The IEA publishes a defence of liberalsing the gambling industry

Nick Hayns is Communications Officer at the IEA.

More often than not, gambling is dismissed as just another one of the vices. Tobacco, alcohol, drugs, pornography and... gambling. Something seedy, something to be frowned upon, and – as the policies of successive governments have shown – something to be regulated and, ideally, stopped.

However, new research released by the Institute of Economic Affairs today shows that many of the commonly-held truths about gambling are little more than myths, and that a liberalised gaming sector would bring huge economic benefits to the UK and could prove the saviour for the thousands of struggling pubs up and down the country.

What’s more, it’s a matter of liberty. In a free society people should be allowed to spend their money as they so wish. Want to spend it going to the opera? Fine. Want to spend it playing poker? Fine. Want to spend it on a Chris de Burgh CD? Less fine, clearly, but still nothing to do with the state.

One of the great myths that surrounds gambling is that to liberalise it would be to see a huge explosion in take-up – and consequently a great increase in the number of addicts. However, the facts simply do not support the stigma. In the last decade, the prevalence of gambling has marginally increased (72% of over-16s had participated in some form of gambling in 1999; rising to 73% last year), but it should be remembered that this period saw the unleashing of the great forces of the internet.

Nowadays if you want to bet away your life savings on the roll of a pixellated dice from the confines of your own bedroom, no doubt you can find someone operating through a server in Panama who is more than happy to oblige you the opportunity. And while the globalisation of opportunity has not seen a marked prevalence increase, the number of people designated ‘problem gamblers’ has only increased by a similarly miniscule amount (0.7% – or 290,000 people – in 2010; up from 0.6% in 1999). These increases are so small that even the Gambling Commission has said they are of no statistical relevance.

All this begs the question as to what should be done. Well the first step would be to encourage the debate surrounding gambling to move to a more adult tone. Ignore the Daily Mail-style ‘Society’s going to the dogs’ headlines and instead discuss openly the very many benefits that gambling (in of itself) and gambling (as an industry) can bring. Parking to one side for a moment the arguments that gambling can be beneficial in of itself (using poker as a means to teach children to understand and gauge risk, etc.), the simple fact is that Britain’s often illogical gaming laws are seeing us fall behind and miss out on a great deal of investment and economic growth.

The example of Macau is a captivating one. The country started granting licences for destination-resort casinos (the kind seen in Las Vegas) in 2002. Since then, new licensees have spent an estimated $20bn constructing casinos and in less than five years Macau became the largest gambling market in the world. In the first six months of 2010, the country’s gambling revenues rose 66.9% compared with the first six months of 2009. Tourism increased by 17.9%.

There are currently no destination-resort casinos in the EU, so it is easy to see how the UK could achieve a great advantage. David Cameron wants to promote British tourism – liberalise our gaming laws and there’s his answer. And this does not involve granting one license for one ‘Super Casino’ and having a panel of stuffed shirts in Whitehall decide where to place it. It involves deregulating and allowing the market to work out where the best venue is. It could be Blackpool, it could be Manchester, it could be both, it could be neither. Let the people decide.

And what for struggling pubs? In early 2009, pub closures peaked at 52 per week. It seems that a pint of beer and a bag of pork scratchings are not enough to lure people in nowadays, so pubs are looking to new ideas. However current laws prevent them from diversifying their offerings, for example by running poker tournaments, and competing with casinos in terms of an entertainment experience. Pubs can run tournaments but they cannot charge for them; total prize pools are capped at £100 and players are restricted to a £5 stake over a 24hr period. It’s hardly the Bellagio. Pubs must be allowed to offer more than a dartboard by way of entertainment – it really is the only way to stop ever more of them having to close their doors.

The fact is that gambling is never going to be eliminated – and indeed it shouldn’t. What its critics fail to appreciate is that its lure is more than simple avarice. Instead, and much like with most sports, it is the thrill of the calculated risk that proves its draw. Driving it underground – as many would like see done – would not solve any problems, certainly not in regard to problem gamblers who, in any case, and by their very nature, will find ways and means to gamble. Instead we need to embrace it , to acknowledge its many upsides, and to make sure we reap the many rewards that its liberalisation has to offer.

The government puts its hands so deep into your pockets already that it seems somewhat churlish for it to tell you what you are allowed to do with the money left behind. You want to bet it all on black; be my guest.  Just don’t forget to tip the dealer on your way out.