Industry Must Improve Gambling’s Image Problem, Warn Experts

Chief executives, lawyers and consultants have warned that the perception of the industry in some countries is the worst it has been for more than a decade.

Without a radical rethink by companies, including being transparent about tax and pushing regulators to champion the industry, ministers will continue to see gambling as a prime target for tax raids and tighter regulations, they said.

High-stake slot machines, in particular, have come under intense pressure in three of Europe’s largest gambling markets — Italy, Germany and the UK — through a combination of hostile local authorities, well-organised pressure groups and negative coverage in the media.

Franz Wohlfahrt, the former Novomatic chief executive, said the industry has made a mistake by “not focusing on how the business is reflected in the public”.

Wohlfahrt, who left in September after a decade at the helm of the Austrian gambling giant, said: “The gambling industry has a bad image and it’s more negative now than 10 or 15 years ago.”

He added that the industry now has a lot of work to do and said that if the problem is not solved the worst that could happen is “the public pushing politicians to restrict the market”.

Wohlfahrt was speaking at the International Masters of Gaming Law conference in Florence earlier this month, and was joined by others who called for the industry to revamp its PR image.

Quirino Mancini, a partner at Rome-based SCM lawyers, said: “It appears to me that very little or nothing at all is being done by the industry to tackle the problem.

“Coming from Italy, in this country there’s a very bad perception in the public opinion and the media of what gambling is all about.”

A long campaign from regional governments, media commentators and opposition politicians to clamp down on Italian slot machines meant there was little political downside when the government proposed a punitive tax hike on the sector last month.

Likewise, Britain’s betting shops will be raided for an extra £90m tax from March 1 after Chancellor George Osborne raised machine games duty on fixed-odds betting terminals (FOBTs), which he said had “proliferated” and were “highly lucrative”.

Local councils, with the backing of opposition Labour MPs, continue to press for tighter restrictions on FOBTs, despite ministers making it harder to open new betting shops.

Newham Council in east London, with the support of Manchester City Council, is holding a consultation that closes tomorrow on a legislative proposal for the government to lower stakes from £100 to £2.

In Germany, Angela Merkel’s administration has also approved widespread restrictions on slot machines drafted by regional governments.

Sigmar Gabriel, the federal minister of economy and energy, announced last month that the government had signed off a number of new regulations, including limiting machines to one per pub and reducing a machine’s maximum profit to €400 per hour.

Local authorities have become vocal critics, partly because they are disenfranchised. They collect no direct taxes from the machines but believe they have all the perceived social ills — addiction, crime and anti-social behaviour.

In an effort to change the betting industry’s negative image, four of Britain’s largest bookmakers have now set up the Senet Group, a new self-regulatory body to hold them to account on advertising, another heavily criticised issue.

Peter Howitt, a lawyer at Ramparts and CEO of the Gibraltar Betting and Gaming Association, said: “In the UK the industry is trying to get back to the high ground but to really do that they have to accept that it’s a long process.”

Susanna Fitzgerald QC, a barrister who specialises in gambling and licensing law, added that companies have “dropped the ball” since the UK Gambling Act 2005 came into effect normalising gambling.

She said: “The industry need to do more in a sense. It was given the ball and now it has dropped it and now it’s fighting to try and get it back.”

In Italy, licensed online and land-based gambling companies should call on the regulator to speak up for the industry and brief journalists that they are not the “bad guys”, Mancini said.

Italian licensees invested more than €100m on marketing last year, money that the struggling media industry desperately needs, according to Mancini.

Mancini said: “It’s unreasonable to me that the legal industry, the group of industry operators that do have a licence are not doing anything to address this, not doing anything to correct the image in the press.”

He added: “If you as an industry spend €100m on advertising you can afford a few thousand euros to create a consortium of operators to buy med

ia time to say to the public that we are the good guys. We are those who pay taxes, who have compliance managers that make sure we are fully compliant.”

Mancini also suggested companies regularly publish how much they contribute to the economy to raise public awareness that the industry does pay tax and help society.

Additional reporting by Lina Sennevall.