The betting industry is bracing itself for the UK government’s impending ruling on the limit at which fixed-odds betting terminals (FOBTs) can offer stakes.
The machines are mainly used for betting on electronic casino games such as the popular roulette and blackjack.
Previously, the government announced in October that they planned to reduce the maximum stake from £100 to between £50 and £2. However, a new limit is yet to be decided as comments from the industry and campaigners only closed in January.
Recent figures show increasing support for the maximum stake cut, despite industry furore.
Questions over large-scale losses
According to a new survey by Landman Economics, the government could already have its projections wrong. Currently, a large-scale loss is classed as over £500, but new data questions that.
Using figures supplied by the Gambling Commission on behalf of high street bookmakers, the survey suggested a maximum stake of just £50 would lose the player £100 in 93% of cases. Instead, it advocates a much lower limit – a £2 maximum stake, which would all but eliminate the losses of more than £100 per session, according to the Times.
Referred to by the paper as “the crack cocaine of gambling” fixed-odds betting terminals have provided emotive debates in the House of Commons.
Juxtaposed with loss and addiction are industry figures and large users of FOBTs such as racing, who fear the reduction is a death knell. As share prices tumbled last year due to various rumors of a cut to £2, the Association of British Bookmakers (ABB) has warned that any predictions of a dramatically lower FOBT stakes could harm its members.
It suggests 21,000 jobs could be at risk through the closure of 4,500 shops – this could mean a loss to the Treasury of £1.1bn by 2020. In response to the calls for a £2 stake, the ABB then pointed to evidence given to ministers by the Responsible Gambling Strategy Board in January 2017.
In that document, the RGSB, which advises the Gambling Commission on responsible gambling strategy, said it was “far from certain” a reduction in stakes would result in a reduction in harm.
“Large-scale” losses queried
In this latest Landman study, the Times found that almost 33% of sessions with a maximum stake of £20 delivered losses more than £100. It said that when the maximum stake increases to £50, then 93% of sessions ended with a loss of more than £100. In 78% of cases, the losses were higher than £500.
The RGSB said: “It’s not for us to consider the economic damage a reduction to £2 might do to the bookmaking and related industries. But we would find it difficult to regard so strong an action as being proportionate on the basis of the existing evidence.”
Campaigners said the study illustrated that as players’ stake increased, their propensity for large-scale losses increased rapidly.
Matt Zarb-Cousin, of the Campaign for Fairer Gambling, told the Times “losing £100 in a single session on an FOBT is unaffordable for the vast majority of people, so it is puzzling why the government arbitrarily defined £500 as a large-scale loss”.
He added: “The Landman Economics study determines £2 to be the only safe maximum stake for FOBTs, yet despite having the necessary data available, neither the government, the Gambling Commission, nor the body that advises it sought to produce anything similar to this analysis.”
Waiting game
Other key findings from the report also show that the average loss of a fixed-odds betting terminals user was £192 a month, compared with an average of £22 for users of other machines like fruit machines found in pubs that have a £2 limit.
The government has yet to decide what measures are to be implemented, but the final figure will be under £50. Announcing a 12-week consultation last autumn, they said that stake reduction was “in order to reduce the potential for large session losses and therefore [reduce] potentially harmful impacts on players and their wider communities.” This consultation has now ended.
At the time, the Department for Digital, Culture, Media and Sport (DCMS) set the bar for a “large-scale loss” at £500, but it has since attracted criticism that the figure was too high.
Speaking in the House of Commons in October, Culture secretary Matt Hancock said the government had to ensure it came “to the right answer” on fixed-odds betting terminals.
