What are Fixed Odds Betting Terminals and why are they controversial?

  • How exactly do these electronic betting machines work?
  • Exploring the myths and misconceptions surrounding FOBTs

Fixed Odds Betting Terminals (FOBTs) are a familiar sight in betting shops up and down the UK.

Fixed-Odds-Betting-Terminal-(FOBT)
There’s no secret. Fixed odds betting terminals have fixed odds.

While they provide an enjoyable slice of harmless fun for the majority of punters, FOBTs also have their vociferous detractors, at one point being dubbed the ‘crack cocaine’ of gambling.

This bogeyman status has given rise to a number of myths and misconceptions about FOBTs, but here are some facts about these electronic descendants of the humble slot machine.

The RNG

At the heart of every FOBT machine is a random number generator or RNG.

The random number generator in an FOBT is a software program designed to create a number that cannot be predicted with any kind of reliability. Therefore the success rate of guessing this random number is no better or worse than what you would expect by sheer chance.

It doesn’t matter whether you are playing roulette, video poker or any of a 100 different slots games on an FOBT: essentially you are still playing against a RNG.

They’re fixed

All betting shops in the UK trade according to the rules of the UK Gambling Commission, one of the strictest gambling regulatory bodies in the world.

This dictates that all machines in the UK must operate under a code of fair practice, starting with the machines themselves.

So in what way exactly are they be fixed?

FOBTs report is slammed by government watchdog
Fixed odds betting terminals are just that – fixed – so don’t expect to win in the long term.

Well anyone familiar with the terms house edge or return to player (RTP) will know that these terms define exactly how profitable a game is for the house vs how profitable the punter can expect to be. These figures are in essence the ‘fixed odds’, or your chance of winning in any given game.

These odds don’t change with the day of the week or the mood you happen to be in. They’re always the same, and we know they always favour the house.

As this is true for each individual machine, there is (contrary to popular misconception) no need to network the machines to decide when a payout occurs or how big that payout should be. Each machine works completely independently of the others because each FOBT is designed to be profitable.

Fixed odds betting terminals should be played with an expectation of losing in the long term, on average.

Shop staff

Despite popular myths, shop staff in high street bookmakers have no control over FOBTs other than switching them on and off, blocking terminals and loading cash.

The inner workings of the machines are maintained by outside contractors and the person behind the counter certainly never has a button to decide who wins or loses. They will not ‘pull the plug’ if a player is making a lot.

Staff in bookmakers do have a duty of care to customers and are required by the Gambling Commission to monitor player behaviour and playing habits. There is some argument as to how effectively they do that.

Most punters in casinos are very aware they are being watching while they punt but the same is true in bookmakers. You may find that the staff in your favourite bookie are paying a little more attention to your playing than you realise.

The future

The department of government minister Tracey Crouch, the Department for Digital, Culture, Media and Sport, is reviewing fixed odds betting terminals' stake sizes, with an outcome that could have huge ramifications for the industry.
The department of government minister Tracey Crouch, the Department for Digital, Culture, Media and Sport, has reviewed fixed odds betting terminals’ stake sizes, with an outcome the subject of an ongoing 12 week consultation.

The UK Government has just completed a review into FOBTs and it is expected that the maximum bet on all machines will shortly be cut from £100 to a significantly lower number.

Some reports state £50 or £20 would be the new upper limit but there is word that the eventual reduction will be as low as just £2.

FOBTs are associated with high levels of problem gambling in the UK, and while they do have relatively high rates, some other forms of gambling like financial spread betting show worse levels.

However, the fact that players can wager £100 every 20 seconds has led many in the media and in politics to single them out as a problem that needs curbing.

The Association of British Bookmakers, representing the bookmakers, has warned that stake cuts could result in more than 20,000 job losses and up to half of all betting shops to close.

Most betting shops continue to voice strong opposition any new legislation although Paddy Power (which own far less betting shops than William Hill and Ladbrokes Coral) has openly supported the move which could see more people migrate online in search of higher stakes games.

The industry will discover the fate of FOBT stake sizes in January.

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