Monday, 6 January 2014

Gambling in the UK: Ethics and Economics

This is a guest post by Sam Miranda.

In the political and financial discourse surrounding commercial gambling in the UK, one question tends to rise to the surface. That is, can the economic utility provided by the gambling market be reconciled with responsible business practices and reasonable government regulation?

If you were to take your cues from the mainstream British media, the answer would be a resounding no. Scarcely a month goes by without a news splash focusing on the ‘evils’ of commercial gambling, the horrors of addiction, the exploitation of the vulnerable and marginalised. Particular aspects of the gambling sector are placed under special scrutiny, the most recent pariah being the infamous ‘Fixed Odds Betting Terminal’ (FOBT). As Christopher Snowdon points out, the term ‘crack cocaine of gambling’ has been bestowed on “virtually every new gambling product since the 1980s” and with the FOBT controversy, the phrase is once more in the vogue.

However, behind the headlines, the United Kingdom has been taking major steps towards realising the vision of an ethically sound gambling sector. These steps have been concurrent with the increasing acceptance of gambling by the public and the British government. As of 2010, gambling was practiced by 35.5 million adults in the UK and with the increasing ascendance of online gaming (now a £2 billion industry in Britain alone) this figure is surely even higher today. Clearly, public attitudes towards gambling have improved immeasurably in the last decade.

Westminster is certainly not ignorant of the financial contributions of the commercial gambling market: the British betting industry alone generated £2.3 billion in 2012. The most recent piece of serious government legislation on the gambling industry (the 2005 Gambling Act) reflected a willingness, on the government’s part, to embrace an ethically responsible gambling sector as a key contributor to the UK economy. The Act significantly relaxed government regulation of the gambling market and introduced new provisions to protect players. For instance, the Act stipulated that bookmakers should contribute to the funding of research into problem gambling and that the sector as a whole should remain subject to independent watchdogs such as GamCare. 

It seems that the question of whether the economic utility provided by commercial gambling in Britain can be reconciled with a responsible market is redundant. In spite of continuing hostility from the media, in many respects we have gone some way towards realising this scenario. The real question should be; how far have we left to go?

The answer to this question is less straightforward and indeed we have faced many set-backs, most notably Gordon Brown’s refusal to approve the development of Vegas-style casino resorts in Britain. Despite the 2005 Act making provisions for such establishments, Brown’s ideological aversion to gambling (perhaps owing to his Presbyterian background) put paid to this potentially lucrative addition to the British leisure industry.

Other roadblocks have come from within the gambling sector, most notably in unethical advertising strategies that expose underage individuals to gambling content and the woefully under-regulated online gaming market. Attempts to ameliorate the latter issue with a proposed point of consumption tax on off-shore operators have enjoyed a muted reception from industry insiders. William Hill speculated that a 10% POC tax would push up to 27% of consumer bets into “unregulated markets,” potentially resulting in an online gambling “black market.”

Nonetheless, there have also been positive developments since 2005. In 2012 the Culture, Media and Sport Committee published a revaluation of current gambling legislation entitled The Gambling Act 2005: A bet worth taking in which the committee recommended several amendments to the 2005 Act. These included the provision of licences for new regional casinos and “large” casino complex and the creation of a “fair system of regulation and a level playing field for the UK gambling,” including the lowering of taxation on ‘soft’ gambling practices such as bingo. This year, the coalition government officially responded to this report, concurring with most of their findings and promising to carry out many of their recommendations (though it remained resolute on the point of taxation).

I recently interviewed Nottingham Trent’s Dr. Mark Griffiths, a prolific writer on the subject of gambling, and raised the question of an ethically sound gaming sector. Dr. Griffiths envisioned a more democratic gambling market, modelled somewhat on the Camelot National Lottery, wherein a large number of players participate in low-stakes, heavily-regulated entertainment. Conversely, the current state of affairs sees a small number of players contributing the overwhelming majority of gambling profits.

Obviously, we are quite a long way from Dr. Griffiths’ vision, which would depend on much greater public acceptance of gambling in all of its popular manifestations – including casino gambling. Despite the improved character of gambling, less than 5% of the British public visited a land-based casino last year, suggesting that so-called ‘hard’ gambling has yet to be wholly embraced in the UK. Until the media’s assault on the gambling sector abates, progress in the direction of a healthy and ethical gambling market will be gradual. I elaborate on these points in an extended essay, “Gambling On Trial: Ethical Perspectives” – which you can read here. In my view, media hostility is the final roadblock facing a trend towards acceptance that is clear and inevitable. 


Ivan D said...

I think that some serious questions need to be asked about the judgement and ethics of those responsible for editing the BMJ. It is becoming an ideological rag more notable for its politics than any clinical or scientific content.

Joey P said...

Say what you like, a gambling industry (in any form) represents the basest aspects of capitalism distilled.

You derive no utility from gambling (in most instances) other than an addictive thrill, which ensures a steady stream of revenue.

On top of that, the gambling industry is aggressively marketed to deliberately target the vulnerable (i.e. addicts and the young) and (in the case of online gambling) is severely under-regulated.

In short, there is no such thing as a 'responsible' gambling industry. It's like saying you could have a responsible crack dealer. Sure, he's going to make money, but people are going to suffer.