The Gambling Review Report: Redefining the Social and Economic Regulation of Commercial Gambling
| DOI | http://doi.org/10.1111/1468-2230.6604005 |
| Published date | 01 July 2003 |
| Date | 01 July 2003 |
REPORT
The Gambling Review Report: Redefining the Social
and Economic Regulation of Commercial Gambling
David Miers
n
Introduction
The annual turnover of the commercial gambling market in Great Britain has in
recent years been of the order of Bd46, generating Bd7.3 net profit (before tax) for
its operators.
1
The turnover figure includes the Bd4.8 spent on the National
Lottery in 2001/02, which, since its launch in 1994, has generated around Bd12 for
the good causes specified in the National Lottery etc Act 1993.
2
Including 12%
Lottery Duty, betting and gaming duties amounted in 2001/2002 to Bd1.44.
3
A
prevalence survey conducted in 1999, Gambling Behaviour in Britain, found that
within the year preceding the survey, 90% of respondents had gambled at least
once, and that more than half had gambled in the week preceding the interview.
4
Extrapolated to the total adult population,
5
this suggests that around 24 million
people in Great Britain participate in one way or another in gambling in any one
week. For both the ‘past year’ and the ‘past week’ gamblers, the single largest
participation was in the weekly Lottery draw (65% and 47% respectively). For
one in three of ‘past year’ and nearly two thirds of ‘past week’ gamblers,
participation in the Lottery was their only form of gambling.
One of the primary features of the present market is that there are no reliable
publicly available pre-Lottery data about either the volume or the pattern of
gambling behaviour in the British population. It is therefore impossible to assess
the impact that the Lottery has had on consumers’ gambling preferences.
6
Within
n
Professor of Law, Cardiff Law School. The author was Special Advisor to the Select Committee
for Culture, Media and Sport during its enquiry into the proposals to change the current regime
regulating commercial gambling, Nothing to Lose? The Government’s Proposals for Gambling,HC
827-I (2001–2002). The views expressed in this note are personal. The Government’s Response was
published in October 2002 as Cm 5622. Links to the reports cited can be found at the Department
for Culture, Media and Sport’s (DCMS) website: www.dcms.gov.uk. I would like to thank my
colleague Dave Campbell for his comments on an earlier version.
1 Note that ‘turnover’ in gambling means the total amount staked, which may well include winnings
from previous bets. Turnover does not therefore represent the true cost to the individual (outlay).
2 As amended by the National Lottery Act 1998.
3 Department of Customs & Excise, Annual Report 2001/02 (2002) Cm 5671, Tables L1, L2.
4 K. Sproston, B. Erens and J. Orford, Gambling Behaviour in Britain: Results from the British
Gambling Prevalence Survey (London: National Centre for Social Research, 2000).
5 The minimum age for participation in betting and gaming products is 18 but 16 for all lottery
products and the football pools. Since the most significant volume gambling occurs in connection
with the National Lottery draw, 16 is, in effect, the minimum age at which gambling activity in
Great Britain may occur. It should also be noted that in respect of the lower stakes and prizes
machines located outside age-restricted venues, there is in law no minimum age limit for
participation.
6Gambling Behaviour in Britain,op cit n 4, 7. Interestingly, the vast majority (80%) of respondents
to an ONS survey conducted on behalf of the Home Office review said that the introduction of the
National Lottery had not altered their attitude to gambling; DCMS, Gambling Review Report
(2001) Cm 5206, Annex J, Table 6.3.
rThe Modern Law Review Limited 2003. (MLR 66:4, July). Published by Blackwell Publishing Ltd.,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
604
both sets of respondents there was a significant proportion who gambled in three
or four different ways – typically the purchase of lottery scratchcards (the game
properties of which make them a very different product from a lottery draw),
football pools and bingo. Horserace betting was as popular as playing on fruit
machines; least significant were casino gaming and spread betting. Despite the
government’s concern about the threat posed by internet gaming, the number of
‘past week’ respondents who had logged on to a gaming site was so small that it
was excluded from subsequent analysis. The average weekly family spend is d3.50,
with little variation as between income groups. There is, of course, significant
relative variation, in that average expenditure represents a higher proportion of
the lower absolute figures for low-income groups. The survey estimated the
incidence of problem gambling to be between 0.6% and 0.8% of the adult
population – between 275,000 and 370,000 persons. These figures are markedly
lower than is to be found in other countries in which commercial gambling is
socially significant.
7
One of the issues raised by the current proposals to relax
further the historically stringent market conditions for commercial gambling
operators is the possibility of a substantial increase in the number of problem
gamblers.
The past fifteen years have seen the gradual deregulation of key features of the
commercial gambling market. Facilitated by the Deregulation and Contracting
Out Act 1994, this was driven during the 1990s as much by the principal
regulatory agency, the Gaming Board for Great Britain, and by its then parent
department, the Home Office, as by the industry itself. From a position of strict
enforcement, the development of a more business friendly regime was given added
impetus by the introduction of the National Lottery in 1994,
8
and in 2000 the
Home Office commissioned a review of gambling policy. Concurrently, the
Department of Customs and Excise conducted a review of betting duty.
9
This had
been prompted by the threat of the loss of public revenues posed by e-betting and
internet gaming.
10
While they were separate exercises, the Home Office review was
required to take into account how a regulated commercial gambling industry
could respond to challenges such as these. Chaired by Sir Alan Budd, a former
Treasury advisor, the Gambling Review Report was published in July 2001.
11
7 In Australia, for example, the figure is 2.3%. See generally, Gambling Review Report, ibid ch 17.
8 On the influence that organised interests (rent seekers) may have on the development of regulatory
regimes, see for example C. Hood, H. Rothstein and R. Baldwin, The Government of Risk
(Oxford: Oxford University Press, 2001) ch 7.
9 Public Accounts Committee, HM Customs and Excise: Revenue from Gambling Duties, HC 423
(1999–2000); Customs and Excise Consultation Document, Our Stake in the Future: Modernisa-
tion of General Betting Duty for the 21
st
Century (2000). Since then, both general and pool betting
duty have been replaced by a tax on the operator’s gross profits. In the 2002 Budget proposals the
Chancellor of the Exchequer announced a similar shift for bingo duty. In this case, too, it is
expected that the result will be an increase both in gambling turnover and in revenue to the
Treasury.
10 The terms of permissible casino gaming under the Gaming Act 1968 mean that it is unlawful for
an operator to establish an internet gaming site in Great Britain. It is not, however, an offence for
a player to engage with one of the many sites run from other jurisdictions. In an interesting
exercise in extending the possibilities for regulatory arbitrage, the government plans to create a
licensing regime based on the highly successful Gaming Act model to which operators in such
jurisdictions (and those located in Great Britain) can apply. The intention is that ‘‘the kudos of the
Gambling Commission’s approval’’ will create a market for regulation within which such
operators can choose to be regulated within Great Britain rather then elsewhere. See Gambling
Review Report, op cit, n 6 ch 30, 22. See also the parallel case of the regulation of the new media,
A. Murray and C. Scott, ‘Controlling the New Media: Hybrid Responses to New Forms of Power’
(2002) 65 MLR 491, 494–496. The Isle of Man has already acted; see the Online Gambling
Regulation Act 2001; World Online Gambling Law Report (May 2002) www.e-comlaw.com. 03.
11 op cit n6.
Gambling ReviewJuly 2003]
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