‘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

The Observer - - NEWS -

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.

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