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. Until 1 April 2019, when the Gaming Machine (Miscellaneous Amendments and Revocation) Regulations 2018 came into force, the maximum stake on a single bet was £100. It is now £2. The maximum prize is £500.
There are 33,360 B2 machines in Great Britain (Gambling Commission statistics, May 2019). The gross gambling yield (GGY) from B2s is £1.5 billion.
Why have they been controversial?
Critics claimed that the £100 stake meant that it was possible to lose large amounts of money on FOBTs. They also argued that the machines were addictive and had a causal role in problem gambling.
The gambling industry disputed the causal link between FOBTs and problem gambling. It also claimed that reducing the maximum stake to £2 would put betting shops and jobs at risk.
Academic research suggests that the causes of problem gambling are complex and are not well understood.
Timeline of Government action on FOBTs
31 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.
17 May 2018: the DCMS announced that the maximum stake would be lowered to £2.
29 October 2018: the Budget report stated that the reduced stake would come into effect from October 2019. Critics argued that this could put the lives of problem gamblers at risk.
5 November 2018: the then 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 (No. 3) Bill to bring the implementation date forward to April 2019 attracted cross-party support.
14 November 2018: in a Written Ministerial Statement, Jeremy Wright, the then Secretary of State, acknowledged that Parliament wanted the £2 stake implemented sooner than October 2019. He said that implementation would take place from 1 April 2019.
18 December 2018: the Gaming Machine (Miscellaneous Amendments and Revocation) Regulations 2018 were approved by both Houses.
1 April 2019: the Regulations came into force and reduced the maximum stake on a single bet to £2. No change was made to the maximum prize of £500.
This paper looks back over the controversy.
Commons Briefing papers SN06946
Author: John Woodhouse