Fixed Odds Betting Terminals - Are we gambling with our nation's well-being? - New Statesman
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Fixed Odds
Betting Terminals
Are we gambling with
our nation’s well-being?
£
01bacta cover.indd 15 13/05/2014 11:21:14
FACTS AND FIGURES
Rolling in it
Preferred maximum stake: £2
Maximum stake per spin: £100
135,000 gaming machines, of
which 33,000 are FOBTs
FOBTs are located in the 8,700 betting shops
What the public say
open across the UK; other gaming machines can be
found in arcades, pubs and clubs 70% want extra restrictions on
£900 per week is generated per FOBT, equating high-stakes gambling
to a total of £1.5bn each year Two-thirds do not believe that
70% of profit comes from the bookmakers’ code of conduct
roulette games deals with the problems
caused by FOBTs
High-stakes
gambling
Billed as the “crack cocaine of
UK gambling”, fixed odds betting
terminals (FOBTs) don’t have the
best reputation. Here’s why . . .
Supporting those
who gamble FOBTs and
The Responsible Gambling Trust
problem gambling –
exists to help minimise just how bad is it?
gambling-related harm 87% of gamblers say FOBTs are addictive
£6m raised each year in donations 62% of gamblers have played on FOBTs
from the gambling industry until all their money had gone
£4.8m: cost of providing services 40% of FOBTs’ revenues are estimated to come
and treatment, March 2013/14 from at-risk gamblers
£1,000+ can be lost per hour
£13bn is gambled on FOBTs in the
55 most deprived boroughs
£6.5bn is gambled on FOBTs in the
115 least deprived boroughs
Sources: RGT; Campaign for Fairer Gambling;
Gambling Commission; Bacta
2 | NEW STATESMAN | 16-22 MAY 2014
02 facts and figures.indd 2 15/05/2014 14:56:52
CONTENTS
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newstatesman.co.uk 6 10 12
0800 731 8496 FOBTs, betting shops and society The doorway to a mini-casino Thinking differently about regulation
Supplement Editors
Becky Slack
Charlotte Simmonds
Design and Production
Leon Parks
Graphics
Emily Foster
Against the odds
Gambling has long been a pastime Their regulation is at the heart many in this report say it has
Commercial Director enjoyed responsibly by people of a debate to empower local not gone far enough. As Gareth
Peter Coombs
+44 (0)203 0962 268
across Britain. Yet the rise of authorities and protect those Wallace illustrates on page eight,
Head of Partnerships fixed odds betting terminals most vulnerable in society – both gambling addiction can destroy
Eleanor Slinger (FOBTs) in high street betting financially and psychologically. lives and sever relationships.
+44 (0)203 0962 275 shops has been steady and largely The government no doubt This special supplement draws
unchecked. There are now nearly takes the issue seriously, setting together critical voices to discuss
33,000 of these fast-paced, risky out improvement measures as problems and possible solutions
and addictive FOBTs nationwide. recently as 30 April 2014, but to keep gambling safe for all. l
This supplement, and other policy reports, can be downloaded from the
NS website at newstatesman.com/page/supplements
2 Facts and figures 12 Views on regulation
High-stakes gambling FOBTs: whose responsibility to manage?
FOBTs don’t have the best reputation, and the Leading authorities make their cases
numbers show why
16 The psychiatrist’s view
4 The government’s review The time to act is now
Better measures Ian Allsop reports on support for people suffering
Helen Grant calls the industry to account from gambling addiction
5 The Labour Party position 18 Player protection
First published as
Government changes: Responsible recreation
a supplement to the too little, too late Primary player protection responsibility must lie
New Statesman of The new rules regarding FOBTs don’t go far with providers, says Liz Barclay
16-22 May 2014.
© New Statesman Ltd. enough, says Clive Efford
All rights reserved. 19 Gambling research
Registered as a
newspaper in the UK 6 Campaigning for fairer gambling “We’ve got a clean-up job to do”
and USA. The most addictive form of gambling Rebecca Cassidy reveals the research bias
COVER: SHUTTERSTOCK. DESIGN BY EMILY FOSTER
Derek Webb on why usage must be curbed
The paper in this
magazine originates 20 Corporate social responsibility
from timber that is 8 Stories from the front line Our pledge to do more
sourced from sustainable
forests, responsibly The cost to Britain’s high streets Bacta’s Steve Hawkins on its enhanced
managed to strict The Salvation Army’s Gareth Wallace on those responsibility commitments
environmental, social and
harmed by gambling and payday loans
economic standards.
The manufacturing mills 22 International experience
have both FSC and PEFC 10 The legal position Tilting the playing field
certification and also
ISO9001 and ISO14001 FOBTs: beyond regulation? Paul Bendat on what the UK can learn from
accreditation. Linda Hancock and Jim Orford offer answers Australia’s issues with problem gambling
16-22 MAY 2014 | NEW STATESMAN | 3
03 contents & leader.indd 3 15/05/2014 14:57:32
THE GOVERNMENT’S VIEW
Better measures
By Helen Grant
The government message couldn’t be clearer: it’s time to put player
protection and social responsibility at the heart of the industry
here has been plenty of speculation not be able to trade. The Gambling Com- precautionary approach and take targeted
T over the past few months on the
content of the government’s review
into gambling policy, ever since the Prime
mission is currently working to make sure
this happens.
This is in response to the increased con-
and proportionate action to protect play-
ers further when using high stake gam-
ing machines on the high street. This
Minister announced it would be under- cerns over the clustering of betting shops will mean customers who want to stake
taken in January. But I believe that our in some areas; local authorities will be more than £50 in a single action must use
measures published last month, on 30 given more control over whether to allow account-based play or load cash over the
April, have struck the right balance in sup- new betting shops on their high streets. counter through a member of staff. This
porting both a strong gambling industry Under the current system, planning ap- will put an end to unsupervised high-
and a responsible one. plications are not needed for new betting stake machine gaming on the high street,
Since becoming the minister at the shops to open up in premises left empty leading to better interaction between the
Department for Culture, Media and Sport by another business and are viewed in the customer and operator, as well as giving
responsible for gambling, I have listened same category as estate agents, banks and bookmakers more opportunities to inter-
to both sides of the debate through building societies. vene if they are concerned about a player’s
numerous meetings with both the The new rules will put bookmak- gambling behaviour.
industry and campaign groups who have ers in a different planning class to other Bookmakers have a social responsibility
lobbied for stronger protection measures businesses, so local authorities will be able to take care of their customers and their
in the sector. My message to the industry to scrutinise applications for new betting licences can be taken away if they don’t.
couldn’t be clearer – it needs to put player shops and refuse them if they are not con- This is a sensible and balanced approach
protection and social responsibility right sistent with their local plan. These changes which allows players continued use of
at the heart of its businesses. these machines on the high street, while
The government has been encour- ensuring greater supervision and player
aged by the moves the industry has made A successful gambling protection.
– in particular when it introduced new industry mustn’t be at the As part of the review, the government is
voluntary player protection measures on also looking at codes which govern gam-
fixed odds betting terminals earlier this price of public protection bling advertising, given the changes to the
year. FOBTs, found in bookmakers across gambling landscape and the availability
the country, have been the source of much will give local communities in England and promotion of new products which
debate and we have been crystal clear that and Wales a voice in deciding whether were not anticipated when the codes were
we want stronger protection for players of they want another shop to open; it is part devised. We have asked the Advertising
these machines. of a broader package to enhance and reju- Standards Authority to review the codes
The new measures from the industry venate high streets. Gambling operators, for gambling advertising, to see whether
include suspensions in play if volun- when applying for a licence, will also be change is needed with work on this area,
tary limits are put in place and reached, required to show how they would comply due to be complete by the end of the year.
and alerts that pop up on the machine to with social responsibility codes, taking Of course we want a successful gam-
tell players they’ve been playing for 30 into account local circumstances. bling industry, but it must not be at the
minutes, or spent £250. We realise that for some people problem price of public protection. I call on the sec-
While we think this is a step in the right gambling is a serious issue and we are de- tor to put social responsibility at the heart
direction, we believe that voluntary meas- termined to help tackle it. The changes we of their businesses and ensure growth
ures are not enough. The government are proposing are necessary to ensure that comes from customers who are fully in
believes that player protection measures vulnerable players are protected. I want control of their gambling. l
must be toughened and should form part players who use gaming machines to be in Helen Grant MP is the minister for sport,
of an operator’s licence conditions, so control of the choices they make. tourism and equalities at the Department
bookmakers will have to accept them or The government has decided to adopt a for Culture, Media and Sport
4 | NEW STATESMAN | 16-22 MAY 2014
04 Government position.indd 4 13/05/2014 11:30:18
THE LABOUR PARTY POSITION
Too little,
too late
By Clive Efford
The government’s new rules regarding the use of fixed odds betting
terminals don’t go anywhere near as far as they should
T
he government’s £50 limit on a single The government claimed consistently against yet another shop opening, only to
play on a fixed odds betting terminal there was no need to act. It said local au- watch their councillors vote them through
(FOBT) is a sham. thorities had the necessary powers to because their legal advice says they have
First, the limit relies on the betting in- prevent the proliferation of betting shops. no powers to refuse.
dustry to apply it. Second, customers will However, right across the political spec- It makes a mockery of local democ-
be able to bet above £50 on a single play trum people have countered this claim. racy and we will give councils powers to
with permission from betting shop staff. From Merrick Cockell, Tory chair of the prevent the proliferation of betting shops
Third, the government has not provided Local Government Association, to Lon- and to review retrospectively the num-
any explanation of how it came to decide don Mayor Boris Johnson to the Labour bers of FOBTs. We will consult with the
that £50 will deal with problem gambling. mayor of Newham Robin Wales, all agreed industry and local government on the best
For more than two years, the govern- local authorities must have more powers. way to achieve this.
ment has refused to act in response to our The government has now given in and We have set out the minimum meas-
calls for action on the clustering of bet- accepted betting shops must be placed ures we expect to be introduced to reduce
ting shops in high streets. Meanwhile the in their own planning category so that the harmful effects of these machines. To
problem has been getting worse. deal with what experts call the immersive
The industry has also been allowed to nature of FOBT games, pop-ups must be
drag its heels over the research that was The machines should be installed to warn people when they have
promised in response to growing public removed until they are been playing above a set time period or
concern about the possible harmful effects they have gambled over a set limit of their
of the £100 stake coupled with the £500 proven to be safe money. Customers spending more than
prize on FOBTs, which makes them a “B2 this amount would also have to go to
category” gaming machine (a Gambling operators must apply for changes of use the counter to top up the machine. This
Commission rate-system based upon before they can open new ones. But this will enable staff to interact with custom-
maximum stake and prize available). does nothing for those areas that already ers whom they feel may be gambling too
It was not until Ed Miliband challenged have too many betting shops. Unless local much. In the interests of staff safety and to
David Cameron about this in parliament authorities are given powers to deal retro- increase the likelihood of them interven-
that the industry was forced to get this spectively with the number of FOBTs, the ing in this way, we would also end single
research going, research which will in- problem will not go away. staffing of betting shops with FOBTs.
crease our understanding of the effects of The betting industry is complaining that The Association of British Bookmakers’
B2 machines and enable us to make better it is being treated harshly, but it has stuck voluntary code adopted much of what we
informed decisions about them. its head in the sand and refused to ac- were saying on customer interaction and
The government says the £50 limit has knowledge the problems betting shops are pop-ups and the government has said it
been applied as a precautionary principle. causing. Bookmakers cannot be surprised will make the code mandatory, but this is
But surely precaution dictates that, in the that few people outside of the government too little too late.
absence of any conclusive evidence that have sympathy for them now. There is little evidence of joined-up
locating B2 machines on our high streets Consistently, the government and the thinking in what the government has an-
is not harmful, the machines should be industry have chosen to ignore that the ar- nounced, or that it has based its decisions
removed until they are proven to be safe. guments against FOBTs come from within on proper research. I suspect we have not
The absence of evidence has been used as local communities. It is not acceptable for seen the end of this issue. l
the reason for maintaining the status quo. local people to set out their arguments Clive Efford is Labour MP for Eltham
16-22 MAY 2014 | NEW STATESMAN | 5
05 Clive Efford - the Labour party position.indd 5 13/05/2014 11:30:58
CAMPAIGNING FOR FAIRER GAMBLING
The most
addictive form
of gambling
By Derek Webb
Fixed odds betting terminals have a detrimental impact
on society and it’s time their usage was curbed
M
any prosperous years as a winning happen. At the same time, Don Foster MP Gambling Act, which state that gam-
poker player and subsequently as requested consideration of a reduction in bling should be “fair and open”, not as-
creator of three card poker, the most the maximum stake per spin from £100 sociated with crime, and that the young
successful proprietary casino t able game down to £2. and the vulnerable should be protected
ever, have given me a unique insight into The power to do this rests with the re- from harm. A CFG advertisement about
the connection between player behav- sponsible minister at the DCMS and was FOBTs, placed in The House magazine,
iour, game content and gambling regula- granted during the approval of the Gam- received a single complaint to the Adver-
tion. This knowledge was strengthened bling Act 2005, as even then, there was tising Standards Authority (ASA), from
further by my prevailing in litigation in suspicion that FOBTs might be a harmful Philip Davies MP, secretary of the all-par-
the US Federal court on anti-trust issues product. ty Betting and Gaming Group. Further-
related to gambling games. So it is with The Campaign for Fairer Gambling more, given that some MPs in the group
extensive sector experience that I present (CFG), in its submission to the 2013 Tri- are also on the Culture, Media and Sport
my views on the government’s attempts ennial Review of Gaming Machine Stakes select committee, the CFG believes that
to address issues regarding FOBTs. and Prizes, highlighted how FOBTs were undue influence is being exerted.
The main aim of the 2005 Gambling Since then, the Campaign has amassed
Act was to regulate the new gambling
technologies, primarily remote (internet, More than 40 per cent volumes of evidence to support our po-
sition that FOBTs are the most addictive
online and mobile) gambling and FOBTs. of FOBT revenue comes gambling product, with an overall nega-
It failed to achieve this, as demonstrated tive socioeconomic cost and no positive
by the need for the new remote gambling from at-risk gamblers tax generation benefit. We have also
bill and the fact that FOBTs are the most highlighted how the culture department
addictive form of gambling. brought into betting shops illegally. should not rely on industry-funded re-
In the summer of 2012, the Commons However, the Association of British search or the misleading representations
culture, media and sport select commit- Bookmakers (ABB) was able to present by the bookmakers in making decisions.
tee recommended the cap of four FOBTs a code of practice, plus predictable and
permitted in each betting shop should be worthless research, to legitimise FOBTs. Far from fair and open
lifted. However, the committee had only The bookmakers themselves were not Roulette, which accounts for more than
found time to visit one betting shop and even subject to regulatory review, until 70 per cent of FOBT profits, is played
had only very gentle questions for the the enactment of the Gambling Act 2005, faster than the actual casino game, there-
bookmakers in hearings. which occurred in 2007. by resulting in faster losses. Gamblers are
The ensuing media coverage resulted The CFG is philanthropically funded, not informed of this. In addition, many
in a change in attitude from the “quad” and was founded by my partner Han- novice gamblers, including teenagers, are
of Cameron, Clegg, Osborne and Alex- nah O’Donnell and I after we became attracted into betting shops by football
ander, who all agreed this lift in restric- convinced that FOBTs were irreconcil- bet advertising. Many players do not un-
tions on FOBTs should not be allowed to able with the three objectives of the 2005 derstand that the 97 per cent payback in
6 | NEW STATESMAN | 16-22 MAY 2014
is designed to have a minimal effect on
their profits.
The new code is not supported by
the Gambling Commission as it is not
evidence-based and it was recognised by
government as inadequate. Yet now the
government is itself reworking this code
with the trivial changes it has proposed.
The ABB has misled the government
over the potential economic impact of
reducing the maximum stake on FOBTs
to £2, with claims of jobs and shops being
“at risk”. However, both Landman Eco-
nomics and NERA Economic Consulting
have said this is “overstated” as the ABB’s
methodology is “seriously flawed”. Be-
cause spend on gambling machines is
“labour-unintensive”, NERA claims that
the stake reduction would result in more
money being pumped into the local econ-
omies, subsequently resulting in the crea-
tion of between 1,200 and 2,400 jobs.
The government is still waiting for re-
Losing out: FOBTs result in faster roulette losses search commissioned by the Responsible
Gambling Trust (RGT), now due for com-
the small print relates to the total turno- Taking action pletion later this year. This is a mistake,
ver, not the cash put in the machine. This Local authorities are recognising that as the Goldsmiths report “Fair Game”
cannot be fair nor open. betting shops, particularly when clustered explains (see page 19 for more on this),
FOBTs are also associated with crime, on high streets, are detrimental to society, industry-funded research is inclined to
breaching the second objective in the community health and wealth, as well as be biased and “gambling studies” as a
2005 Act. They change the behaviour of the prevention of crime. They have a duty discipline has no code of ethics.
betting-shop gamblers and encourage to assist in delivering the licensing objec- Gambling: the Hidden Addiction, pub-
criminality. Investigations by the Gam- tives – but their powers to do so are total- lished by the Royal College of Psychia-
bling Commission have shown how ly inadequate. Many councils have joined trists, explains that treatment for problem
profits are generated, in part, from the together to take action under the Sustain- gambling is patchy or nonexistent. It is a
proceeds of crime, money laundering and able Communities Act. callous, uncaring government that taxes
illegal underage gambling. Machines and In response, government has decided gambling, allows loose facilitation rather
shop windows are routinely damaged and to exclude betting shops from a new town than tight regulation, and is unwilling to
staff abuse is common. centre use class, requiring bookmakers to provide funding for an internationally
The 2005 act also requires gambling to apply for planning permission in retail ar- recognised health issue.
prevent harm to the young and vulnera- eas. The powers are not retrospective, so With FOBTs now firmly on the
THE BUREAU OF INVESTIGATIVE JOURNALISM/ALICE K ROSS/ THEBUREAUINVESTIGATES.COM
ble, including “at-risk” gamblers. Second- will not deal with the present issue of high political agenda, the CFG is concerned
ary research based on two British Gam- street clustering. Furthermore, it could that there are still establishment inter-
bling Prevalence Surveys (BGPS) shows result in the unintended consequence ests that prefer to ignore the mounting
the link between FOBTs and gambling of creating a ring of betting shops on the evidence and support the status quo.
addiction. Research based on the 2007 periphery of town centres, in proximity The campaign’s recent polling research
BGPS concludes FOBTs have the strong- to poorer residential areas, with councils by YouGov shows public sentiment is
est association with problem gambling powerless to act against them. overwhelmingly supportive of maximum
compared to any other gambling activity, Proliferation and clustering of betting stake reductions.
while the 2010 BGPS shows that more shops is driven by FOBTs, so reducing the The latest government measures are
than 40 per cent of FOBT revenues were maximum stake from £100 per spin to £2 merely a delaying tactic to avoid facing
estimated to come from at-risk gamblers. is the only way to remove the incentive up to the FOBT issue, which now looks
While this is insightful, it offers mini- for bookmakers to open multiple outlets. unlikely to be resolved until after the 2015
mal opportunity to target the core de- The government has missed a key oppor- general election.
mographic of FOBT users, which is why tunity to make this happen. The reduction in maximum stake per
the CFG commissioned a market research The ABB has implemented a new spin from £100 to £2 to reduce the harm
agency, 2CV, to speak to gamblers in New “Code of Conduct for Responsible Gam- caused by the “crack cocaine of gambling”
ham: FOBTs were thought to be addictive bling” as a means of enabling them to is the only rational solution. l
by 87 per cent of gamblers, while 62 per preserve their £100 per spin FOBTs; Derek Webb is co-founder and funder of
cent had gambled until broke. but just like their old code of practice, it the Campaign for Fairer Gambling
16-22 MAY 2014 | NEW STATESMAN | 7
STORIES FROM THE FRONT LINE
The cost to Britain’s
high street
By Gareth Wallace
The rise of betting shops and payday lenders has exploited customers
and destroyed many lives. Is there a politician out there who will stand up
for residents and empower local communities?
A
ndy, from Newcastle, is a man ernment granting greater planning pow- Boles, the planning minister, defended
whose addition to gambling ma- er to local authorities follows on from Article 4 powers as sufficient on the floor
chines cost him his home, his a long-standing debate over whether a of the House of Commons.
friends and his partner. He estimates he separate use class is necessary, or whether This is not, however, the view of many
has lost about £30,000 to £35,000 on current powers already granted to local local authorities. Councillor Fiona Colley,
the machines. “I lied to my partner, my authorities are sufficient to keep betting cabinet member for regeneration and cor-
friends, and I would gamble any money I shops under control. porate strategy on Southwark Council,
had,” he recalls. The government will have to admit south London, contacted the minister to
Andy was referred by the Salvation that these latest concessions are a U-turn, explain the limitations of Article 4 powers.
Army on to a 24-session NECA course after the Department for Communities “I do welcome Article 4 as one tool which
(a charity working with people with ad- rejected the Portas Review’s 2011 rec- local authorities can use,” she wrote, “but
dictions). Having been advised to self- ommendation for a separate use class for it is also a blunt instrument. We see a sep-
exclude from betting shops, he said: “It betting shops, and instead claimed that arate use class as the solution.”
wouldn’t have helped me until I got to The debate over these FOBTs has raged
the point of wanting to recover . . . There for years, with the gambling industry
are dozens and dozens of bookies in Andy estimates he lost vigorously defending itself against allega-
Newcastle alone, and they all have four £30,000 to £35,000 on tions that betting shops with these new
machines in them.” FOBT machines have been concentrated
Betting shops and payday lenders are gambling machines in poorer high streets, and that there has
on the front line of the debate about the been an increase in the availability of ma-
state of our high streets today. Some argue existing powers granted by what is called chines. Gambling Commission figures
it is better to have rent and rate-paying an “Article 4 direction” – which allows put the number of betting shops in the
shops and lenders as tenants, rather than local authorities to restrict development country at a peak of 9,128 in 2012, up from
empty premises. For others, the social rights where that development would 8,862 in 2009. However this slight rise
costs of so-called “predatory capitalism” harm local amenity – were sufficient. in premises masks the fact there are now
outweigh these fiscal benefits. Eric Pickles, the Secretary of State for 33,209 FOBT machines, up from 24,500
Throughout my work with The Salva- Communities and Local Government, in 2006 (the year after the Gambling Act
tion Army, I have met very few who are told me in January that there was no ap- 2005 became law).
in doubt about the harm caused by fixed petite to offer greater powers to local There are around 80 betting shops in
odds betting terminals (FOBTs) and the councils, despite the fact that the flagship Newham, with 18 on just one street, in
concentration of betting shops on local Localism Act 2011 was supposed to be one of the most deprived boroughs in the
high streets, particularly to addicted and built around the principle of subsidiarity. country. Newham Council famously lost
vulnerable individuals such as Andy. Previously, in response to an opposi- a legal challenge against a Paddy Power
The recent announcements by the gov- tion day debate on 8 January 2014, Nick betting shop in June 2013.
8 | NEW STATESMAN | 16-22 MAY 2 2014
08-09 Gareth Wallace - Salvation Army.indd 8 13/05/2014 11:35:03
Councillor Rowenna Davis represents
the Lane Ward, Peckham, on Southwark
Council. She has campaigned and written
extensively on the issues facing her lo-
cal high street, particularly betting shops
and the issue of payday lenders. She vis-
ited one of the payday loan companies in
Peckham to see how they operated. Once
inside, she spoke to a cashier, who was
sitting behind a glass partition. “When I
explained that I was worried about pay-
ing the money back, given my rent prob-
lem, the woman behind the counter told
me not to worry,” she says. “I was told the
rate was 25 per cent and the money could
be with me in 15 minutes. She didn’t tell
me that if I missed the payment, the APR
was 1,410.3 per cent. When I said I might
lose my job next year, she didn’t flinch.
Instead, she smiled and said: ‘We do
loans on benefits too.’”
Davis visited four other shops. She
found that in three out of four, she wasn’t
told the interest rate until she explicitly
asked for it. Despite the fact that these
companies are supposed to complete full
credit checks on customers, one cashier Too fast, too easy: payday lenders don’t always explain their interest rates to customers
told her not to bother going home to pick
up her necessary financial statements. having someone dressed up as a furry in the number of betting shops and pay-
Steve Trevett is the centre manager animal to pose in pictures,” he tells me. day lenders on its high street. Declan
for Christians Against Poverty’s (CAP) “They even boast on advertising they sent Flynn – a therapist from the homeless
Peckham centre, which operates from the through to us about how ‘fast and easy’ and rehabilitation charity Bench Out-
local parish church. Every day the CAP the approval process is, claiming ‘we say reach – has had many people referred
debt advice service meets people whose yes when others won’t’. It’s just awful. As to him through the Salvation Army. He
lives have been devastated by the effects a community we are concerned. ” told me how his most recent client had
of debt. People often tell the same story Poverty and money problems are not become homeless through the accumula-
– that they go to payday moneylenders simply the preserve of the inner city, but tion of vast debt. “They were lent money
as they think it is the only option open can be equally prevalent in rural areas. by a payday loan company whilst being
to them. Many also speak of the negative The Salvation Army runs a dedicated threatened by bailiffs from other credi-
impact that betting machines are having tors,” he explains. “Eventually, they lost
on their finances. their home and relapsed.”
Trevett told me that one man they
People tell the same story: One needs only to hear stories like
have helped through the CAP budgeting they think payday lenders these to understand the widespread local
course ended up in prison due to his gam- concern that our high streets have become
bling addiction. “After his release, he now
are their only option a dangerous magnet for betting shops and
purposely avoids the main roads and high payday lenders. Many campaigners and
streets when walking in London,” Trevett debt advice service across the county. Fio- politicians are wide awake to this; MPs
says. “There are so many betting shops na is the manager of such a programme such as Stella Creasy in Walthamstow
and he didn’t feel he had the strength to in Dunstable, a Bedfordshire town. The have gained a national profile for seeking
resist going in.” service there has been running for about to tackle issues such as payday lending.
Other campaigners, such as Sam Tom- six years and has 75 clients on file, with With the general election a year away,
lin from north London, have witnessed 21 new clients in the last 12 months. “We concerned local residents as well as
the rise of the payday lenders on the high have discovered that our clients can bor- churches and national charities are look-
COURTESY OF THE SALVATION ARMY
street and the questionable tactics they row from several different payday lend- ing to politicians from all parties to take a
use to attract new customers and seem- ers,” she says. “While not every client has lead, both locally and nationally, to stand
ingly normalise the idea of excessive multiple loans, one person we are helping up for British high streets and protect the
lending, even among young people. has 10 payday loans.” individuals and communities who fre-
“Our local payday lender has what In February, I visited the Salvation quent them. l
seems to be a campaign to target young Army Corps in Deptford. This vibrant Gareth Wallace is public affairs adviser
people, giving out balloons and also part of east London has seen a sharp rise at the Salvation Army
16-22 MAY 2014 | NEW STATESMAN | 9
08-09 Gareth Wallace - Salvation Army.indd 9 13/05/2014 11:35:05
THE LEGAL POSITION
FOBTs –
beyond
regulation?
By Linda Hancock and Jim Orford
FOBTs may be a cash cow for the industry
but action needs to be taken to minimise
their impact on individuals
E
nter a betting shop in Britain today quickly became the linchpin of burgeon- jor cause of both problem gambling and
and you are likely to find a number of ing incomes for the betting industry. money laundering.
machines offering the chance to play The idea of “fixed-odds” betting ma- With four machines permitted per li-
various games and events, such as rou- chines was ingenious because it tapped censed betting shop, premises started
lette and horse racing, with fixed odds. into the language of betting, but with a springing up in high streets, especially in
Fixed odds betting terminals (FOBTs) product that has fixed losses the longer it disadvantaged areas. With four FOBTs,
came in “under the radar” in the early is played. No skills are required because a betting shop became the doorway to
2000s, when the bookmaking industry computer-driven randomised number se- a mini casino. After the 2008 financial
saw the profits from electronic gambling lection decides on pay-outs. And for the crisis, the bookmaking industry bought
machines in casinos. Because they are industry, there is no risk. Whether elec- up failed retail businesses in prime loca-
networked to a central computer rather tronic machines are stand-alone or net- tions, such as those close to high street
than the stand-alone machines in clubs, worked to central computers, the design bus stops and at Tube station entrances, at
pubs and casinos, they initially evaded is the same. Games are played for money rock-bottom prices.
regulation. FOBTs with casino games There are four major problems associ-
started popping up in betting shops, win- ated with this. First, local authorities have
ning the argument that they did not fit
The option to ramp up the no say in the number of betting shops that
the definition of regulated gambling ma- bet can result in losses of can or can’t open in their communities.
chines and were therefore within the law. With multiple betting shops in some high
In the meantime, they became the cash over £1,000 an hour streets, local authorities such as Hackney
cow of betting shops, which had strug- Council, which has 68 betting shops clus-
gled with an ageing race-betting clientele. with stakes and prizes that result overall tered in a few shopping strips, have been
They yielded such windfall gains that in diminishing returns. The ease of feed- wringing their hands at their lack of plan-
betting shops with FOBTs started mush- ing in unlimited cash, and the option to ning autonomy. The Gambling Act 2005
rooming across London and other British ramp up the bet, can result in losses of designated local government as the plan-
towns and cities. There are now 33,000 well over £1,000 an hour. ning authority but took away their right
FOBTs, earning on average £900 a week The combination of the product (easy to deny applications on grounds of local
per machine, or £1.5bn a year for the to play and addictive), the environment demand saturation.
bookmaking industry. (a betting shop where you are expected to Second, the ease of feeding cash into
Eventually FOBTs were designated bet, with a quiet corner requiring no in- FOBTs has made them an easy vehicle for
category B2 machines in Britain’s compli- teraction with staff) and ease of spending money launderers. According to a report
cated A to D gambling machine classifica- big amounts (note acceptors quickly suck in the Guardian, the dealers insert drug
tion, but with the capacity to offer games in hundreds of pounds with no limits) money into the FOBTs and then cash
regulated as B3 and C machines. They means that FOBTs have become a ma- out to make it seem that drug money is
10 | NEW STATESMAN | 16-22 MAY 2014
10-11 Orford & Hancock - FOBT regulation (USE).indd 10 13/05/2014 12:07:45Spinning out: with four FOBTs allowed in each betting shop, high street premises become doorways to mini-casinos
gambling winnings. This process pro- hike in FOBT profits tax from 20 per cent zone”; 3) bringing in “mandatory pre-
vides them with a receipt that they can to 25 per cent will only serve to unite commitment”, proposed in Australia to
show to police if ever they are stopped both the government and the industry deal with the harm caused by their high-
and asked why they are holding so much in the status quo rather than encouraging powered gambling machines (see page 22
cash. In addition to this, many locals have a harm-prevention reform agenda that for more on this), whereby a player would
complained of drug dealing and increased would move FOBTs from high streets be required to set a personal spending
crime in the vicinity of betting shops. and into casinos. limit at the outset of play, and would be
Finally, there is a risk of harm to those So what should be done? The Associa- excluded from playing further if that
who can least afford it. FOBTs take ad- tion of British Bookmakers’ (ABB) vol- limit were reached.
vantage of both those who do not have untary code of conduct, already put into A fourth option would be for the Gam-
the money to lose and those who are operation on 1 March without any public bling Commission to regulate in the pub-
prone to problem gambling. The pletho- consultation, is weak and likely to be in- lic interest, as in Norway, where universal
ra of betting shops in deprived areas has effective. The necessary action would be player cards across all forms of gambling
tended to normalise a risky and intense are set to a maximum daily and monthly
form of gambling. The Campaign for Fair- spending limits . These cards enable gam-
er Gambling research found that more Cards could be issued that blers to set personal limits of time and/
than £13bn was gambled on FOBTs in 55 enable gamblers to set or money, which facilitates players tak-
deprived boroughs – double the amount ing breaks from gambling and encourages
staked in the richest areas with compa- limits of times and money self-exclusion.
rable populations. Furthermore, analysis What the Norwegian regulatory ex-
of the 2010 British Gambling Prevalence far stronger. Ideally, legislation should ample is able to show us is the success
Survey shows that just under a quarter of be enacted to remove FOBTs from high of protective interventions. Reforms
all FOBT takings came from players with street betting shops altogether, confining such as these would be easy for Britain to
gambling problems – that amounts to them to casinos, which is the Gambling implement on FOBTs, since they are al-
over a third of a billion pounds annually Watch UK suggestion. ready networked to a common server.
coming from the pockets of people with Among immediate options are: 1) re- Britain is a long way from international
gambling problems. ducing the maximum playable stakes best practice, as the gambling industry
FOBTs are therefore a major challenge from £100 to £2 – the standard maximum continues to lobby successfully for light-
to the three licensing objectives of the for other kinds of gambling machines; 2) touch regulation. l
Gambling Act 2005, of keeping crime out giving local authorities the powers which Linda Hancock has a personal chair in
GETTY IMAGES
of gambling, ensuring gambling is fair they currently lack to control gambling public policy at Deakin University and
and protecting children and vulnerable on their high streets, including the option Jim Orford is an emeritus professor at
adults. The Chancellor’s latest budget to vote to make an area an “FOBT-free Birmingham University
16-22 MAY 2014 | NEW STATESMAN | 11
10-11 Orford & Hancock - FOBT regulation (USE).indd 11 13/05/2014 12:07:45VIEWS ON REGULATION
FOBTs: whose
responsibility is it
to manage them?
Leading authorities from the gaming industry and government
put forward their concerns, and say who they believe should be
in charge of a solution
VOICE FROM LIVERPOOL got paid and had to take out payday loans restaurants, bars, banks or estate agents
for their rent and bills. It contributes to can reopen as betting shops without the
Self-regulation relationship breakdown and exacerbates need for planning permission.
The government needs to go much,
child poverty in a city in which a third of
isn’t working children live in poverty.
With a very different punter profile to
much further than this. I’d like to see the
Gambling Act amended to give councils
Nick Small over-the-counter betting on horses or the the same effective power of veto over
dogs, the growth of FOBT gambling is betting shops as they have over casinos.
Liverpool residents gambled £1.2bn last also changing the nature of betting shops The onus needs to be placed back on the
year on fixed odds betting terminals and where they’re located. Increasingly, operator – as used to be the case and still is
(FOBTs) in betting shops. Across the city bookies are moving away from the back the case for casinos – to prove there is un-
punters lost a combined £40.9m in 2013 streets and on to the high street in prime met demand for gambling in the area.
on FOBTs – that’s £1,433 for every Liver- retail locations. This is crowding out But the government seems to be
pool resident. The problems with FOBTs retail investment and causes a net reduc- backtracking on maximum stakes by
are getting worse. In 2013 Liverpool resi- tion in jobs and, for central government, a considering a compromise with the book-
dents gambled £29m more on FOBTs lower tax take. ies. This is worrying, as ultimately bring-
than they did the year before. Despite the For all these reasons the light-touch ing maximum stakes right down is the
challenges the rest of the high street faces, self-regulation of FOBTs just isn’t work- only way to address the impact of FOBTs
bookies are thriving, with new betting ing. Casino-style gambling has no place in a serious way. I’m fearful that cooling-
shops opening all the time. on the high street. That’s why last year off periods or reducing maximum stakes
There are clear links between poverty Liverpool City Council asked the gov- to £50 won’t make that much difference.
and the FOBTs. The poorer an area is, ernment for new licensing and planning Councils, rather than central government,
the more is gambled on FOBTs. Of the powers to crack down on FOBTs. need to be able to set maximum stake
ten places where the highest amounts are That campaign has partly succeeded. It levels for FOBTs. In Liverpool – and no
gambled on FOBTs, six are among the looks very much as though councils will doubt many other places – we’d want to
ten most deprived local authorities. In get the powers they need to look at the bring that maximum stake down to the
Liverpool – and other places – the pres- clustering of betting shops in particular same level as other fruit machines and slot
sures FOBTs are placing on communities areas and betting shops will be placed in machines: £2 a spin. Now that would be
are massive. I’ve met scores of people who their own class for planning purposes. This localism in action. l
have gambled away everything they’ve will stop the perverse situation where Nick Small is a cabinet member for
got in a matter of minutes on the day they premises that have previously operated as employment, enterprise and skills
12 | NEW STATESMAN | 16-22 MAY 2014
12-15 Vox Pops.indd 12 13/05/2014 11:39:48Fair play: casinos, such as the Hippodrome in London, are the most tightly regulated gambling outlets in the country
THE CASINO PERSPECTIVE machines, to be operated in loosely regu- The FOBTs are so far off the scale of
lated high street shops, with little player Budd’s responsibility pyramid, with the
Stop pretending protection. And they should not be al-
lowed in the UK either.
highest rates of staking and low regula-
tion, that they are causing problems that
that there’s I’m a patient man, and have been in
enough meetings with politicians to
reflect badly on us all. I want to be part of
a consistently responsible industry and
no problem know that change comes slowly, even
when inevitable. But patience is wear-
FOBTs on the high street are wrong.
Casinos are the most tightly regulated
Simon Thomas ing thin in other quarters: among those of all gambling outlets in the country. You
whose lives have been blighted by FOBTs make a conscious decision to visit a casino,
and who want their plight recognised, and and have a planned budget – you don’t just
I am in the privileged position of being the acted upon; experts whose wise counsel is pop in on your way to the pub or a trip to
co-owner of the UK’s busiest and largest ignored; employees in the very bookmak- the shops – and you are fully aware it is an
casino, a trustee of GamCare, the char- ers who house these machines, who see environment designed for hard gambling.
ity that provides support for those with a at close quarters the profound effect they There’s effective door control and large
gambling problem, and in the past an op- have on their shops, their players and as- numbers of trained, certificated staff; our
erator of high-street gambling premises sociated issues; and local communities roulette operates at 38 games an hour and
such as arcades and bingo halls. who do not want their high streets domi- slot machines are limited to £5 a game.
This gives me a unique and informed nated by bookies. Not so the bookmaker, whose premises
view of gambling. “He would say that, wouldn’t he?” sit alongside pawn shops and newsagents
I believe that the pyramid of gambling could be a response. After all, wouldn’t on every high street in the country, pro-
envisaged by the economist Sir Alan Budd I benefit directly if the bookmakers’ lost moting on the one hand the traditional
is fundamentally correct, with the harder their lucrative gambling machines? “sport of kings”, while ignoring the im-
products at the top with greater regulation The simple answer is, irrespective of pact of these modern-day innovations
and player protection, and softer products me, FOBTs should not be on our high that feed gambling addiction, with rou-
lower down with less strict regulation. streets. They cause serious problems, lette at 180 games an hour and slot ma-
And I have strong views on fixed odds bet- and problems associated with any form chines at up to £100 a game.
ting terminals. of gambling are a problem to the whole Bookmakers have so effectively wooed,
GETTY IMAGES
There are no countries in the devel- gambling industry, be it bad press due entertained, supported and lobbied the
oped world that allow the hardest gam- to crime, money laundering or problem political establishment that they are
bling products, such as £100-a-go gaming gambling. getting away with this.
t
16-22 MAY 2014 | NEW STATESMAN | 13
12-15 Vox Pops.indd 13 13/05/2014 11:39:49VIEWS ON REGULATION
Everything from starting a business to betting on the horses involves risk – but risky contracts should be regulated fairly
t
Throw into the mix the same mantra impact on their local community. Part of crosses the road there is an estimate as to
that the pro-smoking lobby used for years that concern is due to the changing nature what the risks are.
– lack of a causal link between smoking of betting shops following the introduc- Some forms of risk-taking have a fi-
and cancer – and you discover the same tion of high stake and high prize fixed nancial element. Entrepreneurs take risks
approach is being used for research into odds betting terminals (FOBTs) which ac- when they invest in business. People who
the impact of FOBTs (funded by the in- count for an ever higher percentage of the invest on the Stock Market take risks.
dustry I may add). There is in fact plenty profits in betting shops. Those who bet on the horses take risks.
of theoretical, empirical and experiential FOBTs – on which you can stake up to It is only reasonable for the government
evidence against the machines, should £100 pounds on every spin (potentially to regulate the types of risks that are seen
you wish to look at it (39 per cent of of thousands of pounds an hour) – aren’t as acceptable and fair contracts. For exam-
calls to GamCare cite FOBTs as the core allowed in bingo halls or adult arcades ple, I have never heard of someone suf-
problem). Need I say more? Let’s stop fering from pressure from the Mob over
pretending there is no problem and rid the bingo gambling debts. It is, therefore, en-
industry of FOBTs. l
Risk-taking is part of life, tirely reasonable for the government to
Simon Thomas is chief executive of the but people are enticed encourage bingo by cutting its taxation,
Hippodrome casino in London as it is not a particularly harmful type of
into unfair contracts risk-taking.
As a first step, following pressures from
LIB DEM VIEW where machines are limited to a maxi- MPs such as Don Foster and me, the gov-
Discouraging mum stake of £2. In general, they’re not
even found in casinos.
ernment has brought in rules to treat bet-
ting shops as a special type of planning
No wonder betting shops have become permission (sui generis) and is working
harmful risks high street casinos (without the same con- to reduce the size of the bets people can
trols) and their machines called the “crack make on FOBTs.
John Hemming cocaine of gambling”. Concern about It is still the case that research is
harm to vulnerable people has led to these being produced to ensure that any final
Last autumn, community leaders in Lon- B2 machines being banned in Ireland. decision on FOBTs is evidence driven. I
don’s Chinatown raised concerns about It is obviously an issue of concern to personally hope that the maximum stake
SHUTTERSTOCK
the number of betting shops in the area. the government, if people are enticed into is reduced to £2. l
With nine already operating and more ex- unfair contracts. Risk-taking is part of John Hemming is the Liberal Democrat
pected, they have real concerns about the normal human life. Every time someone MP for Birmingham Yardley
14 | NEW STATESMAN | 16-22 MAY 2014
12-15 Vox Pops.indd 14 13/05/2014 11:39:51THE GAMBLING COMMISSION
We need an
approach tailored
to individual
gamblers
Mathew Hill
Most people who gamble do so safely
most of the time. In fact, one point that
often gets overlooked in the gambling
debate is that for many people, gambling
is fun. However, gambling also causes
harm, and sometimes serious harm. And
you don’t have to be a gambling addict to
experience that harm – it can ripple out Historically, gambling prohibition has hit leisure gamblers harder than problem gamblers
to families, friends, communities and
employers too. THE ROLE OF THE STATE the gambling industry – despite what the
Historically, gambling harm has been Association of British Bookmakers imply.
managed by prohibition or by limiting Labour failed to Personally, I find it of great concern that an
the amount of gambling. The main prob- estimated 451,000 people have a patho-
lem with such systems is that they tend to hold the industry logical addiction to gambling.
hit normal leisure gamblers much harder What is just as worrying is the poten-
than problem gamblers or those at risk. to account tial for FOBTs to cause harm on a much
And it builds in from the outset an as- wider scale. The clinical psychologist
sumption that a successful gambling in- Tom Watson Professor Jim Orford (who writes on page
dustry must be inherently bad. 10) estimates that nearly half of profits
In our view, society needs to think Politicians insist they care about problem derived from FOBTs come from those
about gambling regulation differently. gambling and the rise of fixed odds betting who are addicted and “at risk”.
We need to shift the focus away from terminals (FOBTs). Those at risk show some signs of ad-
blanket controls – such as limits on In reality, they’re adept at placing the diction, but not all. A poll of players in
machine stakes and prizes and machine onus on the player, not on the industry – a Newham found that nearly nine in ten
numbers – and tailor it more closely to multimillion pound industry that lines its (87 per cent) described FOBTs as “addic-
individual gamblers. pockets with the lost wages of those who tive”; more than three quarters (76 per
As many in the industry are beginning can least afford to lose. cent) revealed they’d gambled for longer
to recognise, this is an idea whose time The state’s role is to enable the custom- than they’d planned; and nearly two-
has come. We live in a society where er to gamble “responsibly” – whatever thirds (62 per cent) had gambled until all
loyalty cards are now a fact of life, where that means – and help the customer “stay of their money had gone. When it comes
people are becoming comfortable with in control”. to FOBTs, the question too often asked is
account-based relationships with suppli- But it should be down to government “How can we ensure players are respon-
ers of goods and services, where smart- to ensure that any product it legitimises sible?” But surely the question should be:
phones and other technologies are bring- comes with a “safety” guarantee from the “Are the gambling industry responsible in
ing new payment methods. This creates manufacturer. The same goes for FOBTs. offering a machine that can take bets of up
the potential to understand individual What Labour failed to do, though, was to £100 every 20 seconds?”
gamblers much better, to spot behaviour to hold the gaming industry properly to There’s no doubt that FOBTs are
that might indicate harm and to inter- account within the Gambling Act 2005 the most addictive form of gambling
vene much earlier and more effectively. and ensure these pernicious machines are available. So the government must ensure
But none of this will work without the managed responsibly. that the player is protected. That means
industry itself coming to terms with its Focusing on problem gambling and bringing the maximum stake down to
responsibility to identify and manage the gambling addiction misses the point. a more responsible £2 per spin. No one
harm that its products can cause. The fu- Surveys show “problem gambling” to be wants a nanny state. But this is a public
ture sustainability of the business model prevalent among less than 1 per cent of the health threat and the industry must be
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may well depend on its ability to do so. l adult population. held to account. l
Matthew Hill is director, regulatory risk Yet these findings should not be used Tom Watson is the Labour MP for West
and analysis, at the Gambling Commission as a barometer for the responsibility of Bromwich East
16-22 MAY 2014 | NEW STATESMAN | 15
12-15 Vox Pops.indd 15 13/05/2014 11:39:52THE PSYCHIATRIST’S VIEW
The time to
act is now
By Ian Allsop
FOBT regulation is only part of the solution.
Changing our approach to treating gambling
addiction is just as imperative
F
ixed odds betting terminals (FOBTs) problem gamblers because of the financial An assessment by the Department for
have been much in the news recent- hardships and anxieties endured.” Culture, Media and Sport (DCMS) says
ly. At the end of April the govern- Gambling is now highly visible in the that “account-based play allows players
ment announced a cut in the maximum UK and as a result of a relatively recent access to up-to-date information which
amount of cash that can be inserted move towards a more liberal position on can reduce biased or irrational gambling
into them. However, campaigners and it, several new trends have emerged, of . . . and help people maintain control”.
researchers say this will do little to which FOBTs are part. The overall num- But are there other measures that can
alleviate the huge social cost of the ma- ber of adults gambling is increasing, while be implemented to reduce the problems
chines, which are a “blight on our soci- British Gambling Prevalence Survey data caused by FOBTs by tackling addiction as
ety” and have been dubbed the “crack co- cited in the RCP’s paper indicates that at its roots? The RCP’s Faculty of Addic-
caine” of gambling. the prevalence of problem gambling ap- tion Psychiatry has called for the govern-
Left untreated, adults with a gambling pears to have increased from about 0.6 ment to give greater support for services
disorder can experience many negative per cent in 2007 to 0.9 per cent in 2010, or that treat adults with gambling problems.
consequences including higher rates of Bowden-Jones says that “pathologi-
physical illness, mental health condi- cal gambling is a behavioural addiction
tions, financial difficulties and involve-
If left untreated it with similar neurobiological presentation
ment in criminal activity. can lead people to to several other addictions and, as such,
Furthermore, an estimated eight to ten needs to be recognised by society as a
other people in the gambler’s social net- lose their homes disease. There needs to be adequate NHS
work will be seriously affected. provision of services as well as a shift in
Dr Henrietta Bowden-Jones, the Royal the “equivalent to around 450,000 adults the current social perception of problem
College of Psychiatrists’ spokesperson on experiencing a situation where gambling gambling as an issue. Too many people are
behavioural addictions and co-author of a disrupts or damages personal, family or still mistakenly seeing it as a weakness of
RCP discussion paper entitled Gambling: recreational pursuits”. Problem gamblers character.”’
the Hidden Addiction, says that pathologi- may be contributing almost a quarter of The RCP has urged the government to
cal gambling, such as that associated with the money spent on FOBTs. recognise gambling disorder as a public
FOBTs, is a serious illness. Currently, gamblers can bet up to £300 health responsibility and believes gam-
“If left untreated it can lead people to in a minute on FOBTs. Under the new blers deserve the same access to treatment
lose their homes as well as causing them government rules, users will need to in- services as those with alcohol and drug
to be depressed and at times suicidal,” she form staff if they want to bet more than addictions.
says. “It can destroy families, leading to £50 cash at a time. Gamblers would also However, current services, which
separation and divorce, and have a long- have the alternative of getting an online are funded almost exclusively by the
lasting negative impact on children of account so that spending can be tracked. gambling industry, are underdeveloped,
16 | NEW STATESMAN | 16-22 MAY 2014
16-17 Henrietta Bowden Jones (2).indd 10 13/05/2014 11:41:12You can also read
