The West Bromwich East MP says Labour would ban betting with credit cards and stop gambling firms from advertising during live televised sports events as as part of the biggest overhaul of the industry in two decades.
It follows Labour's year-long probe into gambling in the UK, which saw Deputy Leader Mr Watson and Shadow Health Secretary Jonathan Ashworth consult with gambling addiction specialists, charities, industry bodies and problem gamblers.
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The report also calls for a compulsory levy on gambling operators, more cash for the treatment of gambling addiction, and new rules allowing addicts to tell their bank to stop online gambling transactions.
Shadow Sport Secretary Mr Watson said: “Problem gambling is Britain’s hidden epidemic and we must treat it as a public health emergency.
“Current gambling regulation is not up to the job of protecting addicts and those at risk of addiction. Treatment is patchy across the country and too often patients are misdiagnosed and not treated by specialists who can spot the signs of gambling addiction.
“Gambling companies have to take more responsibility for harms caused by their products and contribute more to research and treatment.
"We must also face up to the negative effect the explosion in gambling advertising has had and act accordingly. It’s what any responsible Government looking to address gambling addiction must do.
“The refusal of the current Government to address any of these issues is letting problem gamblers and their families down. Labour’s new policies announced today aim to build a world class framework for the prevention and treatment of problem gambling.”
The blanket ban on the use of credit cards would be a major blow to the industry, with a report by the Gambling Commission stating that up to 20 per cent of the £43bn – £8.6bn – deposited annually into betting accounts are made using credit cards.
The 'whistle to whistle' ban on gambling adverts follows calls for Government action to address the growing saturation of gambling adverts on live televised sport.
The number of problem gamblers in the UK is estimated at 430,000, including 25,000 aged between 11 and 16.