While we wait to hear the government’s conclusions following its consultation on the controversial fixed-odds betting machines and on gambling advertising, the Labour party deputy leader Tom Watson has made the clearest statement I have yet heard from a leading British politician about the need for action on our large and neglected gambling problem.

He is by no means the first prominent Labour figure to comment on gambling. In 1905 Ramsay MacDonald wrote: “Every Labour leader I know recognises the gambling spirit as a menace to any form of Labour party.” And in 1929 it was Labour chancellor Philip Snowden who abolished Winston Churchill’s betting tax, largely on moral grounds. But they were operating in a very different era, one chiefly characterised by prohibition of gambling. Between then and the era ushered in by New Labour’s 2005 deregulating Gambling Act, the whole climate has fundamentally changed. Watson is not a latter-day moralising anti-gambler. The issue he is rightly addressing is not a moral one but one to do with the nation’s health and quality of life.

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The 2005 act introduced to Britain one of the most liberal gambling markets in the world. That was deliberate, guided as it was by New Labour’s acceptance of the industry’s claim that the commercial provision of gambling was just like any other leisure industry: essentially safe, except for the exceptional player who could not or would not “gamble responsibly”. The online gambling industry in particular was regulated with a lighter touch than in other jurisdictions and would, the government hoped, become a world leader.

The big mistake was to think that gambling is a commodity like any other. That ignored the lesson learned over centuries: that gambling is always dangerous and needs to be handled with great care both by punters and by lawmakers and regulators. It also failed to reckon with rapid technological change that the industry has taken full advantage of and which has given us, among other things, machines and online betting of increasing addictiveness.

The clearest indication that modern gambling is no ordinary commodity is the use of “self-exclusion”, championed by the Gambling Commission as a leading harm reduction measure. It now requires all operators to have in place procedures to allow customers to ban themselves for a period of months, during which time the operator is obligated to refuse the customer access. This option is now taken up more than one million times a year in Britain. An ordinary commodity it is not.

Only 15% of British people think that on balance gambling is good for society

The Gambling Commission has just published a summary of English, Scottish and Welsh survey findings for 2015. The figures suggest that no progress is being made in reducing the prevalence of problem gambling. The commission’s estimate, acknowledged as likely to be an underestimate, is that the number of British adults with gambling problems is in excess of 400,000. That is a huge number in public health terms. In fact it is about the same as the number addicted to illicit drugs in Britain, although gambling disorder, recognised for some time by bodies such as the World Health Organization and the American Psychiatric Association, attracts only a tiny fraction of the resources rightly devoted to drug addiction.

And to those 400,000 can be added a further 500,000 who indicated in their answers to survey questions that they were gambling in a way that is highly risky.

Unemployed people are the most likely to be problem or risk gamblers, and those employed in managerial and professional occupations the least. Coupled with other evidence that betting shops and gambling machines tend to cluster in poorer areas, this suggests that gambling is now a factor in reinforcing health and social inequalities, which should be of special concern to the Labour party.

Interestingly, the general public appears to be much more conscious of the dangers than the government. Attitudes are mostly negative towards gambling, even among men, younger adults and those who gamble. According to another recent Gambling Commission report, 78% of the public think there are too many opportunities to gamble nowadays, and only 15% think that on balance gambling is good for society. The proportion of people believing that “in this country gambling is conducted fairly and can be trusted” has declined in the past five years from just under 50% to only 35%. The increasing alignment of gambling and sport and the feeling of being “bombarded” by gambling advertising are things that worry many, not just parents.

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But it is family members affected by relatives’ problem gambling who are the largest single constituency of people who bear the harms associated with gambling. In 2001 a previous deputy leader of the Labour party, Roy Hattersley, remembering his grandfather whose life was ruined by gambling, warned: “Respect of the individual requires us to allow men and women to make their own mistakes. But in a civilised society, there is no freedom to exploit others and no freedom to destroy families.”

This is not about a return to the early days of the British Labour movement when many of its leaders were anti-gambling on moral grounds. But Watson has it right: we now need a radical overhaul of gambling regulation; a recognition of problem gambling as a public health issue; a national plan that should involve several government departments, especially the Department of Health, which surprisingly shows no interest currently; public funds directed at the problem, supplemented by a mandatory levy on the gambling industry; and a complete overhaul of the present iniquitous system of industry funding of treatment and research.

• Jim Orford is emeritus professor of clinical and community psychology at the University of Birmingham. He runs the website Gambling Watch UK