Stop the ‘crack cocaine of gambling’

I was spurred to action when a licensing application was submitted in my ward for what would be the 25th betting shop in Manchester city centre.

No longer are betting shops a place to go to put a flutter on the horses or the football. The primary use of these betting shops has fast become gaming via fixed odds betting terminals – roulette and casino gaming machines able to facilitate bets of up to £100 every 20 seconds, meaning it is possible to stake up to £18,000 an hour.

These machines – dubbed the ‘crack cocaine of gambling’ due to their highly addictive nature – crept in without anyone noticing. The Gambling Act 2005 limited each betting shop to four FOBTs, but bookies quickly learnt to leapfrog these regulations by opening up as many shops as possible in each area – a practice known as ‘clustering’.

A Department of Culture, Media and Sport scoping study for the UK Gambling Act 2005, published in 2007, concluded: ‘The international research evidence demonstrates that FOBTs possess the characteristics of those forms of gambling most associated with gambling problems, namely high event frequency and opportunities for rapid reinvestment.’

There has been no research in Great Britain specifically designed to estimate the costs of gambling related harm to society and the economy. However GamCare (a problem gambling charity funded by bookmakers) has estimated the costs of problem gambling at around £3.6 billion per year, based on an estimated average cost per problem gambler of over £8,000 per year (Grinois and Mustard, 2001) and using the 2010 British Gambling Prevalence Survey figure of 450,000 problem gamblers.

It is no coincidence that Manchester Central has one of the highest concentrations of betting shops in the country. Bookies open up in poor areas with high levels of unemployment – the 50 constituencies with the highest levels of unemployment in the UK (including Manchester Central) contain 1,251 betting shops with 4,454 FOBTs, while the 50 constituencies with the lowest levels of unemployment have only 287 betting shops and 1,045 terminals.

£190m was gambled away on FOBTs in Manchester Central last year. Significant numbers of the betting shops in Manchester city centre cluster around Chinatown. The big bookies – keen to exploit more customers – advertise their machines in Chinese outside. Inside you rarely see a vacant machine regardless of the time of day or night.

A recent survey by the Local Government Association concluded in their report that the toxic economy of betting shops, pawnbrokers and payday loan companies was deterring investment and stifling economic growth. Clyde Loakes, vice-chair of the LGA’s environment and housing board, was quoted as saying, ‘… councils believe that the clustering of premises such as betting shops, fast food outlets and strip clubs is hitting economic growth.’

This is a situation we do not want to see occurring in Manchester city centre.

And it’s not just the addictive gambling that causes problems. Greater Manchester police recorded 167 incidents against betting shops in Manchester city centre alone over the last 12 months, covering everything from rowdy behaviour to criminal damage, theft and assault.

I decided to do something about it.

I organised a public meeting for Labour party members and residents in Manchester Central and invited the leaders of the ‘Stop the FOBTs’ campaign. We agreed to mount an objection to the licence application on grounds of the primary use being gaming and not betting and contravention of the licensing objectives of preventing crime and disorder and protecting children and vulnerable people from harm.

I am calling on Manchester city council’s licensing committee to follow the lead of Newham council and reject this application.

Nationally, I am supporting the work of Lucy Powell MP and others to change the law to limit both the numbers of these machines to two per betting shop and bring down the maximum stake to £2 to bring them in line with fruit machines and prevent gambling addicts losing thousands of pounds in a matter of minutes.

I also believe we need to change the planning class of betting shops and give local authorities more scope to be able to reject applications based on the local situation. Localism should mean local decision making on these issues.

I say enough is enough. I am not anti-gambling or anti-bookies, but there is no place for high speed, high stakes, hardcore casino gaming in our area.

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Kevin Peel is a councillor on Manchester city council and tweets @kevpeel

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See also: Betting on failure, by Tom Greatrex MP

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Photo: Andres Rueda

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Comments: 1...

  1. On May 17, 2013 at 1:38 pm Richas responded with... #

    Sorry Kevin but you have been sold a pup on this one. The numbers you quote re what was “gambled away” for instance are a nonsense. That is an estimate of total wagers based on a national average yield per machine, it certainly is not what was spent, it is a huge exaggeration, a false claim..

    Worse though you have swallowed the line fed to us by Fairer Gambling via the Mail, Guardian, Express, Channel 4 Dispatches, Panorama, the Independent, Express….that line is not really about protecting the vulnerable it is a mixture of anger, ego and commercial interest. It is essentially the creation of Derek Webb.

    Derek has sent a threatening letter to the blogger and former BetFair founder Mark Davies for daring to ask what lies behind the campaign and implying some commercial interest. He has published the letter and his reply here http://www.markxdavies.com/

    My contention is that the campaign is less about roulette or FOBTs per se than about the use of Derek’s 3 card poker on a FOBT. Derek claims in the Guardian article that he chose not to sue about using a 3 card poker game. http://www.guardian.co.uk/uk/2013/feb/11/betting-terminals-huge-profits He had no such option. Games cannot be patented in the EU whereas they can in the US so no such legal action was possible. Derek Webb and Galaxy Gaming are vulnerable to competition from FOBTs on pretty much all the games they have dealt in UK casinos. They are high frequency win games which lend themselves well to a FOBT with a maximum £100 stake and £500 prize. Precisely the FOBT ability they are now campaigning against whilst not campaigning against £2 wagers with the same maximum £500 win. Their campaign goal would allow roulette to continue on FOBTs but remove the potential competition for Galaxy Gaming Licenced games in casinos. FOBTs legally using their games as they have no EU patent protection is a huge threat to them, as the lawyer’s letter makes plain, they fight for space and staff in casinos, if the same games are in bookies the casinos have no reason to pay their licencing fees. They can deal the games without fee if they do not use Galaxy Gaming’s copyrighted branding and if the FOBT brand is stronger – why would they?

    The campaign is founded on commercial not public concerns. Derek has a valuable shareholding in the firm Galaxy Gaming and his continuing substantial monthly payments under a promissory note depend upon their continuing success. Details of the promissory note are published here http://biz.yahoo.com/e/111011/glxz8-k.html – the sums outstanding to Derek Webb are greater than the current market capitalisation of the firm ($9.4m).

    People believe that there are far more bookmakers now even though there are not, partly because the popular press, Dispatches, Panorama and everyone else tells them there are but mostly because they have been relocating from less public side streets to high streets to get more footfall and because there are vacant units to rent. There is no huge rise in FOBT machines and no huge rise in problem gambling either. Problem Gambling is pretty low and stable.

    Problem gambling is measured nationally through the British Gambling Prevalence Survey. There are two measures used The proportions increased from 0.5% of the adult population in 1999 and 2007 to 0.7% in 2010 (which is not statistically significant) on one measure and from 0.6% in 1999 and 2007 to 0.9% in 2010 (which is at the margins of statistical significance) on the other measure used. This small rise may be a statistical fluctuation or it may be that the economic crisis that hit between 2007 and 2010 means that more people are reporting that their gambling is causing them financial problems. With 1m more adults unemployed and falling real wages between the survey dates it is hardly surprising that there was a small rise. The real surprise though is that despite gambling being more available by phone, online and on our high streets this technological shift in how we bet between 1999 and 2010 has not seen a rise in numbers of people in crisis.

    Unfortunately the 2013 Gambling Prevalence Survey that would have helped us monitor this terrible problem was scrapped by the incoming coalition government as part of their moves to cut “red tape” and save money.

    Seriously this story is being pushed by Fairer Gambling on an entirely false basis, for commercial reasons.

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