FOBT decision should only be the beginning of tougher regulation of bookmakers
After over a year of debate, propaganda and scaremongering, on Thursday May 17th the British government finally announced their decision on what they will do with the highly-controversial fixed-odds betting terminals (FOBTs).
To the delight of those that have campaigned long and hard for the restriction of the machines, that have acquired the moniker of the “crack cocaine of gambling”, and to the dismay of the bookmaking industry that has reportedly profited in the region of £25 billion from them in the last 13 years alone, the government chose to reduce the maximum stake from £100 to £2, the lowest amount that had been on the table as a potential option.
While it seems likely to be 2019 before this stake restriction is brought into action, it is a thoroughly admirable decision by the British government. It was one taken in the face of the reality that it will hit their own coffers in terms of lost tax revenue, as well as leading to job losses and a reduction of funding for British horse racing as a result of what the bookmakers claim will be the closure of thousands of betting shops due to this decision.
However, at some point, we as people must put aside financial self-interest and look at the bigger picture of the greater good. FOBTs are and have always been despicable devices. Rigged with an in-built profit margin so that the user has no chance of winning in the long term, they are ruthlessly designed with the sole intention of capitalising on human weakness and to make the user bet as frequently as possible.
They have brought untold misery to British society and should never have been allowed into betting shops in the first place.
As for the bookmakers that have been crying so loudly about betting shop closures that will come about as a consequence of this decision, it is difficult to have any sympathy for them. High-street bookmakers are now only reaping what they sowed when clustering betting shops in low-income areas solely with the profits derived from FOBTs in mind.
At the end of the day, if a betting shop cannot make a profit without FOBTs being allowed a max stake of £100, then it is not a betting shop, it is a glorified casino and should be closed. Time will tell whether the number of shop closures predicted by the betting industry following this decision prove to be accurate or merely pre-decision scaremongering, but any shops that do close as a direct result of it will get no more than a send-off of good riddance from this corner at least.
One naturally has sympathy for the staff in these shops, many of whom have had to endure horrendous experiences due to the misery caused by FOBTs, but that is as far as the empathy extends.
While the government’s decision will come too late for thousands that have succumbed to the temptations of the FOBTs and quite literally destroyed their lives, it will at least help to prevent such tragedies occurring in the future. Opponents of the decision will suggest that it will only serve to move the problem out of betting shops and into casinos and online, but the reality is that both casinos and online bookmakers have much higher barriers to play such as sign-up requirements, credit restrictions and the ability to self-exclude that reduce the likelihood of serious problems occurring.
In terms of wider implications of this decision, it could well prove to be a game changer in how bookmakers conduct their businesses. One of the most notable consequences of the rise of FOBTs and the relentless growth in the proportion of bookmaker profits that were derived from them is that they contributed to making bookmakers much more risk-averse in the areas that they traditionally focused on such as horse racing.
For many years this space has discussed the very serious issue of bookmakers restricting the stakes of bettors on horse racing (most recently here) and one can be certain that FOBTs have played a role in this.
The irony that the same bookmakers that have been restricting the stakes of so many of their customers in recent years are now having their own wings clipped in the shape of FOBT stake restrictions shouldn’t be lost on anyone and this decision also has the potential to see bookmakers row back on these policies.
They will be under pressure to increase profits to make up for the loss of earnings from the FOBTs and everyone in racing should be hoping that this will lead to them taking a more aggressive approach to the laying of bets on horse racing.
There is absolutely no doubt in my mind that bookmakers catch an awful lot of punters that would be profitable customers for them in the long term in the crossfire when trying to restrict winning punters. Being slower to restrict bettors could well prove to be beneficial to their long-term profits as it reportedly has to bookmakers in New South Wales and Victoria in Australia that have had a minimum bet guarantee imposed on them by the local regulators.
Whichever way they go, one thing for sure is that the bookmakers will be just fine. Bookmakers in Britain were doing well before the introduction of FOBTs and bookmakers in Ireland, where FOBTs have never been permitted, have shown that they can thrive without them in the modern era.
As admirable as this decision was, my personal hope is that this will just be the start of much tighter regulation of the bookmaking industry. If it were up to me, not only would I ban FOBTs entirely from betting shops, I would not permit bookmakers to offer any sort of casino games or virtual sports either online or in shops. Bookmakers should only take bets on actual real-life events, sporting or otherwise, in which they do not control the results and a skilled punter has some chance of making a long-term profit by betting on them. All other casino style or virtual offerings should be confined to the much more heavily-regulated world of casinos.
As well as that, the aforementioned minimum bet guarantee that has introduced as a condition of being granted a bookmaker license in New South Wales and Victoria in Australia is long overdue in this part of the world. Coral have voluntarily offered a similar guarantee of various sizes dependant on the class of race in their betting offices for three-and-a-half years now. A similar guarantee has more recently been rolled out by Ladbrokes and William Hill also threw their hat in the ring in April by guaranteeing to lay all bets on ITV-televised races to lose at least £1,000 online and £5,000 in shops, but other bookmakers have been reluctant to volunteer such a guarantee.
Making a minimum bet guarantee of £1,000 or more a condition of being granted a bookmaker license in Great Britain and Ireland would help ensure that casual bettors do not get caught up in crossfire of bookmakers trying to weed out unprofitable customers and would be a significant positive step forward for the quality of customer experience in the betting world.
The bookmakers have had a free run for long enough. Now that the British government has shown that it is willing to tackle the industry in the interests of the greater good of society, hopefully they and indeed the Irish government keep on the case and bring in even tougher legislation going forward.
Bookmakers have the right to make a profit just as any other business does, but they have to do so via fair and responsible means. The government made a mistake by allowing the bookmaking industry to regulate itself and now the time has come to clean up what has become a very dirty industry.