‘The man is sweating, rubbing his nose. In minutes, he’s lost £400 on the machines’
A crackdown on fixed-odds betting terminals is on the way. After a day at t the bookies, Jamie Doward discoverss the true extent of the problem
Two in the afternoon and I’m in a Ladbrokes on Caledonian Road in one of the grittier parts of north London. A few yards from a pawnbroker offering Cartier watches for a touch under £2,000, the bookmaker is one of four within 500 metres.
Paddy Power recently opened the fourth betting shop in a former solicitors’ office after the proposal was initially rejected by Islington council, which feared that it would create a gambling cluster in a deprived area.
The government’s planning inspectorate overturned the council’s decision, despite acknowledging that “economically deprived neighbourhoods would be relatively more susceptible to the adverse financial, social and health impacts of problem gambling arising from significant clusters of betting shops”.
A local police officer, asked to give evidence, explained that, while betting shops were used by the criminal fraternity to “waste their ill-gotten gains”, solicitors’ offices were more of a crime risk because they were attractive targets to the moped gangs that plague the area.
There seems little sign that the criminal fraternity is frequenting the Ladbrokes I’m in today. A few old boys are watching horse-racing but it’s stultifyingly quiet.
Then two men in paint- sp attered clothes come in and make for the four machines in the corner. One takes two £10 notes from his pocket and feeds them into a machine, selects a roulette game, one of at least 10 on offer, and presses the screen several times. The ball spins and the man steps back to watch its progress. He turns to his companion, shrugs, and selects some more numbers. He walks away, then returns with two more £10 notes. He repeats the exercise and then walks out of the shop. It has taken less than three minutes for him to lose £40. But this is nothing. The B2 fixed- odds betting terminal (FOBT) the man was playing is a category of machine that allows players to gamble £100 every 20 seconds in the hope of winning £500. Theoretically, this means a player could end up gambling £18,000 an hour, a figure frequently highlighted by a powerful coalition of MPs, church and industry lobby groups, which wants the machines, often described as “the crack cocaine” of gambling, brought under control.
While no one seems to have managed to blow £18,000 in 60 minutes, there is ample evidence of the machine’s addictive qualities. Seven gamblers lost more than £10,000 in a day on the terminals during a 10-month observation period, according to GambleAware. A report carried out by JP Morgan, the financial services firm, on behalf of Ladbrokes and William Hill, suggested that the average loss by a regular FOBT gambler is £1,200 a year. The Centre for Social Justice calculates that £1.7bn is being lost annually on the UK’s 34,809 FOBTs.
Amid growing clamour for action, the government is edging towards reform. As the Observer reported, a reduced maximum stake is back on the cards, possibly as low as £2. This would be devastating for the bookmakers. Analysts at Barclays estimate that Ladbrokes would lose £449m in revenue if this were to happen. But if the stake were cut to only £25, Ladbrokes would lose just £87m. Small wonder that the bookmakers have been throwing everything they can against the proposals.
Two hours later at a Paddy Power betting shop in Chinatown in Soho, only yards from two Betfreds, a man sits at a terminal, staring intently at the screen while the largely Chinese clientele watch the horse-racing. He catches me looking at him. “Back off,” he mutters. Another man, playing the machine beside him, says something to him. “Be calm,” the first man snaps furiously. He’s shaking his head, sweating profusely, rubbing his nose. His gambling habit may not be his only addiction. He’s £400 or so in credit but several minutes later he has nothing. He walks out cursing loudly, eyes bulging.
The ubiquity of betting shops in China town has alarmed residents’ groups. But the betting industry knows its market. Chinese people are enthusiastic gamblers. Deprived areas are targeted, too. The JP Morgan report revealed that 70% of FOBT gamblers were from the poorest, C2DE demographic.
Not everyone who plays the machines is poor or addicted. At a William Hill in Soho a man dressed in pristine overalls and carrying a smart Oakley backpack feeds £10 notes into a machine. He appears to be losing, but his face is expressionless. After a while he cashes in, having lost a little. He takes a paper slip from the machine – confirming what is left of his stake – and approaches the kiosk where he can have the money wired electronically to his account. Half an hour later I see him do a similar thing at another nearby William Hill, this time having played two machines simultaneously. It’s a neat operation. He is down a bit but he has also found a home for a heap of cash.
According to an assessment by the Gambling Commission, when it comes to money- laundering, B2 machines “pose the greatest product risk in the betting sector”.
It’s just after seven at a William Hill in north London where the friendly staff are offering punters free cups of tea and coffee. I am encouraged to play a demo of the roulette games for as long as I like before staking real cash, “so you can get the feel of it”.
The demo suggests I’m winning. Buoyed by my success, I load £5 from my debit card. A few spins and I’ve lost my stake, having been in credit for much of the session. At one stage I had considered cashing in but the bet button was flashing irresistibly.
In the industry this is known as “choice architecture”: the use of design to encourage continued playing. Many want this architecture reformed – and a ban introduced on people loading machines using their debit cards. Prohibiting freebies might help, too. If I’d been in the shop at eight that morning, I would have had the chance to bag a £25 voucher to play the roulette games. “You have to get here early,” I’m told. “They go like hot cakes.”
But I cannot get excited about roulette. It’s so dull. “You’d be surprised,” the staff member says. “Some people sit here for hours.”
My attention turns to a man playing a slot machine game called Eye of Horus. This is a B3 game which has a maximum stake of £2.
In the cacophonous debate about FOBTs, no one talks about these machines. But in the 17 betting shops I visited on Thursday, more people were playing these slot machines than the B2s. B3 machines accept a new bet every 2.5 seconds and they offer a payback of 92%, compared with 97.3% for the B2s.
Dr Jonathan Parke, an expert on gaming, produced a report for GambleAware, an independent charity funded by the gambling industry, that looked at design features of both B2 and B3 machines. According to his calculations, if a £2 stake limit were introduced for the B2 machines, the average money lost per hour would be just under £10, against the current £468.
Yet people would still be free to lose £ 230 an hour on the B3 machines, according to Parke’s calculations. He fears many players would simply switch from B2 machines to B3 machines, which are probably more addictive because of the speed at which you can bet. However, Parke calculates that cutting the stake on B3 terminals from a maximum of £2 to 10p would reduce the average loss to £11.52, roughly in line with that on the B2 machines if the government imposed a £2 stake limit.
Strangely, no one is pushing this line. Not the bookmakers whose shops also feature B3 machines. Nor those campaigning for reform, notably the all-party parliamentary group on fixedodds betting terminals, which produced a report on them supported by, among others, Bacta, the association for the amusement and gaming machine industry, JD Wetherspoon and Hippodrome Casino, all of which make money from B3 machines.
“Simply focusing on the size of the stake alone is a red herring,” said Parke. “If you want to stop people losing more money than they can afford, it’s not just the stake you need to look at but the game speed and payback percentage.”
Andrew Margett, a former gambling addict turned vlogger, also wants broader reforms but of a different kind. He would like more spent on educating people about the risks of gambling. “Drugs, sex and alcohol get taught in schools – gambling should be also.”
The government is expected to announce what action it will take against FOBTs next month. But, given the powerful vested interests skewing the debate, it’s a near- certain bet that any reforms will be partial and narrow.
To put it another way, punters will still end up losing their shirt. But then they always have.
‘The size of the stake alone is a red herring - you also need to look at the game speed and the payback percentage’ Jonathan Parke, gaming expert
Punters play on fixed-odds betting terminals in a bookmaker’s shop. Gamblers can place bets of £100 every 20 seconds and could in theory lose £18,000 in an hour.