Last week, the Birmingham Mail in the UK published a very disturbing story about loaning agencies refusing home loans to people who gambled, even one wager. Presumably bank, credit-, and debit-card statements were used to track the gambling. The article further stated that agencies were sending notices to people who gambled during the month, warning them of potential default.
The story is shocking. The anti-gambling loan policies are not driven by law, government policy, or any other recognized, official, and transparent authority. It is simply a matter of individual choice.
It is a British story and is not in any way connected with the United States or practices in this country. It is also uncorroborated and not fact checked by any major news outlet. Although the Birmingham Mail is a reputable newspaper, the chances are good that it is false news. False or not, it is worth noting. The United Kingdom is experiencing some trends that are present here too. And we, too, might in time be subject to some of the same issues. The trends in the UK may have led an individual loan officer to make the unilateral decision to cease loaning to certain people. Due to the fact that the action was individual and not driven by government policy, in theory at least, it could happen here.
The United Kingdom started 2024 talking about gambling reform based on a government White Paper from 2023. The UK Gambling Commission was planning a pilot program requiring “affordability checks” to be made by bookies. The policy was in reaction to the White Paper, which suggested a series of reforms. The intent of the affordability check was to ensure that anyone gambling could afford to place the wager. As one might imagine, the gaming industry reacted with displeasure. The industry thought it would be expensive, difficult to follow, and drive big bettors to friendlier but illegal alternatives. The program got lost in last summer’s sudden general election and the accompanying scandal over politicians making bets on the election. However, it did not go away and a limited version was introduced in August.
Another of the reforms had to do with advertising, seeking to tighten the existing restrictions. Those restrictions further disturbed the gaming industry. Racing-industry officials say they are being driven out of business. The reforms are not new. In 2018, public pressure led to a limit on slot wagers, which was duplicated by the same policy for online slots in 2023. The Guardian campaign to limit wagers took years, but it was relentless, the very definition of a bully pulpit. The campaign was conducted mainly on innuendo. There were a few facts, but lots and lots of anecdotal horror stories of lives destroyed with pictures and weeping testimony. It worked; elected and government officials listened and eventually took action.
The latest blow for the gaming industry is a proposal to increase gaming taxes to raise an additional $4 billion in revenue. The new tax rate could be as high as 50 percent, more than twice the current rate. Here the story picks up a familiar refrain. Raising taxes to a maximum amount is the same narrative we are hearing in this country.
So how does any of this relate to the original mortgage story or anything in this country? In both the United States and United Kingdom, powerful anti-gambling lobbies are supported by numerous media outlets. When the government, as the UK’s has done, begins making a series of moves to increase control over legalized gaming, it has moral implications to some groups. Clearly, in the UK, the anti-gambling forces take the government policies as indications that gaming is bad, dangerous, and in need of a tight rein, if not a complete ban. With that message from government, organizations are lobbying for new laws and higher taxes and some media sources have taken up the cry. In England, The Guardian took credit for limiting slot wagers from £100 to £2.
There is the possibility, just as the Birmingham Mail reported, that institutions and individuals will feel it is their right, indeed their duty, to take further action. That is what makes this story so unsettling. It is a tale of unprecedented individual action.
Gaming is a controversial industry and gambling is a controversial activity. It is not without risk and potential for harm. That is why commercial gambling is very heavily regulated here and in the UK. It is also true that in some situations, additional regulation is needed. That can and does take place through official and established governmental mechanisms. In the UK, even if the outcomes are unpleasant for the gaming industry, the process is public and transparent. And the industry has the opportunity to comment. The Birmingham Mail story contains none of that.
