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FOBT profits increasing means harm minimisation measures are failing

FOBT profits increasing means harm minimisation measures are failing

Derek Webb, Founder of the Campaign for Fairer Gambling | Campaign for Fairer Gambling

5 min read Partner content

The Campaign for Fairer Gambling argues that official figures released recently indicate measures to reduce irresponsible gambling on FOBTs are not working.

This month saw financial updates published for the three largest high street betting chains, who control two thirds of the UK’s betting shops and Fixed Odds Betting Terminals (FOBTs).

William Hill in their half year update described government measures to help players stay in control as “disruption to gaming revenues”. 

For William Hill, that “disruption”, after adjusting for shop closures was still an increase in profits to £949 per week from each of its circa 9,400 FOBTs. For Ladbrokes, the “disruption” was even better. Last years’ profit per FOBT each week was £913, but in the first half of this year, despite the government measures to help “players stay in control” and the bookmakers’ call for players to “gamble responsibly”, their 8,700 FOBTs yielded £1,022 every week. That’s 11.9% more “disruption”. Not forgetting Coral, soon to be merged with Ladbrokes, whose third quarter update shows its FOBTs each bringing in £963 per week - again up on last year.

What is clear after 12 months of responsible gambling messaging, interventions and interactions for FOBT users, plus the more recent roll out of government measures to “help players stay in control”, is that none are reducing FOBT revenue in line with the industry’s claims to be tackling problem gambling. If players are “staying in control”, taking note of infrequent messages telling them they have just lost £250, acknowledging the “are you ok Sir?” from the lone member of staff behind the counter and have signed up for a loyalty card to seamlessly access stakes of £100 per spin, then why are the bookmakers still grinning like a Cheshire cat at all this “disruption”?

The first evaluation of the Association of British Bookmakers (ABB) Code for responsible gambling - specifically the measures rolled out to the UK’s 34,800 FOBTs - has concluded " the measures are failing”. In a report finalised by NatCen in May this year, but only published by the Responsible Gambling Trust this month, the report’s authors concluded there was “no statistical evidence of any impact of the machine changes”. By December 2014 just 1,400 out of 3.9 million FOBT sessions used the voluntary measures.

Interestingly the Campaign wrote about the ABB Code in 2013; “A similar stake and time restriction measure was introduced following the 2004 Code of Practice, which was not mandatory but initiated by the player out of choice, who had to select the option if desired. Monitoring of this showed zero take up by players during the trial period and was consequently removed. The industry knows this is a measure that will have very little impact on problem gamblers and consequently revenue.”

But, thanks to the government initiated “disruption”, bookmakers now have access to their customer’s mobile number and email address – whether they’ve signed up for a loyalty card or simply had to give it to a member of staff ad hoc to access stakes above £50. The sudden rush to offer up a removal of B2 casino window advertising has been followed by Ladbrokes throwing £3.7 million in “free bets” to its FOBT players in just the first half of this year, while Ladbrokes traditional “over the counter” customers however, only got £1.9 million.

While the not fit for purpose Gambling Commission continues to sleep, resting its head on a FOBT pillow, the bookmakers are discreetly reinventing the FOBT. Revealed in the Ladbrokes report is a sudden surge in yield from B3 slot games. These are games already capped at £2 per spin. Capped, that is, in all other gambling venues except betting shops. The Campaign feels that betting operators, unlike anyone else, see “disruption” as an opportunity for manipulation and deception. The Bookmakers have exploited a loophole in regulation and merged two game categories (B2 and B3), so in betting shops you can play a low stake £2 capped slot game that suddenly introduces the player to £10, £20, £30 plus stakes per spin, another example of how the bookmakers are introducing high stakes play and encouraging punters to trade up stakes.

Ladbrokes is now achieving 38% of its FOBT yield from slot games, up 8% on last year and undoubtedly driven by their latest FOBT deception. The remaining 62% comes from £100 stake casino games.

So, the machines that were illegally introducedto betting shops and are now the most contentious and harmful gambling product in the UK, are undergoing yet another transformation. The new CEO of the Association of British Bookmakers, has begun his tenure by writing to MPs and telling them that their customers now play safely and responsibly on £2 per spin slot games. Meanwhile, behind the Bookmakers Cheshire cat grin, you can see £20 “super feature spins” hanging on the whiskers.

However, with an increasing number of MP’s now backing the campaign against FOBTs, the new CEO hasn’t had a very positive responseto his first letter to them. Already he has angered Graham Jones MP who wrote back to him - “ there are no misconceptions and misunderstandings were FOBTs are concerned other than those being promoted by the industry you now represent.

With conclusive early evidence that the bookmakers’ offer of “self-regulation” isn’t working and the financial figures telling us players are not “staying in control”, as the government measures intended – they are losing more than ever. When will the government wise up and wipe that Cheshire cat grin from the faces of the bookmakers?

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Read the most recent article written by Derek Webb, Founder of the Campaign for Fairer Gambling - World Responsibility Briefing - What the FOBT was that?