*/
A murder in north London, a VAT fraud in the Midlands and the importation of firearms and class A drugs. Richard Jory QC examines three seemingly unrelated cases, all connected by one underlying feature: an uncontrolled addiction to gambling
On 1 November 2018 the Sports Minister Tracey Crouch MP resigned from government, citing ‘unjustifiable’ delay in reducing the maximum stake permitted on fixed odds betting terminals (FOBTs) from £100 to £2. She complained that pro-betting MPs were apparently ‘more persuasive’ than her, and vowed ‘to join a backbench rebellion’ over gambling machines (BBC). The Guardian stated forthrightly that this was ‘a moral issue. No wonder Tracey Crouch has resigned’. By 14 November over 70 MPs from all parties had threatened to derail the Chancellor’s Finance Bill in support of Ms Crouch’s stance, forcing the government to scrap its proposals in ‘an embarrassing climbdown’ (The Independent). ‘Ministers humiliated as rebels win fight over gambling limit,’ declared The Times.
Are Ms Crouch’s concerns justified? And is there evidence of a broader and more worrying issue – a direct link between gambling addiction and the commission of serious criminal offences?
The activities of betting companies are governed by the Gambling Act 2005. The Act established the Gambling Commission to provide oversight and enforce compliance. This was supposed to provide legal protection, particularly to the young, from the risks of gambling addiction. In reality the Act relaxed substantially previous advertising restrictions. Upon coming into force there was an immediate six-fold increase in TV advertising. In the years 2012-17, betting companies spent £1.4bn on advertising, with £200m per year spent on TV advertising alone. Football clubs themselves have embraced the power of the industry, with 60% of clubs in the Premiership and Championship now carrying gambling-related advertising on their shirts.
Although these figures are eye-watering, the returns are substantial. The estimated gross gambling yield, or profit, from all betting in the UK in 2016-17 was £13.8bn, with FOBTs alone generating £1.8bn a year (Gambling Commission, Nielsen). These profits provide a welcome income stream to the government, which collects a 15% flat rate of tax on betting profits. Regulations introduced in 2014, allowing taxation at the point of consumption rather than point of supply, inflated further the government’s take.
Proponents point out that the betting industry contributes £6bn to national GDP. It employs over 100,000 people. Much of the profit is invested in good causes. It offers a service to its customers. These arguments are familiar, reflecting as they do those deployed in support of the tobacco industry prior to the introduction of strict controls on sales and advertising. Even Kenny Alexander, Chief Executive of Ladbrokes, said in October 2018 that TV advertising had ‘got out of hand’ and that in the absence of firmer legislation, betting companies themselves should collaborate to address what he recognised as a problem. The concept of collaboration within the industry seems fanciful. Increased profits have not been accompanied by effective self-governance, reflected in recent financial penalties: in 2017 the betting company 888 was fined a record £7.8m for allowing customers to continue to bet even after the customers themselves had requested they be prohibited from doing so; in March 2018 Sky Bet was fined £1m for a similar breach; and in November 2018 online gambling business Daub Alderney was fined £7.1m for flouting Commission rules designed to prevent money laundering and protect vulnerable gamblers.
The facts surrounding three crown court cases suggest a direct connection between gambling addiction and the commission of serious offences. At Wood Green Crown Court in 2014 an employee of Morgan Stanley was convicted of murdering his wife. He had been systematically stealing from her to cover losses accumulated by his gambling habit. She confided her concerns about his recent odd behaviour to a close friend on social media but she had no idea of the fact and extent of his betting losses. Upon confronting him about the latest item of missing jewellery that he had pawned to place further bets, he strangled her. At trial he attempted to explain her death by saying it was an accident. His extensive betting addiction was a central feature of the evidence and undoubtedly the primary motivation behind the thefts and the subsequent murder.
At Manchester Crown Court in 2015 a Birmingham-based HMRC officer, whose job it was to detect and investigate VAT fraud, faced trial having himself become embroiled in a VAT fraud. He was convicted of Misconduct in Public Office. The Crown alleged that he had been instrumental in setting up the fraud, using his personal knowledge from his experiences investigating such schemes. When his own department began investigating his co-defendants who stood to benefit from the fraud he alerted them, advising them to destroy their computers and paperwork. In the course of their enquiries investigators uncovered the defendant’s history of gambling, which extended far beyond his legitimate means, and had led to an accumulation of debts that he could not repay.
"The estimated income from all betting in the UK in 2016-17 was £13.8bn, with fixed odds betting terminals alone generating £1.8bn a year... These profits provide a welcome income stream to the government, which collects a 15% flat rate of tax on betting profits."
More recently at Isleworth Crown Court in November 2018 a UK Border Force Officer was convicted of being knowingly concerned in the fraudulent evasion of the prohibition on the importation of class A drugs and firearms. Financial difficulties led to the officer being persuaded to drive to Europe in a work van using his special travel privileges to avoid normal checks, to collect and return with £3.4m worth of cocaine and heroin, together with ten fully operational firearms with associated silencers and ammunition. Investigation of his multiple betting accounts revealed a pattern of pathological gambling, including 80,000 betting transactions and total stakes in excess of £750,000 in a seven-year period with regular bets of £1000, all on an annual salary of £35,000. Even these figures only showed a partial picture, as his in-store cash losses could not be quantified.
These cases represent the experience of one practising criminal barrister. In each case the defendant had been in gainful long-term employment, in receipt of regular remuneration, yet each was caught in a spiral of debt arising from uncontrolled gambling.
These cases admittedly represent the extreme activities of only three gamblers, but in a 2017 report the Gambling Commission stated that in excess of two million people in the UK are either problem gamblers or at risk of addiction. An estimated 430,000 people are classified as gambling addicts with the number of child addicts quadrupling in the last two years to 55,000 (Gambling Commission, November 2018). The causes of addiction are varied, but a study funded by the UK Medical Research Council concluded that gambling addiction triggered the same areas of the brain as alcohol and cigarette cravings (Imperial College London, 2017). Addiction is often linked to mental health problems, and research indicates gambling sometimes starts as a way of trying to deal with underlying psychiatric issues, stress and depression (MIND). Pathological gamblers (those who gamble to the harm of themselves and/or others around them) share the same genetic predispositions for impulse actions and reward as drug addicts, requiring ever increasing risk and suffering deeper symptoms of withdrawal (Ferris Jabr, in the Scientific American).
In terms of effect, it is now well documented that pathological addiction can lead to family break up, homelessness (including child homelessness) and suicide. Data released from the NHS indicates that in the year prior to October 2018 there was a 50% year-on-year increase in the number of people hospitalised due to the severity of their pathological addiction, with calls to the National Gambling Helpline increasing 30% in the last five years. 80% of gamblers themselves think there are currently too many opportunities for gambling (Gambling Commission). Unsurprisingly there is discussion in government and elsewhere regarding the potential reclassification of gambling as a health issue, where policy would be governed by the Department of Health rather than the Department of Culture, Media and Sport. The extent to which gambling addiction leads to the commission of criminal offences remains unclear.
No database of statistics exists indicating the proportion of crimes caused, or contributed to, by gambling in the UK. Research beyond mere anecdote is evidently merited. In the meantime various measures to address problem gambling have been proposed and include restrictions on the extent and type of advertising, including a full pre-watershed or in-game TV ban; strictly enforced rules to block gamblers betting beyond their means, including restrictions on credit card use; enforcing punitive penalties against betting companies that permit underage gambling; and betting companies contributing to future research into gambling addiction. As it stands, Tracey Crouch’s instinctive concerns regarding the influence of vested interests within the betting industry, and of the industry’s unfettered and relentless growth, appear well-founded.
National Gambling Helpline: www.gamcare.org.uk | Tel 0808 8020 133
Richard Jory QC is a barrister at Foundry Chambers. He prosecutes, defends and advises in cases involving organised and international crime, complex fraud, corruption, murder, and sexual offences.
Richard Jory KC is a barrister at Foundry Chambers. He prosecutes, defends and advises in cases involving organised and international crime, complex fraud, corruption, murder, and sexual offences.
On 1 November 2018 the Sports Minister Tracey Crouch MP resigned from government, citing ‘unjustifiable’ delay in reducing the maximum stake permitted on fixed odds betting terminals (FOBTs) from £100 to £2. She complained that pro-betting MPs were apparently ‘more persuasive’ than her, and vowed ‘to join a backbench rebellion’ over gambling machines (BBC). The Guardian stated forthrightly that this was ‘a moral issue. No wonder Tracey Crouch has resigned’. By 14 November over 70 MPs from all parties had threatened to derail the Chancellor’s Finance Bill in support of Ms Crouch’s stance, forcing the government to scrap its proposals in ‘an embarrassing climbdown’ (The Independent). ‘Ministers humiliated as rebels win fight over gambling limit,’ declared The Times.
Are Ms Crouch’s concerns justified? And is there evidence of a broader and more worrying issue – a direct link between gambling addiction and the commission of serious criminal offences?
The activities of betting companies are governed by the Gambling Act 2005. The Act established the Gambling Commission to provide oversight and enforce compliance. This was supposed to provide legal protection, particularly to the young, from the risks of gambling addiction. In reality the Act relaxed substantially previous advertising restrictions. Upon coming into force there was an immediate six-fold increase in TV advertising. In the years 2012-17, betting companies spent £1.4bn on advertising, with £200m per year spent on TV advertising alone. Football clubs themselves have embraced the power of the industry, with 60% of clubs in the Premiership and Championship now carrying gambling-related advertising on their shirts.
Although these figures are eye-watering, the returns are substantial. The estimated gross gambling yield, or profit, from all betting in the UK in 2016-17 was £13.8bn, with FOBTs alone generating £1.8bn a year (Gambling Commission, Nielsen). These profits provide a welcome income stream to the government, which collects a 15% flat rate of tax on betting profits. Regulations introduced in 2014, allowing taxation at the point of consumption rather than point of supply, inflated further the government’s take.
Proponents point out that the betting industry contributes £6bn to national GDP. It employs over 100,000 people. Much of the profit is invested in good causes. It offers a service to its customers. These arguments are familiar, reflecting as they do those deployed in support of the tobacco industry prior to the introduction of strict controls on sales and advertising. Even Kenny Alexander, Chief Executive of Ladbrokes, said in October 2018 that TV advertising had ‘got out of hand’ and that in the absence of firmer legislation, betting companies themselves should collaborate to address what he recognised as a problem. The concept of collaboration within the industry seems fanciful. Increased profits have not been accompanied by effective self-governance, reflected in recent financial penalties: in 2017 the betting company 888 was fined a record £7.8m for allowing customers to continue to bet even after the customers themselves had requested they be prohibited from doing so; in March 2018 Sky Bet was fined £1m for a similar breach; and in November 2018 online gambling business Daub Alderney was fined £7.1m for flouting Commission rules designed to prevent money laundering and protect vulnerable gamblers.
The facts surrounding three crown court cases suggest a direct connection between gambling addiction and the commission of serious offences. At Wood Green Crown Court in 2014 an employee of Morgan Stanley was convicted of murdering his wife. He had been systematically stealing from her to cover losses accumulated by his gambling habit. She confided her concerns about his recent odd behaviour to a close friend on social media but she had no idea of the fact and extent of his betting losses. Upon confronting him about the latest item of missing jewellery that he had pawned to place further bets, he strangled her. At trial he attempted to explain her death by saying it was an accident. His extensive betting addiction was a central feature of the evidence and undoubtedly the primary motivation behind the thefts and the subsequent murder.
At Manchester Crown Court in 2015 a Birmingham-based HMRC officer, whose job it was to detect and investigate VAT fraud, faced trial having himself become embroiled in a VAT fraud. He was convicted of Misconduct in Public Office. The Crown alleged that he had been instrumental in setting up the fraud, using his personal knowledge from his experiences investigating such schemes. When his own department began investigating his co-defendants who stood to benefit from the fraud he alerted them, advising them to destroy their computers and paperwork. In the course of their enquiries investigators uncovered the defendant’s history of gambling, which extended far beyond his legitimate means, and had led to an accumulation of debts that he could not repay.
"The estimated income from all betting in the UK in 2016-17 was £13.8bn, with fixed odds betting terminals alone generating £1.8bn a year... These profits provide a welcome income stream to the government, which collects a 15% flat rate of tax on betting profits."
More recently at Isleworth Crown Court in November 2018 a UK Border Force Officer was convicted of being knowingly concerned in the fraudulent evasion of the prohibition on the importation of class A drugs and firearms. Financial difficulties led to the officer being persuaded to drive to Europe in a work van using his special travel privileges to avoid normal checks, to collect and return with £3.4m worth of cocaine and heroin, together with ten fully operational firearms with associated silencers and ammunition. Investigation of his multiple betting accounts revealed a pattern of pathological gambling, including 80,000 betting transactions and total stakes in excess of £750,000 in a seven-year period with regular bets of £1000, all on an annual salary of £35,000. Even these figures only showed a partial picture, as his in-store cash losses could not be quantified.
These cases represent the experience of one practising criminal barrister. In each case the defendant had been in gainful long-term employment, in receipt of regular remuneration, yet each was caught in a spiral of debt arising from uncontrolled gambling.
These cases admittedly represent the extreme activities of only three gamblers, but in a 2017 report the Gambling Commission stated that in excess of two million people in the UK are either problem gamblers or at risk of addiction. An estimated 430,000 people are classified as gambling addicts with the number of child addicts quadrupling in the last two years to 55,000 (Gambling Commission, November 2018). The causes of addiction are varied, but a study funded by the UK Medical Research Council concluded that gambling addiction triggered the same areas of the brain as alcohol and cigarette cravings (Imperial College London, 2017). Addiction is often linked to mental health problems, and research indicates gambling sometimes starts as a way of trying to deal with underlying psychiatric issues, stress and depression (MIND). Pathological gamblers (those who gamble to the harm of themselves and/or others around them) share the same genetic predispositions for impulse actions and reward as drug addicts, requiring ever increasing risk and suffering deeper symptoms of withdrawal (Ferris Jabr, in the Scientific American).
In terms of effect, it is now well documented that pathological addiction can lead to family break up, homelessness (including child homelessness) and suicide. Data released from the NHS indicates that in the year prior to October 2018 there was a 50% year-on-year increase in the number of people hospitalised due to the severity of their pathological addiction, with calls to the National Gambling Helpline increasing 30% in the last five years. 80% of gamblers themselves think there are currently too many opportunities for gambling (Gambling Commission). Unsurprisingly there is discussion in government and elsewhere regarding the potential reclassification of gambling as a health issue, where policy would be governed by the Department of Health rather than the Department of Culture, Media and Sport. The extent to which gambling addiction leads to the commission of criminal offences remains unclear.
No database of statistics exists indicating the proportion of crimes caused, or contributed to, by gambling in the UK. Research beyond mere anecdote is evidently merited. In the meantime various measures to address problem gambling have been proposed and include restrictions on the extent and type of advertising, including a full pre-watershed or in-game TV ban; strictly enforced rules to block gamblers betting beyond their means, including restrictions on credit card use; enforcing punitive penalties against betting companies that permit underage gambling; and betting companies contributing to future research into gambling addiction. As it stands, Tracey Crouch’s instinctive concerns regarding the influence of vested interests within the betting industry, and of the industry’s unfettered and relentless growth, appear well-founded.
National Gambling Helpline: www.gamcare.org.uk | Tel 0808 8020 133
Richard Jory QC is a barrister at Foundry Chambers. He prosecutes, defends and advises in cases involving organised and international crime, complex fraud, corruption, murder, and sexual offences.
A murder in north London, a VAT fraud in the Midlands and the importation of firearms and class A drugs. Richard Jory QC examines three seemingly unrelated cases, all connected by one underlying feature: an uncontrolled addiction to gambling
The beginning of the legal year offers the opportunity for a renewed commitment to justice and the rule of law both at home and abroad
By Louise Crush of Westgate Wealth Management sets out the key steps to your dream property
A centre of excellence for youth justice, the Youth Justice Legal Centre provides specialist training, an advice line and a membership programme
By Kem Kemal of Henry Dannell
By Ashley Friday of AlphaBiolabs
Providing bespoke mortgage and protection solutions for barristers
Joanna Hardy-Susskind speaks to those walking away from the criminal Bar
Imposing a professional obligation to act in a way that advances equality, diversity and inclusion is the wrong way to achieve this ambition, says Nick Vineall KC
From a traumatic formative education to exceptional criminal silk – Laurie-Anne Power KC talks about her path to the Bar, pursuit of equality and speaking out against discrimination (not just during Black History Month)
James Onalaja concludes his two-part opinion series
Yasmin Ilhan explains the Law Commission’s proposals for a quicker, easier and more effective contempt of court regime
