Labour backtracks on casinos

Gambling: Labour backtracks on casinos - at - the best of the week's international financial media.

It was "The Great Casino Climbdown", shrieked the Daily Mail, while its parliamentary sketchwriter Quentin Letts almost danced with glee as culture secretary Tessa Jowell's plans for a Las Vegas-style casino boom in Britain's city centres and seaside resorts were "torn to shreds" by her backbenchers. The Mail's campaign to sink the bill represented middle-class reaction arm-in-arm with Old Labour's hellfire preachers, all united in their desire to keep temptation away from moral weaklings who can't be trusted to decide how much of a bad thing is too much.

Well, we can all agree that gambling on chance is a worthless activity, in which the only guaranteed winner is the owner of the roulette wheel. But that does not mean we should keep casino gambling out of reach of ordinary folks. To paraphrase Signor Buttiglione, former EU commissioner-in-waiting, gambling may be a sin - or at the very least, a manifestation of human weakness - but that is not the same thing as saying that participating in it is anything approaching a crime. And if that is so, why constrain the natural growth of the casino market? Citizens are free to bet without limit on horses, scratch cards, election result spreads and all manner of financial derivatives. They should also be free to find their own limits in casino gambling. Losers will discover those limits by trial and error, but that is, literally, their own bad luck.

So was the libertarian Daily Telegraph right to applaud Ms Jowell for seeking to set aside - in this solitary instance - New Labour's nannyish instincts? No, because in reality the Government was doing no such thing. It was merely holding its nose and pursuing a cynical calculus. On the one hand, new casinos mean regeneration for fading resorts such as Blackpool, funded by inward investment and generating new flows of tax revenue. On the other, more casinos mean more "gambling addiction" and associated misbehaviour - just not quite enough to cause ministerial embarrassment.

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But Ms Jowell is already backtracking, and the bill looks set to be watered down. The weak point in her defence is that her Government is desperate to find painless new sources of tax: the public are readily persuaded this is the key motive for liberalising gambling. She can take refuge in the argument that the state traditionally expresses disapproval of non-criminal bad habits - smoking, drinking, excessive use of carbon fuel - by taxing them to the hilt. But in several existing forms of gambling, sinful profit has been mitigated not by extra tax but by channelling money to useful ends that by-pass the state. Football pools companies set up their own charitable foundation; the National Lottery has generated billions for all forms of worthy activity. So why not amend the bill so that the extra money to be extracted from casinos by the state goes directly to those same good causes - sport, the arts, heritage, charities - through the same distribution mechanisms, exploiting low human nature to fund its higher works? The Government's hands would look cleaner, and even the Daily Mail might take a more balanced view of the debate.