A puff piece adorned the pages of the
Financial Times (FT) last month. The piece advertised the Bookmakers’ “Player Awareness System”. The FT quoted the Association of British Bookmakers’ (ABB) Chief Executive, Malcolm George, who claimed that the system would help customers “be more aware of how they are playing” on fixed odds betting terminals (FOBTs).
It also contained an endorsement from the chief executive of industry-funded charity, GamCare, which described it as “a powerful step in the right direction”. It is telling that despite mounting evidence and public concern, GamCare has remained completely silent on the issue of FOBTs, yet when the bookmakers launch another pointless public relation exercise they are straight on the scene to offer their congratulations.
The Player Awareness System will track players signed up to loyalty cards and send them a text or an email if they are gambling too much. Aside from the
obvious conflict of interestthat arises from bookmakers operating such a system, they have also been marketing heavily to loyalty card customers, many of whom are likely to be vulnerable having signed up under new regulations that require gamblers who wish to bet more than £50 a spin to hold a loyalty card.
The FT claims that some operators “have prioritised the development of lower-stakes gambling machines which have not been demonised but which often have larger margins for bookmakers”. This is a misleading comment as all the content is delivered on the same FOBT platforms by only two suppliers.
What the FT is referring to here is the growth in slot game (or B3) revenue. But this growth has been driven by “
hybrid games”; games that morph from B3 slot games capped at £2 a spin into B2 games capped at £100 a spin from within a session. These pernicious variants of slots – which the Gambling Commission flagrantly calls “B2 slots” – are enticing lower staking players into levels of staking that they cannot afford.
At around the same time as this article appeared in the FT, the ABB responded to East London Lines and conceded – for the first time - that
FOBTs have the capacity to cause harm. In the very same article, Andrew Lyman of William Hill stated there is "no definitive research" regarding FOBTs. The implication therefore is that there is no research to support the ABB-touted "player awareness system" and that FOBTs will continue to cause harm.
The FT assures its readers that “despite pressure from campaign groups, the Government has hinted it is not looking to further regulate the use of gaming machines after increasing duty on their take to 25 per cent in 2014”. Why would the FT not contact the most prominent and relevant group - the Campaign for Fairer Gambling – to counter-balance to the bookies’ PR puff?
However, it is clear that Morgan Stanley does not share in such optimism for the bookmakers. One of Morgan Stanley’s noted “
possible surprises” in their 2016 Outlook note, published this week, is that the £100 stake on FOBTs may be cut. Morgan Stanley cites the upcoming triennial review of stakes and prizes, and the government’s “increasingly cautious view” about the machines, quoting Boris Johnson MP and Charles Walker MP, Vice-Chair of the Conservative backbench 1922 committee, both of whom have expressed serious concern about FOBTs.
Most relevant is Morgan Stanley’s reference to Tracey Crouch, the Minister with responsibility for gambling, who has said her views on FOBTs have not changed since the last Parliament where Ms Crouch supported a reduction in the maximum stake. In a debate on FOBTs, she said: “
I believe that we should look carefully at limiting them or limiting the stakes that people can place on them.”
Morgan Stanley also point to the Scottish Local Government Committee report published last month, which
recommended an outright ban on FOBTs. It is likely that Holyrood will make the most possible use of their devolved powers which would theoretically allow the Scottish Government to ban FOBTs, but only in new betting shops.
The note also refers to the Local Government Association entering into
negotiations with government on Newham Council’s proposalfor a £2 stake, which has been supported by 93 local authorities, making it the best supported submission under the Sustainable Communities Act. This aspect was completely ignored by the FT.
Morgan Stanley concludes that “a reduction in the maximum stake to £10 is a possibility” which could lead to the closure of 2,200 shops. However, they go on to argue that this could be a positive for the industry, as fewer shops mean “higher unit profits and a more sustainable business base, with lower competition, a reduced reliance on machines, and therefore lower regulator and duty risks”. The Campaign for Fairer Gambling supports a sustainable betting industry, but for that to be realised, betting, and not gaming on FOBTs, must be the core business of licensed betting offices.
For the FT to properly inform investors in the leisure sector and its readers of the current political context related to FOBTs, they would be better served by consulting us, rather than generically referencing us.