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Friday 1 February 2019

3 minutes read time

The stakes are too high

The Gambling Act 2005 has brought great riches and hundreds of thousands of addicts to the UK. It’s time to take stock of the great gamble

This week we held a ThinkIn on the topic of gambling – the first in a series. We are planning to open “case files” on really knotty subjects like this, and to explore them in depth.

Gambling opens a window on to some of the most important issues that confront us. How is the notion of individual freedom to choose influenced by the power of technology to steer our choices? What role does the state have in regulating activities which, for the majority of people who indulge in them, are harmless fun? We don’t pretend to have all the answers after a single ThinkIn but we have a much better idea of what questions to ask.

For nearly 15 years, the UK has indulged in a great gamble. In 2005, new legislation turned it into one of the most liberal environments for gambling in the world. Online companies have been allowed to advertise; credit card payments have been permitted; the lid has come off limits on stakes and winnings. The time has come for an assessment of the profound changes that British society has undergone as a result, and for a recognition that some of them have been for the worse.

Exhibit #1: the betting industry has boomed. Around 100,000 people are employed by it, and the revenues flowing to betting companies shot up by more than 13 per cent last year to £5.3bn. Some people (see our article about Denise Coates at bet365) have got seriously rich.

Exhibit #2: gambling addiction has become a grave problem. Some people think the official figures overstate the problem, but this is what they say: Britain now has 400,000 “problem gamblers”, 55,000 of them between 11 and 16 (Gambling Commission). The gross gambling yield of the industry in the UK – the amount staked by gamblers minus the amount paid out in winnings – has gone up 72 per cent in a decade to £14.5bn. A lot of people have got seriously poor.

So much has moved on since deregulation. We now understand gambling as an addiction like any other. We can identify genetic markers that might predispose people to get into difficulties.

Technology has moved on. Smartphones are the perfect platform for high-frequency, highly addictive forms like in-play bets on football (will Sergio Aguero or Harry Kane score the next goal?). These types of gambling are a world away from the more considered bets of the professional horse racing gambler or the backgammon player – but, financially, they’re where the action is.

The response has moved on. A problem that technology can help cause, technology can help cure. Banking innovations that stop customers who sign up to them spending money in high street bookies or online betting and don’t let them change their mind for 48 hours seem to be making a real difference. They are something to be welcomed.

But once addiction to gambling is understood as a medical condition, the idea of relying purely on high-tech sticking plasters that the addict has to administer starts to look insufficient. It seems irresponsible to create an environment in which more people are vulnerable, and then ask them to manage their vulnerabilities on their own.

So regulation has to be part of the solution. It seems sensible to make all betting account-based; too much misery can hide behind cash. The case for allowing credit cards to be used for gambling looks paper-thin. We should hold online companies to account if they seem slow to recognise problems (a real-life case study: if a relatively new customer is suddenly spending £150,000 in a single day, shouldn’t alarm bells be ringing long before that sum is reached, while the scale of harm and misery is manageable?).

There is a lot more we need to find out. How should we think about the similarities and differences between gaming and gambling? Should we go further to clamp down on advertising than the companies have volunteered to go so far?

The result of the 2005 legislation and of years of change since then, is that gambling in the UK has been radically normalised. Whole industries are now reliant on income from it, and it has become a fact of daily life. But the country should not think that the road it has travelled since 2005 is one-way. The risk to the UK is that the lessons of our great gambling experiment are being learned elsewhere but not here.

If you have any ideas for how Tortoise should think about gambling we would love to hear from you. Drop us an email at editor@tortoisemedia.com