Nailing the affordability jelly to the wall
We take a spoon to the slippery problem of how exactly gambling affordability could be defined as it makes its way into law.
Welcome to the Pinchpoint edition #4. Thank you for subscribing.
In this issue we have a report on an enlightening All-Party Parliamentary Group on Gambling conflab; we have also read a book; we ask ourselves what the gambling industry might learn from other approaches to nailing down affordability, as well as taking in some perspectives from Europe.
No news as yet on a White Paper, but we have heard that the UK Gambling Commission is doing its bit for Government’s own cost-of-living crisis: rumours have just reached Pinchpoint of a household name operator having received notice of an eye-watering fine for failures related to inadequate affordability checks and gambling harm.
The All-Party Group Talks Affordability
The All-Party Parliamentary Group on Betting and Gaming is one of several hundreds of such informal associations. Each brings together UK legislators with a shared interest in anything ranging from yoga to space exploration. They have no powers or mandate to scrutinise legislation, but the good ones can be very influential in their field. In the debate about affordability and the gambling industry in general, the APBG competes for influence with an All-Party Group on Gambling Related Harms. Let’s just say they don’t have any members in common.
No surprise then that the APBG, which is considered to be positively disposed towards the gambling industry, chose to focus its session on the practicalities: is there a way to protect players without driving them to the black market? It produced a wide-ranging and well-attended discussion, better than you get most days in the House itself.
David Williams from Rank gave powerful testimony about the exodus of customers they experience when asked for “papers, please”.
Most of the discussion ended up returning to the principle of affordability checks in the first place. More than one of the MPs seemed exasperated by the idea that gambling is so different from everything else that people can’t be trusted to control their own spending.
Meanwhile, as the Platonic ideals were being chewed over, the chat window was a veritable riot. The talk there was of a national database containing everyone’s bets, deposits, and bank balances, and account data - the fabled Single Customer View, to which every gambler would have to allow their data to be submitted or be barred.
Pinchpoint does wonder whether the fastest way to drive players to the black market might actually be to entirely relieve them of their privacy as the price for placing a bet.
Defining affordability
One thing that was very clear from the APPG meeting, though, is that no one agrees on what ‘affordable’ means.
Some clever minds have taken a crack at this in the past, notably the Social Market Foundation a few years back, in the before times - pre-inflation, pre-covid. They derived a number based on statistics about what the average person can spend on leisure and not go hungry. £150, apparently.
Today, though, as the cost of everything except Bitcoin (and gambling company shares) continues to rise, it seems a more nuanced approach is needed.
But where to start?
“Fuel Poverty” is a frequent reference point for gambling affordability and is often cited as a prototype for a future definition.
You’d think it would be easy to count such a thing, given the tradeoff between heating and eating at the point of sale - but even the government is in three minds about what fuel poverty even is: England, Scotland and Wales all define fuel poverty differently. You can be fuel poor in England because you have leaky windows, but not in Scotland, for instance.
The measurements seem to become more complex as they try to integrate different and often conflicting policy goals. And with complexity comes impracticality, and constant need for review. Meantime, people go hungry or cold. Lesson one: we’d better hope that any definition of gambling affordability keeps it simple, and doesn’t try to do too much.
Another place to look is short-term credit - one of those areas where, like gambling, technology has galloped so far ahead of regulation the authorities are in danger of being lapped.
Buy-now-pay-later, the latest innovation in credit, lending happens instantly with automated credit checks and the money doesn’t even go via the customer’s bank.
Now that even the puritans at Apple are getting into BNPL (and causing some consternation) this form of credit has become the bingo of borrowing: that is, not really seen as credit debt, even though that is exactly what it is in the same way that bingo is often seen as not really viewed as being gambling.
For those clinging to the delusion that creditworthiness is a good proxy for gambling affordability, the booming BNPL industry should be a warning, not an inducement.
Recent regulatory inquiries have discovered that BNPL providers don’t even report their data to mainstream credit agencies.
It turns out this is just as well (for them, at least): many BNPL users use their high-quality credit scores to pay off one debt with another. The reward for having more debt is the ability to have more debt.
Therefore, a good credit score might tell a gambling operator the opposite of what they think it’s telling them.
Pinchpoint thinks it's time to start a proper, practical, discussion about what is ‘affordable’ gambling, with the goal of reaching a definition that is fair, factual and functional. Enough of the proxies.
Book review: ‘Jackpot: How Gambling Conquered Britain’ by Rob Davies
The temptation with Rob Davies’ book is to dismiss it as a diatribe from the anti-gambling lobby. This is not that type of review.
The book takes us on a tour d’horizon of how we got to where we are, taking in the toxic FOBT debate, the rise of gambling TV advertising, the rise of the VIP (or vulnerable, impressionable punters as Davies calls them) and the capture of football by gambling sponsors.
Although this book is very much on the side of those who would seek to further proscribe gambling, this is not a rant. It is particularly acute on failures when it comes to regulation, pointing, for instance, as the toothlessness of the UK Gambling Commission until 2013, when the government finally moved to a point of consumption regime from the failed point of supply regime previously.
The book quotes Dan Waugh who pointed out that “one of the biggest mistakes in British gambling regulation was that the requirement to hold a British licence didn’t happen much sooner”.
If we recall the lobbying undertaken by the industry at the time against the point of consumption regime, it is hard not to argue with Davies’ point that by the time the legislative change came about, the operator had “become used to a much more laissez-faire environment with limited scrutiny from the media or politicians”.
This is the backdrop to the litany of regulatory failures seen since then and the imminent restrictions to be imposed by the government. Cold comfort, then that the UKGC also comes in for much criticism.
Davies’ conclusion rightly points out that Britain “finds itself at a crossroads” with gambling. “We have some thinking to do about the place of gambling in our society,” he writes. “The journey is already underway.”
As he says, the upcoming white paper “promises to ask and answer” some big questions. But he makes the point that “huge unanswered questions remain over the effects” of the profusion of online gambling.
Davies says at one point that to raise concerns and to “err on the side of caution when it comes to protecting people is not to be anti-gambling”. It is a fair point. That the sector has needed to be reminded about its responsibilities quite so often by the Gambling Commission suggests it too often failed the test of caution in the past.
For the future, Davies also makes a point about affordability. “Politicians should think hard about integrating affordability checks into online play, ideally at levels that do not affect the vast majority of casual punters.”
Jackpot should be required reading for anyone interested in the sector’s future. Some of this book will be uncomfortable for many. But that is only right and proper. For if gambling is to enjoy a prosperous future in the UK, it needs to better understand previous missteps of which, as this book details, there have been many. Davies is a good enough guide for that, and someone the sector can learn from.
Cost-of-living - Euro edition
Recent polling from YouGov on attitudes among European respondents to the war in Ukraine come up with some interesting statistics for how the concerns around the cost-of-living crisis are European-wide.
Asked about their biggest concerns about the war, the survey found that fears over the war exacerbating the worsening economic picture via higher energy prices are clearly top of mind.
Further reading
Cost-of-living and UK rental housing while iGB reports on a survey from GamCare and YouGov (again) pointing to gamblers’ concerns over the current consumer cash crunch.
Meanwhile, the cost of groceries soars. “The soaring increases in the cost of food and groceries means the average annual shopping bill will increase by £380 in 2022 - more than another £100 since April alone, Kantar said.”
About
Pinchpoint is a newsletter from by Department of Trust and BetBudget.
The newsletter is published independently under the editorial supervision of Scott Longley of Clear Concise Media. Pinchpoint is not affiliated with any other publications.
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Contact
Charles Cohen, DoTrust: charles@dotrust.co.uk