Monday, 30 May 2016

Fixed Odds Betting Terminals - The arguments against them

Want the full low down on FOBT's?

Fixed Odds Betting Terminals (FOBTs) are touch screen roulette machines in betting shops that allow the user to bet up to £100 every 20 second spin.
  •   Reducing the maximum stake on FOBTs to £2 a spin would bring betting shop machines into line with machines in every other easily accessible gambling venue, eliminate the addictive roulette content, reduce the harm caused by this particular product, deter money laundering and reduce betting shop clustering on the high street.
     Labours position is to call for retrospective powers to local councils for them to decide locally on the numbers and location FOBTs including whether they want none at all - FOBT free zones.
  •   Each betting shop is permitted four FOBTs, which now account for more than half of bookmakers’ profits. This led to a 43% increase in the number of betting shops on the high street between 2004 and 2012, and that is likely to be even higher now.
  •   Whilst the government last year returned betting shops to a sui generis class thus requiring planning permission and claimed it was an extra power for Councils to control betting shops it has already been challenged and shown ineffective with Paddy Power overturning a refusal this month. It should also be noted that licensing authorities are still required to “aim to permit” betting shops. Local authorities are therefore still powerless to prevent new premises opening to facilitate more FOBTs.

    Paddy Power encouraged a gambler who was addicted to FOBTs until he lost his home, jobs and family, according to a Gambling Commission report.
  •   Paddy Power admitted that senior staff encouraged a man with a gambling problem to keep betting despite warnings by more junior employees.
  •   The man was a frequent user of FOBTs. Paddy Power staff became aware that the man was working five separate jobs to fund his gambling and “had no money”.
  •   The concerned shop manager informed more senior staff that the man would be visiting the shop less frequently. The senior employee responded by advising that “steps should be taken to try to increase the customers’ visits and time spent in the gambling premises”.
  •   The Gambling Commission said: “This was grossly at odds with the licensing objective of preventing vulnerable people from being exploited by gambling.”
  •   The regulator’s report also highlighted two detailed cases in which Paddy Power failed to apply money laundering controls designed to stop people using FOBTs to conceal the proceeds of crime.
  •   The Gambling Commission said that in August 2014, a shop manager suspected a customer was using FOBTs to launder Scottish bank notes. The manager related their suspicions to more senior members of staff on four occasions over six months, but senior staff “repeatedly overruled” the shop manager. Paddy Power only barred the customer after police raised fears that Scottish bank notes that were the proceeds of crime were being laundered in London.
    The Daily Mail recently reported the story of an accountant losing £3,000 on FOBTs in less than an hour.
    •   He said: “I’ve maxed out all my cards on these machines. The card I’m using is the emergency one my wife keeps in a drawer in the kitchen. She doesn’t know I took it this morning. I should be back at work by now but I’m going to have to try to arrange a quick loan to cover these losses. I’m going to have to go down the pay-day borrowing route.” 
    •   Clinical psychologist Anna Henry, who treats gambling addicts, said FOBTs are designed to foster addiction. “Basically the industry has created casinos in the high street. These machines isolate the player, there is nothing to distract him from that screen. Its speed is to encourage frenzy. And thus more spending.”
    •   A lone working cashier said of FOBT players: “They get irate; they kick the machines. I had a bloke wreck all four at once. Our managers tell us not to call the police if it’s only the shop or the machine that are vandalised.”
The Sun told of a gambling addict bombarded with free bet offers – after hanging himself over thousands of pounds of debt.
  •   Carpenter Ryan Myers was just 27 when he took his life hours after losing £500 on FOBTs, described by his devastated father as “the crack cocaine of gambling”.
  •   He had been forced to take out a payday loan after owing thousands of pounds. His father said: “I am not here to tell people how to spend their money, but the problem now is the industry is taking over town centres and people’s lives.’
 There are also increasing reports of FOBT related suicides and horror stories - February 2012 – Sellathurai Vinoharan: lost thousands of pounds at the bookmakers and threw himself in front of a train. May 2011 – Roland Darren Brown: lost £120 at the bookies before overdosing on painkillers. March 2011 – Mohammed Abdus Sammas: lost up to £400 a day on Coral FOBTs. November 2007 – Daniel Tuck: pumped whatever he had into “fruit machines”, was in £25,000 of debt and was charged under the Human Tissue Act for trying to sell a kidney. September 2007 – Anthony John Johnstone: found dead with a suicide note written on a William Hill betting slip. June 2006 – Michael Brennan: overdosed on painkillers after admitting “quite a lot of debt with the bookies”. July 2014 – Glyn Holland: found with electrical flex around his neck, spotted on CCTV in William Hill earlier in the day. February 2016 – Ryan Myers: hanged himself after losing £500 on FOBTs. November 2015: Lee Murphy: hanged himself after racking up £30k of debt on FOBTs.
According to The Times, the charity that commissioned key FOBT research that informed government policy is now facing an investigation from the Charity Commission.
  •   Neil Goulden stepped down as chairman of the Responsible Gambling Trust after it was reported that he had lobbied on behalf of Britain’s bookmakers whilst the Trust commissioned key research into FOBTs.
  •   The research suggested that the machines were not themselves a problem and that the best approach to minimise harm was to identify problem gamblers.
  •   The lead partner commissioned to conduct the research was a company called FeatureSpace Limited, which is 6.7% owned by Betfair, which has recently merged with Paddy Power, a high street bookmaker with thousands of FOBTs.
  •   The Trust claim that the Responsible Gambling Strategy Board set the parameters of the study. However, the Board also has apparent conflicts of interest. One member of the Board is Russell Hoyle, who was the Chairman of Inspired Gaming until 2010, one of two companies which manufactures FOBTs. Mr. Hoyle is still a special partner in Vitruvian, which owns Inspired Gaming.
    Local authorities, powerless to stop the proliferation of betting shops and FOBTs on the high street, have joined together under the Sustainable Communities Act (SCA) calling for a £2 cap.
  •   93 local authorities, led by Newham Council, submitted the largest ever proposal under the SCA, which was a Conservative-backed Private Members Bill.
  •   The government rejected this proposal last year, but the Local Government Association have since re-submitted it under the terms of the SCA. The government will now negotiate with the LGA for six months, and are bound by statute to “try and reach agreement”.
  •   The government will be producing a policy paper for the LGA soon, which is an opportunity for government to recommend a reduction in the maximum stake.
There were 633 Suspicious Activity Reports in betting shops last year related to money laundering, but much of it goes unreported.
  •   Money laundering alert software is triggered when a customer does not bet more than 40% of the cash that has been inserted into a FOBT before they collect. However, these alerts are known to money launderers, and can be easily prevented playing roulette with minimal risk. It is possible to stake, for example, £48 on red, £48 on black and £4 on 0 in one spin, and this would cost the money launderer £4 in every £100 laundered.
  •   The money launderer can then print a ticket, or collect their winnings as and when they require in cash and request a receipt. One drug dealer in North Yorkshire was found with over 400 FOBT payout receipts totaling £36,000.
  •   Police in Liverpool recently raided a series of homes after learning of a plot to feed £120,000 of illegitimate cash through bookmakers.
  •   Bookmakers are lobbying against their inclusion in the EU’s 4th Money Laundering Directive, which would require customers who have staked more than £1,500 to identify themselves.
  •   There have been ongoing issues with the cleaning of cash stolen in armed robberies and sprayed with non-removable red die being cleaned in betting shops since the machines were introduced 15 years ago. As recent publicised incidents show – this issue remains unresolved.
  •   A Gambling Commission report that will be considered by the Treasury said: “The betting sector is regarded as high-risk relative to other gambling sectors. The customer base is varied, and often customers remain anonymous to the operator within the non-remote sector. The reporting and detection of suspicious transactions in the non-remote betting sector is often frustrated by the ability of a customer to remain anonymous.”
    More crime takes place in betting shops than any other gambling venue.
  •   A Freedom of Information request from Landman Economics to the Gambling Commission revealed 11,232 incidents in 8,980 betting shops from January to December 2014 – an average of 1.25 incidents per premises, up from 0.82 the previous year. This compares to 479 incidents related to the other remaining 2,747 gambling venues – an average of 0.17 incidents per premises, up from 0.16 the previous year.
  •   National and local newspapers highlight weekly the incidents of FOBTs being smashed up in betting shops
    For every £1 billion lost on FOBTs, 16,000 jobs are destroyed in the wider consumer economy.
  •   Because expenditure on FOBTs supports relatively little employment compared with consumer expenditure elsewhere in the economy, Landman Economics found that £1bn of “average” consumer expenditure supports around 21,000 jobs across the UK as a whole, whereas £1bn of expenditure on FOBTs supports only 4,500 in the UK gambling sector.
  •   If current growth rates are maintained, gross industry revenues from FOBTs will double in real terms over the next ten years, resulting in a gain of around 5,000 jobs for the gambling sector by 2025-26, but a reduction of around 25,000 jobs for the economy as a whole.
  •   By 2025 net tax receipts will be around £120 million per year less if the rate of expansion of FOBTs is maintained.
  •   NERA’s calculations suggest that the overall impact on employment and tax revenues for the UK if FOBTs were capped at £2 a spin could well be a positive, perhaps a net increase of between 1,200 and 2,400 jobs as a result of increased spending in other sectors of the economy.
    Myth 1: “The vast majority of betting shop customers gamble without any problems.”
    The Prevalence Surveys are often used to justify this claim, and these tend to put the problem gambling rate at less than 1% of the whole population. However, gambling-related harm is not confined to problem gamblers, and between just 1% and 4% of the population use FOBTs. So stating that the problem gambling rate is low is an obfuscation. This view also over looks, as with binge drinking, the harm caused by binge
FOBT use which often results in large financial losses that can temporarily impact even non-problem gamblers. What is useful for this debate is knowing:
 What share of the FOBT player base experience harm whether the £1 to £100 staking capacity contributes to harm and  whether cutting the maximum stake to £2 would reduce harm
How many FOBT users experience harm?
  •   Secondary research on the 2007 British Gambling Prevalence Survey (BGPS) found that FOBTs had the strongest association with gambling-related problems. FOBTs had the highest prevalence rate for people with gambling problems, and FOBT use was the best predictor of problem gambling.
  •   38% of calls to the national problem gambling counselling service Gamcare relate to gambling in betting shops with 1 in 4 of all calls naming FOBTs as a problem [page11]
  •   The Responsible Gambling Trust (RGT) research found that 37% of FOBT users had experienced gambling-related harm. [Report 2, page 69]
    Does the £100 stake contribute to harm?
  •   The RGT research also found that 19% of those that bet an average of 53p per spin or lower were problem gamblers, but 82% of those that bet £13.40 or more were either problem or at risk gamblers. The RGT did not disclose the proportion of players that experience harm at other staking levels, but we can infer from the data provided that staking level is a predictor of problematic gambling. [Report 2, page 9].
  •   In respect of the UK machine gambling landscape it is important to recognise where FOBTs sit in terms of high stake accessibility – all other gaming machines in easily accessible gambling premises are restricted to £ (and under) per spin.
    Would cutting the maximum stake to £2 reduce harm?
  •   The RGT research found that gambling at £20 compared to gambling at £2 a spin “impaired decision-making ability”. [Report 5]
  •   Former chief economist and head of research at DCMS, Dr Stephen Creigh-Tyte, found that: “...binding limitations on wagers can limit the maximum session losses suffered by punters. The effect tends to be greater the higher the prize and the larger the probability of winning and the lower the time taken by each game.”
  •   Louise Sharpe and Alex Blaszczynski found that those playing machines with a $10 maximum bet spent more time, placed more individual bets, sustained greater losses, smoked more cigarettes and consumed more alcohol than those playing machines with a $1 maximum bet. Patterns of play with faster reel spin speed (3.5 compared to 5 seconds) and for machines with and without the high denomination note acceptors did not differ.
    Myth 2: “Problem gamblers use multiple products, so there is no point restricting one product.”
    The 2010 BGPS did find that problem gambling prevalence is highest among those who reported they had gambled on nine or more different activities on a regular basis. But this tells us nothing about how much time and money is spent on each product, and a product’s features – such as staking capacity, event frequency and game content – all contribute to varying levels of harm.
    Secondary research on the 2010 BGPS sought to address this by estimating how many days’ play of each gambling activity was attributable to problem gamblers and how much problem gamblers spent on each gambling activity. It found that problem gambler losses on FOBTs were greater than several leading gambling activities combined.
It also found that those classed as problem and “at risk” gamblers contributed 40% of the total money and time spent on FOBTs.
Research by Francis Markham found that venue-level expenditure was significantly correlated with rates of gambling harm. Each $20 increase in monthly gaming machine expenditure per adult was associated with an estimated 1.75% increase in the prevalence of gambling harm. In the UK, between 1% and 4% of the population use FOBTs but they derive £1.6 billion in gross gambling yield, whereas 70% of adults play the National Lottery – including the draws, scratchcards and online games – and this generates £3.1 billion in gross gambling yield.
Research by Robert Breen and Mark Zimmerman found that problem gambling occurred much faster in machine gamblers compared to those who favoured other forms of gambling. The rapid intensity of machine play, combined with addictive roulette content, means FOBTs are more likely to induce problematic gambling. Whilst problem gamblers might gamble on multiple products, the evidence shows that they are most likely to gamble problematically on FOBTs.
Myth 3: “Cutting the maximum stake would impact the enjoyment of leisure gamblers.”
The licensing objective in the 2005 Gambling Act is clear: to ensure the prevention of harm to the young and vulnerable. There is nothing in the legislation that seeks to protect the enjoyment of leisure gamblers.
However, even if that were the case, Louise Sharpe and Alex Blaszczynski found problem gamblers were four times more likely to wager in excess of $1 a spin compared to non-problem gamblers. Based on this research, the Australian Productivity Commission recommended a “Dollar Bet Limit” for poker machines as, they argued, this would reduce gambling related harm without impacting leisure gamblers.
It is a contradiction to argue that there is no point restricting FOBTs as problem gamblers will gamble elsewhere, and to also argue that restricting FOBTs would impact leisure gamblers. Leisure gamblers would also gamble on other, less harmful products and this would provide a level of protection for those “at risk” of developing machine gambling problems.
FOBTs were only approved on the basis that if evidence of harm emerged, the maximum stake would be reduced. The burden of proof should be on the bookmakers to show that stakes in excess of £2 are not harmful.
Myth 4: “There is no point in restricting FOBTs when the growth of mobile has given everyone a FOBT in their pocket.”
Whilst gambling on mobile smartphone apps has grown about 300% a year, this argument can be simplified by saying: “There are other harmful gambling products so there is no point restricting the most harmful product.”
It is the locations and demographic that bookmakers target with FOBTs that is actually the least likely to have access to 1) bank accounts 2) debit cards 3) credit thus restricting access to remote gambling sites. Bookmakers are however, using the cover of “account based play” instigated by the government, to provide cash top up cards that facilitate access to their online sites thus detouring around traditional means of access. The government measures have inadvertently linked FOBT play to mobiles.
FOBTs are the most harmful gambling product. Research has shown that they are the most addictive, and bookmakers disproportionately target deprived areas. There are more than twice as many in the most deprived 25% of wards compared to the 25% most affluent.
A report by Gambling Data found that FOBT users tend to be of the C2DE demographic, many of whom do not have smartphones and cannot afford to lose up to £100 every 20 seconds.
Unemployed people are twice as likely to use controversial Fixed Odds Betting Terminals and there are 2 million people in the UK without access to bank accounts. The number of people without access to full banking facilities is estimated to be much higher when discounting the use of Post Office account cards
which do not provide full banking/debit card use.
Myth 5: “Betting shop numbers are not increasing. There has been some clustering in secondary town centre locations and shopping parades.”
Whilst the aggregate number of betting shops might not have increased much, the number on the high streets has, as bookmakers have moved licenses to more prominent locations. Betting shops are clustering on high streets, and this is incentivised by the limit of four FOBTs per premises.
An Association of Town and City Management report “Town Centre Futures” found a 43 per cent increase in town centre units being taken up by betting shops between 2004 and 2012.
Government line – There are indications that, as a result of these regulations, players on B2 gaming machines may now be making a more conscious choice to control their playing behaviour
The DCMS evaluation has been found “lacking quality and availability of data” under a review carried out by Landman Economics. DCMS was unable to measure changes in amount staked per player over any particular period (rather than per machine, or per session) – which is the most important piece of data in terms of identifying the impact of the regulations on the extent of problem gambling.
In the absence of a pilot programme to test the impact of the £50 regulations under more rigorous conditions, the evaluation suffers from simultaneity problems – it is difficult to separate out the impact of the £50 regulations from the impact of other policies on responsible gambling introduced at or around the same time.
The evaluation omits key questions which are important to consider when looking at the success or failure of the £50 regulations. For example, the question why B2 machine players might wish to remain anonymous (e.g. because of the potential for money laundering) is not discussed.
There is potential for account-based play to lead to players being targeted by more specific direct marketing initiatives than when play is cash-based and evidence of the proliferation of this is mounting.
The Landman assessment of the DCMS evaluation is that “the evidence that the £50 regulations have worked as intended is very weak at best.”
Landman Economics highlight that DCMS were completely unable to determine whether the £50 regulations have led to an increase in “player control” or not. Let alone whether the regulations have led to a reduction in the number of problem gamblers. Similarly, the evidence on session duration and speed of play does not allow unambiguous interpretation.
It is difficult to argue that increased session length has led to more considered decision making when the time between spins has only very marginally increased. It is much more likely that players who used to stake more than £50 a spin are just losing their money more slowly. This would not represent more controlled play, but the evidence in DCMS’s evaluation on session duration and speed of play does not allow an unambiguous interpretation nor strong conclusions. Landman Economics state that overall, the evaluation seems flawed and cannot realistically be used as a reliable guide to policy.
Government line – The betting industry introduced new measures in 2014 under its code on social responsibility, which was further updated in 2015.
Rebuttal – report by NatCen found that measures included in the Association of British Bookmakers’ Code of Conduct showed “no statistical evidence of any impact of the machine changes”. These changes included the option to set time and spend limits, which still allowed the player to continue gambling once the limits had been reached.
From analyzing data between March and December 2014, NatCen found that only 1,400 out of 3.9 million sessions on FOBTs used one of the limit-setting measures introduced by the ABB. NatCen found no evidence of any impact on the length of time spent gambling, the amount of money gambled and lost, the impact on those players gambling fro sessions over 30 minutes, and the impact of the proportion of sessions using over £250 in cash for play.
The bookmakers Code of Conduct has also had to be repeatedly overhauled and the Gambling Commission passed this judgement on their attempts at self-regulation “
Government line – The sample of gamblers used in the RGT research was specifically sought to include a high proportion of problem gamblers to assess their behaviour on those gaming machines. The sample is therefore not entirely representative of wider gaming-machine players.
Rebuttal – Report 2 in the RGT research used a loyalty card sample, which NatCen assumed to be “more engaged”. 37% of FOBT users were found to have experienced problems with machines. A more engaged sample provides a much greater insight into the impact of FOBTs as they are likely to be regular core customers of betting shops, hence harm the product causes can be properly assessed. There would be little point in surveying those who use FOBTs once a year. The government is effectively arguing that users in this sample are only more engaged because they are experiencing harm or addicted, and if that is the case then it is a cause for serious concern.
Government line – “Making changes to B2 stakes now would tie the government’s hands when trying to produce a comprehensive strategy."
Rebuttal – The anomaly of stakes over £2 on the high street arose because the unregulated bookies introduced FOBTs illegally. The 2005 Gambling Act’s legitimatisation of FOBTs as “B2s” was probationary on condition that there was no evidence of harm, with the provision to reduce the stake to £2 if there was such evidence.
Research has shown that reducing the stake on gambling machines is the only effective measure for reducing harm. Bringing FOBTs into line with gaming machines in arcades and bingo halls at the £2 maximum could form part of a comprehensive strategy.
  •   Individuals who used FOBTs were associated with the highest mean number of problem gambling symptoms during the previous 12 months.
  •   The top five prevalence rates of any problem gambling symptoms were for those that used FOBTs (26.9%), spread betting (26.3%), casino table games (17.1%), sports betting (16.8%) and betting on dogs (16.1%).
  •   Using logistic regressions, the authors sought to illustrate how well each type of gambling contributes to the “prediction” of gambling problems.
  •   The top five odds ratios were for FOBTs (24.01), spread betting (21.84), internet gambling (9.58), betting on dogs (9.39) and casino table games (8.15).

Their original Code provided insufficient
assurance that they were taking social responsibility, particularly in relation to FOBTs, seriously”.
Whilst the bookmakers may have committed to stopping advertising the £100 a spin B2 content in their shop windows, they have not stopped their aggressive in-shop marketing of the machines through regular tournaments and free play activity. In their draft proposals for the Code, the ABB stipulated that demonstration games, tournaments and other free plays would be guaranteed to operate at the same statistical “return to player” percentage as paid game play. Enticing players to try game content that doesn’t function at the same payout rate as paid for games is deceitful. Yet the Commission notes in its brief that
this measure has been “omitted from the final version of the ABB Code”.
  •   When “involvement” (i.e. the number of types of gambling used in the previous 12 months by individuals) was factored into the modelling, FOBTs were the only gambling type that maintained a significant positive relationship to disordered gambling.
  •   FOBTs had the strongest association with gambling-related problems, but few people (2.6%) had used them in the previous 12 months, suggesting specific types of gambling represent increased risk.
  •   A summary of this research is here -- content/uploads/2015/10/2014-11-28-Research-Summary-Disordered-gambling-type-of- gambling-and-gambling-involvement-in-the-BGPS-2007-v1.2.pdf
  •   Problem gambling prevalence was highest among those who reported that they gambled on nine or more different activities on a regular basis (27.8%). However, the frequency and spend on different gambling products by problem gamblers is not determined by the BGPS.
  •   Professor Jim Orford, Heather Wardle and Professor Mark Griffiths (2013) sought to address this by estimating how many days’ play of each gambling activity was attributable to problem gamblers and how much problem gamblers spend on each gambling activity.
  •   The authors found only three gambling activities where the estimate of days play attributed to problem gamblers exceeded 20%: casino games (31%), FOBTs (26%) and dog races (22%). In other words, problem gamblers account for 26% of the total time spent on FOBTs by both problem and non-problem gamblers combined.
  •   Problem gamblers lost £297m on FOBTs, and £57m on dog racing. This compares to £76m on table games in casinos, £57m on horse racing, £47m on slot machines, £18m on football pools and £16m on bingo. Problem gambler losses on FOBTs are greater than several other leading gambling activities combined.
  •   The authors also estimated the days and spend attributable to problem and moderate risk gamblers combined and found that this varied from 5-6% for lotteries. It was as high as 40% for FOBTs and for dog racing.
  •   However, it is important to note that problem gamblers lose nearly four times as much on FOBTs compared to dog racing, which indicates that FOBTs have the capacity to cause greater harm.
  •   A summary of this research is here -- content/uploads/2015/10/2014-11-28-Research-Summary-What-proportion-of-gambling-is- problem-gambling-BGPS-2010-v .1.2.pdf
  •   The research focuses on one element – the individual – rather than also focusing on stakes and prizes. Key metrics used by FeatureSpace in developing a problem gambling detection algorithm included: frequency and duration of play, net expenditure, levels of play engagements, number of activities or game types undertaken, and chasing. The omission of stake size from predictive model analysis is a glaring error that precludes FOBT policy relevance.
  •   Report 2, Page 9 states that 19% of those that bet an average of 53p per spin or lower were problem gamblers, but 82% of those that bet £13.40 or more were either problem or at risk gamblers. 31% of problem gamblers had an income level of less than £10,400 per year.
  •   Report 2, Page 69 shows 37% of FOBT players have experienced problems -- blem%20gambling%20- %20findings%20from%20a%20survey%20of%20loyalty%20card%20customers.pdf
  •   Report 5 found that gambling at £20 compared to gambling at £2 reduced decision making ability --
  •   In an evaluation of the research, Professor Linda Hancock argued: “The results point to the need for implementation of lowered bet limits to protect players from machines that are calibrated too high for locally accessible venues on high streets.” An executive summary of this evaluation is here -- Executive-Summary-4March15.pdf
  •   Former chief economist and head of research at DCMS, Dr Stephen Creigh-Tyte, found that: “...binding limitations on wagers can limit the maximum session losses suffered by punters. The effect tends to be greater the higher the prize and the larger the probability of winning and the lower the time taken by each game.”
  •   “This finding is in line with Blaszczynski et al. which found that there was a large reduction on time played, number of bets, money lost and consumption of alcohol and tobacco among players of machines the stake of $1 compared with those who played machines with maximum stakes of $10.”
  •   The study aimed to evaluate the effectiveness of three proposed modifications to the structural characteristics of electronic gaming machines (EGMs) as harm minimisation strategies for non- problem and problem gamblers. Structural changes included reducing the maximum bet per spin, reducing reel spin and removing large note acceptors.
  •   Those playing machines with a $10 maximum bet spent more time, placed more individual bets, sustained greater losses, smoked more cigarettes and consumed more alcohol than those playing machines with a $1 maximum bet. Patterns of play with faster reel spin speed (3.5 compared to 5 seconds) and for machines with and without the high denomination note acceptors did not differ.
  •   Problem gamblers were four times more likely to wager in excess of $1 a spin compared to non- problem gamblers.
  •   This research informed the Australian Productivity Commission’s recommendation for a “Dollar Bet Limit” in 2010 -- Productivity-Commission-1.pdf
  •   At a venue level, per capita EGM expenditure was significantly correlated with rates of gambling harm. The level of gambling-related harm varied substantially among venues, both between venues of different types and within each category of venue.
  •   The prevalence of gambling-related harm at the venue level was correlated with estimated monthly EGM expenditure per adult. Each $20 increase in monthly EGM expenditure per adult was associated with an estimated 1.75% increase in the prevalence of gambling harm for a club with 22 EGMs.
  •   This is particularly relevant to a UK context when 1-2% of the population use FOBTs yet they derive £1.6bn per year in gross gambling yield. This research can be found here --
     Surveyed 44 problem gamblers, and broke them down by their favoured form of gambling.
  •   They found that: “The mean latency of problem gambling onset in the 19 subjects who were traditional gamblers at the time of onset was significantly longer than the latency of the 25 subjects who were machine gamblers.”
  •   Therefore, problem gambling occurred in machine gamblers much faster than those who favoured other forms of gambling.
  •   The full report is here -- Zimmerman-Rapid-Onset-of-Pathological-Gambling-in-Machines-Gamblers.pdf
  •   442 participants with a lifetime diagnosis of pathological gambling took part in a standardised clinical interview. High financial losses were associated with suicidal events, alongside mood disorders.
  •   Gambling on electronic gambling machines in gambling halls or bars was associated with increased odds of suicidal events. Other types of gambling, such as casino games or betting on sports, or the number of DSM-IV criteria of symptoms for pathological gambling, were not associated independently with suicidal events.
  •   The findings suggest that gambling on electronic gambling machines in gambling halls or bars is associated with suicidal events in pathological gamblers independently of comorbidity. This result shows that the type of gambling needs to be considered as a relevant factor.
  •   Research published in the Journal of Neuroscience discovered rats behaved like problem gamblers when sound a light cues were added to a “rat casino” model.
  •   Researchers were able to correct the behaviour by blocking the action of a specific dopamine receptor, laying the groundwork for possible treatment of gambling addiction in humans.
  •   This is relevant to FOBTs. which add enhanced audio and visual features to a much faster variation of roulette, making it more addictive.
  •   The study found that the more you gamble, the greater your risk of developing problems. There is no safe level of gambling, only risks that increase as you lose more money – even at relatively low levels of losses.
  •   These findings are important because they contradict conventional wisdom that there is a threshold below which gambling is safe. According to this view, only after a particular consumption level does risk mount.
  •   Public information about gambling should not imply that moderate gambling is risk-free. Public health messaging similar to that which related to tobacco should also apply to poker machine gambling.
  •   A write up of this research is here -- tobacco-no-amount-of-it-is-safe-51037
 It is demonstrated that throughout the world, research findings have linked slot machines with pathological gambling. Slot machines are now the predominant form of gambling activity by pathological gamblers treated in self-help groups and professional treatment centres in numerous countries.
 The full paper is here --
  •   Current services for problem gambling treatment are “underdeveloped, geographically ‘patchy’, or simply non-existent. A treatment response is needed to match the expansion of gambling in Britain. Research indicates that the overall number of adults gambling in Britain is increasing, and the number of adult problem gamblers is also rising with 450,000 in Britain today.”
  •   Expresses “significant concerns” about betting shops “visibly clustering together on the high street” and notes that “fixed odds betting terminals have been linked with problem gambling”.
  •   Touchscreen electronic gaming machines, fixed-odds betting terminals may pose a greater risk of causing problem gambling than other forms of gambling. This has been reported as being partly due to the ability to stake up to £100 on a game that can be played rapidly and repeatedly, and the introduction of more than 33,000 fixed odds betting terminals into betting shops across Britain.”
  •   “Widely-available electronic gaming machines are associated with the highest rates of problem gambling worldwide; in contrast, casinos that require deliberate planning and travel efforts tend to discourage repetitive and impulsive conduct. Anecdotal evidence suggests some forms of gambling are more addictive than others. Generally, forms of gambling that are most addictive are those that allow for continuous play and which offer quick and frequent payouts.”
  •   This can be found here -- behaviours-corrected.pdf
  •   Because expenditure on FOBTs supports relatively little employment compared with consumer expenditure elsewhere in the economy, Landman Economics found that £1bn of “average” consumer expenditure supports around 21,000 jobs across the UK as a whole, whereas £1bn of expenditure on FOBTs supports only 4,500 in the UK gambling sector.
  •   This implies that an increase of £1bn in consumer spending on FOBTs destroys over 16,000 jobs in the UK.
  •   If current growth rates are maintained, gross industry revenues from FOBTs will double in real terms over the next ten years, resulting in a gain of around 5,000 jobs for the gambling sector by 2025-26, but a reduction of around 25,000 jobs for the economy as a whole.
  •   At the end of the ten-year period, the total annual wage bill in areas where FOBTs are established will be around £700m lower than if FOBT use remained at its 2015 level.
  •   At the end of the ten-year period, net tax receipts will also be around £120m per ear less due to the expansion of FOBTs. Revenue from Machine Gaming Duty is forecast to increase by around £280m but this is more than offset by reduced receipts from income tax and National Insurance contributions (due to lower employment) and reduced VAT receipts (due to lower consumer spending on other goods and services).
  •   Increased proliferation of FOBTs also appears to be linked to an increase in the number of incidents in betting shops which required police assistance – up by 51 per cent in 2014 compared to 2013.
  •   The full report is here -- Impact-of-Fixed-Odds-Betting-T erminals-20151.pdf
  •   Key evidence on the adverse economic impact was provided by the consultation response from the Association of British Bookmakers (ABB), which claimed around 7,900 betting shops and 39,000 jobs would be “at risk” if the maximum stake for FOBTs were reduced to £2.
  •   There are several reasons why the ABB have overstated the likely impact: (i) It assumed a very large (68.6%) reduction in the gross profits from FOBTs. NERA identified a number of reasons why the impact could be less than this. (ii) It ignored the likelihood that at least some of the money no longer spent on FOBTs would switch to over the counter betting, thus mitigating the overall impact; and (iii) its approach of defining shops as “at risk” is seriously flawed. It does not mean that a shop is likely to close in practice, and the definition of “at risk” is far too wide.
  •   NERA’s calculations suggest that the number of shop closures could be between 700 and 1200. This would leave the industry with just 5 to 10 per cent fewer shops than in 2000, before the introduction of FOBTs.
  •   The overall impact on employment and tax revenues for the UK could well be a positive, perhaps a net increase of between 1,200 and 2,400 jobs as a result of increased spending in other sectors of the economy.
  •   The full report is here -- 040414.pdf