Statistics and PR guff – how the bookies manipulate FOBT evidence
Campaign for Fairer Gambling
The Campaign for Fairer Gambling calls into question analysis and research into the impact FOBTs have on the lives of problem gamblers.
An excellent article by economist, Tim Harford, in the Financial Times explored "How politicians poisoned statistics". The article’s essential theme was that lies can be exposed, but misleading truths are more dangerous than lies. Politicians have learnt the art of PR smoke and mirrors and of misleading truths.
One such purveyor of PR guff is Philip Davies MP, who has honed pro-bookie misleading truths. He recently raised a question claiming that FOBTs only win £12 per hour per machine and implied that this was a low amount.
The purpose of the question was to help prevent the stake reduction on FOBTs which is not only the objective of the Campaign for Fairer Gambling, but has also been requested by nearly 100 local authorities under the Sustainable Communities Act, has been voted for by the Synod of Bishops of the Church of England, is the subject of a Private Members Bill in the House of Lords by Lord Clement-Jones and has general cross-party support, with the vast majority of MPs in favour of a stake reduction.
Mr Davies did not make any recommendation that betting shops with hourly profits of around £48 from four FOBTs should employ more than one staff member at all times or pay more than the minimum wage. Mr Davies is not a friend of betting shop staff, but of the bookie executives who pay for his trips to the races.
Nevada Gaming Control board reports show that on the Las Vegas Strip there are 42 casinos with just over 42,000 total machines winning just over $3 billion in 2015. With 24 hour opening times, this works out at each machine winning around $8 per hour, which is the equivalent to just under £6 per hour.
However, Las Vegas strip gamblers are flying or driving there, and the destination appeals to a more affluent demographic. This is a stark contrast to the UK FOBT demographic that is biased towards young men in deprived areas. Yet, the hourly loss rate per UK FOBT is double that on machines on the Las Vegas Strip. Mr Davies will probably claim that this is a reason to allow the number of bookie FOBTs to be doubled!
But the key aspect of understanding gambling is not so much the commercial consideration of "What the operator wins", rather it is "What the gambler loses". The Las Vegas Visitor and Convention Bureau provides some interesting insight into this.
The average gambling budget per trip is just under $580. The average trip duration is 4.4 days with an average of 2.9 hours gambling per day. This equates to 12.75 hours at a loss rate of $45.5 per hour of gambling, the equivalent of around £32.
One statistic that the Association of British Bookmakers (ABB) always trots out is that the average loss per "session" on a FOBT is £7 over 11 minutes. It is difficult to determine when a session ends and another begins. When researchers analysed FOBT data for the Responsible Gambling Trust, they defined “proxy sessions”, and decided that a session had concluded when the money balance reached zero. But there was no way of knowing whether the “next session” was in fact a continuation of the previous session, with the same player putting more money in.
However, for the purposes of this comparison, let’s take their £7 in 11 minutes figure. To convert that to an hour of play, there will be a loss rate of £38. So, even if the ABB’s figure is correct, the loss rate on UK betting shop FOBTs is greater than the loss rate on all Las Vegas Strip gambling.
Furthermore, the Las Vegas visitor average age is 48, with over 85% having a household income of over $40,000, whereas the British Gambling Prevalence Survey in 2010 found that FOBT players are much more likely to come from low income households. Furthermore, Las Vegas visitors are also spending on dining, shopping, shows and nightlife.
Over 60% of Las Vegas visitors go to between five and ten casinos and it is just as easy to visit that many betting shops in far less time in most of the UK. The ABB’s claim that £7 is lost per session relates to losses on one FOBT in one shop. It does not take into account the gambler moving from FOBT to FOBT in one shop and from shop to shop.
In the context of the FOBT stakes debate, “the £7 per session loss” is very misleading as it also includes all play at stakes of below £2, which accounts for around 30% of FOBT revenues. It is not the average amount lost per losing session, as it is an average that also includes winning sessions.
Another favourite statistic of the ABB, is that less than 1% of gamblers are problem gamblers. This may be true but it is totally irrelevant to the FOBT debate. Around 10% of FOBT gamblers are identified as problem gamblers.
Robust independent research by British experts on UK Government-funded research data shows that over 40% of FOBT revenues is estimated to come from problem and at-risk gamblers. Academics acknowledge that this is likely to be a gross underestimation. It is easy to postulate that the percentage of revenue from these vulnerable gamblers at stakes in excess of £2 is in the region of around 50%.
The ABB and Philip Davies MP may not be lying, but the Campaign for Fairer Gambling believes their use of data is deliberately misleading. This is dangerous guff as it harms society and pollutes civil discourse.
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