I haven’t blogged very much yet, but I hope it’s already clear why I settled on the site name. Gambling can be an amazing source of entertainment, but it causes a lot of suffering. It belongs in the same category of fun-but-harmful stuff that includes alcohol, drugs, prostitution, American Football and the music of Michael Jackson.
Last week provided a reminder that there is one area on which I’m particularly conflicted – the pay packet of Denise Coates. It was announced she made £469,000,000 in salary and dividends from her bookmaker in 2020. I’m not going to name the company, but they’d have you believe you can wager every day of the year (with a day off on leap years).
That it is a disgustingly obscene amount of money. I deliberately wrote it out in full so that it took a while to read. It’s a lot of zeroes and it’s a big number in front of the zeroes. If you read the first two proper blogs (1 & 2), then you’ll know it represents a colossal amount of human unhappiness.
To illustrate in gambling terms, if she collected her payout in £20 notes from a track bookie, it would take nine straight sleepless months to count her winnings. Then next time there’s a big Euromillions rollover, she could guarantee a win by buying every possible combination – and still have £120M left to spend on scratch cards.
In fairness, that’s not exactly true. As her fans are quick to point out, the Coates family are the biggest taxpayer in the UK. They contribute hundreds of millions to the UK economy every year, so she doesn’t actually get to keep all that cash. Just a measly 55% of it.
Nonetheless, credit is due. Many of the super-rich hide themselves away offshore and find iffy-but-legal ways to minimise their liabilities. Denise, meanwhile, has stuck it out in Stoke, trying her very best to make it a liveable place where kids can dare to dream of a job outside of pottery.
Furthermore, the Coates’ family bookie hasn’t taken from the government what it doesn’t need. The kneejerk response of many companies during the pandemic was to cry for help and get out the begging bowl, whether it was necessary or not.
Not so in Stoke. Even with a slightly less profitable year (due to less sport), I’m led to believe they’ve paid everyone in full and made no redundancies, whilst taking no government support. Even the expensive and expendable Ray Winstone is still on the books.
Denise & Co also have an impressive track record of donating large sums to their charitable foundation. It’s not clear what all that money is being spent on, but I feel comfortable that somebody somewhere will benefit at some point.
They are all valid-ish reasons to be comfortable with a near half billion-pound corporate jackpot, but I have a different reason for being squeamishly okay with it. She has kept her company in private hands and that gives her total leeway to treat people well.
Most UK gambling firms are in public hands, and that means the management’s first responsibility is to their shareholders. Dividends must be paid (and increased) or capital growth must be delivered. The share price is everything. That situation is completely incompatible with operating responsibly.
If profits are going to be maximised, then customers must be fleeced. I know that because that was the attitude as soon as publicly-listed Amaya acquired PokerStars. Staff and players became second class citizens and boosting the EBITDA was priority #1. The cardroom’s reputation has suffered ever since.
Before that takeover, founder Isai Scheinberg’s view was that poker should be competing for a share of a customer’s entertainment budget. They could go see a movie or spend $11 on a tournament. He abhorred the idea of encouraging people to spend more than they could afford.
I don’t like that Denise is filthy rich and that her wealth is the cause of much suffering, but she doesn’t have to care about the share price. She is beholden to no-one. She’s already harvesting ludicrous sums of money and doesn’t need to overmilk her cows. If her firm were in greedier hands then I have no doubt many gamblers would be worse off.
I must admit this is a speculative opinion, because I have no hard evidence that problem gambling is less of an issue at privately held gambling firms. But it makes logical sense to me, because behavioural economics shows that people are highly responsive to their incentives.
It’s exactly the sort of data project that an aspiring gambling academic should be undertaking – if the data were made available (wink, wink).
If PLCs are causing more harm, then the government should take steps to mitigate the problem. Nationalising these businesses is not practical, but taxes can be levied and penalties can be issued. Companies putting profit before people must be punished.
On that basis I hope Denise holds firm for years to come and gets ever richer. She’s the best of a bad bunch.
I now find myself in New Orleans where it’s proved even harder to watch the sport I love. Undeterred, I spent an afternoon in Harrahs where I won at craps and lost at roulette and slots, booking an overall $40 loss. It was a pretty cheap reminder that casino gambling is mostly a bloody awful experience, so plans to head on to Las Vegas have been shelved.
On Friday night I attended the NBA game between the Pelicans and the Hawks. I came out on top of a friendly $1-per-point spread bet across all four quarters for a $37 win.
Saturday involved a great free round of disc golf at the City Park. We contrived a handicap matchplay format for $1 a hole, and although it all got a bit blurry towards the end (due to gas station alcopops), we think it finished all square. Total loss for the week was $3.
Next week we’ve got the Grand National and the US Masters, so regular sports betting is likely.