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 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 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.