“Those who cannot remember the past are condemned to repeat it”
— George Santayana, writer and philosopher
Today in the UK, we find ourselves in the position where a group of well-meaning people want to dictate to others how they should spend their money. Gambling has now become a “public-health issue” and some health professionals believe gambling provides no benefits, only harm, and should be treated in the same way as smoking: It should be stamped out.
In February, I wrote about gambling, speculating, and investing and looked at the social and political attitudes to these activities at different times in history.
At the same time this purely semantic distinction was being made between speculating and investing, the same thing was happening with betting, although with betting, there was no other word to describe it based on what strata of society was doing it.
To recap, in 19th-century Britain, as investing in stocks and shares became more popular, the wealthy and political classes were of the view that what the rich or “knowledgeable” person did when buying shares was investment, while anyone without much money who bought shares was gambling and that should be discouraged.
It was thought that through their ignorance of stocks and shares, the less well-off were disrupting the normal functioning of the stock market and bringing it into disrepute, making it look as if the buying and selling of shares were nothing more than gambling. This was, in the eyes of the Stock Exchange and its supporters, an undesirable connection.
The Stock Exchange developed regulations that effectively stopped the working class from buying shares by setting a minimum transaction level well above what the average worker could afford. Because of its popularity amongst the “lower classes”, enterprising individuals began to offer bets on the movement of shares, where people could buy “time bargains”, a wager of a few pennies that a certain stock was going to rise or fall by a certain amount by a certain date.
There was also the view in political and religious circles that the less well-off could not afford to gamble on stocks and shares and it should be made illegal. The rich could afford it and were obviously more knowledgeable and anyway, there was nothing wrong with ”making investments.”
Born out of the Methodist movement, this patronising view toward the working class by what was the middle class, that the working class should not be doing something they obviously enjoy, has permeated British society since the 1800s.
Betting became popular in the towns of northern England as the Industrial Revolution took hold and the workforce, in general, found that they had steady work, rising income, and a little more leisure time. Workingmen spent some of their leisure time, such as it was, in the pub having a drink and meeting friends.
With the abolition of lotteries in the early 1800s, the pub owners, recognizing their customers’ interest in gambling, started offering lotteries on a small scale, albeit illegally.
By the mid 1800s, the local pub was a place where people could place bets on prize fights (boxing), wrestling, cock fighting, dog fighting, and bull and bear baiting. The more entrepreneurial publicans arranged the fights themselves, put up the prize money, and ran the book.
The creed of the middle class of the time was the Protestant work ethic: Only through hard work, thrift, and prudence could an individual accumulate capital and become socially mobile. Obviously, gambling did not fit their mould.
Former Prime Minister Benjamin Disraeli (1804–1881), who was a member of Crockford’s Casino, lamented the rise of betting amongst the lower classes as “the pollution of a once-noble activity”!
In his book The Origins of British Society, social historian Harold Perkin writes that the reforming middle class believed the “aristocracy and working class were united in their drunkenness, profaneness, sexual indulgence, gambling, and love of cruel sports.”
Realising they could not take on the power of the wealthy, the social reformers focussed their energies on trying to stop the working class from gambling, by passing laws that outlawed the type of betting they enjoyed, cash betting.
In 1845, the powers that be tried to protect the higher orders from the evils of gambling by passing a law that also removed the ability to recover gambling debts through the courts.
During the committee stage of the bill, there was some debate whether this same provision could be applied to the stock market, in the hope it would stop the speculation and the “pump-and-dump” activities of the stock jobbers, people whose role was to sell stock on behalf of the brokers. The committee members declined, however, to extend the provision to the stock market; they thought it would be difficult to separate true investment from speculation.
Eight years later, Parliament took up the matter again, passing the 1853 Betting Houses Act in an effort to close down the betting houses that had sprung up in many industrial towns. At the same time, they did not want any restrictions to impact the traditional betting that went on in the “gentlemen’s clubs”, such as Whites, where members made bets with one another, all on credit.
This law was specifically designed to impact only the working class, making it illegal to place cash bets and “to go to a place or meet a person for the purposes of betting or bookmaking”. Unfortunately for the lawmakers and the police who were responsible for enforcing the Law, Joe Public completely ignored the law, as did the bookmakers.
Due to the threat that they could lose their licence to sell alcohol, publicans did stop accepting bets, but bookmakers moved to offer their services in thinly disguised shops: tobacconists, drapers, butchers, etc., where none of these products could be bought, but a bet could easily be placed.
Ever inventive, some bookmakers started accepting bets made through the post, while others had “runners” on the street. Hence, in 1874, another law was enacted that made street (cash) betting illegal and stopped advertisements being sent by post.
In the late 1800s, workingmen’s clubs were created to promote the “fellowship of man”. One such fellowship, the Clubs and Institutes Union (CIU), which still exists today, was intended for the working class, formed by the middle class with the intention of providing education and non-alcoholic recreation.
Victorian social reformer Charles Booth, initially excited by the prospect of these clubs, became disillusioned; fairly quickly, the CIU and other workingmen’s clubs became places for beer and betting. However, for Booth, there was a big difference between the bettors and bookmakers in the clubs and, in his words, “the bookmakers of good repute” who frequented the respectable clubs of London.
The Exchange Telegraph Co. Ltd. was created in 1872 to transmit financial and business information from the London Stock Exchange. The company also began to transmit starting prices for races up and down the country. This allowed newspapers to carry starting prices, along with the opinions of tipsters. This proved so popular with the general public that papers dedicated to horse and dog racing were published.
Soon, bookmakers placed advertisements in these papers, alongside the starting prices and tipsters’ advice. This change also did something very important: It made the media owners allies with the bookmakers in the battle against further restrictions on betting.
Any attack on the betting business by social reformers was countered by a broadside from the newspapers. The media owners’ counterattack was that it was one law for the rich and another for everyone else.
The 1853 Act had proved wholly ineffective; it was a law that was extremely unpopular and difficult to enforce. After numerous parliamentary enquiries, in 1906, the Street Betting Act was passed in an attempt to close the perceived loopholes of the previous law enacted in 1874. It was described in the “sporting” press as a “monstrous sample of class legislation”. Just as with the 1853 Act, the 1906 Act did not work as planned. Both punters and bookmakers were happy to carry on as before and cash betting flourished.
Today, there are those in society who want to tell us how much we can spend and what we should spend it on. Their thesis is that gambling does more harm than good and should be restricted.
The evidence, I believe, is that most people enjoy gambling and do so within their means. It’s true that some cannot control their gambling and need assistance to help them stop. But I can’t help feeling that the lesson of history has not been learned and that whatever restrictions are put in their way, people will find a way to continue to gamble, even if it means gambling with offshore operators.
For this article I am indebted to Mark Clapson for his book, A Bit of a Flutter, and David Dixon, author of From Prohibition to Regulation.
