In the first of an occasional series, Casino Review picks the brains of a group of industry luminaries and thought-leaders getting their response to a range of pressing and topical issues including how the Government’s response to Covid impacted different sectors of the industry, whether the Gambling Commission is fit for purpose, the thinking behind affordability checks and why the industry appears to be so bereft of political allies. The C-Suite providing their insight are all part of the Spray Lakes community of consultants comprising founder Nick Harding who, in a career spanning four decades, has led corporate transactions with a value of £500m; commercial and technology lawyer specialising in the betting and gaming sector, Jonathan Garnett; Andrew Tottenham, Managing Director of management consulting firm Tottenham & Co and Ian Chuter, who has over 35-years senior level experience gained across both the land-based and online gambling sectors.
Rewind to March 2020 - what would you have done differently if you were the PM and how would you have dealt with the leisure/hospitality industry. Did the decision to allow LBOs to open but keep AGCs, Bingo Halls and Pubs shut make sense - for example?
NICK HARDING
Hindsight is a wonderful thing, isn’t it? It has been fascinating listening to the gospel according to Dominic Cummings over recent days but one thing is for sure, no one could have possibly got it all right and on balance I think that the Government did a reasonable job. The big mistake was the Christmas opening-up but as I say, hindsight… As far as leisure and hospitality venues were concerned of course they would be closed down in line with nonessential retail but I was surprised that Bookmakers were allowed to open ahead of other retail gaming premises, all of which had stepped up to the plate and had put in place strict rules for social distancing and hygiene. I can only imagine that the Government was convinced that customers go into retail betting shops to place a quick bet and then leave: clearly that isn’t the case in a modern shop where players are encouraged to stay longer but you have to take your hat off to the Bookmaking lobbyists who got the argument over the line and got the shops reopened.
JONATHAN GARNETT
Whilst it’s easy to see clearly when picking over the bones of any chaotic emergency situation, we don’t, and may never, have visibility of the data that was available to hand at the time the decisions were made. That said, the enormity of the situation demanded nothing less than a true medical understanding of what SARS Cov 2 was; what the PM listened to were the ideas of an army of statistical modellers presenting an �?end of world’ scenario as the most probable, based on dubious �?science’ that simply wasn’t questioned enough - if at all. What followed in terms of decision-making (close v not close) was always going to be arbitrary.
ANDREW TOTTENHAM
The Government should have locked down much earlier and sealed our borders with only those testing negative, being allowed in without quarantine. Had they done so we could have been in the same position as New Zealand, Australia, Taiwan or Macao. What we know now is that the disease spreads through aerosols, very fine drops emitted when people breath, shout or sing. Dwell time and ventilation are key variables in the transmission of the disease. To the extent that LBOs do not encourage long stays (i.e. short transactions only) then it was correct, although I am not sure that this was the Government’s reasoning at the time.
IAN CHUTER
Considering the Dominic Cummings testimony to the Covid-19 inquiry it’s clear the Government are guilty of making countless mistakes. However, I do have sympathy as they were dealing with the unknown and trying to balance the scales of Health and the Economy. Pubs and Bingo are busy social environments so exercising caution was probably right, but LBO’s and AGC’s are similar low footfall environments so one without the other appears inconsistent. However, LBOs operate on a basis of staff being sat behind a counter and AGC’s pride themselves on customer service so operate on the shop floor. This would have meant LBOs were able to clearly demonstrate how both staff and customers could remain safe. Ultimately it would have come down to each party’s ability to convince Government and the LBO sector has always been very good at this. With the benefit of hindsight, it was probably too early for either LBO’s or AGC’s to open.
Senior Conservative MP and former leader, Iain Duncan Smith has been scathing in his criticism of the regulator calling for the Government �?to get rid of the Gambling Commission altogether’. Is the Commission fit for purpose and if not, what needs to be done?
NICK HARDING
Sadly, I haven’t felt that the Commission has been fit for purpose for some time now but I don’t agree with IDS. What does he suggest, that Betting and Gaming go back to the Home Office? Getting rid of the GC would be a bad move, instead the Commissioners now need to appoint a strong, well-rounded and commercial CEO who can relate directly to industry, reestablish rapport with all stakeholders and settle everyone down. I think it is ridiculous that none of the Commissioners have any experience of the UK Betting and Gaming sector at �?the coal face’. What other quango representing a work force of over 100,000 would feel that it was �?a good thing’ not to have industry representatives advising the regulator?
JONATHAN GARNETT
As with any industry regulator, unless it exists to regulate and where necessary enforce breaches, then there will always be those that have the appetite to fire shots and generate sound-bites; particularly MPs. What seems to be the case across many industries which are subject to fast-paced change, often technology-led, is that regulators will always be enforcing aging laws or regulations that addressed issues of the day; but which become outdated, due to the pace of change and ingenuity of an industry finding ways to push the boundaries further out.
ANDREW TOTTENHAM
Under the 2005 Gambling Act, the GC has wide ranging powers, which are quite sufficient for their purpose. It is how they use those powers which is open to question. The National Audit Office was deeply critical of the GC’s habit of promulgating regulations without understanding the impact of what they propose.
IAN CHUTER
I don’t agree with the APPG for gambling on this, but it does need to adapt faster. I have dealt with Regulators across Europe and the UK in the Digital space, and the UK is highly regarded. However, the world in terms of technology and society is moving rapidly and regulation needs to keep pace. UKGC has lost a lot of talent over the past five years as operators seek to hire the best to address the compliance and regulatory challenges. UKGC is consulting on many subjects but eventually guidelines need to be produced and experience counts when it comes to this. The exit of Neil McArthur at such a key stage will be a loss in my honest opinion as it will just slow things down again when what’s required is a greater sense of urgency and pace. Experience counts when you need to move at pace.
Will Affordability Checks be introduced as part of the Review? Whilst they are being scoped in relation to online, is the philosophy behind them a threat to all parts of the business including Cat C and B3?
NICK HARDING
Affordability checks seem to have been proposed by people who got a degree in history at Durham and then became graduate trainees in some policy think tank that is far removed- both physically and psychologically - from the real world. What next, the barman in your local checking that you really can afford that pint of beer, or the shop assistant at John Lewis checking your monthly outgoings before allowing you the pleasure of buying a new OLED TV? This suggestion strikes deeper than just gambling, it is a slow drift towards Totalitarianism and must be comprehensively resisted.
JONATHAN GARNETT
It appears that affordability checks are less likely than feared. Whilst the philosophy behind checks is well intended; there has to be a balance between the cost of implementing the measures (who will eventually pay?), the more intrusive or rigorous the checks the more likely the cost of implementation will increase, and the more likely it will simply turn non-problematic gamblers away; and therefore, act as a blunt instrument: the opposite of the anticipated surgical re-wiring of the 2005 Act. It is incredibly difficult to see how effective affordability checks could be implemented in land-based premises; and perhaps then, it may actually drive more �?hardened’ gamblers towards environments with less oversight as an unintended consequence.
ANDREW TOTTENHAM
Inevitably the whole of the industry will face further restrictions. The anti-gambling groups and media do not distinguish between types of gambling/gaming machines and regulatory �?mission creep’ will occur.
IAN CHUTER
Let alone the nanny state and privacy issues that this subject raises the all-important question is how it can be implemented. Ultimately, it’s the same process as when you apply for a mortgage. We can’t even introduce a national ID card without civil activists crying foul. Now they will have to prove they can afford to gamble – What next prove you can afford to drink or smoke. Politically I believe it to be a step too far. I see it as a pipe dream instead of focusing on education, social responsibility tools and Artificial Intelligence predictor models. It’s hard enough to consider how you would do it online let alone in a land-based sector and if am wrong it would represent a huge threat to the land-based sector. My experience when you ask customers to provide information in relation to KYC is that they see it as a form of intrusion and just say no and take their business elsewhere. Operators are then left with the option of do they or don’t they report them to the National Crime Agency.
Why does the gambling industry appear to have so few political allies?
NICK HARDING
This is not a recent phenomenon: clearly supporting the Gambling Industry is not a vote winner in the UK so we all have to work very hard to convince MPs to give the industry a fair hearing. Ten years ago, at BACTA we hosted regular briefing dinners with all the major political parties. The opportunity to show MPs that gambling is a fundamental part of the UK Entertainment industry was enormously valuable and re-establishing the programme would go a long way to increasing the number of political allies that we have. I would go farther and suggest (again) that BACTA and the Bingo Association should now amalgamate in order to properly promote the low stake end of the industry.
JONATHAN GARNETT
Perhaps because it’s too sensitive a subject for a politician to get behind and tell a good story. The industry is aware of the problems in certain parts of its customer base. Modern journalism doesn’t help as it polarizes views by focusing on the problems. So, to expect a politician of any leaning to extol the virtues or social utility of the industry against that backdrop is always going to be a struggle.
ANDREW TOTTENHAM
There are no votes in gambling, in fact, for politicians anything but. A negative stance is toxic - the antigambling groups and media pile on any politician that supports the industry. The general public breaks down in to three main groups; one third likes gambling but will not speak out in support of it: one third doesn’t care either way and one third, an extremely vociferous third, hates gambling and wants to see it banned. It is very difficult to write stories about the positive aspects of gambling - bad news stories sell �?papers.
IAN CHUTER
Gambling is not a vote winner so politicians will think very hard when it comes to being pro– gambling. However, MPs are there to serve their constituents and listen to their concerns. Anyone who works in the industry should be forming a relationship with their local MP so they can explain the issues that exist and what needs to happen going forward. There are many MP’s that are supportive of the sector but equally there are those who have negative views. It’s really important that we change the perceptions that exist by providing a balanced story to counter the negativity that exists in some quarters.
SPRAY LAKES IS A SPECIALIST HUB DEDICATED TO SATISFYING THE BUSINESS NEEDS OF THE EUROPEAN BETTING AND GAMBLING INDUSTRY. IT PROVIDES COMPANIES WITH A TALENT POOL OF VETTED C-LEVEL CONSULTANTS AS WELL AS DIRECT ACCESS TO A SMORGASBORD OF SPECIALIST GAMBLING INDUSTRY SERVICES AND ADVISORS.
