The ‘crack cocaine of gambling’ – that is what fixed odds betting terminals (FOBTs) have commonly been dubbed. Much like crack cocaine, FOBTs are devastatingly addictive, impair the life of their users, and disproportionately affect low-income communities.
A staple in high street betting shops, FOBTs are gambling machines with quick high stakes, the possibility of high returns, and of course, big losses. Punters can place bets of up to £100 every 20 seconds, which can now also be done using credit cards, encouraging uninterrupted, unrestrained gambling. According to Matt Zarb-Cousin, spokesman for the Campaign for Fairer Gambling, approximately 52% of betting shop profits in the UK come from FOBTs. 2017 saw FOBTs take £1.8 billion out of local UK communities. Considering that the total gross yield from the British gambling industry in 2016-2017 was £13.8 billion, as low maintenance machines, FOBTs are a real cash cow.
Introduced into betting shops in 2002, FOBTs were further able to spread like wildfire across the UK’s gambling shops after New Labour’s 2005 gambling reform, the Gambling Act. As Heather Wardle, leading expert in British gambling research from the London School of Hygiene and Tropical Medicine, explained to Raddington Report: “The 2005 Gambling Act changed the way gambling premises licenses were granted, but crucially, took away the ‘demand test’ and replaced this with an ‘aim to permit’. This means that Local Authorities have to ‘aim to permit’ gambling venues so long as they are ‘reasonably consistent’ with the licensing objectives”. But defining ‘reasonably consistent’ is a challenge for local authorities and, as a result, they struggle to apply these licensing objectives. As Wardle added, “the Gambling Act 2005 actually tried to empower local authorities to have more control, but in my opinion, because of the inherent ambiguities contained within the terms of the Act itself had an unintended consequence of disempowering them”. The consequence: the unopposed proliferation of betting shops and FOBTs.
Martin Paterson/Murdo MacLeod
After a twelve-week consultation period ending in late January 2018, rumours suggested that the UK government is looking to reduce the maximum stake from £100 pounds to £2. The news had bookies scrambling, with shares in William Hill and Ladbrokes Coral dropping by 15% and 12% respectively.
That said, the road to tighter regulation (although not yet reached) has been far from straightforward. In May 2016, growing concerns with FOBTs prompted the creation of the FOBT Parliamentary Group (APPG). But shortly after, the lack of government response led the APPG to launch its first parliamentary inquiry. Looking for an in-depth assessment FOBTs’ impacts on society and communities, the inquiry gathered evidence from those most affected. It shed light on the dark sides of the gambling industry and its effects on individuals, families and communities.
Despite the inquiry’s final report, that stated “the Government has a prima facie case for significantly reducing the £100, which can be wagered on FOBT” and that the “the Group sees a strong case for the stake being set at £2” – no immediate action was taken. A mere consultation was opened instead – perhaps signalling the gambling industry’s lobbying muscle within the House of Commons, with betting companies often treating MPs to declarable gifts and hospitality. A document leaked prior to the Commons ‘Gaming Machines and Social Responsibility’ debate exposed a series of questions passed onto MPs suggesting arguments to be made in favour of the gambling industry. Conservative MPs Phillip Davies and Laurence Robertson, both having individually received over £3,000 in gifts from bookmakers, are considered fervent supporters of the industry.
As Labour MP David Lammy explained, “everyone who has been involved in this campaign is well aware that the gambling lobby is a very powerful and well-resourced organisation with friends in parliament who are keen to protect their interests and profits”. Effectively, it appears that business interests within Parliament remain a key obstacle in the government’s action on FOBTS.
Responding to the possible £2 stake, the Association of British Bookmakers said that the reduction would effectively represent “a ban on FOBTs” putting “21,000 people out of jobs”. Yet, the fact that not a single bookmaker agreed to provide evidence during the first parliamentary inquiry suggests that betting industry heads may lack confidence in their own arguments.
‘A class issue’
According to research by Geofutures, the clustering of bookies in poorer urban areas is one of the main factors leading to the disproportionate impact of FOBTs on lower-income communities.
The research showed that areas with highest rates of deprivation, unemployment and ethnic diversity had more than two times as many betting shops than areas of lowest deprivation. The research also revealed that “higher-density concentrations are associated with stronger patterns in gambling”, indicating the importance of geographical location. Earlier research by The Campaign for Fairer Gambling found that Paddy Power had a tendency of opening shops in areas with greater ethnic diversity, and that there was a ‘direct correlation between these areas and higher revenues from FOBTs’.
The chair of ABB, Niel Goulden, stated that bookmakers categorically do not target deprived areas, claiming there is absolutely no connection between areas of multiple deprivation and levels of bookies.
But as Martin Paterson, ex-FOBT addict and now anti-FOBT campaigner, explained to Raddington Report: “Where I am in Coatbridge, a population of 40,000, there are nineteen bookies spread in every part of our community, two amusement arcades, two bingo halls, and two pawn shops. Compare this to the leafy suburb of Milngavie Glasgow, which approximately has the same population, and there is only one betting shop.’ Martin went on to explain that every working-class community around his area of Lanarkshire is exactly the same. “It’s a class issue”, afflicting communities living in lower income areas – and it is hard to explain this phenomenon without seeing the deliberate actions of bookmakers as the determining factor.
This same sentiment is reiterated by the former Chief Economist of the Institute of Public Policy Research, Howard Reed, who recently stated that “the fact that payday loan outlets are much more likely to be in evidence in areas where there are large numbers of betting shops suggests that bookies are preying on the poor”.
When asked about this issue, British gambling researcher Wardle explained that “there are many reasons that this spatial pattern exists. Betting is typically a more working-class pursuit so it stands to reason that you find more bookies in these areas. I know the bookies would say they are also looking at footfall and reasonable rents too, which will contribute to this.” Wardle went on to conclude that “whatever the reasoning, this spatial pattern exists and it potentially contributes to further inequalities as we know those from deprived areas are actually less likely to gamble overall but are more likely to experience problems”.
Placing betting shops in areas where it is known that there are high gambling rates is smart business for betting companies: gamblers are the bookies’ lifeblood. But this is all the more reason for local authorities to be empowered to regulate betting shops per area, dependent on the prevalence of gambling-related issues. The Local Government Association (LGA) said that councils should have the possibility to reject applications for new betting shops, particularly where large clusters already subside.
There are over 230,000 FOBT users in the United Kingdom and 43% of these users are either at-risk or problem gamblers. Evidence shows that economically deprived, ethnically diverse communities are deliberately targeted, making for loyal customers. Though the problem is clear: for now, what stands in the way of decent solutions – such as the lower the maximum stake of FOBTs to £2 – is the powerful gambling lobby and its champions in parliament.