Regulus Partners, the strategic consultancy focused on international gambling and related industries, takes a look at some key developments for the gambling industry in its ‘Winning Post’ column.

UK: Politics – Crouch bows out with “alternative facts”

Last week’s resignation of Tracey Crouch as UK minister for sport (and gambling) marked a new low in the recent history of Britain’s gaming and betting industry. Whether one views Crouch’s decision as a noble stand on a matter of conscience or as a futile act of petulance, it is hard to identify any good that will come from it. Her resignation seems to contain so many of the problems that have bedeviled attempts at sane policy in this sector for so long – myopic lobbying (on all sides), political dithering, bullying and unpleasantness and the triumph of emotion over reason.

Whether one agrees with Crouch’s views on gambling regulation, she has undeniably been the most engaged gambling minister that we have had for at least a decade. In contrast to most of her predecessors in the role, she appeared to care and she did her best to make a good job of a thankless brief (as well as being a tireless and effective champion of sport). Her departure seems likely to set back the industry’s relationship with the Government, has caused further damage to its public image and – possibly most seriously in practical terms – may well deter her successor from investing much in the way of personal political capital in this fraught area of politics.

It is difficult to fathom what precisely caused the Member for Chatham and Aylesford to resign. As a backbencher, she had expressed concern about machines in betting shops (a concern that even the ABB seems to have now accepted was justified – whether or not it agrees with the £2 stake solution). Once she was put in a position to do something about it, she pursued the matter with vigour (in contrast to many of her peers who find that with great power comes great amnesia) despite the shifting sands of Cabinet reshuffles that saw her serve three Culture Secretaries in as many years (including her maternity leave).

Given the length of time it took to achieve the goal of stake reduction (15 years on from the old Gaming Board’s first attempt to rein in FOBTs), it seems somewhat perverse that Crouch should step down over the question of whether the coup de grace should be delivered in April or October next year. It is difficult to avoid the conclusion that the six month ‘delay’ was simply the final straw – the point of divergence with ministerial colleagues that sapped the last reserves of her patience.

What happens next is anyone’s guess – the entire FOBT saga has had more twists and turns than Chubby Checker on the Cresta Run. No sooner had we thought that the matter had been put to bed than it has leapt back out again. It seems hard to believe that the Government will change the timing of FOBT stake reduction but if Crouch’s stand galvanizes the support of enough disaffected Tories (Boris Johnson, Iain Duncan Smith and Sarah Wollaston have been among the more high-profile Conservatives to speak out on the subject this week) then Labour may scent (another) chance to embarrass the Government on gambling policy. However, a further ironical twist could be that a stand against the timetable could push out the timetable further – a calculation the government (and perhaps GVC) is possibly banking on to see legislation passed in a timely manner.

The question of who will replace Crouch as sports minister has wider implications for the industry – and the balance of risk is on the downside here. The episode has damaged the reputation of the new Culture Secretary, Jeremy Wright (indeed, it is not inconceivable that he might be moved on) and is almost certain to accentuate his allergy to gambling matters. It is critical that operators start to find positive ways to engage with Government (for example, how they might contribute to a more vibrant post-Brexit Britain) in order to eradicate the stain of years of whining, discord and controversy.

Tracey Crouch’s resignation letter provided another warning of a deeper and darker threat to gambling in Britain (and elsewhere). In explaining her decision to step down, she stated that “two people will tragically take their lives every day due to gambling-related problems”. This seems to be an entirely bogus claim, yet it is now being repeated with such unquestioning conviction and regularity that it is fast becoming accepted as a fact. We will return to this subject in more detail at a later time. For now, we simply observe that it is disappointing that in her final act as minister she should perpetuate such palpable nonsense (the claim seems to be based entirely upon the deaths of 17 people in Hong Kong more than a decade ago).

Our aim here is not to trivialize the subject of gambling-related suicide – it is an extremely serious and tragic issue – but to point out that simply because we don’t know how many people take their own lives in relation to gambling problems does not justify making things up, just as it does not permit the industry to downplay the issue. Those in positions of regulatory-political authority have an ethical duty to deal in facts rather than peddle hysteria.

For operators globally, the challenge is clearly to do a much better job of understanding and addressing harms – both in relation to those experienced by customers; and the damage to their own long-term interests when societal concerns are allowed to become headline news. For now, the damage still appears to be mounting faster than the attempts at repair.

UK: in Parliament – Play School Politics Pans FOBT Fiasco

Tracey Crouch’s final week at the DCMS was a certainly busy one. In his Budget Statement on Monday, the Chancellor of the Exchequer, Philip Hammond set the rate of Remote Gaming Duty at 21% (slightly higher than expected; somewhat lower than feared) with the change due to take effect from October next year (to coincide with stake reduction on FOBTs).

The gambling concern lobby had made it clear that they would oppose any later date than April 2019 for action on FOBTs; and had set their traps accordingly. Anticipating disappointment, Lord Griffiths of Burryport (Lab) had already scheduled a debate for Tuesday on the timing of stake in reduction. Concerns were expressed about both FOBTs and TV advertising but the debate was rather tame by comparison with what was to come.

In the Commons that day, the chair of the Health Select Committee (and former GP), Sarah Wollaston (Cons, Totnes), the Shadow Health Minister, Jonathan Ashworth (Lab, Leicester South) and Paul Blomfield (Lab, Sheffield Central) used a debate on income tax to deliver strongly worded criticisms of the Government’s decision to wait another year (Iain Duncan Smith used a further debate on income tax two days later to the same effect).

Thursday brought DCMS oral Parliamentary Questions. The Labour and SNP Shadow Ministers for DCMS, Kevin Brennan (Lab, Cardiff West) and Hannah Bardell (SNP, Livingston) put the Culture Secretary Jeremy Wright on the spot in relation to the perceived delay on stake reduction. Wright insisted that there had been no delay and that the date for implementation of the new regulations had actually been brought forward from April 2020.

However, Wright was not to escape that easily. Later in the day, Labour’s Deputy Leader cornered the Culture Secretary with an Urgent Question on the timing of stake reduction, precipitating a prolonged debate, involving MPs from all major parties. Perhaps significantly, around half of the 20 MPs who criticised the Government during the debate were from its own party.

In addition to a range of questions on FOBTS, Watson repeatedly asked Wright whether or not his sports minister, Tracey Crouch had resigned (as press reports had suggested). As he bobbed and weaved in response to questioning, Wright extolled the “outstanding job” that Crouch was doing as sports minister and denied that the commercial interests of the betting shop sector had any influence on the timing of stake reduction. It is likely to have been a source of some embarrassment to Wright that within hours of the debate, his “outstanding” minister had indeed tendered her resignation to the Prime Minister and claimed that her personal commitment to the role was incompatible with “commitments made by others to those with registered interests”.

The situation in the House of Lords was also proving rather dicey for the Government. Labour’s Lord Stevenson of Balmacara and the Liberal Democrat Lord Clement-Jones branded the decision to wait until October 2019 before implementing the £2 stake maximum “a disgrace”. This was followed by a rather longer debate on gambling addiction (led by the Bishop of Portsmouth, standing in for the bookie-bashing Bishop of St Albans). Impassioned testimony on the harms of excessive gambling was drawn from a large number of peers. The ensuing discussion roamed free across the wide range of controversies that currently dog the industry, including TV advertising, sports sponsorship, funding for research, education and treatment and even little old bingo which Lord Stevenson described as “that used to be a social game for grannies, but it now seems to be a way into the wider world of gambling because of the opt-in payments and the ability to get on to it” (no, we’re not sure what this means, either).

The Liberal Democrat Shadow Attorney General, Lord Thomas of Gresford left the House gave full vent to his antipathy towards the industry, depicting operators in distinctly Transylvanian tones. “These gambling companies constantly look for new blood to suck”, he said. His party colleague – and former children’s TV presenter, Baroness Benjamin drew attention to issues of gambling participation and problem gambling among children and gambling-related debt for university students. It is perhaps a sign of the low pass that the industry has reached that Humpty’s, Jemima’s and Big Ted’s best mate is now on gambling’s case.

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