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Gambling legislation needs a clear direction

Over a year ago, Theresa May put irresponsible capitalism ‘on warning’. She claimed ‘too many people in positions of power behave as though they have more in common with international elites than with the people down the road, the people they employ, the people they pass in the street.’ She said the government would set out ‘a plan that will mean government stepping up. Righting wrongs. Challenging vested interests.’

A strong interventionist position, at odds with a political party often criticised by opponents for letting the market run riot. A year later questions exist as to whether Mrs May and her government have an overarching plan or intend to address each issue as it comes.

Tracey Crouch minister at the Department for Digital, Culture, Media and Sport, announced a 12 week commission looking into the gambling market. Notably, it was announced that the maximum stakes on Fixed Odds Betting Terminals (FOBTs), currently set at £100, would be reduced to between £2.

FOBTs have long been a lightning rod for critics of the gambling industry, so action on these machines does not come as a great surprise. Indeed, Labour took the opportunity to set out their stall, saying the government had not gone nearly far enough.

With the gambling industry, the government is certainly stuck between a rock and a hard place. Lack of action undermines a commitment to stand up for consumers, but too much could choke off a burgeoning British industry. The Association of British Bookmakers (ABB) estimates cutting FOBT maximum stakes to £2 could cost as many as 20,000 jobs and millions in lost taxes.

Action on FOBTs is a long time coming, but does little by itself to address the wider issue of problem gambling – particularly in the absence of a clear articulation of the goal of reforms. FOBTs are often called the ‘crack cocaine’ of gambling, but getting rid of a user’s drug of choice does not mean they will necessarily go cold turkey.

The scope of the commission does aim to address social responsibility measures to tackle the wider issues in gambling. This aspect of the commission needs to give gambling companies a clear indication of what responsible gambling looks like on an industry, company and personal level and advise on clear and reasonable steps to make that possible. One wonders whether a 12 week deadline is too tight for such a complex task.

Part of the given reason for a commission is that there have been ‘significant changes to the market, to public perceptions of gambling, and to our understanding of the gambling landscape’. The government must therefore design regulation with public perception in mind and not repeat regulatory failures of the past.

An example of this is the continued distrust of the financial services sector. Whilst government intervention kept the banking sector from toppling, by failing to prosecute the few whose actions raised serious questions about which side of the law they were on, the government neglected to create an environment in which attitudes towards the sector could change – instead resentment was left to ferment.

The problem facing the gambling sector is not of the same scale or type as that facing the financial services sector, but one thing is clear: The government cannot sucker punch companies without defining the acceptable limits of gambling within society.

If Mrs May and her government is to intervene it must be in a way that addresses the core issue of responsible gambling, otherwise – to coin a phrase – no intervention is better than bad intervention.

Our Reputation & Strategy team works with the boards of global companies and public institutions to help them understand, influence, and improve their reputations. We apply a proven – but flexible – suite of products & services to provide actionable, nuanced advice and counsel, always underpinned by evidence. Find out more here.

Max McEwan

As Senior Research Executive at Populus, Max explores attitudes to policies and organisations within the Reputation and Strategy division. He holds a BA in Politics from the University of Newcastle and an MA in Political Research from the University of York.

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