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  • George Ellis

Lobbying and the BGC

Updated: 23 hours ago

Introduction


The Betting and Gaming Council (BGC) was formed in 2019 as a merger of three different ‘industry associations’; the Remote Gambling Association (RGA), the Association of British Bookmakers (ABB) and the National Casino Forum (NCF).[i] These associations represented various sectors of the UK’s gambling industry whose interests had not always been aligned.[ii] With the formation of the BGC, however, the industry has created a unified body to advocate on its behalf.[iii]


This advocacy, however, is not the aspect of the organisation that it stresses to the press or the public. Instead, the BGC, since its creation, has styled itself as a ‘standards body’ first and foremost, as CEO Michael Dugher is quoted in bold on their website ‘Our number one priority remains to raise standards and drive big changes’.[1] And whilst the BGC has championed several initiatives to promote safer gambling, their effectiveness has been questioned; the Guardian’s Rob Davies refers to much of the work as ‘cosmetic rather than profound’.[1] The BGC’s role as representatives and advocates of the industry is not immediately apparent and is always couched in the language of promoting industry standards; below Dughers’ quote (and in a much smaller font), the BGC’s stated mission is:


“To champion the betting and gaming industry and set world class standards to ensure an enjoyable, fair and safe betting and gaming experience for all our customers.”[1]

And its purpose:


“To provide a forum to facilitate collaboration, sharing of best practice, drive and champion standards, and create a single voice for the industry.”[1]

Despite this downplaying of its role as an industry-founded and industry-funded organisation, the BGC, like its forebears, is first and foremost a lobbying group for the gambling industry.


Below we examine how and why the BGC was formed, the influence and connections it exerts, to what extent its claims of industry self-regulation can be taken seriously and finally, we will look at some of its strategies and tactics.


FOBTs, the industry’s lost battle and the formation of the BGC


Before their maximum bet was reduced by law from £100 to £2 in 2019, ‘fixed-odds betting terminals’ (FOBTs) were out of control. They represented over £1 billion lost a year by people who gambled, a disproportionate proportion of their players were ‘problem gamblers’ (13.6%, rising to over a quarter when including those at ‘moderate risk’), and they were primarily responsible for overcrowding high streets with betting shops.[2] By 2017, these problems, combined with the heart-rending stories of victims, coalesced into a media storm, with FOBTs dubbed the ‘crack cocaine of gambling.’[3]Unsurprisingly, the same year, the government launched a ‘consultation on a range of options on cutting maximum stakes.’[4]


With each machine bringing in more than £50,000 a year and generating a total of £1.2 billion in income, the industry launched a defensive action. [3] This action would be spearheaded by the Association of British Bookmakers (ABB) and its CEO Malcolm George. Much of their effort was unsophisticated, with Malcolm George often railing against a ‘media panic’ induced by ‘those with their own commercial interests at heart’.[5] George was not entirely incorrect; the industry was divided on FOBTs, with some organisations backing reform and the ABB’s counterpart, the Remote Gambling Association, ‘content to stay out of the matter’. [3] Such heavy-handed attacks, however, did the ABB no favours.


As with much lobbying, however, the primary battle was not in the press but in parliament. Here the ABB acted with much more sophistication and in a manner still emulated by its successor, the BGC:


Firstly, the ABB commissioned KPMG (an accounting firm) to write a report on the impact of cutting FOBT’s maximum stake to £2; the report found that this would cost the industry a staggering £639 million and cause 15-21,000 job losses. It was, however, deeply misleading as the ABB had dictated the parameters of KPMG’s report in such a way to ensure a beneficial outcome. As KPMG notes, the report was ‘performed to meet specific terms of reference’, with certain estimates’ agreed with the industry’ and ‘should not be regarded as suitable to be used or relied on by any other person or for any other purpose’.[6] Despite this, the report was circulated among MPs and Civil Servants; it was used in ‘Treasury modelling’ and even cited by the Chancellor of the Exchequer, Philip Hammond.[3]


Secondly, it would seem that the industry’s allies in parliament attempted to delay or axe the incoming £2 stake limit proposed by then Sports Minister Tracy Crouch. As Crouch would report, Philip Davies lobbied the Culture Secretary Jeremy Wright against the policy; after that, the Treasury and chancellor Philip Hammond (who cited the erroneous report) took over. Crouch then resigned in protest, triggering outroar and a rebellion which forced the Treasury to backtrack. Crouch has stated that without her resignation, she does not believe the policy would have gone ahead, given the Treasury’s and Hammonds’s ‘scepticism’, no doubt influenced by the misleading KGMP report and lobbying by pro-industry MPs.[3]

With these late dramatics, the ABB had been defeated, and the industry’s reputation damaged. It was clear to gambling firms that if they wanted to weather public outrage and growing calls for reform, they would need a modern and sophisticated organisation to “champion” their interests. Thus, in 2018 the Betting and Gaming Council was formed.


The BGC: buying influence


At its formation, the BGC was already a formidable beast. It appointed a veteran lobbyist Brigid Simmonds as chairman. More importantly, it hired Michael Dugher, a former Shadow Secretary and Labour MP as chief executive and Kevin Schofield, a veteran journalist and former editor of PoliticsHome, to run the organisation’s communication strategy.[3] All the contacts and experience in this core team have undoubtedly been useful to the BGC in various ways, some of which we trace below.


With the appointment of Kevin Schofield, the BGC had hired an experienced journalist and a man fully capable of running the organisation’s communications strategy. Perhaps it was this canny understanding of communications that caused PoliticsHome (a news source read by MPs and political advisors) to go from publishing articles broadly sympathetic to gambling reform to publishing no less than eleven articles written by the BGC or its staff in the eighteen months since they hired Schofield.[3] Or perhaps Schofield retains friends and influence at PoliticsHome, for which he was an editor for five years. Similarly, since his appointment, niche BGC reports have received favourable coverage by Schofield’s former colleagues in both the Sun and the Sun on Sunday.[3]


Somewhat more challenging to map is the influence of former shadow minister Michael Dugher. Dugher is a man with numerous contacts from his time at the forefront of political activity; he has undoubtedly helped the BGC meet with and influence officials, ministers and MPs. The nature of such lobbying means that we can only speculate on the extent of his work. What we can note, however, is the apparent influence and reach of the BGC, whose staff met with DCMS officials seven times between October and December of 2020 (the period immediately before the Government’s Gambling Act Review was announced).[3] Perhaps the most well-publicised (alleged) exertion of Dugher’s influence was the hiring of former Labour Deputy Leader Tom Watson by Flutter Entertainment. Of course, Flutter is not the BGC, and there is no evidence that Dugher directly or indirectly influenced that decision. What is known is that Dugher and Watson are close friends, and despite Watson’s former vocally anti-gambling stance, he took a job for the industry, lending it both his expertise and reputation. Further, Watson has taken to using a favourite phrase of Dughers (and not many others) to describe activists in favour of gambling reform, that is, to call them ‘prohibitionists’ (despite the rarity of calls for an outright ban).[3]


It is not just former MP’s the BGC has ties with (nor is the Dugher-Watson connection the height of the industry’s incestuous dealings). In November 2020, the BGC began paying current Conservative MP Laurence Robertson £2,000 monthly for 10 hours work advising ‘on sports and safer gambling’ (an hourly rate of £200).[3] Similarly, Philip Davies (the MP who lobbied to delay FOTB reform) got paid £50,000 for 124 hours of work advising Entain chief executive Kenny Alexander.[3] Alongside this, Davies has several former staff employed in the industry. Two of Entains senior officials previously worked in his office (head of safer gambling and external affairs Sophie Dean and chief of corporate affairs Grainne Hurst); the BGC also employs his former aide Camilla Toogood as its ‘government relations manager’.[3] Whilst there is nothing technically wrong with hiring a host of Davies acolytes, it shows how the BGC and, indeed, the industry maintains a deep connection with those politicians it deems friendly to their cause.


The BGC: self-regulation?


Unlike the old Association of British Bookmakers or the Remote Gambling Association, the BGC’s purpose as a pro-industry lobbying group is not immediately apparent to the casual observer. In a rather successful PR stunt, the industry dropped the standard ‘association’ moniker in its creation of the BGC and has focused on messaging concerning the groups role as a ‘standards body’. The BGC stresses this role at every opportunity and indeed, the organisation has championed several voluntary initiatives aimed at the protection of consumers. This has led many commentators to attribute a genuine concern for those affected by gambling harm. However, such exercises by the industry are best viewed as thinly veiled publicity stunts, primarily tokenistic and driven by the desire for self-preservation, which attempts to mask the actions of an industry desperately trying to fend off outside regulation. Take, for example, two instances of BGC “championed” reform.


Firstly, the much-publicised whistle-to-whistle ban on gambling advertisements during live sporting broadcasts. The ban, agreed on in 2018, was labelled a ‘huge success’ in the BGC’s annual review and has been held up as something of a crowning achievement for the organisation and as proof that effective self-regulation is possible.[7] Indeed, the BGC claimed that the initiative had reduced the number of gambling ads seen by 4-17-year-olds by a staggering 97%.[8] The reality is substantially different; over the first year of the ban, gambling ads across all TV channels fell by about 11.3%.[9] Whilst this might seem substantial, two factors undermine the BGCs narrative. Firstly, despite a ban on tv advertisements during broadcasts, the broadcasts themselves contained numerous gambling logos and advertisements; 9 of 20 premier league clubs and 17 of 24 championship clubs had shirt sponsorships, to say nothing of the numerous advertisements on pitch-side boards.[10] Secondly, the ban only served to accelerate the move to online advertising, which the industry was already in the process of making. Indeed, the 97% reduction in gambling ads seen by children boasted by the BGC is achieved through not only excluding all media except broadcast tv but also by examining only the number of tv ads seen over the span of televised football matches, not the overall number of televisions ads seen at other times.[3] In short, the ban is unlikely to have reduced gambling harm due to the omnipresent nature of gambling ads both online and through sponsorships during broadcast; similarly, it was almost certainly harmless to the industry, which already had a large amount of exposure through those sponsorships and online marketing. The main purpose for the ban seems to have been the positive news coverage it generated for the industry.


Secondly, and of more minor importance, is the BGCs supposed support for gambling reforms. Notably, when the Gambling Commission introduced a ban on gambling on credit - a ban on gambling on debt (and thus likely creating more debt) - Dugher claimed the BGC had always ‘fully and publicly’ supported the ban.[3] Despite this, the Commission's own report indicated that ‘none of the remote gambling operators who responded supported the ban’.[3] The BGCs backers had opposed the reform, and the BGC had only thrown its weight in once it was already decided; rather than championing reform, the organisation appears to have attempted to gain credit for a reform its backers opposed.


What these examples illustrate and what must be kept in mind is that the BGC is, first and foremost, a pro-industry body; its responsibility is not to those affected by gambling harms but to the various gambling companies that make up its membership. As such, the regulatory initiatives it has championed have been aggrandised and have only been incidentally helpful in reducing gambling harm (if they have at all). The BGC commits to such initiatives with the dual aims of improving the industry’s public image and of fending off government intervention – the alternative is that profit-driven private enterprises are funding an organisation whose goal is to reduce their profits through self-regulation.


The BGC: bogus fear of a black market


One of the BGC’s primary methods of pushing back against the prospect of greater regulation is to raise concerns over growth in the gambling ‘black market’ (unlicensed gambling operations). The argument being that much like the American prohibition, a draconian crackdown on the industry could lead to an explosion of an unregulated (and more dangerous) form of gambling. Whilst the prospect of growth in the black market should perhaps not be dismissed outright, the industry’s predictions are certainly exaggerated and cynically leveraged; as Paddy Power co-founder Stewart Kenny has noted, industry heads always ‘used the threat of the black market’ and ‘always knew it was a bit of a bogus argument’.[3]


Despite Mr Kenny’s admission and others like it, the BGC has focused much of its efforts on framing its opposition to regulation as civic-minded warnings. Whilst the ABB of old might have railed against the prospect of regulation (and the APPG on Betting and Gaming certainly has), the BGC’s well-oiled PR machine has taken a conciliatory tone, offering notional support to ‘the Gambling Review’ whilst raising the spectre of the black market if regulation is taken too far, warning that it may lead to ‘regulated industry being smaller and the illegal black market growing substantially’.[11] Dugher and the BGC then call for the government not to limit regulation or roll back its gambling review but rather to ‘take an evidence-based approach’.[11] Whilst this may seem an uncontroversial and eminently reasonable approach, one must recall the KGMP report on FOBTs that was declared unfit for outside use by its authors yet still found its way into Treasury modelling, onto the desks of civil servants, MPs and even the Chancellor’s. The industry can and has created ‘evidence’ which suits their financial interests; the BGC’s network of influence means that often this evidence makes its way to decision-makers even when it is woefully inaccurate and unusable.


It is unsurprising then that in 2019 the industry commissioned PwC to write a report on the size of the UK black market.[3] The report estimated that 200,000 Britons wagered 1.4 billion on black market operators every year; this eye-catching figure was dutifully spread around the press (with Schofield’s old colleagues in the Murdoch Press doing much of the heavy lifting).[3] The report was deeply flawed and had failed to distinguish between real website visits and ones generated by bots; it drew widespread criticism and a surprisingly strong statement from the usually reticent Gambling Commission, with executive Niel McArthur calling the report ‘exaggerated’ and ‘not consistent with the intelligence picture’.[3] Furthermore, it should be noted whilst the report was completed in August of 2019, the BGC, a self-described ‘standards body’, did not choose to publish it until 2020, just as the Gambling Review was initiated.


Not deterred by this criticism, the BGC quickly published a follow-up alleging that wagers on black market sites had doubled during the pandemic and now equalled around 2% of those placed on legitimate sites.[3] As Davies notes with some scepticism, during the same period, wagers on legitimate sites increased by a comparatively modest 13%; the PwC report would suggest that during lockdown, people were drawn not towards the licenced operators whose adverts they saw daily but towards much riskier black market sites.[3] To refer back again to Paddy power co-founder Stewart Kenny this seems incredibly unlikely as most people are ‘not going to lend [their] credit card details to black market operators’.[3]

[i] An industry association is founded and funded by businesses operating in the sector. Its purpose is to promote the interests of the businesses it represents. [ii] Most notably on the issue of FOBTs [iii] Since the absorption of the Senet Group in 2020, the BGC now represents approximately 90% of the UK's licensed operators.

 

[1] Betting & Gaming Council. Our Purpose [Internet]. [cited 2023 Jan 6]. Available from: https://bettingandgamingcouncil.com/about-us/our-purpose

[2] Channel 4. Gambling act was a ‘mistake’ confesses senior Labour politician [Internet]. [cited 2023 Jan 6]. Available from: https://www.channel4.com/press/news/gambling-act-was-mistake-confesses-senior-labour-politician

[3] Davies R. Jackpot: How Gambling Conquered Britain. London: Guardian Faber; 2022.

[4] GOV.UK. Government to take action on Fixed Odds Betting Terminals [Internet]. [cited 2023 Jan 6]. Available from: https://www.gov.uk/government/news/government-to-take-action-on-fixed-odds-betting-terminals

[5] Financial Times. Why criticism of FOBTs needs to be played down [Internet]. [cited 2023 Jan 6]. Available from: https://www.ft.com/content/3304187a-7ff1-11e6-8e50-8ec15fb462f4

[6] Davies R. Government’s FOBT decision influenced by ‘discredited’ report. The Guardian [Internet]. 2018 Nov 12 [cited 2023 Jan 6]; Available from: https://www.theguardian.com/uk-news/2018/nov/12/government-fobt-decision-discredited-report

[7] Betting & Gaming Council. ‘Whistle to whistle’ ban a huge success [Internet]. [cited 2023 Jan 6]. Available from: https://bettingandgamingcouncil.com/annual-review/responsible-advertising-2

[8] Betting & Gaming Council. ‘Whistle to whistle’ ban success [Internet]. [cited 2023 Jan 6]. Available from: https://bettingandgamingcouncil.com/news/whistle-to-whistle-ban-dramatically-reduces-number-of-betting-adverts-seen-by-children

[9] Patel K. Gambling and voluntary bans [Internet]. 2021 [cited 2023 Jan 6]. Available from: https://www.gamblingharm.com/post/gambling-and-voluntary-bans

[10] Association P. Number of clubs sponsored by betting firms is ‘disturbing’, say campaigners. The Guardian [Internet]. 2018 Jul 30 [cited 2023 Jan 6]; Available from: https://www.theguardian.com/football/2018/jul/30/campaigners-concerned-championship-efl-clubs-sponsored-betting

[11] Betting & Gaming Council. New research reveals shocking size of Black Market gambling across… [Internet]. [cited 2023 Jan 6]. Available from: https://bettingandgamingcouncil.com/news/new-research-reveals

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