III THE SOCIAL IMPACT OF GAMBLING
The paucity of research on this subject
- The Report of the Review Body stated that their task, in assessing the likely social and individual impact of deregulation, had been made much more difficult by the lack of research conducted in the UK, in particular on problem gambling. Despite the Rothschild Commission's call in 1978 for a Government funded Gambling Research Unit to monitor the incidence, sociology and psychology of gambling, no such provision was made, consequently the Review Body did not feel confident that it had uncovered the entire picture of problem gambling and its treatment in the UK. Indeed, with the exception of the Gambling Prevalence Survey, whose findings are discussed below, there is, overall, a woeful lack of reliable data about the social and individual impact of normal gambling behaviour, compared, for example, with survey data about other commonplace but potentially harmful activities such as smoking and the excessive consumption of alcohol. Nevertheless, the Review Body made a comprehensive assessment of the current provisions in the UK for the treatment of problem gambling, the main providers being GamCare, Gamblers Anonymous and Gordon House. The Review Body concluded that: too little was known about the nature of problem gambling; there were too few initiatives aimed at limiting and treating problem gambling; too little is known about the effectiveness of treatment and there is too little current funding for problem gambling in Great Britain.
- The Committee has received evidence which supports the Gambling Review's conclusions. GamCare, for example, told the Committee that their funding difficulties had seriously limited both the responses they could make on the present provision, and the initiatives they would like to introduce. They were unable to reduce either the number of missed calls to their helpline (as they could only afford to keep two telephone lines open) or to fund the training of more counsellors. They were also constrained in the development of face to face family counselling and of work within Young Offender institutions, and in the extension of GamCare's work to include female and ethnic groups in counselling. Mr Paul Bellringer, Director of GamCare, told the Committee that GamCare were unable to advertise or to promote their counselling and helpline services freely for fear of being 'swamped'.
- The British Gambling Prevalence Survey, produced by the National Centre for Social Research in June 2000, was, remarkably, the first nationally representative survey of its kind conducted in Britain. Based on a random sample of 7,680 people aged 16 and over, the Survey found that whilst most people gambled once in a while for fun and pleasure, between 0.6 per cent and 0.8 per cent (275,000 to 370,000 people) of the population were problem gamblers. As the Survey itself commented, compared to other countries the UK seemed to have a relatively low number of problem gamblers, e.g. Australia (2.3 per cent), the United States (1.1 per cent), New Zealand (1.2 per cent) and Spain (1.4 per cent). However, the low figure for the UK should be considered in the context of the current (relatively) limited gambling opportunities available to the public. The Committee has also noted that statistics from GamCare's Care Services Report show that 31 per cent of first time callers to GamCare's helpline are partners and relatives of problem gamblers. Estimates by GamCare suggest that the average number of people adversely affected by a sole problem gambler is around 10, making the true figure of people suffering from the effects of problem gambling as being nearer 3.5 million.
- The Review Body concluded that the weight of evidence suggested that increasing the availability of gambling could lead to an increase in the prevalence of problem gambling. The Gaming Board for Great Britain, the Betting Office Licensees Association, the Bingo Association, Quaker Action on Alcohol and Drugs, the Evangelical Alliance and BACTA, amongst others, have submitted evidence to the Committee agreeing with the Review Body, and the Minister for Sport agreed that it was likely that increasing access to gambling will increase gambling problems. Other evidence to the Committee suggested that the lack of research in the UK means that it is hard to predict the effects of deregulation with any certainty. Indeed, the Bishop of Blackburn told the Committee that gambling was the lesser of evils when describing the urban deprivation that might be alleviated by economic regeneration brought about by investment in casinos.
- The Government acknowledged that although too little is known about the features of gambling activities, and what makes them high risk for certain players, this is not a satisfactory reason for leaving the status quo in place. An estimated social cost of the deregulation of gambling does not appear in A safe bet for success. There is a decision which the government needs to take about its policy for the regulation of commercial gambling. Like the decision whether to put a new drug on to the market, the question is whether, in the absence of agreed evidence that the product is safe, the government should be cautious about giving it the go-ahead, or, in the absence of agreed evidence that the product is unsafe, the government should allow further deregulation, letting competition, as Sir Alan Budd recommends, safeguard price and quality for the consumer. The key issue is that at present there is insufficient evidence on which to make judgments about safety.
The Gambling Commission and social responsibility
- The Government has proposed giving the new Gambling Commission a formal role in ensuring that operators adhere to a code of social responsibility. Such a code can constitute a proper foundation for all gambling behaviour, and has been widely adopted, for example, in Australia. A clear and comprehensive policy on social responsibility is an important step in the minimisation of problem gambling, but has a much wider reach. It should be recognised that players, too, as with their consumption of other potentially harmful products, must be expected to gamble responsibly. The Gaming Board described the Government's proposal of a code as a welcome departure from the current position in which the Board has no specific statutory responsibility in respect either of problem gambling or of gambling's wider social impact on those for whom it is not a problem. The Commission will be responsible for:
- issuing and ensuring compliance with a code of responsibility which will form a condition of the licences to operate
- for monitoring the social impact of the increased access to gambling products
- for responding to findings on problem gambling, and, if appropriate, making the relevant changes to its regulation, and to advise the Government on other necessary changes.
Who should be financially responsible?
The industry charitable trust
44. In response to the Review Body's recommendation, the gambling industry has taken steps to set up a voluntarily funded Gambling Trust, with contributions from eight trade associations and twenty-two companies. This Trust will commission research into the prevention and treatment of problem gambling. The Government accepted the Review Body's recommendation that there should be a reserve power to impose a statutory levy, and also accepted that the target figure for the industry's contribution to the Trust should be £3 million a year for at least 3 years. The Trust's initial budget for 2002-2003 is £0.8million, and the Trust has agreed to pay grants totalling £562,000 to GamCare and Gordon House. GamCare have commented that the amount they have received from the Trust so far represents only 43 per cent of their expenditure forecast for the financial year April 2002 - March 2003, and is similar to the percentage raised from direct industry donations prior to the formation of the Trust.
The £3 million target
45. The Review Body decided upon the figure of £3 million as being £10 per estimated problem gambler. A report by National Economics Research Associates has estimated that, based on the Australian experience (Australia has liberalised its gambling laws over the past few years), the introduction of unlimited prize gaming machines could result in an increase the number of problem gamblers in the United Kingdom to one million. As the report suggests, if the charitable trust is working towards a figure based on the current prevalence of problem gamblers, the fund is likely to be inadequate to respond fully to the scale of problem gamblers post-deregulation. Funding in other jurisdictions equates to significantly more than £10 per gambler; in New Zealand it is £44, Canada £40, Australia £26. The British Casino Association agreed that experiences from other jurisdictions should inform the debate. The Association said "We believe that the right way forward is for the GICT to listen and assess bids, with expert advice, from the service providers and ensure that it has sufficient funds to meet those needs. Simply picking a figure and multiplying it by some assessment of the number of "problem gamblers" based on extrapolated figures is unhelpful." We accept that the current target of £3 million towards funding by the Trust may be appropriate for the current regulatory system, but recommend that the Commission requests the Trust to include, as part of its future research, consideration of the viability of the current calculation of £10 per problem gambler as the amount needed to meet the social costs of gambling post deregulation.
- Whilst the Committee applauds the industry's initiative in setting up the Trust it is concerned that the funding stream to organisations such as GamCare and Gordon House is not thus far secure. The Trust budget figure of £0.8 million falls well short of that target and not enough appears to have been committed to tackle even the existing needs. The Committee believes that the industry as a whole should recognise that it must provide sufficient funds now as a commitment that recognises future change in legislation.
Independence of the Trust
47. The Government has told the Committee that although the Trust is not independent from the gambling industry, it has appointed a steering group to help it commission a consultant to develop strategies to deliver cost-effective research, education and support services. The industry intends to appoint additional independent trustees to ensure that the Trust will be in a position to commission research 'which will carry weight as independent'.
- The Prevalence Survey of 2000 was a good example of the industry working with GamCare, the regulators and the Department to produce important independent research on both social and problem gambling. The Committee agree with the Government that the 2000 Survey should be the benchmark for future surveys to be made by the Commission or Trust, at regular intervals, of the general prevalence of gambling in Great Britain, its social and individual impact, and in particular, the incidence of problem gambling in Great Britain. We expect the Trust to make the necessary appointment of independent trustees in the immediate future.
The free rider problem
49. The Committee is concerned that, despite the best intentions of some of the gambling industry to participate in the Trust, there may be a struggle to reach the funding target of £3 million. The British Casino Association told us that they were instrumental in setting up the Trust, and that 100 per cent of their members contribute to the Trust, the contribution forming 48 per cent of the Trust's current funding. However, not all the casinos in the UK are members of the British Casino Association, and the Committee is not wholly persuaded by the pious hope that all casinos will contribute if sufficient moral pressure can be put upon them.
- BACTA, who represent the manufacturers, operators, suppliers and owners of coin-operated gaming and amusement equipment told the Committee that they had contributed on behalf of all its members to the establishment of the Trust. Although BACTA represent over 90 per cent of their sector of the industry, they do not represent the whole sector; and, out of 690 members, only 25 had directly contributed to the Trust. BACTA have told the Committee that they are considering making contributions a condition of membership, but the Committee concludes that those organisations that are not members may not be making any contribution to the Trust. Here, too, the Committee has serious concerns that the task of generating sufficient funding to meet the essential research needs will founder on industry in-fighting about who is to bear what share of the cost.
- The Government has stated that it is in the industry's best interests to show its commitment to social responsibility by sustaining the trust on a voluntary basis, and the Committee recognises that the evidence received from the industry shows that there is on the part of some of the major commercial organisations a commendable commitment to both social responsibility and the Trust. The introduction of a statutory levy as part of the licence fees might create controversy over the level of contributions, e.g. should a contribution be based on an organisation's turnover or the proportion of problem gambling caused by that sector of the industry? It has been suggested that the allocation of the funding burden should await the outcome of further research, but this presents a number of difficulties. The most obvious is that, in the absence of adequate initial funding, research will not take place. Secondly, it is highly unlikely that such research will show unequivocally that problem gambling is "caused" by one gambling medium only (and without taking into account other non-gambling influences, such as alcohol). Thirdly, whether the results show that one medium is more likely to contribute to the development of problem gambling, or that problem gambling is a function of a variety of causes, there will always be opportunities for operators who do not wish to commit funding to dispute their responsibilities. We prefer the simple prescription of "polluter pays", believe it would be unhealthy for organisations like GamCare and Gordon House to depend on the generosity of the industry; and recommend that the Government impose a statutory levy to ensure that research is adequately funded and organisations who support problem gamblers directly receive the necessary funding for their work.
- As matters stand, the problem remains that some sectors of the industry will be 'penalised' for being more diligent than others in their contributions. Whilst the industry considers that it should be allowed to calculate its own formulas suitable for its sectors, the Committee does not consider it an appropriate response that contributions to the funding of essential research should founder on the private wranglings of the gambling industry. Ladbrokes and RAL Holdings both recommended that the Gambling Commission include evidence of contributions to the Trust as part of the fit and proper test to gain a licence. This way contributions would remain at a voluntary level, but would be considered a necessary proof of social responsibility. We are attracted by this proposal and, if the Government decides against a statutory levy, recommend that contributions to the Trust be part of the fit and proper test for licensing, in order to ensure that each sector of the industry contributes fairly to the Trust, and that unseemly conflict within the industry is avoided should it become difficult for the Trust to raise the £3 million voluntarily.
Camelot and the Industry Trust
53. Camelot have given evidence to the Committee of their commendable record in funding research, education campaigns and awareness programmes designed to prevent both under-age and problem gambling. GamCare has confirmed that Camelot has been the single most generous consistent direct donor to GamCare. Camelot donated £50,000 to GamCare for the period 1 January 2001 to March 2002. Although Camelot contributed to the setting up of the Trust, they feel that the Trust's priority will be the treatment of problem gamblers, whereas Camelot wish to prioritise their funding of the prevention of problem gambling. Camelot intend to share best practice with the Trust where appropriate, and will continue to make contributions to both GamCare and Gordon House.
- When asked whether the Government was disappointed in this approach by Camelot, the Minister for Sport replied, "in a word, yes".
- Business in Sport and Leisure and BACTA, amongst others, considered that Camelot should contribute to the Industry Trust, and GamCare stated that "if the Trust is to be fully effective all commercial gambling operators should contribute". The Committee considers that by both contributing funds and sharing best practice with the Industry Trust, Camelot will provide valuable input into the work of the Trust, which at the moment seems to be concentrating on the treatment of problem gambling. We consider that it is vital that research into problem gambling should include the assessment of preventative measures in order to produce greater understanding of the nature of problem gambling. We understand that it is not in the interests of the gambling industry to seek to prevent gambling, but it befits the current worldwide reputation of the UK gambling industry for quality and integrity, and the designation of gambling as a respectable leisure activity, to ensure that we do not see a substantial increase in problem gamblers. It is very much in the interests of the gambling industry to have a reputation for fair and square dealing and socially responsible behaviour. We believe that this reputation, as much as any glitzy advertising campaign, could contribute to the successful development of gambling as a mainstream leisure activity in which people felt secure to indulge.
The Government's contribution to research
56. The Government has told the Committee that it has not ruled out the possibility of commissioning or undertaking research in the area of problem gambling on its own account. The Gambling Review recommended that gambling should be recognised as a health problem by the Department of Health, who should make increased funding available for the treatment of problem gambling. It was also recommended that Health Authorities should develop strategies for dealing with problem gambling. We agree with the Review Body's recommendations, and consider that it will become necessary for the Government to undertake research to ensure joined up policy between the Departments of Health and Culture, Media and Sport. Assessment of the social impact of the deregulation of gambling, and guidance to local authorities on the services they may need to develop, will need to be made by the Government in consultation with the Gambling Commission.
- Ultimately, the responsibility for ensuring that there is adequate research into the social dimension of gambling behaviour lies with the Government. The Committee agrees with Government's decision to give the new Gambling Commission a role in ensuring that operators adhere to a code of social responsibility, and we note that this will include the monitoring of the social impact of the increased access to gambling products. This will require research funding met by Government or by the Industry Trust. If it is to be the former then this presumably will fall within the setting of licence fees. If it is the latter then the Committee is concerned this could lead to a failure by the Commission to meet the obligation. Either way, the Committee recommends that Government makes it clear how it intends that the Commission should meet this commitment. It would be very unfortunate if the Government was, for a second time, to fail to grasp the opportunity to establish the conditions for reliable national research whose results can be used to inform future policy. We suggest that the Government be prepared to invest in both the research and treatment of problem gambling, through the NHS nationwide, independently of the industry trust.
28 Gambling Review Report, p. 173 Back
29 Gambling Review Report, p. 173 Back
30 Sproston K, Erens B and Orford R, Gambling behaviour in Britain: Results from British Gambling Prevalence Study, (2000) London: National Centre for Social Research Back
31 Gambling Review Report, p. 175 Back
32 Ev 127 (Vol III) Back
33 Q 31 Back
34 National Centre for Social Research, PN June 2000 Back
35 British Gambling Prevalence Study Back
36 Q 11 Back
37 Gambling Review Report, p. 85 Back
38 Q 291, Q352, Ev 7, 12, 42 and 48 (Vol II) Back
39 Ev 28 (Vol II) Back
40 Ev 21 (Vol III) Back
41 A safe bet for success, p. 32 Back
42 Gambling Review Report, p. 77 Back
43 Ev 87 (Vol III) Back
44 Ev 87 (Vol III) Back
45 Ev 53 (Vol III) Back
46 Ev 53 (Vol III) Back
47 Ev 127 (Vol III) Back
48 Gambling Review Report, p. 176 Back
49 Predicted changes in the incidence of problem gambling in the UK following the recommendations in the 'Gambling Review Report' and proposals in the white Paper, NERA, May 2002, London, p.34. Back
50 NERA Report, p. 36 Back
51 Gambling Review Report, p. 176 Back
52 Ev 135 (Vol III) Back
53 Ev 105 (Vol III) Back
54 Ev 135 (Vol III) Back
55 Ev 125 (Vol III) Back
56 QQ 60-69 Back
57 Ev 124 (Vol III) Back
58 Ev 124 (Vol III), Ev 44 (Vol II) Back
59 Ev, 128 (Vol III) 15 and 46 (Vol II) Back
60 Q 168, Ev 135 and Ev 136 (Vol III) Back
61 Ev 127 (Vol III) Back
62 Ev 135 (Vol III) Back
63 Ev 63 (Vol III) Back
64 Q 366 Back
65 Ev 127 (Vol III) Back
66 Ev 127 (Vol III) Back
67 Ev 105 (Vol III) Back
68 Gambling Review Report, p. 176 Back