How immoral is online gambling?

There is an article in The Times today that asks a question about Denise Coates:

… on the moral balance sheet can she truly register as good?

This is immediately after the article has set out her good deeds.

Unlike tax-avoiding knights Philip Green or Lewis Hamilton, Coates a CBE, pays millions to the exchequer. Most online gambling firms scarper offshore but her firm Bet365 is mainly domiciled here.

In post-industrial Stoke, she is revered for employing thousands of locals, raising the area’s median wage above central Manchester’s, paying workers through lockdown, refusing furlough cash. Her charitable foundation could do more than donate to arts projects and Alzheimer’s research if it didn’t sit on most of its £385 million reserves; she endowed the local hospital with £10 million and keeps Stoke City FC afloat; she paid for a statue of Arnold Bennett, Staffordshire’s literary son. She adopted four children.

So – how can anyone justify vilifying this patron saint of the community?

She owns an online gambling firm and we are treated to stories of gambling addiction and the like.

Does Coates avoid scrutiny because she’s naturally reserved or because the inevitable questions are too hard? Like, how do you feel about making billions by feeding the addiction of the poor? Or, does it concern you that as Bet365’s profits soared in lockdown the number of problem gamblers referred for treatment has increased fivefold, while those feeling suicidal have quadrupled?

Does she think about her key customers, the 5 per cent who contribute 60 per cent of revenue, the so-called VIPs who are in fact just men of mainly ordinary means, shoving their savings, their summer holiday fund, their kids’ school shoe money, into the beeping, flashing abyss of their phone?

Let’s quote Ludwig von Mises:

It is not the fault of the entrepreneurs that the consumers—the people, the common man—prefer liquor to Bibles and detective stories to serious books, and that governments prefer guns to butter. The entrepreneur does not make greater profits in selling “bad” things than in selling “good” things. [Her] profits are the greater the better [she] succeeds in providing the consumers with those things they ask for most intensely.

Definitions of what constitutes ‘problem gambling’ are problematic themselves. Furthermore it was the government response to COVID that contributed to mental health problems not the distractions that people deployed during lockdown.

Here is the real issue the article is driving towards – but many people won’t like the answer:

Perhaps we should just count the money coming into the Treasury, not the broken relationships, lost jobs, shattered lives. 

The Pigouvian answer to this question is ‘Yes’.

The suggestion here being that gambling imposes third party costs – negative externalities. Let’s assume for argument sake that this is correct – let’s assume that gambling does impose negative externalities. The correct economic solution to that problem isn’t prohibition, as many would like, but rather taxation. As long as gambling and gambling providers are appropriately taxed – and they are taxed quite heavily – there is no net negative externality.

This entry was posted in civil society, Market Economy, Take Nanny down, Taxation. Bookmark the permalink.

25 Responses to How immoral is online gambling?

  1. TBH says:

    Is the business she operates illegal? Is gambling a matter of personal choice? I would think no and yes to those questions, so I’m not sure where the issue is. Sounds to me like the proprietor of this business has done things more or less the right way, so why the opprobrium? The government could ban online gambling, but as the history of prohibition shows us, that is very unlikely solve any of the associated social problems.

    Besides, governments are themselves addicted to the tax money they receive from betting agencies, bookies etc.

  2. Chris M says:

    Online gambling = share trading.

  3. Roger W says:

    TBH hits the nail on the head.
    The article is just another example of the 21st century disease of virtue signalling.
    If you compare 1821 with 2021, the reality is that capitalism has raised the world out of poverty but you won’t find many people prepared to accept this simple fact. Hence the constant desire to impose socialism, even though it has killed about 100 million people in the last 100 years.

  4. Angus Black says:

    If you expect to be treated as an adult – the vote, the right to self determination etc etc etc then you must take responsibility for your own behaviour.

    No one forces you to gamble (or any of an almost infinite list “those who always seem to know better” wish to save you from).

    If you are incapable of making appropriate decisions, there should be the alternative of declaring yourself to be a “minor” and under the protection of the State … but the privileges of adulthood should be sacrificed as part of the deal. I’d say the same for accepting welfare too…you can always buy yourself out of that sort of minority by getting a job and becoming self-reliant.

    Much like Ancient Rome. A starving citizen could always sell himself into (possibly time-limited) slavery…

    There really should be a price to pay for protection, welfare…

  5. Old School Conservative says:

    Every form of refuge has a price.
    (Eagles)

  6. Barry Bones says:

    Maybe – but grubby business anyway. And no heroine. So save the cheerleading for someone that’s added something to humanity.

  7. TBH says:

    If you compare 1821 with 2021, the reality is that capitalism has raised the world out of poverty but you won’t find many people prepared to accept this simple fact.

    Man is that ever true.

    I was reading an article this week about the court cases embroiling the Reinhart/Hancock, Wright and Rhodes families here in WA over royalties agreements. The amount of people in the comments who were suggesting nationalisation of our mineral assets was astounding. Private money made those resources worth something and the companies that sprang from that capital pay a lot of royalties to the states, company tax to the Commonwealth, other assorted fees and charges, as well as wages to over a hundred thousand people directly in WA alone. Little of this happens with state ownership.

  8. Boxcar says:

    Then “Mea culpa”, now “Gamble responsibly”.

  9. Arky says:

    Barry Bones says:
    April 3, 2021 at 2:21 pm
    Maybe – but grubby business anyway.

    ..
    Very grubby.
    Not really capitalism either.
    Just another parasitic organism feeding off what is left of the real productive industries built by hard working men over centuries.
    Part of the final scooping out.
    Along with those other “industries” so beloved of libertarians: prostitution, drugs and importing shit loads of tacky consumer goods produced by communist slaves.

  10. C.L. says:

    In Australia, a man formerly had to be a registered bookmaker standing at the track to take bets legally. You had to be at the track to bet as a punter. After the advent of radio, telephone betting and shop betting (sometimes by registered bookies, sometimes not) became a problem for taxation authorities – usually masquerading as gatekeepers of both morals and the viability of racing clubs. These ‘gaming’ offences were prosecuted or police were paid off to keep walking past suspiciously busy barber shops etc etc.

    Then came the TAB in the early 60s – through which the state took over shop betting. Nice trick, hey? ‘It’s OK when we do it.’ For the next 40+ years, you could bet with a bookie at the track or at the TAB. Initially, governments declared they wouldn’t put their shops near schools and churches or in pubs. Then they did put their shops in pubs – because government. They spent millions advertising their ‘product’ – featuring young blokes, glamorous imagery and good-looking chicks. Oafishly exploitative stuff. Again, this was OK because government.

    Echoing what happened after radio in the 1930s, the internet changed everything again. Now a man didn’t need to go to the pub or down the road to make a bet – let alone to a deserted race track (all of which in the mean time were taken over by the state whose own ubiquitous tote had destroyed track attendance numbers). Now he could bet on horse 2, race five at Churchill Downs sitting in his undies in Mt Isa.

    Coates is a very smart woman and – as history shows – she is merely the latest gambling baddie/goody in a far longer story.

  11. Roger says:

    As long as gambling and gambling providers are appropriately taxed – and they are taxed quite heavily – there is no net negative externality.

    How do we measure the cost of the negative externals so that we know the tax imposed upon gambling providers is appropriate?

  12. mh says:

    Gambling: How The Pandemic’s Been Used To Get You Hooked
    132,270 views•Mar 18, 2021

    Russell Brand
    3.02M subscribers

    https://www.youtube.com/watch?v=G5lMCLAABHk

  13. Arky says:

    Is the business she operates illegal? Is gambling a matter of personal choice? I would think no and yes to those questions, so I’m not sure where the issue is.

    ..
    You can say the same thing about abortion. It’s legal and chicks choose it.
    Doesn’t mean I want to invite abortionists around for fucking tea.

  14. jupes says:

    How immoral is online gambling?

    I gamble online. It is fun and I appreciate the fact that there are companies that allow me to do this. As far as I am concerned it is neither moral nor immoral, just something I choose to spend my money on.

    Wowsers can fuck off.

  15. mh says:

    Thanks for sharing, Jupes.

  16. jupes says:

    Speaking of gambling online. There is a reason that I don’t bet on the AFL* until round 6. Just look at how many favourites have lost / are losing this round. Sinc will be happy at the minute. Even happier if he had placed a bet on the Bombers.

    * Except for West Coast of course.

  17. Squirrel says:

    Surely the real policy issue here is the devolution of sufficient taxation and other powers from the Westminster Leviathan to counties to allow them to compete to be the home of such a beneficent business – and others currently lurking in eastern Europe or across the Irish Sea.

  18. How immoral is online gambling?

    Y’know how every visit from the Tax Office or Immigration (or similar bastards) ends with them turning back as they’re halfway out the door & quietly asking – off the record – “Is there anything you want to tell us?” (Translation: “Is there any dobbing you want to do?”)

    For the past few years, every non-adversarial visit to me from the Office of Liquor & Gaming Regulation ends the same way, with a quiet “off the record” enquiry about ‘online gambling’, how much of it do I think is going on? What effect does it have on gambling turnover? etc etc.

    Translation: How much gambling tax is the government missing out on?

  19. Roger says:

    How do we measure the cost of the negative externals so that we know the tax imposed upon gambling providers is appropriate?

    And if it is found that the cost of the negative externalities is not met by the tax collected from gambling providers, but gambling providers couldn’t bear the burden of tax hikes to meet the actual cost of the negative externalities, that would be a rational, economic argument for prohibiting gambling, would it not?

  20. LBLoveday says:

    ” and they are taxed quite heavily “.
    .
    25+ years ago I stopped teaching and started doing, giving up the tenured, pension-superannuated, 9 weeks a year holidays job to be a gambler, with no boss, no subordinates, no partners, no customers.
    .
    I reckon I’ve generated and, or, paid about $8m taxes for the government in those years. Try “taxed very heavily”.

  21. mh says:

    I heard a call to Hadley a year or so back from a punter with Bet365 who had landed a huge multi. His account had been suspended for a couple of weeks with no sign of any payout. There was no one in Australia from 365 that would deal with it, and he had been given the runaround having to call Europe.

    I believe he was wanting Hadley to help him, but Ray just wished him luck collecting his winnings.

  22. BorisG says:

    I gamble online. It is fun and I appreciate the fact that there are companies that allow me to do this. As far as I am concerned it is neither moral nor immoral, just something I choose to spend my money on.

    Wowsers can fuck off.

    Remarkably this is the first time I find myself in agreement with Jupes. And Yobbo convinced me 10-15 years ago it is fine. Would be interesting to know how he looks nowadays…

  23. BorisG says:

    I had a Russian friend who had a gambling addiction. He made good money in 1990s and gambled most of it in casinos around the world. When I met him 10 years ago he told me he turned his life around and started investing in startups etc. when Russia banned casinos on the streets of Moscow. I asked him, but that they still have casinos in Monaco and Las Vegas. He responded, Vegas is far away but when you have a casino at every street corner, it is very hard to resist…

    Online gambling? Maybe this did not occur to him.

  24. Tel says:

    Everything you do in life has risk … learning a trade is risky, perhaps you will turn out no good at it or technology will make it obsolete, or governments will declare emergency powers and put you out of business. Investing in government bonds is risky, perhaps interest rates will go up right after you bought the thing. Shares are obviously risky … cash is subject to gradual devaluation via inflation. Going out of your home is risky, you might catch a killer virus or get beaten up by a policeman to protect you from the killer virus.

    Is gambling risky? Yes, much like the other things. The real problem started when someone spread the rumour that they have the power to make risks go away … that was always a scam but now it’s out of hand.

  25. Tel says:

    Wowsers can fuck off.

    If only there was a country where that was written into some fundamental law of the land.

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