Voting

GB Politics – is the snap election a break for betting shops?

The British Prime Minister, Theresa May has called a snap General Election, set for 8 June. There is a vote in Parliament today on whether the Fixed Term Parliament Act, which legislates for five-year terms, can be waived; but given the support of (some of?) the Labour Party, this appears to be a formality. The outcome of the 2017 UK General Election may have a profound effect on the future of the United Kingdom – including its relationship with Europe and its own internal cohesion. More prosaically, the timing of Mrs May’s decision to go to the country may also affect the near-term future of important parts of the GB gambling industry.

There are two key pieces of government activity awaiting imminent legislative action: Levy Reform and the “Triennial” Review. Levy Reform is simply awaiting an EU view on State Aid, after which it can become law. Consequently, a positive response is likely to lead to rapid implementation, whereas a negative (or nuanced) response is likely to cause delays beyond the hiccup of election timing. The Review, however, is less simple.

The Department for Culture, Media and Sport had been expected to publish its proposals on gaming machines, TV advertising and responsible gambling measures within the next few weeks (or about as late into their “spring” timetable guidance that they could credibly go). After yesterday’s announcement, the timing – and potentially therefore outcome – of the process has been thrown into some doubt.

It is not absolutely clear whether the DCMS announcement would be caught by the rather imprecise rules on ‘purdah’ (which regulates and restricts civil service activity in pre-election periods). In talking with three different political lobbyists, we received three different answers; but there seemed agreement that the Government might wish to avoid any announcements on gambling in the run-up to a General Election, especially if any sort of debate were to be envisaged (again, by means guaranteed). Further, one gambling company with material LBO exposure has been briefing analysts that it expects any announcement to be pushed back into the autumn, a view which now seems on balance the most likely outcome.

The most recent guidance on the timing of proposals was provided on 5th April (in response to a Parliamentary Question from Labour MP, Tulip Siddiq). The minister, Tracey Crouch stated that “findings and any proposals” would be published “in due course” – a vaguer statement than her previous references to “the spring”.

If the announcement does slip into the autumn then it may mean that the implementation of any actions would be pushed back from April 2018 to October that year (or further if there is a lengthy consultation period: broadly, the bigger the changes, the longer the likely delay). This all seems like good news for the betting shop operators who were recently advised by (the hitherto highly liberal and supportive) former Secretary of State for Culture, Media and Sport, John Whittingdale to prepare for “radical measures” on FOBTs.

The key question is whether delay might affect rather than simply postpone the outcome. In the first instance, it might be tempting to view the delay thus far as a sign that government action might not be clear cut, which could be seen as a positive to bookmakers given the mood music. However, it is dangerous to assume either Westminster or Whitehall will priorities gambling and so timetable slippages are often par for the course. In terms of further events, we would suggest five key drivers to look out for:

  • The extent to which the ABB can maintain its effective defensive streak in the press
  • The extent to which a revitalized CFFG (and others) can step up the pressure
  • Whether the Reivew, or FOBTs more broadly, make it into election rhetoric and manifestos (again; potentially especially Scotland and any further devolution)
  • The size of the Conservative majority: a landslide is conceivable and would remove a lot of external pressure, though whether or not Mrs May already has a strong view and committed course of action remains open to question (such an outcome would have been more positive for  bookmakers under Cameron-Osborne-Whittingdale)
  • Whether Tracey Crouch, who has made her views clear, is reshuffled; though the cabinet was formed fairly recently and stability / continuity are likely to be key Conservative watchwords (the position of Karen Bradley is likely to be less sensitive to the outcome despite her seniority)

The minister responsible for the current review, Tracey Crouch MP has a majority of more than 11,000, having captured a shade over 50% of the Chatham and Aylesbury vote in 2015; it seems highly unlikely that she will lose her seat. She also seems to genuinely enjoy her brief as minister for sports – something she is clearly passionate about. In contrast with certain previous holders of the office, Crouch has grasped the gambling part of the ministerial brief with real energy. It is possible that she will get moved up to a higher station – but this would be a shame both for sport and gambling (other than B2 machines).

There is a chance that we will see some of the other parliamentary actors change. If the opinion polls are at least directionally right then a number of Labour MPs may soon be looking for alternative employment. Indeed, given the rancour that exists within the parliamentary party, it’s possible that some may not even stand for re-election. It would however be a major shock if the FOBT chief prosecutor and highly popular campaigning Member for Swansea East (with a 2015 majority of more than 12,000 votes), Carolyn Harris was unseated.

Of course, all of this assumes that Mrs May prevails on 8th June and effectively acquires her own mandate to govern. Anything other than a Conservative victory appears unthinkable – but in recent times we have lost much of our faith in political certainties. Given that an outside chance is still a chance, it is worth remembering that the position of the Labour Party is to seek a £2 cap on machines in betting shops (and, unlike the old ‘New Labour’ is likely to be unsupportive of any positive reforms for gambling). Labour’s opposition to FOBTs is shared by the Liberal Democrats and Scottish Nationalists and while gambling is not expected to feature as a prominent election issue, it may yet afford the opposition parties the opportunity to take cheap shots at the Conservatives.

Of course, the DCMS review is far broader than just the question of FOBTs. Some sectors (casinos and arcades) had hoped to make gains from the process. It would be strange indeed if a British Government announced pro-gambling moves in the run-up to a snap election; so the casino lobby may have to accept the fact that the wait for reform will go on a little bit longer. Meanwhile, the question of TV advertising does not appear as fraught as the issue of machines and so the outcome may not be so much at risk.

Given that this election will be fought over how to deal with one of the biggest decisions the UK has made in peacetime, the likelihood of other gambling issues creeping into the discourse is unlikely to say the least. However, we will be monitoring the situation.

Finally, the probability that what the industry still considers to be the “Triennial Review” (even though the Government has not referred to it as such) may end up completing a year-and-a-half later than scheduled raises questions about when the next review (which seems likely to include greater scrutiny of remote gambling regulation) might take place. More broadly, the industry should also be thinking both hard and collectively about coming up with a better way than a vaguely triennial timetable to question anything and everything the current climate sees fit: the next government is likely to be a very busy one, but it is also likely to be both stable and rational.

If we are to have an additional delay to this long-running saga, operators should use the extra time wisely – to review their arguments, to identify weaknesses and take active steps to improve their positions (eg, through the development of more effective responsible gambling measures) and to open up channels of intra-industry diplomacy in order to avoid mutually assured destruction. Now is also the time to be thinking about what happens beyond this election and this review: to present a new government with a new way of dealing with an industry hitherto only braced to react to disjointed political pressures.