Support 100 years of independent journalism.

  1. Politics
17 January 2020

When it comes to gambling, the Conservatives are right about Labour’s legacy

The 2005 Gambling Act has proved to be a disaster. The government is finally responding, but is it enough?

By George Grylls

To do well in business you have to be ruthless – shameless, even. And few businesses have as little capacity for shame as the gambling industry.

Last year the founder and chief executive of Bet365, Denise Coates, paid herself £323m – the largest salary of any CEO in the UK. Meanwhile, Paddy Power plastered an oversized advert over Huddersfield Town’s football shirts, accepting that a £50,000 fine was money well spent for a viral marketing stunt. Wayne Rooney, the former England captain, was signed by Derby County in a deal underwritten by betting company 32Red. Rooney now wears the number 32 and starred in a recent documentary made for the company about his own struggles with gambling addiction, which, unsurprisingly, attracted no shortage of criticism.

In order to understand the present situation — in which an estimated 340,000 people in the UK suffer from gambling addiction, 19 per cent of whom have thought about suicide in the past year – you have to go back to 2005. 

With the benefit of hindsight, the initial reaction to Labour’s 2005 Gambling Act looks naive. Parliamentarians were more bothered about the potential for “super casinos” than they were about the effect of the industry moving online. Fifteen years later, more than a third of betting companies’ revenues come from apps and websites, while high-street bookies are declining, taking with them the jobs that are the industry’s only upside. Tom Watson, who was an outspoken campaigner on the issue before he left parliament, has described the Gambling Act as “not fit for the digital age”. Boris Johnson has thankfully cottoned onto this line, calling the Gambling Act an “analogue” piece of legislation.

The Gambling Act liberalised licensing, allowed adverts on TV, and changed the way the industry was taxed. Online operations were able to move their accounts to the tax havens of the Isle of Man and Gibraltar. The net effect was an explosion of the gambling industry, adding more than £4bn a year in profits by 2019.

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. The New Statesman’s global affairs newsletter, every Monday and Friday. The best of the New Statesman, delivered to your inbox every weekday morning. The New Statesman’s weekly environment email on the politics, business and culture of the climate and nature crises - in your inbox every Thursday. A handy, three-minute glance at the week ahead in companies, markets, regulation and investment, landing in your inbox every Monday morning. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A newsletter showcasing the finest writing from the ideas section and the NS archive, covering political ideas, philosophy, criticism and intellectual history - sent every Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.

Eventually, however, shamelessness has its repercussions. When you sponsor half the football shirts in the Premier League, the odds are that some of the people who take notice are not going to be entirely sympathetic to your aims. Thanks to the work of MPs such as Carolyn Harris and Tracey Crouch, a consensus has for some time been building in parliament that gambling laws are not fit for purpose. When even such an avowed free-marketeer as Iain Duncan Smith thinks the industry has over-stepped the mark, you know a crackdown is coming.

Content from our partners
The shrinking road to net zero
The tree-planting misconception
Is your business ready for corporate climate reporting?

Reducing the maximum stake of fixed-odds betting terminals (FOBTs) from £100 to £2 was a good start last year (but took so long that it prompted the resignation of the then-sports minister, Tracey Crouch). A credit card ban will come into force in mid-April. But there is more to be looked at. “Loot boxes” have been banned from children’s video games in Belgium because they encourage gambling habits in young people (the DCMS Select Committee has recommended a ban). And where is the consistency that there are maximum stakes on FOBTs, but nothing on apps? Why does one flashing screen require legislation but not the other? And what about betting companies rewarding problem gamblers with freebies and bonuses? Perhaps most egregiously, there is the wall-to-wall advertising during sport. Hopefully, this reached its nadir when the rights to broadcast FA Cup games were sold to a betting company, but that remains to be seen.

The Conservatives promised a review of the Gambling Act in their manifesto, and the announcements of the past week suggest progress. But there is still a long way to go.