Home Gambling In gambling regulations, the house should not win

In gambling regulations, the house should not win

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Are Downing Street’s deregulation urges about to give the gambling industry a win?

After watered-down audit reform and delays in setting up a digital watchdog, a long-awaited document on gambling regulations would be the last to be checked for “non-conservative” traits by political leaders.

But adding gambling addiction to corporate malfeasance and technological monopoly power to the list of issues neglected by reform efforts would be a tragic mistake.

In the book Jackpot: How Gambling Conquered Britain, journalist Rob Davies convincingly demonstrates that the 2005 Gambling Act – through naivety and timing – triggered changes that did great harm.

It was impossible in the pre-iPhone era to regulate for a world where smartphones put a casino in everyone’s pocket. The new technology has sparked a wave of innovation around in-play betting, product design, marketing and incentives – and has removed any distance between betting companies and their customers. A tidying up exercise is not enough for an industry transformed by such changes.

While wrangling over the final package of measures continues, this remains a risk. A max bet of £2-£5 for online casinos would simply mirror the £2 restriction on machines in stores and has been baked in by the industry and its investors: “anything over £2 is a win” , said an analyst. Even a £2 cap would only affect UK industry revenue by 6%, according to research cited by Numis, which notes that many operators had already set limits at £10 voluntarily.

This is not a substitute for broader measures to limit industry reach and prevent harm. These could include “non-intrusive” accessibility controls for those at risk of unsustainable loss, although the value of these depends on the details: a 2021 study using Lloyds Banking Group data (and cited by Davies) found that signs of financial harm, such as missed payments or high cost borrowing, were evident at relatively low deposit levels of around £90 a month for the average household. In a world of digital financial profiles, there should be a better solution than uploading payslips for those who are already struggling with their spending.

Meanwhile, a ban on “free” bets (which often aren’t free at all) and VIP perks for players who have suffered heavy losses is like stopping an arsonist from pouring gasoline on his blaze. Useful, but insufficient.

Such rewards programs can seek out and fuel unhealthy gambling habits and losses. A House of Lords report said the online industry makes almost 60% of profits with less than 5% of its customers. “Problem gamblers” – a horrible term – accounted for just 0.8% of gamblers and a quarter of profits. (Some in the industry dispute these numbers. But few publish their own player data: Kindred, one exception, allocates 3.3% of its revenue to high-risk players.)

Activists would like to end what they see as the systematic recruitment and cultivation of gambling addicts, who are disproportionately young and male. Hence the focus on banning football shirt advertising, which has been a way of normalizing and glamorizing betting and making it appear as an integral part of the sporting experience.

It’s part of an explosion of marketing, promotion and sponsored content since 2005, the effects of which are intuitively obvious but poorly understood. In fact, one problem in this whole debate – rightly dominated by devastating cases where drug addicts have taken their own lives – is the lack of decent data and research. The first real public review of gambling-related harms, which put the number of gambling-related suicides at more than 400 each year, was not released until 2021.

It is inexcusable that the level of problem play remains disputed (although it is agreed that damages vary wildly by product).

Why rely on problematic investigative evidence, which likely also underestimates the damage, in an online industry armed with tons of real-world data? A sharing that should be part of stricter license conditions. The need for better independent research is a strong argument for a statutory tax on the industry, which would also help improve drug prevention and treatment.

This is not government interference or nanny statism. The white paper should be the first step to improving understanding and safeguards in a high-tech industry where regulation has been hopelessly outdated. No conservative to act? It would be unacceptable not to do so.

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