My Lords, there cannot be a more basic aspect of consumer rights than protecting British consumers from unlicensed providers. This is particularly the case where gambling is concerned, because of the sad reality of problem gambling and the need to protect the vulnerable from providers who are not subject to the social responsibility conditions associated with securing a UK Gambling Commission licence.
The imperative to properly protect British consumers from unlicensed gambling providers is yet further compounded in the context of online gambling because of its association with higher problem gambling prevalence
figures than gambling generally. The 2010 general problem gambling prevalence figure was 0.9%, but it was more than 9% for online on an annual basis and more than 17% on a monthly basis.
When the Government introduced the Gambling (Licensing and Advertising) Bill in another place a few years ago, the point was soon made that it lacked any credible means of enforcement. The Bill proposed a new arrangement whereby online gambling operators based anywhere in the world would, for the first time, be able to access the UK market and advertise here so long as they secured a Gambling Commission licence. The difficulty was that the Bill contained no credible provision for preventing unlicensed gambling sites accessing the UK market. There was, and is, consequently a very real concern that its principal effect will be to allow companies that currently cannot advertise in the UK to do so but without introducing any mechanism to prevent unlicensed providers from accessing the UK market.
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Without providing a new means of prohibiting unlicensed providers from accessing the UK market, there is concern that the primary impact of the new arrangement could be to increase the scope for advertising gambling in the UK, and advertising specifically for a form of gambling associated with a significantly higher problem prevalence figure than gambling generally.
In the other place and in your Lordships’ House, the Government were pressed repeatedly on the lack of any credible enforcement mechanism in the Bill. They argued that the Bill provided for enforcement because, first, unlicensed providers would not be able to advertise in the UK. That was not relevant. Just because a provider cannot advertise in the UK does not prevent it accessing the UK market. Secondly, they argued that players could be educated not to use unlicensed sites. That is true but does not remove the obligation on the Government to make sure that the laws they introduce have enforcement mechanisms. Thirdly, the Government could ultimately seek to prosecute unlicensed sites. The idea that the Government would have the time and resources to chase hundreds of small online gambling providers through multiple jurisdictions across the world simply was not credible, and unlicensed websites know this.
In response, amendments were tabled in another place to introduce IP and financial transaction blocking in order to block unlicensed sites or transactions with unlicensed sites. When presented with IP and financial blocking, however, the Government responded by rejecting these solutions on the basis that the evidence suggests that they are not always effective. This seemed very odd given that, while no one ever sought to suggest that they would be 100% effective, it was always clear that they were much more effective than the three mechanisms advanced by the Government. Indeed, the truth is that they constitute the most effective available enforcement mechanisms. Financial transaction blocking, for example, has been deployed to good effect in the US, Norway, France, Belgium and Estonia. Other jurisdictions have also implemented policies
that reflect the blocking of the financial flow to illegal websites—for example, in Israel, Turkey, Singapore and Malaysia.
After I moved my financial transaction blocking amendment in Committee and tabled one on Report all those years ago, the Government invited me to a meeting just before Report. They explained that, while they would not accept my amendment, they were ready to announce that the Gambling Commission had reached agreement with the major financial transaction providers—notably MasterCard, PayPal and Visa Europe—to block transactions between people living in the UK and unlicensed gambling websites.
Naturally, I welcomed the news but expressed serious concerns because it seemed to me that, even if the big transaction providers were party to this agreement, problem gamblers desperate for the best odds would simply migrate to alternative financial transaction providers. That remains my concern and it is why I have tabled Amendment 105N. It would require as a matter of law that no financial transaction providers processed transactions between UK consumers and unlicensed gambling sites. Moreover, when I met the Minister and officials in those days, I was told that a better place for my amendment to the gambling Bill would be a future consumer protection Bill. Indeed, they suggested that they may insert an FTB provision in a future consumer protection Bill. The Bill before us today provides the perfect context for my amendment and I very much hope that the Minister will accept it, recognising the importance of protecting all British consumers, not just those lucky enough to use MasterCard, PayPal and Visa Europe.
Before I sit down, I give the Minister the opportunity to respond to an alternative argument put to me recently. Some quarters have argued that financial transaction providers are already required, courtesy of our common law, not to process transactions with the provider of any service that is illegal. I take it that that is not the Government’s view; otherwise they would surely have deployed that argument when responding to the first IP financial transaction blocking amendment to the gambling Bill in another place and all subsequent FTB amendments. If financial transaction providers are already legally obliged not to process transactions between consumers in the UK and unlicensed websites, there is no need for my amendment or any of those tabled in the other place. I assume that the Government do not subscribe to that common-law argument, given that they have not used it, but I wanted to give the Minister the opportunity to respond. I commend the amendment to your Lordships.