Written evidence submitted by Clive Carter (GA 1 8 )

Implementation & Operation of Gambling Act (2005)

Summary: The Committee may wish to consider:

§ research into the effect of low brain-dopamine levels

§ abolishing the direction that licencing authorities should aim to permit (gambling premises licence Applications)

§ no longer permitting the ‘crack-cocaine’ of the gambling industry – Fixed Odds Betting Terminals – in respect of new gambling licence applications

§ ways of reducing the number of FOBTs in existing premises licences, to reduce social harm & inequality

§ recognising (formally) that gambling is fundamentally different from ordinary retail business due to its significant obsessive-compulsive and addictive aspects, especially in regard to consumers of FOBTs

1. At the time of writing, there seems to have been inadequate publicity for this enquiry. There seems to be a late awareness, or an unawareness, of local representatives publicising it. Locals have only heard about this recently on the grapevine. It is hoped that an extension to the Thursday deadline may be possible so that more community groups may come know of it and be given adequate time to prepare submissions.

2. It would be a shame, unfair and unreasonable if, due to a lack of publicity, the Committee was in receipt mainly of representations from the gambling "industry" which is doubtless well-funded and organised and has had good notice of the chance to make submissions.

3. An enquiry of this nature is to be welcomed; it is overdue. There has to be concern however that the agenda appears to have been at least partly set via lobbying from the gambling industry in the same way that gambling interests lobbied for the Gambling Act 2005.

4. I note on the Committee’s web page, the choice of the word proliferation; this is used to describe the impact of off-shore on-line gambling operators. This appears to appropriate the word from community groups. Is this usage a calculated attempt to confuse and to muddy the waters about real issues of concern to ordinary people? i.e. the clustering and even saturation of betting shops in certain areas, especially poorer areas.

5. The agenda queries why there have not been more casinos. Possibly, because of some of the advocacy has been questionable. For example, a proposal in March 2006 by a North London council claimed that a casino at Alexandra Palace would promote regeneration and be of particular benefit to black and minority ethnic communities and socially excluded neighbourhoods (?!) The Casino Proposal was not adopted by Haringey Council’s Cabinet Executive. That did not prevent the Palace Trust Solicitor writing (2006–07–07) to the Charity Commission, arguing that Casino use does fall within the objects of the Charity as a recreational activity. If extended, would this logic not see Ladbrokes et al consider seeking charitable status for their operations?

6. I have been involved in the Find Your Voice group (FYV) in Tottenham. FYV campaigned against the conversion of a record shop (Everybody’s Music) to a betting shop. This is a prime corner site, opposite the Seven Sisters London Underground station. The council’s declinatory planning decision was appealed against by Paddy Power, yet the Planning Inspector sided with the Council.

7. That was a rare win by the community against betting shop proliferation and a victory based solely on the fact that the planning application reflected a change-of-use (from A1). Normally, betting operators seek to acquire premises that are already classified as A2: Financial Services.

8. In any event, betting is not clearly a financial service. If it has to be placed under any generic heading, it is perhaps a singular and anomalous form of entertainment. The betting industry is keen to portray their operations as simply another form of retail business and therefore anxious to be grouped with others. In my opinion, betting shops require a sui generis class as they do not fall neatly, easily or appropriately under other heading.

9. However, if the Committee is not minded to create a sui generis class for betting shops and is content to let gambling premises applications remain in the A2 Use category (Financial and Professional), then it surely follows that similar rules ought to apply in the conduct of their trade.

10. Rules applicable for financial services on the High Street. For example, real financial services are surrounded by rules of compliance concerning the marketing of their products. One of the principles is know your customer, so that appropriate products are sold. Customers can sue if misled or are mis-sold products. They are often warned about various risks relating to different financial products. Another hazardous licenced product (tobacco) carries a government health warning.

11. Should there not be corresponding wealth warnings on the outside of betting shops? Most financial services offer the prospect of increasing net personal wealth over time, even if simply interest on a bank account. All promotion on the outside of betting shop is about winning and nothing about losing. And yet overall, gamblers lose. Is this promotion fair or responsible to the vulnerable and feeble-minded in society?

12. If betting shops wish to be classed as financial services, should they not be subject to similar rules about the marketing of their product, as are real financial services?

13. The aggregate net losses of gamblers are so large that they are able to pay for the overheads of shops including wages, salaries, and profits for the owners. These gambling operations represent unfair competition for retail space on the high street. Because of the peculiar and abnormal nature of their operations – especially the hyper-profits from FOBTs (more below) – betting shops are able to pay top-dollar for prime sites. This bids up the cost of rent and leases when compared to regular retail, whose overheads are greater: Ordinary shops have to handle and house stock.

14. Long ago, it was accepted that there was a genuine need to control betting shops via licencing but, thanks to the 2005 Actthis control is now far less effective. Provided an Application does not represent a change-of-use, getting a Gambling Premises Licence is probably more certain than obtaining a driving licence. We have licencing in little more than name only: it is now a rubber-stamp exercise.

15. Betting shops are not the ordinary retail operations that the industry claims or implies and which is pretended via the Act for which they lobbied. This is despite their efforts to convince us otherwise and despite the thrust of the Act. If this is accepted, then this argues for a sui generis classification rather than a general grouping with financial services.  Such a move would of course be in conflict with the Gambling Act. The industry has exploited the imprecision and ambiguity that has followed by being grouped with useful and benign forms of commerce.

16. People sometimes joke about shopaholics. But any compulsive phenomena in ordinary shopping does not compare with gambling. It is hard to think of any form of high street commerce that has "problem" shoppers in the way that problem gambling is recognised. In ordinary high street commerce, there is no equivalent of GamCare:

… that exists in the betting industry. GamCare is a token gesture towards mitigation of problem gambling and towards which betting shops contribute token sums. In regular retail, there is no equivalent of self-exclusion:

17. The above items might be claimed by the "industry" as putting its house in order; the Committee might wish to consider whether these phenomena are in truth, evidence of a form of trade that is qualitatively different from financial services and from ordinary retail.

18. The main reason why betting shops are not comparable with ordinary shopping is the addictive and obsessive-compulsive behaviour aspect that largely goes unacknowledged. Research has linked this to low levels of the neurotransmitter dopamine in the brain of some members of the public. This could imply that the closest relevant Planning category may be similar to that for Methadone Maintenance Clinics, probably D1.

19. The main expression of addictive-compulsive behavior in betting shops is the use of Fixed Odds Betting Terminals (also known as FOBTs). The Gambling Act – otherwise permissive imposed a limit of 4 (four) machines per premises. This sole limit on the activities of betting shops was put there, it is said, almost as an afterthought, by the then Home Secretary after representations from concerned community groups.

20. FOBTs have been described as the crack-cocaine of betting and appear to be the source of most the profits and most of the criminal damage in betting shops (by frustrated patrons). These modestly-sized machines are the fastest legal way of transferring money out of poor communities.

21. Gambling premises appear always to install the maximum number of machines permitted by law (four). Since this form of industrialised-betting is so efficient and profitable, betting shops would doubtless install more than four on their premises if the law permitted. The fact they are limited to four, plus the fact they are hugely and even obscenely profitable, has probably been the main factor in the proliferation and clustering we have seen. An extra premises location equals the ability to install an extra four FOBTs.

22. We see this in places like Green Lanes, Harringay, North London. Including one Adult Gaming Centre, there are 9 (nine) gambling outlets in a relatively short stretch of road. Cynically but efficiently, four of these betting shops are clustered around an intersection where the local Post Office is on a corner. It is literally a short distance from the distribution of welfare payments to the accounts of the betting companies. In this single street, two betting shops are Ladbrokes; another two are operated by William Hill, as well as a further four betting shop operations. This is saturation betting.

23. The Committee is urged to visit Green Lanes to see for themselves the effects of the Act on the ground.

24. While passing one of Ladbrokes’ two Green Lanes betting shops late last year, I overhead a conversation between a teenage girl with two adults. I imagine she was the daughter of the gambler about to go in, and the third person possibly his spouse or brother. I didn’t stop, just heard it while passing and glanced back. In the recessed doorway she said in protesting, anxious tones:

an’ he’s gonna put more money in, an’ he’s gonna lose it all"

25. While bookmakers might claim they’re providing an entertainment service for their customers, which has some truth, it is also true that these companies are facilitating the impoverishment of some poor families. Has the Gambling Act (2005) contributed to the increase in inequality in society that we have seen in recent years?

26. A single kind of business premise saturating a small area is hardly seen in conventional commerce. This is not a normal business and the Committee is encouraged to look at the current permission for the crack-cocaine form of gambling and its effects.

27. The Committee is urged to look seriously at not permitting FOBTs for new licence applications and to consider ways of reducing below four, the number of FOBTs in existing premises. Such an action might begin to address the detriment done to poor communities.

28. A consideration of:

a sui generis classification; and

a prohibition on new FOBTs; and

seeking ways of reducing the quantity of FOBTs already licenced;

… would fly in the face of the Gambling Act. The thrust of this Act, was that betting shops are normal businesses; should be subject to no limits in an unfettered market place; that there should be no ‘demand’ test. In particular the Act mandated an aim to permit on Licencing Authorities. The interpretation of this clause was tested in several Appeals. These demonstrated that neither courts, councils nor communities could exercise control over the spread or concentration of betting shops.

29. The industry might wish that the limit on FOBTs be increased or even abolished. They could argue that any limit runs counter to the instruction in the Act that there should be no demand test and that alone, a free marketplace should be left to determine the level of demand. This logic does follow – but only if gambling is truly a form of commerce like any other. The argument makes sense – but only if there are no addictive or compulsive-obsessive facets to gambling. The evidence of the industry’s own (tiny, token) efforts at mitigation of these effects shows this is not the case.

30. The concept underlying the Gambling Act – that gambling is just an ordinary kind of business; that it should be recognised and be treated as such – was its single biggest misconception. As a result, the Act was misguided and significantly flawed. It was an Act not sought by the general public, but lobbied for by gambling companies and their supporters and it reflects their interests. The Act is urgently in need of reform in order to give local communities some kind of say and bring some equity, fairness and social justice.

July 2011

Prepared 29th July 2011