High Street Gambling and Support from Our Friendly Local Mutual

Kate Calvert of the Better Archway Forum takes a look at the impact of gambling on our communities.

High Street Gambling and Support from Our Friendly Local Mutual This is a longish story so for those who don’t have time to read it:

Summary

1. Mutual building society Nationwide supports High Street gambling.
2. When doing business its corporate responsibility policy is ignored.
3. One of 70 mortgages they hold from a bankrupt gambling property portfolio is on Archway High Street site.
4. As the prime creditors they can influence whether this property reverts to retail if there is a retail demand at a reasonable price. But they are saying they can’t in any way influence the receiver’s decision that only gambling businesses are interested here.
5. Although a mutual, so without big shareholders to please, Nationwide behaves as if profit is king.
6. But unless there’s some kind of secret business model, their receivers don’t seem very good at achieving this. Their agents are demanding a rental of £55k pa, which when added to at least £30k in rates, plus more than £100k for utilities, staff etc, means the site would have to make at least £185k pa before making a wisp of profit. Does that sound likely in a small centre, even with the help of a few high spending gambling addicts?

What Is the Impact of Gambling?

How much damage does gambling do? Well maybe not much on evidence from a Friday count at an arcade in Archway (9am to 6pm, then 6pm to 11pm the following week). Over 14 hours there were just 10 customers.

Of course, those customers who went in did stay a while. One was there for more than four hours, exiting only to visit the neighbouring cashpoint before going back in again. The majority of visits were for well over an hour.

These are not on the whole people who will carry out muggings and burglaries to feed their habit, but they do take money, and sometimes much too much money, from their family and wider connections – see Gambling – Work and Leisure by Downes.

We’re now in the ridiculous situation of the Department of Media, Culture and Sport publicising the The Great Foundation set up to treat problem gambling. It’s funded as a kind of medieval ‘indulgence’ payment on the part of gambling businesses to ensure that their profits remain comfortably safe.

Even if we ignore the human damage, there’s a wider problem, the damage these places do to our town centres.

Gambling is not a warm, cuddly activity, it’s one where the participants are clearly stressed for example. And the number of customers is generally low, so a gambling frontage replacing a shop reduces the numbers on the High Street. The result is that gambling outlets damage the public space around them, affecting not just the attraction of the location (fewer shops means less to buy, means less reason to visit), but eventually also the sense of safety because of the reduction in passersby.

Even more worryingly, for some reason and despite the tiny numbers of customers, gambling operations seem able to pay vastly inflated rents on town centre shops. Why is not a matter to speculate on without getting into all kinds of issues we need to avoid for legal reasons. But it does distort the market against the kind of uses we do want to see there such as homewares shops, to replace the lost Woolworths.

Can You Object?

The previous UK government, ever open to private lobbying, listened carefully to the blandishments of the gambling lobby and changed the law. Now you can’t object to a gambling joint except on four grounds.

1. The prevention of crime and disorder
2. Public safety
3. The prevention of nuisance
4. The protection of children from harm

And although officially there are four, the first two are decided by faceless bureaucrats, who seem incapable of identifying any kind of dodgy behaviour, so appear to rubber stamp pretty much anybody who applies to them.

We can argue about nuisance, but generally addicted gamblers don’t cause breeches of the peace so unless there is drug dealing from the property (not unknown), the licensing committee won’t listen to that one.

We can argue about protection of children from harm, but applicants just promise to blank out the windows so no-one can be attracted by the pretty, blinking lights, and if any teens come through the door they’ll recognise the problem immediately and usher them out. So that’s all right then.

Protection of the vulnerable doesn’t come into it. Go into an arcade and you’ll find it staffed by likeable, attractive and friendly staff. There is even food so you can eat while you hand over your money, soothing while the money disappears.

And there’s not a hope of any success arguing that these businesses harm our High Streets. Money for the gambling businesses comes first.

The Role of the Money Men

It can be startling to discover which other organisations get involved, the ones you would think had corporate social responsibility policy to prevent that sort of thing.

Take the Nationwide Building Society. It’s not one of those for private profit big banks, it’s a mutual. Its corporate responsibility page on the website says

‘We believe as a member owned mutual, we have a duty to be a responsible corporate citizen; alongside being prudent with our members’ money, delivering long term good value products and services, this embraces the way we engage our employees, creates a great place to work and delivers positive social and environmental impacts.’

So you would think that gambling businesses wouldn’t be one of the things they would invest in.

To summarise the sequence of events in just one case:

1. A gambling operation uses a mortgage from Nationwide to pay £1.4m for a shop in Archway, actual value more like £900,000.
2. The gambling business spends thousands (as they did at Nags Head and elsewhere) to force an unwanted gambling arcade.
3. The business goes bankrupt and liquidators seek to sell as a going concern.
4. As mortgage holders Nationwide take back control over this property as just one in a portfolio of 70 which haven’t sold as part of the going concern.
5. The new receivers appoint a property management co. which after a while puts in an application for another gambling operation, saying there has been no interest from anyone else.
6. The claim is challenged and suddenly an agent’s board is erected and particulars made available, but asking rent about double what you would expect, and those expressing interest being fobbed off.
7. People write to Nationwide to object. They write back claiming ‘nothing we can do’. In fact they can intervene ifa. there hasn’t been proper marketing (which there hasn’t) or

   b. the receivers actions bring the chargeholder into disrepute – (which you would think would apply to a mutual like the Nationwide if the receiver is promoting gambling).

8. More letters to Nationwide which ignore these points entirely and instead repeat the ‘nothing we can do’ routine, this time saying the receiver must get money for the bankrupt ‘client’ company. Disingenuous claim – the ‘client’ hasn’t a hope of seeing any of this money, it’s all going to go to Nationwide.
9. Meanwhile we tweet the Nationwide head of corporate and social responsibility to ask her views on the subject. She is presumably too embarrassed to tweet back.

Would that be because all this corporate responsibility stuff is just so much hogwash? And what really counts is making as big a profit as they possibly can, in order to justify the amounts they pay directors?

Certainly, The Guardian in 2011 was shocked at the cosy pay deals the directors are awarding themselves. And there’s a bit more detail from the Building Societies Members Association which reports that the Nationwide CEO earns £1.9m while also holding down another job, and is due for an increase to more than £2m. The chairman, who only works a few days a year, is due to be paid £300,000 for his efforts.

You can compare that with a more genuine mutual, John Lewis, where the CEO earns £500,000.