Problem gambling can plunge individuals into severe financial distress, destroy relationships and lead to criminal activity. This is not to be downplayed.

However, as is the case with so many societal problems – be it obesity, alcohol or drug misuse – government’s ability to identify the issue is not always matched by its ability to propose the right solutions. And the blunt tools advocated by single-issue pressure groups tend not only to fail to address the problem but to deliver a string of unintended consequences.

After the success of the campaign against fixed-odds-betting terminals – emotively referred to as the “crack cocaine of gambling” – campaigners have turned their attention to online betting. A raft of new regulations have been proposed, including an advertising ban, low stake limits, a monthly spending cap, slower gameplay and a ban on VIP schemes, bonuses and inducements.

These proposals will feed into the government’s review of British gambling law “to make sure it is fit for the digital age”. But the interventions favoured by activists have very little to do with the government’s goal.

For a start, the Culture Secretary claims to appreciate the need to balance “the enjoyment people get from gambling” with the right regulatory framework and protections. The past 12 months have been a joyless existence for many, and it is easy to forget that these activities are about fun, excitement and pleasure. Further, the government recognises, in theory, the “freedom of adults to choose how they spend their money”.

Not so the anti-gambling brigade, whose neo-prohibitionist demands are at odds both with enjoyment and personal responsibility. Take the proposed £2 stake limit for online games. In a free country, should the government have the power to limit private individuals’ expenditure in this way? Limits on the amount people can spend on gambling each month are without precedent for any other consumer product. The most zealous among the anti-gambling establishment are calling for a £100 cap.

Not only is this troubling to those of us who value personal liberty – but it undermines two of the three key objectives of British gambling law: to protect the vulnerable and to prevent gambling becoming a source of crime.

We know from experience that, rather than having the desired effect of curtailing harmful activity, prohibitionist policies do the reverse by driving people towards the black market. Instead of helping problem gamblers and protecting those in harm’s way, we are likely to see a shift to unlicensed, unregulated and – importantly for the Treasury – untaxed websites.

Introducing “slow play” measures, which essentially build artificially long gaps between online bets, will make a fun game dull. Activists should admit that the change is intended to deter and curtail enjoyment, and will do little to address problem-gambling.

As with many enjoyable human activities, campaigners have also turned their attention to advertising, calling for a ban on both this and sponsorship. There is very little evidence to suggest banning adverts would have any discernible impact on rates of problem gambling which, at around 0.6% of the adult population, are far lower than in many countries with tougher regulations.

A ban on legitimate advertising would also make it more difficult for customers to distinguish between the regulated and unregulated sectors. It would deprive advertising platforms of an important source of revenue. And bans on sponsorship deals could have a devastating impact on many sports, including lower league football, darts and snooker – a number of which have struggled enormously over the past year.

Rather than viewing technology as the cause of the online gambling “problem”, we should instead see it as the solution. As a new paper from the Institute of Economic Affairs points out, technology has enabled many betting companies to take great strides in the way they treat possible addicts and, in so doing, prevent harm.

Customers are given the option to self-exclude, set deposit limits, set playing times, and opt out of receiving inducements, such as free bets. Sure, addicts might ignore these. But “Big Data” allows companies to identify problem gamblers in a way that was never possible before, with algorithms identifying “markers of harm”, such as chasing losses or switching between products and playing late at night. Such behaviour triggers interventions, from emails reminding the customer about deposit limits, to phone calls, spending caps and account suspensions.

The government could seek to make these practices standard across the board, through targeted regulations. Rather than pandering to the neo-prohibitionist policies of anti-gambling activists – who will never tire of proposing more legislation – the government could formalise these private initiatives while ultimately leaving people free to engage in an activity that is, for the vast majority of adults, harmless fun.

 

This article was originally published on CapX.