Paddy Power has been found to have failings in its responsibilities under the anti-money laundering controls and has agreed to contribute £280,000 to social responsibility causes and ‘share lessons’ with the industry.

In previous GBGC newsletters I have highlighted that the negative publicity attached to problem gambling is likely to cause a decline in gambling overall. The Drink Aware campaign on the misuse of alcohol, along with negative publicity on binge drinking, has caused a decline in alcohol sales of 16% over six years.

Add to this the increases in taxation on gambling and a deluge of regulation throughout Europe and it is fair to say the gambling industry is finding life rather tough at present.
I hope the industry has priced in the cost of regulation, the effect of the press campaign against it, and rises in taxation. I am sure not everything has been fed into the economic model.
The Bank of England imposes stress tests upon the banks that take the form of various factors that could affect the economy and thus the liquidity of banks and the ability to meet their obligations. Tests such as:

• Vulnerabilities stemming from the rest of the world
• A deflationary macro environment
• An adverse constellation of shocks to the housing market

In 2015, according to the Bank of England, five of the seven banks passed the tests but two did not.

The question I asked of the Gambling Commission through a Freedom of Information Enquiry was:

Can you please supply me with your cost benefit analysis, and/or your financial impact study for the Gambling Commission’s Social Responsibility Policy in relation to the effect on the gambling industry?
The reply:

I can confirm that the Commission does not hold the information you have requested. The Commission is not obliged to conduct a cost benefit analysis on changes to our regulatory framework. We do however consider, as a Hampton based regulator, such matters as proportionality and the foreseeable impact through consultations, ongoing conversations with Trade Associations and so forth.
In relation to your second question regarding financial impact, again, we are not currently obliged to conduct such an analysis. However, as you may be aware, the Enterprise Bill is currently going through final legislative steps and, as drafted, the Commission will in future be obliged to conduct an assessment of the impact of regulatory changes. We understand that the methodology for this assessment is still under development by BIS.

The inference is that policies are delivered to the gambling industry without any formal rigour other than a consultation with the trade associations as to the cost to the industry. Yet most government departments do follow a routine of formulating an opinion of the impact when imposing conditions to trade on other industries.
The UK government does have various templates for conducting impact assessments for government policies. It should be of concern to the gambling industry that regulation, taxation, anti-money laundering and social responsibility measures are being imposed without telling the industry the potential cost. The industry needs to know so that it can adjust and prepare accordingly.

by Warwick Bartlett