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Rushing to judgement on the ‘crack cocaine of gambling’

20 December 2013

4:35 PM

20 December 2013

4:35 PM

Ed Miliband’s pledge to crack down on the ‘crack cocaine of gambling’  is a significant moment in the extraordinary moral panic over fixed-odds betting terminals (FOBTs). Earlier this year, the Department for Culture, Media and Sport found that there was very little data to back up the anecdotal evidence of the anti-FOBT brigade and so decided to commission some research. This process will take 18 months and a decision about stakes and prizes will be made once there is some evidence to study. This eminently reasonable, evidence-based approach has naturally been howled down by the anti-gambling lobby whose campaign has thus far relied on anecdotes and, at best, half-truths.

Earlier this year I wrote a report for the Institute of Economic Affairs called ‘The Crack Cocaine of Gambling?’ which examined each of the anti-FOBTers’ claims in detail. The facts are clear for those who have eyes to see them. The ‘crack cocaine of gambling’ label is a generic, scaremongering soundbite that has been used by moral reformers to describe virtually every new gambling product since the mid-1980s. Britons are not ‘losing’ £46 billion on FOBTs each year, as newspapers routinely claim. We are putting £46 billion in and getting £44.5 billion back in winnings. We are ‘losing’ (ie. spending) £1.5 billion a year, which is about the same amount that we spend over the counter in bookmakers without anyone throwing hysterics. Punters are not spending more in bookies than they did a few years ago, they are just spending it on different gambling products.

Contrary to conventional wisdom, there has been no ‘dramatic proliferation’ of betting shops. Their numbers peaked in the late 1960s at around 16,000 and reached an all-time low in 2000 at around 9,000. Since then, there has been only the mildest revival, with numbers rising by 4.5 per cent between 2000 and 2012 – barely enough to meet population growth. The popular perception of ‘dramatic proliferation’ is probably due to betting shops moving out of the side streets and onto the high streets at a time when rents have fallen and shops are boarded up. With their unerring ability to mistake correlation for causation, the anti-FOBTers have inferred that the bookies have made the shopkeepers flee. In fact, they have just made themselves more visible to middle class moral entrepreneurs.

As for the claim that FOBTs have led to a rise in problem gambling, there is no clear evidence of any increase in problem gambling prevalence since 1999, let alone as a result of any one game. Of course FOBTs can be addictive if you are a compulsive gambler. So can online gambling, casino gambling, fruit machines, poker, spread-betting, dog racing and scratchcards. The question is whether there is something about FOBTs that makes them so problematic that the 99 per cent of us who are not compulsive gamblers should have this avenue of pleasure closed off to us. That is what the new research seeks to answer. Miliband seems unwilling to wait.

Fifty years after casinos and bookmakers were legalised, gambling still retains a certain taboo. It is difficult to think of an innovation in the gambling market that hasn’t sparked a moral panic of some kind. Few people remember how controversial the early bookmakers were in the early 1960s and most people have forgotten the concerns that were raised about the National Lottery when it was introduced, but the more recent panic about ‘Vegas-style’ casinos was a classic of the genre. Similar worries about various ‘crack cocaines of gambling’ around the world—including pokies, Keno, scratchcards and virtual horse-racing—all follow the same pattern in which epidemics of addiction are predicted only to be quietly forgotten when it becomes clear that the new gambling product is neither especially pernicious nor particularly contagious. For campaigners against the latest ‘crack cocaine’, it is crucial that FOBTs are suppressed before the panic subsides.

Christopher Snowdon is director of lifestyle economics at the Institute of Economic Affairs

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