Man loosing his money in the casino
Artillery Row

The anti-gambling racket

New regulations are not based on expertise

When the government launched a call for evidence on gambling in December 2020, anti-gambling groups were straight out of the blocks with a series of policy demands. They wanted a ban on gambling advertising, a ban on gambling sponsorship, a limit on how much people could spend on gambling each month, a ban on VIP schemes, a ban on free bets, and new regulations to slow down the speed of games online.

They didn’t get any of this when the government’s new white paper was published last week. They got some wins, to be sure, but I was expecting them to be screaming blue murder and accusing the government of caving in to the gambling industry. Instead, Carolyn Harris, the Labour MP who has led the fight against gambling in Parliament, seemed to be cock-a-hoop.

If you are familiar with how the online gambling market actually operates in Britain, rather than the caricature of it presented by the media, the three main reforms proposed in the white paper are relatively modest. The first is that there will be a stake limit on online slots somewhere between £2 to £15, subject to consultation, with the limit halved for players aged 18 to 24. The discrimination against younger players is patronising and objectionable, but stake limits themselves are not a big deal. According to the Gambling Commission, 87 per cent of online slot spins are played for £1 and only 1 per cent are played for £5 or more. 

The second policy is affordability checks. Unlike every other company in the world, online gambling firms are expected to know whether their customers can afford what they are paying for. The mere fact that they have the money and are paying upfront is not deemed sufficient. The government wants affordability checks standardised across the industry and if a check raises concerns, it says that “operators should act accordingly”. What this means in practice will be decided in a forthcoming consultation, but the government expects it to include “applying limits to an account or ending the customer relationship completely where there are serious concerns.”

This doesn’t sound too bad in theory. If you were gambling erratically and spending huge sums of money in a casino, a member of staff should at least have a quiet word with you, but online operators do this already. Moreover, they do it in a more sophisticated manner than is being suggested in the white paper, using algorithms to spot hazardous patterns of play, such as gambling at unusual times of day and switching between products. The government is instead relying on a single measure — how much you spend — and it is setting the level so low that a large number of players will be checked up on. 

The white paper wants to see the industry conduct background checks on anyone who loses £125 in a month or £500 in a year. For gamblers aged 18 to 24, these thresholds would be halved. This is all at the low end of what any enthusiast might spend on their hobby. Plenty of gamblers, myself included, think nothing of losing £150 one month, perhaps having won a similar amount the previous month. Under the new rules, this would be enough for the operator to be required to check for “financial vulnerability indicators” such as “County Court judgements, average postcode affluence, and declared bankruptcies”.  

This doesn’t sound like a modest reform so far, I grant you. But how will it actually work in practice? Plenty of people have a CCJ or have a bankrupt business to their name. Let’s say that you have one or more of these “vulnerabilities” and spent £125 on Betfair last month. Surely the government isn’t daft enough to think it can ban you from gambling online. It is more likely that it will require the operator to send you a safer gambling message by e-mail or text. You might even get a phone call. If you’re developing a gambling problem, this could the wake up call you need. Or it might not. Either way, operators are already doing it and doing it in a smarter way. Making it a statutory obligation is unlikely to move the dial on problem gambling. 

So why are most anti-gambling campaigners so happy with the white paper? To understand that, you need to grasp the implications of the third policy that was announced: a statutory levy on the gambling industry to fund “research, education and treatment”. 

Problem gambling is a psychiatric disorder. Some people recover by their own efforts and plenty of young men simply grow out of it, but others benefit from treatment. Of those treated by the UK’s National Gambling Treatment Service in 2020/21, 70 per cent were no longer problem gamblers by the time they finished. The service is funded by GambleAware, a charity that is funded by the gambling industry. Until recently, NHS problem gambling clinics were also funded by GambleAware, but that ended last year after the NHS’s mental health director, Claire Murdoch, decided that the service was somehow compromised by its financial links to industry. It was a sign of growing fanaticism within the health lobby and had the effect — probably intentional — of furthering the case for a statutory levy.

The size of the levy has yet to be agreed, but anti-gambling campaigners (and the Gambling Commission) have suggested a 1 per cent tax on the industry’s Gross Gambling Yield (which essentially means pre-tax revenue). Since the four biggest gambling companies have already agreed to voluntarily give away 1 per cent of their Gross Gambling Yield for treatment and prevention, this seems like another fairly minor change, but the practical consequences could be enormous.

The levy could rake in as much as £150 million a year for research, education and treatment. This would be enough to provide world class support and rehabilitation for any problem gambler who wants it, but the anti-gambling lobby isn’t primarily interested in treatment — or in education. It’s the research they want to get their hands on. 

In recent years, activists and academics have been maneuvering to get problem gambling redefined as a public health issue rather than a mental health issue. This is much more than a question of semantics. As a mental health issue, clinicians work with the 0.2 per cent of the population who have a gambling disorder while the Gambling Commission regulates the industry to protect children and the vulnerable. As a public health issue, by contrast, all gambling is seen as unhealthy and the industry is regulated with the aim of having as few people gamble as possible. It is a one-way ratchet of suppression, as with smoking.

Public Health England was all too happy to help with this transition. One of its last acts before being disbanded was to publish an evidence review which contained an estimate of how many gambling-related suicides take place each year. The estimate was based on risible junk science and the report was later withdrawn, but it served to further the narrative that gambling kills. 

The empirical literature on gambling does not support the sledgehammer approach of the public health lobby. It does not support the idea that certain gambling products and certain forms of marketing “cause” problem gambling. Researchers have proposed various harm reduction strategies but they are more subtle — and probably more effective — than the neo-prohibitionist policies supported by the current wave of activists. 

Against this backdrop, public health academics have taken a Year Zero approach

Against this backdrop, public health academics have taken a Year Zero approach, trashing everything that came before them. In their version of events, the only source of funding for gambling research until now has been the industry. Since he who pays the piper calls the tune, the empirical literature takes a pro-industry position and ignores the real solutions. The levy will allow “independent researchers” to get to the truth of the matter.

Not only is this an insult to academics who specialise in gambling research (who are effectively being called corrupt) and to GambleAware (which has always been operationally independent of the industry), it is simply not true. Several prominent gambling researchers are fairly openly anti-gambling and certainly do not further the industry’s financial interests. And, as the authors of the white paper point out, any researcher can apply for a grant from the state-owned UK Research and Innovation (UKRI) which has funded over 100 studies on gambling since 2005. “Despite there being no barrier to accessing UKRI funding,” say the authors, “a perception has to some degree developed that [industry] funding is the only source of funding.” It is a perception that has been cynically fostered by anti-gambling groups.

The statutory levy will create an avalanche of cash for activist-academics at a time when gambling is being repositioned as a public health issue. Gambling research has always been a small academic niche. The only people itching to get into it are left-wing social scientists who cut their teeth in the wars on tobacco, alcohol and food and are looking for new dragons to slay. They don’t know anything about gambling and have little desire to learn. They will simply repurpose old anti-smoking regulation and temperance legislation and create the policy-based evidence to justify them. 

This is obvious from reading the laughably bad articles written about gambling by public health academics to date. Last month, the British Medical Journal published no fewer than four articles on the topic in a single issue, clearly intending to influence the government’s white paper. They included an editorial which made the basic error of confusing gross revenue with net profit, and an opinion piece which claimed that the gambling industry is “a serious threat to the health of individuals, families, and communities worldwide” because money spent on gambling could instead be spent on the “essentials of healthy living” (a charge that could be levelled at almost any industry). The authors then argued against a statutory levy for several nonsensical reasons, such as that the money raised would be “miniscule in relation to annual earnings of the gambling industry”. Another article claimed that “gambling disorder” and “pathological gambling”, which are the clinical terms for problem gambling used around the world for decades, are “stigmatising” and “shift responsibility away from the gambling industry”. 

In a bizarre article published in Lancet Public Health last year, 35 public health “experts” were presented with 103 hypothetical anti-gambling policies and asked which ones they thought would be effective. Only two were considered ineffective. Policies judged to be not only effective but feasible included a ban on gambling in venues where “vulnerable people are present” (will they be wearing badges to identify themselves?) and “All gambling products to have plain packaging” (as if these “products” were in a box on a shelf). 

It is difficult to avoid the conclusion that these people are not intimately acquainted with the market they are so keen to regulate, and yet if they get their hands on even 5 per cent of the proceeds of the levy, they will be able to build a multi-million pound empire whose continued existence will depend on the belief that there is an “epidemic” to tackle. Some of the money may even end up in the hands of the legion of anti-gambling pressure groups that have suddenly popped up in the last few years, such as Gambling With Lives (2018), Clean Up Gambling (2020), the Coalition Against Gambling Ads (2020), Gambling Harm UK (2020), Action Against Gambling Harms (2020) and Tackling Gambling Stigma (2021). 

The average person doesn’t mind higher taxes so long as they are levied on people they dislike and the money is used for projects they approve of. Taxing the gambling industry to pay for the treatment of problem gamblers is about as popular a policy as the government could hope to find, but there is a strong chance it will become a slush fund for bone-headed academics and moral entrepreneurs. Eric Hoffer once said that every cause begins as a movement, becomes a business, and degenerates into a racket. With the anti-gambling cause, that is set to happen before our very eyes.

Enjoying The Critic online? It's even better in print

Try five issues of Britain’s newest magazine for £10

Critic magazine cover