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Friday, 10 October 2014

Getting on with Government: the Importance of Being Earnest

By Dan Waugh, Partner, Regulus Partners

"Life is never fair, and perhaps it is a good thing for most of us that it is not." Oscar Wilde

Life isn't fair. One would have thought that gambling more than any other industry might understand that fact - but sometimes you have to wonder.

Over recent years most parts of the Britain’s regulated gambling industry have felt cause to bemoan the “unfairness” of government interventions. In 2007 it was casinos (duty increase) and bingo clubs and arcades (slot machine restrictions); in 2009 it was casinos and bingo clubs (duty again). In 2014 and 2015 it’s the turn of betting shops and remote gambling (in both cases increases in duty payments and the potential for regulatory restrictions). The claim to fairness is also evoked by those seeking further regulatory relaxations (more slots, higher limits etc).

Amidst all the nickel and dime industry grumbles, one occasionally hears the call for government to set out a vision for the industry - a consistent and coherent framework that will enable us to understand the purpose of policy. For those of us in gambling, this appears entirely reasonable. Behind all the legislative detail, we reason, there must be a grand plan from government - an idea of how it perceives the role of gambling in Great Britain and how it will shape this. We form a legitimate part of the country’s leisure retail and entertainment industries and we deserve to know what the big idea is.

There are however a number of problems with this view. First, gambling is not simply another part of the leisure market - for reasons of substance and perception, society judges that gambling is different from say restaurants or cinemas. This context is important when we consider how much government feels it needs to care about us.

Second, government has expressed a vision for gambling in Great Britain. It underpins the Gambling Act 2005 and expresses a desire that gambling be conducted in a manner that is fair, transparent, free from crime and equipped with safeguards to protect the vulnerable. True - this is more an expression of what gambling should not be rather than what it should be - but it is a fairly clear articulation of principle.

Third, and crucially - it is not actually the role of government to articulate a more positive vision for gambling. It is up to the industry itself - and in recent years it has not done a particularly effective job of this.

Of course, there is no single body that is empowered to speak for gambling as a whole - but the behaviour of the main players suggests that for many senior executives the goal they are aiming for is simply to make the inherent human desire to gamble as profitable for their companies as can be. Recently this has been tempered by a re-balancing towards harm minimisation; but the over-riding image we are left with is of an industry trying to get rich quick without causing too much damage - hardly very uplifting.

We are left without any real sense that anything truly valuable (or even interesting) is being built - a process of extraction rather than construction.

There are of course exceptions. What Simon and Jimmy Thomas have built at The Hippodrome starts to reframe the question of why gambling might be an industry that government should support rather than simply control; and of course there are plenty of examples from overseas markets where governments have been able to contextualise a positive role for gambling companies within the highest levels of state policy.

We in Britain do need a vision for gambling if we are to escape the cycle of boom and bust (or liberalisation and repression) but we should not rely for this on either government or the regulator; nor does it play to the strengths of business school graduates or compliance officers. In order to carve out a better place in society, gambling needs to rediscover its entrepreneurial roots and its desire to entertain; only then will we manage to excite policy-makers to want the same things that we want.

We may find it difficult to put past injuries behind us - particularly when some of the wounds are still so fresh - but the time for lamentation and brow-beating is past. Now is the time to inspire.

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