Do we really need government to save us from ourselves? It used to be that ministers concerned themselves with ensuring national security and sound money. Unfortunately, that view of limited government seems to have gone out the window. Instead, the heavy hand of Whitehall during the pandemic has given way to a further bout of paternalism.
Why does this matter? Well, a determinedly interventionist stance by regulators, whether in relation to the drink and tobacco industries, or any other part of the economy deemed to have negative social consequences, presents an unpredictable (and growing) risk factor for investors.
We were recently given a reminder of the government’s interest in our welfare in a trading update from Entain (ENT), owner of the Coral and Ladbrokes brands. The gambling group’s share price clicked into reverse when it revealed that online net gaming revenue (NGR) had seen mixed volumes across the group, “but in aggregate, softer than anticipated”. Consequently, NGR growth for the third quarter is “expected to be up high single-digit per cent, and down high single-digit per cent on a pro-forma basis”.