House of Commons Library publishes FOBT briefing paper

A House of Commons Library briefing paper has been published that looks at the controversy over fixed odds betting terminals. It represents a convenient summary of what has led to last month’s announcement by the Government that the maximum stake on FOBTs will be reduced to £2 from £100.

The briefing paper (that can be downloaded below) makes no reference to recent speculation that HM Treasury has agreed to delay the reduction in maximum FOBT stakes until April 2020 (one year later than has been anticipated), whilst nevertheless intending to introduce an increase in remote gaming duty in the April 2019 Budget “in order to cover any negative impact on the public finances” according to the DCMS website.

The relevant House of Commons Library webpage states as follows:

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 33, 611 B2 machines in Great Britain (Gambling Commission statistics, November 2017). The gross gambling yield from B2s for April 2016 to March 2017 was £1.8 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 are 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.

What’s the Government doing?

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 Government announced that the maximum stake on FOBTs will be reduced to £2 from £100. This will require secondary legislation. No further details are available at this point (PQ 147334).