Gamblers winning on bookies’ high stakes slots? - according to Gambling Commission data!
The Campaign for Fairer Gambling asks questions about Gambling Commission data, which is being used as part of a DCMS review into stake levels on fixed odds betting terminals (FOBTs).
In February 2017 the Gambling Commission published data on FOBTs in betting shops (LBOs) and B3 machines in arcade and bingo halls. Although FOBTs include B3 games at stakes of up to £2 a spin, they differ from B3 machines in that they also include B2 games at stakes of up to £100 a spin.
After the bookmakers introduced FOBTs illegally, they were legalised under the 2007 enactment of the 2005 Gambling Act. At that time, nearly all B2 revenue was on roulette. High stakes “B2 slots” did not exist and so were not referenced in the Act.
The FOBT suppliers creatively worked around the Act by developing hybrid games such as B3 content that morphs into B2 stakes. These games are identified as “B2 slots” in the Commission data which it had obtained in September 2016.
When the Commission made the data public it claimed that this was "new evidence which helps inform our advice to the Government’s review". If this "evidence" can inform the Commission, why could it not inform parties submitting to the DCMS review consultation which closed in December 2016?
At the same time as this data was published, the Commission also published an analysis of "Types of gambling and gambling involvement", claiming that this would also help develop the advice to DCMS. The implication is there is a relationship between the data and the analysis, but this is not the case.
In September 2016 upon getting the data, the Commission obtained an analysis conducted by Bryson Purdon Social Research, although not attributed to them. Interactions with Harvard (where the research on which the analysis was based was first conducted) and with the Responsible Gambling Strategy Board, took place through to November 2016.
Again, the Commission did not make this research "evidence" available to interested parties in time for 2016 DCMS consultation. Whilst the Commission published an interpretation of the analysis, it did not publish an interpretation of the data.
The analysis shows that FOBT gambling in 2010 and 2012, contra to 2007, was not shown to be associated with disordered gambling, but only after using involvement as a control. It did not consider either 2014 statistics or using another control factor. As the spreadsheet shows on Tab 3, “Odds Ratios with No Controls”, FOBTs were more associated with disordered gambling than any other gambling activity in 2007 and 2010. However, in 2012, spread betting was more associated with disordered gambling than FOBTs.
Spread betting comes under the Financial Conduct Authority’s remit, which is proposing restrictions on spread-betting. There are several times more FOBT gamblers than spread bettors who are typically substantially wealthier. So FOBT harm would far exceed that of spread betting harm even in 2012.
Getting back to the FOBT data and going to LBO data Tab 5, "Net Expenditure by Session Type", there are entries for each of the two FOBT suppliers (Scientific Games (SG) and Inspired Gaming Group (INGG). Expenditure equals stakes minus paybacks which equates to the loss to the gambler which in reality is the FOBT win to the bookie.
From July 2015 to June 2016 (after the £50 threshold measure was introduced) mean expenditure on B2 slots was in the red with SG gamblers winning a mean of £18.19 per session and INGG gamblers winning a mean of £26.90 per session. This raises the astounding question - why are bookies offering games they are losing at?
The explanation is that these are hybrid games with losses accounted for in other reporting, resulting in a false presentation of gamblers winning on B2 slots. So how would this help the bookies?
It allows them to claim that B3 game revenues are increasing and B2 game revenues are decreasing, with the implication that there is less need for government to reduce the maximum stake. Are bookies’ investors being misled by this accounting trick, or don't they care about how the money is made?
With the Commission disclosure not confirming that actually FOBTs are more associated with disordered gambling than any other gambling activity and not explaining the false B2 slot data, how can DCMS rely on Commission advice?