Online gambling is the next battleground as bookies fail to clean up their act

Posted On: 
26th February 2019

The Campaign for Fairer Gambling writes to explore legislative changes to online gambling, given that current laws "came into force during a period when internet gambling was only getting started, and smartphones hadn’t even been invented".

"Given the behaviour of remote gambling operators, it might not be long before our gambling laws better reflect the digital age, and the principle of limiting stakes online is introduced" - Campaign for Fairer Gambling

The first step to solving a problem is acknowledging that one exists. That’s what gambling addicts are often told in therapy, but it can be applied to any given scenario. Which is why the bookies’ trade body, the Association of British Bookmakers (ABB), did themselves very few favours by publicly refusing to accept there was an issue with FOBTs.

For years, the ABB appeared as though they were in denial, which meant despite the evidence of harm building and public opinion turning more heavily against their high stakes machines, the bookies were in no position to offer any meaningful concessions such as voluntarily reducing the maximum stake from £100 a spin.

Instead, the ABB opted for public relations initiatives designed to soften their image, while refusing to consider FOBT reform. Ultimately, this failure to recognise a problem and impose measures to reduce harm – rather than merely attempting to appear responsible – gave the government no choice but to enact a £2 cap on their machines.

It appears as though lessons might have been learnt from that failure as the ABB looks set to fold, with the creation of a new lobby group that may encompass both remote and non-remote betting. According to the Guardian, they have already started advertising for a CEO with “strong government connections”.

The new trade body will have its work cut out if the recent coverage related to online gambling is anything to go by. An undercover Daily Mail investigation revealed Bet365 to be giving financial inducements to customers who were likely to be addicted in order to keep them gambling.

BBC Radio 5 Live revealed the case of a man with a brain injury, incurred from a violent assault, losing £210,000 in compensation money to online gambling firms which, despite in some cases deposits exceeding tens of thousands of pounds in a matter of hours, carried out no social responsibility checks.

Similarly, the Times revealed the case of how Ladbrokes had used non-disclosure agreements (NDAs) after failing to verify the source of a customer’s funds, after he had gambled away £1.8 million he had stolen from his clients. Given the large scale of the deposits, Ladbrokes should have checked whether the funds were the proceeds of crime, or whether the customer was laundering money. Ladbrokes agreed to pay half the stolen money back, but on the condition that the customer and his clients signed NDAs that prohibited them from informing the Gambling Commission

The Times criticised the sector’s use of NDAs in an editorial entitled “Rotten Business”, arguing that while NDAs can play an important role in commercial transactions, “it should not be possible to use them to cover up wrongdoing or impede the work of regulators”, noting that this has come from operators whose reputations have suffered after their resistance to FOBT reform.

As reported by the Financial Times, the Gambling Commission is considering a ban on permitting gambling via credit cards, which account for between 10 and 20 per cent of deposits online. Given gambling with money you can’t afford to lose and getting into debt through gambling are both signs of addiction, facilitating this by allowing deposits by credit card or – as reported by the Guardian – abuse of PayPal, are not justifiable.

PayPal enabled a customer to deposit £150,000 they didn’t have into a gambling site before it attempted to recoup the money from their bank account 48 hours later. This also amounted to yet another case of a remote gambling operator failing to carry out money laundering or social responsibility checks.

FOBTs came to be known as the crack cocaine of gambling, which reinforced how addictive they were, but implicit in that description is the notion that gambling products can be inherently harmful, and some significantly more so than others. New research covered by the Guardian indicated that smartphones have the capacity to be more addictive than FOBTs.

Unlike stakes and prizes on machines, there is no mechanism in the law for the government to limit the stakes online, as our legislation came into force during a period when internet gambling was only getting started, and smartphones hadn’t even been invented. But given the behaviour of remote gambling operators, it might not be long before our gambling laws better reflect the digital age, and the principle of limiting stakes online is introduced.