Campaign challenges IEA report on Crack Cocaine of Gambling

Posted on April 24, 2013 by admin
Print this page

In advance of a debate scheduled for Wednesday 24th April, the Institute of Economic Affairs (IEA) has published a report questioning whether the fixed odds betting terminals (FOBTs) are indeed the crack cocaine of gambling and threatening the credibility of the Campaign for Fairer Gambling.

The Campaign has hit back saying that the report is nothing more than Association of British Bookmaker (ABB) propaganda and omits key evidence that proves the harm caused by the electronic gaming machines with roulette content, found in betting shops.

Derek Webb, founder of the Campaign for Fairer Gambling said: “The IEA is a free-market libertarian think-tank, which enjoys access to both politicians and the media. It is registered as charity but does not disclose who its corporate donors are. The author of the paper, “The Crack Cocaine of Gambling?” relating to the subject matter of B2 “Fixed Odds Betting Terminals” (FOBTs), the gaming machines in betting shops, Chris Snowdon, describes himself as a “journalist” and is the Director of Lifestyle Economics at the IEA.

“This paper is a thinly veiled attack on the Campaign for Fairer Gambling and its Stop the FOBTs campaign. We are campaigning for the enforcement of the 2005 Gambling Act objectives, particularly the prevention of harm to the young and vulnerable, which we believe is contravened by FOBTs.”

The Campaign has recently exposed two independent papers of secondary research based on the British Gambling Prevalence Survey statistics of 2007 and 2010, proving the link between FOBTs and problems gambling, which has been ignored by the IEA report. Of the 15 different gambling activities considered, the only activity with a strong association with problem gambling in 2007 was FOBTs, with a fourfold relationship. The estimated loss by FOBT problem gamblers was at least £297 million in 2010, accounting for at least 23% of total FOBT revenue.

Webb added: “I am surprised that Chris Snowdon does not refer to the fact that gaming machines generate minimal employment. His paper avoids the fact that if money spent on B2 gaming machines was spent on alternative activities then more employment would be generated. He also ignores the impact of FOBT revenue on the local and wider economy.”

The Campaign for Fairer Gambling recently commissioned economist Howard Reed of Landman Economics to analyse the impact of FOBTs on job creation and the wider economy. The Landman report shows that each job created by FOBTs results in destruction of around three other jobs, therefore, a net economic loss of two jobs per FOBT job. In effect, FOBT revenue of £1 billion could be removing 13,000 jobs from the wider economy.

Horseracing, the sport of kings, is subsidised through bookmaker funding. This is clearly irreconcilable with the free-market libertarian ideology. Betting shops are currently the only easy-access high-street premises with machines that accept stakes up to £100 per spin, with all other machines being are capped at a £2 maximum. Surely a free-market libertarian would think this was protectionism.

Derek Webb of the Campaign for Fairer Gambling had been invited to speak to the IEA at a discussion on FOBTs. Derek said: “I expected the IEA to draft a paper on this drawing on the debate for substance, but I had no idea it would be drafted before the discussion. Clearly there is no purpose in the Campaign attending this event as the IEA position has already been determined.”

Hugh Robertson, the Minister at the DCMS has the power to restrict FOBTs today by reducing the stake to £2 and bringing FOBTs in line with all other machines operating in the UK. He has already stated that “common sense suggests there is a problem” but he needs evidence. The Campaign urges Hugh Robertson to look at the empirical evidence linking FOBTs to problem gambling and the Landman economic report, which highlights the negative economic impact of FOBTs.


About the Campaign for Fairer Gambling
It is a campaign striving for fairness in gambling. So, the campaign is centred around the three licensing objectives of the Gambling Act 2005, aimed at:
1. preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime,
2. ensuring that gambling is conducted in a fair and open way, and
3. protecting children and other vulnerable persons from being harmed or exploited by gambling.

The Campaign aims to:
1. Engage with politicians to toughen legislation
2. Gather evidence of unfairness and non-transparency
3. Rally support from special interest groups to highlight the negative social and economic impact caused by problem gambling under the current legislation

The Campaign for Fairer Gambling (, a not-for-profit entity funded by Derek Webb and Hannah O’Donnell.

Derek Webb was a successful poker player, businessman and the inventor of Three Card Poker; a game that is played worldwide on casino tables and is an expert in understanding gambling game content and gambler behaviour. Derek and his partner, Hannah O’Donnell, have retired from commercial activity following an asset sale of their gambling games to a US public company. Derek and Hannah provide funding for the Campaign for Fairer Gambling and the Stop the FOBTs Campaign.

Press contacts:
Rachael van Oudheusden/Lucy Knighton/Sam Metcalf
0115 948 6900