“Paternalistic” restrictions won’t address problem gambling, says new IEA research

10 Mar 2021 12:52 PM

The government risks introducing “extraordinarily paternalistic” measures aimed at deterring people from gambling, warns a new report from the Institute of Economic Affairs.

• The government has launched a review into British gambling law to “make sure it is fit for the digital age”.
• Despite claims of a gambling “epidemic”, the number of people who gamble in Britain has not risen in the last decade, and there has been no rise in the rate of problem gambling since records began in 1999.
• Anti-gambling activists have called for an advertising ban, low stake limits, a monthly spending cap, slower gameplay and a ban on VIP schemes, bonuses and inducement.
• However, there is very little evidence that an advertising ban would have any impact on problem gambling.
• There is no evidence that a ban on sponsorship would yield any benefits.
• A £2 stake limit for online games and artificially long gaps between online bets would be, in essence, forms of neo-prohibition designed to deter gambling rather than tackle problem gambling.
• Limiting the amount people can spend on gambling each month would be “extraordinarily paternalistic”. There is no other market where consumer spending is restrained by the state.
• Over-regulation is likely to push gamblers towards unregulated websites. 4.5 per cent of UK online gamblers have used an unlicensed operator in the past twelve months and 44 per cent are aware of at least one unlicensed gambling website.
• Technology should be seen as the solution, not the problem. Big data can help identify problem gamblers and prevent harm.
• The current mix of regulation, self-regulation, guidance and private initiatives aimed at reducing gambling harm could be consolidated, formalised and made legally binding.
• These practical solutions, not the blunt tools of anti-gambling activists, could be the focus of the government’s review.

‘A Safer Bet: Gambling and the risks of over-regulation’, written by the IEA’s Head of Lifestyle Economics Christopher Snowdon, sets out how Big Data and sophisticated algorithms are used by some in the gambling industry to detect and support problem gamblers without the need for over-reaching regulation which appears designed primarily to reduce enjoyment.

Snowdon notes that while these practices are not universal, they could be made more widespread. He challenges calls from anti-gambling campaigners for measures such as an advertising ban, low stake limits, a monthly spending cap, slower gameplay and a ban on VIP schemes, bonuses and inducement.

Evidence these policies would reduce problem gambling is limited or non-existent. The number of people who gamble in Britain has not risen in the last decade and there has been no rise in the rate of problem gambling since records began in 1999. But there is plenty of evidence to suggest they would be detrimental to organisations which rely on gambling sponsorship, such as lower-league football, professional snooker, and darts clubs.

Protecting the vulnerable and preventing gambling becoming a source of crime are two of the three key objectives of British gambling law. The policies proposed by anti-gambling campaigners could undermine both of these by stimulating demand for unregulated websites that can be easily found via internet forums, search engines and affiliate sites. Many players will be unwilling to tolerate online content that has been made deliberately tedious and unexciting by limits on speed of play and stakes/prizes. Unregulated online casinos closely resemble their regulated competitors and, if advertising is also banned, consumers could have great difficulty distinguishing one from another.

Rather than shoehorn in a raft of ill-conceived, neo-prohibitionist policies designed to sap pleasure and deter gambling altogether, the government could address how best practice could be made standard – and in a way that neither infringes the rights of the average gambler nor hands a competitive advantage to the unregulated sector.

Christopher Snowdon, Head of Lifestyle Economics and author of the report, said:

“There has been no shortage of regulation and self-regulation in the gambling industry in recent years but none of it has satisfied anti-gambling campaigners. Despite being sufficient to fulfil the government’s longstanding objectives of protecting children and vulnerable people, preventing gambling being a source of crime, and ensuring that gambling is conducted in a fair and open way, activists and campaigners driven by anti-gambling sentiment demand yet more restrictions.

“The hard truth is that nothing can stop a pathological gambler from losing more money than they can afford if they are so inclined but problem gambling is endemic at low levels in all societies, and in Britain its prevalence is lower than average.

“Developments in technology have allowed customers to self-exclude, set deposit limits, set playing times and opt out of receiving inducements, such as free bets, as well as help gambling companies identify and support problem gamblers. Best practice could be made standard. Regulated online operators use a range of practical harm reduction measures which advance the government’s objectives without infringing the rights of the average punter or handing a competitive advantage to the unregulated sector. It is these practical solutions, not the blunt tools of anti-gambling activists, that could be the focus of the government’s review.”