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13 February 2013

Campaign launched to stop the 'crack cocaine' of gambling

Campaign launched to stop the 'crack cocaine' of gambling

In parliament on 11 February a campaign to 'stop the FOBTs' was launched to stem the spread of highly addictive gambling machines. The machines, known as Fixed Odds Betting Terminals (FOBTs), are mainly found in betting shops and are becoming an increasingly vital part of their business model.

However, as well as being highly profitable these machines are also increasingly under scrutiny as a significant cause of problem gambling. Anecdotal evidence has suggested for a while that FOBTs encourage players to part with large sums of cash, and in referrals to the gambling helpline they are frequently cited. While they are played by six per cent of gamblers, 24 per cent of those reporting problems say they have played these machines recently.

Of those who play on these machines – which first hit British bookmakers in 2001 – a high proportion have gambling problems and nearly a quarter of all takings is estimated to come from those with problems. Only betting on dog racing sees a higher proportion of spend from problem gamblers, but this only equates to a small fraction of the amount lost on FOBTs. Those with gambling problems often use many different products and it is sometimes difficult to distinguish which forms of gambling are the most damaging. However, research looking into the 2007 British Gambling Prevalence Survey shows that only FOBTs are a significant indicator of problem gambling when detached from other activities.

Prior to the introduction of the 2005 Gambling Act these machines, which have been regularly described as the 'crack cocaine' of gambling, were outside of the regulatory regime. Under the new regime betting shops are allowed up to four machines, and so too are casinos. The vast majority of FOBTs in the UK are in betting shops, and now contribute over £1.4 billion to their annual profit. In the past year, profit from gambling machines exceeded over-the-counter betting profit for the first time.

Games such as virtual roulette are usually played on the FOBTs and in game play, prize and stake levels and addictiveness differ substantially from other types of gambling machine. Whereas the maximum you can stake per game on a machine in an arcade or bingo hall is £2, on an FOBT you can simultaneously play 10 £10 games, and each game lasts just 20 seconds. It is therefore theoretically possible to feed in £18,000 an hour into the machines – the only thing stopping that is the physical act of getting the money into the machine.

A player would also not lose all of that money because the machines have a very high win rate of 97.5 per cent which is, as the name would suggest, fixed. That payout rate is calculated per game, and when wins are rolled over into future games, as usually occurs, the win rate decreases. The high chance of winning something – even if it is less than your stake – combined with the fast speed of play are two of the factors that contribute to the highly addictive nature of the machines.

Research published to coincide with the launch of the campaign demonstrated the impact of the machines on communities across the UK. Research has already suggested that they are more commonly sited in urban and deprived communities, and the profitability of the machines has spurred a proliferation of betting shops in order to maximise the number of machines that betting companies can operate. On the new website you can find out how many betting shops and machines are in your parliamentary constituency, and how much has been gambled and lost in the past year.

Local authorities have found that even in situations when they would choose to turn down an application for a new premises they have been unable to do so. This is due to the presumption to permit new betting shops, the specific requirements needed to object, and the threat of well-funded legal appeals if the applications are refused. Despite persistent requests the government have not made changes to the licensing and planning regime which would enable local authorities to decide whether they wanted more betting shops in their area.