Bookies must accept hit on FOBTs if evidence shows stake reduction will improve problem gambling rates, says ABB

  • Association of British Bookmakers says serious financial losses for bookies would not justify inaction on FOBT stake sizes
  • But ABB CEO Malcolm George says evidence must be compelling that measures will work, or risk pushing at-risk players to other forms of gambling
  • Government review set to land in late October

The trade body representing high street bookmakers in the UK has said that limiting stake sizes on fixed odds betting terminals (FOBTs) can only be justified if clear evidence exists that problem gambling rates would be significantly reduced.

Malcolm George, CEO of the Association of British Bookmakers.
Malcolm George, CEO of the Association of British Bookmakers.

But amid huge pressure on FOBTs both politically and in the media, the Association of British Bookmakers (ABB) CEO Malcolm George made it clear in an interview with Casinopedia that if reducing stake sizes resulted in a significant reduction in gambling harm, then the economic cost to bookies is a ‘price that should be paid’.

FOBTs are found in most high street bookmakers, and have been singled out for criticism because of the ability for players to stake and lose £300 ($405) every minute, coupled with their abundant presence on the British high street.

Bookmakers are bracing themselves over a triennial review of gambling, which will include a focus on FOBT stake sizes, by the Government’s Department for Digital, Culture, Media and Sport (DCMS).

The odds are that when the review is published, in late October at the earliest, that some form of limitation on stake size will be enforced, with some calls for a dramatic reduction from £100 ($135) per stake to £2 ($2.70).

FOBTs accounted for about £1.7 billion of gambling spend between October 2014 and September 2015, according to the regulator the UK Gambling Commission, and amounted to 56% of betting shops’ profits.

They offer casino games like slots and roulette, via a touchscreen interface, and allow players to make a wager or spin every 20 seconds.

‘Financial losses would not justify inaction’

The ABB has said the potential cost to the industry of reducing stake sizes on FOBTs to £2 would be huge. For a start, half of the 9,000-strong estate of high street betting shops would face closure – 2% of Britain’s total retail units.

With that would come the loss of 21,000 jobs – many of which, Mr George explains, are woman who take advantage of flexible working hours.

There would also be a massive loss to the UK Treasury in the form of tax receipts – about £1 billion ($1.35 billion) by 2020, at the ABB’s estimate.

But despite that Mr George said the industry is prepared endure the upheaval if the government recommended a radical cut in stake size coupled with robust evidence that it would meaningfully reduce problem gambling rates.

He said: “We’ve engaged with the government throughout this process going right back to the original call for evidence last year. We’ve continued to engage and set out a very evidence-based approach on problem gambling.

“If they (the Government review) came to a view that was evidence-based and would have an impact on player safety then I think we would take that evidence seriously.

“If there’s the benefit to problem gambling then this is the price that should and has to be paid. Economic arguments against stake reduction in of themselves do not justify inaction.”

Robust evidence and an industry-wide view key to getting problem gambling down

The position of the ABB is that, due to the problem gambling safeguards in place in betting shops, including mandatory warnings on the terminals themselves, and the training of the staff, that FOBTs in their current form are wholly appropriate in the betting shop environment.

But Mr George said that the industry continues to innovate on problem gambling, under a regulatory framework, and that best practice is improving all the time.

“The challenge for the industry is, how do we get those problem gambling numbers down?,” he said.

The challenge for the government is striking the right balance between maintaining a healthy industry, and making sure any measures it does introduce have a material impact on problem gambling.

Mr George said that simply reducing stake size of FOBTs would not necessarily improve the figures.

He pointed to recent statistics put out by the Gambling Commission, that the highest degree of prevalence of problem gambling was among those who participated in multiple gambling activities.

He said that there is little point in simply shackling fixed odds betting terminals only to push people to the many other forms of gambling that exist.

Mr George said any government review would need to look at the industry in the round if it wanted to make meaningful contributions to reducing problem gambling rates.

It is feared that limitations of FOBTs’ stake sizing could create a ‘worst of both worlds’ scenario which both costs jobs and tax revenue and has no meaningful impact on safety for punters.

Recognition industry needs to do more

If there is a PR war on fixed odds betting terminals, it is not one that the bookies are winning. Campaigners against the industry status quo are gaining traction both in the media and among the public, and politicians appear to be listening.

FOBTs report is slammed by government watchdog
Fixed odds betting terminals are under fire from politicians,
the media, and public opinion.

Mr George conceded that the industry needs to work better together to showcase the work it is doing on responsible gambling. He said good best practice, sometimes pioneered by bookmakers, is not always widely shared, and that some segments of the industry have been sniping at others, which has also had the effect of doing down the whole sector.

He said: “We are all providing a gambling product. I’m not convinced that the industry targeted by the campaign is just bookmakers. I think gambling as a whole has been tarnished by the methods that have been used.”

Quite what the industry can do as a whole, and how it might better come together is not quite clear, but news this week that betting companies are set to contribute to an advertising budget of £8 million for a series of responsible gambling ads might be one such example.

The review

The government’s review will also look into other classifications of gambling machines, including B1s and B3s, and will look at what the maximum stakes and prizes should be.

It will also look at the appropriate numbers and locations for the machines and the measures in place to reduce problem gambling.

There will also be a look at gambling advertising, including whether children are too exposed.

Minister for the DCMS, Tracey Crouch MP, said that fixed odds betting terminals were under particular scrutiny in the review.

There has been huge clamour for action on the machines, dubbed in the media as the ‘crack cocaine of gambling’. The Conservatives’ coalition partners in government, the Democratic Unionist Party, have also urged action on the machines.

The findings were expected to be published this summer, but the earliest date is now believed to be late October.

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