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Once again Government won’t act, so Parliament must

3 min read

Lib Dem Peer Lord Strasburger writes about his question in the House of Lords today on 'Misuse of fixed-odds betting terminals in betting shops'

Parliamentarians, especially my colleague Lord Sharkey working with Jo Swinson MP, can be proud of how they persuaded a reluctant government to take decisive action to stop the worst excesses of the payday loans industry.

Now it is time for politicians to tackle another industry whose business model is, like payday loans, based on exploiting the poor and economically illiterate with devastating results for them, their families and the local community.

With little fanfare, the big bookmakers are making more than half their profits in betting shops from Fixed Odds Betting Terminals (or FOBTs for short).  These are high stakes – up to £100 a spin - addictive gambling machines which mimic casino games, usually roulette, but run 3 times faster than the games are played in a real casino.

They are aimed at the poorest members of society, being clustered in or near areas of deprivation.  Research last year by Landman Economics found that “the 50 most deprived local authorities in England have 0.90 FOBTs per 1,000 adult population, whereas the 50 least deprived local authorities average 0.38 FOBTs per 1,000 adult population – less than half the number of FOBTs per head.”

The design of FOBTs, the high speed of the games and the environment in which they are located all enhance the risk of addiction and problem gambling.  Even research which recently emerged from a betting industry-funded organisation reveals that 80% of players staking the average £13.40 per spin exhibit problem gambling characteristics.

The effects of gambling addiction on its victims can be devastating - for them and for their families and also their local community.  As with drug addiction, there must be a consequential increase in acquisitive crime in the locality as addicts seek to fund their cash-hungry habit.  It is no coincidence that 1 in 8 FOBT players use payday loans to sustain their use of the machines.

There is also clear evidence that FOBTs are being used to launder drug money and proceeds of other crimes.  A single customer laundered £900,000 through FOBTs in Coral’s betting shops in the North East and the company’s response was to entertain him at the races.

Since FOBTs were introduced in 1999, the betting industry has run a highly effective campaign to avoid the firm regulation that is needed.  They were helped by a weak regulator, the Gaming Commission and. DCMS, which instead agreed to a voluntary Code of Practise which has since been comprehensively breached by the bookmakers.

The most obvious and immediate change that is needed is a reduction in the maximum stake from £100 to the £2 maximum that applies to fruit machines, and this reform is Liberal Democrat policy and has been promoted by John Leech MP.  

Other issues that need to be addressed are the high speed of play which is believed to increase the risk of addiction, as well as the financial incentives that some betting shop staff are given to increase revenue from FOBTs in direct contradiction of their supposed task of preventing problem gambling.

Parliamentarians should not be fooled by the fanciful figures cooked up by the gambling PLC’s and their apologists for the job losses that would result from a £2 maximum stake, nor should we accept the wilful blindness of the Government.

Instead we must do what is what is obviously right and protect the poor and vulnerable from exploitation by big business, just as we did with payday loans.

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