Fixed odds betting terminals - a scourge on the poorest

By John Freeman

| 02 November 2017

Starting with the key point - fixed odds betting terminals (FOBT) are a key contributor to family and child poverty and should be banned. But I fear they won't be banned, and the best we can hope for is better control and regulation - though many vested interests will argue against even that.

Why do I feel so strongly?

FOBTs are one of New Labour's greatest mistakes - as even ministers at the time now admit. They have completely distorted the betting industry, with, for example, 20 per cent of William Hill's revenue coming directly from FOBTs. A total of £1.7 billion was taken across the country in 2014/15, contributing 56 per cent of betting companies' profits.

Betting shops and FOBTs are largely located in the poorest areas of the country, sucking money out of the families that need it most. Robin Wales, Mayor of Newham, one of the poorest boroughs, tells us that people in Newham - families - lost almost £20 million to FOBTs last year. For a poor borough to have 81 betting shops with FOBTs is a clear indication that this is the sort of place where they make money - betting companies have lots of shops in Newham but only a few in Wokingham.

GambleAware figures show that nearly a quarter of a million gamblers - who are of course people, many with children and other dependants - lost more than £1,000 in a single sitting last year. I don't know about you, but I'm by no means in poverty, but when we had children at home I wouldn't have been able to lose that sort of sum without some impact on my family.

However, the vested interests in favour of FOBTs are massive, even though the arguments are completely based on short-termism and ignore the bigger picture.

So, for example, the Treasury gets an annual £250 million in tax from FOBTs and that hole would have to be plugged somehow. It is estimated that the number of high-street betting shops would halve (if FOBTS were completely banned) from 9,000 to 4,500 - this would further blight high streets, it is said, and would reduce business rates income. At the same time, 20,000 jobs would be lost, leading, it is said, to an increased benefits bill. And, of course, the betting companies - with the exception of Paddy Power, which supports a reduction in the maximum 20 second bet to £10 from the present outrageous £100 - want to continue with FOBTs as they are a reliable source of easy profit.

The reality is that the arguments in favour of FOBTs are fatuous at best, as ephemeral as smoke. Yes, the Treasury would lose some tax, but it's a tiny amount in the total taxation income, and it is focused almost entirely on income from the poorest. Yes, some betting shops would close - but would that really have a serious negative impact on high streets? There are other, much more fundamental, reasons why high streets are under pressure. Business rates income would decrease, certainly, but do we really want to secure income from business rates only at the cost of putting more people - families and children - into poverty? There is both a moral and a practical case here for both national and local government, and I'm pleased that the Local Government Association has backed a reduction in the maximum stake to £2 "to protect vulnerable people". And what about the unemployment of 20,000 people? Well, with the unemployment rate at record lows, even though income is not rising to match inflation, and even though the rise of the gig economy brings its own problems, I have no doubt that the people concerned could find jobs elsewhere.

Just to put the numbers in a local context, Newham might lose 40 shops and 160 jobs to avoid a drain of £20 million every year from poor families, with the associated impact on child poverty and their poorer life chances.

It seems to me the case is unanswerable. However, I imagine that almost all of the readers of this blog - like me - don't live in an FOBT hot spot - and don't frequent betting shops - though I'm certain that many readers will have direct experience of working with families in poverty. So please  respond to the respond to the government consultation on FOBTs, and ask your organisation to do so, with a response that supports the reduction in the maximum take to £2 and an increase in the time between bets to 1 minute.

One last point - Australia has had the same problem for many years, with more gambling machines per capita than anywhere else in the world. As early as 1974, the Royal Commission into Gambling concluded that "poker machine playing is a mindless, repetitive and insidious form of gambling which has many undesirable features. It requires no thought, no skill or social contact. The odds are never about winning. Watching people playing the machines over long periods of time, the impressionistic evidence at least is that they are addictive to many people. Historically poker machines have been banned from Western Australia and we consider that, in the public interest, they should stay banned".

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