An independent report carried out by NERA Economic Consulting, published this week by the Campaign for Fairer Gambling, has revealed that the Association of British Bookmakers (ABB) – the betting industry trade body – could have misled the Government over the potential impact a stake reduction on Fixed Odds Betting Terminals (FOBTs) would have on its shops.
The new report, The Stake of the Nation – Balancing the Bookies: A Review of the Association of British Bookmakers’ Impact Assessment, analyses information submitted by the ABB to the Department of Culture, Media and Sport (DCMS) during its 2013 Triennial Review of Gambling Machines stakes and prizes. The Government said at the time that the ABB’s submission gave a “clearer understanding” of the economic impact of a stake restriction on FOBTs.
The ABB submission claimed that 7,800 betting shops and 39,000 jobs would be “at-risk” if there was a reduction in FOBT maximum stake from £100 to £2 per spin – bringing them in line with all other high street gaming machines. The NERA report, however, has concluded that these figures were “overstated” and “flawed”. Instead it found that “the likely impact on the betting industry is therefore very substantially smaller than that suggested.”
NERA projects that, even after the recent duty increase on FOBTs to 25%, the net impact of a stake reduction on tax revenues is likely to be small. The socio-economic cost of FOBT problem gambling, which is not at present measured by Government is likely to be reduced, as would the social cost to society as a result of FOBT related criminality.
Proposals by Maria Miller MP to toughen up the ABB’s Code of Conduct, following the Prime Minister’s “concerns” about the industry, combined with the possible reintroduction of a separate use class for betting shops, still fall short of dealing with the issue properly. Whether mandatory or voluntary, as was revealed this week by the Guardian, the methodology used to determine the measures now appears completely flawed based on confidential Ladbrokes data.
The responsible Minister, Helen Grant MP, has previously stated in the House of Commons that if the betting industry fails to deliver on its commitment to implement enhanced player protection measures by March 2014 and fails to share data for independent research, the Government will not hesitate to act.
With both the bookmakers’ economic argument and their methodology behind the Code of Conduct now being brought into question, the Campaign for Fairer Gambling maintains that an immediate stake reduction on FOBTs is the best solution to the problem and one that does not need primary legislation.
Derek Webb, founder of the Campaign for Fairer Gambling, said: “This NERA report shows how self-serving the ABB report is. There is some risk to industry corporate profits, senior staff bonuses and share prices, but the risk to individual shops and staff has been dramatically over-stated.
“There has been complacency in Government whereby there has been an assumption that the economic consequences of FOBTs are understood, and this is then used as an excuse not to take action on FOBT stakes. However, if Government has been relying on the ABB report, they have been relying on misleading representations rather than evidence. It is essential that this new evidence-based report by NERA is given adequate consideration by Government.”
Tom Watson, MP for West Bromwich East, added: “This report shows that the government has been badly advised and misled by the betting industry about the economic value of FOBTs to betting shops and unfortunately the ministers responsible have been suckered by this overstated argument.
“The bookmakers have inflated the threat of job losses and shop closures as a scare tactic to protect FOBTs and this comes at the same time a report from Goldsmiths University highlights research into problem gambling tends to be ‘hampered and blocked’ by the industry. I urge Maria Miller and Helen Grant to read this report and seek explanations from the bookmakers.”
Derek Webb added: “The Stop the FOBTs campaign will continue until it prevails in a stake reduction from £100 per spin to £2 per spin, which can be done based on the precautionary principle, without primary legislation. Bookmakers are lacking in anti-money-laundering and social responsibility controls, according to Gambling Commission investigations. There is no justification for government restricting bingo and arcade operators to £2 maximum stakes whilst the bookmakers are allowed the most addictive form of gambling, the super-speed roulette at stakes up to £300 per minute.”