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Why is the Betting Industry in the News at the Moment

It is 26 years since my boss sent me to sit behind counsel in my first betting case. There was an immediate attraction. John Bull QC v Sir Richard Beckett QC in a battle between William Hill and Ladbrokes in St Austell, Cornwall. A 5 star luxury hotel, 3 nights away with a stunning dinner each night (lawyers, company representatives and expert witnesses all dining together), and 550 miles at 42 per mile in expenses. I knew immediately that I wanted to be a licensing lawyer…2 weeks into being an articled clerk! What of the case? William Hill won a new licence and everyone left with hearty farewells.

Until the Gambling Act of 2005 became effective legislation I repeated this for Demmy, William Hill and then Ladbrokes, once, twice and sometimes three times a week and all was serene in the betting world. We fought like dogs in court….sometimes there were heated exchanges…but for the most part, good humour prevailed once the case was over. And the industry went along making money with little or no adverse comment in the media.

The court of first instance was the magistrates’ , with a route of appeal to the Crown Court for both parties. No political influence, no suggestion that betting was an overtly worrying pastime. All out in the open, on the High Street and carried on by a well regulated industry. The only real issues to be determined by the courts were:

  1. The suitability of the premises. Were they compliant with certain regulatory compliance checks?
  2. And the real battle ground…was there demand for a new licence?

All great fun, but now in the dim and distant past.

What has changed? Why so much negativity in some quarters towards the betting industry?

  • We now have premises licensing controlled by the Local Authority.
  • Fixed Odds Betting Terminals (“FOBTs”) generate huge profits, and some would say are the primary reason for the grant of many new licences.
  • No demand test and a relaxed planning environment, which have led to unprecedented growth in the number of betting shop licences in some areas.
  • Huge competition from online betting and gambling operators.

It really is worth just taking a step back to analyse where the issues are and whether there is any substance to them.

The Gambling Act 2005 moved the licensing of premises for the provision of betting facilities to the local authority in whose area the premises are situated. What has happened since that point, with the removal of the demand test, is that operators have been able to go through a relatively straight forward process of applying to the authority for a premises licence.

Virtually all licences have been granted by delegated authority or after a hearing where objectors have been able to articulate their representations. Some have been refused, but not many. Not a single refusal has been upheld by the magistrates’ court on appeal…anywhere in England and Wales. Some say this is indicative of the unreasonably liberal drafting of the legislation. Others point to the decision of the legislature to relax and liberalise the provision of betting, after Alan Budd’s report, years of deliberation and parliamentary scrutiny.

What has happened as a result, is that nationally the number of betting shops has not increased. There is a finite spend available from potential customers and the free market has led to a reasonable distribution of new licences. However there has been a large increase in some inner city areas, and particularly in some London Boroughs.

What exercises these authorities against the further proliferation of licences? The main issue is concern surrounding FOBTs. Each betting shop premises is automatically allowed 4 of these high stake and prizes machines. There has been a significant rise in the amount of money gambled using FOBTs in recent years. Between October 2013 and September 2014, £1.6bn was lost by gamblers using the machines, up from £1.3bn in 2010-11, according to the Gambling Commission. Bookies now make more profit from these machines than they do from horse and dog racing and other bets combined.

Some 93 councils in England and Wales called for the highest stake on fixed-odds betting terminals to be cut from £100 to £2. However, the bid to have the stakes and prizes reduced was dismissed by the Government.

Newham Council, which led the campaign, said the move would help prevent clusters of betting shops, particularly in deprived areas. The proposal had been submitted under legislation which allows councils to urge central government to change the law to help them promote the “sustainability of local communities”. The Government said it had already introduced stronger controls through changes in planning permission for betting , which will give authorities greater control over their number and position.

Newham’s mayor, Sir Robin Wales, said the decision was an “insult” to councils. “We will challenge this decision, because without a reduction in stakes, FOBTs will continue to blight the nation’s high streets,” he said.

Earlier this year, new rules were introduced which mean anyone wanting to place a stake over £50 on the machines has to interact with staff or set up an account with a bookmaker. The Government said this change will allow staff to monitor behaviour, and act if they identify signs of problem gambling.

All bookmakers have to comply with rigorous compliance tests carried out by the Gambling Commission, in order to be granted and maintain an operating licence, which is a condition precedent for operating from high street premises. Government believes these tests are stringent and it also monitors potential issues of problem gambling through regular prevalence studies.

Bookmakers operate voluntary self exclusion programmes where customers who feel their betting is getting out of control can voluntarily exclude themselves from betting in certain shops or with certain operators. Glasgow is taking the lead and going a stage further, and for the first time people in Scotland will be able to call a confidential helpline to exclude themselves from all 36 of the city’s high street betting shops, regardless of the operator.

The scheme, launched as a three-month pilot by the Association of British Bookmakers (ABB) and Glasgow City councillors, will also allow individuals to select individual shops they would like to refuse them service. Previously, anyone in the Scottish city wishing to exclude themselves had to do so by contacting one shop at a time and filling out a form for each different operator.

The helpline will also provide advice on how to deal with, and receive counselling for, a gambling problem.

Malcolm George, Chief Executive of the ABB, said: “This is a very important step towards helping problem gamblers in Glasgow stay in control, and get the help they need. High street betting operators want all customers to enjoy their leisure time and gamble responsibly. We also want to help those who may be getting into difficulties, and this scheme is a big step forward to achieving that. In addition, it will directly shape the UK-wide scheme that will begin next year.”

Glasgow City councillor Paul Rooney was more cautious, stating: “Only time will tell if it will offer more effective support for Glaswegians who are struggling with their gambling here and now. But, I also want to ensure the city uses this opportunity to gain a better understanding of who finds their gambling become a problem, how they try and cope with that, and to what extent they are able to bring it under control.”

However, the scheme has been decried as a PR exercise by a gambling campaign group, citing issues with enforcing the exclusions. Adrian Parkinson, director of the Campaign for Fairer Gambling, “There is nothing new about self-exclusion. It has been operating in betting shops since the mid 2000s.The bookmakers are trying to improve a system that has consistently been shown to be ineffective in helping pathological problem gamblers to exclude from betting shops.”

Instances of self-exclusion have been on the rise across Britain, according to statistics published last month by the Gambling Commission. New self-exclusions recorded by operators rose from 22,541 for the period April 2012 to March 2013 to 28,844 between October 2013 and September 2014.

We will continue to monitor the success of the Glasgow self-exclusion pilot and whether Newham does indeed attempt to challenge the Government over their reluctance to reduce the stakes and prizes for FOBTs….and any other potential changes affecting the sector.

I can still remember Sir Richard Beckett’s face when, after asking for a lift to the station, he saw my blue Fiesta 1.1L…complete with coat hanger as a radio aerial…and no heating!