This is the first of two articles which consider the prospect of the introduction of ‘affordability checks’ in gambling. This first article looks at the potential proposals themselves while the second article will look at how we have arrived at a point where such radical proposals now appear an imminent possibility.
The White Paper
In recent months the prospect of a government White Paper which will herald a new dawn of ‘affordability checks’ on punters has cast an ominous shadow over horseracing in particular and the world of gambling generally. Concerns over what the new regime may consist of have, perhaps for the first time, united the majority of pundits, punters and bookmakers in condemnation of the idea.
Significant confusion remains however as to what any new system of checks will in fact look like. Reports based on supposed ‘leaks’ or off the record briefings have frankly only added to the confusion. Moreover in recent weeks we have been confronted by the somewhat bizarre spectacle of bookmakers claiming that they have already started to carry out invasive affordability checks on their customers at the behest of the Gambling Commission while at the same time the regulator denies having asked them to do so. Not for the first time there is sense of ‘regulation by rumour’ in British gambling.
The Social Market Foundation and ‘the protective influence of regulation’
The current concerns stem in part from a lengthy and detailed report into the gambling industry by the Social Market Foundation, an influential cross-party think tank. The report, published in August 2020 and entitled ‘Gambling Review and Reform: Towards a new regulatory framework’ is in many ways an impressive piece of work. But its recommendations on the subject of affordability checks are, regardless of anyone’s views of their merit, undeniably radical.
As has been widely publicised the SMF has recommended that a ‘soft limit’ of £100 per month be imposed on all punters. The report makes clear that this is not intended to limit all punters to losing only £100 per month. Instead the recommendation is that bookmakers should ask for personal financial information from customers who go beyond this limit, essentially in order to reassure themselves that the relevant customer can ‘afford’ to lose more.
This ‘soft limit’ figure of £100 has grabbed most of the headlines but that is not in fact what makes the SMF’s proposal so radical. The enormous departure from the traditional approach to the regulation of gambling in Britain which the SMF advocates is the curbing of gambling habits of people who do not in fact have a gambling problem.
The SMF’s central belief is perhaps best summed up at page 39 of its report:
“We believe that individuals should be at liberty to gamble as self-determining agents within a free market. At the same time, if that activity becomes disproportionately more costly than their income allows, making gambling not just unaffordable but also a precipitant of harm, then it is unreasonable to suggest that it should be mitigated by the protective influence of regulation”.
The theory then is that gambling more than you can afford to can lead to harm and that alone justifies regulatory intervention when you lose more than £100 in a month.
It only takes a moment’s comparison with other legalised but potentially harmful products to see why this is so controversial. While the government publishes clear guidance on the use of alcohol and tobacco, it neither actively seeks to limit the use of those products by adults nor does anyone investigate the extent to which adults spend their money on those products.
The difference between alcohol and gambling from the point of view of the SMF appears to lie in the relationship between ‘affordability’ and ‘problem gambling’. However, while acknowledging that the concept of affordability is hard to determine and that affordable gambling and safe gambling are not the same thing, the SMF’s report does frankly appear rely on a significant degree of conflation of these two distinct concepts.
‘Affordable’ gambling versus ‘harmful’ gambling
Within its report the SMF appears to agree with a suggestion that gambling is now a leisure activity similar to going to the cinema or going bowling. Indeed this idea that punters habitually treat gambling as an alternative form of entertainment to going the cinema seems to be at the centre of the purported logic behind affordability checks. But many punters would say that this represents a fundamental misunderstanding of their behaviour and psychology.
For many, gambling is an outlook (the argument goes) which permeates not just what bets they place but what decisions they make in their life generally: they are risk-takers willing to face greater losses in life in return for the chance to secure greater rewards. These individuals would say that they simply subscribe to a different but no less legitimate set out values to those who take no enjoyment from gambling. Making decisions which others might not make, or might even consider unwise or irresponsible, is not (they would say) remotely the same thing as having a gambling problem. Put another way, all sorts of consumers spend their limited money on products and services they may not need and which more risk-averse people might say they cannot ‘afford’. But in the absence of an actual gambling problem, why should the decision to have a bet be treated any differently to, say, purchasing an expensive new car which loses half of its value immediately upon purchase?
Certainly more needs to be done to protect against the harms caused by problem gambling, but the introduction of affordability checks poses a real risk that authorities are instead going to mistakenly drag those whose mentality it simply does agree with into the arena of the unwell. It is hard to see how this could be a positive development either for problem gamblers or for those who are in control of their gambling.
How then did we get to a point where the suggestion that bookmakers should assess the private financial records of their customers before deciding how much to allow them to bet has gained so much traction? On one level the answer is simple: the Gambling Commission has since its inception failed to set clear boundaries for bookmakers and then failed to properly enforce the rules it has set. The regulator has left itself open to the criticism that it has relied on headline-grabbing fines imposed on operators seemingly at random and is more concerned with being seen to take action than in actually regulating. While bookmakers cannot be absolved of blame, there is some merit in the suggestion that what is expected of them by their regulator has too often been unclear.
But the genesis of this quagmire and the concerns of impending regulatory overstep may in fact have their genesis entirely outside the gambling industry. In the second part of this article we look at the part which the courts may have inadvertently played in arriving at the current state of affairs.