“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 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 but 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 because it made it look as if the buying and selling of shares was 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 that was 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 bet 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 towards 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, realising the interest their customers had in lotteries started offering lotteries on a smaller 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, that only through hard work, thrift and prudence could an individual accumulate capital and become socially mobile. Obviously, gambling did not fit their mould.
“The pollution of a once noble activity.”Benjamin Disraeli, on the rise of betting among the lower classes
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 to extend the provision to the stock market because they thought it would be difficult to separate true investment from speculation.
8 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 each other, all on credit.
This law was specifically designed to only impact the working class, in that it made 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 and so did the bookmakers.
Due to the threat that they could lose their licence to sell alcohol, the 1853 law did stop publicans from 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 moved to accept bets made through the post, others simply had “runners” on the street. In 1874 another law was enacted that made street betting (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”. An example, 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, who had been excited by the prospect of these clubs became disillusioned because fairly quickly, the CIU and other workingmen’s clubs became places of 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 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 hugely popular with the general public. So much so that papers dedicated to horse and dog racing were published.
Soon bookmakers would place 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. Again, this Act was specifically designed to stop the type of betting popular with the working class, cash betting and the use of agents or runners. 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, cash betting flourished.
Today, there are those in society who want to tell us how much we can spend and what we want to spend it on. Their thesis is that gambling does more harm than good and should be restricted.
The evidence is, I believe, that most people gamble within their means and is something that they enjoy. It is true that there are some that 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.