Are we a nation of losers?

In the past three years, the amount wagered by British punters has quadrupled, from £7.3bn a year to £29.6bn. And that's before the relaxation of the gaming laws opens the floodgates to the US casino giants. Can Britain afford such a habit? Terry Kirby and Maxine Frith investigate
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Rachel was in her late twenties when she sought help for her gambling addiction. A successful sportswoman from an affluent background, she tried online roulette while laid up with an injury and discovered it provided the thrills she was missing. Within three years, she had lost her home, her coaching business and her partner, was around £500,000 in debt and living in a bed and breakfast.

Rachel was in her late twenties when she sought help for her gambling addiction. A successful sportswoman from an affluent background, she tried online roulette while laid up with an injury and discovered it provided the thrills she was missing. Within three years, she had lost her home, her coaching business and her partner, was around £500,000 in debt and living in a bed and breakfast.

Sue found fruit machines a distraction from her parent's break-up when she was just 12; she spent her pocket money, her dinner money and then money she stole from her parents and friends. She moved on to casinos at 18 and, by 26, was sleeping in her car with debts of £40,000.

The stories of Rachel and Sue represent the modern face of gambling - and are a long way from more traditional images of high rolling Arabs blowing their oil riches in Mayfair casinos or the grubby inhabitants of a smoke-filled betting shops strewn with discarded copies of the Racing Post.

The face of gambling is changing for ever: the typical small punter is now just as likely to be a Home Counties housewife who places her bet on the internet and has never been inside a bookmakers - while the casino habituees of the future are going to be elderly retired couples on holiday in Blackpool, rather than Middle-Eastern high rollers spending their oil money.

Whoever is doing it, one bet is certain: there's an awful lot more of it going on than ever before and the Government is largely responsible for creating the situation. But the downside is that more people - particularly women - are now becoming addicted to gambling than ever before.

"There has been a huge creation of opportunities for betting, which have resulted in an increase in competition and value for money for everybody,'' said David Forrest, an economist and member of the Centre for Gambling at the University of Salford.

According to government figures the total amount of money staked in all gambling style activities, including the Lottery, bookmakers, casinos and slot machines, was £63.8bn in 2002-03. About six out of 10 of us now spend at least £50 a month gambling, according to government figures.

The biggest increase has been in ordinary betting, whether by bookmaker or on the Tote, which has risen from just £7.3m in 2001 to £29.6m last year. This is entirely due to Gordon Brown's decision that year to scrap the 50-year-old betting tax, which took about 7p on every pound staked or won, with most punters choosing the former. As a result, William Hill saw its profits increase by £32m to £170m in 2003; Ladbrokes says profits have risen 43 per cent this year. Change is also coming to Britain's 8,000 high street betting shops in an effort to become more user friendly - air conditioning and coffee and sandwich outlets are among the improvements being introduced.

But other areas have boomed as well. Bingo clubs, in decline a few years ago, have benefited from being allowed to advertise more freely; about three million people are now members of 670 clubs, staking £1.4bn annually, an increase from £1.08.bn five years ago.

The number of casinos has risen from 118 in 1999 to 131, more than any other European country apart from France, while the amount staked in casinos by punters has increased from £3.16bn in 1999 to £4.1bn this year. And now the industry is gearing up to profit even more from the planned deregulation, which will allow the creation of regional "super casinos" containing, as well as the conventional roulette and blackjack tables, huge numbers of Las-Vegas style slot machines which have no limit on their payouts.

Blackpool is already planning a massive development, based around such a casino which will create dozens of jobs and attract a completely different kind of punter, more akin to the well-off retired couples who travel to Las Vegas for a flutter. Officially, such developments will have to be part of a bigger leisure complex with hotels, restaurants and sports facilities. Sol Kerzner, the South African tycoon behind the Sun City development is also planning a "super casino" at the Millennium Dome in south London, in partnership with new owner, the American billionaire Philip Anschutz.

The Government has also framed the legislation in such a fashion as to assure the future of such "super casinos" once they get off the ground. They have scrapped plans to allow smaller, high street casinos which would have provided competition and created regulations preventing the building of larger casinos anywhere close.

Dr Forrest says that is a missed opportunity. "By concentrating the casinos around regional centres, they have lost out on what seemed to be a genuine opportunity to create a whole new area for people to enjoy themselves. Gambling can be a significant part of people's leisure spend, particularly among senior citizens," he said.

The other significant area of growth has been the internet, which has made online betting possible and thereby created a whole new set of punters who might otherwise have restricted their gambling activities to a once-a-year shot on the Grand National.

Betting exchanges, where punters bet among themselves rather than with bookmakers, and spread-betting sites, where bets are placed on the variation in a result from that expected by the bookie, are now also proliferating. Online betting is now likely to be less on horse-racing and more on football or one-off events such as the Oscars and Big Brother.

"The bookmakers shop has, as we know, a very narrow demographic profile, while online betting attracts people are the top and bottom end of the scale," said Dr Forrest.

At the bottom are women, who would not otherwise have much experience of betting and would never have gone near a betting shop while the second group are the experienced, professional gamblers, who spend their entire time studying form and now don't need to go near a betting shop.

But a large chunk of the revenue from these activities was going overseas and not, therefore, part of the £1.5bn the betting and gaming industry pays each year in various taxes to the Treasury. Hence the government moves to help the British industry and protect that revenue, which has dropped slightly to £1.3bn in the past few years.

Ironically, although the creation in 1995 of the National Lottery helped fuel the culture of a "quick flutter", the Lottery itself has recently seen its earnings drop in the face of the new internet based competition. "The Lottery is definitely a loser," said Dr Forrest, "People get bored with it and because it's only once a week, you lose that repetitive feeling that's part of the attraction of gambling.''

But it is precisely that repetitive, addictive quality that has fuelled concerns that we are all about to become hooked on gambling, with enormous social and welfare consequences. According to a 1999 survey, 0.6 to 0.8 per cent of the adult population - 275,000 to 370,000 people - are estimated to be "problem gamblers" - that is defined as where it interferes with our social obligations - of which around two per cent are women. The figure is almost certain to have risen since.

Dr Forrest, who says he has never personally placed a bet in a bookmakers, is sanguine. "I've never been in fear of assault from a problem gambler. While I accept that there are issues for the families of gamblers, I don't believe they are the same consequences as those from alcohol.'' However, he points out the example of Australia, where deregulation allowed widespread placing of high-prize slot machines and the percentage of problem gamblers rose from about the British level to 3 per cent in just a few years.

Gordon House, the UK's only charity offering residential treatment programmes for gambling addicts, say 8 per cent of the inquiries they receive are from women, suggesting that the official figures underestimate the problem. This year, the charity opened the first - and only - women-only residential unit for addicts.

Places on the male and female programmes are oversubscribed. A spokeswoman said: "We have 35 places for men and four places for women but last year we received more than 200 applications. We have seen a 100 per cent increase in applications on the previous year, and increasing numbers of women gamblers."

She added: "Gambling is everywhere - in supermarkets and post offices with lottery tickets and on the internet. Internet gambling means women don't need to leave the house, they do it without being seen.''

The charity points out that when woman develop a problem with gambling it is often worse than with male gamblers because women can bring a greater emotional intensity to their addiction. Equally, men will be able to rely upon a partner to keep the family together; woman may not have that option and may face the agonising choice of getting help, which may mean her children going into care, or trying to carry on without help.

The ease with which people can give over credit card details and log on to gambling websites means they can lose huge sums of money in a matter of days. Michael Smeaton, "remote gambling" specialist at the charity GamCare said. "We have heard of people losing six-figure sums in six months. Computers in themselves are very absorbing and people don't see the money they are losing as real."

The new Bill will bring in tighter regulations and guidelines on websites but charities say more needs to be done to curb the proliferation of online betting. "Gambling sites are the most advertised sites on the internet," Mr Smeaton said. "They have opened up a huge new market of gamblers - and these new people are extremely vulnerable to developing problems."

WINNERS ... AND LOSERS

Betfair

The British online betting exchange has revolutionised sports gambling by taking the bookmaker out of the equation. Punters bet against one another, either on winners or by "laying" bets; and, because there is no bookmaker, the prices are better. Betfair started in June 2000 and has a weekly turnover exceeding £50m.

The Chancellor of the Exchequer

Although the Treasury's net gain from gambling has dropped from £1.5bn to £1.3bn a year since the abolition of betting tax on punters, it still imposes a 15 per cent tax on bookmakers' net profits, and this is likely to yield increasing rewards when the gaming laws are relaxed.

Big bookmakers

Despite competition from online betting exchanges, traditional bookmakers still thrive. The hotel group Hilton, owners of Ladbrokes, announced that their pre-tax profits more than doubled for the first four months of this year. The company made £214m before tax in 2003.

Casinos

Several big leisure companies hope to create huge Las Vegas-style "resort" casinos, capable of making £50m profit a year each. Marc Etches, managing director of Leisure Parcs, is hoping to create one in Blackpool; others in the field include MGM Mirage.

Sol Kerzner

The South African tycoon, who made his name and fortune with the apartheid-era Sun City resort, plans to build a 635-bed hotel and casino at the Millennium Dome and two others in Manchester and Glasgow, at a cost of £600m. The Dome resort, made possible by a relaxation in Britain's gambling laws, is expected to feature 900 slot machines.

Crockfords

Stanley Leisure, owners of the exclusive Mayfair casino, announced on Wednesday a 13 per cent drop in profits, to £21.5m. This followed a heavy losing streak to high-stakes punters at Crockfords.

Lottery

National Lottery sales have risen in the past year, by 1 per cent (£40m). But sales for the main draw fell by 4 per cent and may be further hit if the regulation of casinos and slot machines is eased.

Football pools

After the National Lottery began in 1995, takings for Littlewoods football pools, which accounted for about 80 per cent of football pools betting, were badly damaged by many "soft gamblers" deciding to have their weekly flutter on the lottery draw instead. Profits halved and thousands of jobs were lost.

High streets

Retailers in town and city centres will be disappointed after the Government dropped plans for local "high street-style" casinos, intended to mirror the proliferation of bingo halls.

Women

More women than ever are "binge gamblers", according to recent research, although they are more likely to bet on such events as football, Big Brother or the Oscars, than on horse-racing. Reasons range from gambling's improved image (attributed to the National Lottery) to the greater convenience of internet gambling. More middle-aged women engage in online betting than any other group.

THE NUMBERS

£50: Amount spent on gambling each month by six out of 10 British adults.

350,000: Estimated number of British "problem gamblers".

33 per cent: Minimum estimated increase in calls to Gamblers Anonymous since the first National Lottery ticket was sold eight years ago.

£516,439: Amount stolen from a sorting office safe by senior postmaster Dean Williams, 34, to fund his addiction for gambling on horse racing. He now faces up to nine years behind bars.

£63.8bn: Total amount staked in all gambling activities, including the Lottery. (£29.6bn is spent on ordinary betting at bookmakers and Tote.)

£28m: Amount fed into fruit machines each day in Britain in 2001-02.

131: Number of registered casinos in the UK.

£5.37: Amount spent by average household on Lotto tickets each week.

13,980,000 to 1: Odds against picking all six Lotto numbers.

£3.5bn: Money exchanged in for gambling chips in British casinos last year.

£44: Average amount spent by a punter during one visit to a UK casino.

£350: Average amount lost in a visit to a Las Vegas casino.

£3m: Sum to be provided by the gambling industry each year to fund research and help for problem gamblers.

30,000: number of jobs that councillors in Blackpool, Lancashire, hoped would be created by transforming the seaside town casino resort.

699: licensed bingo clubs in UK.

Research by Oliver Duff and Geneviève Roberts

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