Will any party manifesto dare to ignore the £50 billion black hole?

Posted on April 27, 2017 by admin
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Any manifesto commitment other than a £2 maximum stake will be going soft on the bookies, says the Campaign for Fairer Gambling. 

A woman uses a gambling machine

The EU referendum campaign did not bring the potential £50 billion Brexit divorce payment to the attention of the public. Whilst it has to be paid in Euros, it is only a one-off and the payments can be staggered, so the UK can easily handle it.

But a far more serious black hole of £50 billion has just been discovered. However, this time it is an annual black hole that is not being handled but should be of immediate concern. The Guardian reported last week, “Problem gambling takes a £30bn toll on nations happiness, says study” and referred to a paper by Walker et al entitled, “How much of a problem is problem gambling?”

The paper is based on data collated under the British Gambling Prevalence Survey (BGPS) of 2010. Sadly, this survey has now been discontinued and less information is collated in substitutive Health Surveys.

There has already been secondary research published on this BGPS 2010 data by Orford et al, which estimated that the revenue from problem gamblers on FOBTs exceeded the revenues from problem gamblers at several of the other leading gambling activities combined. It also estimated that 40% of FOBT revenues were from problem and at-risk gamblers. This would now equate to nearly £750 million per year.

The methodology used in the Walker paper was to compare happiness index statistics for problem gamblers with non-problem gamblers. Using a conventional economic measure, problem gamblers would need to have an annual income increase of £90,000 per year to get to the same happiness level of the general population.

Despite the Guardian headline, the paper notes the cost on happiness at around £50 billion per annum, stating that it is of “the same order of magnitude as that associated with alcohol abuse, and exceeds the tax revenues associated with gambling expenditures by an order of magnitude.” This is an understatement as the gross revenues from gambling, ( including taxes) are less than 30% of the £50 billion cost.

The estimate of £50 billion is likely to be more accurate than the £30 billion the Guardian quoted as BGPS’ methods make it difficult to capture the representative demographic of young males gambling, particularly on FOBTs. Also, the self- reporting technique is liable to lead to gamblers under-estimating their losses and the impact of gambling on their lives.

In the Walker paper, at-risk gamblers were placed in the normal group rather than the problem gambler group. As overseas research has explained, because the size of the at-risk group is much larger, the total harm in the at-risk group is greater than the total harm in the problem gambling group. Taking all these factors into account, the black hole could easily be closer to £100 billion per year.

The main sources of calls to gambling support helplines relate to FOBTs and remote gambling which are the two new forms of gambling that are technology-based. Both forms of gambling are also the focus of the now delayed DCMS Review.

The power for DCMS to reduce the FOBT stake to £2 if there was subsequent evidence of harm, was granted by the Labour Government at the time of the 2005 Gambling Act. Bodies who agree with Fairer Gambling on reducing the maximum stake to £2 include nearly 100 local authorities who submitted a Sustainable Communities Act proposal calling for precisely that (which government must try to accommodate); the Royal Society for Public Health; the Synod of Bishops of the Church of England and the All Party Parliamentary Group on FOBTs.

Imagine if the bookies had not been allowed to introduce FOBTs illegally and that they now demanded: “Let us have £10 a spin machines, but don’t let bingo or arcades have anything over £2.” Most people would think the bookies were crazy to expect to get away with this.

It is inconceivable that Labour will not include a £2 maximum in the manifesto, as this is their policy. The Conservatives have a chance to act through the DCMS review by placing restrictions on remote gambling advertising and reducing the maximum stake to £2 on FOBTs, along with other restrictions.

Brexit negations require difficult decisions to be taken on the balance of probability. There is no room for “more research” or delays. Any government dithering over something so straightforward as restricting FOBTs and bookie advertising will not bode well for its ability to handle the negotiations.

Some are advocating a “sizable stake reduction”. but this is just pussyfooting around. Anything other than a £2 maximum will be soft on the bookies. The party manifestos will show who has the heart to try to deal with the blight of gambling unhappiness. A £2 maximum stake in the manifesto is only a minimum commitment.

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