This Library briefing paper looks at the controversy over fixed odds betting terminals (FOBTs).Jump to full report >>
What are fixed odds betting terminals?
Fixed odds betting terminals (FOBTs) are electronic machines, sited in betting shops, which contain a variety of games, including roulette. Each machine accepts bets for amounts up to a pre-set maximum and pays out according to fixed odds on the simulated outcomes of games.
The Gambling Act 2005 classifies FOBTs as B2 gaming machines. Up to four machines can be sited on betting premises. The maximum stake on a single bet is £100, the maximum prize is £500.
There are 32,956 B2 machines in Great Britain (Gambling Commission statistics, November 2018). The gross gambling yield (GGY) from B2s was £1.7 billion.
Why are they controversial?
Critics point out that it is possible to lose large amounts of money and claim that the machines have a causal role in problem gambling.
The gambling industry says there is no evidence of a causal link between B2s and problem gambling. It also claims that reducing the maximum stake to £2, as some critics have been campaigning for, would put betting shops and jobs at risk.
Academic research suggests that the causes of problem gambling are complex and are not well understood.
Government to reduce the maximum stake to £2 from 1 April 2019
In October 2017, the Department for Digital, Culture, Media and Sport (DCMS) announced a range of proposals to strengthen protections around gambling. These included lowering the maximum stake on FOBTs to between £50 and £2. A consultation on the proposals, including the level of the new stake, closed on 23 January 2018.
On 17 May 2018, the DCMS announced that the maximum stake would be lowered to £2.
The October 2018 Budget report stated that the reduced stake would come into effect in October 2019. Critics argued that this could put the lives of problem gamblers at risk. Tracey Crouch, the Sports Minister, resigned over the “delayed” implementation, claiming that it was “unjustifiable”.
On 5 November 2018, the Chancellor told the Treasury Select Committee that the Government had to implement the new stake “in a way that is balanced and fair and allows for an orderly transition”. However, amendments to the Finance Bill to bring the implementation date forward to April 2019 attracted cross-party support.
In a Written Ministerial Statement of 14 November 2018, Jeremy Wright, the Secretary of State for Digital, Culture, Media and Sport, acknowledged that Parliament wanted the £2 stake implemented sooner than October 2019. He said that implementation would now take place from 1 April 2019.
The Gaming Machine (Miscellaneous Amendments and Revocation) Regulations 2018 were approved by both Houses on 18 December 2018 and will come into force on 1 April 2019.
Commons Briefing papers SN06946
Author: John Woodhouse