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Lies, Damned Lies and Roulette (May 2006)

This article was first published on The Guardian's Comment is Free

The UK's disease of obsessive gambling is even more rampant than I had thought.


Benjamin Disraeli was no great shakes as a Chancellor but his line "There are lies, damned lies and statistics" lives on. I did a blog on 13 April about Wayne Rooney, gambling, and the condition of Britain. The British disease got its statistics wrong, and I apologise. I had underestimated our gambling obsession by over 50%.

I wrote that according to the German weekly Focus (20 March) we were blowing $626 per capita on gambling, collectively $32.5 billion a year or 2.5% of Gross Domestic Product (GDP). That was old stuff. Polly Toynbee and David Walker's Better or Worse (Bloomsbury, 2005) already had it at around £50 million in 2004, and updated to 2005 it should have read £1266 per capita, collectively £76 billion a year, and 7.7% of GDP. The statistics are in a piece in Saturday's Scotsman (Stephen McGinty, 'Scots gamble £ 7.5 billion on betting epidemic', 13 May). They are awesome.

McGinty was citing Prof Leighton Vaughan Williams of the betting research unit at Nottingham Trent University, who calculated that between 2001 and 2005 UK citizens increased their spend on gambling from £25 billion (£416 per capita) to £76 billion (£ 1266 per capita). Now in 2001 UK gross domestic product (GDP) in terms of consumption was £872 billion. By 2005 it had risen to circa. £983 (definitive data not yet published: See here. This increase was £111 billion. The increase in gambling expenditure was £51 billion.

Gambling has gone, 2001-5, from 2.9% to 7.7% of GDP, mainly through a surge in on-line sports betting and casinos. Over 40% of UK growth wasn't coming from productivity gains or flexible labour policy, the things 10 and 11 Downing Street boast about, but from us throwing money at actual or virtual casinos. Sure, gambling supports 90,000 jobs, with new casinos likely to double that number, according to Vaughan Williams, who thinks this is great. The Chancellor rakes in £6 billion from taxes, and the Lottery shells out an average billion a year for good and not-so-good causes, but ...

Despite Gordon Brown's pride in the health of the British economy compared with our laggard European neighbours, it's difficult to square this with the pervasive shabbiness of our society and infrastructure. Despite low unemployment, for example, our child poverty rate is still over 20% while Germany's is 10%. If the Germans were to hit the green baize tables, actual and virtual, with our enthusiasm, this would inject $196 billion (or 6% growth) into their economy. Whether they would benefit from it is another matter.

I don't think I'm alone in echoing the American social scientist Robert Putnam, in Bowling Alone: the Collapse and Revival of American Community (2000) on the importance of social capital. We need an economics which differentiates between growth which expands the sort of capital that multiplies people's life-chances through education, participatory sport, safe food, cheap public transport, etc., and anti-social capital, or activities whose ill-effects have to be remedied by public expenditure. Patching up the Saturday night casualties of growth in the food, drink and entertainment sectors in Accident and Emergency Departments is the classic example of "growth" which actually diminishes social capital.

Where does the Chancellor address gambling's huge contribution to the British numbers? He isn't a man given to public self-analysis, but Gordon Brown frequently lauds Adam Smith, who described lotteries as " tax on all the fools in creation". Britain has experienced an increase in a deeply anti-social activity not encountered on this scale among our European rivals and neighbours. If the Germans gamble only $33 per capita (though the figure for prosperous Baden-Württemberg is $150) it's because of strong state control. Gambling may have boosted our GDP dramatically but it's also helped inflate our level of domestic debt, and its longer-term add-ons - financial collapse, family neglect, loan sharks, accompanying addictions, crime - don't have to be spelt out. Scotland has 10,000 jobs in gambling, 35,000 "problem gamblers", and an illegal economy (mainly drug-driven, but of which gambling is an important part) which in my Mending Scotland (Argyll, 2004) I reckon at about 5% of GDP.

I had always suspected that Brown's booming Britain had something of Disraeli's smoke and mirrors about it. Someone reassure me, please.

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