Fixed Odds Betting Terminals

Mark Field Excerpts

Tuesday 26th April 2016 Westminster Hall

[Mark Field (Cities of London and Westminster) (Con)]

As the hon. Member for Strangford (Jim Shannon) rightly pointed out, the size of the stake—up to £100—and the very short cycle make FOBTs a particularly aggressive form of gambling that encourages fast repeat visits. FOBTs now account for almost half of betting shops’ turnover in the UK as a whole. Given that shops are limited to only four terminals per site, the way to make more from that money spinner is to open additional branches. The result has been that betting shops have proliferated, particularly in the Chinatown area of my constituency. Local authorities are hamstrung by the “aim to permit” guidance under which they review premises’ licence applications for betting shops.

The Soho Society and the London Chinatown Chinese Association have become increasingly alarmed. Betting shops have been pushing for later opening hours and more branches to target people—particularly members of the Chinese community in my constituency, who work until the early hours in the area’s busy restaurant scene. Many of those people are particularly vulnerable to becoming problem gamblers.

Some 12 months ago, the Government accepted that FOBTs are a serious cause for concern and said that more evidence would be gathered on their negative effects. Unfortunately, there is still no sign of a definitive review. Several key questions need to be answered. Should £100 stake gaming machines be allowed in ambient gambling environments such as betting shops? Do those machines exacerbate problem gambling in betting shops? Would cutting the stake protect those who are vulnerable?

The regulator has a statutory duty to act to protect the vulnerable. It has suggested that a precautionary approach could be applied to reduce the stake. Campaigners against FOBTs want the maximum to be reduced from £100 to £2, in line with all other category B machines. I support that suggestion.

Gambling the world over has evolved within a fairly sensible, consistent structure. The hardest gambling is reserved to highly regulated venues such as casinos—my constituency has many—to which customers go with the expectation of experiencing a much harder gambling environment. Casinos have very high levels of player supervision and protection. Players tend to be occasional visitors, and casinos tend to be viewed as destination leisure venues that have more than just gambling on offer.

The Gaming Act 1968 put in place a regulatory pyramid. At the top, harder gambling was reserved to more strictly regulated venues. The lowest level of supervision was for soft gambling at seaside arcades, for example. The middle tier—the general, high street, ambient gambling, which we are discussing today—was expected to be fairly soft gambling with lower levels of player supervision. It is not, in my view, suitable for the kind of hard FOBT games that we see today.

B2 gaming machines are totally inappropriate for high streets across the country at the current level of stake. Until their advent, bookmakers had few issues with crime and attacks on staff. Since their introduction, police call-outs to gambling premises have rocketed, as frustrated users carry out damage to machines.

I understand that the instinct of this Government—a Conservative Government—is not to give in to nanny state urges. I make that sort of argument fairly regularly. However, it seems odd that at the self-same time as we are imposing a sugar tax and ever more draconian measures against smokers, we are allowing these high-stake gambling machines to proliferate in a loosely regulated environment. I ask the Minister to work with responsible operators in the gambling industry, of whom there are very many, to reduce the FOBT stake.

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[Mr Nuttall]

The fact is that very few people bet £100 a stake—only about one in 100 customers even stake over £50. The average stake on a machine is £5.13.

As I was saying, there is no control over how many games of bingo someone may play, and there is no control over how much people may spend on betting on their mobile phone. Betting shops, arguably, are the safest place to gamble responsibly.

[Mark Field]

I have some sympathy with the nanny state argument. As my hon. Friend knows, we have had discussions about that in many different areas of public policy. Does he not recognise, however, that there is an element of responsibility here? Without doubt, no self-respecting newsagent would be selling dozens and dozens of scratchcards to a 16-year-old; the newsagent would take responsibility there and then. A lot of things are regulated, but in this sort of area the Government need to find a balance. As I said in my contribution, it seems to me that what is happening in many of our betting shops should be regulated at a higher level than might be expected for a seaside arcade.

[Mr Nuttall]

In answer to the point about scratchcards, there is nothing to stop people going into 10 different shops and buying as many scratchcards as they want. I am not suggesting that they would buy them all from the same shop.

I will make two final points. First, it is generally accepted, and it has been mentioned in the debate this morning, that the FOBT machines make a profit of about £1,000 a week—the figure given earlier was a little more than £800 a week. Given that the shops are open for about 90 hours a week, on average, that works out at a profit of about £11 an hour. So the question that those who want to control the machines further must answer is, do they think that such a level of hourly profit is fair? If not, what hourly rate do they think is fair?

Secondly, it is argued that the FOBTs are used for money laundering. That argument has been advanced again this morning. Unfortunately, however, it has been advanced by exactly the same people who argue that people are losing £300 a minute on the machines. Which is it? Are people losing £300 a minute, in which case that is not a good way to launder money, or are the machines being used for money-laundering purposes? Clearly, they cannot both be true.

We should protect the freedom of the individuals who want an occasional flutter, and allow them to do so.

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[Clive Efford (Eltham) (Lab)]

It is a pleasure to take part in this debate under your chairmanship, Sir Alan, and I start by congratulating the hon. Member for Strangford (Jim Shannon) on securing it; it is important and has certainly attracted a lot of support on both sides of the House.

I get a feeling of déjà vu when I come to these debates, particularly when I read the briefings from the Association of British Bookmakers—I think I could have written the opening sentence of the one I have here before I even received it. It says:

“There is no objective evidence from either past British Gambling Prevalence surveys or Government Health surveys that problem gambling levels in the UK are rising.”

We ask the question, “Is there a problem with FOBT machines?”, and we get an answer to a completely different question. This has got to stop. That sort of propaganda does the industry no service whatsoever, and it is not fooling anyone.

[Mark Field]

Will the hon. Gentleman give way?

[Clive Efford]

No, I will not, because of the time. I have argued consistently that if we are going to move ahead with any restrictions on FOBTs, we need to do so on the basis of evidence. People are calling for a £2 stake, but there is no evidence that that will be any safer than the existing stake.

However, in terms of the issues confronting us—as many hon. Members have said today—this is about location more than anything else. It is about the proximity of these machines to people who may be vulnerable to developing a gambling habit and to falling foul of their propensity to gamble too much by going into a betting shop and losing more money than they can afford to. There is no denying that a high proportion of these machines are in proximity to socially deprived communities, and a disproportionate amount of the money gambled in them comes from people on low incomes.

We hear the figures about the numbers of betting shops and all the rest of it, but it is clear that the trend in betting shops is for more money to come from B2 machines than from over-the-counter betting on horse-racing, dog-racing or football, as more of that sort of betting moves online. The growth in the gross gambling yield from machines has more than covered the decline in over-the-counter betting, with a combined gambling yield in 2014-15 of £3.74 billion, which is higher than in any previous year recorded by the Gambling Commission. The yield from the machines has been higher than that of over-the-counter betting every year since 2011-12 and now represents 54.2% of the combined gross gambling yield. The number of premises has been in decline since March 2014: there were 299 fewer premises on 30 September 2015 than on 31 March 2014. However, the number of B2 machines has increased year on year since records began in 2008-09 and has now reached 34,500.

We have a growing problem in our communities, given the proximity of FOBTs to locations where, I think, they do not belong. Anyone who has been to discuss these machines with me knows I loathe them. I do not think they belong in our high streets, but they are an unintended consequence of the Gambling Act 2005, and they are now there. Many businesses are predicated on the machines being there and if they were to be removed, people would lose their jobs and livelihoods, which is why we must move forward on the basis of evidence.

We are told that there is no problem, or that the problem lies elsewhere, or perhaps that the problem is not getting any worse, so we should not do anything about it—or a combination of all those arguments. However, the number of people in treatment, according to GamCare, is up by 39%, and the number of people who present problems as a result of playing FOBT roulette machines represent 26% of those who are in contact with GamCare. The number of calls from people addicted to FOBTs has gone up by 50% over the last five years.

I accept that there is a growing problem online. For the first time ever, the current figures show that the number of people presenting problems to GamCare from gambling online has increased over the number of people who are presenting problems from machine-related abuse. However, that can be explained by the increase in the number of people who are contacting GamCare and does not show a reduction in the problems from FOBTs. It shows an overall increase of people who are presenting with problems, and we have to address that issue going forward.

The Gambling Commission wrote to the Secretary of State in March 2015 about the conclusions of research carried out by the Responsible Gambling Trust and NatCen Social Research. It was based on people who gamble from accounts, because they can be tracked and their gambling behaviour can be followed. There were some interesting factors: 37% of the number of people who have loyalty cards or gambling accounts said that at some time, they had a problem with machine gambling—so a very high proportion are presenting with a problem.

The Gambling Commission says that the betting industry needs to increase the number of people who have accounts, so that detailed research can be carried out on what is going on with these machines. In the letter, it states:

“Consequently, we recommend encouraging operators to promote account-based play with the aim of increasing uptake significantly. If they succeed, playing anonymously might itself become a useful indicator of risk. If operators fail to make sufficient progress with promoting account-based play, then the case for making it mandatory would need very serious consideration.”

Will the Minister therefore consider, in his next discussions with the betting industry, whether that should be made mandatory? If we are not making any progress, we are just not finding out what the problem is. We have the technology. We can do it and we need to make more progress in this area.

I say to the betting industry, “Make this move before it is forced on you, or you will lose the machines completely.” I think that the time is coming when action on these machines will be forced on the gambling industry. If there is not a problem, let us have the data and the account-based play, so that we can demonstrate that there is no harm.

The time has come to apply the precautionary principle. The betting industry says there is no evidence to prove that the machines are harmful, but there is no evidence to prove that they are not, so we should apply the precautionary principle that if it cannot be proved that they are not harmful, let us remove them until there is proof that they are not. It is time to act. The data are available to the Minister so let us move towards account-based playing of the machines and ensure that we satisfy ourselves that it is safe to have them on our high streets. Otherwise, they should be removed.

In conclusion, I want to ask the Minister a few questions. The Government are carrying out a review of the £50 stake, which is why the triennial review has been delayed. When will the former be concluded and when will the triennial review of stakes and prizes start? What steps is he taking to investigate money laundering—several hon. Members highlighted that this morning—and whether there is a money laundering problem?

There is concern about late-night betting and the fact that stakes on these machines tend to increase late at night. Should we review the opening hours and the rules that allow live racing from Hong Kong to be played and betting shops to stay open even later so that more people can play these machines? Should we mandate account-based play on these machines? Will the Minister support giving local authorities, once and for all, the powers they are demanding so they can control the proliferation of betting shops in our communities?