Gambling policy is a hobby horse for politicians and an easy target for wider concerns about human behaviour. Steve Donoughue argues that we need to view concerns in the context of history and the liberalisation of advertising and markets.
Anyone under the age of 30 would be forgiven for thinking gambling has always been a normal part of our commerce and culture. Commercial television channels carry advertisements encouraging viewers to play online bingo or enter online poker tournaments. The nation’s high streets are home to clusters of bright new betting shops openly advertising their wares in their windows. And – seemingly – every other newsagent will happily sell its customers a lottery ticket as well as their daily paper.
However, in reality the visibility of gambling, the range of opportunities to gambling and the number of us actually gambling are all very new phenomena. Until 1960 it was illegal to gamble anywhere other than a racecourse or a dog-racing track. These restrictions were put in place by our Victorian forebears in order to suppress the thousands of betting and gaming houses across the land that were corrupting the morals of the working classes (and were causing many members of the aristocracy to lose their family estates).
The preceding – 18th – century had been the high point for European gambling. Although our modern television dramas present the lives of men-in-tall-hats and women-in-Empire-necklines as being one long social whirl, in truth there was comparatively little ready entertainment available to much of the population. As a result, drinking or gambling – or a combination of the two – became many people’s preferred forms of recreation. And in this period it was considered gentlemanly to ’go deep’ and gamble more than one could afford. Much of Britain’s burgeoning sports culture was created as a medium for betting: wrestling, boxing, foot racing, tennis and even cricket. Indeed many of our governing bodies of sports owe their existence to a desire for consistent rules and regulations so that the betting could be fair. Gambling was an honourable activity where gentlemen competed against gentlemen and the lower orders found escape from the monotony of their daily struggle.
The introduction by the Victorians of what was effectively Prohibition ensured that gambling went underground and allowed organised crime to fill the breach. In poorer areas, criminals provided illegal bookmaking and illicit gambling dens. In richer ones, the wealthy continued to enjoy their private gaming and wagering. It would take a century of lawbreaking, three Royal Commissions and lobbying from the Police Federation that the laws were out of date, widely ignored and leading to the corruption of police officers before gambling was legalised… after a fashion.
Between 1960 and 2007, gambling legislation and regulation revolved around the notion of “unstimulated demand”. Gambling could be offered, but nothing could be done to encourage people to gamble. Advertising was restricted to the point where casinos could advise customers of their existence only through small, purely factual ‘small ads’. And betting shops were required to prevent passers-by from seeing the interior of the premises. The politician Rab Butler is alleged to have said that “someone leaving a betting shop should feel like they are leaving a brothel”.
Regulation was ratcheted up further in the late 1960s with the creation of the Gaming Board for Great Britain, which was created to police the activities of casinos, bingo halls and amusement arcades. Somewhat surprisingly there were few objections to this paternalist approach from either within or outwith the industry. Equally surprisingly this approach proved highly effective, and – unlike many other countries – gambling in Britain remained largely free from crime and our system of regulation came to be widely envied.
What brought this era of consensus to an end was 1994 and the creation of the National Lottery and the invention – for most people for most practical purposes – of the internet and internet gambling. Both offered gambling that was outside of the existing legal and regulatory framework, and the land-based industry was quick to recognise the threat and to press for a levelling of the playing field. The result was (another) commission of inquiry and eventually a piece of legislation: the Gambling Act 2005 (which came into force in 2007).
The Act is a prime example of New Labour legislation. Free market principles (it allows stimulated demand by allowing advertising and made premises licensing a planning matter for the local authorities rather than a ‘demand’ issue for a magistrate) backed up by the need for problem gambling measures to be part of operators’ practice. Unfortunately, like much of New Labour’s freeing up of the markets, the new regulator, the Gambling Commission, is proving to be incompetent and toothless. While this may not be a huge issue in some markets, like in financial regulation, this is bound be a problem in the future for the industry. Fortunately this would appear to more an issue of personnel than structure and the industry sits and waits for some retirements.
So today we have a much higher level of perceived gambling due to the liberalisation of advertising and premises licensing. We have higher numbers of gamblers than before but that’s mostly due to the National Lottery. But we don’t actually have any more land based gambling venues. The number of betting shops and bingo halls has declined and the number of casinos while up at the moment is also expected to decline. Gambling has moved online and that is where most of the expected growth will be. Whereas before the internet, the UK was a localised market for gambling, now it is fully part of the globalised industry. So much of the growth has come from the efforts of foreign operators targeting the UK, which at the moment is the biggest market for online gambling.
There are always those who have problems with their pleasure, be it alcohol, drugs, sex, shopping or gambling. In the UK our problem gamblers number on a par with the European average and are less than the USA, Australia and South Africa. The 2005 Act brought in some of the strictest anti-gambling measures found in the world but still whenever their number is discussed; gambling gets a kicking as politicians find it an easy hobby-horse to climb. History shows us that it is impossible to end a populations’ urge to gamble and consequently there will always be problem gamblers, just as with the human love of alcohol and its creation of alcoholics, drugs and drug addicts, shopping and shopaholics.
The debate over how much gambling we have needs to be through the prism of how much the state is involved and how much it should interfere with our fun, however good or bad it is for us. We have more gambling these days due to the free market approach of our previous government, to change this could well turn back the clock and drive gambling underground. To paraphrase a famous chef; it’s the fat that is the most unhealthy part of the meat, but it’s also the bit which gives it the flavour. Do we want to live in a world without any risk?
Steve Donoughue is one of the UK’s leading management consultants specialising in the gambling industry.