On Friday, Compare.bet News caught up with the Betting and Gaming Council’s Chief Executive Officer, Michael Dugher, to discuss the impact of the coronavirus pandemic on the land-based gambling industry and what’s next for the sector once things begin returning to normal.
CB: How would you describe the government’s policies implemented during the coronavirus pandemic?
MD: “I do have some sympathy for the government because I think our government like every government around the world, has had to grapple with challenges that are genuinely without precedent and so to that extent they are having something thrown at them that none of us could have predicted and no government has ever had to deal with before.
“It’s obviously had a huge impact on our industry. The land-based sector is where most of the jobs are in betting and gaming in Britain, in total the industry employs 100,000 people and pays over £3bn in tax every year. It is a significant globally leading UK industry and it (the pandemic) has had the biggest effect on the land-based sector for obvious reasons.
“We were really pleased and relieved when we were allowed to access financial support such as furlough and I think the government responded very well in terms of furlough as we were not originally included as qualifying for help with business rates. For the BGC that was one of our earliest campaigns which saw us go to the government and treasury and convince the government that the people who work in our sector and the businesses in our sector needed the same support as others. Casinos deserved the same support as other businesses working in hospitality and entertainment and betting shops deserve the same help as the rest of non-essential retail. We got that help and it was absolutely critical.
“Reflecting on it, there have been bumps along the road and quite significant ones. We were pleased that betting shops could reopen with the rest of non-essential retail back in June. It was a pretty good process with lots of engagement with the Department of Culture Media and Sport (DCMS) and I feel we were able to reopen that sector quickly and safely which was essential for jobs and the health of the sector.
“With casinos, it’s been a much more difficult process because I think the government has been slower to understand the realities of casino businesses. There was a misconception very early on that these were pseudo nightclubs which is totally unfair. I would argue that betting shops are best in class in terms of anti-covid measures of any business on the high street and I think casinos are best in class for anti covid measures anywhere in hospitality. But, their reopening was later, it was scheduled for early August and then with less than 24 hours notice it was cancelled. That decision on its own cost casinos £6m and casinos were delayed from reopening for another two weeks.
“I think there have been frustrations along the way, even with betting shops that have opened and thankfully now casinos have reopened and are still reopening in Tier 2 areas but they remain closed in Tier 3, which is now the bulk of the country. Of course, in Tier 3 betting shops are operating under really significant restrictions, which include not being able to show horse racing and not having chairs and all kinds of other heavy restrictions. So it’s been an incredibly tough period and it shows no signs of getting easier, especially in the next few months.”
CB: What kind of an impact have these policies had on the land-based gambling sector in terms of redundancies and venue closures in the UK?
MD: “It’s important to remind ourselves that if there are 100,000 jobs in the broader regulated betting industry, the majority of them are still in betting shops and casinos and it still makes up the bulk of the tax so it’s an important part of the industry and they’ve obviously taken a very big hit.
“It affects the treasury too, as these are sectors now taking money from the treasury in things like furlough and all the other help and they are not paying the same kind of tax, because if they are doing less business, they will be paying less tax so there has been an impact there.
“It’s also worth remembering the fact that casinos generate £120m a year in tourism spend, betting shops pay roughly £300m a year to horse racing in media rights and levy payments so this has an impact beyond our own immediate industry. We know that gross gambling yield and revenue for betting shops is down 45% compared to 2019 and for casinos, it’s down around 70% so there has been a huge impact on businesses.
“I would also add it has had a huge impact on the staff themselves, which is all of the uncertainty with long periods of businesses being closed and staying home on furlough. Unfortunately, there have been some closures and job losses along the way and I think that continued uncertainty is something we are mindful of when it comes to our staff in the industry.”
CB: The land-based sector responded by ensuring that businesses were COVID-secure and implementing several safety measures. Despite all of the time, effort and money spent doing this, businesses were still unable to reopen in some parts of the country. How did BGC members feel about this decision?
MD: “It’s been a frustrating experience. The BGC and our members are 100% supportive of the government’s efforts to tackle covid, it’s why as I mentioned before, betting shops are best in class when it comes to non-essential retail in terms of what they have in place to tackle covid in those shops.
“I think casinos are best in class compared with any other part of hospitality, Professor Van Tam visited The Rialto casino in Piccadilly in London before the reopening at the end of the summer and everyone involved in the visit could see how impressed he was with the measures. With a proper track and trace system and with the level of CCTV we can track and trace customers for the entire duration of a visit. There’s been huge amounts of investment, no standing at the bar, no congregating and you’re sat behind perspex screens so there’s been a huge effort made, also there’s been no evidence put to us, or that we have seen ourselves, that betting shops or casinos have played any part in the spread of coronavirus. There’s obviously been concerns over other parts of society and the economy which has resulted in other pressures in terms of the disease.
“I don’t think anyone is saying that about our sectors so I think it’s been quite tough for them when they have been closed because of this open shut open shut open shut experience, in fairness, it has been experienced by other industries and it’s enormously frustrating because our industry has made a significant investment in that.”
CB: Of course, it doesn’t help when you’re told you can open one week and then you have to close the next…
MD: “We almost look back with fondness on the times where the government used to change its mind from one month to the next because in recent weeks it’s almost felt like the government has changed its position from one week to the next and even in a few days. That can obviously be incredibly inconvenient and infuriating for the general public but it also makes it very hard to run and plan a business when operating in those circumstances. So when the inconsistencies, the contradictions, the mixed messages and decisions come flying from one direction in a short space of time it is very difficult.”
CB: Is financial support being provided for land-based gambling businesses that aren’t able to reopen during the new tier three restrictions? Is there more you’d like to see from them?
MD: “There’s always more help, all businesses need support. It was welcome news that furlough was extended until March and then until April, that does enable businesses to plan a little better and it gives them a bit more certainty and security so that was very welcome news. However, it was a slightly depressing sign of how the next few months are going to pan out, but at least it provides a degree of support and certainty.
“There will come a point when this is finally over and the number of businesses in the industry that will have come through an incredibly difficult set of circumstances will need support. Like casinos that have gone from having strong balance sheets to being in difficulty and casino and betting office closures, I think there have been about 400 betting shops close in 2020 and to my knowledge at least 6 casinos have closed during that period.
“This is obviously involving hundreds of thousands of jobs and what we’d like to see at the end of this, once we are finally through this, and we do have a lot of sympathy and appreciate that the government is dealing with ghastly circumstances, but when we are through this we will need continued help and we certainly need the government to understand that businesses are in a weaker position. Businesses will have come through what has looked like an existential threat and we don’t need the government to do anything that clobbers the industry further. So when we are through the worst of covid, they have got to give the businesses and industries the support, the time and space to breathe and rebuild their balance sheets and strength, that’s the biggest message I have to the government.”
CB: There needs to be some consideration and support for what happens next.
MD: “That’s got to be a consideration in terms of the review of gambling. We don’t want them to do anything that puts further pressure on the businesses in the industry that potentially, from the government’s perspective, would reduce tax take or reduce its employment further. With the perilous state of the public finances, the government is going to want to ensure it is not putting in jeopardy the tax revenue from any industry or that when they are seeing rising levels of unemployment, they are not doing anything that jeopardizes good quality jobs in our industry.”
CB: Do you think the land-based sector could survive another nationwide lockdown or mass closure of businesses after the holiday period?*
MD: “I think it’s already happening in truth, with what we are seeing. I think the government is playing silly beggars with the language of it but for instance, Tier 3 as is currently the case feels every bit like a lockdown compared with the restrictions of November. Certainly there a lot of speculation, but if non-essential retail closes in Tier 3 areas, which we have seen in wales, then for all intents and purposes Tier 3 is a lockdown and if most of the country is in Tier 3, then that’s going to look a lot like a national lockdown, and as the government has extended furlough until April, that looks like we are potentially looking at a number of months in the situation and that is very serious.
“What I hope they do is genuinely follow the science. One of the frustrations there has been with decisions of late, for instance, taking high street betting shops out of the rest of non-essential retail and closing them during Tier 3 before the November lockdown, was completely arbitrary and not remotely rooted in the science or medical advice. I think it was just the government casting around for some things to close.
“Thankfully Tier 3 now sees betting shops open, they are under severe restrictions, but they are open. I felt this signalled the government was taking a much more coherent approach but unfortunately there have been too many examples in recent months where arbitrary decisions have been made which are impossible to understand and have not been rooted in the evidence or the science. The industry has felt that sometimes some decisions have not just been incoherent or contradictory or arbitrary; they’ve even on one or two occasions looked vaguely political.
“I think what we need is the whole country to come together to fight coronavirus and the pandemic and give the government the support it needs. But, we can only do that if everyone is confident that the government is acting in a fair way and is genuinely being led by the science and is acting in a consistent and coherent way.
“I think if the government does that, then we can work together to pull through this pandemic and I know that everyone who works in the industry and even our customers hope that’s the case.”
CB: How have the devolved administrations (England, Wales, Scotland and Northern Ireland’s governments) supported their local gambling sectors during the pandemic?
MD: “Again, I have sympathy for them, like the UK government they are facing unprecedented challenges. I think some of the things they have done have been right and some things haven’t and occasionally their decisions have looked ill-informed and arbitrary and then there are times when we feel they have acted in a sensible way.
“I think we’ve had a reasonable amount of engagement with them but I do feel that devolved governments have suffered from a handicap as they have never been responsible for gambling as an industry, sector or policy perspective When it comes to things like future regulation that sits with the UK government.
“The UK government and especially the DCMS has a lot of institutional memory and good knowledge of the gambling sector. The DCMS has not always had their voice heard and I think that’s one of the biggest problems of recent months, but in the devolved governments, they’ve never been responsible for the gambling sector and with the lack of knowledge and exposure to our issues, it has been fairly clear from time to time that they have not known how a land-based casino or a licensed betting office works. I’m not sure many or any have understood the processes, so that has been another challenge for us.”
CB: It’s like they have just been thrown into the situation without any help…
MD: “They just don’t know anything about our sector, whereas the DCMS definitely does. Our problem with the UK government has been that the DCMS is not always listened to and whoever has taken a decision in the government has not always listened to people within the government who have knowledge of the sector.
“In Wales and Scotland, our problem has been that a lot of people in those governments just don’t know much of anything about our sector. But again they are working in horrendous circumstances so you’ve got to understand this is an unprecedented challenge and we are only one industry, we are a big and significant industry but we are not the biggest and the government has got competing priorities and all governments are having to make decisions where it’s impossible to make anyone happy.
“It’s like a Chris Witty line where he says “there are no good options.” The government should try not to create any worse options. It should try its best to limit the bad options and notwithstanding the pace of change, it needs to camp on more solid ground because this content chopping and changing in a matter of days is very frustrating for businesses and employees and investors.”
CB: Overall, how does the BGC feel the government has handled the gambling sector during the pandemic?
MD: “I think they have been faced with unthinkable challenges and there are many people in the UK government and devolved governments, who have engaged with the BGC, tried to understand our issues and have tried to give us the support that any large legitimate industry that contributes a huge amount to the economy, tax base and employment base needs.
“They have not always gotten every decision right, there have been moments of frustration when decisions have been more arbitrary and difficult to understand, but we are absolutely committed to working with the UK government and devolved governments on behalf of all of the people who work in the industry to ensure we can help the government fight coronavirus and continue to defend our sector and our jobs and businesses.”
*This interview took place on Friday 18 December, prior to the UK government’s decision to introduce Tier 4 coronavirus measures in the south of England.