Hippodrome Casino Limited – Written evidence (GAM0070)

Executive summary
 

We welcome this review of gambling and gambling legislation in Great Britain. In the absence of regular governmental reviews, a number of issues in relation to the gambling market has accumulated. We hope that this wide-ranging, independent and balanced parliamentary review will restore some clarity to matters of gambling policy. We have explored the questions posed in some detail in the attached submission. In summary:

- In general, the objectives of the Gambling Act 2005 are being achieved in Great Britain. Levels of problem gambling are low in relation to participation and to other international markets – and they appear to have been fairly stable.  There is very little criminal involvement in gambling. A tightening regulatory framework has served to raise standards of fairness and transparency (particularly since the mandatory licensing of remote gambling in late 2014).

- Gambling is generally well-regulated - particularly since November 2014 when it became a requirement for remote operators to be licensed by the Gambling Commission.

- Modernisation of our gambling laws is overdue. In particular, we observe that the laws and regulations governing land-based casino gaming have not been updated to reflect societal changes, customer demand and the significant changes brought about by the expansion of remote gambling; moreover, in not bringing forward necessary reforms, successive Governments have has failed to follow official policy. Specifically, we would like to see the following:

• Completion of the Government’s evaluation of the trial of regulatory modernisation for casinos. This evaluation was due to have been published in 2014.
• Greater choice for casino customers with respect to gaming machines, electronic casino games and sports betting (subject to controls and harm prevention measures).

- In common with most consumer activities, gambling involves both benefits and costs. There is no standard or universally agreed methodology for assessing benefits and costs – and all attempts to do so are subject to considerations of selection and measurement. Current political discourse tends to focus almost exclusively on costs, yet our examination of the research literature indicates that consumer benefits are likely to outweigh costs. We believe that more needs to be done to understand the nature of both costs and benefits through a structured and longitudinal programme of research.

- Greater funding than has been available in the past may be required for the purposes of problem gambling treatment, research and preventative education. At the same time, we note that the voluntary system of funding has in recent years proved effective in raising the level of funds identified by the Responsible Gambling Strategy Board and the Gambling Commission. There has been considerable conjecture on this subject in recent years (with a range of proposals made) without any scientific attempts to quantify how much money is required nor any comprehensive review of the most appropriate funding mechanism.

We hope that the committee finds our submission useful and we will be pleased to participate further in the process of inquiry should that be helpful.

Simon Thomas, Chief Executive Officer, The Hippodrome Casino Ltd

Hippodrome Casino – detailed responses – 6th September 2019

This submission is made by the Hippodrome Casino, which is licensed in Great Britain by the Gambling Commission. The Hippodrome was opened in 2012 and is one of the most popular (in terms of visitation) gaming venues in Europe. Every month, we receive more than150,000 visits from customers to play table games, electronic gaming machines, peer-to-peer card games; to dine in our award-winning restaurant; and to watch live entertainment, including our Magic Mike Live show. The Hippodrome is a good example of what was envisaged by the Gambling Act 2005 – regeneration, renovation, job creation, tourism. It is an entertainment-based destination casino, very popular with customers and providing gambling in a closely supervised environment with large numbers of highly trained staff. With relatively modest changes in casino regulation, there could be more Hippodrome-style destination venues in Great Britain, delivering exciting casino led entertainment venues that people like, with high levels of protection and supervision; and bringing local employment and amenity benefits and inward investment.

The Gambling Act 2005

1. Are the three primary aims of the Gambling Act 2005 being upheld?                                                                                   
Based upon the evidence available, it would seem that the primary aims are – to a large extent - being upheld. We consider evidence in relation to the three objectives below:

1.1 - preventing gambling from being a source of crime or disorder. There is limited direct evidence available on the incidence of crime in relation to gambling. On the basis of the present data, we consider that gambling in Great Britain is almost entirely free from criminal involvement from an operational or ownership perspective. The extent to which gambling may be a source of criminal activity, or used by criminal elements for recreational purposes (‘bad money’), is more difficult to assess due to poor availability of data and complexities involved in establishing cause. However, based upon what we do know and given the scale of the industry, gambling does not seem to be a major cause of crime. Moreover, there is no evidence that gambling-related crimes have increased since the passing of the Gambling Act in 2005. Banks and Waugh (2018) propose a four-tier taxonomy for classifying gambling-related crime[1], which may be helpful in addressing this question:

• Illegal and unlicensed gambling - “Where either the type of gambling is prohibited by law or where the party is not licensed within the jurisdiction to offer the relevant gambling services.”
• Non-compliance - “Where the provider of gambling is licensed by the relevant authority but – either by design or negligence – transgresses the law.”
• Gambling-centred crime - “Where the provision of gambling attracts crime. This includes, but is not limited to, betting shop robberies, theft from patrons, money laundering, and bribery of officials to obtain licensing consents.”
• Criminogenic gambling - “Where the act of gambling causes individuals or organizations to commit crime. This includes, but is not limited to, theft in order to fund a gambling addiction, abuse arising from disordered gambling, violence against family members and in order to collect gambling debts.”

1.1.1 - illegal and unlicensed gambling. Great Britain has been highly successful in suppressing the development of a black market for gambling. This is likely to be the result of relatively liberal laws to permit the betting and gaming products that consumers wish to play; the maintenance of taxes (with some exceptions) at reasonably modest levels; and by effective enforcement by the Gambling Commission and other relevant authorities. The main source of quantitative evidence in this area relates to offences under the Gambling Act 2005. Official data shows that in 2016, 140 defendants were proceeded against at magistrates courts for offences under the 2005 Act (down from 208 in 2012). This represents 0.01% of the total number of cases received by magistrates courts in England And Wales. The overwhelming majority of these (129) were for the unlicensed supply of gambling facilities[2]. Separately, in 2018/19, the Gambling Commission took action against 31 unlicensed remote operators.

1.1.2 - non-compliance. The Gambling Commission adopts a highly vigorous approach to ensuring regulatory compliance. In 2018/19, the regulator carried out 1,200 compliance assessments on licensees. During the same period, a total of £19m of divestments by gambling companies were made in relation to regulatory investigations. This reflects an increasingly stringent approach to enforcement by the regulator. In the year to April 2019, the Gambling Commission revoked five operating licences and issued warnings or conditions to a further eight companies. The regulator also revoked 20 personal licences and issued warnings to a further eight personal licence holders. These data indicate that Britain’s licensed operators are generally compliant with gambling law and regulation. Where breaches are detected, the Gambling Commission takes a robust approach to enforcement and the encouragement of all licensees to learn from individual operator failings[3].

1.1.3 - gambling-centred crime. According to the 2015 National Risk Assessment (‘NRA’) by HM Treasury and the Home Office, gambling is classified as a “low risk” activity in terms of facilitating money-laundering[4]. We note that since the time of the assessment, licensees are considered to have been increasingly diligent in reporting suspicious activity to the Gambling Commission and other relevant authorities. It should also be noted that enhanced Social Responsibility measures and capabilities, especially around customer due diligence and affordability, further strengthen licensee capabilities in this area. Land based casinos – unlike most other sectors of the gambling industry - are subject to anti-money laundering regulations. This provides an additional level of assurance that casino gaming is not being used for the purposes of financial crime. Another area of concern of gambling-centred crime is robbery or armed robbery of licensed gambling premises – where the presence of money attracts acquisitive (and sometimes violent) crime. In this respect, gambling premises are no different to other businesses (such as banks and petrol stations) where criminals are attracted by the presence of cash. The casino sector has a long history of working with law enforcement to minimise risks in this area. As Banks (2016) notes, “there is little evidence to suggest that the introduction of legalised gambling establishments has a significant impact on the overall crime rate in the jurisdictions in which they are located.”[5]

1.1.4 - criminogenic gambling. A minority of people with gambling disorder may steal or commit fraudulent acts in order to fund their gambling – but the overwhelming majority do not. For this reason, in 2013, the American Psychiatric Association removed criminality as a diagnostic criterion for disordered gambling within its DSM-5 derived screen. The Gambling Commission has powers to investigate cases where the proceeds of crime are used for the purposes of gambling – and in recent years has agreed a number of regulatory settlements (involving substantial divestments and penalties) for failings by a small number of licensees in this area.

1.2 - ensuring that gambling is conducted in a fair and open way. The vast majority of gambling activity in Great Britain is carried out in a fair and transparent fashion. Government and Gambling Commission data shows very small levels of fraudulent activity; and most people who gamble in this country do so with companies licensed by the regulator.

1.2.1 – Competition and Markets Authority investigation. An investigation into online gambling initiated in 2016 by the Competition and Markets Authority (‘CMA’) in association with the Gambling Commission highlighted a number of concerns in relation to “inadequate or unclear information”; “potentially unfair rules that restrict certain play strategies, on which firms rely to deny customers a pay-out when they come to claim their winnings”; restrictions on withdrawals; and account dormancy charges. As a result of the investigation, a number of large licensees gave undertakings to amend practices and guidance was issued to all licensees (including land based casinos) to ensure high standards across the industry. In April 2019, the CMA and Gambling Commission announced that the investigation had closed but that practices would continue to be monitored. We believe that the investigation has been successful in raising standards of fairness and transparency in the remote sector. While similar concerns of fairness have not been raised in respect of land based casinos, the CMA investigation has generated a number of useful insights.

1.2.2 – public perceptions and revealed attitudes. The Gambling Commission has been conducting quarterly surveys of attitudes and perceptions towards gambling since 2008. In 2018, 30% of survey respondents who agreed that gambling was carried out in a fair and trusted way; 34% of survey respondents who had gambled in the past year agreed with the statement. These figures were markedly lower than in 2008. While the survey findings are a source of concern, we note that they are based upon relatively small samples and on self-report. We also observe that public trust levels in a large number of large institutions have fallen significantly since the financial crisis (effectively, the period covered by the survey series). Comparing the Gambling Commission findings with the broader Edelman Trust Barometer, indicates that gambling is trusted only somewhat less than business in general and higher than social media companies. The Gambling Commission survey data does not distinguish between different sectors of the gambling industry; nor does it identify the reasons for changes in levels of trust.

1.2.3 – fairness and customer perceptions at the Hippodrome Casino. At the Hippodrome we carry out regular surveys of customer willingness to recommend (using the Net Promoter Score or ‘NPS’) which we consider to be an important measure of trust. Our most recent NPS was 84%, which is considered “world class” according to the designers of the NPS. We also score highly on the consumer review site, TripAdvisor (see our response to Question 6 for more information on customer attitudes towards the Hippodrome Casino).

1.3 - protecting children and other vulnerable persons from being harmed or exploited. Based upon available data, we consider that Great Britain has been relatively successful in protecting children and vulnerable adults – particularly when one considers the significant changes that have taken place since the passing of the 2005 Act (some of which could not have been foreseen by legislators).

1.3.1 – youth gambling. According to official estimates, 39% of 11-to-16-year-olds are likely to have gambled at least once in 2018. While this is relatively high (the adult population estimate of gambling participation is 59%), the overwhelming majority of gambling by children appears to be legal – private betting or gaming (e.g. card games) with family and friends; National Lottery products; and low-stake gaming machines in arcades. Reported rates of gambling by children have declined significantly in recent years. Between 2011 and 2017, past-week gambling by 11-to-15-year-olds fell from 23% to 12%[6]. Gambling by children on age-restricted products appears to be relatively low – much lower for example than for consuming alcohol[7]. Between 2011 and 2017, past-week gambling on age-restricted products fell from 14% to 6%. These patterns were observed across each age and gender cohort. Past-year participation in (non-lottery) online gambling is around 4%. According to survey data, the majority of this underage online gambling (three-quarters) takes place using the account of a parent or guardian; and around half of underage online gambling takes place with the consent of the parent or guardian (suggesting that educating parents about the risks of underage gambling may be a useful area to focus on in the future). While the absolute number of children participating in gambling and age-restricted gambling may be a cause for concern, prevalence does at least appear to be in decline.

1.3.2 – casinos and youth gambling. Casinos have the highest entry controls in the industry and Gambling Commission data (from regulatory returns) indicates very low levels of underage gambling. The National Casino Forum carries out annual mystery shopper surveys (based upon a ‘Think 21’ policy). In 2018, 96% of casinos passed the test (with all casinos passing on re-test). The Hippodrome Casino has passed these tests in every year that they have been conducted at the venue. According to most recent data from the Gambling Commission, in the 12 months to September 2018, there were 52 incidences in casinos where individuals were unable to verify their age after having gambled; and it seems likely that in some (but not necessarily all) of these cases the individuals may have been under the age of 18. While, we strive to ensure that no underage gambling takes place in casinos, we observe that this figure equates to 0.3 incidents per casino per year. Britain’s casinos receive around 20 million customer visits per year so these incidents represent around 0.0002% of total attendance. We note too that casinos have the lowest number of such incidents across the gambling industry.

1.3.3 - problem gambling among children. Estimates of problem gambling among 11-to-15-year-olds (using the DSM-IV-MR-J screen, designed for use with children) have been published since 2014. The reported rate of problem gambling in this age group was 0.7% in 2014; 0.6% in 2015 and 2016; and 0.9% in 2017. It is categorically not the case – as some have claimed – that there was a three-fold or four-fold increase in problem gambling amongst children between 2016 and 2018. Indeed, the Gambling Commission’s report makes it clear on a number of occasions that due to a number of changes in sampling (notably the inclusion of 16-year-olds in the 2017 and 2018 surveys but not in the earlier surveys) and survey methodology, the 2016 and 2018 data are “not directly comparable”. 

1.3.4 – issues with measurement (children) - Caution should be exercised in attempting to draw conclusions about changes in problem gambling rates between surveys. Over the course of the five surveys where problem gambling has been measured, the mean number of respondents identified as problem gamblers is less than 20 per year. Care should be taken when attempting to extrapolate from such small numbers to arrive at population-level estimates. Attempts to assess problem gambling rates among children have been criticised within the academic research community. For instance, Professor Jeff Derevensky (McGill University, Canada), a leading authority on high-risk behaviour by children and adolescents, has challenged reported rates in global research – and in particular the accuracy of the DSM-IV-MR-J screen, stating “there are common scoring errors in certain instruments‚ in particular the DSM-IV-J‚ which have resulted in over-estimates‚ and current screening instruments for youth lack sufficient construct validity[8].”

1.3.5 - problem gambling among adults. The rate of problem gambling among adults in Great Britain has – according to official estimates – remained broadly stable over the course of the last two decades. The first major household survey to assess problem gambling rates in Great Britain – the British Gambling Prevalence Survey 1999 – reported a problem gambling rate of 0.6% of the population (16-years and above). The most recent estimate – from the combined Health Surveys 2016 – also reported a rate of 0.6%[9]. The highest rate of problem gambling was recorded in 2010 (0.9%) and the lowest in 2012 (0.5%). In 2016 (the most recent year for which we have data from a major household survey), the central estimate of the number of people in Great Britain with problem gambling (using the DSM-IV) was 290,000 (0.6% of the population above 16 years). If those identified as problem gamblers under the Problem Gambling Severity Index are added, the central estimate rises to 340,000. This is a large absolute number of people but a relatively small percentage of both the population and the gambling population.

1.3.6 – problem gambling and casinos. The rate of problem gambling for those who play table games in a casino has also been relatively stable despite a significant increase in casino visitation during the period. In 1999, the problem gambling rate for players of table games was 5.6% and in 2016 it was 7.1%. It should be noted that these data indicate correlation rather than causation – they do not indicate the extent to which casino gambling may or may not be the cause of any problems. By comparison with other forms of betting and gaming, casino gambling would appear to be a middle-ranking activity in terms of problem gambling prevalence.

1.3.7 – issues with measurement (general). The use of self-report surveys to identify gambling-related harms is not perfect. Some critics argue that problem gamblers are likely to be under-represented and that accuracy of recall (or even dishonesty) may depress reporting. On the other hand, some researchers contend that problem gambling prevalence surveys produce a high proportion of false-positives and have poor validity when compared with clinical screening – and that these factors result in exaggerated levels of problem gambling.

1.3.8 – international comparisons. Caution should be exercised in comparing of problem gambling rates between international jurisdictions, given the capacity for methodological and cultural differences to affect comparisons. However, so far as we can tell, the rate of problem gambling in Britain is relatively low by international standards[10].

2. What changes, if any, are required to bring the Act up to date with new technology and the latest knowledge about how gambling harm is distributed?                                                                                                                                           
The timing of the last comprehensive review of gambling in Great Britain (the Gambling Review Body of 2000 to 2001) and the last major restructuring of our gambling laws (the Gambling Act 2005) predated a number of profound changes to market supply – including the emergence of mobile gambling. The Gambling Review Body (whose 2001 report strongly influenced the Gambling Act 2005) estimated that around £100m was spent on remote gambling in 2001 – compared with around £5.5bn in 2018. As a consequence of this – and the British Government’s decision to abdicate responsibility for remote licensing prior to November 2014 – our gambling laws were not designed to consider these significant alterations in market supply. While there has been a number of changes to the way that remote gambling is regulated and taxed in this country, there have so far been no attempts to modernise the law for traditional, land based licensees to reflect the altered state of the market. As a result, casino operators have been held back in their attempts to meet customer expectations by a series of antiquated and anti-competitive regulations. We outline these below.

2.1 – the need for legislative modernisation for casinos. From a casino’s perspective, a number of changes are required to gambling legislation in Great Britain. These changes reflect societal changes, customer demand and the fact that the development of remote gambling has fundamentally changed the nature of gambling market supply – to the extent that anachronistic restrictions are not simply anti-competitive but also work against the best interests of consumers.

2.1.1 - revision of machine gaming entitlements to better match consumer interests. At present, the majority of casinos (145 out of 152 currently operating) in Great Britain are restricted to just 20 gaming machines, regardless of size or the volume of customer visits. The limit is entirely arbitrary and has resulted in a situation where less than 2% of the total number of gaming machines in land-based premises (i.e. excluding the almost universal availability of slots-style games available on millions of smartphones and internet devices) are found in casinos – in spite of the fact that these venues typically feature high levels of entry control and supervision. The present situation, where seven casinos are entitled to offer a higher number of machines[11] but the remaining 145 are restricted to just 20 is the result of the British Government’s failure to adhere to its own policy. The Government had planned to use the opening of new casinos under the Gambling Act 2005 as a trial for the wider modernisation of casino regulations. This was confirmed in July 2008 by the then Parliamentary Under-secretary for Culture, Media and Sport, Gerry Sutcliffe who indicated that an assessment was scheduled for 2014[12]: The first of the new casinos opened in 2010, in the London Borough of Newham and since then a further six have opened. We are now more than nine years on from the first opening and more than five years on from the scheduled Government assessment. In that time, there have been no suggestions that the wider availability and choice of machine gaming in these casinos has negatively affected the licensing objectives contained within the Gambling Act. As a consequence of this legislative paralysis, the British Government has pursued an approach of permitting machines proliferation in convenience locations while imposing heavy restrictions on destination venues. This is at odds with regulatory orthodoxy in gambling markets[13]. Indeed, in some jurisdictions in the world (e.g. France and Western Australia) gaming machines are only permitted within casinos.

2.1.2 – impact on consumers. At the Hippodrome Casino, we typically host between 4,000 and 8,000 customers a day (and at peak times have around 1,600 customers on our premises); yet we are able to offer them just 20 gaming machines. This creates a “restriction effect” which the economist, Professor Douglas Walker (of the College of Charleston, USA) observes is a type of harm to the consumer[14] (where the consumer is harmed through being prevented from engaging in mutually beneficial transactions[15] and from having freedom of choice curtailed). Consumers also suffer from a lack of choice as the casino machines supply market in Great Britain is insufficiently large to support more than a handful of suppliers. Thus, many popular games available in other jurisdictions (or indeed online in Britain) are unavailable to patrons of British casinos. Analysis provided by the European Casino Association (the ‘ECA’) has shown that British casinos derive the second-lowest proportion of revenue from gaming machines of any of the 25 European nations included in the ECA’s membership. Casinos also derive the lowest proportion of revenue from machines of any sector of the British gambling market (c20% in 2017/18) as well as the lowest absolute quantum of revenue. There are also some indications that current restrictions may result in unintended harm to consumers by discouraging breaks in play (for fear of losing one’s place at a machine) and encouraging persistence – something that was highlighted as a concern by the Department of Digital, Culture, Media and Sport in 2018. It also deters operators from being able to offer the normal full range of entertainments usually found in a modern casino by making investment economically unviable.

2.1.3 – consequences of reform. An increase in the number of machines permitted in casinos from 20 to a maximum of 80[16] (which has been discussed at length with the DCMS over the course of the last four years and agreed in principle) would result in more positive experiences for consumers; while any concerns around problematic gambling might be addressed through measures to ensure that high levels of play supervision are maintained[17]. We estimate that this change would result, over time, in the addition of around 2,500 machines in casinos nationwide (a further 17 per casino on average). The consequence of such a change would be a gradual and relatively modest increase in the total number of machines in casinos that would be more than offset by the anticipated reduction in machine numbers in other venues (notably licensed betting offices where around 12,000 machines are expected to disappear as a result of closures). An independent evaluation of the effects of changes would allow for regulatory recalibration or change if concerns were identified. In 2018, the Government acknowledged the problems posed by current restrictions and indicated that, should improvements to social responsibility be made[18], the sector’s requests for regulatory modernisation might be approved. Given the progress achieved by casinos in a number of areas – and in particular play tracking and limit-setting – we would like to see the reform of machine allocations brought forward. We note that our proposals are consistent with the views of both the Gambling Review Body (2000 to 2001) and the Culture, Media and Sport Select Committee inquiry of 2012.

2.1.4 – electronic casino games. Under current regulations, it is difficult to offer casino customers a full range of opportunities to play electronic versions of casino table games. This is because the law requires electronic table games to be based on actual physical events (such as the spin of a roulette wheel or the turn of a card) rather than the use of a random number generator (as is the case in most international markets). As a result, casinos have been largely restricted to being able to offer electronic roulette (where outcomes from an automatically spun physical wheel are relayed to electronic terminals) while electronic versions of blackjack, three-card poker or player-to-player poker have been rendered impractical by the need to use physical playing cards. We are unaware of any policy objective underpinning this restriction. As far as the consumer is concerned, it is irrelevant whether an electronic game is determined by a physical event or a random number generator. In terms of social responsibility, we are unaware of any reason why electronic casino games should not be made more readily available to consumers within a controlled casino environment (so long as appropriate technical standards are in place and that levels of supervision are maintained at high levels). We would like to be able to offer a wider range of Gambling Commission approved casino games via electronic terminals. This would involve the use of a random number generator to determine outcomes. We do not envisage that this change would necessarily lead to any significant expansion in the number of terminals in casinos – simply greater choice for consumers on existing units.  One negative consequence of the current restriction is that – in general – customers wishing to play casino card games are required to play at physical tables where minimum staking levels are typically much higher (reflecting the high costs of operating manned tables). The consumer may thus be harmed through restriction of choice and a higher cost of play. We consider that there may be wider social responsibility issues in relation to this restriction.

2.1.5 – sports betting. Under current regulations, only a handful of Britain’s casinos (seven out of 152) are able to offer sports betting, despite the fact that many casino customers enjoy a bet on sports. Once again, this approach is at odds with international regulatory practice. Indeed, in some jurisdictions sports betting is only permitted within casinos. We would like all casinos to be able to offer sports betting to customers under appropriate levels of supervision – particularly as observational evidence indicates that many casino customers are already betting online while watching sports within casinos. Permitting casinos to offer sports betting would have only a very minor effect on the supply of sports betting in land-based venues (there are currently 152 casinos and more than 8,000 betting shops in Britain). Indeed, given the planned closures of several thousands of betting shops, this provision would only minimally offset a large anticipated decline – and may result in the preservation of customer choice in certain markets. In terms of social responsibility, we note that sports betting has consistently had a relatively low level of problem gambling in British prevalence surveys; and that in the handful of casinos where it has been available (since 2010), no negative issues have been reported.

2.1.6 – positive change yields positive outcomes. The implementation of these relatively modest areas of legislative modernisation will lead to stepped up investment in casinos (including the expansion of non-gaming amenities), enhanced customer enjoyment and increased employment. In 2016, EY estimated that machine regulation changes alone (see 2.1.1) alone would yield £90m of capital investment, create 975 new jobs and increase in taxation of £65m. Changes to regulations covering electronic casino games and sports betting would trigger further investment and additional jobs and taxation. More importantly, they would result in the development of casinos as more broad-based entertainment venues, of higher value to the communities where situated and with higher economic and social benefits[19]. The Hippodrome Casino has developed plans to invest a further £2m in its premises should regulatory modernisation be approved. This is part of the casino’s £6m three-year capital investment package and in addition to the initial investment of around than £45m.

2.1.7 – addressing concerns. While we consider that the areas for modernisation outlined above are critical in order to “put the customer at the heart” of gambling policy, we are also aware that any increase in gambling opportunities are likely to cause concern. In addition to the fact that our requests are relatively modest (and are likely to only marginally offset declines in machines, electronic casino games and sports betting as a result of betting shop closures), we are investing in a range of initiatives to raise yet higher our standards of safe gambling. These measures are in addition to existing high standards and include enhanced employee training, play tracking, the development of diagnostic analytics, enhanced supervision and testing of biometric technologies. We believe that our actions are more than adequate to address concerns but are also keen to understand other ways to ensure that we may raise levels of consumer enjoyment

2.2 – taxation. Casinos in Great Britain – and in London in particular - are subject to high levels of duty that discourage investment and hinder their ability to compete in an international market (which in turn negatively affects tourism). Uniquely for retail, leisure and entertainment, casino games are taxed on a sliding scale of duty. The scale starts at 15% of gaming revenue (gross gaming yield) and ends at 50%. As a result, the effective rate across the casino sector is around 26%. At the Hippodrome, our effective rate of duty in 2018 was around 40%.[20] Britain’s casinos (which generate less than 10% of gross gambling yield in Great Britain) pay almost 13% of the total duties collected from the industry[21]. In the fiscal year 2018/19, the casino sector paid £266m in duty – an excess of at least £86m compared with what it would have contributed under VAT[22]. The Hippodrome Casino alone paid more than £24m in gaming duties - £14m more than would have been the vase under VAT. The Hippodrome’s total tax footprint (including VAT on non-gaming products, PAYE and business rates) was more than £32m. Such high levels of taxation fail to recognise the business risks involved in operating a casino and penalise the consumer. In a major review of gambling taxation in Europe (commissioned by the Netherlands Bureau for Economic Policy Analysis), the economist, Professor David Forrest found that “high taxes are likely to hurt recreational consumers badly while not necessarily mitigating problem play[23]”. Professor Forrest argued that the application of elevated rates of taxation for gambling is regressive and observes “the evidence is virtually unanimous that gambling taxes add to the unfairness of the tax system[24]”. A flattening of the duty regime would result in renewed investment in Britain’s casinos, triggering growth in consumer surplus, employment and taxation and supporting tourism.

3. Is gambling well regulated?                                                                                                                                                          
Britain has (so far as we can tell) low levels of illegal gambling; relatively low levels of problem gambling by international standards; low levels of cheating; and a generally compliant industry. This is despite fairly profound changes in market supply (notably the rise of remote gambling). The Gambling Commission only gained comprehensive oversight of the remote industry late in 2014 – two decades after the launch of the first online casino. While there are clearly some issues in relation to the regulation of remote gambling in Great Britain, these may be explained (at least in part) as legacy effects from the Government’s former ‘point of consumption’ approach to licensing. Over the last four-and-a-half years, the Commission has progressively raised standards in the regulation of remote gambling – particularly in the area of harm prevention. Standards of age verification are high within casinos (see section 9.2). We note too that recent changes to the Licensing Conditions and Codes of Practice have brought the remote sector into line with the industry at large by requiring age verification prior to play.

4. Should gambling operators have a legal duty of care to their customers?                                                                      
Casinos – in common with the broader licensed gambling market – already have an ethical, legal and regulatory responsibility to implement measures in order to protect vulnerable people. This requirement is enshrined in the Gambling Act 2005 – to ensure fairness and to protect against harm. This also applies to the Government and to the Gambling Commission – to legislate and regulate in accordance with these objectives. Gambling consumers also need to accept a level of responsibility for their own actions and behaviours. The autonomy of the consumer – alongside appropriate regulatory and licensee measures - is a critical component of harm prevention. Blaszczynski (2017) emphasises the importance of personal responsibility to the process of overcoming gambling disorder, writing that “it is a fundamental understanding in clinical psychology and psychiatry that people do not change their behaviour unless they are fully motivated”[25].

5. What are the social and economic costs of gambling?                                                                                                 
As we explore in 5.1 (below), estimating social and economic costs related to gambling is typically controversial and highly subjective. Some of the illustrative examples offered in the question may not meet the definition of “social and economic costs” under classical welfare economics. They may, however, qualify under the much broader classification of gambling-related harms (as proposed by Wardle et al., 2018). The absence of a systematic framework to measure costs or harms has resulted in a dearth of reliable data and the generation of some questionable research studies.

5.1 – Defining social costs. The research literature on the measurement of social and economic costs related to gambling reveals what Professor David Forrest (Management School, University of Liverpool; member of the Advisory Board for Safer Gambling) has described in his ‘An Economic and Social Review of Gambling in Great Britain’ as “a striking lack of consensus over methodology that suggests caution in taking any purported estimates of social cost too literally.”[26] This, he argues has given researchers “considerable scope…to exercise judgement in constructing their measure of social cost, with the risk that their own ideological perspectives may drive the results they report.”  The economist, Professor Douglas Walker of the College of Charleston has defined a social cost as “a reduction in social real wealth…[which] refers to whatever is valued by individuals”.  He goes on to state that “A change in the state of the world that simply redistributes wealth from some persons to others without changing the sum of wealth for all individuals taken together would produce neither a social cost nor a social benefit…This neutrality of wealth transfers in welfare applies even when the transfers are involuntary”[27]. Using this definition, Walker has set out a framework for what he considers are “legitimate social costs”[28] (see table 1).

What Walker’s framework makes clear is that some of the social costs are in opposition to one another. For example, an expansion of treatment services would represent an increase in treatment costs but would be expected to alleviate psychic costs. It also indicates just how difficult it can be to measure costs.

5.2 - The IPPR Study. In 2016, the Institute for Public Policy Research (‘IPPR’) published a report (commissioned by the Responsible Gambling Trust[31]). The report (entitled ‘Cards on the Table[32]’) considered costs to the state related to gambling disorder, based upon four areas:

• Health: primary care (mental health) services; secondary mental health services; and hospital inpatient services
• welfare and employment: Job Seekers Allowance (‘JSA’) claimant costs and lost labour tax receipts
• housing: statutory homelessness applications
• criminal justice:  incarcerations

The authors of the study defined fiscal costs as “a transfer from a government entity to a non-government entity: in this case an individual, or else the sum of individuals, who are problem gamblers.” They concluded that, based upon this definition, the excess cost to the state of people who were problem gamblers was likely to fall within the range of £260m to £1.16bn. It is important to note that the study was not designed to capture social costs. Indeed, under a social costs framework, a number of the costs reviewed would not be admissible. As we note below, the British Government’s Regulatory Policy Committee has criticised the IPPR’s report.  As the authors of the report acknowledge themselves, they were required to construct their estimates using imperfect data; and we consider that there may be a number of methodological flaws used within the calculation. Importantly, the study attempts to provide estimates of excess costs related to problem gambling; it does not comment (and cannot comment) on costs arising as a result of problem gambling. The authors are very clear on this point[33]. In April 2019. the British Government’s Regulatory Policy Committee (‘RPC’) criticised the IPPR report (along with a separate study by the Centre for Economics and Business Research) within the context of the DCMS Impact Assessment on stake reduction on B2 machines in licensed betting offices. The RPC commented on “limitations in the available data”, noting that the Government had been “unable to replicate the analysis, or to critique or test all of the assumptions that underpin the calculations and outputs[34]”.

5.3 – harm reporting. The harm reporting framework proposed by Wardle et al. (2018) may be useful in guiding future operational, healthcare and regulatory policies. It is unlikely however to be able to provide a reliable assessment of social costs related to gambling. However, as Walker (2015) notes, there may be practical value in simply acknowledging their existence (rather than trying to apply arbitrary monetary values to them). While welcoming recent advances in research of gambling-related harms, Delfabbro & King (2017 and 2019) raise a number of concerns with respect to how such information should be interpreted and used. In particular they note that setting a low threshold of what is considered “harmful” is likely to result in problems distinguishing between genuine harm and opportunity cost. They also highlight the difficulties in establishing whether specific harms are caused by excessive gambling or simply correlated. They observe that “in the National Co-morbidity Survey Replication in the US (Kessler, 2008), 96.3% [of] individuals with pathological gambling had a lifetime history of at least one other psychiatric disorder with the other disorder occurring first in about 75% of cases.”

5.4 – social costs and casinos. We note that – in terms of harm prevention – there is a number of inherent characteristics that put casinos in a relatively strong position. As Professor William Eadington and Professor Peter Collins observed in their 2009 paper on costs and benefits (which has strong policy implications for gambling in Britain and is worth reading in full), from different modes of gambling[35] the destination nature of casinos means that they are less likely to attract impulsive gambling; while their scale also gives them an “ability to implement more effective and pro-active responsible gambling programs and strategies”. Casinos in Great Britain benefit from a number of aspects that are likely to reduce the potential for harmful play:

• Mandatory entry supervision;
• A range of additional entry controls (including the use of facial recognition technologies and ID scanning systems);
• High levels of manual supervision by trained (and licensed) employees;
• High levels of supervision via CCTV;
• Play tracking through anti-money laundering provisions (mandatory) and player cards (voluntary);
• The presence of positive inducements to take breaks in play – such as enjoying a meal or watching live (non-gaming) entertainment.

In addition, casinos typically offer highly social environments, which as Thompson et al (2009) suggest itself acts as a risk mitigant: “Social restraints were seen as key to tackling problem gambling tendencies. It was widely felt that social relationships could enable problem gambling to be identified, monitored and addressed.”[36] The researchers contended that relationships between customers and between customers and employees served to moderate gambling behaviour: “Members of staff and fellow customers at gambling venues were seen as better positioned to identify gamblers who were exhibiting problematic behaviour.”[37]

6. What are the social and economic benefits of gambling? As with estimating social and economic costs, the process of identifying and measuring benefits is fraught with issues of selection and attribution. Men and women have been gambling in some form or other for several millennia – and in every part of the world and in every major culture. As Jan McMillen (the former chair of the Australian Institute of Gambling Research) has written, “Gambling is one of the few social activities that occurs in nearly all cultures and in every period of time: in this respect it can be said to be virtually a universal phenomenon in human societies.”[38] Given that gambling appears to be an enduringly human pastime, it ought therefore to be self-evident that it involves a range of benefits for those who participate in it and others.

6.1 - consumer enjoyment. As Ross et al. (2008) observes, the principal social and economic benefit of the gambling industry is to allow adults to engage in pursuits that they wish to do and find enjoyable. Casinos exist as a direct response to consumer needs, providing a structured and trusted mechanism for consumers to play the games that they enjoy in a social and supervised setting[39]. Walker adds that, “there can be no greater benefit from legalized casino gambling than the enjoyment the consumers achieve from the activity[40].”

6.1.1 – customer enjoyment at the Hippodrome Casino. The Hippodrome Casino surveys customers every month to record willingness to recommend (net promoter score or ‘NPS’). Our NPS currently stands at 84%, which according to Bain (who developed the NPS) is considered to be “world class”. At present, 60% of our ratings (n=1,182) on TripAdvisor are “excellent” and 22% “very good”. These scores put us above other entertainment and tourism venues such as Alton Towers (43% excellent) and the London Eye (55% excellent); and only slightly below the Tower of London (67% excellent). In addition, 64% of TripAdvisor ratings for our Heliot Steakhouse (n=1,778) are “excellent” and 18% are “very good”; while customer reviews of our Magic Mike show (n=328) are 58% “excellent” and 11% “very good”. Our combined TripAdvisor score (based upon “excellent” or “very good” reviews for the casino, our restaurant and the Magic Mike show) is currently 81%[41].

6.1.2 - consumer surplus. Economists traditionally measure consumption benefit by estimating consumer surplus. Consumer surplus describes the difference between the value that consumers ascribe to a product or service and the price that they pay to obtain it. Forrest (2013) observes that while no rigorous assessment of consumer surplus in relation to gambling in Great Britain has been carried out, his “rough calculations” (based upon the approach to calculating consumer surplus used by the Australian Productivity Commission) showed “a consumption value for Britain” in 2011-2012 of £1.9bn. This, he wrote was the “’value of fun’ equivalent in terms of benefits to individuals of giving household in the country extra untaxed income of about £75 per year”[42]. We note that the gambling market has grown in value by almost one-quarter since that point (in absolute terms). It therefore seems likely that consumer surplus may also have increased materially; although by how much is difficult to estimate. We believe that a conservative estimate of consumer surplus from gambling in 2018/19 would put the value in excess of £2bn. This indicates that casinos are likely to generate consumer surplus in the range of £200m to £250m a year and that the Hippodrome Casino may generate consumer surplus of £12m to £18m a year. Indeed, if we consider Eadington and Collins (2009) analysis of costs and benefits (which found that casinos generate the highest ratio of benefits to costs), these figures are likely to be under-estimates.

6.1.3 - well-being and happiness. There has been a limited number of studies in recent years to understand well-being or happiness in relation to gambling. In studying data from the BGPS 2010, Forrest (2013) found that among men, “results indicate a statistically significant increase of just under 0.2 points on the happiness scale if the subject is a recreational gambler rather than a non-gambler”; and that “this is a non-trivial effect, close to that predicted by the model if the individual is moved from the mid- to the top-tercile in the income distribution”[43]. This finding was consistent with a later study a study by Blackman et al. (2019) that found not only higher levels of well-being among recreational gamblers than non-gamblers but also found that well-being increased with gambling engagement – except in those cases where problem gambling occurred[44]. There has been a number of studies of self-reported happiness and gambling among elderly people in care homes[45]. These studies have consistently demonstrated higher levels of happiness among those who gambled regularly and higher levels of happiness while gambling by all participants. Some studies have found that participation in certain gambling activities may increase mental acuity.

6.2 – social and economic benefits of casinos. We consider the social and economic benefits of casinos specifically. According to Eadington and Collins (2009), gambling in destination casino venues results in high levels of benefits (as well as lower levels of costs, as identified above). These benefits are driven by the following factors:

• The ability to attract customers from outside the local community (including tourists);
• High levels of capital investment (including infrastructure spending);
• The offering of a wide range of amenities (including dining and non-gaming entertainment).

The potential for casinos to support investment and tourism are likely to become increasingly important in the future, given the United Kingdom’s planned exit from the European Union. In addition, we note that casinos in Great Britain employ more than 14,100 people – often in highly skilled positions (a large number hold personal licences from the Gambling Commission).

6.2.1 – tourism. International research indicates that casinos have significant potential for encouraging tourism. Eadington (1999) observed that “the form of legal gambling that is most associated with tourism is casino gaming[46]”. Casinos, particularly large entertainment-led casinos and high-end London casinos play an important role in supporting British tourism. With the support of the Government (to permit greater choice of games as described in 2.1), the casino sector has the potential to play an even greater role in stimulating visitation and expenditure by overseas visitors (see section 6.1). At the same time, the failure to modernise casino regulations may be the cause of an outflow of economic value as both international visitors and British citizens switch their consumption to casinos in overseas jurisdictions (both existing markets such as Las Vegas[47] and new markets such as the integrated resort casinos under development in Cyprus and Spain).

6.2.2 – community benefits. In addition to the consumer and employment benefits, other advantages are bestowed on consumers by the local licensing of casinos. For example, casinos typically offer the use (without charge) of facilities to community groups. Since its opening in 2012, the Hippodrome Casino has provided a home for London’s Chinese Community Centre at an estimated cost of £150,000 per year. The casino is an active supporter of London’s Chinatown community and participates in cultural events throughout the year. The Hippodrome also provides support, meeting rooms and refreshments for a range of other groups, including charities, local business groups and even the Metropolitan Police. The annual value of these donated goods and services is more than £40,000.

6.3 – casinos – how revenue is distributed. The economic effects of casinos flow to a wide range of parties, including the Government, casino employees and their families, and other businesses. In 2018/19, the Hippodrome paid £32.3m in taxation, representing around 42% of business income. To illustrate how casino revenue is distributed, we can consider the average (mean) expenditure on a visit to the Hippodrome Casino of £44.68 (broadly commensurate with expenditure on other leisure activities in central London). Of this consumer expenditure, Her Majesty’s Revenue and Customs receives £19.55; £9.51 is paid to employees of the casino in wages and benefits; £13.16 is paid to other businesses (property costs and the supply of goods and services; £0.47 is paid in loan interest. Ultimately, just £0.77 is retained by the casino as profit (a modest reward given business risks).

It is clear from this illustration (see Chart 2, above) that consumer expenditure on casino gaming provides high levels of income to the Government and benefits a wider range of stakeholders who help to drive economic activity in Great Britain. If anything, the rewards (in terms of retained earnings) to owners of casinos (who risk capital to establish and operate them) are very low – something that needs to be taken into consideration when assessing matters of regulatory and fiscal change.

6.4 – summary of benefits from casinos. Tables 3 and 4 (below) summarise some of the beneficial effects of Britain’s casinos and the Hippodrome Casino in particular.

7. Is the money raised by the levy adequate to meet the current needs for research, education and treatment?
The Hippodrome is a long-standing supporter of research, education and treatment. We have provided financial and non-financial support for a wide range of organisations, including GamCare, GambleAware and YGAM. In addition, we have sponsored research into problematic gambling on casino products. The question of funding adequacy assumes that there is a clear understanding of a) how much is raised at present in relation to section 3.1.1 of the Licence Conditions and Codes of Practice; and b) how much is required for research, education and treatment. We examine these below:

7.1 - how much is currently raised? There has been a tendency in policy debates to focus exclusively on funding provided to GambleAware; yet this does not represent the sum total of contributions to research, education and treatment (‘RET’) and is only a fraction of industry funding for harm prevention more widely. We can however make assessments of funds raised in relation to the three-year National Responsible Gambling Strategy (or the ‘NRGS’) which set out the official approach to RET. Under the NRGS, the Responsible Gambling Strategy Board, the Gambling Commission and GambleAware agreed how much would be required for GambleAware to fulfil its responsibilities. It does not include expenditure by the Gambling Commission in pursuit of its responsibilities under the strategy (which is funded by the industry through licence fees[48]) nor by the industry (for example in the establishment and operation of multi-operator self-exclusion schemes).

In recent years therefore, voluntary contributions from licensees to GambleAware in relation to the NRGS have been closely aligned to the budget set (excluding GambleAware operating costs of c£1m per annum). Including funds made available to GambleAware via voluntary regulatory settlements, a large surplus to budget has been achieved. If we are considering whether sufficient funds have been made available by the industry to meet the RET requirements identified by the RGSB/ABSG, then the answer would appear to be emphatically positive. It may be that greater funding is required than has been identified in the past; and we examine this question below. However, in recent years, it is difficult to avoid the conclusion that the voluntary system of donations has been relatively successful in achieving funding targets. Clearly, there can be no reliance on funds arising from regulatory settlements in the future. However, we would observe that a) there is a sizeable reserve of unallocated funds currently available to achieve the aims of the National Strategy to Reduce Harms; and b) the voluntary levy system has been moderately successful in raising funds sufficient to meet official requirements in the past. It seems plausible that with better engagement of licensees as part of the NRGS/NSRGH, a voluntary system could meet funding requirements. The recent commitment of five operators to increase RET funding to £60m per annum by 2023 strongly suggests that it should be possible to achieve even the RGSB’s implied upper estimate of required funding (of £76m per annum)[49].

7.2 - how much is required? In 2018, the Gambling Commission published estimates for future funding indicating a range from £21.5m to £67m. However, official estimates have been arrived at using only very high-level analysis – including comparisons with other jurisdictions (e.g. Canada, New Zealand, some US states) and other domains (e.g. alcohol harm). Such comparisons may help frame the debate but are not directly germane to the question of how much should be invested in Great Britain. For example, there is no law of parity when it comes to treating health disorders (alcohol disorder may typically involve significant detriment to physical health as well as mental health – leading to different approaches to treatment). At present however, there is no funding guidance under the National Strategy to Reduce Harms (the ‘NSRH’) equivalent to that disclosed in the NRGS. This is unhelpful and we hope that it may be provided soon. We consider that it would be useful for a robust needs assessment to take place in order to determine what RET services are required, how they should be provided and how much they might be expected to cost.

7.3 - do we need a mandatory levy? The idea of a mandatory levy is of course not without merit. In theory, it offers a high degree of transparency and funding stability; and it is perhaps more equitable than a purely voluntary arrangement. However, we believe that this proposal requires far more thorough examination than has heretofore been the case. In particular, we would wish to understand the costs (to the state and to industry) of running a scheme; the governance arrangements that would be put in place; how funding levels would be calculated (including contributions from the National Lottery); how funds would be collected and by whom; the basis for distribution of funds; how funds would be ring-fenced; how the scheme would be enforced; and what sanctions would be employed for late payment or non-payment. In addition, we note that attention should be paid to possible unintended negative consequences arising from a mandatory scheme. In particular, the shift from a voluntary scheme to a mandatory one may result in a diminution of engagement and interest between the industry and organisations carrying out work in research, education and treatment (which we observe anecdotally appears to have happened in certain jurisdictions where statutory schemes are in place). In short, there may be advantages to a system built on intrinsic motivation rather than coercion.

7.4 - who should pay? It seems to be a generally accepted principle that funding for RET should be borne by the gambling industry under a “polluter pays” principle. This view appears to be at odds with broader public health approaches where RET is funded from general taxation; and also requires an understanding, not yet sufficiently clear, of the source of “pollution”. We observe that the gambling industry already contribute around £3bn a year in duties[50] around £2bn of which relates to non-lottery products. We estimate that if these gambling expenditures were subject to VAT at the standard rate then Her Majesty’s Revenue and Customs would receive at least £200m less in taxation each year. As we have set out above (in response to Question 2), casinos contribute an excess of at least £84m a year; and the Hippodrome Casino generates an excess of £14m a year. If we assume that gambling duties are set higher than the standard rate of VAT because there is an appreciation of social and economic harms, then it seems logical that the excess tax revenue might be allocated towards addressing those harms. Those operators paying very high levels of gambling duties (for example, London casino operators, some of whom pay more than 40% of their revenue to HMRC in gaming duty) might reasonably ask why such tax receipts are not allocated to treatment services.

In addition, we highlight that the “polluter pays” principle makes an assumption of causation. We should always bear in mind that gambling-related harms are not necessarily the same as harms caused by gambling. We do not dispute the fact that excessive gambling can lead to some very severe harms; but it ought to be recognised that excessive gambling can also be the result of pre-existing harms. There is also the matter of comorbidity with other disorders (such as alcohol or substance misuse).  The gambling industry has provided funding – almost entirely exclusively - for RET for 17 years; and we will continue to do so into the future. We are not seeking to avoid our social responsibilities; nor are we opposed in principle to a mandatory system. However, we do consider that any review of RET funding (and in particular any structural changes to the current system) should at least consider why it is considered inappropriate to use public finances (and in particular excess taxation) for this purpose.

8. How might we improve the quality and timeliness of research in the UK?

8.1 – a long-term and inclusive strategy. We consider that a more expansive, pragmatic and coordinated approach to research would be more effective in guiding operational, regulatory, prevention and treatment policies. First, we consider that there should be a greater focus on applied research to assess the effectiveness of different operator prevention and support mechanisms. This would involve evaluation of sector or major industry-wide initiatives (such as the assessment of multi-operator self-exclusion schemes) but also smaller projects to compare different approaches to common problems by different operators. It would also involve a more collaborative approach to research, built upon greater trust. We are aware of criticism of industry participation in research but contend that the involvement of licensees involves a number of benefits (including better access to consumers and consumer data and greater engagement in harm reduction). Moreover, we note the results of a recent large-scale study by Shaffer et al (2019) of 720 research papers produced between 2008 and 2018. The authors found that the evidence did “not support the hypothesis that gambling research methodological quality or study outcomes is biased by funding source”[51]. They also observed that industry-funded research tended to be more transparent than supposedly “independent” studies, with “conflicts of interest statements…more likely to be included among studies funded by the gambling industry compared to other funding sources”[52]. We would like to see the development of a proper research strategy, involving longitudinal studies of gambling and problem gambling behaviour and prevalence alongside applied research conducted in association with operators and treatment providers. As part of this approach, attempts should be made to synthesise findings and identify practical consequences.

8.2 – evaluating legislative change. In addition, changes to regulation and legislation should be assessed. This recommendation was included in the Gambling Review Body in 2001 and yet, with a small number of exceptions, this has been largely ignored over the last 18 years. We consider that where regulatory relaxation or tightening are concerned, it may be worth considering limited trials. In this way, the consequences of restrictions could be better understood before full enactment. It might also make it easier for the Government to make positive changes to legislation in the interests of consumer enjoyment by being able to identify and address concerns. As we have observed above, the British Government committed to an evaluation (due in 2014) of the trial of casino reforms with some casinos having larger numbers of gaming machines but this has not yet transpired.

8.4 – understanding positive play. We support the recommendation made in the Report of the Gambling Review Body in 2001 (the ‘Budd Report’) that the benefits of gambling should be studied in addition to harms. This is critical for using research to divine balanced, sound policy that “puts the customer at the heart” (as the Gambling Commission has urged). We also believe that in focusing on healthy attitudes and behaviours we may be better able to identify the behaviours that we should encourage (rather than simply those behaviours that we should discourage). It might also help to guide more responsible product and service innovation. To date, there has been almost no official research carried out on consumer benefits and positive play; and it has been indicated that there is no official appetite to conduct such work under RET arrangements (even with a substantial increase in funding). This contravenes the description of “a public health approach” as articulated by Latvala et al. (2019): “In a public health approach, the impacts of gambling, negative and positive, are assessed”; and “in a public health approach, the positive effects associated with gambling are recognized”[53].

9. If, as the Responsible Gambling Strategy Board (RGSB) has suggested, there is limited evidence on which to base sound decisions about gambling by children and young people, what steps should be taken to rectify this situation? 

9.1 – research. Undertaking research where children are concerned poses specific challenges and ethical concerns. For one thing, where children are gambling on age-restricted products, it is by definition impossible to track and monitor their behaviour. Where self-report studies of gambling by children are concerned, there are specific issues of interpretation and recall. At present the Gambling Commission’s annual survey of gambling by 11-to-16-year-olds is the principal research vehicle for understanding gambling – and problem gambling – behaviour by children. As we have noted earlier, a high degree of caution is required when attempting to draw conclusions from this data – including interpretation and sample sizes. We suggest that this survey be continued but that thought be given to using a larger survey sample and that the research methodology be independently reviewed in the light of latest research into youth studies. We note too that the Avon Longitudinal Study of Parents and Children (‘ALSPAC’) has provided some useful information about gambling by young people and, in particular, how gambling attitudes and behaviours change as children grow up. There has also been a number of studies of gambling by children and young people. However, there appears to be an absence of coordination between these projects. We recommend that consideration be given to developing a research strategy to enhance understanding of gambling by children and young people.                                                            

10. Is enough being done to provide effective public education about gambling? If not, what more should be done?  

Public education about the risks of gambling is still relatively undeveloped in Great Britain, although in recent years substantial sums have been invested in this area – most prominently through the Senet Group’s ‘When the Fun Stops Stop’ and ‘Bad Betty’ campaigns; and more recently through GambleAware’s ‘Bet Regret’ campaign. There has also been a number of schools-based initiatives through organisations such as GamCare, YGAM, Demos and Fast Forward. In order to assess effectiveness, it is important to understand – prior to commencement - the aims that the public education programme is designed to achieve. For example, research has shown that public education programmes may be successful in raising awareness of risks but have little positive effect on behaviour (and sometimes may result in unintended negative consequences). This is particularly likely to be the case for campaigns aimed at children. At present, there is little coordination between public health campaigns (to raise awareness of risks at a population level), operator-led campaigns (to encourage moderation and play management by their customers) and treatment campaigns (to encourage help-seeking). It is likely that an overarching strategy may be required to link each of these elements. We believe that public education should be a focus of any strategy to reduce harms – but that simply increasing scope of current initiatives without attempting to gauge effects and recalibrate may not be a good use of resources. There is likely to be merit in understanding what lessons may be learned from other jurisdictions (notably Canada, which has pioneered education campaigns in relation to gambling) and other domains (e.g. alcohol).

11. Are the services available for the treatment and support of people at risk of being harmed by gambling sufficient and effective? 

11.1 – current provision. There is a number of reasons to believe that the current range of treatment services in Great Britain requires expansion. Gambling disorder is a highly complex and heterogeneous disorder. The behaviours, root issues, symptoms, consequences and severity may vary significantly between diagnosed individuals. Thus, it is unlikely that all problem gamblers require the same treatment. Second, very little is currently known about the effectiveness of different treatment services. Third, very little is known about the current use of problem gambling treatment services beyond those funded directly by GambleAware. Based upon the recent pledge by five of Britain’s largest operators to commit £100m for treatment services between 2019 and 2023 as well as plans published under the NHS Long-Term Plan, it seems likely that the resources necessary to achieve a substantial expansion of treatment and support is required. The critical challenge is to ensure that funds are spent wisely to support those in greatest need (including affected others).

11.2 – improvement of services. There is little research currently available into the effectiveness of treatment services in Britain. There has also been no systematic attempt to understand the full extent of treatment provision across the country (outside services funded by GambleAware). With these factors in mind, we advise that care is taken when expanding services not to focus exclusively on numbers of people receiving treatment. Importantly, it should be noted that not everyone with a gambling disorder will need treatment[54]. While it is commonly stated that only 2% to 3% of problem gamblers receive treatment, these estimates ignore therapy services provided by Gamblers Anonymous, by private organisations, by the National Problem Gambling Helpline and by community and health groups. It also ignores findings from the AMPS 2007[55] that a high proportion of problem gamblers access non-gambling-specific mental health services. The ambition should be to provide treatment and support based around the needs of the individuals concerned. Research has indicated that, for some, helplines can be effective in achieving moderated behaviour and/or abstinence. The value of such services for people with lower severity gambling disorder should not be discounted. Research indicates that most problem gamblers correct their behaviour without recourse to formal treatment services; and that relapse is a significant factor in sustaining levels of problem gambling. It is likely that efforts to improve long-term effectiveness of treatment services may be more effective than simply increasing the number of people accessing such services.

11.3 – encouraging greater use of treatment services. A major US study of help-seeking amongst those with alcohol disorder [56] has indicated that the biggest reasons for not obtaining professional support help are the beliefs that formal help is not needed to address problems; and that the problems will resolve themselves naturally. It seems likely that these findings may be applicable to gambling disorder also. Blaszczynski (2017) notes that, “some gamblers are reluctant to seek treatment because they believe that they can overcome their problems on their own and consequently do not need outside help”[57]. Given high levels of self-correction, this may be a rational point of view for some – but certainly not all – problem gamblers. In an earlier work, Blaszczynski (2015) notes that “very few people seek help for gambling problems because so few experience the rare and critical events that often compel people to seek help”. We should at least consider the possibility that low rates of help-seeking reflect low levels of interest and perceived relevance amongst the target population (of people with a gambling disorder). The clear suggestion is that there may be benefits in formally recognising that different people will have different needs in terms of support and in encouraging those at risk of harm to receive (lower level) help before serious problem occur. Such an approach appears at odds with the more simplistic but oft cited suggestion that we should be striving for an increase in the number of people accessing existing services. Blaszczynski (2017) observes that “the stigma associated with gambling is [a] deterrent to seeking help”[58]. We suggest that taking steps to destigmatise help-seeking may help. A better understanding of pathways to problem gambling and stronger links between specialist treatment services (e.g. GamCare and its partners) and operators, healthcare providers (GPs or other mental health services for example), homelessness services, the criminal justice and penal system may increase use of treatment. Given concerns in relation to relapse, thought should be given to improving levels of follow-up care, ensuring that the issues underlying the problematic gambling are addressed and helping those who have experienced severe harm (e.g. loss of employment) to rebuild their lives.

12. What steps should be taken better to understand any link between suicide and gambling? 

Suicide is a complex and emotionally charged issue and the examination of any links to gambling or disordered gambling requires care and sensitivity. The Samaritans advises that “Over-simplification of the causes or perceived ‘triggers’ for a suicide can be misleading and is unlikely to reflect accurately the complexity of suicide. For example, [we should] avoid the suggestion that a single incident, such as loss of a job, relationship breakdown or bereavement, was the cause.”[59] We suggest that a collaborative and careful approach to understanding linkages is required. The aim of research should be to explore what is clearly a difficult subject and provide pragmatic solutions rather than to promote specific ideologies. The first stage, in our view should be a scoping study. We support in principle the proposal contained within Wardle et al. (2018) for coroners to actively consider the involvement of gambling in suicides but suggest that this should be accompanied by consideration of how this might be achieved in an appropriately scientific fashion (for example by ensuring that coroners are suitably equipped to identify the presence of gambling disorder and assess it influence alongside other factors). We note that great care needs to be taken when assessing and reporting on gambling-related suicide. We are aware of a number of scientifically weak attempts to estimate gambling-related suicides in Great Britain. Where gambling disorder is identified as having involvement, care should be taken not to attribute direct causation without appropriate examination. Some problem gamblers do die by suicide; but it should not be automatically assumed that gambling disorder is a motivational (or solely motivational factor) in each of these cases. As Latvala et al. (2019) points out, “the interaction between suicide and gambling is complex, and it would be an oversimplification to assert that gambling causes suicides.[60]” Where research is carried out, it is important that findings are treated scientifically and with due sensitivity. We are concerned that some members of the press and the political community (and even some researchers) have ignored guidelines on suicide reporting provided by the Samaritans. In particular, we would advise that care needs to be taken not to encourage over-simplification, over-identification and imitation (for example by suggesting that suicide is a common choice for those with gambling disorder); and melodramatic or sensational reporting. We hope that serious attempts are made to adhere to these guidelines. If not, then it seems plausible that any attempts to understand linkages through research may have unintended negative consequences and that useful insights may be lost in distorted reporting.

13. The RGSB has said that by not taking action to limit the exposure of young people to gambling advertising “we are in danger of inadvertently conducting an uncontrolled social experiment on today’s youth, the outcome of which is uncertain but could be significant.” Do you agree?

In respect of this question, we wish to observe only that prior to 2007, land based casinos were subject to outdated and draconian restrictions on advertising. Since the full implementation of the Gambling Act in 2007, casinos have made relatively modest use of greater freedom to advertise. We do not believe that current concerns in relation to advertising have anything to do with the activities of traditional, land based casinos. It is therefore important to consider precisely the nature of concerns in this space and to address them in a targeted fashion in order to guard against negative unintended consequences.

We have elected not to respond to questions 14, 15, 16, 17, 18 and 19 as all of our gambling products are for those aged 18 years and older; and we do not operate a lottery.

Appendix

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6 September 2019