In July 2020, the House of Lords Social and Economic Impact of the Gambling Industry Committee published a report entitled ‘Gambling Harm—Time for Action’. The House of Lords is due to debate the report on 27 April 2022.

The House of Lords committee criticised what it called the current “laissez faire” approach to gambling regulation. It said this was the result of the provisions of the Gambling Act 2005, which the Government described as the basis for “virtually all” regulation of gambling.

The committee argued that “successive governments and regulators have failed to keep up with the revolution in the UK gambling sector”, in particular the rise of online gambling. The committee said this had not been foreseen at the time of the 2005 act and made the act unsuitable as a basis for current regulation of the sector.

In particular, the committee stated that “gambling operators have made hay” exploiting the current regime. For example, the committee argued that the regulatory structure has allowed some gambling companies to use “unscrupulous methods and ingenuity” to increase their profits. Such tactics have included targeting the “most vulnerable” people with inducements to gamble, when the companies knew such bets were unaffordable for the customers.

The committee also criticised regulators in the market, notably the Gambling Commission, which was set up by the 2005 act. The committee said that “only recently” has the committee begun to use its wide powers, which include heavy fines and revoking an operator’s licence.

The report made over 50 recommendations. It stated that all the main political parties had promised to reform the laws on gambling in their 2019 general election manifestos, including the Conservative Party’s promise to carry out a review of the Gambling Act 2005. The committee said this review should be taken forward “with some urgency”.

Other recommendations included:

• The Gambling Commission should have a revised remit, funding structure and powers. For example, its remit should expand to include “prevention of potential and actual harm” from gambling. The commission should also demonstrate “much greater willingness” to use its existing powers; for example, to withdraw an operating licence in the case of repeat offences or other extreme circumstances.
• The Government should impose a mandatory levy on gambling companies to fund research, education and treatment for gambling addiction.
• Companies should be obliged to take steps to identify whether customers are betting more than they can afford. In addition, operators should be allowed to share affordability information where a vulnerable customer has accounts with more than one company.
• Customer communications containing inducements to gamble should be allowed only within “strictly controlled limits”, including affordability checks.
• ‘Loot boxes’ in video games should be brought into the scope of the 2005 act and regulated as games of chance.
• There should be additional restrictions on gambling advertising, for example a ban on sponsorship of team shirts and a ban on advertisements at or near sports grounds. For a more detailed discussion of issues around gambling advertising, see the Library’s briefing for a debate on the subject that took place in the House of Lords on 1 March 2022 and the Hansard report of the debate itself.
• There should be a transparent and independent ombudsman service to resolve disputes between customers and companies.

The Government’s formal response to the committee said “the priorities for action as set out in the committee’s report” are reflected in the “wide scope” of the review of the 2005 act. The Government’s response to many of the committee’s recommendations referred to work being undertaken as part of the review.

The Government also noted developments including:

• Gambling Commission work to tighten the requirements around how online gambling games, particularly slot machines, are designed. These changes took effect in October 2021.
• The Gambling Commission strengthened its enforcement strategy in 2017. The Government said that since then there had been increased financial penalties and 16 operator or personal licences had been revoked.
• The Gambling Commission was reviewing its approach to research into the industry and adding additional questions to its quarterly survey of gambling prevalence.
• A ban on using credit cards for gambling, which came into effect in April 2020.
• A 2019 NHS commitment to open 15 specialist gambling clinics by 2023/24. The Government said seven clinics would be open by May 2022.
• An increase in the minimum age for playing the National Lottery, to 18. This came into effect in October 2021.

LGA encourages councils to take a ‘whole council’ approach to tackling gambling harms

In advance of the House of Lords debate, the LGA called on councils to take a ‘whole council’ approach to tackling gambling harms, saying:

"The LGA encourages councils to take a ‘whole council’ approach to tackling gambling harms, involving the range of council service areas. We have published guidance to support councils to successfully introduce this approach, which we plan to update in the coming months."

Other key messages by the LGA:

• Government should also prioritise introducing a new legal power for councils to break the ‘statutory aim to permit’ if this is necessary. These measures will be vital to stop the proliferation of gambling premises in concentrated areas and allow councils to design places that meet residents’ and the local economies’ needs.
• Calling for the Government to restrict the volume of gambling advertising, particularly where it can be seen by children – for example, during televised or live sport as well as for greater control on sponsorship. We hope that the Gambling Act Review will address this.
• A further area of concern for authorities is gambling licence fees. Nationally set licence fee caps have not been increased since 2007 and should be updated to reflect the increases in associated costs since then. We are calling for local flexibility to allow councils to set fees in line with the costs of administering a license, in line with taxi and private hire vehicle licenses and other areas of licensing. However, if the Department chooses to maintain a national rate or cap, then it is vital that the rate is at least increased in line with inflation since 2007.