Betting Away Spending Power and Social Values

14^th December 2007
The Malta Independent - Friday Wisdom

I had clearly pointed out the risk to public morality of privatising the hitherto public lotto without taking precautions not to expose the general public, with an inherent Mediterranean cultural inclination for gambling, to an excessive temptation to spend a disproportionate part of disposal income on such human frivolities.

Writing in The Malta Independent on Sunday on 4 November 2001 I had asked: “what precautions are being taken to ensure that we do not end up with a gaming terminal in every street corner augmenting gaming and gambling far beyond the broad economic growth rate? Has the government calculated the social cost that a sudden surge in gaming would cause through forced recourse to usury and other criminal practices? Has anyone made any calculation of the economic costs of such sudden surge in gaming as expenditure gets shifted from other consumption with much more economically effective multiplier effect?”

Now we seem to have landed exactly where I had feared we would land. Ask anybody around you and he or she will tell of first hand experience of people who hardly earn enough to keep their body and soul together, who are scrounging to somehow live in the false hope of hitting the big Super Five jackpot.

We spend a handful in protecting our kids from vices such as drug and alcohol abuse. Our moral authorities, the Church included, do sterling work to educate the exposed sectors about the stark consequences of experimenting with core drugs and or their modern synthetic derivatives. Admirable people, to whom we shall remain eternally in debt, like those at Caritas, Appogg and similar organisations, dedicate their lives to redeem and rehabilitate those fragile among us who give in to the temptation to seek refuge in drugs or alcohol.

Even the State and the public sector spend a handful in supporting these NGOs through budgetary allocations, sponsorships or outright donations and in running a centre to give controlled drugs or methadone alternatives to those undergoing a rehabilitation programme involving a controlled withdrawal.

It is therefore quite paradoxical that gambling is not only legalised in controlled environments like casinos, but that we have opened it up to full exposure in practically every street of every town or village. We must be working on the false assumption that exposure to the abuse of gambling is morally less damaging then exposure to the abuse of drugs or alcohol.

I am surprised that Church authorities, who regularly find an opportunity to warn us of the great moral pain which would befall this country if we were ever start to consider giving up the privilege of being one of the only two countries in the world that outlaws divorce, has not expressed any reservation about the great destruction to family values being incurred by the undue exposure to gambling (gaming if you wish to be more polite) by overblown jackpot prizes which exploit human weakness to resist being drawn to the quick rich route which inevitably leads to financial and moral devastation.

Even our commercial community is being severely hit as retailers (and eventually wholesalers, importers or manufacturers further up in the delivery chain) complain that when the Super Five prize reaches jackpot proportions a significant portion of the disposable income normally spent on ordinary consumption, gets deflected to frivolous gambling.

A butcher confided to me that sale of meat in a Super Five jackpot week falls dramatically as presumably the reduced disposable income following the spend on the get-rich-quick illusion, forces housewives to feed their families on pasta with plain butter or hobz biz-zejt.

I think it is time for the authorities to take a fresh hard look at the situation before more damage is caused to family values which ultimately hurts society at large. As a simple first step the authorities should direct that the jackpot should once more be subject to a reasonable maximum figure and that any excess is shared by allocating 50 per cent for future prizes in subsequent weeks and 50 per cent to be donated to recognised NGOs who perform valuable social work on a non-profit basis.

Secondly, the authorities need to control the spread of gambling/gaming channels to avoid seeing gaming machines in coffee shops or other large retailers which should be kept clear of gambling terminals. Gambling terminals should only be allowed in recognised offices like lotto offices where the gambler goes purposely to gamble. There should not be a mix of gambling with anything else imaginable.

Thirdly, gambling of amounts beyond a certain limit should be made subject to more formal procedures. In the financial services sector we are expected to keep documentary evidence of identity with anyone we do business with even in the most ordinary course of business and we are expected to have a long nose to smell that we do not handle any money which could have been sourced from criminal activities. How can it be that people authorised to accept lotto/super five stakes are not obliged to keep identity records of people staking above a certain limit let alone satisfying themselves of the clean source of the funds being staked?

What you read so far is perfect reproduction of a contribution I published in The Malta Independent of Sunday on 11 December 2005. Nothing ever changes but dubious patterns start being formed of jackpots tending to accumulate to juicy proportions in the run-up to Christmas.

The government has to take a decision when the gaming licence comes up for renewal in the near future. The government’s responsibility to protect social values cannot be allowed to play second fiddle to the lucrative income government gets in taxes from gaming revenues. There must be also some control on gaming promotion and advertising. As advertising of tobacco has been practically abolished and advertising of alcohol is strongly regulated it is hardly understandable that advertising of gaming remains uncontrolled, creating a situation where the press, a clear beneficiary of such irresponsible liberalism, has a clear conflict of interest and a heavy feet to influence protection of social values.