Steve Donoughue: Comparisons between the Gambling Commission and Soviet Russia

By Gambling Insider

This article originally appeared in the January/February edition of Gambling Insider magazine: UK gambling regulation expert Steve Donoughue has some strong views about the Gambling Commission which many may disagree with. Comparing the regulatory body to Soviet Russia, Donoughue explains why he disagrees with the way the Commission controls the UK market.

In today’s febrile world of populist politics, fake news, persistent pearl-clutching and every thread on social media eventually resulting in someone being called a Nazi (Godwin’s law), it is increasingly difficult to rise above it all when your job is to write about Britain’s gambling politics and describe the world’s biggest, in gambling regulation terms, car crash as it happens.

Since my last article, and please remember I am writing this at the end of November 2020, my prediction that the Gambling Commission (GC) would be imposing loss limits on the industry has proved correct. The consultation, published on the 3rd November, called Remote customer interaction - Consultation and Call for Evidence basically states that there will be loss limits, they will be lower than anyone can think feasible, the Consultation is not really a consultation and the evidence the GC is willing to use for their ideological outburst is basically paper-thin and flawed.

I cannot restate this enough, if the loss limits supported by the GC are introduced, they will have a devastating impact on the industry. They will undoubtedly fuel a massive explosion in the black market due to the unnecessary, unwarranted and un-evidenced demands of the Commission. The only reason for this is that the GC has been captured by the prohibitionist lobby and appears willing to do whatever it takes to show the world how tough it is after the, mostly unnecessary, pasting they got in the summer from the Public Accounts Committee and National Audit Office.

By the time the British public has survived Covid-19 and Brexit and is ready to consider ‘normal’ politics again, the UK gambling industry could well be 50% smaller. Millions of British gamblers will be gambling happily on the black market, and a significant proportion of them will be descending into problem gambling due to the lack of any regulatory restraints on black market operators. All of this because the UKGC had an ideological point to prove and a desire to save its organisational skin.

In this article, I will argue that the UKGC is acting like a totalitarian regime that shamed humanity in the 20th Century, the USSR.

Soviet Russia does provide some interesting similarities to the workings of the GC. Obviously the two are not 100% similar, but the effects of affordability will be akin to a 10 megaton blast above London. What I’m saying is that both the USSR and the GC both seemed keen to destroy the British way of life for their own ideological purposes.

For much of the history of the USSR, very little was known by the West about how decisions were made at the top. The same is true of the GC as any attempt at finding out why it has made the decisions it has, such as through FOI’s, is responded with heavily redacted or plain minimalist responses. What we do know is there is a lack of consistency. Secondly, and linked to the former, is the Stalinist approach to having all GC utterances considered to have the weight of full regulation.

Millions of British gamblers will be gambling happily on the black market, and a significant proportion of them will be descending into problem gambling due to the lack of any regulatory restraints on black market operators.

Thirdly, a disrespect for rule-based government. In the USSR, this stretched to confining millions to the Gulags, invading and usurping foreign nations and basically acting like the global bully. For the UKGC, it is illegally imposing Covid-19 regulations – the law is quite clear that before any regulations can be imposed there must be a consultation with the industry. Anyone who has been trying to implement the illegal May regulations will be interested to know that the UKGC is also obliged to “ensure clear information, guidance and advice to help those they regulate meet their responsibilities to comply.”  This has not been the case so far.

The publication of the affordability consultation at the beginning of November was, I’m certain, received with relief for many as it put some much-needed detail on the May restrictions. It also showed up the GC’s willingness to use incredibly weak evidence to back up its case for ideological action. The May restrictions were introduced on the back of figures showing a tiny number of people had gambled a tiny bit more during the first bit of lockdown. Subsequent hard facts have shown that there was absolutely no increase in problem gambling caused by lockdown but the GC felt this didn’t mean emergency (and illegally imposed) measures should be lifted after lockdown was lifted. 

I refer my readers to the excellent missive by Regulus Partners, entitled Presumption of Guilt – unpicking the evidence on affordability from the 19th November 2020. This shows how yet again the GC has chosen the weakest of evidence for imposing loss limits. People saying they have on occasion spent more than they can afford is not a reason to destroy the gambling industry. The more logical question, ‘Have you suffered any financial hardship from your gambling,’ was ignored - with the number of participants positively responding being minimal. 

If you saw the UKGC’s new five-year plan/response to the PAC/NAO, the GC National Strategic Assessment 2020, you will have been surprised to read that the Commission has definitively understood the reasons why people gamble and how it fits into their lives. This is something gambling academia has struggled with over the last four decades. The fact that this major leap in human knowledge was achieved through the work of a market research agency interviewing 18 people for 90 minutes each, reading the diaries of 53 gamblers (not renowned for their veracity) and a two-hour focus group session with 40 people would see less than conclusive evidence for making the biggest change in gambling regulation since it was legalised in 1960. But as with those gambling under lockdown or Soviet Tractor Production, the numbers are only really there to support the ideology.

The May restrictions were introduced on the back of figures showing a tiny number of people had gambled a tiny bit more during the first bit of lockdown. Subsequent hard facts have shown that there was absolutely no increase in problem gambling caused by lockdown but the GC felt this didn’t mean emergency (and illegally imposed) measures should be lifted after lockdown was lifted

To end my analogy that we are dealing with the GC/USSR, I want to relate the story of how Gorbachev decided to deal with the alcoholism problem in the USSR in the second half of the 1980s. While loved in the West for bringing in Glasnost and being the architect of the USSR’s eventual demise, he was not afraid to act like any tin-pot dictator. His approach to Russia’s long term endemic alcohol problem, caused by a population with little heat, health, happiness or hope was to restrict supply by putting the price up dramatically, close off licences and start a public health campaign (sound familiar). The Russian populous responded by making their own vodka, known as samogon. As with the bootleg booze of the Prohibition America in the 1920s, the venture into the Black Market meant that Russians went blind and died in their thousands. Commissar McArthur is heading for the same result with affordability. It will be the end of the GC, but it will take with it the British gambling industry, its jobs, the taxes it generates and its reputation. 

What we need is a massive campaign to stop this madness.

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