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Bookies temporarily upgraded from probably to potentially b*ggered

Some commentators and analysts have taken last Thursday’s shock general election result to suggest that the gambling industry, and by this we mean the retail betting sector, to be in for easier times with the election of a majority (albeit small) Conservative government and the appointment of supposedly gambling friendly John Whittingdale MP as Secretary of State for Culture, Media & Sport.

There is no denying it that a Tory government has always been, for gambling, a better alternative than one of the left, who are mostly ideologically opposed to our favourite leisure pastime. The prospect of an Ed Miliband minority government was quite frankly scary beyond belief. Ed was convinced that bookmakers were predatory capitalists and his gambling spokesman, Clive Efford, seemed to think even worse. Add a bonkers Scottish Nationalist Party and it could have been the last bookmaker to leave the high street, please turn the lights out and the machines off.

So has a bullet been dodged and can the bookmakers move forward into the broad, sunlit uplands?

I'm afraid not, major threats to the industry are still real and present, and any complacency by the bookmakers (e.g. their current strategy of lobbying) will see them back in troubled waters faster than you can say ‘Tories in Europe melt-down’. These threats remain the FOBTs and as announced in the March budget, the racing right which I suspect will evolve to a sporting right.

Let us look at the evidence:

The new Gambling Minister is Tracey Crouch, MP for Chatham and Aylesford. She has already seen fit to campaign against FOBTs in 2013 (http://www.traceycrouch.org/news/parliament-fixed-odd-betting-terminals) and may not feel like taking an evidence-based approach like her predecessor did, especially when the bookmakers have had bad press in her local authority of Medway (http://www.bbc.co.uk/news/uk-england-kent-28094916 ). There is also precedence for a Gambling Minister using their powers to help themselves at constituency level. Seaside MP John Penrose (Con, Weston-Super-Mare) increased the stakes for B3’s just months after his appointment (arguing it was a manifesto commitment even though evidence of this is yet to be found). By slapping down FOBTs, the Minister could show off the caring face of Cameronian Conservatism and who would be there to oppose it?

Those thinking the new Minister will be tempered by her Secretary of State should not be so sure. John Whittingdale MP is a lovely man and a very convivial and experienced Chairman, of the Culture, Media & Sport Select Committee. I had the honour of being one of his special advisers during the Select Committee’s inquiry into the Gambling Act in 2012/13. This was the one where we recommended increasing the number of FOBTs per shop. So on the surface it would seem like John is one ours. I can safely say he’s not. He chaired the meeting where the majority agreed, or the majority didn’t take an interest (Tom Watson MP, very vocally against FOBTs never showed up). My reading of the Secretary of State is that he takes no sides, just considers the evidence sagely.

However two things changed once Mr Whittingdale went from being a well-respected back-bencher to a member of the Cabinet. Firstly, he has to be political and responsive to the media mood (which is against FOBTs) and secondly, and most importantly, he is there for the sole reason of beating up the BBC. This is what will be consuming him and his time. If his junior minister decides that enough is enough and the precautionary principle need exercising again to enthral the readers of Kent Online, why would he bother to intervene?

This brings me to my second threat, the racing right, which I think could appear as a sporting right.

As you may remember, DCMS was conducting a series of consultations about possible alternatives to the Horseracing Betting Levy. On the 5th February the third and final consultation was posted on the concept of a racing right, where an organisation (like the BHA) would get the ownership of the betting IP for horseracing and charge bookmakers for licences. There was a shortened consultation period of 5 weeks due to the oncoming general election.

This policy was met with an almost unanimous (apart from the lunatic fringe of racing) rejection as it was considered overtly anti-competitive under both UK and European law as well as giving racing the potential to ruin bookmakers with excessive charges.

Six days after the consultation period had ended and with the DCMS website showing the consultation was still being considered, the Chancellor of the Exchequer announced as part of the budget that the racing right would be happening. The betting and racing world was stunned.

Many of us thought that this was actually just a favour by George Osborne to his chum Matthew Hancock, the MP for Newmarket (West Suffolk), so he could convince the good voters of HQ that he was worth voting back in again and fend of UKIP. The fact that there was no mention of it in the Tory manifesto seemed to confirm this as well as the belief that many manifesto promises were designed to be bartered away in the expected hung Parliament.

So what does this mean? Well it could mean nothing. But it could also turn into something for two reasons. Firstly Matthew Hancock has not done well in the Ministerial postings, a new Minister in the Cabinet Office but not a Cabinet Minister and reporting to Oliver Letwin. He is reported to be fuming. The racing right might be a nice consolation prize as it would ensure his seat for eternity. DCMS have implied that they think it’s legal and quite frankly would the Commission care?

Now secondly, the new Gambling Minister is mad about women’s football and even coaches it. Anyone who has ever spoken to anyone involved in women’s football knows that there is immense bitterness about the amount of funds and attention that goes into men’s football compared to women’s where England is actually good at it and the players are actually English.

So my wild and crazy assumption is that our new minister will see that if a Racing Right is transformed into a Sporting Right, as the Labour spokesman has already suggested (thus implying bi-partisan support), then the bookmakers would have to pay a licence fee for any sport that they offered betting on and this money could then be given to the grass roots. Which would be wonderful for her, her team and the press and actually makes more sense for football, funding grass roots, than racing – which doesn’t have any grass roots (apart from the turf).

So our new Minister could cover herself in glory by whacking the FOBTs to protect the populace and introducing a Sporting Right to fund grass roots sport and there would be no-one to argue the case for the bookmakers.

Why? Because (see my previous articles) the argument of jobs and taxes, though more effective on Tory ears, becomes less effective as the economy improves and of less interest to the people in No. 10 who are now more left wing then their colleagues on the backbenches.

Having said all of this, and with no room to elaborate further but hopefully its plainly obvious, there is still also the potential of a tax increase on online from 15% to 20%. Why? Because it’s easy!

So in summary, unless the bookmakers really change their game and get politicians back onside, serious threats to their industry still exist. And if you think the excellent work of the Senet Group and their fabulous adverts should be enough – just consider that Labour, the Lib Dems and UKIP all had anti-FOBT pledges in their election manifestos, which were all written well after the adverts were launched. Politically the bookmakers are hardly relevant any more.

As a Special Advisor to DCMS said to me last year, when I said that the Tories were a good thing for bookmakers, ‘we cannot be seen to be outflanked’. This means that there is a limit to how far they will go against public opinion in defending evidence based policy. New Ministers may see some political opportunities for themselves and then my upgrade is downgraded again – to b*ggered.