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Agenda item 2 is on our inquiry into fixed-odds betting terminals. We will take evidence from Scottish Government officials as part of the inquiry. There are proposals on gaming machines in the Scotland Bill, of course. I welcome Quentin Fisher, who is head of the licensing and human trafficking unit, and Walter Drummond-Murray, who is a policy officer in that unit. Do you want to make brief opening remarks, gentlemen?
No, thank you, convener.
First, can I clarify that you watched last week’s committee meeting or read the Official Report of it?
We have read the Official Report.
We will move straight to questions.
One issue that came up last week was planning. The local authorities seemed to feel that they cannot use planning to the extent that they feel that they should be able to on the siting of bookmakers shops, most of which lead to the introduction of fixed-odds betting terminals. Do you have any comments on that from a Government perspective, please, gentlemen?
An underlying point is that we feel that licensing is the more appropriate mechanism to deal with such things and that the question whether a betting shop should be allowed should more naturally fall into licensing. However, we do not have the power in that regard.
Mr Neil indicated to Parliament that we would look at amending the use classes order if we did not get from the United Kingdom Government the most effective powers on controlling payday lending and gambling. The Scotland Bill has now gone to the House of Lords, and the Scottish Government will consider the next steps, but we are clear that the question whether a betting shop should be allowed is more naturally a licensing decision than a planning one.
Many of us around the table found ourselves in situations in our previous lives as councillors—Mr Buchanan is the only one who has escaped being a councillor—in which, as Mr Adam said earlier, we wore one hat in one place and another in another place. Difficulties often arise between planning committees and licensing boards. Would it be much easier to have a joined-up approach? Is it possible for the Scottish Government to consider that?
That is not possible as things stand, because there is the distinction between the reserved powers on the licensing of betting and the devolved powers in relation to planning. However, not only in the context of betting but in respect of pubs and all the other licensed activities, it is familiar territory for local authorities that there is a distinction and people approach things with a very different mindset. Licensing is concerned with the typical licensing objectives of protecting public health, preventing criminality and reducing disorder, for example. Planning is very different.
Last week, we heard that there is a flaw in the ability to police aspects of the Gambling Act 2005. I understand that there was an attempt to amend that through the Scotland Bill—that is what we were told. Has the Scottish Government made any representations to the UK Government to amend the 2005 act and ensure that licensing boards have a better ability to police outlets than is currently the case?
I take it that you are referring to the provision on the ability of licensing standards officers to police outlets.
Yes.
We have raised that issue with the UK Government. It is not a new issue; it is old. The Gambling Commission has also made representations and I know that it offered evidence to the committee in which it raised that point. Needless to say, we cannot change the UK legislation, but we have supported the work that the Gambling Commission has done.
What has the UK Government’s response been to the Scottish Government’s requests for that to be changed?
You will note that there have been no such amendments to the Scotland Bill.
I understand that, but you said that the Scottish Government made representations to the UK Government. What was the UK Government’s response? I understand that an amendment was rejected during the Scotland Bill’s passage through the House of Commons, but what written responses, for example, has the Scottish Government received from the UK Government?
My memory is that Kenny MacAskill as the then Cabinet Secretary for Justice wrote to his counterpart at the time—I think that that might have been Jeremy Hunt—to raise the matter and Mr Hunt replied with a willingness to do something. More recently, officials have indicated a willingness to approach the problem, but the point is that primary legislation is required and the Scotland Bill might not necessarily be the right vehicle. The UK Government has expressed a willingness but, as yet, there has been no sign of the work being undertaken.
I think that I speak for my colleagues when I say that we would be interested in seeing the lobbying that has gone on and the responses that came back from the UK Government if we could.
I think that the correspondence has been published, but we can certainly provide it.
If you could send that to the committee, that would be useful.
I have a question about the Scottish Government’s perspective on fixed-odds betting terminals. Are they a problem in themselves or is it the users of the machines who are the problem?
We share the concern that many stakeholders have expressed that fixed-odds betting terminals may be particularly problematic. That may be because of the speed of play, the stakes and the nature of the casino-type games that are played on them, such as roulette. Nevertheless, as regulators, we acknowledge that the empirical evidence is currently inconclusive or, at least, there are different views on how it should be interpreted. Against that, the anecdotal evidence of harm is substantial and we note the Gambling Commission’s position that there is a case for taking action on fixed-odds betting terminals on a purely precautionary basis.
Fundamentally, we do not have the policy responsibility or legislative powers for fixed-odds betting terminals or gambling more generally. Therefore, we have not developed and agreed a detailed policy approach on what specific steps could or should be taken to mitigate possible harm. It is worth considering measures such as reducing stakes, reducing prizes, slowing the speed of play and limiting the number of machines but, under the current constitutional arrangements and those that are set out under the Scotland Bill, it is for the UK Government to undertake that work.
Some of the evidence that we heard last week in the round-table discussion indicated that there is a flaw in the Gambling Act 2005 regarding the role of enforcement officers, which is different in Scotland from that in England and Wales. The evidence suggested that, if enforcement officers in Scotland had the same powers, they would be able to deal with some of the issues that are being raised on fixed-odds betting terminals. What is your position on that?
The issues on fixed-odds betting terminals are probably more fundamental than enforcement. The issues that are being raised with staking and the speed of play cannot be addressed by enforcement. However, better enforcement would be welcome and could only be a good thing. A particular betting shop might not be following the codes of practice in specific instances, for instance. However, there are more fundamental issues that enforcement would not address.
Have there been any discussions with the UK Government about amending the remits of licensing officers in Scotland under the 2005 act?
As I just discussed with the convener, we have raised the issue with the UK Government on a number of occasions and ministers have raised it in correspondence, but the ball is firmly in the UK Government’s court to find the right legislative vehicle to do something about it.
On the UK Government’s and the Scottish Government’s policy positions, I am sure that, if you have not already done so, you will convey what happened at last week’s committee meeting to the cabinet secretary and the relevant ministers. Have there been any discussions with the UK Government in recent times about the lack of empirical evidence that you identified, to determine whether both Governments can put together something to find out exactly what harm the machines are doing?
We have previously written to UK ministers about that. We will share the correspondence with you, if that would be helpful.
From the survey that we carried out, the submissions that we have received and the evidence that we took last week, it seems that everyone apart from the bookmakers, including other folk from the gambling industry, feels that there are difficulties with the machines. There seems to have been inaction on the part of Government to address those concerns. Is that the case?
Convener, do you mean the UK Government, the Scottish Government or both?
I meant both Governments.
The Scottish Government commissioned research some years ago not into fixed-odds betting terminals in particular but into gambling more broadly. We are constrained by the fact that gambling remains a reserved matter. Whatever we do has to be within those confines and, consequently, the main thrust of our efforts has been to engage with the UK Government and the Gambling Commission to try to improve existing regulation.
There might be a view that not enough has been done, but it is not the case that nothing has been done. The Gambling Commission produced a new code of practice that came into effect in April 2014 and required people who stake more than £50 on the machines to go to the counter to seek authorisation or have some sort of interaction.
The commission conducts a triennial review on stakes and prizes for gaming machines. That is due in 2016, so work is continuing to improve the research picture. Within that, it is recognised that there is already a case for doing something on a precautionary basis. The commission will see what effects the measures that have already been taken have had before it considers next steps.
Let us look at the evidence that we received last week on some of those measures. Many betting companies seem to use the registration for stakes of more than £50 as a marketing tool. We were told that folk got text messages to their mobile phones—with which they have to register—with adverts or slogans such as “Big men bet big”. None of that seems to be particularly precautionary to me. It seems that, with what has happened thus far, we have simply created yet another marketing tool for the betting shops. What is the Scottish Government’s view on that?
We would be deeply concerned if such practices were going on. The Gambling Commission should certainly be aware of and discuss that, because it seems to be counter to the spirit of what the companies sign up for and what that tool is intended for.
What will the Scottish Government do to ensure that the Gambling Commission and the UK Government take cognisance of those concerns?
We have a continuing relationship with the Gambling Commission and we speak to it on numerous occasions over the year but, in direct answer to your question, we have no power to ensure that it does anything.
It might be worth flagging the point—although I am sure that the committee is already aware of it—that the Scottish Government’s position on the regulation of gambling more broadly and not just FOBTs is that the power should be devolved to Scotland, which would give us the ability to consider the issues, do the necessary research, do the necessary development work and make the regulation as effective as possible.
In relation to the Law Society of Scotland’s concern about the constitutional position whereby licensed premises in Scotland are currently regulated by the UK Government and the Scottish Government, the Scottish Government’s position is that all the regulation and legislation should be devolved, so that the Scottish Government can deal with it in its entirety. Is that correct?
That is correct.
We have talked about the Gambling Commission and the negotiations with the UK Government. What discussions have taken place with licensing boards in Scotland about the use of their powers to restrict the number of premises and, more particularly, to restrict the number of fixed-odds betting terminals that are located in betting shop premises?
My understanding is that there are powers to allow licensing boards to restrict the numbers. Has there been any discussion with the Scottish Government about using those powers to try to get licensing boards to cut the numbers? A witness told us last week that, in effect, their chain of betting shops was maxed out with fixed-odds betting terminals. There does not seem to be any restriction on the number of terminals in betting shops. Could the Scottish Government tell licensing boards that they have the powers to restrict the numbers and ask why they are not using those powers?
11:45
As a general point, there has been engagement with licensing boards under the auspices of the Gambling Commission. That has predominantly been focused on enforcement and the powers that they have and do not have. I am not aware that that has specifically gone into the powers that boards might have to limit numbers of fixed-odds betting terminals, but there is a general assumption under the legislation that there is a maximum of four per shop, which tends to be what the shops get.
I am not aware of any suggestion that licensing boards have significant powers to say no to an application for a betting shop in the first place or, once the licence has been granted, to significantly limit the number to fewer than four.
Basically, you are saying that there is a free-for-all out there and that licensing boards have no powers whatsoever in this regard.
I am saying—
I would say that that is what you just described to me. I do not think that I misheard that.
I would not characterise the position as strongly as that. There is regret that licensing boards do not have more powers. Before the Gambling Act 2005 was passed, there was a demand test that enabled applications to be dealt with on the basis that, if there was one betting shop on a high street already, another was not needed, and the onus was on the applicant to prove that there was unsatisfied demand. That test was removed in the 2005 act and we very much regret its passing. Licensing boards and local authorities tell us that they do not feel that they have enough powers in determining applications. I would not go as far as saying that it is a free-for-all, because the boards have powers.
Describe to us the powers that a licensing board has to restrict the number of betting shops and FOBTs in its area.
Boards have very little power in that regard. I was referring to the powers that they have that relate to monitoring behaviour, ensuring that underagers are kept out and ensuring that the codes of practice are complied with in terms of—
Basically, you are saying that licensing boards have no way of preventing the issuing of licences to as many bookies as can possibly come into an area. The boards have no ability to restrict the number of FOBTs, other than by ensuring that there is a maximum of four. Is that what you are saying?
It is correct that the maximum number of FOBTs in each betting premises is set in UK legislation, and that is not—
Yes, it is set at four.
I understand that that is not at the discretion of the licensing board.
Basically, Mr Drummond-Murray is saying that the board has to license whatever number of bookies applies.
There is no mechanism for dealing with overprovision in the Gambling Act 2005.
So there is no ability whatsoever for licensing boards to use the sort of overprovision powers that they have in relation to alcohol in dealing with bookmakers shops.
Exactly.
Therefore, the only way in which a local authority would be able to prevent an increase in the number of bookmakers shops would be through the planning system. Is that correct?
As I said earlier, planning is not the right mechanism for dealing with the issue. Planning is more naturally—
Can I stop you there? You have already said that planning is not the right mechanism, but there seems to be no other mechanism through the licensing process. If I was a local authority member and I had concerns about the number of bookmakers in my area, I would be looking at planning.
Last week, Councillor Rooney indicated that, in a small parade of shops in his ward, there are three bookmakers with 12 FOBTs, and I have found out since then that there is also a pawn shop that folk use before going into the bookies. Councillor Rooney feels that that is overprovision, it seems that his community feels that it is overprovision and there is cross-party agreement in Glasgow City Council that there is overprovision. To him, the only way in which he can deal with that is through planning legislation, and you have basically said as much to me. What can be done in that regard?
The point that I was trying to make is that we are not sure how effective planning would be. Nonetheless, Mr Neil said that we would look at the use classes order following the conclusion of the Scotland Bill, and that may provide a route for something to be done through planning. However, as I said, there are questions about how effective that would be.
Let us hit the specifics. Has the Scottish Government considered revising the planning rules to create a separate planning class for licensed betting premises, thereby ensuring that planning permission must be sought from a licensing board to open a licensed betting premises? Is there scope to include that issue in the current independent review that is taking place?
I am not a planning expert, but I am aware that a consultation was done in 2014 on the question of expanding the use classes order. The conclusion was not to proceed with the approach that you describe of putting betting shops in a separate use class. However, Mr Neil has subsequently said that we are happy to look at that again following the passage of the Scotland Bill. There is a strong preference for us to have the powers to deal with the issues through licensing but, if that does not happen, planning might provide a route for us to do something, and we are happy to look at it.
I would like those powers to come here, too. However, as things stand, unless amendments to the Scotland Bill are lodged and agreed to in the House of Lords, it is unlikely that that will happen. Therefore, we have difficulties that we need to deal with using the legislative competences that we currently have. I realise that you are not a planning expert, but I think that I speak for all members when I say that I hope that those issues will be considered during the review of planning.
I want to follow up on my earlier question. We are considering what we can do to restrict or control the number of FOBTs. In our papers for the meeting, we received a note to help us to consider the questions that we will ask. I will quote it, because I want to hear your views on this. It states:
“The Gambling Act 2005 gives licensing boards the powers to, amongst others, review premises’ licenses and attach conditions or revoke them. In doing so, it should be mindful of, amongst others, the licensing objectives (relating to preventing crime, fairness, protecting children and vulnerable people) and the licensing authority’s statement of licensing policy. This licensing policy can reflect local issues, priorities and risks and underpin its approach to local regulation.”
Do you know of any licensing boards that have been encouraged to set licensing policies that outline the concerns that have been raised by the committee and others in relation to the unfettered market for betting shops and FOBTs?
As I said, the Gambling Commission had a session with licensing boards on their policy statements and what could be in them. Boards are encouraged to take account of the licensing objectives in formulating their policies.
On the more fundamental question about how far those policies can be used to tackle the specific problem of fixed-odds betting terminals, I am aware of a case in England in which a council—I think that it was Newham London Borough Council—tried to prevent a betting shop from being opened on public health grounds, but my recollection is that the council lost that on appeal. I come back to the point that boards feel that the legislation circumscribes what action they can take.
My question was about the Scottish Government’s discussions with licensing boards, not the Gambling Commission’s.
I want to be clear about the guidance, information and advice that are being provided by the Scottish Government on the operation of licensing boards and policy decisions. You mentioned an authority south of the border that tried to invoke certain conditions and whose decisions were overturned. The court system in Scotland is different and the issue would be whether the Scottish Government would be seen to be actively supporting licensing boards, such as the Glasgow board; as we heard last week, that board has serious concerns about the number of licensed betting shops and FOBTs that are operating in Glasgow.
Has the Scottish Government entered into discussion with licensing boards or encouraged them to use those powers to restrict the number of betting shops and FOBTs in their local authority areas?
Justice officials have not engaged local authorities in that discussion, to my knowledge, primarily because we have no particular locus in the matter. I cannot say whether planning officials have had such discussions.
Are you saying that the Scottish Government has no particular locus regarding the number of betting shops and FOBTs that are currently in operation?
I apologise—rather than the word “locus”, I should have said “power”. We have no particular powers to address that issue.
We considered that under the discussions that the Gambling Commission organised, so we see ourselves as being involved in the process. However, the constitutional position is that the Department for Culture, Media and Sport is responsible for the matter. DCMS charges the Gambling Commission to take forward such work and the commission has undertaken that process of engagement with the licensing boards to develop their policy statements to be as effective as possible.
When did all the discussion between the Gambling Commission and the local authorities take place?
It was in spring this year—April, perhaps.
My next question is for the convener and the rest of the committee. The planning review is an opportunity for us to put down some kind of marker and I agree that we should do what we can. Could the committee write to the independent review body to raise the issue and reflect the discussions that we have had?
That is a likely scenario, which we should discuss in more depth. That seems to be the way that we are going, if I am reading the views of members properly, although I do not want to pre-empt anything.
Thank you.
It sounds like a discussion about a transfer of power that does not actually transfer any powers—that is very strange. I will take a chance and ask another, related question. At last week’s meeting, I asked about the deployment of technology, particularly in order to protect individuals who might be tempted to gamble beyond their means. There was some discussion about that and we were told that William Hill had put in place a system to try to identify people who are at risk. Can that be progressed further?
The deployment of the technology seemed to be about enriching the experience and hooking someone into gambling, rather than protecting them from it if they were vulnerable. Is there any scope for us to influence the direction of travel to protect individuals who might make those mistakes?
I noted the committee’s discussion last week on the value of the algorithms and so on. As the machines are run from servers in the companies, it is very easy to make changes. That has already been done, so that, for example, after someone has spent £20—or £50 or whatever it might be—a message pops up asking whether the player should take a break.
Our more fundamental concern is that all those things are aimed at the gambler, rather than the product. We do not think that technology can provide the whole answer—the solution needs to be wider than just providing discrete measures that might assist an individual gambler. That brings us back to the discussion about the stakes and the speed of play and so on more generally, rather than just trying to tailor something for an individual.
12:00
But we must have an interest in whether harm is being caused. I think that you mentioned that in your remarks. An extensive amount of data gathering will take place on a person’s gambling experience and the industry will have all that data. Do we have any opportunity or right to access that data to see whether we can help the industry to protect people? I very much doubt it, but surely there has to be an opportunity there to ask the industry whether it would share that data.
I think that there is a willingness to share data. The industry does that with research bodies such as the Responsible Gambling Strategy Board and the Responsible Gambling Trust, which have undertaken substantial research studies into the issue, albeit that the conclusions are subject to different interpretations.
We have not specifically asked for that data—I am not quite sure what we would do with it—but the experts in the field who are conducting those studies could certainly make use of it.
How much contact has the Scottish Government had with betting organisations and anti-gambling organisations since we indicated that we were going to have this inquiry?
If we go back a little further, over the past two or three years, since the whole question arose of the constitutional arrangements changing, we have moved from a position of virtually zero engagement from different companies to quite substantial engagement.
The Association of British Bookmakers has been in touch with us. William Hill has been in touch with us on a couple of occasions. From memory, we have also met Money Advice Scotland and the RCA Trust, which provide support for problem gamblers.
Have you met the Senet Group?
Only via William Hill, which is a member of Senet. We have not met Senet itself.
Was William Hill speaking on behalf of Senet?
No. It did not portray itself as speaking on behalf of Senet; it portrayed itself as being a member of Senet and told us about it.
So there has not been any lobbying from Senet itself or meetings and discussions with Senet?
No, although I understand that it is quite a new organisation.
Okay. How regularly have you met Government planning officials regarding these matters?
We have regular contact by email and I spoke to planning officials yesterday.
What was that discussion about?
It was about the use classes order and what exactly the commitment may be to look at that following the Scotland Bill.
What was their response?
It was around the remarks that I made earlier regarding Mr Neil’s commitment to look at amending the use classes order following the Scotland Bill.
Does your team or the responsible minister or cabinet secretary intend to submit anything to the independent review of planning on that issue?
I am afraid that I could not say.
Has there been any discussion about that?
I assume that there has been some discussion, but I have not been involved in it.
Okay. Thank you for appearing as part of our consideration. As agreed, we now move into private session.
12:04 Meeting continued in private until 12:25.Previous
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