If there is such a thing as welcome regulation, this should be it
2nd May 2014 7:22 am GMT
After questions in the House of Commons, tax increases and a storm of crazed headlines, the government response to the FOBT debate might finally have doused the flames of this bitter debate.Well, who would have thought Ralph Topping would be the voice of reason?
“The proposed recommendations are a balanced response, and we will now work to develop and embed the necessary IT changes and enhanced compliance framework,” said the William Hill chief executive yesterday.
Back in January, Topping was tweeting like a deranged teenager as his fury over hysterical Daily Mail “crack cocaine of gambling” headlines spilled over into an online spat with the Campaign for Fairer Gambling.
However, the image of Topping as a hothead is somewhat overblown. His response to government moves, which will likely harm his company’s revenue growth if not its market position, was a canny move.
Given the political hyperbole, the government’s moves to tighten up responsible gambling measures on fixed odds betting terminals (FOBTs) were remarkably commonsensical. It would be fascinating to find out who were the most influential voices whispering in the government’s ear. Aside from the changes to the planning laws, which were largely the same as those proposed by the opposition Labour Party, the measures on responsible gambling were not championed by any of the most vocal lobby groups.
One lobbyist I spoke to was quick to claim there was nothing in the proposals that was not expected but the leaks in advance had only focused on the planning changes, which are designed to combat the perceived problem of betting shop clustering.
The uber-aggressive response of the Association of British Bookmakers (ABB) (described by one person I spoke to as “peevish”) is probably a by-product of the vocal minority among its membership. The big four bookmakers (Betfred, Coral, Ladbrokes and Hills) account for around 90 per cent of the UK’s retail outlets and they have their own voice. The independent bookmakers, which make up the remaining 10 per cent, rely on the ABB to be their voice and they will be the hardest hit by these proposals. Unfortunately, government cannot cater to the minority. However, it might get a legal challenge from them.
Paddy Power is the chief competitor among the minority. It immediately decried the planning changes as anti-competitive. As well it might. One of its most obvious strategies is to open up next door to Ladbrokes in the belief that most punters will choose the green shop over the red one.
However, it must be doubtful whether the rules can be proved to be anti-competitive. The bureaucracy inherent in the new planning rules will require extra administration and legal fees - but all the government has done is to close a ludicrous loophole. Paddy’s fear is that the local councils will start turning them down when a few angry locals start complaining.
The measures on FOBTs will surely require the introduction of loyalty cards. SG Gaming and Inspired Gaming, which provide the majority of these machines, will have no problem upgrading the terminals to take cards but it is an investment the smaller bookie could live without.
The bookmakers scream that customers want to remain anonymous but there is little evidence of that. In countries such as Sweden, where loyalty cards are mandatory, customers are said to welcome the increased information the cards and systems give them. People like to know how much they are spending and how they are spending it. It helps them make informed decisions.
There are issues to be cleared up with any new rules but in theory they do little but make the ABB Code of Conduct mandatory. Lobby groups point out that there are a number of reviews in motion - from the Gambling Commission, the Responsible Gaming Trust, the Advertising Standards Authority and the Industry Group for Responsible Gambling among others. They would have liked to see these reviews come to fruition before mandatory rules are introduced.
However, the government wants the issue off the political agenda and if the industry is wise it will do everything it can to assist with that effort. The rules will not appease the Campaign for Fairer Gambling and while the Labour Party has yet to comment publicly, one source suggested to me that it is unlikely to let it go.
So all in all, it should not be a surprise that Topping was so welcoming. Ladbrokes was also cautiously accepting although its statement included a notable plea to (in effect) “please give us a break now!”
Both will know there is little public or political sympathy for whining bookmakers. There is only opprobrium to be gained from rebelling against responsible gambling measures that will not break you - and might well queer the pitch for your smaller competitors.
Ladbrokes has said the Code of Conduct will cost it a small single digit percentage of revenue. Former Hills director Paul Leyland of Regulus Partners surmises these more formal rules might then cost around 5 per cent. That can be considered a small price to pay to stop the noise emerging from the anti-gambling brigade.
However, nobody is really expecting this furore to completely die down. To really make it go away, bookmakers might need to go beyond the regulations rather than simply adhering to them. And that might cost a bit more than 5 per cent.sah@gamingintelligence.com
The bookmakers scream that customers want to remain anonymous but there is little evidence of that. In countries such as Sweden, where loyalty cards are mandatory, customers are said to welcome the increased information the cards and systems give them. People like to know how much they are spending and how they are spending it. It helps them make informed decisions.
There are issues to be cleared up with any new rules but in theory they do little but make the ABB Code of Conduct mandatory. Lobby groups point out that there are a number of reviews in motion - from the Gambling Commission, the Responsible Gaming Trust, the Advertising Standards Authority and the Industry Group for Responsible Gambling among others. They would have liked to see these reviews come to fruition before mandatory rules are introduced.
However, the government wants the issue off the political agenda and if the industry is wise it will do everything it can to assist with that effort. The rules will not appease the Campaign for Fairer Gambling and while the Labour Party has yet to comment publicly, one source suggested to me that it is unlikely to let it go.
So all in all, it should not be a surprise that Topping was so welcoming. Ladbrokes was also cautiously accepting although its statement included a notable plea to (in effect) “please give us a break now!”
Both will know there is little public or political sympathy for whining bookmakers. There is only opprobrium to be gained from rebelling against responsible gambling measures that will not break you - and might well queer the pitch for your smaller competitors.
Ladbrokes has said the Code of Conduct will cost it a small single digit percentage of revenue. Former Hills director Paul Leyland of Regulus Partners surmises these more formal rules might then cost around 5 per cent. That can be considered a small price to pay to stop the noise emerging from the anti-gambling brigade.
However, nobody is really expecting this furore to completely die down. To really make it go away, bookmakers might need to go beyond the regulations rather than simply adhering to them. And that might cost a bit more than 5 per cent.sah@gamingintelligence.com 
