Gambling in Britain

Eleven years ago, Parliament voted to legalize the popular forms of gambling in Britain for the same reason that many Americans want to legalize marijuana: to “rationalize” the law and bring it up to date with accepted social standards. Before 1960, Britons could bet on horse or dog races or pinball machines, but with strict controls. Big money gambling—casino games or off-track race betting on a cash basis—had been outlawed for a variety of reasons for six hundred years. The earliest laws were to prevent men from wasting time that could be spent at archery practice. But in 1960, Parliament accepted the fact that gambling was probably good for no one, moderately bad for most, and very bad for only a few, and it decided to leave the decision on whether to gamble to the people themselves. Keeping laws against various forms of gambling on the books was hypocritical since so many people engaged in it that the police could not control it all. During the debate in the House of Commons, the Home Secretary, R. A. B. Butler, said: “The failure of the authorities to enforce the law has brought the law into contempt.” To eliminate that contempt, Butler chose not to get the authorities to enforce the law but to ease it.

Almost every country in the world, including the Soviet Union, permits some form of organized gambling. But no country permits it for quite the same reasons as Britain. Most operate the activities themselves, or at least tax them heavily, to earn tax revenue in a painless manner—and often a usurious one. The Swedish government, for example, takes 55 percent of the national lottery pool as pure profit and returns the rest as prizes and commissions. The French government takes a 32 percent cut of the money bet in the weekly tiercé horse race.

The British government, with one minor exception, does not run any of the gambling activities it has legalized, and under the Betting and Gaming Act of 1960 it began to collect only nominal taxes. Off-track betting shops, for example, were charged only £100 for a license (and £1 a year to renew it). Casinos, which were unlicensed, paid no special taxes at all.

The 1960 act was not supposed to allow everything. Its purpose was to allow casual wagering among friends, low-stakes bingo and slot-machine gambling, and convenient race betting.

By permitting bookmakers to take cash bets, the law aimed to “democratize” horse and greyhound betting. Since 1926, the bookies had been licensed to take bets only on credit. The idea was to protect the poor, who could not get credit, from wasting their money foolishly. Now the poor could bet too. Most important, the law was supposed to “prevent the commercial exploitation of gambling,” as the bill’s sponsor in Parliament, Dennis Vosper, said, and “to impose such restrictions as are desirable and practicable to discourage or prevent excess,” as the Royal Commission on Betting, Lotteries, and Gaming recommended.

In fact, the law achieved very few of these high-minded goals. By 1968, there were 2500 bingo clubs, 1000 casinos (compared with 150 in France), and 16,000 cash bookmaking shops in the country. Private enterprise was doing well. Slot machines often collected more than 30 percent of turnover. Bookmakers averaged 10 percent. Bingo operators picked up extra money by running high-profit variations of roulette between sessions, with a house cut sometimes exceeding 15 percent. Bingo clubs were “linked” for large jackpot games. The prizes were hardly casual—up to £15,000.

Most of these figures are drawn from reports by the Gaming Board for Great Britain, which was appointed in 1968. Until that time, no single government body was charged with keeping track of gambling. Even today, there are no official figures or even estimates of how much is bet in Britain in a year. The Churches’ Council on Gambling, a private group, works backward from tax records and makes educated guesses. A high Gaming Board official told me that its figures are reasonably accurate for gambling volume in 1969:

Races and general betting

(elections, etc.) £1.123 billion

Casino gaming £500 million

Bingo £132 million

Football pools £50 million

Slot machines £80 million

Premium bonds

(lottery) £32 million

The total translates into more than $4.6 billion.

Advantage

With illegal betting included, Americans gamble far more money than the British. The best estimate is that Americans, with only four times the population, bet eight times as much money a year. But a higher proportion of Englishmen place bets every year—48 percent, according to a recent survey. The proportion of Americans who gamble is half that.

Gambling in Britain grew so big because the Gaming Act was poorly drafted and poorly enforced. It had an enormous loophole, and the thousand casinos poured through it. The law said that gaming was allowed in clubs among members as long as no player or owner had an advantage over the others (the “unequal chance” rule). In other words, the house could not use its traditional advantage over the players to make a profit.

At the same time, the law allowed clubs to collect a charge for the use of their facilities. A percentage cut is far more valuable to a casino than an entrance fee, says Michael Hudson, the casino owners’ chief lobbyist, because the player does not see it come out of his pocket. The purpose of this part of the act was to prohibit big-time gaming while permitting bridge and whist among clubmates.

But the big-time casinos sprang up by using clever devices to circumvent the unequal chance rule. The government challenged the casinos in the courts, but trials were drawn out and decisons appealed. The first important case, Crickett v. Kursaal Casino, was not decided by the House of Lords until December, 1967. The casino lost, but it soon tried something else. It became clear, as well, that the police were not enforcing the law very vigorously. There was no special detail to control gambling, and the Commissioner of the Metropolitan Police had issued a confidential order inhibiting his officers from investigating gaming clubs, since their crimes were considered to be of a low priority. In January, 1968, the Appeal Court ruled that the Commissioner must withdraw his order and have his men enforce the law.

Mess

By 1968, many casinos were cheating in order to survive the unequal chance rule. Government investigators said that they found magnetic dice that “can almost be made to dance on the table.” A more subtle device was “double-felting”—adding an extra imperceptible thickness of felt between the number slots on a roulette wheel to make a slot narrower so it would be harder for the ball to fall into it. The slots that were double-felted were the ten most popular numbers (5,8,11,14,17,20,23,26,29, and 32)—popular because, as the middle column, they are used for combination plays, chevaux and carrés. But most alarming was a report in the Wall Street Journal (November 8, 1968) stating that American gangsters were about to move into London “in a big way.” The Home Office had already barred Dino Cellini, an associate of Meyer Lansky, and the actor George Raft from the country after it learned their backgrounds. They had set up shop in George Raft’s Colony Sporting Club. But the casinos were getting out of control, and there was no way to keep track of who was running them or even where they were. It was time for a new law.

The Labor government drew it up, happily criticizing the Conservatives for making a mess of the first one. The law was viewed as a compromise. It permitted commercial gambling in casinos for the first time, but it included measures to control strictly the number of casinos and the kind of betting that went on in them.

The Gaming Act of 1968 went into effect in July, 1970. It set up a fivemember Gaming Board to license casinos and bingo houses, set rules for them, and police them. The Board received 750 applications from casino owners for “certificates of consent” (tantamount to a license) in 19691970.

After most of them were in, the Board decided to limit casinos to 30 areas in England, Scotland, and Wales—mainly large cities and resorts. Over 400 applications were eliminated for being “out of area.” From the rest, the Board granted certificates to just 138, turning down such old and prestigious London clubs as Crockfords. Nearly 200 applications were turned down because the owners had criminal backgrounds or undesirable connections or because they were incompetent or foreign.

Taxes were raised. A license now costs £1000. Casinos are charged for the number of tables they have. The Victoria Sporting Club, England’s largest with 12,000 members (it had 20,000 when the new law went into effect, but it had to remove them from its rolls and start over), paid over £200,000 last year in taxes. Its first two tables are tax-free; the next three cost £5000 each; and subsequent ones £10,000.

The new rules are strict: casinos may be open between 2 P.M. and 4 A.M. New members are required to wait forty-eight hours after signing up before they can play. No entertainment can be offered on the premises as an inducement to play. (The Playboy Club had to build two separate establishments, one for gambling and one for entertainment.) No tipping is allowed. No credit can be given. If a member buys chips with a check, he must honor it. It is not handed back to him if he wins, as it used to be.

The Board also modified some of the games to give the house less of an advantage. A few high-edge bets are outlawed in craps, and advice must be printed clearly in front of players at blackjack tables. The permitted games are roulette, blackjack, craps, chemin de fer, baccarat, and punto banco. The last three are variations of the same game, that with the highest stakes in French casinos and the most exciting to watch.

Slow nights

England has two separate hardgaming scenes: London and the provinces. In the large cities of the Midlands and the North, gambling is very different from what it is in Nevada and Cannes. Roulette is played in well-established workers’ clubs with memberships large enough to support weekly entertainment by big names like Tom Jones and Petula Clark. Gambling is only a secondary attraction. The stakes are low; the normal bet is around ten new pence (about twenty-five cents), and nightly turnover is about £2 a head. These clubs have been hurt by the new law. They have had to separate their cabarets from their gaming tables. All this means that their profits are low; but taxes are based on the number of tables rather than profits, so the regional clubs have to pay the government almost as much as the London clubs pay. Michael Hudson, general secretary of the casino owners’ group, the British Gaming Association, said recently that six provincial clubs were on the verge of shutting down.

In London, most of the clubs were started after 1960. Gambling was not merely added to older attractions. The rooms are large and plush, but few of them are clubs in the traditional sense of the word. Almost anyone can join by paying a small fee. The members hardly know each other, and during the tourist season about one fifth of them are foreigners, mostly Americans. Well over half the total money, and almost all the big money, is bet in London. Still, the betting is not as large or as interesting to watch as it is on the Côte d’Azur or in Normandy. At the Victoria Sporting Club, the blackjack dealers are big-breasted young women, who deal fast and sloppy. Everything goes fast. There are no dramatic pauses after big bets—something you still see in Monte Carlo or at the Palm Beach in Cannes. The bet limits are generally low, and many who frequent the casinos seem to be poor, unskillful, and compulsive gamblers.

The Sportsman is a different kind of club. It is very serious about its several good works and looks a bit like a country club. It sponsors scholarships (“SPORTSMAN SPONSORSHIP PROGRAMME LAUNCHED WITH CHARITY GALA EVENING,” the Sportsman’s glossy internal newsletter headlined). It presents a Sporting Award of the Month to famous people; Prime Minister Edward Heath (yachtsman) won it once last year. David Grey, the manager, wears a dinner jacket and a black bow tie, and tells a new acquaintance, “I see you are wearing Guccis too. They are a very good shoe.”

Grey complains about the same things as do Tony Jackson, the manager of the Victoria, and Tony Rees, the manager of the Charlie Chester Casino near Piccadilly Circus: the forty-eight-hour wait that cuts down on the number of foreigners who gamble (“another bit of protection from the nanny government. . . . Don’t they want the foreign money?”), the rule against tipping (“Some of my members want to tip. They think it’s good luck.”), and the growth of underground gambling since the new law went into effect (“The Gaming Board have twenty-six investigators. That is not enough to keep up with it.”). They are happy to have less competition, of course, and volume has increased.

Everything but horses

While roulette is the sport of the English upper class, the lower class prefers racetrack betting. Horses are the main topic of conversation in pubs, more popular than politics. A betting office—with a sign like “Jack Swift, Turf Accountant”—is never more than two or three blocks away from anything in London. You enter a room with forms tacked to the walls, a large blackboard facing you, and two or three cashier’s cages. It looks like a small post office. Races are broadcast over a loudspeaker. Often, three tracks are running the same afternoon, with their races staggered ten or fifteen minutes apart. You check the odds on the blackboard, write your bet on a slip of paper, pay at the window, get a receipt, and listen to the race. Everything is there but the horses. And betting is painless and convenient even if you do not have an account. If you are a painter or a street sweeper, you can drop by without missing more than a few minutes’ work. If you are cooped up in a factory, runners will take your bets for you. The shops are open during business hours, usually from 9 A.M. to 6:30 P.M.

The only problem is finding things to bet on. The British racing industry has been hurt by off-track betting. Track attendance is down. In the first five years under the 1960 law, the number of racetrack spectators fell from 5.5 million to 4.9 million, and greyhound spectators from 15.3 million to 11.5 million. Turnover dropped as well. The government-run totalisator, which takes parimutuel bets at the tracks, suffered a 30 percent falloff in betting between 1968 and 1969. The tracks themselves receive only a small percentage of the off-track betting profits (as opposed to France, where the tiercé cut enables the Jockey Club to offer purses even higher than those at New York tracks). Entrance fees for spectators have had to be raised and purses lowered. Good and even mediocre horses are more and more frequently shipped to the United States or France to race for higher purses. In one afternoon, I listened to three races in which only two horses competed. For the bookmakers, it is clearly better to have ten two-horse races than two ten-horse races, but not for the racing industry.

Bookmaking is a business in which large capital reserves absolutely guarantee success. A small bookie can be hurt by a single big loss, but a large one knows he will make it up, because the percentage is with him. Profit is about 7 percent of turnover— not investment. In fact, investment is very small—it usually consists of a one-room office with a three-man staff, and an accounting and communications network.

The success of Ladbroke’s, the largest bookmaking chain in England, has been phenomenal. The publicly held company started with 31 shops in 1966. It had 556 as of October 20, 1970, and expected to open almost 100 more by June. Last year’s turnover was £71.6 million—up 48.9 percent from 1969. Profits before taxes were £5.1 million—up 54.3 percent. The stock is doing well too: the company paid a 27.5 percent dividend last year. Ladbroke’s is starting to diversify; it recently bought a hotel and a restaurant in Malta. A fairly large proportion of its bets—38 percentare on credit.

The Ladbroke’s main office, on Ganton Street near Liberty’s, is decorated with pictures of old horses: Azor beating Young Wizard in the 1817 Derby, and so on. Old horses seem to have had small heads and wonderfully large withers. The company officials like to talk about the strange bets Ladbroke’s takes: “The English will bet on anything, anything at all.” In September, 1969, after a well publicized television show about the Loch Ness monster, many people wanted to bet that the monster existed. Ladbroke’s offered opening odds of 10 to one against it and booked £2200. Later, it booked £1000 at 8 to one, and finally £2000 at 6 to one. The company’s terms were: “We are betting against the existence in Loch Ness of a large creature, not less than 30 feet in length, hitherto unknown in Great Britain, and positively identified as such a monster before Jan. 1, 1970.” Ladbroke’s won that one, but they lost their bets on Goldie the Eagle, who escaped from the London Zoo. A total of £12,000 was bet on the proposition that Goldie would return the next day. It rained, and Goldie returned. The present odds against flying saucers (manned by beings from another planet) are 100 to one. Among other favorite races to bet on have been competitions for Miss World, President of the Bank of England, Professor of Poetry at Oxford, and whether Sweden will join the Common Market. The total bet on the 1968 American presidential election was £147,000 and on the 1970 British general elections £786,000.

Release

The best loved proletariat-style gambling activities are bingo and football pools. The pools, in which you must guess the outcome of a large number of weekly matches, have larger payoffs than bingo, and they are tax-free. In a six-year period, Littlewood’s, the biggest pool outfit, paid 28 winners over 100,000 each and one winner 300,000. About one third of the adult population makes a weekly football pool bet; usually it is less than five new pence.

If turnover is considered as gross income, gambling is Britain’s largest industry. It employs 100,000 people. But despite the boom of the 1960s, it is hard to say how it affects Englishmen. The average gambler bets the equivalent of about $250 a year, but he loses only $25 of it, a fairly minor investment. The penny arcades around Piccadilly are jammed with middle-aged women pulling the levers of fruit (slot) machines, but the bets are only a few new pence a throw.

The Churches’ Council on Gambling has begun a three-year study to determine who gambles, how much, and why. The Council thinks that compulsive gambling is socially and economically destructive. The Reverend Austin Williams of Islington told the Council that compulsive gambling causes more family problems than alcoholism. A survey taken shortly after the 1960 act went into effect in Bermondsey, a working-class district outside London, concluded: “The new act has made the largest revolution in the habits of the British working class since the war.” It said that two thirds of the families gamble regularly. At the same time, the National Union of Small Shopkeepers reported that bad debts had risen 10 percent. Embezzlement is the main crime of compulsive gamblers.

A postal clerk, for example, recently stole £750 to pay gambling debts. But instead of paying them off right away, he used the money to gamble some more, and he lost all of it.

The Reverend Gordon E. Moody, who has been general secretary of the Churches’ Council for the past twelve years, has started a Gamblers’ Anonymous group. He told me that he thinks people gamble because their social needs are ignored. “I have heard so much about how the working man ‘wants his pint and his bet’— that’s saying that he wants a release from his savage situation. . . . We can’t just tell people to stop swapping wives and going to bookmakers, or stop drinking alcohol and try cannabis. We have to create a society where we don’t need these releases.”

The casino managers and the Ladbroke’s people say that Englishmen gamble because of some sort of “sporting instinct.” Moody thinks they gamble because they see income distributed unequally and irrationally all around them. Why are some people rich and some poor? “You can see absolutely,” says Moody, “that wealth is distributed by chance. It is a function of health, I.Q., constitution, education, parents. . . . So why shouldn’t you use chance to get money?”

Is there a moral equivalent of gambling? No, he says, since it would be a substitute, and substitutes are not the real thing. People will continue to gamble, not until they have something better to do, but until they live in a society where they do not need it. Meanwhile, Moody’s organization helps people who cannot stop and lobbies for stricter controls. The Churches’ Council warned Parliament of the casino loophole in the 1960 act, but no one listened.

On the other side, Michael Hudson of the owners’ lobby believes that the new Conservative government will loosen up a bit. The number of areas where casinos are permitted is ex, pected to be raised soon. The slot machines have been retooled to take decimal coins. The dogs and the horses will continue to run. Rationalized law will prevail.

—JAMES K. GLASSMAN