Politics Home | Fixed Odds Betting Terminals

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22 December 2015

Government will be forced to act on FOBTs both sides of the border

The Campaign for Fairer Gambling writes that the Government needs to act on fixed odds betting terminals because of local authority pressure and investigations by the Scottish Government.

Gambling

 

For the first time since the Sustainable Communities Act (SCA) became law, the Government will be forced to enter into negotiations where they will have to “try to reach agreement” with the Local Government Association (LGA).

The initial proposal for a reduction in the maximum stake on Fixed Odds Betting Terminals (FOBTs) from £100 to £2 a spin was submitted by Newham Council, on behalf of 93 local authorities, making it the best-ever supported initiative under the SCA.

Ninety-six councils, comprising of Conservative, Labour and Lib Dem controlled authorities [including Exeter City Council], now support the proposal. They know that they are unable to ensure the licensing objectives of fair and open gambling, prevention of crime and prevention of harm associated with gambling cannot be upheld whilst £100 a spin machines are permitted on the high street. Despite its level of support, Newham Council’s initial submission was rejected by the Government.

The proliferation of betting shops on the high street and the associated clustering is driven by FOBTs, as bookmakers seek to circumvent the limit of four machines per premises by simply opening more. In Newham, this has led to the phenomenon of 18 betting shops on one street. Newham Council understand, alongside 95 other local authorities, that in order to deal with the issue of betting shop clustering the root cause must be addressed, and that is the staking capacity permitted on FOBTs.

FOBTs are the most addictive form of gambling, and now account for more than half of betting shop profits – topping £1.6bn last year. Under the previous Gambling Act, bookmakers were not permitted gaming, and so provided roulette on FOBTs illegally, claiming the random number generator was at a remote location and therefore the experience was akin to betting on a horse race.

The 2005 Gambling Act legitimised FOBTs as “Category B2” machines, but Dame Tessa Jowell, the Minister responsible for the Act, stated they were “on probation”, granting the responsible Minister the power to reduce the maximum stake to £2 a spin if evidence of harm emerged.

Number 10 recently blocked gambling Minister Tracey Crouch’s request for a review. Whilst a backbencher, Ms Crouch made some very sensible comments in the last Parliament in support of FOBT stake reduction. But now the Government will be forced to negotiate for a period of up to six months with the LGA, which has re-submitted Newham Council’s proposal under the terms of the SCA. The LGA has previously stated its support for a £2 cap, and the SCA requires that the government must “try to reach agreement”.

The Campaign looks forward to a constructive negotiation between the LGA and Government, which must act in good faith, take an evidence-based position and not allow the bookmakers’ lobbying to influence the process.

Meanwhile in Scotland, the Holyrood Local Government and Regeneration Committee having looked into FOBTs has concluded that they should be “banned from the high street”.

The report correctly explains that the relevant provisions in the Scotland Bill do not give the Scottish Parliament any powers to control FOBTs and betting shops as they only apply to new premises.

The Campaign congratulates the Scottish Executive on holding an evidence based public enquiry. As the Gambling Act requires local authorities to help deliver the licensing objectives, it is clear that Scotland should be granted adequate powers.

The Scottish people remember all too well the number of politicians who spent time arguing for Scotland to stay in the United Kingdom. Promises were made that enough power would be devolved to Scotland.

Will the Government continue to regard the commercial interests of the bookies as more important than delivering the Gambling Act objectives of “fair and open” gambling, preventing an association between crime and gambling, and the preventing harm to the young and vulnerable?

How could Westminster possibly justify continuing the FOBT status quo under the combined pressure of the SCA submission and the Scottish demands?

 

Stop The FOBTs | Govt will be forced to negotiate with the Local Government Association on FOBT maximum stake

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22 December 2015

Government will be forced to negotiate with the Local Government Association on FOBT maximum stake

For the first time since the Sustainable Communities Act (SCA) became law, the government is being made to negotiate and “try to reach agreement” with the Local Government Association (LGA).

Originally submitted by Newham Council, the initial proposal fought to get the maximum stake on Fixed Odds Betting Terminals reduced from £100 to £2 a spin. The proposal was submitted on behalf of 93 local authorities crowning it the best ever supported initiative under the SCA.

Despite its record levels of support, Newham Council’s initial submission was originally rejected by the government.

Currently in Newham there are a whopping 18 betting shops on one single street. Newham Council believe that the root cause of the bet shop cluster epidemic lies in the high staking capacity of FOBTs, an issue which they believe must be addressed.

We look forward to constructive negotiation between both the LGA and the government and hope it acts in good faith, takes an evidence based position and doesn’t allow bookmakers’ lobbying to influence the process.

Stop the FOBTs | Number 10 blocks much-needed review on FOBTs

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29 November 2015

Number 10 blocks much-needed review on FOBTs

News emerged this month that David Cameron had blocked a review of addictive fixed odds betting terminals (FOBTs).

The story broke in the Times (£) – and made reference to fellow Tory Boris Johnson and his public concerns around the £100 a spin machines. It revealed that the The Department for Culture, Media and Sport had proposed a review of the machines, which made £1.6bn for thebookies in the year to September 2014, a £45m rise on the previous 12 months.

However, the proposal was blocked by the Cabinet Office, in a move that Tory MPs say was sanctioned by Number 10.

Charles Walker, vice-chairman of the 1922 committee of backbench MPs, said the decision flew in the face of mounting concerns among fellow Conservatives. “There are a growing number of colleagues on our benches who are concerned about FOBTs,” Walker said.

“I would have very much welcomed a review. I don’t like the idea of them, I don’t like the way they operate and I don’t like the way that the betting industry tries to defend them.

“We all know what they are — they are a way of extracting vast sums of money from people who can mostly ill- afford to lose it.”

The story also made headlines in Totally Gaming, BBC Kent and the Christian Institute.

LGA | Briefing on Fixed Odds Betting Terminals

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24 February 2015

LGA briefing: Fixed Odds Betting Terminals

Key Messages: 

  • Many councils have long held concerns about the impact of clustering of betting shops on their areas, as well as the associated numbers of Fixed Odds Betting Terminals (FOBTs).
  • In recent years, betting shops have increasingly moved into vacant premises in high street locations, thereby increasing their visibility. Many councils are concerned about the resulting clustering of betting shops, with the worst affected reporting having over 40 premises in close proximity to each other.
  • Councils are also concerned that vulnerable residents are losing money on high stakes betting machines. At £100, the stake for a FOBT machine is significantly higher than for other betting machines.
  • In 2014, the LGA set up a ‘Betting Commission’ to bring together councils, the Association of British Bookmakers (ABB) and the ‘Big Five’ firms (William Hill, Coral, BetFred, Ladbrokes and Paddy Power) to discuss council concerns about betting shops and FOBTs. This has led to a joint LGA-ABB framework to encourage closer engagement between councils and betting shops to address local concerns.
  • However, the LGA believes that fundamental changes are needed to enable councils to tackle betting shop clustering and the risk of harm posed by FOBTs.

Background 

Gambling Act 2005 
The Gambling Act 2005 (the Act) introduced a new system of governance for all types of gambling.

The Act requires local licensing authorities to “aim to permit” gambling, subject to licences complying with the three licensing objectives: keeping crime out of gambling, making sure gambling is fair and open and protecting children and vulnerable people.

In addition, the Act abolished the so-called “demand test”. This means that local authorities are now no longer allowed to base a decision on whether or not there is demand when considering an application for a betting shop. This is the case even where there local residents are opposed to the application or there are already a number of other betting shops in the immediate vicinity.

Clustering of betting shops
Figures suggest that the overall number of betting shops has remained largely unchanged since the introduction of the Act. However, there has been a shift in the location of premises, with betting shops increasingly moving into vacant stores in high street locations and in close proximity to each other, creating the clustering effect.

Oversaturation of any type of establishment on high streets and in town centres is a significant concern to local residents and can damage the long term sustainability of high streets / town centres by limiting the variety of shops and services available in the retail offer.

While many areas welcome the presence of branded betting shop premises on their high streets, others are extremely concerned about the overall number of betting shops. Additionally, there is concern that betting shops are clustering in deprived areas. This highlights the need for councils to have flexibility to respond to local circumstances when considering planning or licensing applications for betting shops and other types of premises.

 The number of betting shops in Islington has already doubled in the last decade to 72, while Newham has 81 betting shops. Tottenham High Road, in Haringey is home to 11 betting shops alone.
 Greater London Authority figures show a 13 per cent increase in betting shops in London’s town centres between January 2010 and December 2012.
 There are 39 licensed gambling premises in Stockport, including 33 betting shops. Twelve of these are located within the town Centre.

Type of betting activity – Fixed Odds Betting Terminals
Changes in technology have led to a change in the type of machines available in premises. In 2003 there were no FOBTs at all. Now each betting shop is permitted up to four FOBTs. There are concerns that FOBTs can be habit forming and that the size of stake and speed with which money can be accepted can make them a particularly addictive form of betting.

To establish if it is possible to identify harmful markers of play and whether FOBTs pose particular risks, the Responsible Gambling Trust commissioned the National Centre for Social Research to conduct research into play on FOBTs based data provided by the UK’s 5 main bookmakers.

The research* found:
 Key regional differences. Most bets were placed in London where there were the highest stake values and most money was lost.
 Those who play machines after 8pm have distinct patterns of play: stake sizes rose dramatically from 8pm, the proportion of sessions that reached the maximum stake doubled between 10pm and midnight.
 Machine play appears to be affected by major sporting events, with an increase in the number of bets placed when large sporting events occurred.

The numbers of FOBTs have not increased significantly over the past 6 years. However, according to the ABB, the percentage contribution of machine income to average betting shop profits was 39.9 per cent in 2008 and rose to 49.4 per cent in 2011.

The £100 maximum stake for a FOBT machine is significantly higher than other betting machines, and maximum pay-outs are proportionately much lower relative to the stakes involved. Additionally, play at casino tables is four times slower than is the case with FOBTs where £100 can be staked in 20 seconds.

The current £100 maximum stake should be brought in line with maximum stakes for other gambling machines allowed in betting shops (£2) and casinos (£5).

LGA position on betting shops / FOBTs
In April 2014, the Government announced a series of measures aimed at addressing concerns about betting shop clustering and FOBTs. Government chose not to adopt some of the tougher measures that they were considering (for example, giving councils the power to limit the number of FOBTs in a shop). Instead, key proposals included:
 A Department for Communities and Local Government consultation on proposals to put betting shops and payday loan shops in a separate use class. Therefore, planning permission would be required where a new betting shop represents a change of use.
 The requirement for new premises licence applications to demonstrate how betting shops will meet local social responsibility requirements.
 A new range of player protection measures that ‘end unsupervised high stakes play’, but there will be no reduction in the current maximum £100 stake. Customers wishing to stake more than £50 on FOBTs will need to pay over the counter in cash or use account based play, which track and monitor play.
 A range of work on gambling advertising including the implementation of a Think-25 initiative (as distinct from Think-21) in line with other age-restricted products.

The Government announcement is a step in the right direction. However, the proposals do not enable councils to tackle the problem. For example, they do not address the perpetuation of existing clustering. If an existing betting shop closes down, a different operator would be free to open a new betting shop as there would be no change of use.

Councils should be able to restrict the opening of any new betting shop (regardless of whether it constitutes a change of use) if they do not believe there is demand for the betting shop and / or there is evidence that it will be harmful to local economies, communities or individuals.
Alongside the proposal to amend use classes, the LGA is calling for the return of the demand test (or some consideration of cumulative impact) in the Gambling Act 2005, which would be the most appropriate and effective route for addressing clustering.

Betting Commission
In 2014, the LGA set up a Betting Commission to bring together councils, the ABB and the ‘Big Five’ firms (William Hill, Coral, BetFred, Ladbrokes and Paddy Power). This led to a joint LGA-ABB framework to encourage closer engagement between councils and betting shops to address local concerns. The Betting Commission was firmly of the view that there is significant scope for the framework to support and encourage joint working in many local areas and that a public commitment to a more collaborative approach would be helpful.

Additional powers for Scotland
Elsewhere in the UK, the Smith Commission has recommended the Scottish Parliament should have the power to “prevent the proliferation of FOBTs”. Clause 33 of the Draft Scotland Clauses 2015 will devolve legislative competence to Scotland to vary the number of FOBTs authorised by a new betting premises licence. Scottish Ministers will be given power to make an order following a debate in Parliament to vary the number of FOBTs and will therefore be able to influence how many gaming machines are available for use in Scotland. In light of this, the LGA would like the Government to clarify whether English councils will also be given the same powers as Scotland to vary the numbers of FOBTs.

* Responsible Gambling Trust: Patterns of play: analysis of data from machines in bookmakers [December 2014]

LGA | Briefing on Misuse of FOBTs in betting shops

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09 February 2015

Misuse of Fixed Odds Betting Terminals in betting shops 

Many councils have long held concerns about the impact of clustering of betting shops in their areas, as well as the associated proliferation of Fixed Odds Betting Terminals (FOBTs): each betting shop is permitted up to 4 FOBTs. The machines have a maximum stake of £100, significantly above the maximum stake that can be played on other types of gaming machines.

In 2014, the LGA set up a ‘Betting Commission’ to bring together councils, the Association of British Bookmakers and the ‘Big Five’ firms (William Hill, Coral, BetFred, Ladbrokes and Paddy Power). This led to a joint LGA-ABB framework to encourage closer engagement between councils and betting shops to address local concerns.

While there is an important role for partnership working between councils and the industry, fundamental changes are needed to enable councils to tackle betting shop clustering and the risk of harm posted by FOBTs to vulnerable people.

The LGA is calling for:

o Cumulative impact tests to be introduced to enable councils to reject applications for new betting shops where there are already existing clusters of shops.

o Licensing laws to be updated to allow councils to take health issues associated with problem gambling and anti-social behaviour concerns into account when considering applications.

o On FOBT stakes, councils believe the current £100 maximum stake should be brought in line with maximum stakes for other gambling machines allowed in betting shops (£2) and casinos (£5).

The Smith Commission recommended the Scottish Parliament should have the power to “prevent the proliferation of FOBTs.” Clause 33 of the Draft Scotland Clauses 2015 will devolve legislative competence to Scotland to vary the number of FOBTs authorised by a new betting premises licence. Scottish Ministers will be given power to make an order following a debate in Parliament to vary the number of FOBTs and will therefore be able to influence how many gaming machines are available for use in Scotland.

The LGA would like the Government to clarify whether councils will also be given the same powers as Scotland to vary the numbers of FOBTs. 

In November 2014, Newham Council lodged a Sustainable Communities Act proposal with the Department for Communities and Local Government demanding that the Government reduces the maximum stakes on FOBTs from £100 a spin to £2. In Newham alone there are currently 86 betting shop premises licenses, an increase of almost 30 per cent since 2007. Ninety-three councils have now signed up to Newham Council’s submission.