Jeremy Hunt MP: Brown's U-turn on supercasinos masks damaging gambling liberalisation

Jeremy Hunt MP, Shadow Secretary of State for Culture, Media and Sport, outlines Brown's failures on gambling policy.

When is a U-turn not a U-turn? The answer, it appears to be, is when political imperatives rather than policy analysis dictate government actions. That is why the Gambling Act, which came into force on 1st September, is such a disaster.

Gordon Brown became Prime Minister knowing that he had to establish himself as the “change,” sufficiently different to Tony Blair to prevent the electorate thinking they needed a new party in power if they wanted a new administration. Cancelling Manchester’s “supercasino,” a measure Gordon Brown himself had supported as recently as March this year, seemed to fit the bill. It played to the “son of the manse” image and had the additional political benefit of winning support from long standing opponents of gambling liberalisation.

But when you unpick what has now happened in gambling policy, Gordon Brown has actually done exactly the opposite. We now face a gambling free for all with untold consequences in terms of the growth of problem gamblers. Professor Jim Orford of Birmingham University has talked about the new Act creating an additional 1 million gambling addicts. 

The Gambling Commission’s Prevalence Study published yesterday showed little change in the number of problem gamblers from the last time such a survey was undertaken. However, when you scratch the surface you realise that problem gambling is particularly rife amongst new forms of gambling – namely on the internet. This form of gambling has been left virtually untouched by the new legislation that came into force this month. Nearly 1 in 10 of online gamblers have addiction problems that can lead to indebtedness, family breakdown and crime. So what has Gordon Brown done? He has liberalised gambling advertising, and in his last budget created a fiscal environment that massively deterred overseas-registered sites from registering in the UK. 

Why have we had the first examination of problem gambling in seven years after gambling legislation was updated? Surely we should have examined the problem and then used legislation to address any issues that were uncovered. Instead, we are left with a situation where problem gambling through new methods of gaming is worryingly high yet the new legislation we are left with is unable to rein this in. 

Why has this happened? Casinos have conveniently been made the fall-guy for those concerned about the growth of problem gambling. But in many ways casinos are one of the easiest places to prevent problem gambling. Constant video surveillance means that casino operators, who no more want problem gamblers than nightclubs want alcoholics, are in a powerful position to intervene if they think someone is at risk. They are not allowed to give credit, preventing the build-up of gambling debts. 

The real problem within the gaming industry is unregulated internet gambling. The huge market for internet gambling is already worth $9.2 billion, predicted to be worth 8% of all gambling by 2012. It is growing at more than 20% per annum, one of the fastest growing sectors on the already rapidly-growing internet. Along with the growth in fixed odds betting terminals in betting shops, this is the issue that the Government has failed to tackle. 

Should Conservatives, who believe in personal responsibility and deregulation, be seeking further regulation of any business sector? With great caution, as this is a classic example of where ham-fisted government regulation will simply keep internet gambling operators offshore, out of the reach of UK government regulations and taxmen.

But that does not mean we should do nothing. Iain Duncan Smith identified problem gambling as one of the “addictions” leading to Britain’s broken society. It is a “pathway to poverty” which in the end costs all of us through broken families, destroyed childhoods and higher welfare bills. We need to create a framework that minimises the problem – but the Gambling Act makes it far worse.

Regulating internationally-mobile internet sites is not easy. But most leading operators of gambling sites had indicated that they would bring their sites “onshore” and thus make them subject to UK regulation, if the taxes were levied at realistic rates. 3% was mooted by the industry as about the right level. Instead in his last budget as Chancellor, Gordon Brown decided to levy taxes at 15%, with the result that online gambling operators are choosing to stay offshore’.

Ministers repeatedly stated that one of the central planks of the new Gambling Act was the regulation of remote gambling. Richard Caborn said last year that “the Act has achieved everything that the Government wanted to achieve—that is, dealing with online gambling and remote gambling. We believe we have done that”.

However, under the Gambling Act, as of September of this year, overseas sites will be able to do something they were not able to do before, namely advertise on television in the UK. All they have to do is register somewhere in the European Economic Area. So, fiscal policy has ensured that not a single overseas-registered site has chosen to bring itself under UK jurisdiction, whilst advertising policy has been liberalised to help them drum up business.

Any approach to problem gambling has to recognise that in a free society you cannot – and should not – seek to eliminate the role of personal responsibility in determining people’s actions. That is why we should not follow the United States in banning online gambling completely. But you can create a framework that makes responsible behaviour more likely.

The government chose the cancelling of the supercasino as a magic bullet. But if they had really wanted to tackle the growth in problem gambling, they would have considered a number of practical measures such as:

1. looking at how the fiscal framework can encourage, rather than discourage, gambling websites to register in the UK;
2. examined the possibility of a “debit not credit” policy whereby people could only use debit cards not credit cards on gambling websites e.g. gamble with money they already have, rather than gamble on credit;
3. insisting that all UK registered sites have procedures to set limits and reminders on total amount spent as well as proper age verification procedures; and
4. ensuring that the telephone number of a problem gambling charity is on all advertising.

The government may have done a U-turn on the supercasino. But there has been no U-turn on its ill-thought out and irresponsible laziness in its approach to problem gambling. There is no contradiction between having a strong and responsible gambling industry and a tough framework that prevents growth in problem gambling. In Britain we risk having neither.