Hope for the future

13 March 2020

Tom Watson was one of the first MPs to call for significant changes to the British gambling sector and played a key role in shaping politicians’ thinking on the industry. But at a time when the industry is taking a very public bashing and its political opponents are in the ascendancy, does he feel things can be salvaged?

“Analogue legislation not fit for the digital age” has become something of a cliché to describe the 2005 Gambling Act.

And it was a line first used by former Labour Party deputy leader and Member of Parliament for West Bromwich East Tom Watson. In his capacity as Shadow Secretary of State for Digital, Culture, Media and Sport between 2016 and 2019, Watson was an early and influential advocate for changes to the industry. 

His influence is seen in a number of areas. There is the whistle-to-whistle advertising ban, implemented from August 2019. Then there is the Gambling Commission’s ban on credit card betting, to come into force from 14 April this year.

And the funding commitment by the UK’s ‘big five’ of William Hill, GVC Holdings, Flutter Entertainment, Sky Betting & Gaming and Bet365 to contribute 1% of gross gaming yield to research into treatment of problem gambling by 2023.

All of these appeared in a 2018 document co-authored by Watson, alongside Shadow Health Secretary Jonathan Ashworth, setting out the Labour Party’s plans for an overhaul of the British gambling sector. 

Belligerent defiance
If this gives the impression of a sector ready and willing to make changes, this is a recent development. It is a result of the industry’s heavy defeat in a battle over fixed-odds betting terminals (FOBTs) – another key issue on which Watson campaigned.

On that issue, Watson says, the industry pursued a strategy of “belligerent defiance”, which saw politicians “beaten up” by lobbyists protecting the sector’s interests. Relations with parliament hit an all-time low as a result. 

However, he isn’t triumphalist or bitter, and instead is delighted with the speed of the industry’s change in approach.

“We’ve come out of the fixed-odds betting terminal saga with all stakeholders – parliamentarians, policymakers, consumer groups and campaign groups, clinicians and industry leaders – recognising it’s a very unproductive way to deal with social and economic challenges ahead,” he says. 

“So I think we start with a sense that we have to find a new way of working together, and I’ve been very pleasantly surprised […] just how much chief executives recognise that there are some reforms that are required.”

Spirit of cooperation
He points out that the review of the Gambling Act, promised in the Conservative Party’s election manifesto, being welcomed by the industry is a key sign of change from a sector still bearing fresh scars from FOBTs. This gives him hope that the dawn of a more socially conscious era is breaking in Great Britain. 

In fact, he admits to having been “taken aback” by how quickly the sector has responded or got ahead of the curve on key issues, as evidenced by policy proposals by Labour – in opposition, no less – that have quickly become reality. 

“However we got there I think there’s a new spirit of cooperation, and I think a consensus is very possible.”

This consensus must focus around harm reduction and prevention: “If you start off with 320,000 problem gamblers, and work back from there to protect these people, while maintaining the sector’s reputation for innovation and creativity, I think that’s a good starting point.”

“It seems to me there are issues the industry is talking about now, and how they work with parliament on it will depend on the legislative and regulatory burden will be in the years ahead. 

An obvious starting point, he says, is an ombudsman for consumer complaints, as well as a more strategic approach to a statutory levy, to ensure it is being spent wisely and effectively. 

“Then there are areas such as stake caps or stake reductions, and what is to be done about VIP programmes,” he continues. “You quickly get on a level of detail that not all parliamentarians are aware of, and if the industry can solve its own problems, it’s infinitely more preferable than lawmakers trying to do it.”

“So I just think there’s a sense of the industry coming together with a collective voice to define reform and engage with stakeholder groups, and indeed parliamentarians, that legitimately felt their concerns were not being heeded.”

Hardline stance
It’s certainly a sign that things have moved quickly and decisively forward in the wake of Labour’s 2018 review of gambling. That document was originally designed to provide a sense of direction as to how Labour would approach gambling if it had been returned to power in the next General Election, at that point scheduled for 2022. 

Things changed remarkably quickly. That election took place instead in December 2019, and saw the Conservatives returned to power with an 80-seat majority. Labour finished with 202 seats, its worst result since 1935. Watson, having stepped down as deputy leader and as an MP ahead of the contest, is no longer in the House of Commons. 

And there are signs that his conciliatory approach is being consigned to the past. Today the torch bearers for gambling reform are led by Swansea East MP Carlyn Harris, who has taken a much more hardline stance against the industry (see interview with Harris on iGB tomorrow). 

Watson describes the Gambling Related Harm All Party Parliamentary Group (APPG) chaired by Harris as a “challenge” for the industry.

“It’s unfair of me to name the individuals, but there were some back bench characters, who despite minimal resources were doing their best to express their concerns about what were legitimate problems,” he says of the APPG. “[They] had their individual reputations besmirched by lobbyists working for the sector. 

“It’s no surprise to me that they’re pretty sore about that, and that’s now another challenge for the industry.”

Fit for purpose
Alongside the £2 stake cap demanded by the APPG, its other bombshell was the claim the Gambling Commission is not fit for purpose. 

Watson says he doesn’t want “to be the guy that passes judgment on the effectiveness of a regulator” but argues that the evolution of the industry has put the Commission in a difficult position (see page 68). 

“[There] has been a huge change in the sector through consolidation and an explosion in creative digital products that no one could have imagined years ago,” he says. “Then there’s the globalisation of operations, that any regulator no matter what powers they had would have struggled to deal with.”

This, he says, means the question is not whether the Commission is doing its job well (or not) but whether it has the tools it needs to effectively regulate the industry. 

Ultimately, he says, the rise of the APPG and the growing momentum for strict new controls highlights the urgency with which the industry needs to repair its relationship with the political establishment and the public.

Key to this will be engagement with the sector’s critics and tackling falsehoods in the media, at a time when inaccurate stories are more likely to be believed by those ready to believe the worst of the industry. 

“I read in a Sunday paper about the ‘ruthless data targeting’ by a company in the sector, which turned out to be totally untrue. The story was written in a way that suggested a rapacious industry was targeting under-16s with gambling products. I remember reading it and thinking ‘I can’t believe they’re doing this’. As it happens, they weren’t.”

“By 3pm that day the gambling sector, via the Betting and Gaming Council (BGC), had calmly put out a fact-based rebuttal,” he adds. “A year ago that would have led to an urgent question in the House of Commons and two or three more days of negative headlines.”

It was a positive start. Since this interview, however, the BGC – led by Watson’s friend and another former Labour MP Michael Dugher – has come in for increasing criticism from anti-industry campaigners.

And without Watson in parliament, the fight to convince the critics that the industry is committed to change becomes more difficult. His efforts have seen him described as anti-gambling in some corners of the industry press. However, Regulus Partners’ assessment, that he was the “most intelligent and balanced parliamentary commentator on gambling regulation” is probably more accurate. 

“Watson appears genuinely interested in regulatory problem-solving rather than political grand-standing and for this he deserves serious attention,” Regulus said back in March 2019. 

Now he has been replaced by a new wave of more hardline politicians, it remains to be seen how big a loss he will be.