How Gambling Was Liberalised in Britain 1

The twentieth century saw two distinct periods of gambling liberalisation in Britain (Dixon 1991; Reith 1999; Orford 2011). The first occurred before and after World War II, climaxing with the Betting and Gaming Act of 1960. Betting houses had been illegal in Britain since 1853 and the Street Betting Act of 1906 had made illegal the acceptance of bets on the street or in other public places as well. For over half a century until 1960 Britain experienced an era during which gambling was largely prohibited although betting on horse races at the race courses themselves was never banned. The 1960 Act allowed bookmakers to accept cash bets in ‘licensed premises’, the ‘betting shops’ or ‘bookies’ that have been such a familiar feature of the British urban landscape ever since. Meanwhile, new forms of gambling had appeared on the scene, such as football pools, fruit machines and betting on dog races.

There then followed an era of tolerance of gambling. As well as licensed betting offices, the 1960 Act had also legalised commercial gambling clubs and casinos and gambling machines in a wide variety of venues. But gambling was to be tolerated only and not positively encouraged. So, for example, betting shops were not allowed to invite custom, and the interior of the shop should not be visible from the street. Gambling was, at least in the early part of this period, ‘…most emphatically not regarded as performing any desirable or any productive economic function’ (Miers 2004). A key principle of government regulation during this period was the so-called ‘demand test’. Gambling promoters were allowed to meet existing demand but not to stimulate it. Casinos, almost all small by modern international standards, were members-only clubs and only allowed in 52 permitted areas of the country.

The second era of liberalisation, entered upon in the last years of the twentieth century, put paid to all that. An important event was the inauguration of a National Lottery (NL) which started to great acclaim in 1994 and was immediately highly popular and productive of funds for good causes . It is now firmly established as Britain’s most popular form of gambling and a prominent part of national life. At first it was promoted by Government as being of a different nature than other kinds of gambling, in fact hardly constituting gambling at all. That fiction was necessary at the time in order to justify Government taking on the role of gambling provider, in addition to its roles as legislator and regulator. The fact that it is productive of funds for good causes provides what Kingma (2004) has referred to as an ‘alibi’ for Government involvement in gambling promotion. It has been organised ever since as a monopoly run by a single private company which wins the contract put out to competitive tender every few years. Although the NL is probably one of the most benign and least dangerous forms of gambling, it was undoubtedly an important factor in a general ‘ratcheting-up’ of gambling in all its forms (Creigh-Tyte 1997). The last few years of the twentieth century then witnessed a whole range of minor liberalising changes which did not require a change to primary legislation. They included the easing of restrictions on membership and opening times for casinos, increases in the numbers and types of gambling machines in bingo halls and betting offices, and a general acceptance of a greater variety of games, jackpots and rollovers.

Not surprisingly gambling flourished in the new climate. Gambling providers demonstrated their capacity for innovation. To the long-established practices of betting on horse and dog races and on private card games, and to the more recently legalised casino, bingo, lottery, pools and machine gambling, were now added new ways of gambling. This included: spread betting which originated as a form of financial speculation and is still regulated as a financial service; betting on a wider variety of sporting and non-sporting events; betting through a betting exchange rather than a bookmaker; playing tournament poker; playing virtual casino-style games on the new ‘fixed odds’ betting machines in betting offices; and accessing gambling or playing virtual gambling games of one kind or another online. What it amounted to was that the many former restraints on gambling were being quite rapidly eroded (Orford 2012).

That was the background to the announcement in December 1999 of the Labour Government’s plans to establish a Gambling Review Body (GRB). It reported in 2001, not to the Home Office which had set it up, but to the Department for Culture, Media and Sport (DCMS), now to be the lead Government department for gambling, a move which illustrated the way Government thinking on gambling had changed. This highly significant change was scarcely noticed at the time and never received much media attention. A government department responsible for, among other things, leisure and sport, provides the industry with a more reliable governmental ally than a department concerned with crime and security. There has been little attempt since to formulate a cross-department government strategy. The Department of Health, for example, is notably absent from gambling policy discussions. It illustrates how gambling is seen by Government—principally as a matter of sport and leisure and not as a matter of public health.

Two of the basic principles underlying the review committee’s recommendations were rejected. One was the idea of allowing local authorities greater say in what gambling would be provided in their areas. This interesting idea of local option was rejected by Government and the idea has not resurfaced since. As a consequence, local authorities are given the very considerable and highly frustrating task of licensing gambling premises but with little real power to control what gambling is offered in their communities. Even more controversial was rejection of one of the review report’s most basic principles, that what they called ‘ambient gambling’ should not be encouraged; in other words that by and large gambling should be restricted to premises where gambling was the main activity. Otherwise, the committee’s overwhelmingly liberalising proposals for the future of gambling were incorporated into the Gambling Bill which subsequently became the Gambling Act 2005. The latter had come fully into operation by autumn 2007. Britain now has one of the world’s more liberal gambling regimes (Sulkunen et al. 2018).

The UK now has a particularly large gambling market. Between April 2016 and March 2017, Britain’s gambling industry generated a Gross Gambling Yield (GGY: the amount retained by operators after the payment of winnings but before the deduction of the costs of the operation) of £13.7 billion. Online gambling generated a GGY of £4.7 billion, making it now the largest gambling sector in Britain—over the same period £3.4 billion was generated by the National Lottery, £3.3 billion by the high street betting sector and £1 billion by traditional casinos (Gambling Commission 2018).

Globally, in terms of gross revenue, it was estimated that in 2013 Britain came in fifth after the USA, China, Japan and Italy. In terms of per capita gambling spend (i.e. losses), Britain (at a little under US$400 per person) was in 11th place globally and in sixth place among European countries. Britain’s gambling market is also very diverse. Among European countries it outstripped all others for betting and bingo but also had amongst the largest casino, lottery and gambling machine industries (H2 Gambling Capital 2016, cited by The Economist 2017).

The Gambling Industry Discourse

The liberalisation and expansion of gambling has been bolstered by a new way of thinking and talking about gambling. At least the following three elements make up the dominant discourse about legal, commercially provided gambling (Orford 2011). This hegemonic way of thinking about gambling in the liberalised era is promoted by the industry and largely accepted by Government and much of the non-government and academic sectors (Hancock and Smith 2017).

Gambling Is a Harmless Form of Leisure Activity and Entertainment, Just a Bit of Fun—The Harmless Entertainment Discourse

The Amusement Caterers’ Association, giving evidence to the Betting, Lotteries, and Gaming Royal Commission of 1949–1951, was already in the business of using language effectively to control how modern gambling was to be thought of. Machine gambling was a ‘wholesome entertainment that is perfectly innocuous’, they claimed. To this day the gambling machine industry maintains the idea that their customers play electronic gambling machines (EGMs) for entertainment. Premises on town high streets that house banks of gambling machines are referred to as ‘amusement arcades’ and by the Gambling Commission, the official regulator, as ‘adult entertainment centres’. British children, unlike children in other jurisdictions, are permitted to play EGMs, requiring low stakes and offering small prizes but in all other respects just like other EGMs. Tradition has been allowed to grow up that these machines, referred to in law as B4 machines, should hardly be seen as gambling at all but rather as ‘amusements’, a traditional part of the family day out, to be found in ‘family entertainment centres’.

Forms of Gambling Are Products or Commodities Just Like Any Other and Their Provision Is Just Like Any Other Form of Legitimate Business—The Ordinary Business Discourse

The Business as Usual discourse was explicit in what the responsible Home Office minister said at the time when the Gambling Review Body was set up in Britain in December 1999:

Much of our current gambling legislation is over 30 years old. Social attitudes have changed and the law is fast being overtaken by technological developments. The Government wants to get rid of unnecessary burdens on business, while maintaining protections necessary in the public interest. (cited by the Gaming Board 2000)

In the subsequent Government proposals for legislation, set out in its document, A Safe Bet for Success, the discourse of ordinary, not-to-be-restricted business predominated. For example, ‘gambling products [would be] more visible and accessible’; gambling debts would for the first time be enforceable by law, ‘like other consumer contracts’; casino operators would be freed from the existing controls which, ‘unnecessarily discourage innovation and restrict customer choice’; and there was an aspiration that Britain would be a ‘world leader’ in online gambling. In summary the ideology that governs Britain’s gambling regulation, ‘…sits squarely within the neo-liberal mode of regulation that has been pursued in Great Britain since the 1980s’, which means that regulation, ‘… should not unduly hinder economic progress’ (Miers 2015).

Citizens Should be Free to Choose How to Use Their Leisure Time Including Being Free to Gamble as They Wish But Consumers Have a Responsibility to Protect Their Own Health and Well-Being, and That of Others Close to Them, by Gambling Responsibly—The Personal Responsibility Discourse

The most recent, and possibly most powerful, addition to the cluster of establishment gambling discourses speaks of ‘responsible gambling’. It sits well with notions of gambling supply and consumption as ordinary business, harmless amusement and free choice. The idea that consumers have an obligation to consume these products ‘responsibly’ is a concept now widely signed up to by, not only much of the gambling industry, but also governments, gambling regulators, and even by organisations whose aims are the treatment and prevention of gambling addiction. In Britain we have a Responsible Gambling Strategy Board and official pronouncements about gambling and reports and documents on the subject are peppered with the expression ‘responsible gambling’. Although this appears uncontentious, only a little reflection on the idea, plus observation of the way it is used in practice, are needed in order to see how this idea of responsible gambling, in conjunction with the other elements of the dominant discourse, serves the aims of promoting an expansionist gambling industry.

The Public Does Not Share the Establishment View of Gambling

While the UK Government was busy preparing for its major piece of liberalising gambling legislation, a survey carried out by National Opinion Poll, of nearly 1000 18-plus-year-olds in 2003, provided a strong hint that British public opinion was against further liberalisation. For example, 93% said Yes to the question Do you think there are enough opportunities for people to gamble in Britain at the moment? and 56% said No to the question Would you be happy for a casino to open near to where you live?

The 2007 British Gambling Prevalence Survey made a systematic study of national attitudes towards gambling for the first time. The results were clear-cut. Although most people were not in favour of prohibition of gambling, the weight of public opinion was on the side of believing that gambling is foolish and dangerous, that on balance it is bad rather than good for families, communities and society as a whole, and that it should not be encouraged. For example, 65% agreed that ‘Gambling is dangerous for family life’ (only 8% disagreed) and 55% disagreed that ‘On balance gambling is good for society’ (only 8% agreed). Although there were differences in attitudes between different groups—for example, men were more positive towards gambling than women, younger people were more positive than older, and frequent gamblers more positive than others—even the majority of gamblers were on balance negative in their attitudes and it was only the relatively small number of multiple-interest gamblers (those who engaged in a variety of forms of gambling) whose attitudes were on balance positive (Orford et al. 2009).

The 2010 British Gambling Prevalence Survey repeated the exercise and found that, although attitudes towards gambling had changed very slightly in a more positive direction, the general picture was the same (Wardle et al. 2011). The proportion of people who think that ‘in this country gambling is conducted fairly and can be trusted’ has declined in the last five years from just under 50% to only 35% (Gambling Commission 2017).

How Does Gambling Fit with Our Conception of a Good Society?

But there are bigger issues to consider. These are questions to do with the kind of society we want to live in. How does gambling fit in with our ideas of a good society? In the late nineteenth and early twentieth centuries, an era in which anti-gambling movements flourished, that question was often asked (Dixon 1991). Decades later, in the early years of the twenty-first century, the British people were being told by their Government that the issue of gambling was not now to be marred by any discussion of ethicality or values. For example, the Department for Culture Media and Sport made this quite clear when announcing its proposals for new liberalising legislation: ‘In the Government’s view the law should no longer incorporate or reflect any assumption that gambling is an activity which is objectionable and which people should have no encouragement to pursue’ (Department for Culture, Media and Sport [DCMS] 2002).

In fact the Government had not been totally successful in stifling discussion of values. In the week following the publication of the Gambling Review Report, on which the Government based its new Bill, Lord Hattersley, former Deputy Leader of the British Labour Party, wrote (Daily Mail, 18/07/2001):

It seems possible that Britain… will become the gambling capital of Europe… The problem now is… a gradual and corrosive destruction of the values on which our society is based. Nobody can be sure the casinos will not become easy territory for drug pushers, but we can be certain that, once the international gamblers move in, they will be fertile ground for men who want to take money from people who cannot afford it… We have to ask, is it worth it?

Gambling may be simply an example of a general trend, bemoaned by Skidelsky and Skidelsky (2013), when they say, ‘liberal thinkers have insisted on public neutrality between rival conceptions of the good. The state… should not throw its weight behind this or that ethical outlook…’ That, they think, is a fundamental misunderstanding of liberalism which should not back off from making value judgements and used not to. Meanwhile there are some obvious beneficiaries of this value neutrality. The neutral state ‘simply hands power to the guardians of capital to manipulate public taste in their own interests’. Furthermore, insisting that the state should not interfere with individual choices, ‘inevitably and inescapably hands the choice of system and instruments to those with the greatest amount of wealth and power’.

The Infiltration of Research and Services by Vested Interests

One consequence of the new liberalisation and the accompanying establishment discourse surrounding commercial gambling is that the situation regarding the funding of research and treatment in Britain is very unsatisfactory. Funding dedicated to gambling is on a small scale and comes almost entirely directly from the gambling industry. It involves an arrangement whereby a self-acknowledged industry-led body known as the Responsible Gambling Trust (RGT, recently rebranded as GambleAware) is given the responsibility for raising funds from the gambling industry, through a levy which is currently voluntary, and then deciding how to allocate those funds for gambling research, education and treatment. Without a national structure for research and treatment which is independent of the powerful provider industry, conflicts of interests are endemic and scarcely recognised to be such by many in the field.

In 2014, Goldsmiths, University of London, launched an important report, Fair Game: Producing Gambling Research (Cassidy et al. 2014), which addressed the controversial issue of how gambling research is produced. It was based on interviews with over 100 gambling researchers, policy-makers and industry members, over half from the UK. There was much in the report about lack of research funding, the comparatively low status of gambling research, absence of cross-fertilisation between gambling studies and related fields, and difficulties in accessing data. The biggest theme, however, was the dependence of gambling research on industry support, a lack of transparency about this, and a poor understanding in the field about conflicts of interest. As the report put it,

The interests of funders are reproduced in diverse ways, including in the questions that are prioritised, …the ways in which applications are assessed and the ways in which research is disseminated. Voluntary contributions… are conceptualised as gifts… This allows the industry to maintain a sense of ownership over research.

Two examples can be given here which illustrate the way in which the prevailing ideology surrounding gambling in Britain plus industry infiltration are affecting how research is conducted and evidence interpreted.

How British Research on High-Powered Gambling Machines Has Been Hijacked by the Gambling-Providing Industry

In November 2012, following publicity about the harms believed to be associated with the British variety of modern technologically sophisticated, fast and high-powered gambling machines—the so-called Fixed Odds Betting Terminals or FOBTs—RGT announced a half million pound research programme about machine gambling. However, unlike a proper public health programme of research which would also look at the danger to which people are exposed, and the environment in which exposure takes place, this research in practice focused on the behaviour of the people exposed to the danger. Central to this industry-funded research was betting transaction data provided by the five big British bookmaking companies. This was lauded by RGT as being the first of its kind in Britain, the largest set of such data yet assembled anywhere in the world, and as demonstrating industry goodwill and willingness to collaborate. The size of the database was indeed huge—more than 6.7 billion bets placed in over 32,000 gambling machines in over 8000 betting shops.

The first report (Responsible Gambling Trust [RGT] 2014) claimed that it had been shown to be possible to predict problem gambling and that there was therefore, ‘a bright future for behavioural analytics’ in the area of social responsibility and gambling. A detailed study of the findings shows that conclusion to be over-optimistic. Of course no one expects perfect prediction but the results were hardly impressive since they showed, for example, that 50% of problem gamblers (screening positive on the Problem Gambling Severity Index) could be identified but only at a cost of a false positive rate of 25% amongst the larger group of non-problem gamblers. This represents an unacceptably high false-positive rate. In other words at even a modest level of sensitivity, specificity is unacceptably low.

A subsequent Department for Digital, Culture, Media and Sport consultation document, among other things seeking opinions about reducing the maximum allowed stake on FOBTs, says that the second phase of this research (GambleAware 2017), ‘found the industry could accurately detect problem gamblers using data held by operators today, with a refined set of 22 predictive markers used to create a customer specific risk score’ (Department for Digital, Culture, Media and Sport [DDCMS] 2017, Section 5.22). The Consultation document goes on to optimistically say that these markers could be used ‘to inform tailored interventions’ and that this is ‘a key area of opportunity for operators to strengthen their processes to identify and minimise gambling-related harm’. Unfortunately such statements are again greatly over-optimistic. In fact what it shows is that, even when all 22 indicators are put into the equation, the degree to which users of online gambling sites who have gambling problems could be identified was very far from perfect: for example, using a threshold which identified 7% as possibly having gambling problems resulted in a false positive rate of only 15% but a false negative rate of no less than about 84%).

The DDCMS consultation document accepts that large losses are being experienced by players of B2 machines, and that there has been no reduction in the prevalence of problem gambling. It concludes that the maximum stake on a single play on a B2 machine should indeed be reduced, as has been widely suggested, from the current £100. It is stated that evidence is lacking to inform their decision about what a new maximum stake should be. The document goes on to outline four illustrative alternatives: £50, £30, £20 and £2, although anything between £50 and £2 is possible. A reduction to £2, which would bring B2 machines into line with other categories of gambling machine, is what has been widely called for (by the Local Government Association and 93 local authorities across England and Wales, by a variety of campaign groups, charities and faith groups, by the All-Party Parliamentary Group on FOBTs, and by the campaign group 38 degrees which submitted a petition with over 100,000 signatories), whereas £50 would scarcely alter the nature of B2 machines at all. The international evidence suggests that to be effective any such changes to machine design need to be substantial (Sulkunen et al. 2018).

Unsurprisingly the industry argued for maintaining the status quo on stake limits. But not content with defending abnormally high stakes on B2 machines, the industry had also made other proposals which clearly indicate their intention to press forward with further innovations which are likely to increase the risk potential of their products. For example, the industry proposed increases in maximum stakes and/or prizes for other categories of machine, and in casinos more machines plus a 500% increase in the maximum size of the progressive jackpot prize. The British Amusement Catering Trades Association (BACTA) also made a further extraordinary proposal for a new sub-category of machine in amusement arcades which would have a maximum stake of £10. They argued it would allow operators to offer more varied selection of products, including what they describe as ‘low stake roulette’. So, not content with having turned betting shops into mini casinos in the high street, they have now set their sights on doing the same for amusement arcades. To their credit, DDCMS are not persuaded about the need for these changes at this time and propose maintaining the status quo, at least for now.

The Use of Evidence to Resist Calls for a 9 p.m. TV Gambling Advertising Watershed

A 2015 report from the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) in Britain acknowledged that the amount of gambling advertising had increased enormously since 2005 (CAP and BCAP 2015). There were then 90,000 spot adverts, mostly TV adverts, a figure that had risen to 1.4 million in 2012. Those figures equate to 5.8 billion person ‘impacts’ or viewings in 2005 rising to 30 billion in 2012. That is 630 per adult viewer. The figures for 4- to 15-year-olds were 0.5 billion impacts in 2005 rising to 1.8 billion in 2012. There has been widespread concern about children’s exposure to gambling advertising, particularly in the form of television adverts and clear signs of sports sponsorship when viewing major sporting events before the 9 p.m. ‘watershed’, before which it is a generally accepted principle that material children should be protected from seeing should not be shown.

CAP and BCAP’s general conclusion was that the present rules were more or less in the right place. On the specific issue of pre-watershed advertising the report concluded that there was no convincing evidence that this was harmful, and therefore, no change was required. In the process of reaching these highly contentious conclusions, the familiar establishment device of minimising was much in evidence. For example, the general consensus, the report said, was that advertising has little causal role in producing harm except possibly in the case of encouraging further gambling by people who already have gambling problems—a group referred to as a ‘small minority’. The report acknowledged that there was some evidence of the effect of gambling advertising on young people, for example on their attitudes. But drawing on work on food advertising particularly, it concluded that there was only a modest direct effect of gambling advertising on children and young people. It was emphasised that, in any case, 55% of TV gambling adverts were shown after 9 p.m. and less than 10% (excluding lotteries and scratchcards) between 5 and 9 p.m. The report’s complacency is summed up in their conclusion that the existing rules met a key objective of the 2005 Gambling Act—to protect children and young people from harm.

In its recent consultation document DDCMS also proposes to leave gambling advertising largely unchanged, arguing that existing Advertising Codes and the industry voluntary code already restrict the content of gambling advertising. They repeatedly cite a review carried out by Binde (2014), published by RGT (now GambleAware), now several years old and much quoted by the industry, which came to the controversial conclusion that the impact of advertising on problem gambling prevalence was ‘likely to be neither negligible nor considerable, but rather relatively small’. The DDCMS report refers to what they call a ‘package of measures and initiatives… intended to address concerns about gambling advertising…’, but this appears largely to consist of making the existing regulations clear to everyone, tightening up on them a bit, welcoming the proposals of the CAP to produce new guidance, and supporting GambleAware, broadcasters and industry groups who have drawn up proposals for a major responsible gambling advertising campaign. Such education campaigns are of doubtful effectiveness (Sulkunen et al. 2018) and in the case of gambling may do as much to promote the normalisation of gambling as to reducing harm.

A particular focus of complaints to the Advertising Standards Authority about gambling advertisements—complaints increased fourfold between 2005 and 2012—had been about offers of ‘free bets’ and also ‘bet now’ messages. But a lot were about ‘advertising generally’. This links to what Binde (2014) recognised as the issue of societal values or what he called the ‘moral dimension’, including concern that advertising is contributing to the normalisation of gambling. But as the report so aptly put it, ‘a degree of “normalisation” was envisaged as an acceptable consequence of the [2005] Act by Parliament at the time’. The stimulation of demand was allowed for the first time and there was greater freedom to advertise. Therefore, in their view the issue was not whether normalisation was occurring since it was virtually written into the law when it was formulated. There was also a hint of something more fundamental in a section of the report on possible general consumer harm. It referred here specifically to Binde’s conclusion that gambling advertisements can be deceptive because they give a misleading impression of the likelihood of winning. But the report did not consider that this was something they should act on.

A Government That Supports Gambling Growth and Is Committed to Taking a Backseat

The Executive Summary to the recent consultation document (DDCMS 2017) contains a clear statement of the overall position of the Government in relation to gambling regulation and its own responsibility in the matter. There are two statements in particular that stand out. First: ‘The objective of the review was to ensure that we have the right balance between a sector that can grow and contribute to the economy, and one that is socially responsible and doing all it should to protect consumers and communities, including those who are just about managing’. That makes it abundantly clear that Government wants to encourage the growth of gambling in Britain. This is strange for a government that must be concerned about its public image, since survey evidence is quite clear that the majority of the public do not want more gambling, in fact most people think there is too much of it already. The second, equally revealing and worrying, statement makes it clear that Government intends to take a back seat, giving the industry a central position: ‘…we want to see industry, regulator and charities continue to drive the social responsibility agenda, to ensure that all is being done to protect players without the need for further Government intervention…’

It is Government’s overall position on gambling in Britain that needs to change. We will not see serious reform while Government continues to support the growth of gambling and refuses to contemplate a proper national debate on the role of gambling in modern Britain and a proper national gambling strategy which mandates cross-Government department action on the prevention and treatment of gambling harm.

Note

  1. 1.

    The chapter refers throughout to Britain rather than the UK since gambling regulation is dealt with separately in Northern Ireland.