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Wheel of Misfortune: The case for lowering the stakes on Fixed Odds Betting Terminals

Publication Details

Launched on 16th October, ResPublica’s new report with Campaign for Fairer Gambling: Wheel of Misfortune: The case for lowering the stakes on Fixed Odds Betting Terminals. 

This is a key moment in the debate over the regulation of Fixed Odds Betting Terminals (FOBTs) in Britain today. We remain the only country in the developed world that allows up to £100 to be staked every 20 seconds on casino-style gaming machines on our high streets.

The Department for Digital, Culture, Media and Sport (DCMS) is currently looking at the regulation of FOBTs as part of a wider review into gaming machines,
with the findings of this review due to be announced in the Autumn.

The review is taking place in the context of growing cross-party support for action to address the harm caused by FOBTs since their introduction to high streets in 2001, and is an opportunity to examine ways in which the Government can deliver better regulation of these machines for the benefit of people, their communities and the economy. Questions have been raised over a regulatory approach that has failed on its own terms by allowing and encouraging the proliferation of high stakes casino-style gaming machines on high streets, and that exposes to harm a disproportionate number of people who live in deprived areas.

In anticipation of the Government’s review into gambling, we believe that the debate must continue to focus on the impact that these machines have had on three aspects of life in Britain.

First, the impact on people. The number of people using casino-style, high stakes
gambling machines on Britain’s high streets is estimated to have reached 1.5 million. Evidence has shown that a disproportionate number of those people live in areas of poverty, high unemployment and deprivation. The growing prevalence of FOBTs on Britain’s high streets has contributed to increases in problem gambling over recent years, with a range of harmful impacts – from worklessness and indebtedness to domestic violence and family breakdown – which undermine the Government’s welcome focus on healing Britain’s social fabric. The latest available research has found that the number of problem gamblers has surged – from 280,000 in 2012 to 430,000 in 2015.

Second, the impact on economic prosperity. There has been a profoundly negative impact on the productive economy as FOBTs have grown. Typically, the defence of high stakes FOBTs is that they bring economic benefits. Our paper assesses the evidence and finds that this is manifestly not true because FOBTs are diverting expenditure from more productive parts of the economy. The rise of FOBTs has consequently damaged employment – 23,400 potential jobs lost last year alone – and in doing so has increased the burden on taxpayers. This hidden cost to the economy is substantial, and we argue that it should therefore be considered a priority for economic as well as social policy reform.

Third, the impact on place. Britain remains the only developed country in the world to
have high street betting shops that allow people to bet up to £100 every 20 seconds.6
Our high streets should be at the heart of our economic and social fabric, providing
both sources of local employment and enterprise but also places of community
life. But poor regulation has catalysed the disproportionate growth and “clustering” of
betting shops, and further driven the decline of thoroughfares that once flourished as centres of growth and community. We argue that regulation needs to be improved to
better serve communities, local business and our high streets.

The case for better regulation of FOBTs on Britain’s high streets is a call for greater consensus and consistency. It is clear that there is an opportunity for cross-party consensus: since the launch of the DCMS review, the Labour party has committed to reducing the maximum stake to £2, and to increasing the delay between spins in games. Likewise, the Liberal Democrats have committed to a reduction of the maximum stake to £2.8

Earlier this year, the cross-party APPG on Fixed Odds Betting Terminals concluded that there was a strong case for a reduction in the maximum stake to £2.9. This reduction would redress an imbalance created by the 2005 Gambling Act, whereby FOBTs were classified as “B2” machines and allowed a maximum stake of £100 on a single bet, as opposed to £2 for other B machines.

We believe that this year’s review of the gambling industry represents an opportunity for Government to respond to the prevailing calls for consensus and consistency, by introducing renewed regulation of Fixed Odds Betting Terminals.

In this paper, we assess the evidence and the options open to policy-makers, and conclude that by implementing a clear policy to reduce the maximum stake for FOBTs to £2, the Government can put people, prosperity and places at the heart of their vision for the country.

Chris Philp, Conservative Member of Parliament for Croydon South and PPS to the Treasury, said:

“As the Government prepares a review of gambling, I welcome this report which calls for greater consistency and consensus in the regulation of Fixed Odds Betting Terminals. Across all political parties, there is a strong feeling that these gambling machines are having a detrimental effect on our high streets. ResPublica’s report provides vital evidence to show how this damages the lives of people, our economic prosperity and the fabric of our communities. Crucially, it demonstrates how this damage could be mitigated by smarter regulation of gambling machines, by reducing their maximum stake to £2 per spin.

This is not about more regulation, but rather better regulation of machines that have
proliferated because of loop-holes in the 2005 Gambling Act. It would also bring the United Kingdom into line with gambling practice in the rest of the developed world.

I commend ResPublica’s report ahead of the Government review, and believe that implementation of their key recommendation would help provide a gambling climate in which prosperity can return to the lives of people and their communities.”

Phillip Blond, Director, ResPublica said:

“High streets that once flourished as centres of growth and community are now dominated by these shops. It has become a negative multiplier effect on our high streets: the spread of FOBTs creates higher levels of problem gambling, which creates a demand for more supply, which then, of course, encourages more machines. In some communities, the situation has got out of hand. The sheer number of these shops acts as a kind of sink hole on their high street, sucking in the vitality of everything else around them.

This is why the regulation of FOBTs should be seen as a truly Conservative cause.
If you care about thriving high streets, economic prosperity, or the social fabric of families and local communities, then it is clear that the spread of gambling machines in understaffed shops in some of our most deprived neighbourhoods has had a harmful effect on our country.

For families and communities, research has shown that the use of FOBTs contributes to increases in problem gambling, with a range of harmful impacts – from worklessness and indebtedness to mental health problems and domestic breakdown. Many of these problem gamblers come from some of our most vulnerable ethnic minorities. This should be at the top of the to-do list for a Prime Minister has placed social reform at the heart of her agenda, pledged to help people “just about managing”, and who has spoken eloquently about the importance of mental health.”

 

  • Phillip Blond

    Director

    Phillip is an internationally recognised political thinker and social and economic commentator. He bridges the gap between politics and practice, offering strategic consultation and policy formation to governments, businesses and organisations across the world. He founded ResPublica in 2009 and...

    Phillip Blond
  • Dr James Noyes

    Head of Policy and Strategy

    Dr. James Noyes is Head of Policy and Strategy at ResPublica. Prior to joining our team, he was a lecturer at the Paris Institute of Political Studies (Sciences Po). James has a PhD from the University of Cambridge, and is...

    Dr James Noyes
  • Edward Douglas

    Policy and Projects Manager

    Edward manages ResPublica’s housing programme. He has written extensively on housing, planning and regeneration. He also works on employment, skills, enterprise and finance policy. He is the author of Great Estates on regeneration, and co-author of Going to Scale on...

    Edward Douglas