Gambling vs. state in UK

Tuesday, 31 May 2011

More people than ever before are gambling in the UK and enjoying this past time. The Gambling Commission, in their recent report, stated that nearly 75% of adults had gambled sometime during the previous year.

The odds in London are that a previously vacant shop on a high street near someone is now a betting shop. As they prepare to celebrate the 50th anniversary in May of the legalisation that first allowed them to open, bookmakers are proliferating on Britain’s high streets.

Bookies have been dealt a strong hand: both the recession and changes in the law having been relatively kind to the industry. But the champagne remains on ice. Betting shops have a fight on their hands. Rather than being heralded as the success story of the UK high street in tough economic times, bookies are fast becoming the pariah of the shopping parade.

Retailers, politicians and local communities have been taking to the streets, signing petitions and lobbying government in protest at the opening of up to 15 bookies on some high streets.

The hostility has arisen because the Gambling Commission’s British Gambling Prevalence survey suggests, as a nation, when times get tough, we like a flutter. The latest survey, published in February, showed that last year, the proportion of people who gambled (excluding the National Lottery) was 56% – up from 48% in 2007 and 46% in 1999.

The prevalence of people betting on specific events and sports also rose, from 6% in 2007 to 9% in 2010.

Safe bet in a recession

With the popularity of gambling increasing, larger- chain bookmakers have been able to take advantage of other retailers’ recessionary woes by moving into more prominent empty high street shops.

They are categorised as A2 retailers and have capitalised on closures of bank branches, following mergers in the recession, and estate agents, both of which are in the same planning class. The stricken pub industry has also been a prime target and breweries and pub companies have approached bookies to take on their unprofitable sites.

Bookmakers have also been assisted by the Gambling Act 2007, which removed the need for betting shops to prove a demand for their services in an area, a test councils used to block applications. Without this test, bookies have started to cluster in areas that are seen as gambling hotspots.

This trend is acute in deprived areas. Tottenham High Road in north London now has more than 15 betting shops, while Deptford in south-east London has 10, either on, or within 200 metres of, the high street, and an 11th is due to open soon (see box, opposite). Luton High Street also has eight bookies.

But perhaps surprisingly, the number of UK betting shops has remained fairly static. According to the Gambling Commission, the number rose from 8,800 in 2007/08 to 8,822 in 2009/10.

While some newer entrants to the market, such as Paddy Power and Betfred, are expanding, others have felt the competition from large chains, leading some smaller, independent businesses to close.

So rather than an explosion in the number of betting shops, the hostility on the high street stems from a shift in focus, as bookmakers take advantage of the recession to move out of secondary locations into prominent vacant units, bringing them into the public eye and into conflict with other retailers. Shop owners are protesting and petitioning about rising crime levels associated with betting shops and a loss of trade as the variety of business is eroded.

Gambling vs Taxes

Gambling laws in the UK currently prevent pubs from running gambling events, with prize pools capped at £100 and stakes restricted to £5 in any 24 hour period. It is felt by many in the gambling industry that a relaxation of these laws could revive Britain’s ailing pub trade and provide a cash cow for the economy.

A new IEA report has called for the liberalisation of UK gambling legislation in an effort to promote economic growth. Members of the UK gaming industry were aggrieved to learn that the country could be losing out on significant economic opportunities due to the overregulation of gambling services. A recent study published in the official termly journal of the Institute of Economic Affairs has suggested that the UK could be missing out on literally billions of pounds worth of investment. The findings go on to indicate that whilst other nations are starting to reap the benefits of increasingly liberal legislation, several British pubs are being forced to close as a result of stifling UK law.

Commenting on the survey Director General of the IEA, Mark Littlewood, said that the benefits enjoyed by other countries were “clear to see”. He lamented the “stigma and myths” surrounding gambling which “prevent us from relaxing our laws to maximise economic gain”. Meanwhile Chris Brady, Dean of BPP Business School and editor of the IEA journal said that it was important to recognise that gambling is about “far more that simply winning money… By failing to liberalise the law, politicians over the years have felt that they are somehow protecting society from avarice”. “People should be free to do with their own money as they wish – it’s time for the state to take a giant step back”, he concluded.

Council challenge

As bookmakers proliferate on some of Britain’s less affluent high streets, local councils say they “have no power” to prevent clustering. The only way to block an application to open a betting shop is for the council to make representations during the licensing process to prove that there will be a link to crime, a risk to children and vulnerable people, or that gambling will not be conducted fairly.

Councils can also seek article 4 directions under the Town and Country Planning (General Permitted Development) Order to remove permitted development rights, and require planning applications to be made even when occupying a unit of the same use class. But this is costly and time consuming for councils that are under pressure from central government grant cuts.

Lewisham Council is responsible for Deptford High Street and has made three attempts to use legislation designed to promote the sustainability of communities to amend the Gambling Act to allow it to limit the number of betting shops.

Meanwhile, politicians are also lobbying to restrict the number of bookmakers. Lammy wants to amend the Localism Bill to reclassify bookies as “sui generis”, so that conversion to a betting shop will require planning permission.

Ken Livingstone, who is running for mayor of London, wants to revise the London Plan and change the capital’s planning regime so local authorities can specify the balance of high street shops.

But it will be tough to make any changes. The Department for Culture, Media and Sport, which is ultimately responsible for gambling, says: “We are not aware of any data that demonstrate the concentration of betting shops is a widespread problem requiring us to amend legislation, or that the current powers available to local authorities are insufficient to address legitimate concerns.”

Author: Editor

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1 Comment

  1. Great delivery. Outstanding arguments. Keep up the good work.

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