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World Responsibility Briefing - What the FOBT was that?

World Responsibility Briefing - What the FOBT was that?

Derek Webb, Founder of the Campaign for Fairer Gambling | Campaign for Fairer Gambling

4 min read Partner content

The Campaign for Fairer Gambling writes that self-regulation in gambling is not working and argues that: ‘FOBTs have a negative impact on government finances’.

Recently, there was small event in London (with a high entry fee) called the World Responsibility Briefing. Its billing sounded as though it could address some of the urgent global crises.

The leading event supporters were Playtech, a remote gambling and FOBT software company, and the Senet Group, the bookie funded PR machine with the motto "Promoting Responsible Gambling Standards”. So the event was ostensibly all about responsibility in gambling!

The key panel of speakers had representatives from Ladbrokes and Coral (soon to be merged), Playtech, which has business relationships with bookies such as Ladbrokes, and the Senet Group, a self-regulator that is funded by the bookies and has bookie executives on its board. They both took part in a panel discussion entitled: “Beyond regulation: Building the case for responsible gambling and advocating self-regulation”.

With such an extreme position when it comes to advocating the self-regulation of gambling, there first needs to be a consideration of the big picture. These include whether there are adequate benefits of legalised, taxed and self-regulated gambling.

From an economic perspective, gambling profits from the proceeds of crime, the welfare state, capital or non-disposable income are not beneficial. Gambling profits from disposable income are of limited economic benefit as typically this is just a transfer of spend from one economic activity to another.

High labour intensive gambling, such as casino table games, can have enough staff employment to have a net economic benefit. In contrast, remote gambling and high stakes machines such as FOBTs have the lowest staff employment and are the least justifiable.

From a tax perspective, all taxes other than direct gambling taxes should not be considered, as those taxes would also apply to any substituted economic activity. The tax is only an asset to society if the socio-economic cost is lower than the tax collected.

However, in respect of FOBTs, whilst the current year direct tax will be just over £400 million, the estimated loss from vulnerable and at-risk and problem gamblers will be around £650 million.

The consequences of FOBT losses by vulnerable persons are borne by the health service, the benefit system and the judicial system. Mr. Osborne and the Treasury need to recognise that even with the 25% tax rate, FOBTs have a negative impact on government finances.

It is easy to understand why the bookies prefer self-regulation. For around 50 years they operated legally, but not under direction of a gambling regulator. Members of the media and politicians were treated to hospitality at racing and sporting events.

It was the lack of regulation that enabled the bookmakers to introduce and illegally operate FOBTs. Bingo halls and arcades, being subject to the regulator, would not have dared gone down that route. The legacy is that bookies have a market monopoly on high-street FOBTs. Every government over the last 50 years is to blame. But this Tory government is still shamefully blind to FOBT harm.

The big topic at the event should have been the failure of the Association of British Bookmakers (ABB) Code, which recent NatCen research showed is having no impact on reducing the time or spend per session. Both the ABB and the Senet Group have been quiet on this subject.

The moderator of the panel was Malcolm Bruce of Gambling Integrity, so you might think he would want to make the failed ABB Codea discussion priority. But Gambling Integrity clients include Ladbrokes, Paddy Power and the ABB!

Thinking of gambling integrity, where is the public facing, independent, transparent entity that has access to all UK facing remote gambling sites to determine if the games are in compliance with the "fair and open" licensing objective of the Gambling Act? You’re right - there isn't one. So how do we know that right now some remote gamblers are not being cheated?

So with no economic or tax benefits, particularly in respect of FOBTs, is self-regulated gambling a better choice than making gambling illegal? With no advertising and limited access to illegal gambling, it should be obvious that the quantity of harm would be far lower if gambling was illegal than if gambling operators were allowed to self-regulate.

The very existence of this panel session should be a wake-up call to DCMS. Lack of DCMS control of the Gambling Commission is allowing a weak Commission to dilute the intentions of the 2005 Gambling Act.

The Campaign believes the preposterous proposition that bookmakers should be allowed to self-regulate, when they are incapable of admitting that their own ABB Code is failing, should be treated with the contempt it deserves. Denial is in their DNA – their DNA is in DeNiAl.

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