That betting firms should contribute to funding treatment for gambling addiction is beyond dispute these days. Even the companies agree. Their trade body, the Betting and Gaming Council, often boasts about how its leading members volunteered to boost their joint funding of education and treatment services to £100m during the 2019-2023 period.
The problem, though, is obvious: the promises are voluntary. While £100m, even when spread over several years, sounds a large sum, it seems plucked out of the air. Nobody would claim it comes close to covering the cost to the public purse of providing even the current patchy level of treatment for addiction.
This is the context of the call by Claire Murdoch, national mental health director for NHS England, for a mandatory industry levy. She says the NHS is being left “to pick up the pieces” as the number of people seeking help to stop gambling has soared.
Murdoch is not alone in lobbying for a mandatory levy. The Gambling Commission, the government’s own regulator, is in favour. So is BeGambleAware, the charity that receives much of the funding from the industry. And MPs from all main parties support the mandatory route.
The government’s review of gambling laws, launched last December, is free to adopt the measure – indeed, it is in the terms of reference for consideration. It is just that restrictions on advertising and marketing, and the spin-speeds of online roulette games, tend to grab most of the attention. The risk is that a mandatory levy, which could have been introduced years ago, continues to fall between the cracks.
Start from first principles. What would it cost to treat gambling addiction as a public health problem, which it is recognised to be? And what is it reasonable to expect the industry to pay beyond regular taxes on profits? The answer to the second question is surely more than token sums of £20m or so a year.
Has Credit Suisse been revisiting an old playbook?
Credit Suisse has done the easy bit: binned a few senior executives, axed top-level bonuses and told shareholders they will have to live with a lower dividend after the Archegos and Greensill disasters. None of it, though, amounts to a new strategy, which is probably what the Swiss bank requires after finding itself at the centre of the two most serious blow-ups in financial markets this year.
For Archegos, Credit Suisse has the inadequate excuse that other big banks were also exposed to the collapse of the fund run by Bill Hwang. That factor, though, does not explain why Goldman Sachs and Morgan Stanley, also acting as prime brokers, were able to flee the scene and liquidate their exposures while the Swiss bank, plus Nomura, were slow out of the blocks. A hefty $4.7bn hit to profits suggests a failure of the entire system of risk controls.
The upfront financial pain with Greensill is smaller (though let’s see what lawsuits from clients exposed to the affected funds brings) but the reputational damage is arguably larger. It is one thing for a greedy or gullible former UK prime minister to be caught up in Lex Greensill’s happy talk about reinventing supply-chain finance, but the default setting on a Swiss bank is meant to be prudence and scepticism. Credit Suisse seems to have been repackaging loans according to a playbook from the pre-2008 bad old days.
Good luck to António Horta-Osório, incoming chairman, in sorting out the mess. The challenge looks at least as daunting as the one he faced at Lloyds, which at least had the comfort blanket of market leadership in UK retail banking. In investment banking it is not obvious why Credit Suisse is trying to compete internationally.
Pouring oil on troubled waters
BP has managed to flog a few assets and the price of oil has recovered. The mechanical result is that borrowings have fallen faster than expected to the target level of “only” $35bn. Thus corporate thoughts have turned to share buy-backs to cheer up shareholders after last year’s dividend cut.
One can see the temptation, but oil companies are reliably terrible at judging when their shares are cheap. Ask Shell, which was buying merrily almost until the moment it cut its own dividend. Investors should not celebrate too soon.