The plot against gambling: how a powerful lobby is out to change betting forever

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The House of Lords was not exactly full on the afternoon of Friday, November 19.

Parliament's unelected upper chamber was close to completing its debate on the second reading of the Coroners (Determination of Suicide) Bill. Only 14 members were occupying the famous red benches, one of them being Baroness Scott of Bybrook, who rose to her feet at 2.07pm, dressed entirely in blue, fittingly for a government whip in Boris Johnson's Conservative administration.

She began by congratulating Dr Alan Smith, the Bishop of St Albans, on securing this latest stage in the passage of his bill. As a long-time critic of the gambling industry, including as vice-chair of Peers for Gambling Reform, it was understandable the bishop was using his position in the house to discuss the subject and, in particular, his belief that a coroner or inquest jury should be required to record gambling addiction in relation to an applicable death by suicide.

One of the early contributors to the debate was Lord Brown of Eaton-under-Heywood, a former law lord and justice of the Supreme Court. He prefaced his comments by noting: "I bring to this debate very little expertise about gambling." From that position of having minimal knowledge of the subject, he then declared: "I recognise that gambling is a huge attraction to some – a craving, an addiction and, in truth, a cancer in our society today."

What Lord Brown said might have raised at least some of the eyebrows occupying the chamber, yet there was no great need to be concerned by the apparent sensationalism in the commentary of a crossbencher. The voice of the government, surely more balanced and nuanced, was also soon to be heard.

Baroness Scott duly explained why there were enormous complexities in determining what had caused an individual to take their own life. The government, she advised the bishop, could not support his proposed legislation, yet she prefaced her response by making a statement with which the right reverend would most definitely have agreed.

"At the outset," said Scott, "I have to say that the government are absolutely determined to prevent gambling-related harm and suicide. Gambling is one of our society’s major ills. It causes untold misery and distress to countless families across this land."

According to the baroness, gambling is "one of our society's major ills". She had not homed in on problem gambling. She was talking in a more general sense about gambling, an activity that can encompass the purchase of a lottery ticket, a night at the bingo or a £1 each-way bet on the Grand National.

It was a remarkable view for a member of the government to express, yet although alarming to hear, such comments are so commonplace they no longer even shock.

A powerful and influential coalition has formed that accommodates some of the strangest bedfellows. It features politicians who would normally never agree on anything; it has advocated policies applauded by the Daily Mail and equally so The Guardian; it has been embraced by health professionals, academics, regulators and clerics.

What unites those on board the campaign is the conviction that gambling should now be treated as a serious public health issue, analogous to the consumption of tobacco.

They want to impose significant restrictions on those who enjoy betting. They want to challenge hitherto untouched freedoms. If successful in their ambitions, anyone wishing to place a wager of any nature would be subjected to affordability checks and left with no choice but to permit inspection of their financial dealings by an ombudsman empowered by the state to decide whether or not they should be allowed to spend money on betting.

This all matters now. The government is poised to set out its plans for the future of gambling in the United Kingdom either before Christmas or soon after. Figures on both sides of the debate agree on one thing: what is proposed in the next stage of the gambling review could unleash the biggest regulatory changes in a generation.

An unlikely alliance

Bookmakers used to be seen as pantomime villains. They were bracketed alongside estate agents, journalists and second-hand car dealers, figures you loved to hate. Of course, you did not really hate them, for unless personal experience influenced your thoughts, there was no need for enmity. It's not like that now.

Gambling has increasingly been uttered by some as though it is a dirty word. It is hard to believe that at any other time a government minister would have addressed either house of parliament and described a perfectly legal pastime as one of society's major ills. Indeed, the late Tessa Jowell, the culture secretary responsible for the 2005 Gambling Act that is currently being reviewed by government, accused some of those who railed against her liberalisation of gambling laws as guilty of "a whiff of snobbery".

So what changed?

The nature of betting has changed as bookmakers have added remote business to their offerings

Gambling certainly changed. Once upon a time the idea of a bookmaker conjured up a different sort of picture in people's heads. They might have imagined Honest Sid, shouting out the odds from a wooden box at Kempton Park. The bookmaker was real. That caricature no longer exists in the public consciousness.

The industry has undergone a corporate revolution. The once personal has become largely impersonal, not least through the advent of the internet and remote betting. Where there was mainly just bookmaking, there is now gaming. The two things are very different but are often conducted by the same businesses. As such, they are seen by many as the same thing, deserving of the same disdain – and few things have provoked as much fury (or as many travails for the industry) as fixed-odds betting terminals, whose numbers in betting shops increased significantly as a result of the 2005 legislation.

Yet the machines are now heavily regulated, with maximum stakes brought down from £100 to £2 in April 2019. The battleground has shifted to include other forms of betting, the extent to which individuals should be free to bet as they choose, and the right of gambling companies to advertise.

Gambling industry commentator Dan Waugh, a partner at global strategic advisory business Regulus Partners, says: "The change in tone might be partly down to a shift from betting being a physical, in-person experience to something more virtual and less dependent on human engagement. The rise of remote gambling has changed the way the public at large perceives betting – and, on balance, not in a good way."

An insider perspective is provided by gambling reform activist Matt Zarb-Cousin, himself a recovered gambling addict.

"There is a very difficult balance to strike," says Zarb-Cousin. "Many people enjoy gambling and don't have a problem. However, I don't think it's something that should be actively promoted – and I believe many people feel uncomfortable about the types of product that are the most heavily promoted, primarily casino products and slots.

"If you sign up to gamble on racing or sport you get cross-sold those other products. For me, that conflation of bookmaking with gaming products is where the line was crossed. That happened to an extent with fixed-odds betting terminals but it was mainly driven by the remote sector and its advertising."

Zarb-Cousin is also a prominent left-wing political activist, having been a spokesperson for former Labour leader Jeremy Corbyn. The latter's long-time deputy Tom Watson was an early critic of the gambling sector within Labour's ranks. With Watson now on the payroll of Flutter Entertainment – parent company of Paddy Power, Betfair and Sky Bet – that flag within the party is most enthusiastically waved by Swansea East member of parliament Carolyn Harris.

Ideologically, there would not be much to unite Harris with fellow MP and one-time Conservative Party leader Sir Iain Duncan Smith. What brings them together is a conviction that those who bet need to be more closely watched.

Harris is chair of the All Party Parliamentary Group for Gambling Related Harm, an organisation that even has its own impressive website. Duncan Smith, very much towards the right wing of Tory thinking, is one of the vice-chairs. The two also joined forces in May to endorse a report produced by the think-tank Duncan Smith created, the Centre for Social Justice. The report's recommendations – about which more later – have the capacity to devastate the gambling and horseracing industries if ever implemented.

Politicians are only one of the main groups of players in the movement to shackle gambling. Together, they espouse that gambling is one of the leading public health issues of our time. Not surprisingly given that line of attack, among the most strident critics of gambling have been high-profile figures in the public health sector, including Clare Murdoch, NHS England's National Mental Health Director, and Henrietta Bowden-Jones, spokesperson on behavioural addictions for the Royal College of Psychiatrists and founder of the National Problem Gambling Clinic.

The end result is an ever more powerful, and similarly successful, lobbying alliance. Crucially, it does not struggle to get its opinions expressed in the media, with extensive coverage provided by the Daily Mail's Tom Witherow and Rob Davies at The Guardian, which in February plans to publish a book by its reporter that promises to expose "the sinister inner workings" of the gambling industry.

"Public health itself has become an industry and is therefore constantly looking for new areas to become involved," says Waugh. "Public health is progressively working its way through all areas of consumption and consumerism – seeking to exert control over what we eat, what we drink, how we spend our spare time and how we get our kicks. Everything has come together to create a perfect storm."

Matt Zarb-Cousin has been one of the most prominent members of the campaign for significant gambling reform

Explaining how and why such a strange cast of characters has come together, Zarb-Cousin adds: "This is one of those unusual issues that cuts across political lines and it's interesting how it's united left and right. When reform proposals are put forward, different groups have different views, but I do think a consensus has developed around what types of reform are needed.

"I suppose it can look coordinated but, in my opinion, it's more about the strength of ideas and there being a natural consensus around what needs to change."

The nature of some of the desired changes is seismic.

State surveillance

On May 17, 2021, Duncan Smith's Centre for Social Justice published a report entitled: 'Not a Game: A call for effective protection from the harms of gambling.'

On its front cover was a picture of three young people sitting around an equally young man who is shown with his head in his hands. It is not a happy scene.

In his foreword to the report, Duncan Smith does not mince words, telling readers: "The gambling industry now poses a very real threat to our communities and the time has come to get a hold on this pernicious addiction which has such a strong connection to social problems, including drug and alcohol addiction, debt, family breakdown and crime."

The CSJ's remedy is one based on Big Brother-like state surveillance of those who bet.

It pushes for the introduction of affordability checks, whereby an individual's ability to place any sort of bet would rely on a government-appointed ombudsman agreeing that the person should be allowed to spend the money in the way he or she wants. It would represent an unprecedented erosion of hitherto sacrosanct civil liberties. Those wanting to bet would suffer a considerable loss of privacy by being compelled to permit analysis of their bank accounts by the ombudsman. Moreover, whether or not we can bet would be determined not by our own judgement but an algorithm.

The report says: "Once risk factors can be accurately identified and agreed upon, we recommend that the ombudsman work with data analysts, banks, and credit agencies to construct an algorithmic tool capable of classifying a person's financial harm on a scale. The ombudsman would be responsible for determining the threshold for affordability and also capable of changing any criteria if further data suggests this is necessary.

"Any and all decisions made about affordability must rest with the third-party ombudsman and its decision must be enforced by the operators."

Banks would be made to share customer data with the ombudsman, but it would be the betting operators that then had to intervene by rejecting a bet.

Central to making the entire system possible would be the compulsory tracking of all transactions. With the surveillance of remote gambling deemed insufficient by the CSJ, anyone placing a cash bet – even the purchase of a National Lottery scratchcard – would first have to provide PIN details. As such, all activity could be recorded, monitored and analysed by the state using the unexplained algorithm. The outcome would be the introduction of a gamblers' register in which everyone who bets has their personal information logged on a government list.

"The CSJ recommends that all gambling transactions must be verified via debit card details to confirm an individual's identity and thereby provide the financial sector holistic data on all gambling spend," states the report.

"The classification of all gambling spend by merchant category codes also allows for banks to use machine learning to review gambling customers' financial positions and gambling spend. An algorithmic approach ensures objectivity in affordability measures and limits any privacy concerns individuals may have... Once a customer has reached the affordability threshold set by the regulatory body, gambling operators must take immediate action to block that user from their platforms."

It all amounts to Orwellian interference by the state. Asked to jump through intrusive hoops, and deterred by the knowledge that their betting activity would be policed by the government, the pleasure of punting would be massively diminished, as would the number of people who bet. It is nigh on certain that many would rather stop betting than consent to external inspection of their financial dealings.

The consequences for the gambling industry would be monumentally damaging. For the sport of horseracing, so heavily funded by those who bet, the outcome would be equally catastrophic.

British racing's leaders estimated earlier this year that affordability checks could cost the sport more than £60 million a year in reduced levy income and media rights payments. Even starker in his warning was Arena Racing Company chief executive Martin Cruddace, who forecast an annual loss of £100m based on a projection that between 60 and 70 per cent of punters would reject having to prove they could afford gambling losses.

In addition, the CSJ wants the government to impose a ban on anything that promotes bookmakers, betting or gaming.

The report argues: "We call for the comprehensive elimination of gambling marketing, inducements, and advertising in the UK... We recommend that policymakers consider an approach akin to that applied in tobacco control, which takes into consideration all forms of advertising, including promotion and sponsorship. Additionally, the implementation of the Tobacco Advertising and Promotion Act 2002 would provide a guideline for advertising regulation that could easily be followed."

The ban would likely bring to an end almost all mainstream television coverage of the sport, given that it depends on commercial broadcasters – currently ITV and previously Channel 4 – being able to make profits out of partnerships and advertising deals with bookmakers. Racecourses would also be denied by far their biggest source of sponsorship income.

"It's important to stress we're not anti-gambling," Duncan Smith tells the Racing Post.

"It's time to have tighter control to protect those who become vulnerable and should not be gambling. We also need an acceptance that the way some gambling companies make most of their profits from people who gamble excessively is an abuse and almost immoral.

"We're anti a completely unregulated industry and a fairly toothless commissioner that doesn't intervene when seeing a gambling company is not doing the right thing."

Duncan Smith is wrong to claim the industry is unregulated. The British gambling sector is one of the most regulated in the world, while the Gambling Commission, for all its failings, regularly imposes penalties. Even where Duncan Smith is right – particularly when talking about the terrible consequences that can befall the victims of gambling addiction and their families – he all too often offers solutions that are, at best, highly questionable.

So, too, is the report's credibility, as when speaking to the Racing Post this week, Duncan Smith directly contradicted some of his own document's principal points.

Sir Iain Duncan Smith: 'I've had flutters on things, although I'm not a professional gambler'

He told us: "We're not asking anyone to monitor every bet." That does not tally with the report's recommendation that "all gambling transactions must be verified via debit card details" or that an employee of the state would have the ultimate say on approving a bet request.

Asked about the CSJ's call for an advertising ban, Duncan Smith insists: "We're not banning all advertising. For us it's not about that." Yet in his foreword to the report, the member for Chingford & Woodford Green says: "We call for a broad range of bold measures including the ban on all gambling advertising."

It begs the question, what are we supposed to believe? On top of that, what are we supposed to believe he believes?

"We're not at all anti-gambling," he repeats. "I've had flutters on things, although I'm not a professional gambler. We fully understand racing's need for levies from gambling. It's all much better controlled in racing, too. We're just trying to get things into a reasonable state. We're not trying to ban gambling. Don't worry."

But the sustained opposition to gambling as a respectable leisure pursuit is a worry, particularly as the CSJ report is far from the only one of its kind.

In their August 2020 report for the Social Market Foundation, 'Gambling review and reform: Towards a new regulatory framework', authors Dr James Noyes (a former advisor to Tom Watson) and Jake Shepherd also recommend the creation of a gambling ombudsman and, for punters, a monthly net deposit threshold of £100 (or £23 a week), after which the ombudsman would be compelled to determine if any further gambling spend was affordable to the individual in question.

Noyes and Shepherd argue: "Our model enables us to conclude that a 'soft cap' threshold of £100 per month, based on net deposits, should be applied across operators on all remote gambling activity, after which enhanced customer due diligence checks should be made."

The authors, who write about a "public health crisis" in relation to gambling, add: "We recognise that affordability can change depending on circumstance. We also recognise that some free agents engaging in a fair market might want to spend more than others, and that affordability will mean different things to different people. However, we maintain that when it comes to preventing gambling-related harm, consumer protection is a priority."

For vulnerable individuals that protection might be welcome. For many other punters it will be interpreted as unnecessary, unwelcome and entirely inappropriate interference. Yet that sort of narrative is pumped out regularly by academics, commentators and senior public figures, including within the NHS.

The news section of NHS England's own website last year posted a story about Clare Murdoch, the head of mental health care in England, writing angry letters to the heads of a number of gambling firms.

"The links between the sporting industry and gambling are deeply disturbing, and the tactics used by some firms are shameful," Murdoch told her employer. "It is high time sporting bodies get back to their roots and start focusing on fans and families enjoying watching their heroes play, rather than allowing firms to hijack sport in pursuit of profit."

The reality is most sports event sponsors 'hijack' an event for commercial reasons. Murdoch's implication that it is wrong for betting organisations to make a profit further implies that betting is somehow improper, while in failing to appreciate that sport itself is driven by profit, she is either stunningly naive or deliberately disingenuous.

"After seeing the destruction the gambling industry has caused to young people in this country, it is clear that firms are focused on profit at the expense of people's health," Murdoch told The Guardian earlier this year.

The NHS may not have an explicitly official position on gambling but it is evidently content for senior figures within it to be part of the campaign against gambling.

A genuine threat

This is not a quiet time for the Conservative government. The Covid crisis continues, as does the fallout from Brexit. One school of thought says that when the now-imminent white paper of the gambling review is published it will seek to be as balanced and uncontroversial as possible. Given the ferocity of gambling's critics, achieving an outcome that placates all will not be easy.

In recent days the heat has been turned up even more. Over 160 MPs and peers gave their backing to a letter sent to the prime minister on November 17 by members of the All Party Parliamentary Group on Gambling Related Harm and Peers for Gambling Reform.

The nine signatories to the letter – who include Duncan Smith, Harris, the Bishop of St Albans, former Scottish Conservative leader Ruth Davidson and Lord Grade, previously a senior figure within the BBC, ITV and Channel 4 – call on Johnson to be "bold" in the legislation. Troublingly, much of the evidence for reform they present is not based on fact.

They argue that "on average a problem gambler commits suicide every day", yet that statistic is one that can only be based on guesswork, not evidence. The letter states a discredited figure when referencing the annual cost of gambling harm, while their assertion that 60 per cent of the gambling industry's profits "come from the five per cent who are already problem gamblers or who are at risk of becoming so" is an unsubstantiated claim that comes from a corrupted reading of a 2016 report.

There is a danger that a vital public policy debate is being distorted by the presentation of misleading evidence. That is a real cause for concern. Some friends of racing in Westminster are also expressing fears that Chris Philp, the minister now with direct responsibility for gambling, could see the review as an opportunity to markedly raise his profile. Philp has already said enough to suggest he has much less confidence in the gambling industry than his predecessor in the role, John Whittingdale.

Chris Philp is now the Conservative minister directly responsible for gambling

It all adds to real uncertainty over what will feature in the white paper. However, Zarb-Cousin, founder of the Clean Up Gambling campaign and respected on both sides of the debate, insists that in determining what action should be taken, a range of approaches are essential.

He says: "If drugs were legalised and you bought cannabis from a newsagent, you wouldn't then want the shop to try to sell you heroin or cocaine. I'm not saying gambling is necessarily analogous to drugs, but the problems come from operators offering a range of products. The bookmaking and betting aspect gets lumped in with the gaming, slots and casino, which is where the harm really takes place. I think it's important to differentiate between the different products and regulate them appropriately."

Zarb-Cousin adds: "In my conversations with parliamentarians and other groups, I've never met anyone who wants to ban gambling. If I ever were to meet anyone who wants to ban gambling I would say that would simply lead to the same problems we have with drug policy, namely you force it underground. It's much better for the consumer that the industry is legal and regulated.

"I did Radio 4's The Moral Maze and was cross-examined by Giles Fraser, who asked me if I now believed it was immoral for me to have gambled. I thought that was a real throwback argument. I feel the discourse has moved on from that. I don't think anyone with a significant platform in this public policy debate has a moral objection to people gambling. There might be some who perceive the behaviour of the gambling industry as immoral, but not gambling itself."

Despite that assertion, the most draconian reimaginations of gambling regulation could have an effect not far short of banning the activity. The public protestations of the anti-gambling lobby are often far removed from what they are actually seeking to achieve. For that reason, the industry has for some time been in combat mode, without ever really looking like it is winning the public debate.

That, in part, could be due to the breadth and skill of its opponents, whose message can be carried on the back of powerful real-life stories of the most enormous sadness. Waugh also asserts that there has been a futile tendency to offer pointless olive branches, such as recent signals of willingness to support an advertising blackout.

He says: "There is some industry support for giving up broadcast advertising – but it is not clear this would benefit consumers. Its importance is likely to be symbolic in that it would reinforce claims that 'gambling is the new tobacco'.

"Policies of appeasement generally have the effect of encouraging those you are trying to appease to push on progressively for more and more – and policies of appeasement are particularly disastrous when applied to the public health lobby, which has set out a strategy based upon the achievement and consolidation of small victories."

Those victories have continued to mount up. Some have been widely and justifiably applauded, helping to shape the gambling industry into something that is more responsible and committed to customer protection. However, where we are is still nowhere near good enough for those most hostile to the industry.

"There needs to be something to arrest this swing," says Waugh. "At the moment it's not obvious what that will be. The Gambling Act review could do that, but if it tries to strike a balance the public health lobby will simply say it isn't what it wanted and ask where are the affordability checks, the spending caps and the complete ban on all forms of advertising?

"They will keep going, piling on the pressure. It wouldn't then be difficult for the government to make changes through secondary legislation, plus it's remarkably easy for the Gambling Commission to make changes through licence conditions. In fact, the Gambling Commission can do anything that isn't specifically reserved for the government."

Waugh adds: "If you're a gambling consumer, are you going to have to forgo privacy when it comes to your bank statements as a condition of being able to gamble? Well, it's not going to happen tomorrow, but could it happen in five years' time? It absolutely could.

"I think these threats are very realistic. If you get into a cold bath, it's not very pleasant. If you get into a hot bath that gradually gets cooler as you lie in it, you don't notice it so much. That's what's happening with the gambling industry. So much has changed for the better over the last five years, yet the hysteria is at a higher pitch than it was five years ago – even though all the evidence tells us harm-related gambling is decreasing. It would be naive to think things cannot get worse."

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