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A Tory grandee has threatened the government with "war" if a long-awaited review of gambling rules is toned down.
A required "polluter pays" fee on betting companies to support addiction treatment and research is apparently being left out of a White Paper due out next month.
According to sources involved with the negotiations, No10 is expected to approve increased voluntary contributions in order to prevent further taxes on the industry.
According to the Mirror, officials are still debating whether to incorporate the levy.
According to reports, the White Paper may also refrain from requiring Premier League teams to remove betting advertisements off players' jerseys.
The government is reported to be aiming for a voluntary arrangement with Premier League teams to remove betting sponsors' names from jerseys.
Tory ex-leader Sir Iain Duncan Smith lashed out at the levy, telling the Sunday Times: "On this, I would go to battle with the government."
The data is clear on the harm that problem gambling may create. I will not budge on the levy."
"I am more than unhappy," Labour MP Carolyn Harris, head of the All-Party Parliamentary Group on Gambling Harms, told the Mirror.
“If this is true, they have missed a fantastic opportunity to completely change the gambling environment and to protect those who need our help.”
She suggested there could be a repeat of the last major revolt over fixed-odds betting machines - which almost derailed the 2018 Budget.
She said: “We’ve done it before and we can mobilise the support to make sure we do go to war with the government.
“We can’t allow this to continue”.
A review of the 2005 Gambling Act began in 2020 and is due to report back imminently. Ministers promised it in “the coming weeks” in late March.
The review said Tory ministers would “seek evidence on the positive and negative outcomes” of betting firms’ logos appearing on football shirts.
It also said they would consider a statutory levy for funding addiction treatment, if the current voluntary system failed to deliver the funding necessary.
The Social Market Foundation think tank has argued “the current voluntary funding system lacks consistency, transparency, and accountability”.
But the review by the Department for Culture Media and Sport (DCMS) prompted a strong lobbying operation from the gambling industry.
The Betting and Gaming Council highlighted figures saying problem gambling fell to 0.2% of the population, with 22.5million bets placed a month.
Chief executive Michael Dugher said the review was an “important opportunity to further raise standards”. But he said earlier this month: “A small but noisy anti-gambling lobby are demanding draconian restrictions for an activity they don’t approve of.” Estimates published by the government in September suggest 409 suicides a year in England are “associated with problem gambling”. They also suggested there were “212,511 people with depression and problem or at-risk gambling”.
Combined, the cost of this suicide and depression to the economy in England was estimated at more than £950million a year.
Matt Zarb-Cousin of the Clean Up Gambling group said: “The whole reason this gambling review came about was to address issues caused by an online gambling sector that has not been prepared to reduce harm voluntarily.
“If both the levy for treatment and restrictions on advertising are left up to voluntarily arrangements, then this review spanning two years will have been a waste of time.
“Government should be listening to the evidence from leading clinicians and implementing an independently administered statutory levy, and ending gambling advertising in football.”
A DCMS spokesperson said: "We are undertaking the most comprehensive review of gambling laws in 15 years to ensure they are fit for the digital age.
“We will be publishing a White Paper as part of a review of gambling legislation in the coming weeks."