A new spectre is stalking Britain’s high streets: the fixed-odds betting terminal (FOBT). Labour politicians and local councils are increasingly concerned about the growing prevalence of these high-stake, hi-tech gambling machines, which can be found in almost every betting shop in the country. The terminals are widely regarded as a blight on working-class communities, with Liverpool Council earlier this year voting to ban what its critics call ‘the crack cocaine of gambling’ and Labour narrowly losing a vote in parliament last week to cut the machines’ maximum stake from £100 to £2.
The figures around FOBTs - casino-style machines where punters can theoretically stake up to £300 a minute on games such as roulette and computer-generated horse-racing - certainly seem eye-watering. Since the introduction of FOBTs in 2001, their usage has soared annually, with Britons now apparently spending £46 billion a year on them. Their popularity is the main driving force behind the much-noted recession-bucking ubiquity of betting shops on the high street, with Britain’s leading bookmakers (such as William Hill, Ladbrokes, BetFred & GalaCoral) now deriving almost 50 per cent of their profits from them. Stories abound of addicted punters blowing astronomical sums on FOBTs – accompanied by references to the UK’s soaring rates of gambling addiction - and the use of such terminals has been associated with money-laundering and encouraging underage gambling, among other problems.
Yet, inevitably, on closer inspection the figures paint a different picture. That the total profit from these machines is less than £1.5 billion (not inconsiderable, of course) should indicate that the bookies are not the only winners here: the machines have a pay-out rate of 97 per cent (considerably better odds than the low-stake fruit machines Labour seems to favour). In an Institute of Economic Affairs report published earlier this year, Christopher Snowdon observed that while such machines are therefore considerably more attractive to gamblers, the growth in popularity of FOBTs is due to a decline in more traditional (and riskier) over-the-counter forms of gambling, rather than any mysteriously addictive power in the machines themselves. The betting industry’s total yield (stakes minus winnings) has actually fallen in recent years.
Yet, nonetheless, the seemingly widespread view that these machines are the ‘crack cocaine of gambling’ is a powerful one. Critics charge that they are specially designed to appeal to ‘problem gamblers’ with their promise of easy returns for big bets, and encourage particularly irresponsible behaviour through the mechanistic ease of being able to feed through huge sums of money quickly without having to face the social stigma of handing the money over to another person (an example of ‘smoothing the ride’). Indeed, one of the most prominent campaigners against FOBTs, Derek Webb from Fairer Gambling, made a fortune through designing similar casino games.
The problem, however, is that gambling addiction as a concept – and what constitutes a ‘problem gambler’ – is hotly disputed even among addiction specialists. The British Gambling Prevalence Survey in 2010 gives a high-end estimate that gambling addiction could extend to 0.9 per cent of the population. Admittedly, that would represent an enormous leap from 0.4 per cent in 2007, but it is an estimate that the authors themselves urged ‘caution’ over given the enormous number of variables. It also found that 8.8 per cent of players of FOBTs could be classed as ‘problem gamblers’.