other operators. Quite often we find that they have. We will try to assemble a pattern to see whether there are any potential breaches of our licence conditions and try to understand what may have happened in this case.

It is a very difficult one because it is for coroners to determine if someone took their life and what the circumstances were. Wherever that happens, if we are asked to participate then we will. This area will be a feature of the Gambling Survey of Great Britain as well in terms of ideation and whether people have had suicidal thoughts. It is an area that is under-explored and it is difficult to have reliable figures on exactly what this looks like, partly because the circumstances are unique to individuals and it is a very difficult topic to explore.

If we are aware of someone who has taken their life and gambling has been a factor and we are informed of it, then we will always have a look into those cases and try to determine what we think can be learnt from it. If there are things that we think can be learnt from it then that is built into what we do.

Having looked at a number of cases of people very tragically having taken their own lives, it is clear that some of the gambling behaviours that we have seen for those individuals, regardless of causality, some of the things that you would hope to do in those cases are features of the Government’s White Paper in terms of some of the early interventions that we think would be sensible. They are not necessarily designed around the risk of someone taking their own life but they are things that would, we think, help.

Certainly, this will be a feature in the Gambling Survey of Great Britain because it is an area in which it is very difficult to say definitively what the position is, partly because we also rely on the coroners who will make a determination, which may be some years after the passing of someone.

Q274       Paul Blomfield: It is helpful to know that you will explore all deaths that are alerted to you because obviously a very small number go to coroner’s inquests.

I wonder if I could move to the issue of the powers that you need to ensure regulatory compliance. Obviously the size of fines and regulatory settlements have increased in recent years. Do you think that that has strengthened deterrents for preventing bad behaviour by operators or do you think that they factor it into their business planning as a necessary cost in what is a very profitable business?

Andrew Rhodes: You have outlined the two greatest accusations that the commission gets in this area, first, that the industry is terrified of us and constantly lives in a state of perpetual fear that the commission will turn up at any moment and hit them incredibly hard for no obvious reason and secondly, that gambling operators simply shrug these things off. Neither of those things is accurate, and I do not mind the question in the slightest.

I set out in November 2021it happened to be at the GamblerAware Conferencethat the commission would focus on what I described as recidivist behaviouroperators that we are seeing for a second or, God forbid, a third timeand that we would escalate penalties, and that is exactly what we have done. During the last year, we have seen the two largest penalties levied anywhere.

I was told last week by someone in the industry who has been looking at patterns across the world at gambling regulationand this does tally with what I have seenthat nine out of 10 of the largest penalties and 85% of all the activity in the world in gambling regulation comes from us. I would say that we are being very active.

Your question is about whether we are seeing improvements. We are seeing fewer egregious cases, and I am sure we will touch on those, but we are not seeing none. That is an odd thing to say. We are not seeing their absence altogether, sorry.

In terms of our compliance activity, in quarter one 2022-23 we conducted five cycles of compliance and only saw a 20% compliance level. In 2023-24 we executed 21 cycles and saw 95% compliance. We are seeing an improving picture.

But the other thing is that our overriding strategy has been compliance at the earliest opportunity. Penalties happen at the end, when the operator is either so egregious that the penalty is the right thing to do or we have not been able to secure compliance straightaway because they have decided to object to it, whatever their reasons will be.

Our engagement with operators to secure compliance at the earliest opportunity is working very well. We are seeing a much more rapid response and that is getting us into the right place. But I can tell you now that the penalties that we have put in place have caused the industry some real distress. They are very profitable companies but it does cause undoubted distress, and we have seen a difference. The other thing that the industry says itselfand this is from many of the people I talk to, as well as I think the trade bodyis that the industry has not done itself any favours in recent years with some of the cases that we have seen. In all of the examplesI am talking about the penaltiesthe operators have accepted that there were breaches and there were failings and have agreed that they needed to be put right.

People will argue about why was it not right in the first place, and that is a very justifiable question. But we are seeing success in this area undoubtedly. I think that is what we need to continue to press on.

Q275       Paul Blomfield: One final question from me about regulatory settlements. You have recently taken the decision to transfer, I think, about £32 million of regulatory settlement money to GambleAware to distribute. I think that is a transitional step as we move from the current settlement to the post-White Paper architecture. Obviously that is money that previously was used by or had been made available to third sector organisations who will not accept industry money. I wonder what you thought was the future position for those organisations to receive funding during this transitional period. We are talking about organisations that the Government leaned on or drew on very heavily in the work that they did on the White Paper.

Andrew Rhodes: I will say a few things on that, and Tim might want to go into a bit more detail about regulatory settlement. Regulatory settlement funds have grown quite considerably as we have taken more and more action. The commission cannot use any of those funds to pay for the administration of the distribution of those funds. We cannot take money for assessing the efficacy of any of that work. The funds are of such a size that we think they ought to be with a body that does have that capability. That is consistent with our statement of principles.

The funds are not industry money. I appreciate there are bodies who do not want to take funds from the industry and that is partly where the statutory levy decision-making I think comes from. These are ring-fenced funds. They are ring-fenced by GambleAware. They come from regulatory settlement. They are predominantly to ensure system stabilisation as we move towards a statutory levy. We do not know exactly when the levy will take place or at what level. We would not want to see bodies that are currently funded, and have good solid programmes that will stand up to scrutiny, being unable to get funds when those funds are available but it is not the Gambling Commission’s job to ensure that particular parties are funded.

The regulatory settlement funds are meant for things such as innovation and for one-off funding. They are not meant to support particular charities or anything like that. This is why we think the system stabilisation fund is the right way to go until the statutory levy is introduced, which is obviously the Government’s stated intention. I would anticipate the regulatory settlement funds would then join with the levy funds.

This Committee also was critical of the Gambling Commission about how we handle the regulatory settlements, which we took on board, and we think there is a better way of doing it. Tim, do you want to add to that?

Tim Miller: As Andrew said, since regulatory settlements first became available we have seen the volume of them increase quite considerably to the point where this Committee and others rightly raised some questions as to the rigour of that process. Where we found ourselves with the volume of settlements we are talking about was that we would have needed to put in place a proper commissioning framework in order to administer them properly.

As a gambling regulator that is not our role but, secondly, because we cannot take any of those regulatory settlement moneys to fund it, we would have been subsidising it from our core regulatory funding, which would mean taking money away from regulating the industry, addressing any regulatory breaches that we have seen in order to do so.

A range of people have a range of different views on GambleAware but it does have an established operating commissioning system in place. We felt that in the short period of time between now and when a statutory levy comes into place, that was the most efficient and effective way of ensuring appropriate rigour around how the money is used and ensuring that there is no cliff edge between now and when the regulatory settlements come in. That was the reason for taking that decision.

Q276       Paul Blomfield: You are right that we should not get into the argument about GambleAware, but you will recognise that NHS England withdrew funding from them on the basis of concerns over the industry funding. It would be helpful to at least have an assurance that you do not think the decision that you have made for the interim should influence the post-White Paper architecture for the sector.

Tim Miller: That is not the case at all. The Government will decide and set out what that architecture will be. We are very clear that we do not see ourselves having a key role in that, other than collecting the money from operators. Certainly the intention of the decision we made about regulatory settlements was in no way to influence what that future or system will look like. It was simply to recognise the quite legitimate questions that this Committee raised about how we were running that system and also to recognise that there is a risk of a bumpy transition and we wanted to make use of that substantial pot of money to try to aid that transition.

Q277       Damian Green: One of the threats that the industry holds over you and the Government is that if you over-regulate, people will be driven to unlicensed sites, which will do even more harm. Do you give any credibility to that threat?

Andrew Rhodes: We hear this a lot and I have said in public a number of times that I think the risk is over-stated, but I do not think there is no risk.

A lot of people around the industry will tell you that within the GB market, to be technically correct about it, the size of the black market is very small as they estimate the position to be, but estimates do vary.

What I will say about it is that we have been very active in the space of tackling illegal gambling. We have taken 500% more action between 2021-22 and 2022-23. Most recently four of the top 10 illegal domains for—it will be online casinos targeting the self-excluded—four of the top 10 are now geoblocked. We have seen a 46% reduction in traffic to the largest illegal sites coming into our market. We have also worked with Google and I think it is 17 sites are now blocked from Google search results. We have worked with Mastercard also removing payment facilities from illegal sites, plus we have served cease and desist notices against a number of media outlets for advertising illegal gambling. We are having a lot of success in this area.

However, every time I have heard someone say to me, “Based on what is happening here, people are going to the black market”, I have asked them same question, “Tell me where. I have not once had an answer. I have not once been given the name of an operator or a person or a location or anything I can act upon, and I have consistently asked that question every time.

There is undoubtedly a risk that if people cannot gamble in the legitimate industry for a number of reasons they may go somewhere else. We have to get the balance right, which I think is what the White Paper is trying to do. But also the commission needs to be very proactive, as we are, in tackling illegal gambling.

Q278       Damian Green: You say that the illegal market is very small. You will have seen the PwC report commissioned by the Betting and Gaming Council that said it had roughly doubled in size recently. Do you reject that?

Andrew Rhodes: It depends on what you are talking about, on what has doubled in size. First, the PwC report relies on the same data that we do in terms of channelisation. Channelisation is either 96% or 97%. That means how many things can you gamble on? We are the most liberalised market in the world that suppresses illegal gambling. In markets where they do not have higher channelisation, they have a lot more illegal gambling because people want to gamble on certain things, so they will.

Based on the discussions we have had with research bodies, including Yield Sec, which the BGC has quoted in public, what we see happening is that the growth is largely in targeting self-excluded people through online casinos, specifically looking at Not on GamStop, which is the tool that allows people to fully self-exclude from online gambling. That is where we have seen the growth. It is very difficult for illegal operators to get access to the UK market because it is so competitive and the channelisation is so high.

Other countries around EuropeSarah was in, I think, Denmark recentlyare looking to our model in terms of channelisation and our approach as the way to combat illegal gambling.

Q279       Damian Green: Do you feel that you know enough about the illegal market? Is your research in that area satisfactory?

Andrew Rhodes: I do not think we know enough. It is in our evidence gaps and priorities plan for the next three years. I think there are too many people claiming they know more than they do. From talking to operators based on what they see around Europe, in particular, I do not think we have a large black market but the research is not as good as it needs to be. However, it is also very difficult to estimate the size of something that is illegal. There are plenty of surveys that do not hold a lot of water in terms of methodology but which will tell you certain things. However, the evidence base is not as strong as it needs to be and that is why it is in Tim’s team’s research programme over the next three years.

Q280       Damian Green: One of the new powers proposed for you is to act against third-party providers. Do you think that is going to be effective?

Andrew Rhodes: Yes, we want a power of injunction effectively. We want the ability to injunct anyone who is facilitating illegal gambling. We have taken a lot of action, particularly in the last year, which has been very successful. A lot of that has been done in partnership. Some of it has been using our cease-and-desist powers, but our ability to have further powers would mean that we could do things more rapidly. It is a power that the French regulator has recently been given, and we are watching with interest to see how they use it.

Q281       Damian Green: It would require a court order; does that delay things?

Andrew Rhodes: It is my understanding that the French one does not require a court order.

Damian Green: But the proposal here is, as I understand it, is that you—

Andrew Rhodes: But from my point of view I would like to be able to issue the injunctions so that we can move as quickly as possible. But that is something that will be consulted on, I have no doubt.

Q282       Jane Stevenson: As a follow up, I wondered to myself if I could use a VPN and just gamble anywhere, and a quick Google brings up dozens and dozens of sites offering exactly that. How can we combat VPNs?

Andrew Rhodes: VPNs are the other issue that we face, which is why we are working with internet service providers because there is an ultimate destination, which is the router, wherever you are. People can use VPNs and that is one of the issues. That is why we need to do more work with the tech sector to find ways to combat that.

However, one of the reasons that we have been specifically looking at payment methods—I think we have issued three cease-and-desist notices recently against FCA-regulated payment providers—is to make it more difficult to transact anyway because of where those sites are. It is to prevent your money from being able to move. We are also talking to the FCA about crypto organisations who are on the list that the FCA uses, where they can advertise, for example. We are also looking at that area.

VPNs are a weakness in the system. They are there to circumvent things like geoblocking. That does not mean that we have not had success with the other interventions that we have put in place in the last year. But VPNs and how we deal with that problem is definitely one of those things that we will keep working on.

Q283       Jane Stevenson: Do you have any idea of the scale of VPN use? I presume data gathering from VPNs is nigh on impossible.

Andrew Rhodes: I would think it is probably very difficult. I personally do not have that information in terms of VPN usage generally. They are widespread. On pretty much any app store you can download a VPN for a variety of purposes.

Quite a lot of legitimate operators have blocked VPNs themselves, so if you are in Australia, for example, and you try to use a UK gambling site, even through a VPN, you will quite often find that you cannot. They do constantly update them and that is so they do not offer gambling illegally in another jurisdiction. There are things that can be done.

Q284       Jane Stevenson: How do they know that you are not in Australia if you give a random address in Melbourne?

Andrew Rhodes: VPNs use rotating IP addresses, which are in different countries. If you see a spike in the usage, a bit like the way that we detect unusual patterns in gambling behaviour, then that can be alerted and they start to block those IP addresses through VPNs. But it is a constant chase.

Jane Stevenson: Are we doing enough compared with countries like Australia?

Andrew Rhodes: This work is being done by UK companies who have spotted those patterns. I use Australia as an example just because I conducted my own test and you can see how it works.

Q285       Jane Stevenson: But to follow the money, that must be incredibly difficult because how do you know where money is going if it is going via a website?

Andrew Rhodes: It has to do with the payment providers themselves. If Mastercard is advertised on an illegal site we alert them and they will remove the payment facility, which makes it harder for you to make payments.

Q286       Jane Stevenson: Are they illegal sites?

Andrew Rhodes: They are illegal sites.

Q287       Jane Stevenson: VPNs are illegal?

Andrew Rhodes: I will separate the two issues. There are illegal gambling sites and there are VPNs. What we have done with the payment providers is tell them who the illegal sites are, so even if you were using a VPN your money cannot move from a UK financial institution to an illegal one.

Q288       Jane Stevenson: But what about legal foreign operators? If it is a legitimate online gambling set up in the US how do they know?

Andrew Rhodes: If you are operating legally in another jurisdiction, in order to take custom from the UK you have to have a licence here as a point of consumption law. Legal operators will always have to have a licence in this country.

Q289       Jane Stevenson: But if there is money going in, I do not see how a UK customer who gives an address in Americadoes that circumvent regulation?

Andrew Rhodes: I do not think I am quite following your question.

Jane Stevenson: If I were to give a false address in America and do it via a VPN, which just masks where my computer was, if I transfer money is there any trace of that going over to—

Andrew Rhodes: Any money you transfer from a UK institution is traceable. We focus on payment providers. The payment provider will know where your money is coming from, so you cannot mask that. If you are using Mastercard, for example, to make a payment to an illegal site and if we are aware of that illegal site and have notified Mastercard, they will not allow a transaction to go from the UK to that site. That is traceable. It does not matter if you use a VPN or not or whether you lied about your address; that is irrelevant.

Q290       Jane Stevenson: Where do you think there are improvements to be made to cut down on VPN?

Andrew Rhodes: I cannot say I know enough about what we need to do on VPNs. VPNs are one of my concerns around illegal gambling because we have geoblocked four of the top 10 illegal sites. We saw a 46% reduction in activity. Some people will use VPNs to try to circumnavigate that but sites that are geoblocked know they cannot access our market. They will be looking for the same rotating IP address patterns as legitimate operators will. But VPNs are a challenge, which is why we need to do more work in the data and technology space to find ways that we can make using them even harder.

Q291       Simon Jupp: I want to talk about the gambling ombudsman. Do you have any concerns about how effective and fully independent it can be, given it is not statutory?

Andrew Rhodes: Our advice was very clear. We said that we thought the ombudsman should be a statutory ombudsman set up on a statutory basis. We understand why the Government have not gone down that route, particularly with the time remaining in Parliament. What is written in the White Paper is that we have to be satisfied that the ombudsman is sufficiently operationally independent of the industry. It will also have to meet the Ombudsman Association—?

Tim Miller: Yes.

Andrew Rhodes: I have it right, but Tim always has to correct me on this. I always call it something else—but the Ombudsman Association standard otherwise it cannot be called an ombudsman, and that has a series of minimum standards. We will need to see what is specified by the industry and whether it meets those standards and whether we think it is operationally independent. That work is being overseen by DCMS, which will become involved as it goes further on. Tim, do you want to add to that?

Tim Miller: The industry made the offer that it would seek to establish this ombudsman and make sure that it is properly independent. I think it is for all of us, DCMS, probably this Committee as well, to hold industry to account for that. If they fail to make a proposal that is sufficiently independent, if what they come forward with is something that is inherently compromised, then I think the White Paper was very clear that the Government would then look to legislate to put it on a statutory footing.

The industry has an opportunity here. It can stick to the commitment and deliver something that consumers properly have trust in or the alternative will be that statutory ombudsman. As Andrew said, our advice recommended that statutory would be preferable but we do recognise, particularly given where we are in the current Parliament, that that could mean that an ombudsman is some way off.

I do think if the industry proposal is genuinely independent and effective then we can get an ombudsman in place sooner, and that will be good for consumers. But it is for the industry to demonstrate the commitment of its words.

Q292       Simon Jupp: How soon would you like to see this set up? Full proposals and your agreement to it and everything elsehow quickly would you like to see this?

Tim Miller: I think the White Paper spoke about it being established by next summer. We would like to see it established as soon as possible because we see from our own conversations with consumers, the calls into our contact centre, a real need for clear independent redress for consumers. It is important though that what is established is properly independent, is effective, has consumer confidence. If that is rushed in much more quickly—

Q293       Simon Jupp: How do you judge consumer confidence if it is not there yet and how long would it take to judge consumer confidence?

Tim Miller: Different ombudsmen approach that in different ways. My background prior to the commission is being with a number of ombudsmen. And ombudsmen themselves look to measure consumer confidence with that system. Part of that is through the use of that system. Do we see an increase in consumers feeling comfortable in bringing forward their complaints compared to the system that we have now? How satisfied are consumers with the outcomes that they receive? They will be the sort of measures. They are things that you can probably start to measure fairly quickly.

Simon Jupp: What is the timescale?

Tim Miller: It would be, frankly, impossible to say in part because the ombudsman will also be independent of us as a regulator and I do not want it to seem like we ourselves are, at this stage, trying to set performance standards for any future ombudsman.

Q294       Simon Jupp: How much did the commission push back on the idea of it not being statutory and the idea there is not enough parliamentary time? I know it is going over old ground but it is important to understand. You put it in very “Yes, Minister style language but did you push back, how hard did you push back and did you feel that there was any movement at all?

Andrew Rhodes: I suspect Tim will want me to answer that bit. I will try not to be too “Yes, Minister then. We raised our concerns about it not being statutory in terms of whether consumers would have sufficient confidence in it. The main point for me, which I was just jotting down now, is if you are to have an ombudsman that is not statutory, what the industry wants is it to be a licence condition so it is part of the LCCP, you have to do it or you can lose your licence.

In order for us to do that we would have to consult on it. For us to consult on it we would have to believe it was properly independent and consumers would believe in it and it was something that we could put our name to and that our board would be prepared to put its name to. Our concern, if the ombudsman did not live up to those standards, is that we could not do that. It has to have that rigour otherwise we simply will not be able to make it a licence condition because it does not meet the required standards.

How much did we push back? As Tim said, we understand the constraints of parliamentary time and it is better to have an ombudsman than not to have one. Ninety-eight per cent, I am told, of our correspondence we cannot deal with because we are not an ombudsman but people would like us to be. It is one of the biggest criticisms of the commission. There are plenty of lobbies who would like to criticise us but one of the criticisms is that we do not deal with individual cases because we were not set up as an ombudsman. So we want to see one but it has to be something that can fill that role, and we were very clear about that.

That is why the White Paper says it has to be properly independent of the industry. This is work that the DCMS is leading on at the moment. Obviously we are sighted on it because we will have a relationship with the ombudsman because I am hoping it will be drawing out themes that we need to look at as licence issues.

Tim Miller: Let's remember that our advice was not given in secret—we published it on the same day as the White Paper—nor has the Government sought to try to hide that advice. The White Paper itself linked directly to our advice. I do not think this is a case about us soft-pedalling that advice or the Government trying to avoid any areas where there were slight differences of views.

Q295       Simon Jupp: I want to ask about obviously the ombudsman for social responsibility complaints but alongside of course eight ADR providers for other disputes. Will that be confusing for customers who gamble?

Tim Miller: Yes, I think would be the answer, if that is where we end up, and we were clear that what we wanted to see was a single ombudsman that could deal with the entirety of consumer complaints. Certainly, you look at the criteria that the Ombudsman Association set, they have always been very clear that having multiple ombudsmen or complaint systems within one sector is not desirable. Consumers need to very clearly understand where they can go when they have a complaint. We were clear in our advice that a single ombudsman to deal with the entirety of those issues would be the right way to approach things.

Q296       Julie Elliott: How will gambling operators have to respond if a customer does not pass a financial risk check?

Andrew Rhodes: We probably need to explain the rationale behind this. What we are trying to guard against, because this happens already, is there are a number of operators who already have checks in place on basic financial risk who turn away customers because of their level of financial risk, and this already happens and is a commercial decision that they have made.

The reason why these things are in place or rather why we propose it and the White Paper says that these things should be in place, is if you look at the history of cases that we have seen in the last not very many years, they are quite extreme. There is an NHS nurse on a salary of £30,000 a year losing £245,000 in three months, a customer losing £70,000 over 10 hours within a day of opening their account, a customer earning £1,400 a month having a deposit limit of £1,400 a month, another customer losing £23,000 in 20 minutes. What we are trying to guard against are people with high-velocity gambling, or gambling that might be reaching a level that they cannot  cope with. We are talking about 3% of accounts. The vast majority of people gamble a lot less than that, 84% of accounts in our Patterns of Play research spend less than £200 a year. We are talking about a narrow window of customers.

I don’t think the financial risk checks are necessarily pass-fail. They are there to help guide the operator on the risks that an individual may well be facing. That is what it is there for. It is not there to pass-fail someone.

Q297       Julie Elliott: How will the new checks interact with existing requirements around customer safeguarding?

Andrew Rhodes: There are a range of things that operators need to do, which are not just about the financial. They are there looking at, for example, someone’s patterns of play. Somebody could be gambling for very long periods. They need to intervene. They should be having a break. They should be made aware of how long they have been gambling for. They should have tools available to limit. Things like that. Therefore, it is actually about a range of factors not just the financial ones.

We talk about the financial ones more, because when you hear a really difficult story it is normally the level of money that they lost that we tend to talk about. Combined with that will be the length of time that they were gambling and the variety of things they are gambling on, so there are quite a range of risk factors. Somebody who is gambling more frequently on different—

Q298       Julie Elliott: How do they all interact with each other? How do you see it working?

Andrew Rhodes: Operators have to have policies and processes in place that take those things into account, a lot of which they already do. What is different here is the Government setting minimum required standards in terms of financial vulnerability and risk. Already operators do look at how frequently someone is gambling, what they are gambling on, how they are splitting things between products. More than 56% of people in the Patterns of Play work were betting across two to five subjects, so that is how they build a risk profile for that individual and that is what they look at.

Q299       Julie Elliott: What requirements will you place on operators to protect customer data, because there is a lot of data going on here?

Andrew Rhodes: There is a lot of data going on here, which is why we have worked hand in hand with the Information Commissioner’s Office from day one on this. Tim, do you want to expand on that work?

Tim Miller: Yes. It is very important because, whenever you are dealing with people’s data, people want to feel that they can trust the way that data is being used and that it is not going to be misused. As Andrew said, we worked closely with the expert data protection regulator, the ICO, to ensure that the right protections are built into it, to ensure that this is compliant with data protection legislation, and they will continue to work with us as this is developed further.

Importantly, the rules will be very clear that any data that is collected through this can only be used for the purposes of helping to protect consumers. It cannot be used for commercial purposes, and if operators were to do so then not only would they find themselves on the sharp end of regulation from us but also from the Information Commissioner as well.

I think it is really important that consumers have that trust and confidence in terms of the effectiveness of any protections. If consumers don’t feel that their data is being used fairly and responsibly, they will seek to try to opt out from these systems. It does increase the risk of them trying to circumvent it, so it has been really hard-wired into the development of this work.

Q300       Julie Elliott: Will it be for gambling operators to conduct their own checks or will they pass it on to third parties to do it on their behalf?

Tim Miller: There will be a mixture. We recognise that a lot of the data that is involved is not held by gambling companies and does not necessarily need to be held directly by them. So we in government have been working very closely with people like the credit reference agencies, and so there will be heavy reliance upon the sort of information that they have to carry out checks to provide appropriate assurance to gambling companies.

What that does not do then is allow gambling companies off the hook in terms of the existing requirements that we have. You asked the question about how it interacts with some of our existing protections, and certainly they are complementary. It has long been expected that gambling companies understand their customer, understand the risks that their customer faces,  so gambling companies will need to conduct their own assessments. They will need to look at the information they have been given by credit reference agencies and others, and decide: what does that mean in the context of the player patterns that they are seeing for individual consumers, and what do they as a company need to do to protect those consumers?

Really, that is no different to what we have expected them to do for a very long period of time. The difference is that the industry themselves were saying to us, “We want to ensure that we are all acting with consistency. We want you to give us a clearer steer as to at what level should some of these checks kick in”, and that is exactly what this work is doing. The White Paper set out a very clear policy around bringing in these checks, and what we are consulting on is how you bring those into practice.

Q301       Julie Elliott: You have mentioned credit reference agencies as being one-third party that will be used. What other types of organisations are going to be used? What do you see being used?

Tim Miller: I think at the moment it will primarily be credit reference agencies, but clearly there is a range of other data that can be publicly available that can be useful here. We reference in the consultation, for example, postcode data, which can be very useful in terms of helping you understand where areas of deprivation exist.

It will not necessarily immediately tell you that the customer who lives in that postcode is at greater risk. However, if they are living in an area of greater deprivation, I think it is right that we say that there is a great onus on the operator to properly understand whether that customer can afford the sort of gambling that they are engaged with so that publicly available data would be something that would supplement what you would have from credit reference agencies.

Andrew Rhodes: It is important to say that these things are taken in combination, because there are quite a few people who comment on this, and I can almost guarantee someone is writing a tweet right now saying, “The Gambling Commission says whether you can gamble or not depends on whether you live in a poor area or not”. What we are saying is there is a whole wealth of data that can be used to build a risk picture, and it is not one thing on its own. We take things in combination.

There is no guarantee that because someone lives in an area they have a particular income, but if you take that in combination with something from a credit reference agency, other public information and other information you can gather, you start to build a risk picture. We estimate that we would have extremely high coverage of anybody who would need to go through an enhanced check. It is only 3% of accounts that we are talking about that, in terms of risk, overlap with the overall profile of gambling risk, so those two things go together quite well.

That is something of course that the industry very loudly said it wanted us to do, and wanted the Government to do in the White Paper: leave the majority of people alone who don’t necessarily pose a risk and focus on the higher risk area. These two things do overlap.

Q302       Julie Elliott: Sarah, you have not commented on this yet. Is there anything you want to add to this?

Sarah Gardner: One of the points I was just going to come in and say was I think it is important to realise that this is not a new thing that the Commission has dreamt up quite recently, but we have had the outcome that we are looking for on our rulebook for many years now and it is in its most modern form since at least 2014-15—I think I am correct in saying—when we did a big review of social responsibility measures, and that is the outcome: gambling operators must take all steps to identify customers who are at risk and intervene appropriately.

Now clearly the kinds of cases that Andrew has outlined there, which we have seen in our case workload, are inconsistent with that outcome. Therefore, what we are doing here to some extent I think is spelling out a rule that we have had on the rulebook for some time. As colleagues have said, the industry has expressed appetite for that and I hope that is what we are doing. We would like people to tell us how this can work most effectively, and that is why we are consulting and I hope people will respond as they clearly are doing.

Q303       Kevin Brennan: Good morning, everybody, and can I also repeat my declaration from the previous session in relation to hospitality with the BGC?

You wrote to us about the statistics, which Paul Blomfield referred to earlier on, that letter. Do you think we should ask the BBC’s Radio 4’s “More or Less”—because you are critical of both sides in relation to statistics—to adjudicate on who is right?

Andrew Rhodes: We actually considered that ourselves.

Kevin Brennan: Did you?

Andrew Rhodes: We did.

Kevin Brennan: What, to ask “More or Less”?

Andrew Rhodes: Actually, it was some of our research and statistic teams who thought that would be quite good. We thought it might be a bit niche, to be honest but—

Kevin Brennan: It is a niche programme.

Andrew Rhodes: It is a very niche programme; gambling is even more niche but we did seriously consider it. The reason that we have taken the position we have, and why I put out a public letter, is at the moment I think the debates on gambling can be very poor quality. I think there are very strong views, and we have seen statistics used in a way which can misrepresent.

Q304       Kevin Brennan: We asked the Statistics Authority—which I used to be the Minister responsible for many years ago—to run the rule over our report when we come up with it, to check because you were quite critical of some of the questions as well by members of this Committee; run the rule over it and see whether or not it holds up, because it is responsible for checking official statistics.

Andrew Rhodes: Well, certainly, we have talked to the official statistics regulator about the statistics—

Q305       Kevin Brennan: Have you talked to the Statistics Authority about this?

Tim Miller: Yes. We work closely with all the different statistics bodies—the Office for Statistics regulator and the Official Statistician as well—because obviously what we deal with primarily are the official statistics.

Kevin Brennan: What about the Statistics Authority, have you been in touch with it?

Tim Miller: Through the Official Statistician, yes.

Kevin Brennan: Right. Through the ONS basically, yes.

Tim Miller: Yes, that is right. Certainly, if the Committee when producing its report wants the authoritative voice around the gambling statistics, we are very happy to offer any of that to you.

Q306       Kevin Brennan: Okay. On the matter that Julie Elliott was asking about, about the affordability checks, I was in the House when the Secretary of State announced the White Paper and made a statement on 27 April. In her statement, she said that most people—I think it was 80% of people—would have to do nothing at all in relation to that, while 20% would have a simple check on whether they have a County Court judgment against them. Is it your intention in what you are doing at the moment to implement what she said in that statement in the House?

Tim Miller: Our intention is to implement exactly what the White Paper says. That is what we have been charged with doing.

Q307       Kevin Brennan: When she introduced the White Paper to the House of Commons that is what she said to the House of Commons, and obviously that is, as we know, quite a serious matter. When a Minister makes a statement to the House of Commons they have to be truthful. We have actually managed to establish that with a former Prime Minister. That it is a serious matter if you are not truthful about it. Did you hear what she said in that statement, and is that what you are trying to implement?

Tim Miller: Yes, absolutely. Our estimate—and indeed the White Paper’s estimate—is that, in terms of the lower level financial vulnerability checks, around 20% to 21% of accounts will be caught by those. Again, on those checks, there isn’t an expectation that the customer will need to do anything. These are checks that an operator will be able to do on County Court judgements and so on. In the consultation, we have asked the question about whether operators should take account of the job title that consumers have.

Q308       Kevin Brennan: That is right. Job titles, employment status and home postcode are the three things that I think are additional to what she said in the House. Would that fulfil what she said?

Tim Miller: I would not say that that is in addition to what she said. It is worth saying that with all of the consultations—

Kevin Brennan: Is it in addition to what she said or is it not?

Tim Miller: No, I would not say it is an addition.

Kevin Brennan: Okay.

Tim Miller: I think it is a part of it, but specifically around job titles we have asked the question: should this be included? The reason we have asked that question is that gambling operators themselves, many of whom are actually using that sort of information when accounts are being opened, have said it has been a really helpful thing to have.

Q309       Kevin Brennan: If someone gave their job title in one of these frictionless checks, would they have to supply documentation to prove that they were telling the truth?

Tim Miller: No.

Q310       Kevin Brennan: Right, so you could just invent the job title. If you were asked you could just say, “I’m an astronaut”?

Tim Miller: You could, but what we have said in the consultation is that it is a piece of information that could helpfully go alongside.

Q311       Kevin Brennan: How would it be helpful if you do not know if it is accurate?

Tim Miller: If it is not true, if you are looking at it by itself I think that would be problematic. However, what we have said is that it could be a useful addition to it. But, importantly, this is a consultation. We have asked the question. We have invited people to provide us with evidence as to whether they think that would be a helpful addition or not. I think it is very important that we do not lose sight of the fact that this is a genuine consultation—

Q312       Kevin Brennan: In what way would the postcode be useful? We have established that basically you are asking the question—I accept that—as to whether somebody being asked for their job title, fictitious or not, would be useful. In what way would their postcode be useful and how would that be checked?

Tim Miller: The postcode can be helpful in terms of identifying, as I said before, areas of deprivation. It does not automatically tell you that that consumer themselves is experiencing deprivation.

Q313       Kevin Brennan: Aren’t they supposed to be financial checks about individuals, rather than financial checks or a kind of generalised assumption about our constituents in a particular area and whether or not they are at risk of being a problem gambler?

Andrew Rhodes: It is important for us not to try to separate out each area as though it was the only thing happening, so you are looking at a combination of factors. When you look at the Patterns of Play research, which was very extensivefrom memory it was over 20%--somewhere around a quarter of people who were gambling at a high level did live in areas of higher deprivation, so we know there is a risk factor association. That is not the only thing we look at. In the initial risk-check point that we are talking about here, 20% of people, we are looking then at things like bankruptcy declarations, County Court judgments. We are looking at high risk, which is individual.

Q314       Kevin Brennan: Which I think the Secretary of State did refer to, yes.

Andrew Rhodes: What we are saying is you have to build an overall risk picture so that each thing on its own isn’t something you make a decision on.

Q315       Kevin Brennan: Would the postcode be checked? You said that the job title would not be checked.

Tim Miller: It is likely that a postcode would be because when you open an online account you have to provide your postcode in order to open that account. If that postcode did not match with other information you would probably struggle to open that account in the first place.

Q316       Kevin Brennan: What would happen if someone supplied a false postcode in one of those checks?

Tim Miller: They would not be able to open an account. Alongside money laundering requirements, for example, if you give false information, that is probably going to make it harder for you to open an account. One of the important things to note is that before we published these consultations, we did ensure that DCMS itself confirmed to us that what we were consulting on was consistent with both the wording of the White Paper and the intention of the White Paper, and we will do that for every White Paper-related consultation.

Q317       Kevin Brennan: When the Secretary of State said in the House that people would not be aware of any of this, that it would be frictionless and it would just be a check on their creditworthiness and so on, that was inaccurate?

Tim Miller: No, I do not consider that was inaccurate.

Kevin Brennan: Incomplete information, should I put it that way?

Tim Miller: No, I do not agree with that at all.

Q318       Kevin Brennan: She did not mention postcodes or job titles or anything like that. She said they would not be aware of it in the vast majority of cases. How could you not be aware of it when you are asked your job title?

Tim Miller: In most cases when an account is opened at the moment consumers are asked for that information. It is unlikely that they will be asked for things that they are not already providing when they open an account. The whole point was—

Q319       Kevin Brennan: She said that 80% of people—and I did check it—would have to do, “nothing at all”—then she said—“20% having a simple check on whether they have a County Court judgment against them”.

Tim Miller: Yes, that is exactly right.

Kevin Brennan: She did not say anything about them being asked for their job title or postcode.

Tim Miller: She did not say in Parliament that they would be asked for their name, but consumers do get asked for their name when they open an account.

Kevin Brennan: It was incomplete information rather than inaccurate is what you say, is it?

Tim Miller: I do not think it would be fair; I think the Secretary of State not saying that a consumer would be asked for their name I do not think you could class as—

Q320       Kevin Brennan: The reason I am pursuing this—I do not have a particular axe to grind on it, but I am interested in what Ministers say to us in statements in the House of Commons—is it was clearly meant to give the impression to the House, and I am not editorialising about whether they should be asked for their name or whether it should be checked or not, that nothing would be required of customers.= That they would be unaware of it and that most people would just have a simple check on whether they had a County Court judgment against them.

However, the impression was not given to the Commons that they would then be asked for their job title and their postcode. It gives a whole new meaning to the phrase “postcode lottery”, doesn’t it? Because it is not an individual check at that stage, is it? It is actually a check on where you live.

Andrew Rhodes: Gambling operators are required to know who their customers are, so if you set up an account today they will ask you for information so that they can identify you. Therefore, the Secretary of State did not run through what happens when you open a gambling account, and I would not have expected her to.

Q321       Kevin Brennan: Why does it need to be in your consultation if this is information that is already—

Andrew Rhodes: Because it is a question that the industry—

Q322       Kevin Brennan: It is additional to what is already happening is what you are saying, is it?

Tim Miller: What we are saying at the moment is it is not necessarily consistent, and so we have asked the question as to whether it would be helpful to make it consistent.

Q323       Kevin Brennan: I do not have a gambling account but if I set one up would I be required to say I am a Member of Parliament?

Tim Miller: As I said, because it is not consistently being asked you might but you might not. We have asked the question—and it is a genuine question—as to whether you should. Just to be very clear, I am satisfied that what the Secretary of State said in Parliament is both accurate and complete.

Q324       Chair: Thank you. Just more broadly, what assessment has the Gambling Commission made of the potential damage that the proposals in the White Paper will enforce upon the horse racing industry?

Andrew Rhodes: The Department made its own assessment—which is an annexe to the White Paper itself—of what that might look like. In terms of the current position of the horse racing industry, the latest projections for the horse racing levy show the highest amount returned to the industry ever, and the BGC recently publicised that the largest amount of money from the gambling industry ever has been given to the industry.

What we are talking about with the horse racing industry is the same as we are talking about with anything else, but the horse racing industry does have some different factors around it. We are talking about 3% of accounts requiring an enhanced check. That is very similar to the level of gambling risk that we are concerned about. Horse racing gets 70% of its income from 1% of accounts, which is why it will have a natural concern about this. In terms of an assessment of the overall impacts of the White Paper, that would be for the Department because it is the Department’s White Paper, not the Gambling Commission’s, and that was published. I don’t know if you have any further information on that.

Tim Miller: Yes. For us, when we consult what we need to take account of are the licensing objectives that are in the Gambling Act. We appreciate that is a slightly narrower view than the wider public policy view that the Government as a whole will take in terms of the impact on things like racing, and so on, which is why the White Paper published that assessment in one of its annexes.

Q325       Giles Watling: From what I have heard so far it is a balancing act that you are performing all the time because you have to bring people with you, the gamblers and the operators. Before I go on to the safety of the actual games, which I want to talk about, something came up earlier when you were talking about the operators. I visited a few of the betting shops—good old-fashioned betting shops—in my constituency. They tend to be sort of centres of community. They know who they are dealing with, and it is in the operator’s interest to ensure the safety of their customers, and indeed they do.

They have cups of coffee and they note if old Fred is spending a bit much and they know the conditions that the chap lives in, and talking about what Kevin Brennan was talking about, about his name, his postcode and all of that. They know their customers well. Now, clearly, when we get into the online arena this is far harder to do. Do you find the operators are interested in knowing this about their customers? Are they with you on it?

Andrew Rhodes: Do you mean in terms of the safety and financial risk?

Giles Watling: Yes, because clearly it is in their interest, I would imagine, to not exploit people if at all possible.

Andrew Rhodes: What the industry definitely does not want are difficult stories about people being harmed or have gone beyond their means, and that is pretty universal. People go about it in different ways and they express their views in certain ways but, absolutely, it is not in the industry's interests. The industry has had a very bad press, which I think it brought upon itself for a long time with cases like this. So the industry, yes, is with us.

There will be a difference of opinion in terms of how it should be done and what exactly it means. That is not unusual. You are quite right, between land-based and the analysis checks—the checks we are talking about here—it is not applicable to betting shops, but in terms of their ability in a land-based venue to know their customers it is much greater.

It does depend a little bit. I visited a few betting shops very recently. I was in a busy city centre and one was next to a train station, so of course the people who come in there are a mixture of regulars but when the football is on they will get lots of people they do not know. That is when they have to have good policies and procedures and be on their toes because there is a mixture of things going on in most betting shops now.

People might think about it as all over the counter but, actually, 50% of their income comes from the machines on one side of the wall. Another maybe 30% comes from the self-service betting terminals where there is very little interaction, and there may be about 20% to 30% variable—depending on the betting shop and community—will be over the counter. Therefore, the job in a land-based venue has changed quite a lot, particularly in the last few years.

Q326       Giles Watling: These operators are keen to work with you. You do not feel like you are working against them, so you are part of a team here.

Going back to the evidence you gave to Damian Green earlier, when talking about driving gamblers from legit sites to underground, you seemed to think that this was not an issue. Yet, for instance, in China since 1949 gambling has been totally illegal. Thirty years ago I worked in China and I have never seen so many people gambling, so there is a balance to be struck surely.

Andrew Rhodes: Yes, absolutely. I think there is a big difference between jurisdictions where gambling is not permitted or regulated in the grey market. We are talking about a very, very liberalised market here but in terms of: is the industry working with us? Yes, they are working with us and we have had very sensible conversations. I think the high-quality responses we will get, particularly on financial risk, will come from some of the larger operators who will have invested heavily in their evidence base around this. That is what I expect to see.

From my conversations—and I speak to the large operators on a very regular basis, as an organisation we had 220 stakeholder engagements last year, the equivalent of one every working day. We have broad engagement, not just with the industry but with other groups as well and I think everybody has a broadly shared aim. People sometimes have very strong views about how that should be delivered, and your description of us being engaged in a balancing act is absolutely right. That is where we are all of the time. The reality is the vast majority of people who gamble on a regular basis will not have any issue at all, but it is hard to predict who will.

Q327       Giles Watling: Thank you. I just wanted to get that aired. Thank you very much.

I would like to move on to product-level protections. Online products are already subject to tests on randomness and fairness. Is it not possible to have those checks on safety as well before release?

Andrew Rhodes: I will bring Sarah in on this in just a second. What I would say first is that there is a balance between product, person, place and circumstances. The way people gamble and interact is normally a combination of those things. So how I would react to a particular game or a particular type of betting and how Tim might react can be very, very different. It would be a mixture of how we are as people, the product itself, where we are doing it, when we are doing it, our financial circumstances and a range of other things. If I just preface that and ask Sarah to expand.

Sarah Gardner: Yes. In the Government review, the Government did consider this question as to whether games ought to be tested for harmfulness. The White Paper obviously rules it out. I think that is consistent with the Commission’s advice, which was based on the evidence that tells us the extent to which gambling harms arise from a combination of complex factors, as Andrew described.

You have core product characteristics that can influence harm, so things like event frequency and features that do things like increase the speed of play, but also all those other factors around the person: the circumstances they are in at the time, the number of activities they gamble on, the frequency and duration of play and so on, as Andrew described earlier.

Because of that quite complex picture, it would be very difficult—in the way that it isn’t when you are testing for randomness and so—to test for safety, because safety will look different for different people in different circumstances.

Q328       Giles Watling: You introduced frequency of plays on slots, for instance, I think in 2011 it was 2.5 seconds between each spin. Now you are recommending five seconds; is that right? So you are interested in safety.

Sarah Gardner: Yes, absolutely. Because of that complexity, what we think is that it is important to get safeguards in place so that there are controls across the product. What we did in 2021 was a piece of work introducing a whole load of controls around online slot products, in particular. We banned features that speed up play or give the illusion that the player has somehow got control over the outcome when they haven’t. We banned slot spin speeds in excess of 2.5 seconds, so that is the maximum speed it can go. We banned features like autoplay, so this is where the player can essentially disassociate from the play and not really be engaged. Again, we were concerned about the risks in that space.

We have also required operators to make sure the customer is aware of what they are doing. They have to clearly display to players their total losses or wins and the time they have been playing for so that there is a consciousness about the gambling that is going on.

Q329       Giles Watling: Have you seen results from this?

Sarah Gardner: Yes. I think in June we published an assessment of the changes that we made in 2021 to online slots, and those were quite encouraging. That is partly why I think we are now consulting for non-slot games on some wider safeguards. When we reviewed the findings from the 2021 changes, there was some evidence of reduced play intensity on online slots products since those changes were introduced, no increase in staking activity in response to the limit on spin speeds in particular—that is quite interesting—and no evidence of a significant negative impact on the enjoyment of gamblers.

The things that we are currently consulting on are a five-second minimum game speed on non-slot online games, and removing those features that can speed up play, increase the intensity, again, to try to reduce the risk of harm to consumers.

Q330       Giles Watling: This is all about the safety of the product, but you do not feel as a Commission that you cannot do a safety assessment prior to the release of a game, is that right, Sarah?

Sarah Gardner: For all the reasons I have described, it would be impractical. There is also a very important point about what we know about people who have problems with their gambling, which is that they are more than likely to be gambling on more than one product. You get some quite odd things. I am sure when the Committee has looked at some of the problem gambling rates associated—

Q331       Giles Watling: Might it be possible to have a safety testing regime if you had more data from the gambling operators?

Sarah Gardner: The approach we have taken is to get safeguards in place and, as ever, make sure our rulebook is very clear about outcomes, and the onus being on operators to make sure that they are only releasing safe products into markets, so we expect them to do a lot of risk testing.

Q332       Dr Huq: I want to ask some questions about advertising and then research, which we keep coming back to.

The Commission recommended that the Government ban front-of-shirt advertising in elite sports and reduce the volume of gambling in sports stadia generally. Were you surprised that the Government did not follow this advice?

Andrew Rhodes: I will take that, and Tim may want to join in. Our advice was based on the evidence, particularly in terms of exposure to more vulnerable people, particularly children, associated with the Premier League. The Government do have to balance a range of things. Our responsibility is around gambling and the licensing objectives. We are not required to make wider considerations, in terms of the financing of football, for example. The Government will have to factor those things in. Our advice is our advice. We felt that there should be changes made. The Government made their assessment and have decided not to make those changes. Obviously, there is the voluntary agreement with Premier League for front-of-shirt, but that was the decision that they took. Do you want to add to that?

Tim Miller: Yes. As Andrew said, I think there is a range of wider considerations that the Government rightly need to take into account that, as a gambling regulator, we do not need to take into account when we give our advice. We focus purely on the licensing objectives in the Act.

It is important, though, when you look at the White Paper, there is a comprehensive package of measures in the advertising space. While a lot of the coverage focused on sports sponsorship, the consultation that we have live at the moment around restrictions on cross-selling, I think will make a real difference.

Similarly, I think the future work that we will be doing—linked to the White Paper as well as around incentives and bonuses—is another area in that kind of advertising space that could make a real difference. I think seeing these things as a package is very important.

Q333       Dr Huq: We talked about the fallibility of statistics but we know that YouGov polling shows 60% of people think there is too much gambling advertising, around 77% within football alone. Do you think gambling policy on advertising is being held to a higher standard than on other issues? We have had Professor Heather Wardle speak to us. She says that the causal connection is impossible to prove and why are we even asking for this? Why is there such a high standard when it comes to gambling?

Andrew Rhodes: There are two issues there. One is public acceptability and whether people like it or not. When I meet people, people I haven’t seen for a while and we talk about where I work, they will inevitably want to complain to me about the level of gambling advertising, although that is not actually in our remit. It is something that is not particularly popular in society. I think that is different to, as you make out, that causal link.

Our advice was based on the available evidence. The White Paper is a rare opportunity to explore this issue and we were clear. We felt there should be some reductions in this space. Is it held to a different standard to other things? I think that in the end is a political decision as to what people want to do with it. You will sometimes struggle to have a truly definitive evidence base because these are complicated things.

If you look at problem gambling overall, the circumstances can be extremely complicated and lots of different things can play a role, including advertising. We do know that people who have problems with their gambling are more likely to gamble when they see advertising, but drawing a causal link between the level of advertising and problem gambling is exceptionally difficult to do as it is in lots of other areas.

Q334       Dr Huq: Just on this subject of research, do you accept that the funding model of research on gambling is a bit messed up here? In your previous incarnation as the National Lottery Commission, you funded lots of good people stuff out there.

My previous office mate when I was an academic, Dr Emma Casey—she is now at York—her stuff on women doing the lottery, you funded that and people are grateful. At the same time, you mentioned, Andrew and Tim, quite a few times, the Patterns of Play research, which among the academic community seemed to be very problematic because the industry had its fingers all over it.

I think when it went out for tender part of the promise was that the dataset would be available for public good for all afterwards. It was online companies for independent academics to analyse but when the project finished all that data was taken away. The people who worked with it were told they were not allowed to touch it again. It just looks a bit fishy that there is a huge paucity of genuinely independent scholars working in this area. They do not have access to the data. The industry controls it. What can you guys do to loosen things up there?

Andrew Rhodes: I think the White Paper’s decision to create the statutory levy is a very big part of that solution. If the model is something along the lines of full research and there is an independent research council that is used to commission and oversee that, I think that would be an excellent step forward.

At the moment, you have different groups vying within the same area. It is difficult to get long-term funding. This is an area that we think is under-researched. Actually, I think probably research in this country is very good internationally in terms of the volume of it but we do not think it is enough. So I think that is a big step forward with a statutory levy being used in this area.

There will always be an argument about the data and access to it. I think some in the industry fear the data will be used by people who have made their minds up, so they are very cautious about the use of data. Others feel they cannot get access to the data so the industry must be hiding something. That is where I think having an independent research council and the right standards around it will help encourage more research, truly independent research, as you say, into the area of gambling. I think that can only be a good thing, and at worst it will tell us that some questions are difficult to answer or cannot be answered. That would be a step forward in itself.

Q335       Dr Huq: Paul Blomfield alluded to this as well: that now that the regulatory settlement fund has been closed, all that money has been hoovered up by GambleAware and there are people who, because of the industry influence, feel that that is not the appropriate vehicle or right mechanism for this. Do you get the point being made?

Andrew Rhodes: The money is not being hoovered up by GambleAware. We have set up a system stabilisation—

Q336       Dr Huq: Some organisations may not want to engage with them because of the industry influence.

Andrew Rhodes: As we said earlier, the Commission is not in a position to be a commissioning body for research. We were not set up as one. We are a licensing body and we do not have the resources or the funding to do that. A long-term solution is needed, which is what the statutory levy is about. People will make criticisms of GambleAware. I think some of those criticisms are unfair, but people will hold their views.

The current funding model has relied very largely on industry funding and there are people who will be unhappy with that. They will feel it is tainted, and they will decide to not deal with different bodies. That is a view that people are entitled to hold but I think the future lies in there being a more independent approach, so the model is based on a statutory levy where there should be no concern about the origins of the funding or any control, even if that assumption is misplaced.

Q337       Dr Huq: Lastly, on consultation, these things are all interconnected, so the fact that there are so few independent academics in the area means that those who are stretched very thin. There is an imbalance in these consultations. Your independent researcher, working in a university with loads of students and other demands on them, will be outgunned and outnumbered by the whole might of the industry. Therefore, they have to be strategic and choose which consultations they reply to. When I was an academic we had to account for every hour of our day. What were we doing: funded research, independent research, teaching, marking, blah, blah, blah. Therefore, people like that are just going to fall through the cracks.

Andrew Rhodes: The reassurance I would give is that when we consider consultation responses we do not treat this like a kind of referendum or opinion poll. We do not weigh the responses on either side of the argument. We look at the quality of what is being provided. We look at the evidence base, the strength of that, the independence of it, and we supplement it with our own research and data gathering as well. I feel confident that, when we have run consultations, that risk of perhaps one side of an argument outgunning the other does not really play into it. We may get a lot of responses on one side of the argument but if they are not driven by clear, robust evidence they are not going to carry as much weight.

Sarah Gardner: If I could just add as well, I think the advisory groups that we have set up are really relevant in this space. The gap that you have articulated I think is one we have recognised. That is why we set up our Advisory Board for Safer Gambling, which brings together a whole load of experts, academics and others, to help us understand what the evidence base is out there and to actually generate some interest in the academic community, which is also important.

It is not a panacea for the issues you have described, but we supplement that with advice from our other advisory panels. We have one on lived experience and we have a digital advisory panel as well, which is important in the context of the market we regulate. So I think that is also important, the things we are doing to plug some of those gaps.

Q338       Dr Huq: Going forward, what safeguards can you build into the statutory levy process so all stakeholders are equal or to even the playing field?

Andrew Rhodes: That is probably more of a question for DCMS because it is leading on the set-up of the statutory levy and will consult on it. Based on section 123 of the Gambling Act 2005—he says in a proper “Yes Minister” moment—we will have to be consulted on that as per the Act, so we will give our views on how we think it should be structured.

I do think, though, the general premise of the way that the levy has been described has those safeguards that you have: independent research and funding to allow academics to be a bit more dedicated in this space. I spent three years working in a research-intensive STEM-intensive university. Although academics would violently object to me describing myself as anything remotely close to an academic, I have seen the balancing act and it is very difficult—the load between teaching and everything else, and you have your ref submissions and all of that stuff. It does make it very difficult, particularly in an area where funding is harder to come by or is debated. Therefore, I think this is going to be a big step forward, but it will take time.

It will take time to grow a community of people who are interested in this field and will come at it in the right way. What we set out in the evidence gaps and what the priorities were, is where we see some of those very clear gaps that exist that do need that research so that people are not just starting from scratch. We are trying to guide people towards where we know there isn’t as much information as we think we should have, to try to assist with this. However, you do need to have that funding framework in place, as has been necessary for any field of academic study.

Dr Huq: It would be good to have a champion from academia on that. Thanks.

Q339       Chair: Thanks, Rupa. Thank you all for your time today. Was there anything further you wanted to add before we allow you to escape?

Andrew Rhodes: Nothing on the content, but I am going to embarrass somebody. There is a young man sitting behind me. It is his 18th birthday today and he wanted to spend it in Parliament. Happy birthday to James, who has come to have a cup of tea for his birthday, which is one of the more unusual 18th-birthday celebrations.

Chair: That is firmly on the record. Thank you very much everyone for your time today. We will now bring in the second panel, please.

 

Examination of witnesses

Witnesses: Rt Hon Stuart Andrew MP and Ben Dean.

 

Q340       Chair: Good morning. Our final panel. We are joined by the Rt Hon Stuart Andrew MP, the Minister for Sport, Gambling and Civil Society, and by Ben Dean, the director for sport and gambling at the Department of Digital, Culture, Media and Sport. A warm welcome to both of you. Apologies for the delay in kicking off this second panel. I would encourage both the Committee and our witnesses to try to keep the questions and the answers as concise yet as exciting as possible.

I am going to kick off the questions today. Do you consider gambling to be a public health issue?

Stuart Andrew: I think that the treatment of gambling harm is, yes. That is precisely why we have published this White Paper with the proposals to try to address many of those issues. As we all know, it has been 20 years since there has been a systemic review of gambling and a lot has changed in that time. Therefore, it is right and proper that we do that with that thought in mind.

Q341       Chair: The head of the NHS’s new gambling clinics told us that he does not expect the White Paper’s reforms to lead to a decline in referrals. Does this concern you?

Stuart Andrew: This is the sort of thing that we would obviously need to monitor but there may be a number of reasons why that may be the case. For example, more centres opening sees more people seeking treatment and that is probably a good thing. We want people to be able to come forward and seek the treatment that they need.

Also, hopefully, we can start to see a reduction in the stigma in the people who are suffering with gambling harm. It is important that people feel that they can talk about it and that they can seek the support that they need. Working to ensure that through the statutory levy that the treatment that is available, the education and the research will be an important element of how we tackle those harms.

Q342       Damian Green: Good morning. I am struck that throughout this debate, not just our investigation but the whole debate around gambling, there is a window of acceptability, which is how much tighter does the regulation need to be, what do we need to do. However, on the other side we have had more than 100 letters sent to all members of the Committee by a host of people saying, “I’m an adult, I’m doing something legal, I can take decisions how to spend my own money, butt out of my life”. Do you have any sympathy with that view?

Stuart Andrew: Exactly. When I first came into this role it was clear to me that there are strong arguments on both sides of the debate. The first people I met were families whose stories were, frankly, devastating and that stuck with me. Then there are the vast majority of people who do enjoy gambling in a safe way and it is not for us to tell them how they should spend their money. What we are trying to do here is bring about a balanced and proportionate approach that addresses many of the changes that have happened over the gambling scene in the last 20 years but also seeks to bring about a uniform approach among operators to have a process in place to identify those who perhaps are entering the risk of gambling harm.

Q343       Damian Green: One of the pieces of framing that we have during the course of this inquiry has been is gambling more like alcohol or tobacco. From what you say, you are more at the alcohol end of the spectrum.

Stuart Andrew: Yes, I think so, but I would also say that this needs a bespoke approach because there is a tremendous amount of research into the effects of alcohol and of tobacco. There is probably less research in gambling so it does need a slightly different approach. In itself, alcohol is not something that can be instantly harmful, it is over a period of time, so, on that level, perhaps yes, but the potential to enter gambling harm could happen a lot quicker than with alcohol. Do you see what I mean? There are some distinctions and that is why I would say that it needs a slightly different approach than just thinking about an alcohol approach.

Q344       Damian Green: Do you think that we are behind the curve in that for decades we have been regulating alcohol and tobacco and on gambling we are behind the curve?

Stuart Andrew: We are probably behind the curve in terms of research. This is why I think that the introduction of the levy gives us a generational change in terms of the funding and gives us an opportunity to have some of the best research in the world so that we can identify what are the issues that need to be addressed in this area. That is what we have tried to do very much with this White Paper. It is very heavy on being evidence-led on what data we have and what research we have available to us at the moment to take that sensible approach.

Ben Dean: To add to that, the one thing that we know that has fundamentally changed the system has been the introduction of the smartphone. The last legislation was done in 2005 before smartphones were around the country and that is where we need to focus our efforts because that is where we know that a lot of the harm is being caused because you can bet at the moment any amount of money at any time of day.

Q345       Damian Green: You emphasised research because, as it were, on the other side people are saying that there is death by consultation here. You assembled a lot of evidence for the Gambling Act review and now we are going through the same again with the White Paper. Is that in danger of delaying everything?

Stuart Andrew: I understand that and I have had that question put to me on a number of occasions. Yes, there has been extensive research going on and consultation on the preparing of the proposals within the White Paper, but it is right for us to consult on the detail of those proposals that we are bringing forward, for a number of reasons. We want to make sure that we get it right. I know that there has been a lot of coverage on various issues within a number of those proposals. It is important that we do get that right and take the time to consult.

Equally, we have to do what is expected of us. If we do not, there is a risk, potentially, of legal challenge. That would further delay and that is the last thing that I want. I am keen for us to get these done. We are committed to delivering the majority of these by the summer of next year and we are working hard to progress that.

Q346       Damian Green: Some of them will require primary legislation. I am not going to ask you the standard question about will it be in the King’s Speech because I know what the answer is and I have given it in my time. However, if there is a requirement for primary legislation, does the requirement for consultation act as a barrier to that? Will it delay or will you be in time to introduce any primary legislation that may be required?

Stuart Andrew: The approach that we have taken here is looking at what we can do. Rather than just having one new gambling Bill, let’s do this in an approach that can deliver the changes that are necessary, whether that be through voluntary introduction, whether that be through secondary legislation or through the Gambling Commission. We think that we need primary legislation but, as you rightly say, I do not know whether we will secure that. It is going to be a very busy session.

Damian Green: You are bidding for gambling legislation?

Stuart Andrew: We will be, yes.

Ben Dean: I would add that what we know is important is in terms of the main measures that will have an impact on the ground in trying to address the harm that we want, we can do most of that without primary legislation. When you look at the statutory levy, online slots, financial risk checks, setting up an ombudsman, some of the land-based reforms that we are talking about and safer game design, all of those we are confident we can take forward without primary legislation and do so quickly.

Q347       Chair: Can I talk to you about the statutory levy and the way it is going to be administrated and how it is going to be delivered and distributed? What will be the role of the Department in all of that and how do you assess the quantum of funding that will need to be raised in order to deliver on all the commitments and aspirations?

Stuart Andrew: In terms of the administration of that, that is what we are consulting on at the moment. We want to know what is the best way to maximise the opportunities of what is fundamentally a major change in how we are funding some of these services and the research and the education. That is something that we are keen to focus on to make sure that we get that right, because there are a lot of organisations that have not touched the voluntary levy, as you will well know, and we want to ensure that we do maximise the opportunities that this presents to us. We will consult on what we think is the best way for this to be administered. There will be roles for other Departments, the Department for Health and Social Care being the lead Department in the provision of treatment. It will be important for us to work very closely with it and we have done. That is why we were keen to get that consultation out as quickly as we can and that will come in soon.

Q348       Chair: Do you see the Department for Health and Social Care having a role in the way that it is set up?

Stuart Andrew: We have not made a decision on that yet. We genuinely want to listen to those consultations to read what comes back. There have been a number of scenarios presented to me and we also know that a lot of the services that are provided at the moment are provided by the third sector. There is a lot of expertise there that we would not want to lose. There is genuinely a need for us to understand what would be the best model.

Q349       Chair: What sort of role do you see GambleAware and the national Gambling Support Service having once the statutory levy is implemented?

Stuart Andrew: Why I mentioned them is because I would hate us to lose the expertise that they have. I have had regular meetings with GambleAware’s CEO. That is exactly what we want to do. How do we create an effective model in terms of the administration of the levy, making sure that the treatment is available for those who need it in all parts of the country? Education is an important piece of work, educating about how to gamble safely. That is something that we need to design. It is getting the best people to help us to provide the best services: that is what we are consulting on.

Ben Dean: One of the things that we recognise is that a huge amount of provision is from that third sector. We definitely would not want to lose that expertise. One of the things that we have been working on is making sure that we have a smooth transition and that they do not have funding that falls off a cliff or anything dangerous like that.

Q350       Chair: Given the number and the extensiveness of the consultation that is happening, to what extent are you satisfied that the provisions that have been put in place in the interim are going to leave the current services fully funded and able to carry out all their responsibilities?

Stuart Andrew: Having come from the third sector myself, I know how difficult it can be when you have this uncertainty around funding. It was something that I raised directly with the industry. It has committed to continuing in this interim period, but the Gambling Committee has made available to GambleAware £33 million. I am confident that we do have sufficient support there in the interim but it will be something that I am very mindful of and will continue to monitor throughout this period.

Q351       Paul Blomfield: Perhaps I can follow up can follow up straightaway on that point. There are a couple of issues, which we have explored with the Gambling Commission, about its decision to put the regulatory settlement money in the hands of GambleAware during the transitional period. First it has given us assurances that it does not see that as in any sense framing what the future architecture might look like. I assume that you would agree with that.

Stuart Andrew: Very much so, yes. We want to literally get this consultation there and get the best ideas forward.

Q352       Paul Blomfield: Thank you, but it does leave a question, which Mr Dean alluded to, about how, during this transitional period those organisations—which the Department has drawn on heavily for advice and support in developing the White Paper—are going to receive funding because they are organisations that are not on the list that will not accept industry money. Do you think that there needs to be some framework within which we can guarantee continued support for those groups in the third sector?

Stuart Andrew: Do you mean in the future?

Paul Blomfield: During the transitional period.

Stuart Andrew: Yes, this is something that I am extremely mindful of. While we are in this transitional period I do not want to see any of those organisations that are delivering important work to find themselves in a difficult position. That is why we invited in the industry. I have to say it was very open to committing to making sure that there would not be a problem within that period, but this additional £33 million should help as well.

Ben Dean: We have had explicit meetings with industry, as the Minister said, and it is maintaining its voluntary commitments until the statutory levy is in place. That is vital to make sure that we do have that funding certainty.

Q353       Paul Blomfield: My question was more seeking assurance that all parts of the third sector would continue to receive funding, because traditionally some of the groups that you have leaned on for support have not taken money through GambleAware.

Stuart Andrew: If they have not taken money from GambleAware, I could not guarantee—

Paul Blomfield: They have taken regulatory settlement money as opposed to industry money.

Stuart Andrew: Yes, not from the voluntary. Yes, I get your point. I would have to have a look and do an assessment of who we might be talking about and what the level of support is. This is something that has been directly raised with me by GambleAware and other charitable organisations. We are literally on it, as it were, because I am very conscious of the potential problems.

Q354       Paul Blomfield: That is very helpful. Could I ask one other question? The chair opened the discussion on talking about how gambling is a health issue and you rightly talked about gambling harm. At the extreme end of gambling harm is addiction and those who have taken their lives. You mentioned the impact that testimony from families has had on you. The Office of Health Inequalities and Disparities has concluded that there were between 117 and 496 additional suicides related to gambling every year, something approaching 10% of all suicides. I guess that you would accept that assessment. Do you think that we do enough currently to learn from those deaths? Because much of the focus has been on one or two striking cases that have had coroner’s inquests but the majority of deaths do not.

Stuart Andrew: The first thing that I would say is that, as I mentioned a few moments ago, meeting those families has been incredibly difficult. That is why we are keen to make sure that we try to do what we can to ensure that we have a better understanding of the issues that many people who are facing gambling harm face.

in terms of the recording of suicides, I do not think that we as a Government have actual, definitive information that would say that X number of suicides are a result of gambling harm. In some cases that will have been a cause but there will be potentially other reasons as well. That goes back to the point that we need greater research in these areas to understand this important piece of work. We want to be able to have much better research and evidence so that we can continue the approach that we have already taken, which is very much evidence-led. Where research shows that there is evidence that there needs to be more work done in an area, we will be more than happy to do that.

Ben Dean: Clearly they are very complex cases when it does happen but at the heart of what we are trying to do through the White Paper is to reduce that harm. The measures that we are taking—things like the financial risk checks and stuff like that—are all about trying to prevent that harm taking place. It is extremely difficult in those cases but that is what we are aiming to achieve.

Q355       Paul Blomfield: I appreciate that. I am guessing that you are not challenging the OHID numbers, because it gave a fairly broad range, didn’t it, in a fairly exhaustive piece of research?

Ben Dean: The research is the research and it has used the best available evidence. It was based on a Swedish study and extrapolated up, so there are caveats around all data. However, at its heart we recognise that there are suicides linked to gambling and that is the harm that we are trying to address.

Q356       Paul Blomfield: I was raising the point more to raise a wider issue, which is how we learn from those deaths and how we draw from the experience of families. You have talked about that and the Secretary of State acknowledged that when she introduced the White Paper to the Commons. One of her predecessors, the current Deputy Prime Minister, said that there should be a role for those with lived experience on the Gambling Commission. Would you agree with that?

Ben Dean: We were heavily engaged with the Gambling Commission at the time and it has set up a lived-experience group that now has a formal role within the Gambling Commission. That is something that we have welcomed and it is important that these voices do get heard in the Gambling Commission.

Q357       Paul Blomfield: And a clear voice for those with lived experience in whatever the new architecture is?

Ben Dean: My understanding is that that lived-experience group is operational in the Gambling Commission and will continue to be so.

Q358       Dr Huq: Is there in some ways a contradictory aim or ambition that you have in this White Paper? On the one hand you are encouraging growth and innovation and the economic contribution of the section but on the other hand you want to protect people from risks and harms? At the same time there is a rankle that central Governments have never taken ownership of the national strategy to prevent gambling harm. Other national strategies have targets and outcomes and those sorts of things, whereas this one feels like you have subcontracted it away to the Responsible Gambling Strategy Board and then the Gambling Commission. It seems a bit unsatisfactory. What is going on here and how do you reconcile all this?

Stuart Andrew: You do rightly raise this complex area of work where gambling is something that a lot of people, as I said at the beginning, do enjoy and do enjoy it safely. It is an industry that employs a lot of people in this country and makes a significant contribution to the Exchequer. That safe and responsible gambling is something that we obviously want to help. However, we have to ensure equally that there are those checks in place to ensure that we are reducing the risk of people falling into gambling harm.

At the moment there is an obligation on operators to do checks but we see that there are different approaches to those checks and it is not a very consistent field. That is why in our proposals we will introduce that so that all of those operators will have the same approach to doing those financial risk checks and ensuring that those people who we need to identify are identified and offer the support that they may need at an earlier stage.

Ben Dean: It all comes back to balance. When I think about my other hat as director of sport, and the Minister is obviously Minister for Sport and we have just launched a sport strategy, which is about getting people to do more sport, get more active. With gambling it is about that balance that the Minister talked about. Forty per cent of the population gamble every month and the vast majority of them do so safely and happily and we have to recognise that it is their money to spend how they see fit. However, what we want to focus in on is that 1%, roughly, of the population who are problem gamblers and those who are at risk of harm. That roughly 1% has been pretty stable over 20 years and this White Paper is about trying to do all we can to reduce the impact on those at risk and those suffering gambling harms.

Q359       Dr Huq: Would you ever set outcomes? At the moment it feels like progress cannot be measured, if it is all so vague.

Ben Dean: We are trying to say that we want to see that 1% of people who are suffering harm addressed and we want to see that minimised as far as possible. We have not set a specific figure on it but that is what we are aiming to do.

Q360       Dr Huq: In Australia and in Canada they have tons of research that backs this up. They have made lower-risk gambling guidelines. It is things like you should not do it four times a week. There are specific measurable outcomes that they have. The Canadian website—I can send it around—says that you should not gamble more 1% of your household income, not gamble more than four times a month, and not regularly gamble on two types of game. Is there stuff that we can learn from there and cut and paste across?

Ben Dean: One of the things that we look closely at is what we call the markers of harm—what are the signals that identify that you may be suffering gambling harm. That is something that the Gambling Commission work very closely with the industry on, the best markers of harm to identify those problem gamblers and, when those markers go up, making sure that industry is then making appropriate interventions. If you are playing at unusual times of day, if you are chasing your losses, if you are losing excessive amounts, those types of markers of harm are absolutely where we would want to see interventions happening.

Q361       Dr Huq: Encouragingly you said that more research is needed. That is a given. What the role are the Government playing to encourage more research into gambling and gambling harms? Also the growth of research, if it is industry funded, there is always suspicions around it. It hogs its data for itself and it is very protective over that. How can we improve the picture?

Stuart Andrew: This is where the introduction of a statutory levy means that there will be—first, we are working with UKRI on what are the research programmes that we need. However, because we now will have a statutory levy we may well see other organisations wanting to come on board and provide that research to us and accept that funding, where they would not have before. That will enable us to commission independent research that people can have confidence in. As I said earlier, where that research provides evidence where we may need to address other issues, we will obviously look at that very carefully. If we think that that evidence is compelling and that action is needed, we would look at doing so.

Q362       Dr Huq: It is a bit vague again on how that money is going to be distributed after the new regime.

Stuart Andrew: That is exactly why it will be passed with a consultation. We are going to ask, as part of that consultation, how that money should be distributed, what is the level of income that is needed. We will consider the responses to that consultation when we then develop how we will—

Ben Dean: What we hope that people will feel confident about is first, where people were unwilling to take money from industry, it addresses that problem. Secondly, it will give us long-term funding so that we can set in places things like longitudinal studies that are needed to monitor this over many years to come.

Q363       Dr Huq: Would you look at the international comparisons too? Maybe some of those are replicable, again longitudinal, as you say. You need to track cohorts over a long period. The way current funding cycles work is that you get a five-year project or whatever. Five is a lot, actually.

Ben Dean: We fully recognise that we do need long-term funding and we do need some of those long-term programmes. As the Minister said, the very reason that we want to consult on it is to get people’s views on it to make sure that we are engaging those who have the expertise before we finalise the plans on it.

Q364       Dr Huq: At some points this will be as well researched, as you mentioned at the beginning, as tobacco, alcohol and those things. There is loads more research than there is on gambling out there. I would make a plea for independent academics as well. I said to the last panel that they do not even have time to respond to the consultations because they are so over stretched. Good.

It also feels like this White Paper talks a lot about encouraging land-based gambling, whereas at the same time we recognise that things like slot machines, especially for kids, are a magnet for increasing all these harms that we are trying to prevent. That again has raised eyebrows.

Stuart Andrew: It is because we are trying to, for want of a better word, level the playing field a bit. The costs that a lot of the land-based industry faced, there are significant costs that they have to address compared to online providers. To give them a fighting chance, because they are important employers in local areas as well, is why we have put those recommendations in there and we are consulting on that now.

Ben Dean: The White Paper is always a balance. Going back to what I said about when the last legislation was done in 2005, back then the main form of gambling was people going into land-based premises, where it is now online and we recognised that online needed tightening. We feel that with land-based there are rules that quite outdated. Some of the ratios that made sense in 2005 do not make sense in the modern age where you have machines that can play multiple games. There are some areas where we are changing the rules so that they can operate effectively.

A very good example is in casinos you sometimes have very restrictive rules, which mean that you have a load of machines that have to be turned on but are not being used, and queues of people waiting for other machines. Giving them more freedom to decide what ratios are needed, still within some rules, will help to ensure that they operate more effectively.

Q365       Dr Huq: Okay. I also want to ask a bit about advertising. We know that £1.5 billion a year is spent on gambling advertising, and all the polling shows that it is quite unpopular. People do not like these popups every time they are trying to do something on the internet, flinging Foxy Bingo or whatever at them. Why did the Government not go further in curbs on gambling advertising, for example front-of-shirt advertising? It would have been an easy win and it is popular with the public. I think that people are surprised that no further action is being taken, when everyone accepts that advertising influences increased consumption, and increased consumption equals increased harms.

Stuart Andrew: Again it is important to point out that we went on an evidence-led approach on this. We looked at the types of advertising that may potentially lead people into gambling harm. It is also important to say that some changes have been happening in this area, some rules have been tightened up. However, we have gone very much on the evidence. There is little evidence that exposure to advertising alone causes people to enter into gambling harm, although we do recognise, of course, that it can perhaps disproportionately affect those who are going through gambling harm.

However, there is clear evidence that personalised direct marketing can pose a risk. That is why a number of changes have been made in those areas. Once we have the research, if there is more evidence that proves that advertising is causing harm, then we will look at that. The Secretary of State made that point when we introduced the White Paper to the House. She was very clear on that.

Ben Dean: We said all along that we would be led by the evidence. While we did have people asking us to do blanket bans on all advertising, as the Minister said the evidence was not there that the harm was linked to general advertising.

However, it is important to note what we have done. We have banned aggressive targeting practices. The Gambling Commission has taken that action on VIP schemes and reduced the number of VIP customers by 90%. It is consulting on further work on bonuses and free bets. The advertising code has also been tightened. You are not allowed to particularly appeal to children. You mentioned that the Premier League has taken voluntary action to remove shirt sponsorships of gambling companies at the end of the 2025-26 season. Twenty per cent of gambling advertising has to be safer messaging, which is an industry commitment. We are also working with industry and gambling about a sports code about better social responsibility around these areas. There is quite a lot of action being taken, backed by the evidence that we have found.

Q366       Dr Huq: If you are looking for a direct causation that this made this happen, that is going to be impossible to prove. You have correlation. Correlation is not causation. If you are setting yourself that bar, it is impossible and you are never going to meet that, that that did not make that directly happen. It is a vicious cycle, it seems.

Ben Dean: Is your question should we have banned all advertising?

Dr Huq: If you are saying that there is no direct causation, therefore we are not going to do anything—because you have not acted at all.

Stuart Andrew: No, that is not true.

Ben Dean: I have just listed six things that we are doing.

Dr Huq: They are voluntary things that other people have taken in spite of—

Ben Dean: No, no, they are not all voluntary. The VIP schemes that the Gambling Commission has cracked down on was not voluntary. The work that the Advertising Standards Authority has done is not voluntary. A lot of this is not voluntary.

Q367       Dr Huq: A last one from me. Do you accept that gambling in a way exists on a spectrum? People can move in and out of these behaviours. The person from the commission, Sarah, said that people can use more than one product. When we measure these things in these ways, we are ignoring things like—“problem gambler” is a very problematic term because it puts all the personal responsibility on the individual and we are ignoring structures of inequality, things like class and gender and all these things. I would like to see this future research that comes in, this new framework, looking at intersectionality more because at the moment it is all very stats based and it is all the person’s fault. Would you accept that?

Stuart Andrew: I do not think that we would ever say that it is the person’s fault. This is a complex area of how people find themselves in some of the positions that they do.

Dr Huq: Personal responsibility is what I mean. It is a very easy get-out clause if you just shove everything into personal responsibility.

Stuart Andrew: We would not say that, because there is an obligation on operators to do the checks. The problem is that there is an inconsistency in the approach of doing those checks and identifying. That is why we are trying to bring about a consistent approach so that industry knows what is expected of it and that therefore we can identify those people who are at danger of entering gambling harm but at the same time allow all those people who want to carry on enjoying gambling to do so as part of how they wish to spend their money. It is safe.

Q368       Dr Huq: We can go on and on and I will end here, but sometimes putting non-gamblers into these same statistics conflates the picture, which is why it looks not as bad as it is, whereas with some products it can be one in six people get addicted. Therefore, the way that we collect those statistics is wrong.

Ben Dean: What we definitely recognise is that there is a spectrum of harm and there is also a spectrum of product that causes harm. That is very much one of the things that we have tried to look at through our review. We know, for example, that the main national lottery draw has a very low form of harm compared to online slots. That is very much why we are trying to take targeted interventions and where the harm really lies.

Q369       Chair: Going back to what you just said, Minister, about the fact that the vast majority of people do enjoy gambling safely, do you think that the Gambling Commission’s lived-experience panel should include those who do include gambling safely and have never had any health issues from it?

Stuart Andrew: That is an interesting point. I do not know if they do.

Ben Dean: I do not want to speak on their behalf, but I know that one of the things that it has heard and that it is considering is that it has seen the value of having that lived-experiences group but it also recognises that there is a body of people who, as you say, are normal gamblers, normal people who have been engaged in the industry. They may not be industry representatives but they come from that side of the debate as well. It is something that it is looking at about how it engages that side and whether there is more that it should be doing to make sure that it is hearing a balanced view from both sides of the argument.

Q370       Chair: Picking up on Rupa’s questions, scooping up a few things that have popped into my head while I have been listening. I will go back to Rupa’s question on advertising. One of the things that occurs to me, despite that fact that female gamblers are a much, much smaller cohort of the problem gambling sector, there is a massive growth in the number of women who are gambling, particularly online. Does the number of TV ads for online bingo concern you that are specifically and robustly targeted towards females?

Stuart Andrew: Again this is why we want this research funding because it will help us to really understand in greater detail any impact, if there is, on precisely the issue that you raise. The thing that has made me feel comfortable about what we have done with the White Paper is that it has been evidence-led and you can point to evidence. That is important when you are dealing with two sides of a very difficult debate at times, and being able to say that we have taken this approach because the evidence has led us in this direction. If we can have more research that will look at exactly the points that you raise and it does identify that that is causing a problem, then, yes, we would look at that.

Ben Dean: The key advantage that we see of that statutory levy as well as research that the Minister talked about is that if there are identifiable areas, as you have set out, then we can also look at the prevention element as well as if a bespoke treatment is needed as well.

Q371       Julie Elliott: Good afternoon. I want to move on to some of the checks being proposed for online gambling accounts. We have heard that the enhanced financial risk checks may miss some people experiencing harm at lower levels of gambling spend. Why did you not propose lower thresholds for triggering these checks?

Stuart Andrew: Again a lot of this was around the evidence that was available to us, looking at—I cannot remember the figure but it was a significant number of bets that happened over the previous year. I have forgotten the figure but I can perhaps write to the Committee with it. It was throughout that that brought us to the level that we will be consulting.

Q372       Julie Elliott: Were you looking at the levels of money impacted by it or were you looking at the numbers of people affected? What determined how you did it?

Ben Dean: It has been a bit of both. It is important to say that this was a consultation. One of the things that we want is to get further input from people and further evidence. However, when you break down how much each account wins or loses, it is helpful to understand that broadly 20% of accounts win in any given year. You have about 50% of accounts who lose under £100 in a year, about 20% of accounts lose between £100 and £500 a year and about 10% lose more than £500. You are absolutely right that you can have harm at lower levels but what we are trying to do is to get a proportionate balance. The vast majority of people will not be impacted by this, but those where we know there is most likely to be harm will have to go through the checks but those checks will be frictionless for the vast majority of people.

Q373       Julie Elliott: How will they be frictionless?

Stuart Andrew: That is exactly what we are consulting on at the moment. I want to make it very clear, because I have seen lots of discussion about this in the press, and I want to be clear why we are doing this. It is so that there is a consistent approach that the industry will follow, designed to identify those who are at risk so that we do not see the cases who we have seen in the past like the nurse who is allowed to spend £245,000 in three months or somebody spending £70,000 in 10 hours. Those checks should have been identified by the operators by bringing in this consistent approach.

We are working with agencies across the board to ensure that these checks are frictionless. For eight out of 10 they will carry on as they do now. There will be then a percentage who will have an enhanced check and many of those will be able to carry on. Even of the 3% that we will need to do even more detailed checks, the percentage of those who will be facing frictionless checks will be high. I want to be clear that we want to make sure that this system works. We will, if necessary, pilot this to make sure that it is working. Only when we are confident that it has delivered the frictionless tests that we have envisaged will we then look at rolling it out.

Q374       Julie Elliott: If we look at the conduct at the more enhanced checks, will gambling companies need customer consent to carry those out?

Ben Dean: It is quite likely that customers may have to tick a box to consent to it. This is being devised at the moment but what we have talked about and what the Gambling Commission is looking at in its consultation is saying that at that basic check it might be something like comparing records against whether or not you have been made bankrupt, do you have county court judgments against you, open-source datasets like that. At the enhanced check, as the Minister talked about, that is where we are likely to rely more on things like credit checks and stuff, which can happen instantaneously and happen frictionlessly other than the customer may have to tick a box, or it may be part of the terms and conditions. That is still to be determined, but frictionless is key.

Q375       Julie Elliott: How will you ensure that customers’ financial profiles are not affected by the enhanced checks and how their data is going to be protected?

Ben Dean: That is something that I know the Gambling Commissioner and we have been talking to the Information Commissioner’s Office about to make sure that those protocols are in place.

Julie Elliott: Therefore, you do not yet know how that is going to happen and it is still in discussion?

Ben Dean: The plans are still being consulted on and are being discussed but that is absolutely the aim.

Q376       Kevin Brennan: Welcome both. Is this the favourite part of your brief, Minister?

Stuart Andrew: It is the most challenging, if I am honest.

Q377       Kevin Brennan: We had some interesting exchanges earlier on about the statistics that get bandied around, and we we have had some more now during your session. I suggested that maybe it might be a case for the excellent Tim Harford and Radio 4’s “More or Less” programme to dig into, our inquiry. Would you go along with that?

Stuart Andrew: I have mentioned this a number of times now. I do think that, in all seriousness, the introduction of the statutory levy does present us with a real opportunity to get first-class research. When you have that research it will provide us with absolute evidence. That is what I will be focusing on.

Q378       Kevin Brennan: We had a letter from the GambleAware last year and it has been highlighted just now in our exchanges about the OHID report. Ben, you referred to it earlier. It says in its letter, “We have even seen this figure extrapolated to say 10% of suicides in the UK are due to gambling. This is not a reliable or accurate way to use the range published by OHID”. What is your response to that?

Ben Dean: This goes back to what we were talking about earlier, that when you are looking at something very tricky like suicides, we recognise the importance of doing all that we can to reduce suicides. We do not have the evidence at the moment to know exactly how many suicides are—as has been said, there is some research out there but was based on, as I mentioned, a Swedish study and extrapolated. Clearly in an ideal world we would have better quality evidence and that is what the Minister is talking about trying to get from the statutory levy.

Q379       Kevin Brennan: Ben, would you describe this as a significant policy intervention? You did say earlier on it is the first time in nearly 20 years that this has been looked at.

Ben Dean: The White Paper as a whole? Yes.

Q380       Kevin Brennan: My question to the Minister, to follow that up, is if it is such a significant policy intervention with a large industry and there are lots of implications for health matters, as we have heard about, for employment, for tax revenue and so on for the Government, why is it not worthy of an impact assessment? The Government do impact assessments. I am required by the Whips to turn up to all these little statutory instrument committees and I always read the impact assessment because that is where you find out what is really going on, so why is there not an impact assessment on this very important major policy intervention?

Stuart Andrew: I will probably need to come back to you, to be honest with you, Mr Brennan, and to the Committee, because I would not want to give any misinformation.

Kevin Brennan: I get a bit fed up with Ministers saying that they need to come back to me when I ask about impact assessments.

Stuart Andrew: Okay. I take your point.

Q381       Kevin Brennan: This is a huge thing, yet the Government do not deem it worthy. Ben was looking for some inflight refuelling and is now itching to tell me what he has found out.

Ben Dean: I was just checking, but we did do an impact assessment for the online slots consultation and that came out.

Kevin Brennan: You have not done it for this.

Ben Dean: When you say “this”, which bit are you referring to?

Kevin Brennan: For the White Paper.

Ben Dean: We did publish, as part of the White Paper, the overall impact that we think that it would have on GGY.

Kevin Brennan: That is not the same as a formal Government impact assessment, as you well know.

Ben Dean: We are publishing the best data that we can.

Q382       Kevin Brennan: Are you going to publish a proper impact assessment at some point as a Government?

Ben Dean: We have the more detailed consultation, as I said, on online slots.

Q383       Kevin Brennan: What discussions did you have about whether or not you should publish an impact assessment in relation to this major policy intervention that you just agreed that this is?

Ben Dean: What we are trying to balance is being as transparent as we can, to publish the information that we can, but also—

Kevin Brennan: If you had been as transparent as you can, you would have a full impact assessment.

Ben Dean: Hold on. One of the main criticisms that we have had is being able to move on to make actual impact on the ground. We did not want to hold up further the White Paper by having a detailed impact assessment when what people want is us taking the White Paper out and having an impact on the ground, which is the main criticism that—

Q384       Kevin Brennan: The White Paper has that because Ministers could not agree on publishing it for about a year. They could have done the impact assessment during that period of time, couldn’t you? I find it staggering that there is not one. That is all I was going to say.

Did you hear the questions earlier on, and Julie Elliot asked some questions as well, about affordability checks? Are you content, Minister, that what is being proposed in the consultation by the Gambling Commission squares up with the message that the Secretary of State gave us in April on the floor of the House?

Stuart Andrew: Yes, I think that it will bring out what we are seeking in terms of the structure of the model that we are looking for. That is why I was very clear earlier on that when we say we want these frictionless tests, we mean it. The last thing that I want to see is those who are enjoying gambling in a safe manner and in a way that they have done for many years to be impacted. However, once we have this consultation concluded, then we will obviously look at all the detail that is submitted. That is exactly what we are seeking to achieve; we are very clear on that.

Q385       Kevin Brennan: I have raised this matter, another matter, previously, when we had our inquiry into the national lottery on this Committee. Why is the lottery not included in the White Paper?

Stuart Andrew: Because it is established under a separate piece of legislation. It is important to recognise that the national lottery contributes significantly to good causes in this country.

Q386       Kevin Brennan: It is possible to buy a lottery ticket. Ben referred on to the main lottery draw, which, as we know, is not the whole picture about the potential gambling harm with the lottery. It is still possible, isn’t it, technically, to buy a lottery product with a credit card?

Ben Dean: You raised this the last time I was in front of you.

Kevin Brennan: I did raise it, yes. I was not sure if you remembered.

Ben Dean: I very much remember and I took it seriously and I went away and looked at it myself. As I said at the time, you are right that you can, using a credit card in a shop, buy a lottery ticket. What we have banned is that you cannot use a credit card on the national lottery app or online but—

Kevin Brennan: You can go in and buy a Mars bar.

Ben Dean: But if you are in a shop we made a conscious decision—this is having talked to retailers—is that what customers do not want and what retailers do not want is to have to do two checkouts where someone would be buying their groceries and then have to use a separate card. What we have also looked at is do we have any evidence is that there is harm being caused by people using credit cards for national lottery purchases. At the moment we have no evidence that there is harm. It is under 1% of transactions. Should that change and we see that there is harm, clearly that is something that we will have to look at.

Q387       Kevin Brennan: We have talked a lot of about evidence and I absolutely agree that we should look at what the evidence is. Why is the lottery not being included in the statutory levy?

Stuart Andrew: Because, as I say, the contribution that it makes to society is significant. Also there is a voluntary contribution that it makes.

Ben Dean: Yes, it does contribute voluntarily.

Q388       Kevin Brennan: It is 0.01% of its gross gambling yield, isn’t it?

Ben Dean: It does have statutory obligations about player protection that it has to follow. As I mentioned earlier, the main draw in particular is at the lower end of the spectrum.

Kevin Brennan: It contributes less than £500,000 out of £3.5 billion.

Ben Dean: It also contribute currently about £1.6 billion and £0.8 billion a year to good causes. That is sports, heritage, culture, arts, voluntary organisations up and down the country. We believe that that combination of their good-cause returns and its voluntary contribution and the harm is proportionate.

Q389       Kevin Brennan: Isn’t this an opportunity, now that there is a new operator, if you are not going to make it part of the statutory levy, to encourage them to contribute more towards the gambling harm charities than it is currently? It is obviously required by statute to do what it does in terms of its good causes and so on. I think it is just less than £500,000. Is my figure right? Couldn’t it be doing more?

Ben Dean: We believe what it is currently doing is proportionate and balanced given the £1.6 billion to £1.8 billion to good-cause returns as well and given the amount of harm that is caused by the national lottery. We think that it is about right. Clearly if it chose to put more in, we would always welcome that.

Q390       Kevin Brennan: Finally, should its adverts have more safer-gambling messages in them than they do? I do not see much evidence of that. I see a lot of adverts from betting companies saying that you should gamble responsibility, but I do not see it on lottery adverts.

Stuart Andrew: I see your point. It probably goes back to the point that there is no significant evidence to show that the national lottery results in people falling into gambling harm but it is an interesting proposition. I am not making any commitments here but I will certainly have a look at that.

Q391       Steve Brine: If I might just take you briefly to the gee-gees before we finish, you will know that the horseracing has expressed concern about the impact of the financial risk checks. Coming back to Mr Brennan’s point about impact, what are your views on the impact of the White Paper on the horseracing industry and could you update us on your review of the horserace betting levy that you promised to conduct by 2024, presumably by the end of Parliament? Could you update us on those two things, Minister?

Stuart Andrew: Again, I personally, and the Department and the Government recognise the massive contribution that horseracing makes to this country. It is the second-biggest spectator sport in the UK. There is no way that we want to do anything to harm that. That is why, yes, we are bringing in these checks but we want them to be frictionless and that standard approach throughout. At the same time we have launched the review into the horserace betting levy. We have had representations from both the British Horseracing Association and from the Betting & Gaming Council. We have encouraged them to come together. There have been some recommendations made by BHA that we are currently considering but we have also said to the two to get together and come up with some proposals. We even extended the deadline to allow that to happen because I am keen that we take this opportunity to try to plug the gaps where we can and ensure that we secure a good future for horseracing in this country. There is a lot that we can be very proud of with the horseracing industry in terms of its reputation around the world and we are keen for that to happen. However, we are using this as an opportunity to do the two hand in glove as it were.

Q392       Steve Brine: In terms of what has come up so far, have you been taken by any suggestions? I think that I am right in saying that you estimate the reduction in online horse betting, the gross gambling yield, at between 6% and 11% so to mitigate its loss is why you decided to undertake the review of the horserace betting levy. Has anything come up, Ben or Minister, that you have been taken with?

Ben Dean: The review is ongoing so I do not want to pre-empt what comes out of it. As the Minister said, the two sides talking and coming together collectively—we are seeing them next week—is important. However, one of the things that we also recognise is the levy is on track to bring in about £99 million in 2022-23. We have not had the final figures through but that would be the highest amount the levy has brought. Therefore, we want to make sure that it is fair and balanced but ideally we want the two sides to come together.

Q393       Chair: Finally on this whole subject, can I talk to you quickly about the ombudsman? Obviously you will have heard our conversation earlier on the argument about whether it should be statutory or industry led. Given we are where we are, what standards do you expect from the gambling industry in setting up this new ombudsman and, crucially, for ensuring its independence?

Stuart Andrew: We have taken this approach because we want to try to get this established as quickly as possible. Our aim is that it will be established next year looking at social responsibility complaints and see the progress that it makes. However, I will be clear that if the voluntary arrangement around the ombudsman does not work, we will have to look at that and look at a statutory model instead.

Ben Dean: As you probably heard from the Gambling Commission, there is the option as well of it becoming a licence condition on operators. We feel comfortable that there are ways to hopefully ensure that there is strong compliance and strong engagement with it.

Q394       Chair: Thank you. Before I let you go, and I am sorry to do this, I cannot let you escape. Minister, I know this is not entirely within the curtilage of your portfolio, but can I very briefly ask you about the British Museum?

Stuart Andrew: Yes.

Chair: I want to know what the Department is doing to ensure that the British Museum is now taking appropriate care of its collection.

Stuart Andrew: Obviously there are live investigations going on at the moment so I have to be somewhat careful in what I say but I would refer to the written ministerial statement where the Secretary of State outlined that she had spoken to the chair of the museum. We are very clear as a Department that we need to ensure that that investigation happens but also that lessons need to be learnt. We will be monitoring that very closely.

Q395       Chair: Clearly this has shone a light upon some worrying facts about how recordkeeping and collections are cared for. Are the Government confident that other museums and galleries sponsored by the Department are looking at this appropriately as well? Is this going to be one of those situations where it unearths a whole range of problems in other parts of the estate?

Stuart Andrew: Yes, I know that my ministerial colleagues are certainly looking at this in terms of the wider picture. As I say, once we have seen some of the conclusions of the investigation, but also even before that, following discussions that the Secretary of State had with the chair of the British Museum, we will want to ensure that we are replicating that, if you like, with other organisations around the country.

Chair: Thank you for allowing me to prod you on that a little bit. Obviously as my captive audience it is the Chair’s prerogative.

Thank you very much for your time today. We have been very grateful to have you in front of us and for all your answers. If there is anything else you think of once you have departed, please drop us a note on it.