The Speculator

A FOBT ban could be terminal for high-street bookies – and great for a Labour donor

‘The crack cocaine of gambling’ and its enemies

22 February 2014

9:00 AM

22 February 2014

9:00 AM

Hands up: who knows what a FOBT is? It stands for fixed odds betting terminal. No? Well, you should, because they are a serious menace to society. That’s what Ed Miliband says, anyway.

FOBTs, you see, are those souped-up slot machines one can find in bookmakers’ shops all over the country, especially in deprived areas, usually next to Poundland. The most popular ones offer casino-type games, such as roulette, and have become notorious because of the speed with which they enable punters to lose large sums of money: up to £100 every 20 seconds, apparently. The Daily Mail likes to call FOBTs the ‘crack cocaine of gambling’, which makes them sound much more fun than they are. Campaigners claim that gaming companies use FOBTs to prey on ‘the most vulnerable’, by which they mean the feckless poor.

Miliband, a puritan at heart, wants to give councils the power to ban FOBTs. David Cameron, for his part, says that he wants to see ‘empirical evidence’ before he takes action, but he does believe that there are ‘problems with the betting and gambling industry’ and that it is his job to stamp them out.

The hoo-hah has so far done the gambling industry little harm. Playtech Plc, which makes much of the gambling software for FOBTs, computers and  mobile phones, last month announced better-than-expected results for the end of last year. It’s true that Ladbrokes, Britain’s leading bookmaker, is now halting its shop expansion strategy, but that was more to do with a broader move into the digital sphere than any response to the panic over FOBTs.

In fact, there must be lots of people who have been introduced to FOBTs because of the fuss surrounding them. Like me. Not so long ago, I heard Tom Watson MP on the news talking about the ‘pernicious’ influence of these wicked machines. Shut it, Tom, I thought, and headed to my local Ladbrokes. I only managed to lose £10 in about 20 minutes on the roulette game before I got bored. I might go back, though. It would be satisfying to tell Tom Watson that his stand against the evil bookmakers turned me into a problem gambler.

What really seems to wind up the Watsons of this world is that FOBTS have, against all odds, saved the high-street bookmaker from death by internet. The more traditional forms of betting, such as sticking a few pounds on a horse race, are all moving online, yet gamblers still pour their money into these glorified one-arm bandits just to pass the time. It’s odd, given that the FOBT experience is little different to what a casino website can offer. Partly this is a matter of access: you don’t need to register an account to play on a FOBT, or have a computer. But the success of high-street FOBTs means that British gambling has become more visible than ever — and thus more distressing to the media and political classes.

From an investment point of view, the interesting question is where will the smart money go when the state finally clamps down on FOBTs, probably some time after Labour wins the next general election. Many gambling firms are anyway worried because of the Point of Consumption Tax, which is expected to come into force in December. This levy is meant to stop gaming companies from avoiding tax on their British businesses through subsidiaries in Gibraltar and Malta. A FOBT ban on top of the new tax could be a crippling double blow, even for giants such as William Hill and Ladbrokes. The most obvious beneficiary, however, would be Bet365, Britain’s biggest online operator. Interestingly, Bet365’s owners, the Coates family, have given the Labour party more than £400,000 over the last decade. I wouldn’t bet against them soon becoming Britain’s leading bookies.

Got something to add? Join the discussion and comment below.

You might disagree with half of it, but you’ll enjoy reading all of it. Try your first 10 weeks for just $10

Show comments
  • it is incredible to how the Governments view and acceptance of gaming has changed over the last decade. Industry veterans have pointed out the dangers of these machines for several years now and nothing has been done .The UK was renowned in the 70.s 80’s and 90’s for it’s gaming laws and many other countries looked to the UK when they were introducing their own Gaming Legislation but right now the Industry is in a mess and reputations are at stake hence the damage limitation endeavours by William Hill and Ladbrokes, which i believe will eventually improve their market share.

  • Nick Smith

    You argued that fobts saved the bookmaker from the internet. I don’t see that as a positive. I have been into many bookmakers with these machines in and the punters on them appear agitated and the atmosphere in the shops feels threatening. Gone are the days when you could sit down and enjoy the newspaper with a cup of tea. The problem is, these machines are the equivalent of heroin to people who have only before tried nicotine. The very fact a person is able to gamble 300 pounds every 30 seconds is wrong. I am not a Labour supporter, but on this issue they have my support. There is a good reason heroin and cocaine are not legal – they are damaging and addictive and expensive. The same goes for fobts.

  • Richard Bayliss

    The problem is, the evidence Cameron will be given will be gathered by the betting industry, all the bookie big wigs are in bed with the government and they are pretty much allowed to regulate themselves so very little will be done about these machines. If Cameron wants the real evidence then spend an afternoon in a betting shop, speak to the staff & one of the many people who have had their lives ruined by these machines or even the families of these people who are also effected….this is the real evidence and will be very different from the report Mr Cameron will be reading!

  • Tom Putnam

    Quick one – as a former bookie with no interest in them myself. I have watched normal people, not just the most feckless, become addicted. I watched as the same people ply hundreds into them and was amazed by their ridiculously odd power. They have to be halted. Don’t cry for the bookies. They’ve made enough.