Triennial review’s winners and losers hard to predict

Instead of clarifying matters, the triennial review will usher in another period of consultation and lobbying. But, despite industry efforts, legislation might well be dictated by events beyond its control, says Scott Longley

Last week, the UK high-street bookmakers edged closer to knowing their fate when it comes to the level of stakes and prices for fixed odds betting terminals (FOBTs). Kind of. The delayed triennial review report on the choices that lie before the government revealed there would be another consultation period.

Only after this will the wheels of government slowly turn towards implementing whichever maximum stake is finally decided.

“The problem is that we may not have got anywhere at all,” says Dan Waugh, partner at gambling consultancy Regulus Partners, about a process he estimates has already been going on for two years and is likely to go on for at least another 12 months before any legislation hits the statute book.

“In the absence of anything definitive, there will be a further three-month round of submissions to the Government, with the concomitant lobbying, positioning and some counterproductive bickering between trade associations.”

Internecine warfare
This last point is instructive. At a recent conference on problem gambling, Philip Davies, Conservative MP for Shipley and chairman of the all-party parliamentary group for betting and gambling, suggested the gambling companies “hunt in a pack”.

This behaviour, he said, leads to companies hiding behind the skirts of trade associations and, when it comes to the introduction of further responsible gambling measures, it means operators moving at the pace of the slowest adopter.

“They all want to hide behind a trade group like the RGA [Remote Gambling Association] or the Association of British Bookmakers and, in effect, what they say is, ‘We’ll do it if they do it,’” he told the audience.

Yet we subsequently saw a notably unified effort after a newspaper campaign against what industry detractors suggested were games and marketing designed to appeal to under-18s.

In a show of unity, the UK Gambling Commission, the Advertising Standards Authority, the Committee on Advertising Practice and the RGA warned operators in the UK that such marketing and content might fall foul of the rules against appealing to children.

It was a defensive move but, given the litany of issues facing the industry, such small steps at least suggest an awareness of the mountain of difficulties it has, suggests David Clifton, partner at the Clifton Davies legal consultancy.

These include 888’s record fine for its self-exclusion failings, the AML and social responsibility shortcomings identified in various public statements in recent years, problems with irresponsible marketing by affiliates and, finally, the problems being uncovered by the Competition and Markets Authority and Information Commissioner’s Office investigations.

“It might be thought that the online industry has a lot to do in terms of tidying up its own turf before fighting lobbying battles on it,” Clifton says.

Lack of silver linings
“The dark clouds are forming,” says industry consultant Steve Donoughue, who is also the secretary to the aforementioned all-party parliamentary group. “Be very certain that the venom that has been sprayed on the bookmakers is now going to be poured on online,” he cautions. “If the online industry doesn’t start serious lobbying now, it will be butchered in the same way retail bookies are about to be.”

He goes on to suggest two areas of focus: the need for an instant rebuttal process (which might be said to have been behind the unified under-18s attack response); and, in his words, a big gesture. “The online industry has to seriously consider making a big gesture to show those beginning to see this as an issue that the industry as one is managing.”

Some in the online world are taking the route suggested by Davies, but going it alone. BGO went very public with a move to end the practice of couching bonus offers with all-but-impossible wagering conditions, setting the company apart from the rest of the industry.

“We have not taken this decision lightly,” says marketing director Allan Turner. “The bonus issue is something that is continually discussed and we are at a crossroads where we need to make the right decision for both the company and the consumer.”

It is certainly a brave move. But responding to Davies at the Responsible Gambling Conference, Richard Flint, chief executive at Sky Betting and Gaming, pointed out that “putting your head above the parapet” might bring only a further onslaught of attacks as the anti-gambling lobby senses blood in the water.

This arguably is also the opinion of outgoing Paddy Power Betfair chief executive Breon Corcoran, who took the opportunity afforded by a recent trading statement to make public his company’s concerns about the current size of maximum stakes.

Gesture politics
The industry reaction to the comments — ranging from mild surprise to absolute horror — pointed out the differing economic interests of the various companies and sectors involved and the degree to which unanimity is so often lacking.

Take the issue of advertising. Donoughue’s suggestion is that the “big gesture” the industry should consider is a self-imposed ban on all TV advertising, a move he suggests would be “drastic” but would be highly visible, given the prevalence of some gambling advertising. “If a ban was imposed, the problem wouldn’t go away completely but for the majority online gambling wouldn’t appear on their radar.”

However, although the bigger operators would support the move, medium-sized ones would doubtless see this as a selfish move on the part of the market leaders to cut out one avenue of competitive attack.

And any such move might also rebound on the sector. Clifton says that the Corcoran comments merely confirmed prejudices. “It can, and probably will, be regarded as an admission from within the retail betting sector that social responsibility concerns outweigh the economic concerns about betting shop closures, job losses and a reduction in Treasury receipts from machine games duty.”

Never has the caution of be careful what you wish for been more appropriate. Or, to take the oft-quoted words of Harold Macmillan, what the industry should be most fearful of is, quite simply, events.

Any industry lobbying efforts, whether unified or solo, are liable to be upended by what happens beyond those efforts. And the likelihood is that those events are unlikely to be good news.

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