Institute of Economic Affairs slams UK regulation proposals as “neo-prohibition”
New report suggests there is no evidence that stake limits or sponsorship ban would have positive effect on problem gambling rates
Affordability caps on UK gamblers would be an “extraordinary paternalistic” measure that would amount to an invasion of privacy, according to a new report by the Institute of Economic Affairs (IEA).
The wide-ranging think-tank report, authored by IEA head of lifestyle economics Christopher Snowdon, claims affordability caps, as well as a ban on gambling advertising and sponsorships, are not necessary and that there is little evidence to suggest they would help to reduce problem gambling rates.
“Many of the policies proposed by the anti-gambling coalition would be incompatible with the government’s stated aim of respecting ‘the enjoyment people get from gambling’ and ‘the freedom of adults to choose how they spend their money’,” the IEA report said.
“Although it has been suggested the deposit limit could be lifted for those who prove they can afford it, it is not easy to see how this could be done without significant bureaucracy and the invasion of privacy.
“Ordinary people who want to gamble with their own money would be treated as if they were taking out a mortgage or living off the proceeds of crime,” it adds.
Measures to limit the amount players can spend and lose on gambling are currently under consideration by the government in its Gambling Act 2005 review.
“A £2 stake limit for online games would have a similar effect as the £2 stake limit on fixed-odds betting terminals, which is to say it would make them unplayable for many gamblers.
“This is not regulation in the normal sense, but a form of neo-prohibition which would likely drive players to unlicensed, unregulated and untaxed websites,” the IEA said.
The IEA report dismissed claims of a gambling ‘epidemic’ in Britain, as evidenced by no rise in the rate of problem gambling since 1999 and a decrease in the amount spent on gambling since 2015.
A ban on advertising, the IEA claims, would make it more difficult for customers to distinguish between licensed and unlicensed operators.
“It would deprive advertising platforms of an important source of revenue and stifle competition,” wrote the IEA. “There is very little evidence that it would have any impact on problem gambling.”
The IEA report claims any ban on sponsorship would similarly hinder licensed operators from establishing their brands and would have a “devastating impact” on many sports, such as lower league football, darts and snooker.
“There is no evidence that it would yield any benefits,” the IEA wrote.
The institute has also claimed policies proposed by anti-gambling campaigners could stimulate demand for unregulated websites that can be easily found via internet forums, search engines and affiliate links.
Although the report admits use of these sites is rare, the IEA suggests online casino and poker players, who would be most affected by any changes, would be more likely to use unregulated websites if limiting measures are introduced.
“Unregulated online casinos closely resemble their regulated competitors and, if advertising is also banned, consumers could have great difficulty distinguishing one from another,” the IEA claimed.
It also suggests many players will be unwilling to tolerate online content that has been made “deliberately tedious and unexciting” by limits on speed of play and stakes/prizes.
“Artificially long gaps between online bets would be boring and frustrating for players,” the IEA said.
“As with the £2 stake limit, this policy can be seen as an attempt to deter gambling per se, rather than tackle problem gambling.
“The technology exists to track harmful patterns of play and intervene. Sophisticated algorithms and timely interventions for the minority of high-risk gamblers are more effective than simplistic, blunt tools,” the report adds.
As an alternative to potentially punitive measures, the IEA has suggested that current measures used by operators to reduce harm and identify problem gamblers could be made mandatory throughout the sector, reinforcing the government’s objective of preventing problem gambling.
“Not every company uses their technology to prevent harm in the same way, but best practice could be made standard through regulation. It is these practical solutions, not the blunt tools of anti-gambling activists, that could be the focus of the government’s review,” the IEA adds.