The Betting Shop and Your Community: A History

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1 The Betting Shop and Your Community: A History

2 Contents Introduction Chapter 1: Betting Shops: A History of Legislative Change Chapter 2: Cultural Significance of Betting Shops in British Society Chapter 3: Industry contribution to Horseracing and Other Sports Chapter 4: Importance of Social Responsibility to the Industry Conclusion Page 1-2 Page 3-6 Page 7-10 Page Page Page age 15

3 1 2 Introduction Betting shops have come a long way since they were legalised 50 years ago. Once upon a time they were dark, smoky environments without seats or televisions, hidden away from passers-by. The legislation was designed to keep betting hidden and the environments unattractive as a result. As society s attitudes to gambling have changed they have become bright, spacious and modern retail environments where you can relax in a leather seat with a coffee while watching live racing or football and glancing outside at the passers-by. Former Sports Minister, Gerry Sutcliffe MP Betting has always existed and always will. At various other points in our history, and indeed in some other countries even now, it has existed underground, unchecked, unregulated and untaxed. This is not the way to deal with what many people enjoy as a pleasurable leisure activity. The UK has made great strides towards ensuring that betting in this country is fair to the customer, run by respected, responsible and licensed operators; is free from crime, is conducted in an open and transparent way and in safe and secure environments. The regulations protect the vulnerable by ensuring that codes of conduct are in place for age verification and that companies have clear strategies that encourage responsible gambling and provide support for the relative few that develop a problem. The impetus for these important steps has come jointly from both Government through legislation, from the regulator in enforcing it and the industry in applying it. All parties work together to ensure an environment where businesses can progress but consumers are protected. Betting shops have come a long way since they were legalised 50 years ago. There is no doubt that in addition to the importance of betting and gaming as leisure activities that millions of people enjoy, the industry contributes to both the economy and society. High street shops attract footfall to neighbouring businesses and they provide much needed employment, particularly important in the current environment. The betting shop also provides a social hub where people meet and enjoy each others company. At a macro level, we also have to look at the important tax contributions made by the industry, adding up to around 1 billion a year, in addition to the 75 million Horse Racing Levy and considerable sums raised for the sport through media rights. Additionally the industry raises 5 million for the Responsible Gambling Trust contribution, as well as donating millions to good causes through each operators charitable trust and community programmes. This pamphlet provides a good backdrop to how betting became regulated in Britain, how it is a mass-participation leisure industry that is a part of the nation s fabric. It is important that, while some have moral objections, legislators understand and appreciate that this is a popular and well-regulated activity and debates about future regulation should start from that point rather than the many misconceptions about gambling that abound.

4 3 4 Chapter 1 Betting Shops: A History of Legislative Change BETTING in Britain has a long tradition, but the landscape has changed beyond all recognition over the last 50 years, particularly in the short time since the turn of the century. Developments in social attitudes and sporting popularities have been underpinned more recently by rapid advances in technology, with the result that betting activity has taken on a very different outlook to the past. All the while, Government legislation has driven the huge differences from yesteryear and formed today s horizons. The betting shop remains the most visible outlet but the internet is catching up fast, as successive Governments have sought to regulate gambling as a positive leisure experience, in which operators act fairly, consumers are protected, and the economy benefits from direct taxation and employment. Historically, horseracing was king, with the mid-19th century forming the basis for mass betting and bookmaking in Britain 1. From the 1840s, the electric telegraph enabled results to be transmitted from the racecourse to betting outlets 2. The rise of the sporting press the daily Sporting Life was first published in 1859 and the Manchester-based Sporting Chronicle in 1871 led to the publication of starting-price odds, which made the lives of bookmakers and their customers considerably easier. Yet, not for the first time in the history of betting and definitely not for the last opposition to the popular activity emerged, and attempts at curtailment followed. Historically, horseracing was king, with the mid-19th century forming the basis for mass betting and bookmaking in Britain. In deciding how and to what extent to regulate bookmaking, Queen Victoria and her Government appeared to be driven by the belief that workingclass citizens could not best decide how to spend their money, and the 1853 Betting Act made it an offence to keep a house, room or other place for the purposes of betting 3. High-end private clubs, frequented by the wealthy, were made an exception. Demand among popular society remained strong, and bookmaking largely moved to the public house as part of broader social activity. Victoria s Government reacted by passing the 1872 Licensing Act, prohibiting gambling in the British pub 4. Further prohibitive legislation in the 1874 Betting Houses Act made it illegal to use advertisements inducing people to bet. Away from private clubs, the only legal place left for bookmaking was on street corners, but once again, where gambling and bookmaking went, the Government followed vigorously. The Street Betting Act of 1906 limited gambling other than on credit - to racecourses and other sporting venues. The elitist nature of this legislation led to its being nicknamed the Class Law, because of its intolerance of working-class gambling 5. (1) Mark Clapson, Popular Gambling and English Culture, c to 1961, PhD Thesis, June 1989, p.38 (2) Ibid. (3) (4) John Samuels, Down the Bookies: the First 50 Years of Betting Shops, p.17 (5) David Dixon, Class Law: The Street Betting Act of 1906, International Journal of the Sociology of Law, 8, 1980 (6) Clapson, Popular Gambling p. 266 (7) Patrick Basham & John Luik, Gambling: A Healthy Bet, 2011, p.145 (8) Clapson, Popular Gambling, p.273 (9) Samuel, Down the Bookies, p.41 If the 1853, 1872, 1874 and 1906 acts were intended to outlaw gambling, they largely failed. Betting continued in disguised premises and on the street, and was so commonplace for the next 50 years that local-level authorities often turned a blind, or at least a benign, eye to its activity. After World War II, though, a greater libertarianism arose around bookmaking and gambling in general 6. There was a broader consensus towards trusting people with their own moral and economic affairs. In the 1951 Royal Commission on Betting, Lotteries and Gaming, which recommended that off-course betting should be legalised, gambling was viewed as a relatively harmless issue that would be able to raise significant sums for Government coffers 7. The Royal Commission eventually led to the passing of the Betting and Gaming Act of 1960, which honoured a commitment to tackle possible corruption by legalising licensed betting offices (LBOs) from 1 May They were to be licensed by local authorities, which gave approval under guidelines laid down by the Town and Country Planning Acts of 1947 and Despite the early reticence of both Ladbrokes and William Hill, now the two largest betting-shop chains in Britain, interest in opening premises was generally high. By the end of May 1961 approximately 7,000 betting shops were open and trading 9 ; at the close of the following year there were 13,340, and the number peaked at around 15,000 in Popular demand had been satisfied. In advance of the legalisation of betting shops, discussions were held between horseracing s ruling body the Jockey Club, which was seeking money from betting to bolster the sport, the bookmakers and the Government, via the Home Office. Subsequently, although the Betting and Gaming Act of 1960 made no mention of providing money to horseracing, the Betting Levy Act of 1961 did, and since then the betting industry has continued to contribute to British horseracing by statute, at various times from a percentage of turnover, but more recently from gross profits in line with the way the industry is taxed. While legalising betting shops, the 1960 Act went out of its way not to encourage the activity on which they relied. Each office was to contain only the counter, books, betting slips and lists of starting price-odds in the pages of the racing newspaper. There was to be no loitering, no stools, no television or radio, and no continuous betting. Shop windows were blacked out, and identification was minimal.

5 5 6 Historian Ross McKibbin noted that it became difficult to distinguish a betting shop from a dirty book shop 10. The official view came from RA Butler, the Home Secretary who introduced the legislation, when in his published memoirs he wrote: The House of Commons was so intent on making betting shops as sad as possible, in order not to deprave the young, that they ended up more like undertakers premises. It was not until a quarter of a century later that Government recognised in law that the betting shop was a respectable retail outlet, playing an important social and cultural role, and was more than just a place to bet. Legislation passed in 1986 provided the opportunity for improvements such as the provision of hot drinks, window displays and brighter interiors 11. Crucially, televisions were permitted and shops subsequently showed live pictures from the racecourses. SIS, a company created by bookmakers, transmitted its first live broadcast on 5 May 1987 and enjoyed a monopoly on racecourse coverage to British betting shops for 20 years, until Turf TV entered the market. Gradually, the mood for liberalisation and pressure for deregulation enabled betting shops to become more accessible and enjoyable as a leisure venue. From 1 April 1993, Home Secretary Kenneth Clarke allowed betting shops to remain open in the evenings from April to August, and later that year further measures sanctioned larger television screens and the display of adverts. In May 1994, following changes to the Sunday trading laws, betting shops were allowed to open on certain Sundays, which led the way to British horseracing emulating its counterparts in most major overseas countries by operating a seven-daya-week programme that the betting industry was quick to follow. Longer opening hours during the week and new products, such as numbers betting and fixed-odds betting terminals, whose benefits have kept many shops profitable, were sanctioned with Government approval, in response to industry approaches after the introduction of the competing National Lottery in November While the Lottery cannot offer the same social and leisure experience as a betting shop, it does provide an attractive if idealistic form of gambling for the general public. As one life-long industry member observed: Those who had two or three quid bets in the shops hoping to win ten back could now bet for jackpots of over one million pounds 12. Improved technology, which contributed to the success of the Lottery, soon brought with it a new phenomenon, which has had a profound impact on the traditional betting industry. As well as providing fresh opportunities, the Internet changed the face of British bookmaking. Exchange betting, in which Betfair has been the dominant force, would not have been possible without the mechanics of the internet. Its rapid growth, accompanied by an explosion in mobile telecommunications, has also fuelled the advance of offshore operations, which the majority of British-based betting companies have joined in order to compete on favourable tax terms. The impact of offshore competition was met by Government legislation in October 2001 to scrap betting duty on a turnover basis and replace it with Gross Profits Tax (GPT) at 15% - a move strongly supported by individual betting operators and their trade representatives, such as the Association of British Bookmakers. The new tax replaced General Betting Duty (GBD) which had been reintroduced in 1966, having first been introduced in 1926 by Winston Churchill, before being dropped three years later. Following pleas to reinvigorate the racecourse betting market, GBD was removed from on-track bets in March 1987, but having peaked at 8% of turnover in 1987, the tax remained in place on bets placed in the UK in shops, on the phone and online for a further 14 years, being largely recouped from deductions from punters winning bets. Its abolition and replacement with a tax on bookmakers profits was a crucial move for the British betting industry, benefiting customers, helping to continue the modernisation of the betting shop and subsequently rewarding Government in the form of increased taxes. The second key legislative watershed of the millennium was the Gambling Act of 2005, which had its roots in a decision by Home Secretary Jack Straw in December 1999 to appoint an independent body to conduct a 12-month review of the gambling laws. Chaired by the economist Sir Alan Budd, the review body s report, published in July 2001, contained 176 recommendations, the majority of which were accepted when, following the transfer of responsibility for gambling from the Home Office to the Department for Culture, Media and Sport (DCMS), the Government published its response in a White Paper, A Safe Bet for Success Modernising Britain s Gambling Laws. Introduced into the House of Commons on 18 October 2004, the Act received Royal Assent on 7 April 2005, and came into effect in 2007 bringing together responsibility for overseeing all forms of gambling under the new Gambling Commission. Crucially for the development of high-street betting shops, the Act removed the demand test the need to prove, to the satisfaction of the local licensing magistrates, that there was demand for a new betting shop. Instead, the Government adopted a free-market approach, arguing that betting shops would open only if they were profitable and could satisfy local demand. Ultimately the Government was placing responsibility on the British citizen to decide if they wanted to spend their money in a betting shop, and where they would like that shop to be. (10) Basham & Luik, Healthy Bet, p.147 (11) (12)

6 7 8 Chapter 2 Cultural Significance of Betting Shops in British Society Many events on which gambling took place in 16th and 17th century Britain have disappeared, but the enthusiasm for a normal social activity remains high among all strata of society. For cock fighting, read football s Champions League; for prize fighting and wrestling, read cricket s World Cup and golf s Ryder Cup, and from time immemorial add in horseracing. Amidst the myriad developments, betting shops have evolved as a key outlet for that enthusiasm, assuming cultural significance along the way. Whereas modern thinking generally separates alcohol and betting, from the late 17th century the public house, as the centre for both rural and urban lower-class recreation, was an obvious place to lay and collect bets 13. Friends, neighbours and workers would bet, drink and enjoy each other s company as part of a rich social network 14. Despite the 1853 Betting Act rendering betting shops illegal, bookmaking continued to flourish. Although there are no precise figures on the extent of illegal betting for that period 15, the Act merely illegalised an activity that had already gained significant cultural weight 16. In 1860s Manchester, for instance, local literature highlights that shops carrying the sign John Smith, cigar maker or James Robinson, chops and steak were not quite what they seemed 17. London had a different vibe, with bookmakers pinning their lists to trees in Hyde Park 18. Even when the 1906 Betting Act prohibited street betting, bookmaking remained in existence, admittedly not without its negative characteristics and characters 19, but ultimately supplying a demand among people who enjoyed this part of their social and leisure activities. Prominent historians have noted the important cultural and social role of street bookmaking during the prohibition years 20, as punters ranging from unskilled to skilled workers participated in the activity 21. One commentator noted there was a strong social network of organised street betting in local communities around Britain 22. In Southampton, for example, a fish and chip shop owner ran a lucrative local trade in bookmaking, resulting in his premises being jokingly described as the shop for a win or a plaice 23. Community involvement extended to the workplace, and the 1923 Report of the Select Committee on Betting Duty noted that there was scarcely a works in the country where there was not a bookmaker s agent 24. The turning point came with the legalisation of licensed betting offices from 1 May Whereas illegal betting had previously played a role among local communities, punters could now freely walk into a local shop, and operators could make and plan for a respectable career in the bookmaking industry. (13) Wray Vamplew, Pay Up and Pay the Game, 1988, pp (14) Clapson, Popular Gambling, p.24 (15) Ibid., p.43 (16) Ibid., 35 (17) Ibid., 35 (18) Ibid., 36 (19) Ibid.,103-4 (20) See, for example, Ross McKibbin, Working-Class Gambling in Britain, , Past and Present, No 82, (21) Mass Observation Survey, Mass Gambling, 1947, p.32 (22) Clapson, Popular Gambling, p.64 (23) Ibid., p.96 (24) Ibid., p.65 Over the 50 years of their legal existence betting shops have played an important role on a national level, following the development of major brands such as Coral, Ladbrokes and William Hill, and more recently Betfred, which joined the big league by buying the Tote from the Government in While Coral Bookmakers merged with gaming company Gala under private equity ownership and Warrington-based Betfred have steadfastly remained an independent, family-owned business, Ladbrokes and William Hill have developed into well-recognised, publicly quoted, national companies. Ladbrokes floated on the London Stock Exchange in September 1967, William Hill followed in 2002, with both companies currently a constituent of the FTSE250 index 25. Coral, Ladbrokes and William Hill all owed their growing success as respected national bettingshop organisations to the drive and entrepreneurial spirit of individuals at their helm Joe Coral, Cyril Stein and William Hill himself respectively. Originally from Warsaw, Coral and his mother joined a wave of migrants to Britain in Stein, who was born in London s East End, bought Ladbrokes for 100,000. Hill was the second of 13 children raised in modest working-class conditions in Birmingham. Changing times and economic conditions have transformed these major national brands, but the entrepreneurial outlook lives on at Betfred through their co-founder Fred Done. A fish and chip shop owner ran a lucrative local trade in bookmaking, resulting in his premises being jokingly described as the shop for a win or a plaice! (25) stocks/summary/company-summary.html?fourwaykey=gb00b0zsh635gbg BXST MM (26) Samuels, Down the Bookies, p. 217 (27) Ibid., p.162 (28) Ibid., p.163 (29) Ibid, (30) Ibid. Recently published figures estimate that the bettingshop industry as a whole contributes 3 billion a year to the British economy and employs approximately 40,000 people. Recently published figures estimate that the betting-shop industry as a whole contributes 3 billion a year to the British economy and employs approximately 40,000 people 26. Thanks to Government deregulation and the ensuing increase in competition, both within the betting industry and as part of the general business requirement for companies to attract their share of the leisure pound, the vast majority of the shops which generate such impressive turnover have changed their appearance beyond all recognition. While the internet revolution has clearly increased competition, major companies and private individuals alike have embraced other forms of new technology. For 30 years after legalisation, betting shops operated through cash tills, microfilm cameras and human bet settlers with sharp mathematical brains 27. Thereafter the development of reliable image-scanning equipment and software that could be programmed to understand betting terminology has acted as a catalyst for change 28. Computers able to instantaneously undertake complex calculations and telecom modems with the capacity to transmit data became available more cheaply. Ladbrokes was the first organisation to install a bespoke Electronic Point of Sale (EPoS) system, labelling it their Shop 2000 initiative 29. The system automatically produces a scanned copy of the slip that that a customer gives to the cashier, which acts as an information source for the company and a receipt for the customer 30.

7 9 10 In 2011 around 40% of shop profits were derived from machines, ensuring the profitability of around one-third of Britain s 8,500 betting shops and guaranteeing 10,000 jobs. The introduction of Fixed Odds Betting Terminals (FOBTs) has been crucial, both for betting-shop profitability and customer interaction. The first random number generator machines were introduced into Admiral Bookmakers in The key aspect of FOBTs that made them legal to use in betting shops was the location of the number generator outside the premises, so that the process of using a machine was classified as a bet rather than gaming. In 2011 around 40% of shop profits were derived from machines, ensuring the profitability of around one-third of Britain s 8,500 betting shops and guaranteeing 10,000 jobs that these shops provide 32. While betting shops have permeated British society on a national level, their social and cultural significance is perhaps best appreciated at a local level, through the staff, the customers, and the local community in which they operate. The latest estimate is that 14% of the British population placed a bet with a bookmaker in the past year. While typical studies highlight the positive contribution of betting shops to the British economy, Patrick Basham and John Luik examined the social benefits that gambling including betting shops generate 33. They outlined 11 key points, ranging from a reduced personal sense of social alienation to an improved sense of humour 34. The authors concluded that the simple, uncomplicated truth is that gambling is a terrific form of entertainment 35. From the punter s perspective the betting shop is often regarded as a social hub, providing an enjoyable and exciting leisure experience. (31) Ibid., p.178 (32) Ibid., p.182 (33) Basham & Luik, Healthy Bet, pp (34) Ibid., pp (38) Ibid., p.114 (35) Ibid., p.101 (39) Ibid. (40) Ibid. (36) Mike Atherton, Gambling: A Story of Triumph & Disaster, 2006, pp (37) Ibid., p.93 In his book Gambling, former England cricket captain and enthusiastic punter Mike Atherton visited the William Hill betting shop on Portobello Road 36. Befriending a group of local punters, he describes the excitement and camaraderie of one man s successful bet: He turns to take the acclaim and revel in the collective delight of the dozen or so West Indians who are gathered around the big screen. There is much back-slapping and I-told-you-so-ing. A win for one, it seems, is a win for them all. 37 For this group of friends, going to the local betting shop was about having fun and enjoying each other s company. Atherton also visited a Paddy Power betting shop on Kilburn High Road, where he met Freddy, an Irish painter and decorator, who no longer gambles but still makes regular visits 38. They look after us in here, Freddy says, the staff are great and they even give us coffee, tea and biscuits. 39 Atherton comments that Freddy goes in because his mates go in and that the atmosphere is similar to that which you might find in any local pub 40. This personal observation goes some way towards explaining why, despite the accessibility of internet gambling and the Lottery, the number of betting shops is still approximately 8,500. Among a plethora of leisure activities, they represent an important social amenity, where people to meet and have fun that goes beyond simply placing a bet.

8 11 12 Chapter 3 Industry Contribution to Horseracing and Other Sports Which came first sporting activities or betting? The answer is probably a dead heat, since the two, particularly in British horseracing, have been intertwined for the best part of the last 400 years. Today, thanks largely to the emergence of satellite television and the internet, as well as changes to the product mix in betting shops, odds markets are available on virtually every sporting event staged by a recognised governing authority anywhere in the world, whatever the time of day or night. As a consequence, the relationship between the betting industry and individual sports and their governing bodies has come under the spotlight. The Association of British Bookmakers, the trade body for the betting-shop industry, itself posed the question: Bookmakers profit from sport, shouldn t they help pay for it? 41 The inescapable fact is that the industry does make a large financial contribution, especially to horseracing, which has benefited from the Betting Levy Act of 1961, updated in 1963 by the Betting, Gaming and Lotteries Act, through the Horserace Betting Levy Board (HBLB) 42. Unlike most non-departmental public bodies, the HBLB does not receive central Government grant-in-aid or National Lottery funding. Instead, it is required to collect a statutory levy from UK horseracing business conducted by bookmakers, which it distributes for the improvement of breeds of horses, the advancement or encouragement of veterinary science or veterinary -education, and the improvement of horseracing. 43 The annual levy scheme is negotiated each year by the HBLB and its Bookmakers Committee, and the statute stipulates that in the event of the two parties failing to reach agreement by 31 October, the Government, by order of a Minister, must settle the outcome 44. Introduced in 1961, the levy was originally set at either 10% of profit or 0.25% of turnover, whichever produced the greatest figure. In that year it raised 900,000, slightly short of the 1m estimated 45. Terms were modified over the years, so that by the amount contributed by the bookmakers and the Tote was 60.3m. The levy calculation underwent another re-orientation in 2001, when it began to be based on bookmakers gross profits on UK horseracing, at the initial rate for off-course operators of 10%, rather than turnover 46. The levy raised 67m from bookmakers and a further 5.9m from the Tote in , and rose to a combined total of m in Even as pressure mounted on bookmakers margins, through the growth of internet and sports betting and a decline in horserace betting, the annual levy contribution from bookmakers fluctuated between 90.5m and 102m from , before falling significantly from (41) bookmakers-profit-from-sport-shouldn-t-they-help-pay-for-it/ (42) (43) (44) Samuels, Down the Bookies, p.42 (45) Ibid. (46) Ibid., p.171 (47) (48) Today, odds markets are available on virtually every sporting event staged by a recognised governing authority anywhere in the world, whatever the time of day or night. In making his determination in 2011, the Culture Secretary Jeremy Hunt increased the general rate of levy to 10.75% of gross profits, which raised an estimated 71.4m, taking into account Betfair s voluntary contribution 47. It is expected that the 51st Levy Scheme, for , agreed on 1 November 2011, will raise a similar amount 48. Discussions have gone on for several years between the Government, horseracing bodies and bookmakers about modernisation of the levy system, which would probably replace the current method with a commercial agreement. Whatever the outcome, the economic link between betting and horseracing seems sure to be maintained.

9 13 14 Bookmaker sponsorship in other sports extends to individual leagues and major events, while every Premier League football club has a commercial betting partner, often through online betting operations, as well as shirt sponsorships. More broadly, as part of social responsibility programmes, bookmakers provide one-off donations through charitable trusts. For example, Ladbrokes made UK charitable donations totalling 931,840 in The majority went to the GREaT Foundation (now the Responsible Gambling Trust), but smaller-scale donations are regarded as proportionately significant, such as the 10,000 grant made by the Ladbrokes Community Fund in August 2012 to GreaterSport, a Greater Manchester charity with the aim of changing lives through sport and physical activity 54. William Hill, Gala Coral and Betfred also have charitable organisations that distribute funds to sports projects and charities 55, while many independent bookmakers support local initiatives on an individual basis. It is clearly a misconception that betting operators ignore the importance of sports and the community or that the relationship is one sided. To that end, the Remote Gambling Association (RGA) conducted a wide-ranging consultation with sports and gambling industry members on sports betting, examining claims that betting undermined the integrity of sport and investigating whether the betting industry should do more to financially support UK sport. A report entitled Sports Betting: Legal, Commercial and Integrity Issues was published in January While the levy contribution represents the bookmakers most significant financial support for horseracing, the sport has benefited from betting in other ways. In the early 1970s, every year brought warnings of the last Grand National 49. In 1973, Aintree racecourse was sold to the property developer Bill Davies, who in the face of falling attendance subsequently revealed that he was giving serious consideration to selling the racecourse for development 50. In order to ensure the continuation of the most famous race in Britain, Ladbrokes stepped in and signed an agreement with Davies to allow them to manage the race. They did so for seven years, before the Jockey Club and its fundraising Grand National Appeal took over in More generally, bookmaking companies are the biggest supporters of race sponsorship, illustrating the inextricable link between the industry and the sport. Backing ranges from some of Britain s most prestigious races the Ladbrokes St Leger, Coral- Eclipse Stakes and Betfred Cheltenham Gold Cup, for example to more modest events on smaller racecourses. Alongside horseracing, bookmaking companies also support British greyhound racing, through a voluntary British Greyhound Racing Fund. At present, bookmakers pay 0.6% of turnover on greyhound bets to the fund 51. Currently, annual contributions total approximately 12m 52. Bookmakers also support greyhound racing to the tune of 18m in payment for fixtures organised by the Bookmakers Afternoon Greyhound Services, as well as sponsoring key meetings. (49) (50) Grand-National (51) (52) Ladbrokes made UK charitable donations totalling 931,840 in 2011 (53) annual-report-2011.pdf, p.30 (54) greatersport-receive-charitable-donation/ (55) gala_coral_group/galacoralgrouplimited2011.pdf (56) web.pdf (57) Exec summary, 1.25 (58) Exec summary, 1.16 & 1.17 (59) Exec summary, 1.21 (60) Exec summary, 1.27 & 1.28 In terms of integrity, the report concluded that, barring some rare exceptions It is fundamental to understand that the European licensed gambling industry is the likely victim of any fraud that is perpetrated and in no sense can it fairly be described as a polluter. 57 In terms of financial support for sport, the report noted that the gambling industry provides numerous income streams and commercial deals and that the licensed gambling sector pays everything it is legally obliged to pay 58. Further financial support for sport or grassroots sports was not deemed necessary 59. The RGA report also noted that the commercial sporting sector should not have control of the betting product 60. Only if the evidence base suggested control of the gambling product which it did not would this be a legitimate activity, it said. Ultimately the report highlighted the important contribution made by the betting industry to sport in general and that critics of the relationship were painting a one-sided picture of what is a financially and culturally supportive association.

10 15 16 Chapter 4 Importance of Social Responsibility to the Industry Social responsibility for the betting industry is enshrined in the Gambling Act of 2005, which created the Gambling Commission with three statutory licensing objectives - to keep crime out of gambling; to ensure gambling is conducted fairly and openly; and to protect children and vulnerable people from being harmed or exploited by gambling. Betting operators, and most particularly the major companies, have taken a lead within the sector in demonstrating a strong commitment to ensuring that individuals gamble in a safe and responsible manner, as part of an enjoyable leisure experience. As part of the commitment, they have paid particular attention to research, education and treatment in the area of problem gambling. The 2010 prevalence survey an independent study commissioned by the Gambling Commission highlighted that 73% of the British adult population participated in some form of gambling in the previous year 61. This equates to around 35.5 million adults. The same study also showed that just 0.7% to 0.9% had some form of gambling problem, depending on the methodology used 62. For the very small numbers who demonstrate a problem with their gambling, the bookmaking industry provides a sizable financial contribution to support research, education and treatment. The central fundraising body is the Responsible Gambling Trust (RGT), which was formed in April 2012 as an amalgamation of the GREaT Foundation and the Responsible Gambling Fund to align the fundraising and commissioning roles of the two previous bodies. The RGT s key objective is to commission research, education and treatment services as priorities in a national responsible gambling strategy 63. In % of the British adult population participated in some form of gambling. The aim of the RGT is to raise a minimum of 5m a year on a voluntary basis, with a target of 7m, which builds on fundraising by the GREaT Foundation under targets set by the UK Government. From April 2009, GREaT raised over 15m 64. Demonstrating the commitment of the major betting companies, Ladbrokes donated 834,000 in while William Hill and Gala Coral gave 700,000 each 66. In distributing funds, the RGT will base its decision on the national gambling strategy that the Responsible Gambling Strategy Board (RGSB) has developed in its role as advisor to the Gambling Commission. In the funding cycle, the RGT plans to distribute funds to four main categories of organisation: national gambling help lines; treatment services; education and prevention bodies and research organisations 67. (61) Gambling Commission, Prevalence Survey 2010, p.9 (62) Ibid., p.12 (63) (64) (65) corporate-responsibility/highlights-of-the-year-2011.aspx (66) GalaCoralGroupLimited2011.pdf (67) One of the key bodies that educates and treats people with gambling-related problems is the charity GamCare. Its mission statement is to provide support, information and advice to anyone suffering with a gambling problem 68. Crucially, it set up telephone and internet help lines, offering advice and counselling free of charge. GamCare is largely funded by the RGT and on 1 August 2012 the two bodies agreed a new funding package 69. The RGT will provide a grant of at least 5.7m over the three years from to In return, GamCare is committed to increasing the number of clients it treats by 56% and must improve its intervention programmes. The arrangement makes clear that sizeable financial support from the betting industry, routed through the RGT, is distributed to key front-line organisations that help tackle problem gambling. Gordon Moody Association (GMA) is another important treatment organisation supported by the industry through the RGT. Founded as a charity in 1971 and previously called Gordon House, the GMA has over 40 years experience providing treatment to acutely addicted gamblers. Unlike GamCare, which places an emphasis on advice over the telephone and internet, the GMA runs a residential programme designed to help severe problem gamblers. It has been singled out as an organisation that the RGT wishes to support with future grant funding. (68) (69) responsible_gambling_trust_and_gamcare

11 17 18 Conclusion Betting and gaming is a part of British culture and has been for centuries. Betting and gaming is part of British culture and has been for centuries. History shows that attempts to ban it, often as a result of moral objections, merely drives it underground, putting consumers at risk. Since 1961 the high street betting shop has developed from being a basic transactional facility to a safe modern leisure environment and is all the better for it. Operators embrace corporate social responsibility and community involvement - ensuring they give back to the communities in which they operate beyond generating employment and tax revenues. Of course for those that enjoy the enhancement of sport through an accumulator on Saturday afternoon football, the intellectual challenge of unpicking the form of a horse race, or the fun of a flutter on a gaming machine, it is simply an enjoyable pastime, and the way they choose to spend their leisure time. When considering future regulation of the industry the best starting point is the consumer and their right to enjoy their pastime in a safe environment. But what about the future? Today s shops continue to compete with digital technologies that make betting and gaming available on every mobile phone or laptop. As we move into the future, these trends will continue to challenge the local betting shop, particularly if arbitrary constraints do not keep pace with technology developments, and this could be a real threat to future job creation and tax revenues. If betting shops are to continue to contribute to a vibrant high street then legislation and regulation must keep pace with developments. Televised racing, Sunday racing, sports and novelty events, evening opening, the ability to serve food and drink and the presence of gaming machines have all enabled the betting shop to survive in a highly competitive leisure marketplace. Throughout this time betting shops have had their detractors. Often the arguments are moral and full of inaccurate misrepresentations. For many the basis of their objection comes from the fact that they do not understand why people would want to engage in betting.

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