Betting on failure

Tom Greatrex, Labour and Cooperative MP for Rutherglen and Hamilton West, will tonight outline concerns of the negative economic impact of fixed odds betting terminals in betting shops.

For those of us who live close to high streets and main streets across the UK, the opening of new betting shops has become a common sight in recent times. It is not unusual to see a whole cluster of betting shops – sometimes with more than one branch of the same chain – within yards of each other. Of course, many retail businesses cluster together – estate agents or coffee shops are good examples, and others go where they think the market share is, none more focused than large supermarket chains. So why is it that betting shops are a problem, recognised by my colleague David Lammy in his constituency and referenced in the government’s own review undertaken by Mary Portas ?

Increasingly it is becoming apparent that the drive to open new betting shops is driven by the virtual gaming machines with casino game content known as FOBTs. These high stakes, fast play, random number generated machines are now the source of half the profits of high street bookmakers, and with a limit on machines per shop, a driver of how, and where, new shops are located. Labour-led Newham council is challenging this proliferation, and Labour have pledged new flexibility for local authorities to address oversupply through the planning process.

This is about more than the real concerns about the look of many high streets – it is also about a form of gambling that I believe could be increasingly trapping people into an addiction that is hard to kick.

Last year, I was contacted by a constituent who had accumulated losses of £25,000 in one month alone, leading him to question whether the machine was rigged. It seemed alarming to me that it was possible to lose such a high amount in such a short space of time on a gaming machine in a high street bookies in my constituency. After further investigation, I found that this was by no means an isolated incident. I have now met several constituents who got into problems through using these machines, many of whom had not gambled serious amounts of money before.

As an unannounced visitor to several betting shops in recent weeks, I have seen machines occupied for prolonged periods by one individual – and with high stakes, fast play meaning it is possible to place £300 in one minute, or at the extreme, up to £18,000 in an hour – this is far from 10 minutes on a fruit machine in the pub. Of course, many people gamble as a form of entertainment – be it the horses, football, at the casino or bingo – without any problem at all. There are doubtless some who play FOBTs and know when to walk away. My concern is that there are many that don’t, and with more machines around we could be shifting from harmless entertainment into multiplying problem gambling, with all its invidious consequences, for individuals, families and communities.

Take the often-quoted 97 per cent payout figure, reproduced on the machines. You might assume that means you would win back 97 per cent of what you stake, but it is averaged over a longer period. When I asked one of the high street bookmakers to explain it, they conceded it wasn’t clear. People who play these machines regularly have complained that they never received the 97 per cent pay out as the machine suggests, and further, on reading the ‘help’ that is provided on these games I too was left puzzled. It is important that the ‘help’ on these machines offer just that, and that the gambler is clear in what is likely to be returned to them upon a win in order to prevent them chasing their losses or following up on their wins.

If the machines are keeping betting shops going, and employing people in constituencies across the UK, then they are making a contribution to the economy, state the campaign postcards MPs are receiving from bookmakers. The economic impact is important, but needs to be assessed on the basis of the total impact on local economies. A recent study by Landman Economics found that the £1bn in FOBT spend supports 7,000 jobs in the gambling sector compared to 20,000 jobs if this expenditure was elsewhere. Or put another way, there could be 13,000 fewer jobs for every £1bn spent through the machines. Money being used to gamble in local high streets may be good for the big companies overall profit margins, but the local impact is less beneficial. More and more, betting shops are employing fewer staff as gambling is through machines with less need for personal interaction.

The gambling industry lobby group is robust in its response and dismissive of concerns – because something is popular doesn’t mean it causes problems, and look at all the people employed in betting shops, and the contribution to the local economy. And everybody knows exactly what they doing – lots of them have A levels.

It is this type of attitude that highlights precisely why the government, as Labour’s shadow minister Clive Efford has argued, should keep the impact of these machines under review and not leave it to the industry to act under its own initiative. While the industry argues FOBTs are not addictive, anecdotal evidence suggests the opposite. The confusion in the government’s own statements is similarly apparent – they say the causal link ‘remains poorly understood’ but also ‘the association between high stake, high prize machines and gambling related harm is widely accepted.’ Which makes its decision to end the Gambling Prevalence Study all the more alarming.

Like many others, I am not against gambling or betting shops. I have been known to put on my coupon, and demonstrate my belief in the improbable by betting on Fulham to win the Cup (never yet happened) and it should be up to individuals to decide how to spend their money legally. But it is the proliferation of FOBTs, the fast speed of play and high stakes, the clustering of shops and the wider economic impact which should be provoking government into monitoring the effects and collecting the evidence to inform policy. That they are doing neither is a dereliction of duty.

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Tom Greatrex is Labour and Cooperative MP for Rutherglen and Hamilton West. He tweets @TomGreatrexMP

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Photo: Andres Rueda

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Comments: 3...

  1. On April 22, 2013 at 4:00 pm nilsinela boray responded with... #

    Interesting article. It’s a long time since I went in a betting shop. The anguish I felt at losing every race in my only ever bet – a £2.00 yankee – has never left me. I don’t have any particular feeling against gambling or betting shops – in fact licensed betting shops clearly go a long way to avoiding illegal (and possibly rigged) betting. However, neither do I get a good feeling about it.

    While people should be free to gamble if they wish, I’d prefer it if they didn’t do it in my high street – or actually anyone elses . Call me a spoilsport but … well yeah – spoilsport – I’ll take that !

    Fulham came close(ish) against West Ham in the final in 1975 – losing 2-0 – a bad day at the office for blonde haired goalkeeper Peter Mellor – who was in later years (at Portsmouth) regularly and mercilessly ridiculed by fans of my team Huddersfield (who incidentally put Fulham out of the cup the next year in 1976). Gambling – it’s a mugs game – as my Grandma used to say !

  2. On April 22, 2013 at 4:26 pm roy steele responded with... #

    Al-Anon, Gamble-Anon, Drugs-Anonymous — all adds up to billions spent on people who get NHS-ill (mentally&physically) from Booze, Gambling & Drugs abuse.
    From the small-fry who loses his week’s pay at the Bookies, to the billionaire Aussie who gambled billions over a few weeks this year, the net result is the same : chaos and mayhem for the losers.
    [And some of the ‘winners’ lose out after splashing out their winnings].
    Its certainly their choice as individuals, but must the Exhequer/Jobcentre/Taxpayer in UK have to pay up to allow the Bookies to get richer ? Then ‘we’ pay up again to tidy up the broken pieces of lives ??
    Start with a revamp on the big Lottery. I ask anyone to show me one good reason why that specific lot isn’t banned for a start ? Horse Racing is The Sport of Kings.
    Until I am one [ a king] I shall stay out the Bookies and off the Tote/Racecourse.

  3. On May 9, 2013 at 5:44 pm Richas responded with... #

    A pretty measured article.

    I’d like to see the figures behind the Fairer Gambling funded research by Landman Economics though as Fairer Gambling are a pro casino anti bookie campaign group with a record of using dodgy figures.

    At first look it seems like a simple study – if it was spent on a basket of other goods and services not on a machine then this many jobs….. but that ignores the impact of related activities, like the 20% tax revenue, the business rates paid and the additional counter staff lost at the margins of viability for a bookies that produce losses in the more staff intensive side of the business. Comparing any basket of goods with any automated machine is likely to deliver this result, especially if the way that most of the machines are designed and built in the UK is ignored.

    Fairer Gambling have form – For example they claim that Tom’s constituency has 116.48 FOBT in it despite 116 being licenced. They produced a report claiming to say what was bet in every HofC constituency but failed to explain that it was a simple model. The model assumed that the yield and amount bet per machine varied by Euro Constituency Region in a fairly arbitrary way. To avoid the basic nature of the model being revealed by having identical constituencies in the same region/group produce identical betting figures they tweaked the number of FOBTs by a fraction to conceal the model and instead claim to have accurate constituency level betting data when they did not.

    I remain deeply ambiguous about FOBTs I don’t use them, don’t like them but people should be free to do so and frankly this sort of betting is safer in the alcohol free bookies than on the smartphone in the pub next door or at a casino with beers brought to you at the table by the waitress.

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