Government announces FOBT maximum stake is to be cut to £2

The Government has just published its review of gaming machines and social responsibility measures (that can be downloaded below, together with its accompanying Impact Assessment).

As part of the review, the Government has decided that it will reduce the maximum stake on an FOBT [B2 gaming machine] from £100 to £2. Insofar as timing is concerned, an announcement on the DCMS website states that:

“Changes to the stake will be through secondary legislation. The move will need parliamentary approval and we will also engage with the gambling industry to ensure it is given sufficient time to implement and complete the technological changes”.

Matt Hancock MP, Secretary of State for Digital, Culture, Media and Sport, refused to be drawn on this morning’s BBC Radio 4 “Today” programme on the precise timescale, which he said will depend on how long it takes to make the required legislative change. He added that it would also be necessary to work with industry to take account of the timescale needed to introduce changes to existing machines.

In her Ministerial Foreword to the Government response to the consultation on proposals for changes to Gaming Machines and Social Responsibility Measures, Tracey Crouch MP, Minister for Sport and Civil Society, says:

“The Government is of the view that B2 gaming machines should have a mandatory maximum stake of £2. This is the lowest end of the Gambling Commission’s suggested range and we select it after very careful deliberation. There remain consistently high rates of problem gamblers among players of these machines and a high proportion of those seeking treatment for gambling addiction identify these machines as their main form of gambling. We are concerned that factors such as these are further amplified by the relationship between the location of B2 gaming machines and areas of high deprivation. Following analysis of the evidence received at consultation, £2 has been found to be the stake limit that would most substantially impact on harm by reducing the ability to suffer high session losses, while also targeting the greatest proportion of problem gamblers, and mitigating risk for the most vulnerable players for whom even moderate losses might be harmful. Even cutting to £10 would leave problem gamblers, and those most vulnerable, exposed to losses that would cause them and their families significant harm”.

That does not by any means represent the only outcome of the review. The full Executive Summary to the Government response reads as follows (with our added emphasis on aspects that we believe will have particular bearing on the industry or sectors of the industry):

1.1.  The objective of the review is to ensure that we have the right balance between a sector that can grow and contribute to the economy, and one that is socially responsible and doing all it should to protect consumers and communities. Underlying this objective is ​our focus on reducing gambling-related harm, protecting the vulnerable and making sure that those experiencing problems are getting the help they need.

1.2.  We welcome the responses to the consultation and in preparing our conclusions, we have reflected on the evidence, concerns and issues that have been raised. Having considered these responses, as well as the advice from the Responsible Gambling Strategy Board (RGSB) and the Gambling Commission (the Commission), we are taking forward the following measures on gaming machines, and driving action across online, advertising, research, education and treatment (RET) and more widely, the public health agenda in regard to gambling.

1.3.  We are reducing the maximum stake from £100 to £2 on B2 gaming machines.​ ​As we set out at consultation stage, ​there remain consistently high rates of problem gamblers among players of these machines, with the ​latest data for 2016 (England only) finding that 13.6% of players of gaming machines in betting shops are problem gamblers, the highest rate for any gambling activity. We noted that ​the highest proportion of those who contact the main gambling addiction provider (GamCare) identify machines in betting shops as their main form of gambling and g​aming machines in betting shops also account for one of the highest proportion of those in treatment for gambling addiction.​ We are concerned that factors such as these are further amplified by the relationship between the location of B2 gaming machines and areas of high deprivation.

1.4.  Following analysis of consultation responses, ​we think that a reduction to £2​ ​will reduce harm for the most vulnerable. ​In comparison to other gaming machines, B2 machines generate a greater proportion and volume of large-scale losses (for example, more than £500 in a session); and losses are larger and sessions longer for those who bet at the maximum stake (£100) than those who play at a lower level. Even cutting to £10 ​leaves problem gamblers, and those most vulnerable, exposed to losses that would cause them and their families significant harm. ​In particular, we note that over 170,000 sessions on B2 roulette ended with losses between £1,000.01 and £5,000. These sessions persist at average stakes of £5 and £10, but by contrast, none involved average stakes of £2 or below. ​We also think that a limit of £2 is likely to target the greatest proportion of problem gamblers and mitigate the impact on those most vulnerable to harm, such as those in more deprived areas and those who are unemployed. ​There was clear support for this measure at consultation stage from the public, local authorities, faith groups, Parliamentarians, charities, interest groups and academics, as well as from some within the betting sector itself, with calls for cutting the stake limit to £10 or less from one betting operator.

1.5.  In addition, the Commission will work with industry to improve player control measures, including the potential ending of sessions when player limits are met, effectively limiting session losses to a certain cap. It is also seeking to explore in more detail the costs and benefits of tracked play, not just on B2 gaming machines, but also on B1 and B3 machines in other premises (see para 1.6). ​We encourage industry to work proactively with the Commission on these measures.

1.6.  We are alive to the risks posed by other Category B gaming machines, so we welcome steps taken by the Commission to take forward proposals to improve player protections on B1 and B3 machines, including measures such as time and spend limits for players, which are already in place on B2 gaming machines. We acknowledge the complexities around identifying and implementing harm-minimisation measures and therefore encourage the Commission, RGSB and industry to continue to develop, trial and evaluate further measures in the pursuit of reducing harm.

1.7.  We are maintaining the status quo across all other gaming machine stakes and prizes and allocations for the time being.​ ​We have agreed to an uplift for stakes and prizes on prize gaming which we think is sufficiently low-risk. However, we have asked the Commission to monitor any potential risks following the change. Stakes and prizes on Category C machines will be maintained, but we will continue to monitor consumer demand and player protection in the sector. If regulatory changes are needed, these will be considered and take place outside of the review process. On Category D machines (including non-complex cranes and pushers), stakes and prizes will be maintained. We are aware there are pressures facing Family Entertainment Centres (FECs) in seaside locations. It is for this reason we have requested further information from the British Amusement Catering Trade Association (BACTA) relating to player protection measures for children, including their existing social responsibility code of practice and evidence of how this is monitored and reported. Discussions related to these points will be taken forward outside of the review process.

1.8.  We are not minded to make any immediate changes to stakes and prizes or machine allocations in casinos. However, we accept that machine allocations are, by international standards, low for this sector; and unlike other venues, the total number of casinos is capped, which also limits the total possible number of machines available across the casino estate in Britain. We are aware that pilots of further player protections are underway and encourage casinos to work with the Commission on measures to enhance both player protections and evaluation strategies. ​If additional measures are put in place to manage the risk of gambling-related harm effectively, we will consider looking again at the question of allocations.

1.9.  We are not minded to pursue contactless payments on gaming machines at this stage due to concerns about player protection. However, ​we encourage industry to continue its engagement with the Commission so that it can keep pace with technological change in regard to payment methods, including potential alignment with work that the Commission will be doing in regard to tracked play.

1.10.  We were clear at consultation stage that more is needed to be done to protect consumers who gamble online. ​Unlike the land-based sector, all online gambling is account-based and therefore operators know who their customers are and their patterns of play. ​Operators must use customer data effectively to identify potentially harmful behaviour and target interventions to reduce the risk of harm occurring. We expect operators to act now and trial a range of measures to strengthen the existing protections in place. ​If operators fail to demonstrate sufficient progress, then the Government and the Commission has powers to introduce additional controls or restrictions on the online sector​.

1.11.  The Commission has also set out a clear plan of action to strengthen player protections online; specifically around age verification, improving terms and conditions, identifying risks to players earlier and on customer interaction policies. ​​This continues to be a rapidly growing and evolving sector and we welcome the ongoing focus of the Commission to assess the effectiveness of current protections and to enhance these wherever possible to reduce the risk of harm.

1.12.  Our engagement with stakeholders during the Review made clear the importance of technology in developing stronger player protection measures. Through the development of algorithms to identify potential harmful play, gambling operators have been at the forefront of using data and technology to protect players. We recognise that this area evolves quickly and for our understanding to evolve alongside it, we will need greater collaboration. As the department responsible for the digital and online agenda, we have an important role to play in bringing together work from across Government with industry initiatives. As a result, the Minister for Sport and Civil Society will co-chair a roundtable with Margot James, Minister for Digital and the Creative Industries, to bring together stakeholders from the gambling and technology sectors and move towards a wider roll-out of best practice. This will include helping to develop understanding of, and best practice around, online advertising and marketing.

1.13.  On advertising, ​we set out a package of measures at consultation – to be implemented by regulators, industry and broadcasters – which will help protect those who are most vulnerable and continue to improve our knowledge about the links between advertising and harm. There has been good progress on these measures: the Committees of Advertising Practice (CAP) has published new guidance on tone and content to help protect those vulnerable to harm, and further guidance on children and young people is due later this year; the Commission has consulted on toughening sanctions for breach of the advertising codes and aims to publish a response in July this year; and a major responsible gambling advertising campaign is due to be launched later this year. This will seek to raise public awareness of the risks associated with gambling and how to mitigate these, including where to seek further information and help if needed.

1.14.  The Industry Group for Responsible Gambling (IGRG) is also amending its code on socially responsible gambling advertising to ensure that a responsible gambling message appears for the duration of all TV adverts. This change is due to be implemented in June this year. Substantial research on the effects of marketing and advertising on children, young people and vulnerable groups has been commissioned by GambleAware. Getting advertising protections right is an essential part of protecting vulnerable people. We welcome these initiatives and will continue to monitor the situation carefully​.

1.15.  The chapter on research, education and treatment looks at support for those who experience harm, including the arrangements for funding and delivering treatment and the research that underpins this. Steps are being taken to improve evidence on treatment, to assess gaps and expand services and to develop treatment guidelines. Tools are being developed to make it easier for staff in front line services to identify people with gambling problems and signpost them to help available. The chapter also outlines action the Commission proposes to take to strengthen the voluntary system for funding and commissioning research, education and treatment. ​Gambling-related harm is a health issue and the Department of Health and Social Care (DHSC) and Public Health England (PHE) will be closely involved with DCMS on follow-up to this review​.

1.16.  We recognise the concern from some local authorities about gambling at the local level and the potential impact that gambling has on communities. We also note that the main concern raised by local authorities at consultation stage was around B2 gaming machines, and that a stake reduction to £2 will help support local authorities in their pursuit of protecting wider communities. However, in regard to the request for more powers, we note that where current powers are deployed, local authorities can have a greater say over how and where gambling can be offered and will not therefore be bringing forward further changes at this stage.

1.17.  We also recognise the special and long-standing relationship between the betting and horseracing industries. We are confident that Britain’s thriving racing industry will continue to prosper and that future commercial arrangements between the two industries will adapt to any changes in the market.

1.18.  In April 2017, we acted to future-proof the Horserace Betting Levy against channel shift from Licensed Betting Offices (LBOs) to online by extending the Levy to include offshore bookmakers who take bets on British racing – resulting in an estimated £35m increase in statutory funding this year. We previously committed to review the rate of the Horserace Betting Levy by 2024. If it becomes apparent that changes to stake limits cause significant market changes, we will consider bringing forward the timing of the review of the Levy arrangements.

 You can read the Gambling Commission’s response to the Government review here.