14 Dec Sympathy for the Devil – Painting it Black Unlikely to Offer Long Term Satisfaction
“Maybe then I’ll fade away and not have to face the facts; it’s not easy facing up when your whole world is black.” Mick Jagger, Paint it Black
For every action, we are told there is an equal and opposite reaction. After years of light-touch regulation of Britain’s gambling industry, we appear now to have swung into a phase of legislative tightening. Both the Government and the Labour Party are currently carrying out reviews of gambling, the Competition and Markets Authority is investigating a number of remote gambling companies (and has issued strong recommendations on consumer fairness to all) and the Information Commissioner’s Office is – we must presume despite its silence – still ploughing through its probe into affiliate marketing. The near-term effects on industry profitability are likely to be negative.
Gambling executives are warned on an almost weekly basis that matters are approaching the stage where the Government and its agencies will take steps to intervene if operators are unable to provide sufficient assurance with regard to the licensing objectives. The public utterances of politicians and policy-makers describe a watershed, with gambling companies variously at a “tipping point”, a “crisis point” or drinking in the “Last Chance Saloon”.
This is the language of balance and imbalance – the see-saw of gambling’s perceived utility in society. At the heart of the ‘Budd Report’ in 2001 (the last time that gambling was the subject of a systematic Government-sponsored review) was a desire to balance consumer enjoyment against consumer harm (and other social costs). It was what ‘Budd’ referred to as the “central dilemma” for policy-making in this field:
“The most difficult general issue that we have had to solve concerns the familiar dilemma between the desire to permit free choice and the fear that such choice may lead to harm either to the individual or to society more widely.”
That was then, and this is now. Based on the tenor of current public policy discourse, one could be forgiven for thinking that Budd’s “dilemma” no longer applies – gambling is simply a bad lot. I am reminded of the words of the late Professor Bill Eadington (the godfather of modern gambling studies), who in 2003 observed that: “because gambling is still often perceived as a vice, consumer surplus associated with gambling consumption is often discounted in policy discussions”.
In the same essay, Eadington warned that, “If the perceptions of social costs associated with gambling become substantial relative to the economic rents that it is creating, then the political winds can quickly shift against its permitted status.”
Arguably, the winds in Britain have not shifted that slowly at all – the warning signs have been there for some time. Nevertheless, there is a sense that the industry is now being judged almost solely on the basis of negative outcomes.
The industry is largely culpable for this situation (although successive governments are far from blameless). There has been “bad behaviour” by some operators but perhaps more damningly a lack of interest in gambling-related harm by companies in general (albeit with some notable exceptions). Yet even if – as certain executives seem to accept – the current opprobrium against gambling is simply the cost of earlier negligence, there remains something unsatisfactory about it all. Put simply, an exclusive focus on the costs of gambling fails by definition to “put the customer at the heart” of policy-making.
Let us go back to Budd. One of the neglected recommendations from the 2001 report was that the benefits of gambling should be studied alongside its costs. Budd lamented that too little was known about harms; but while in recent years we have started to get a better grasp on this (GambleAware alone funds research to the tune of more than £1m a year), we appear to have learned very little about the positive aspects (in terms of enjoyment, well-being and sociability).
Gambling is patently not (as some argue) “just another leisure activity”; but at its best, it does share a number of things with more socially acceptable pursuits – the promise of suspense and surprise, mental engagement and the opportunity to join together with others in a shared experience.
Last week, I discussed this matter with an eminent researcher in gambling studies. He responded that while he recognised the value of researching gambling and well-being, he would feel intimidated about doing so for fear of being vilified as an apologist for the industry.
I am no apologist (and have in the past been disparaged for my views by certain elements of the industry). I spent the best part of a decade as an industry executive and understand that there are sometimes gaps between the PR of CSR and reality; and yet, I believe firmly that we have a responsibility to consider both sides of Budd’s Dilemma. There are two key reasons for this view, which I will explore here.
The first is that a failure to weigh the good against the bad is likely to result in flawed policies. Indeed, if we focus on negative consequences to the exclusion of positives, then the logical end state must be prohibition. This is true of almost any activity or industry – drink, cars. energy, smartphones, internet usage – and while there is a small, vocal minority who favour of a total ban on gambling, the balance of public opinion (as measured by Gambling Commission surveys) is against.
In addition to concerns over personal freedom, it is questionable how effective proscription would be in tackling harm. As Williams, West & Simpson (certainly no industry apologists) observed in their 2012 review of harm prevention, “There is no ‘magic bullet’ to prevent problem gambling. Even total prohibition would likely only have a moderately positive impact, with some offsetting negative consequences.”
My second reason to strive for balance is that in understanding positive modes of gambling, we may learn much about harm prevention. The field of ‘Responsible Gambling’ is dominated by reductive strategies focused on stopping gamblers and gambling companies from engaging in harmful activity. It seems plausible that if we had a better understanding of what makes gambling a beneficial experience, we may be able to nudge individuals (and operators) towards positive behaviour and so away from harm.
This is an area that Richard Woods has been exploring in Canada in recent years (examples include working with British Columbia Lottery Corporation to develop the Positive Play Scale) and may be worthy of closer examination here.
Indeed, as we have observed before, if operators and legislators diverted some of their resources to the question of what might bring the greatest enjoyment to the greatest number of people (rather than obsessing with the most highly engaged elements) then we might well have a very different industry; one that placed greater emphasis on creation, less on extraction and was less reliant on ‘VIPs’.
The question of balance extends to the need to be fair in how we discuss these issues. For too long, gambling companies marginalised the harm that arose in relation to their products and services (albeit largely through negligence than malevolence); but now the pendulum has swung and the industry struggles to get a fair hearing.
There has been much made of Gambling Commission research that illustrates declining levels of public trust in operators. I am inclined to believe that the surveys are accurate – after all the industry displays deep cynicism in itself (judging by the comments from the different sectors about the probity of one another). However, the Commission’s research also reveals that, on balance, people still think that “gambling is good for society”.
This paradox is well documented in gambling research in western societies. The general public will invariably respond negatively to questions on freedoms granted to the gambling industry but positively on the individual’s right to gamble. If we are to present information on what the public thinks about gambling, we should disclose the full picture rather than selective elements.
Then there is the question of funding. Recently, the gambling minister, Tracey Crouch warned that companies were drinking in the “Last Chance Saloon” in relation to a collective failure to meet the financial needs of the National Responsible Gambling Strategy. The minister warned that a statutory levy could be brought forward if the industry did not contribute 0.1% of its gambling revenue to tackling harm.
There are two problems with this. The first is the presence of an imagined equivalence between what companies invest in tackling harm and what they donate to the charity, GambleAware. Even last week (in response to a Parliamentary Question) Crouch admitted that in aggregate almost £10m had been contributed to GambleAware and the Senet Group over the course of the previous year. Some operators make substantial direct contributions to other charitable and non-charitable organisations engaged in research, education and treatment (including GamCare, the Gordon Moody Association, YGAM and BetKnowMore).
While one can debate how much should be spent on tackling harm (at the launch of Labour’s Campaign for Gambling Reform, an annual budget of up to £100m was suggested), it is likely that contributions from licensees (excluding the National Lottery) are much closer to the 0.1% threshold than is popularly supposed. The problem is that our fragmented industry has so far been unable to capture this figure.
This funding is targeted at research, education and treatment but of course, tackling harm goes far beyond those areas. In recent years, substantial investment has been made in a variety of safer gambling initiatives, including multi-operator self-exclusion schemes and awareness campaigns. If these activities are valuable (as the Government indicates), then they ought to be included in the reckoning when calculating corporate investment in dealing with problem gambling.
Looked at in this way, the immediate issue on funding may be less about the quantum of monies invested in tackling harm and more about prioritisation, coordination and how we frame the question.
If we are serious about tackling harm then focusing on a specific figure or percentage may be counter-productive (after all, would we consider it appropriate to reduce funding if industry revenue declined?). We should instead ask whether all companies are contributing what they should (rather than focusing on the mean) and whether the funding is targeted in the right areas.
The second problem is that a majority of industry executives (certainly most of those from ‘high-impact’ and ‘moderate-impact’ licensees) appear to support the introduction of a levy. Given the consensus on this point, we are forced to conclude that the barrier to imposition is governmental reluctance to burden itself with the responsibility of collection under a statutory system rather than industry resistance.
Whatever the causes of the Government’s lukewarm attitude towards a levy, it is neither transparent, fair nor particularly sane to make public (and publicly damaging) threats over something that most operators appear to welcome.
The recent statements on this matter from the National Casinos Forum and Remote Gambling Association demonstrate that different sectors can find common cause. Taking this a step further, it ought to be possible for operators and trade associations to calculate aggregate investment in research, education and treatment (and harm minimisation more broadly) so that a more accurate picture is presented in public debates.
There is a similar dynamic in the debate on TV advertising. It is a poorly kept secret that the Government’s restraint in this area (and in particular its reluctance to enforce the 9pm watershed) is the result of lobbying from powerful media companies rather than gambling operators (some of whom stand to gain from heightened restrictions); and yet that is not the way that the situation is presented. If the proposed fix to public concerns over advertising goes wrong, it will be the (relatively ambivalent) gambling operators rather than the media who get the blame.
Before pouring fresh invective on the industry, the denizens of Westminster and Whitehall might pause to reflect on their own responsibilities. The FOBT issue has been so damaging and is now proving so difficult to resolve precisely because successive administrations chose to ignore it for so long. We offer no opinion on whether or not it is good policy to permit £100-a-spin roulette terminals in betting shops – but surely it ought not to have taken 16 (going on 17) years to come to a decision on this.
Similarly, we might observe that most of the recent controversies (and the largest regulatory sanctions) have centred on remote gambling – a sector where, until three years ago (and against the recommendation of Budd), domestic licensing was not even a requirement. The roots of many of the current issues may lie in the fact that for a long time regulatory oversight was largely abdicated to offshore jurisdictions where benefits (in the form of jobs and taxes) were imported and costs (harm, crime and sharp practice) exported.
Operators may legitimately ask what others are doing to tackle harm. Is it right that banks offer the option of gambling transaction blocking on corporate accounts but not on personal accounts (which may provide more effective harm mitigation than some of the measures being mandated)? Given the significant efforts made by the regulator, treatment providers, charities and industry, is it really too much to expect a joined-up approach to harm minimisation from the Department of Digital, Culture, Media and Sport and the Department of Health (as the Labour Party is now starting to do on a shadow basis)?
Equilibrium is never truly attainable but all parties have an interest in avoiding cycles of boom and bust. While it is clear that some industry executives still don’t ‘get it’ when it comes to tackling harm, an increasing number do. After a slow start, some companies are employing ingenuity and considerable financial resources in this area – and they deserve credit and encouragement just as much as the negligent deserve shaming and punishment.
The fundamental point here is that “putting the customer at the heart” requires a willingness to accept that millions of people engage in gambling (without experiencing harm) because they experience well-being from doing so – and that their interests (rather than the economically slight arguments for jobs and taxes) deserve consideration when formulating policy. It requires us to respect the right of the individual to exercise choice and to balance this right against state and operator responsibilities.
Some years ago, Professor David Forrest commented that “gambling benefits very many people, each by a little, and hurts a rather smaller number of people, but each by a lot”; and herein lies the rub. The negative consequences – because they can be severe – gain greater attention than enjoyment, which is often perceived to be slight (particularly by non-gamblers). The availability bias of vivid harms over more obscure benefits of well-being affects how we think about these issues.
While we might hope that policy-makers will weigh benefits alongside costs, we ought not to rely on this. Consequently, if operators wish to break the current negative spiral of public policy discourse, they may need to amplify well-being as well as reducing the costs – and to seek a better appreciation of both. This is likely to require greater cooperation between companies and sectors to present a more accurate picture of what is going on (a greater willingness to recognise and take responsibility for harms twinned with the confidence to set the record straight where facts are misrepresented) and a renewed focus on customer well-being.