Gambling

In the Introduction I mentioned a call from the Home Office, to ask me if I would be prepared to join a government committee looking into the regulation of gambling law. I was told it would involve around a dozen meetings and a similar number of trips to ‘gambling establishments’. How could I refuse? I agreed right away. In the event it took up almost all of my research time for the next yearand-a-half. I visited dog tracks, a spread betting office, amusement arcades, and casinos, ranging from the tawdry to the unbelievably opulent. One casino employed more chefs than it would have gamblers most days, and redecorated its restaurant every two weeks to fit in with the theme of the London season. I visited during the Wimbledon fortnight. I also had to read thousands of pages of submitted evidence, as well as many research papers and reports. But it was worth it. The committee, called by the unattractive name ‘The Gambling

Review Body’, had the brief of looking at all aspects of gambling in the UK, except the National Lottery, which was outside our remit. As I understand it, the government thought a review was needed for several reasons. First, at the time – early 2000 – it was recognized that the Internet was going to change the gambling scene in a very significant fashion, yet there were no regulations in place. The gap needed to be filled. This was a challenge as we, as a committee, needed to predict how the Internet gambling industry would

develop and grow. One prediction was easy. Internet business would gravitate to low-tax locations to avoid UK gambling duty and thereby make their offering more competitive and more profitable as well. At the time we started our deliberations, betting at bookmakers was subject to duty, which you could pay either on your stake or your winnings. However, there was no duty on stakes placed at the racetrack. Accordingly, professional gamblers would go to the races, as betting-office duty dug deep into their margin. But with new tax-free online betting opportunities from companies located in Malta and the Channel Island of Alderney, a good deal of business was switching offshore. Tax reform was therefore considered an urgent issue. That, then, was the easy Internet development to call. The other

was more difficult. What types of Internet gambling would be offered? There was little doubt that traditional horse and sports betting would be made available, but what else? We were worried about slot machines, and the possibility that every home or office computer could be transformed into a highly addictive gambling machine. As things turned out we seem to have been worrying about the wrong thing, and what has become probably the most popular form of Internet gambling – playing poker against other human beings – didn’t even occur to us as a possibility. In a way it is rather comforting that people seek out human company even on the Internet, rather than playing against a machine. The Internet, then, was an obvious gap in the regulations, and,

in the event, one we found hard to cope with. A second problem was that the introduction of the National Lottery had led to the allegation that the government was not following rules it had laid down for others, and so, potentially, could be subject to legal challenge. The immediate problem was that gambling operators were very limited in opportunities to advertise their services. At this time, for example, it was not permissible to advertise betting shops or bingo halls on television. We will explore the reasons for this later. But the point is that while commercial gambling providers could

not advertise, there were no similar restrictions on the lottery. A huge effort went into marketing the National Lottery, and other gambling operators felt that they were hampered by unfair competition, in possible breach of competition law. In addition there were other aspects of the then current law

which were possibly not compliant with generally understood ideas of fair procedure. For example, for reasons we will come to, the licensing authorities could refuse an applicant a licence to open a casino without having to explain the reason and without allowing the possibility of appeal. People were beginning to ask whether this practice was compliant with human rights legislation. Further, there were laws that seemed quite archaic. For example, if you wanted to go to play bingo, it was necessary to take out a membership of the club, which, by law, had to take forty-eight hours to process. This was to ensure that those who decided to go to play bingo had engaged in a sufficiently lengthy process of mature reflection before entering such a den of iniquity. Another strange quirk was that gambling contracts were not enforceable in law. If a betting shop refused to pay out you could appeal to a voluntary arbitration panel, but its rulings were not enforceable, and there was no further legal remedy. In the submissions we received, several letters were from people who claimed that they had been cheated on a grand scale, bookies refusing to pay out hundreds of thousands of pounds. Generally the bookmaking company believed that the claims were fraudulent, based on collusion with an employee who had falsified the betting slip, filling in the details after the races had been run. Who knows the truth? The claims were never tested in law. In taking on the question of what sorts of reforms would be

appropriate it was important to try to come to an understanding of why the law had developed as it had. It was also necessary to think more generally about the morality of gambling, and the reasons for its regulations. Given my background in political philosophy, and my general agreement with liberal principles, the issues, at first

sight, seemed to me reasonably clear. A generally liberal approach to politics and public policy suggests that if people want to spend their time and money gambling, then, in principle, there is no difference between gambling and going to a football match or a restaurant. Like it or not, what people do in their own time is their own business. As the authors of the Royal Commission on Gambling (Rothschild Commission), a UK report published in 1978, put the point:

In passing it is worth mentioning that the authors of this excellent 1978 report were an interesting group. In addition to Baron Rothschild, the Royal Commission included the philosopher Bernard Williams, the football commentator David Coleman and the journalist Marjorie Proops, best known as ‘agony aunt’ writing the ‘Dear Marje’ column for the Daily Mirror, among others. Their report, however, was ignored by the government as it had the misfortune of being commissioned by the outgoing Labour administration and was of no interest to the newly elected Conservative administration of Margaret Thatcher. In Chapter 6 we will see that the same fate befell another report commissioned at around the same time: the Black report on the National Health Service. As was true in 1978, and as it is now, gambling seems an

ordinary part of life for many people. There are betting shops everywhere. British families used to do the ‘football pools’ and now

they do the lottery. People have a fondness for a ‘harmless flutter’, entering sweepstakes for the Grand National or the World Cup, and having a go on the slot machines at the seaside. Indeed in the UK we are so relaxed about gambling we even let our children do it. The UK is one of the very few countries where it is legal for children to gamble, albeit for small stakes and small prizes, on slot machines, penny falls (also known as ‘pusher machines’) and cranes. Cranes are those machines where you might be able to pick up a furry toy by manipulating a crane mechanism in a glass box. They are often assumed to be games of skill, but in fact there is a gambling element as the grip of the crane varies according to a random pattern, so while skill is needed, it is never sufficient to win the prize. As it happened, seaside operators were worried that our committee might recommend further restrictions on gambling by children. Critics had pointed out that, while gambling by children on holiday with, and under the supervision of, their parents might be a harmless bit of fun, many children live near seaside towns and for them legal gambling could become a serious problem. In anticipation of criticism, a powerful lobby formed in defence of current practices, and the trade association organized a letter-writing campaign by seaside Members of Parliament, each of whom sent the committee an identical letter, arguing that to ban children from gambling would mean the end of the British seaside holiday, and that the practice was entirely harmless, adding ‘spice to a bit of fun’. There is, though, an interesting further angle to the debate about

gambling by children. Sometimes it is argued that allowing children to gamble for trivial stakes and prizes under the supervision of their parents is rather like the alleged French practice of allowing children to drink watered-down wine at meal times. In both cases it is claimed to lead to responsible practices as an adult. However, the evidence, at least in the case of gambling, is less clear. One ‘risk factor’ for developing a problem with gambling later in life is to have been introduced to gambling by your family. Another, apparently, is having a large win early in your gambling career, which can

give you the illusion that somehow you are good at gambling, and continual success is a legitimate expectation, almost a right (Bellringer 1999). Thinking about how people can develop problematic attitudes to

gambling can lead one to think about it in a quite different way. The occasional small-stakes bet is one thing, but hearing that someone goes to the casino every night makes us worried about them in a way in which we typically don’t worry if we hear that someone goes to the theatre or to hear music every night. It seems, perhaps, sordid, or rather sad, even if they can afford to lose. We also worry that gambling can be addictive, or lead to a loss of self-control, at least for some people. Or perhaps we think it reveals a mistaken approach to how to get on in the world. Many people have at least some negative reactions to gambling; they regret that it seems to be on the increase in many countries. Recent attempts to experiment with a ‘resort casino’ in the UK, of the sort to be found in Las Vegas, met with hostility, perhaps even bewilderment about why this was considered a desirable change. It was the subject of massive press campaigns. Eventually the idea of a resort casino fell into a black hole, and there seems little appetite to revive it. There are many different questions concerning the ethics of

gambling. One, of course, is whether it is wrong to gamble. Here we can see that views are divided. Another is whether it is wrong to profit from gambling, and a third, quite distinct, is whether it is wrong to encourage people to gamble (Doughney 2002). It is possible, for example, to be very relaxed and tolerant about gambling, as long as people arrange it between themselves in their own homes, while, at the same time, strongly objecting to the commercial provision of gambling in which companies profit from other people’s gambling. So, for example, in some countries gambling is, in effect, a nationalized industry with all profits going to the state. But even if one is prepared to tolerate commercial profit, it is possible to draw a line saying that there should be no encouragement in the form, say, of advertising. Indeed, as we will see later

in this chapter, all of these distinctions have played a role in legislation in the UK. However, an even more important distinction needs to be made

between questions of morality and questions of policy. Is gambling perfectly legitimate from a moral point of view, or are there reasons to have moral doubts about it, at least in some forms? But we need also ask what we can achieve through regulation. Both of these questions will concern us in what follows.