One item of industry news has extended far beyond the business press and into the mainstream media, including the BBC and other broadcast groups, and almost all national daily newspapers.
This is the £19.2m penalty imposed upon three William Hill companies by the UK Gambling Commission for both failing to protect consumers and weak anti-money laundering controls.
The group’s current owners, 888 Holdings, say that these problems occurred under previous ownership and that following their acquisition, 888 quickly identified and addressed the issues. The specific cases cited by the Gambling Commission took place between 18 months and three years ago, so 888’s response is valid. However, in my view there is a large ‘however’ in play here…
A question of timing
The UK government has been conducting a lengthy review of its gambling legislation and must soon be publishing its long-awaited White Paper, outlining proposed changes to the laws. So the timing of this highly publicised announcement of a penalty for offences committed long ago, and by an organisation that is now under different ownership, is an interesting issue in itself.
Firstly, it is a belated flexing of muscles by a Commission that should be anticipating severe criticism in the White Paper. Closing the stable door after the horse has bolted, as the saying goes.
Secondly, imposing a £19.2m penalty on an organisation with expected revenues of £1.85bn and profits of £300m+ may be described by some as modest, roughly equivalent to half a parking ticket in individual consumer terms.
The real point is the PR battle
My main issue is with the timing, and that it is so close to the publication of the White Paper. In terms of a political move, with the unveiling of stronger restrictions on gambling imminent, the timing of this penalty is ideal. By creating a perception in the eyes of a wider public that the large gambling companies need bringing into line, the authorities have made it easier for this public to accept – and even welcome – any draconian measures they might have in mind.
And let us remember, we are all very close to this issue. Out in the wider world, gambling is a minority activity. Despite its high profile, the reality remains that the majority of people do not gamble and are either opposed or totally ambivalent. With respect to those at William Hill, if every one of their 1,300 or so retail shops disappeared from the streets tomorrow, the majority of UK citizens would neither notice nor care.
Firmly in the crosshairs
Furthermore, whilst £19.2m may not be a life-changing amount of money to its owners, the public perception is that it is a vast sum, and if this penalty can be paid quite comfortably then something must be extremely wrong with the world.
This is the political and PR battle that the UK industry has been losing for decades. This is not wholly the industry’s fault, as gambling is an easy target. With millions of people choosing not to gamble, and viewing it as a ‘vice’, it has always been low hanging fruit for both politicians and the media. Having said that, the industry as a whole has never done enough to help itself.
For many years, certain wise souls within the industry have consistently called for its representatives to be less reactive and to take more proactive and meaningful steps. The ‘lip service’ paid to the concept of responsible gambling is embarrassing. And crying out for any form of self-policing at this point, when the cross hairs are already on the forehead, is too little, too late. The time for such measures was a decade ago and so now we are on the verge of a crisis management plan.
Proactivity, PR and political prudence
Having made a financial example of William Hill, with a number that sounds huge to the average individual, it seems inevitable that the next transgressor will have their licences suspended. Previous conduct will be irrelevant, we are all tarred with the same brush here, with every warning shot applying to everybody.
In my view, the next best step would be to get ahead of the publication of the White Paper and fire off a pre-emptive strike that outstrips any government plans.
This could include, for example, the immediate introduction of (further) voluntary affordability checks at a level beyond what is believed the government wishes to introduce. Couple this with a significant revision of all existing responsible gambling practices and support for problem gamblers, and we might legitimately call that a start.
With the industry’s collective PR machines sent into socially responsible overdrive, the message being that existing business models are being comprehensively rewritten, and we might be able to put ourselves ahead of the game in the eyes of the wider public, and those in authority might find it more politically prudent to go easier on an industry that is finally being seen to be doing the right thing.
