Your tax increase on FOBTs to 25% has not deterred FOBT gamblers. Even the DCMS introduction of the £50 threshold on FOBT stakes per spin has not had any meaningful impact on bookie profits. With your budget pending and mounting pressure on government to do something about FOBTs, it must be time for you to check your FOBT sums.
The only purpose of allowing a form of gambling to be legal is to regulate it and to tax it adequately to cover any socio-economic costs. FOBTs would not be operated illegally as they require a server based intranet - a far too complex operation for illegal gambling.
FOBTs have a negative economic impact on localities. If player losses were spent on other activities, they would generate wider distribution of funds, create more economic activity, more jobs and more tax revenues. These points have been substantiated by both
Landman Economics and
NERA . Furthermore, whilst FOBT profits have been increasing, the number of betting shop employees has been decreasing.
Additionally, the cost to society of FOBT harm must be factored in. FOBTs are the most addictive form of gambling. The quantity of FOBT losses by vulnerable at-risk and problem gamblers
exceeds the combined losses by vulnerable gamblers across all licensed gambling activities in bricks and mortar premises.
In fact, in fewer than 15 years since FOBT introduction, FOBT roulette losses alone exceed all losses on all table games and all slots in UK casinos. Bearing in mind that UK casinos include the high-end Mayfair premises where gamblers stake up to £10,000 or more per spin, this speaks volumes of how addictive FOBT roulette really is.
The impact of FOBTs on shops has resulted in lone staffing, abuse of staff, unreported damage to machines and premises, and easy facilities for
money-laundering on the high street . All of these factors have been an influence on the local authorities that have joined together to act against FOBTs under the Sustainable Communities Act.
Gambling addiction has a serious impact on both the gambler and their family members. It is very remiss of the establishment – DCMS, the Gambling Commission, the Responsible Gambling Strategy Board and the Responsible Gambling Trust – that no research into the economic and social cost of FOBT gambling has ever been undertaken. This is particularly interesting as FOBTs were always "on probation" according to Baroness (Tessa) Jowell who
has now called for that probation to be terminated . The option of stake reduction from £100 to £2 was retained if FOBTs failed probationary standards.
Stake reduction would result in a reduction in losses, a reduction in harm and a disbursement of FOBT taxes, but there is no evidence that there would be any negative impact on the overall economy or the revenue position of the Treasury. In fact, NERA estimate that a £2 cap would lead to the creation of up to 2,400 jobs in the wider economy.
The bookies have been leading the charge in the Gibraltar Betting and Gaming Association legal action against your 15% point of consumption remote gambling tax. They want to use EU law if they think it will help their profits, but don’t want to comply with the EU4 money laundering directive!
Ironically it is only through the UK enabled Protectorate status of Gibraltar that this situation could ever arise. With the Gibraltar Gambling Division supporting this action against the UK economy, should the question be asked “Does the UK need Gibraltar?”
With FOBT gambling tax at 25%, it is understandable that you might fear a dip in tax receipts if there were to be a clampdown on FOBTs, even though there is so much evidence that the impact on the wider economy would be positive rather than negative.
But Chancellor, you have an easy opportunity to create greater tax revenue from remote gambling by increasing that rate from 15% to 20% or 25%. Surely this would be a prudent step in your upcoming Budget? Planning for funding for racing from offshore remote betting sites should not deter you from a tax increase at the same time.
You must know by now how DCMS has let you down on the FOBT issue. It gets advice from the Gambling Commission and the Responsible Gambling Strategy Board, which the Gambling Commission appoints to advise it. They both base their advice to DCMS on advice from the Responsible Gambling Trust (RGT) – whose
credibility has now been questioned by national newspapers. The whole subject of the RGT FOBT research is now being reviewed by the Charity Commission.
And have you seen the incompetent DCMS £50 threshold Evaluation? You would be embarrassed if this standard of work was produced by the Treasury!
Many of your Tory colleagues now understand that the Labour legacy of FOBT harm needs to urgently addressed. You must realise by now that it’s time you joined with them and supported a stake reduction from £100 to £2 per spin.