15 Dec Back to the Future: Budd-ism and the Meaning of (Regulatory) Strife
The die has been cast. Operators across the land have by now submitted their thoughts and ‘evidence’ to the DCMS review of how best to achieve “socially responsible growth” in gambling. When the submissions are made public next year (as is the convention), it will be curious to see how many organisations actually answer the questions posed and in particular, how they have interpreted the idea of “socially responsible growth”.
At last week’s GambleAware Harm Minimisation Conference, Dr Sean Cowlishaw of Bristol University questioned whether such a thing was even possible – could the gambling industry grow without causing additional harm? This is not a question that operators enjoy; but it sits at the heart of the way that we think about gambling regulation in this country.
It is something that the Gambling Review Body referred to as “the Central Dilemma” – and they devoted the second chapter of their 2001 report (the “Budd Report” of colloquialism) to addressing the matter. ‘Budd’ identified a critical balancing act between the desire to promote consumer choice and enjoyment with checks to ensure the protection of children and vulnerable people, the promotion of fairness and the exclusion of crime. These are – at least notionally – the foundations upon which our gambling legislation is built.
I should at this point confess an interest – I am a fervent disciple of Budd-ism. It seems to me self-evident that the answers to many of the regulatory issues facing gambling are likely to be found in the last serious (intelligent, independent, considered) review of the industry. Perplexed as to why no government had ever assessed the extent to which Budd’s ambitions had been realized, I decided to do it myself. Last month I published in the UNLV Gaming Research & Review Journal my paper, ‘Budd Revisited; Gambling in Britain 15 Years On’.
I concluded that Budd’s hopes for achieving a sustainable balancing of the Central Dilemma – where customer choice would expand without causing additional harm – has not materialised. It is not a question of one prevailing over the other; but potentially the undermining of both.
In theory, the choice for consumers wishing to gamble in Great Britain has never been greater. The early adoption of permissive remote gambling legislation has stimulated a mushrooming of both consumer choice and gambling expenditures; and lower costs of operation have been passed back to consumers in the form of better value (or at least lower operator win margins).
Looked at another way though, choice may in fact have contracted – the supply of bingo clubs, arcades and betting shops appears to be in structural decline while the growth of casinos has been pretty underwhelming. In part this is a reflection of broader shifts in consumer spending from traditional retail to e-commerce; but it also involves the unconscious connivance of two unlikely parties – Government and the industry itself.
For reasons that are still not entirely clear, the British Government has long favoured remote gambling over its land-based counter-part – making licensing and taxation effectively optional until December 2014 (more than seven years after full implementation of the Gambling Act). Even today, regulation and taxation for remote gambling is relatively light, allowing it to respond with agility to changing consumer needs. Licensed venues on the other hand are still fundamentally confined to the regulatory constructs created for them in the 1960s – constructs that are being washed over by the tide of half-a-century’s changes in technology and consumer behaviour.
At the same time, the land-based gambling industry has – with a few notable exceptions – been slow to respond to the threat from remote. Rather than competing on experience and entertainment (as Budd envisaged), venues have often gone toe-to-toe with online and mobile on gambling as a transaction. This is most visible in the domain of machine gaming, where the structural characteristics of stake and prize have come to dominate industry discourse on regulation. Rather than address the issue of declining core products, many operators have sought instead to prop them up with increased expenditures from machine play.
It is difficult for me to see how we can provide an adequate response to Dr Cowlishaw’s question without a fundamental review of gambling in Great Britain. This would be a chance to reaffirm or change the policy objectives outlined in Budd and create the space needed for reflection and a more scientific process of evidence gathering (rather than a partisan free-for-all).
In the course of writing my paper, I had the pleasure of spending many enjoyable hours in the company of Sir Alan Budd. Around the start of the year, he told me “Gambling in the UK is a mess – but it’s a dull mess. The present state of things is clearly unsatisfactory but there is no sense of national crisis or enthusiasm to take a step forward…”.
If anything, things appear to have become messier over the course of the last 12 months (and the mess is certainly no longer dull). It may be that this is a required pre-cursor of any clean-up – and the expanded scope of the Triennial Review certainly indicates a more vigorous approach from DCMS. For my money, we need to go deeper yet.
I conclude ‘Budd Revisited’ with these words: “It seems a matter of historical inevitability that the British Government will at some point feel the need to carry out another systematic review of the role of gambling in British society and the economy. Whether the impulse for that review is a positive one (as with Budd) or a negative one is likely to have a significant impact on the development of the industry.”
Sometimes one needs to take a step back in order to move forward. Now may well be the time to go back to Budd.