Tottenham Report: Another Day, Another Set of Eye-Catching Headlines By Hannah Gannagé-Stewart, CDC Gaming Reports June 2, 2021 at 10:00 pm The House of Lords’ Peers for Gambling Reform group has landed a doozy with its latest contribution to the debate surrounding the UK’s Gambling Review. The cross-party group, chaired by Lord Foster of Bath, recently commissioned NERA Economic Consulting to conduct an economic assessment of select proposals to reform the UK Gambling Industry. In its subsequent report, NERA estimated that the impact of the reforms on the profitability of the gambling industry would be between £696m and £974m annually. Not surprisingly, the UK’s newest trade body, The Betting and Gaming Council (BGC), was up in arms. In his response to the report, BGC Chief Executive Michael Dugher decried it as “daft”, “fantasy” and “the dream of anti-gambling prohibitionists”. Safe to say then, he’s not impressed. The only problem is, the report does play beautifully into the hands of those who feel uncomfortable with the perceived greed of the industry, before you even get onto the cost of problem gamblers to the NHS and the society as a whole. In fact, looking at gross gambling revenue (GGY) for the pre-COVID era, which was reportedly £14.12bn between April 2019 and March 2020, even NERA’s top estimate represents just shy of 6.9% of the total GGY of Gambling Commission licensees at the peak of the market. On top of that, the NERA report – with the rather jarring caveat that excess expenditure cannot always be causally traced back to harmful gambling activity – estimates the cost to society of individuals who have harmful gambling habits to be in the range of between £270m and £1,170m per year. Of that, the UK’s much-loved but under-funded health sector is estimated to pick up a bill of between £180m to £760m annually. With those kinds of headline figures, NERA has certainly provided what it was commissioned to provide. It is no wonder Lord Foster was talking as if sweeping reforms to the industry were a fait accompli when it was published on 26 May. “This report clearly sets out the economic benefits of reforming the gambling industry with tax revenues looking set to increase, jobs that could be created and a boost to funding for research, education and treatment”, he said. “The evidence base and now the economic case for reform have been made. This government now needs the resolve to get on with it.” You can almost hear him triumphantly brushing the metaphorical dust from his hands before heading to the Lord’s bar for a celebratory tipple. However, Dugher’s response on behalf of the BGC, albeit similarly melodramatic, does provide food for thought. “The dream of anti-gambling prohibitionists has always been to somehow force people not to gamble or to gamble less, just because they don’t like betting. A minority of peers may look down their noses at the millions of working people who enjoy a bet, but the truth is that the overwhelming majority do so perfectly safely”, he argued. And this is true. Not only is it true, but operators have started setting ambitious targets to prevent harm to the minority that do suffer at the hands of their products. For example, Kindred Group (regularly a trailblazer for safer gambling initiatives) aims to make zero revenue from harmful gambling by 2023. If that goal is achieved by one operator, it is replicable. With that in mind, would ploughing ahead with reforms that cost the industry £974m really be helping to make it fit for the future? Or would it leave it hamstrung just as it was making progress? Another of the claims at which Dugher took aim was the idea that some 30,000 new jobs could be created if revenue that once found its way to gambling operators were redirected to other — allegedly more labour-intensive — sectors. The idea here is that because the gambling sector employs fewer people and pays them less per unit of expenditure than any of the four industries that NERA expects expenditure to divert to, it will create more jobs in those sectors than are lost in the gambling industry. The sectors expected to benefit from gambling’s reduced profitability are retail; food and beverage; creative, arts and entertainment; and sports, amusement and recreation. I’m no social scientist, but my first thought on reading this was: “How likely is it that a gambler, if not gambling, would instead go to the theatre?” The way Dugher expressed similar thinking was: “And the idea that somehow restricting betting would create more jobs is economically daft and frankly for the birds.” Actually, you need look no further than the report itself to see that its estimation may be overblown. “We assume that 100 per cent of money not spent on online gambling diverts to these industries”, it says, before pointing out “this is certainly an over-estimate”. Because, as one might assume, some of the revenue will not be spent at all, some may divert to alternative legal gambling activities, and some may divert to illegal gambling activities. The latter is one of the reasons that regulated offerings exist at all. However, NERA adds: “It is outside the scope of this report to estimate the amount of revenue that could divert to illegal gambling activities. Instead, we refer to the evidence submitted by then-CEO of the Gambling Commission Neil McArthur to the Select Committee: “There is no great sense of a burgeoning illegal market”. As we know, McArthur is no longer at the GC, after a somewhat swift and shady exit in March. It takes me back to my common fear about this review of the 2005 Gambling Act, which is this: Modelling the future, both as the industry may shape it and as these reforms may shape it, is taking a backseat to the more emotive issues in the here and now. And isn’t that how we ended up here in the first place? Perhaps there is no burgeoning illegal market because, at present, the regulatory model succeeds in keeping it at bay?