Nelson McCausland: Betting firms are making big money, but we all pay the price of the online gambling boom
Something needs to be done to repair damage done by ill-considered 2005 legislation, writes Nelson McCausland
Over the past few weeks Brexit has dominated the news and other stories compete for the limited space available. I was therefore struck by the fact that a number of those stories related to problem gambling and the gambling industry.
Gone are the days of the back street bookmaker or the one penny slot machines at holiday resorts, with their black and white pictures of famous film stars of the day. The stake was one penny and the maximum pay-out was six pence.
Society has moved a long way from those days and Fixed Odds Betting Terminals provide the opportunity to gamble a stake of £100 every 20 seconds. They can be highly addictive and are known as the 'crack cocaine' of gambling. These FOBTs are in betting shops across the UK and last year there were an estimated 230,000 sessions in which a user lost over £1,000.
For that reason Parliament has decided to reduce the maximum stake for FOBTs from the current £100 to just £2. There were differences of opinion within the Government about the timing of its implementation and Sports Minister Tracey Crouch resigned when it was proposed to delay the implementation by six months, but in the end she was vindicated when the reduction was brought forward from the autumn of 2019 to the spring.
That is a good start, but FOBTs are only one aspect of the gambling industry and the growth area is undoubtedly online gambling. Bet365 is the largest British provider and it hit the headlines last week with the news that Denise Coates, the multi-billionaire boss of the gambling firm, paid herself a salary of £265m last year.
That works out at £726,000 a day and gives us some idea of the scale of online gambling. Bet365 is just one of the online gambling companies, but it has an annual revenue of £2.9bn, with annual growth of 25%, and an annual profit of £660m with annual growth of 31%.
Much of the growth in the gambling industry can be traced back to the 2005 Gambling Act, which liberalised the gambling laws. One of the changes was that it permitted gambling advertisements on television for the first time and around £200m a year is spent by the gambling industry on television advertising.
The 2005 Gambling Act was introduced by Tony Blair's Labour government, but there has been a change of heart in the Labour Party. Deputy Leader Tom Watson has taken a particular interest in the damage caused by problem gambling and in September he produced a series of proposals to reduce problem gambling.
Labour realise that they got it wrong and Watson's proposals make good sense, including a compulsory levy of 1% on the profits of gambling firms to fund treatment for addicts.
The Church of England has also unveiled plans for a special parliamentary inquiry into the 'social damage' caused by Tony Blair's liberalisation of gambling laws in 2005 and has argued that deregulation has spawned a gambling epidemic.
"It has been a huge experiment," said Bishop Alan Smith. "We are normalising gambling across a whole generation with no understanding of what long-term effect it will have."
It is true that betting companies pay a lot of tax and employ a lot of people, but the question that is now being asked more frequently is whether the cost imposed on society, in terms of debt, depression, despair, deprivation and family breakdown actually outweighs those benefits.
There are around 430,000 problem gamblers in the UK but the number of people affected is far greater than that when we remember all the hidden victims - especially the children and the partners of problem gamblers.
There are wives and partners who have to scrimp and save to put food on the table and there are children who suffer deprivation while their father feeds his gambling addiction. It is also important to remember that online gambling, in the privacy of the home and accessible 24 hours a day, has fuelled a dramatic growth in the number of female problem gamblers.
The evidence is overwhelming and there is now general agreement that something needs to be done to undo the damage caused by ill-conceived and ill-considered legislation in 2005.