Fixed odds betting terminals in licensed high street outlets are job destroyers

Phil Prentice (The Scotsman, 6 October) argues that betting shops in Scotland’s towns and cities “provide a vital economic stimulus” and that “those who call for a clampdown on bookies should consider the consequences for jobs, investment and the future of town centres”.

As luck would have it, Landman Economics has been considering the economic consequences of fixed odds betting terminals (FOBTS) for the last five years in a series of published reports. Our research has compared the number of jobs supported by players’ expenditure on FOBTS with the number of jobs which might be created if those FOBT stakes were instead spent elsewhere in the economy.

We calculate that £1 billion of “average” consumer expenditure supports around 21,000 jobs across the UK as a whole, whereas £1bn of expenditure on FOBTS supports only 4,500 jobs in the UK gambling sector. Based on data for the 201516 tax year this implies that spending on FOBTS reduced employment in Scotland by around 2,800 jobs relative to what it would have been if FOBT gambling money had been spent elsewhere in the economy. In other words, FOBTS in licensed betting outlets are job destroyers (with the knock-on consequence of lower tax revenue for the Exchequer). Town and city centres would be more “alive” if expenditure on FOBTS was significantly lower than it is today.

Crucially, our estimate of the number of destroyed jobs makes no assumption about where the money that is now being spent on FOBTS might instead be spent elsewhere in the economy – we do not assume that the expenditure goes to “the local boulangerie” or equivalent middle-class outlets, as Mr Prentice claims.

Mr Prentice argues that bookmakers have “remained loyal” to the high street when retail shops moved out. But in fact the heavy presence of betting shops in high streets has more to do with legal constraints on FOBTS than bookmakers’ loyalties to local communities.

FOBTS are limited to a maximum of four terminals per shop by law, so the bookmakers have opened multiple shops to get around the restriction. And this is particularly the case in the most deprived areas of Scotland, Wales and England. Analysis of data from the Scottish Index of Multiple Deprivation by Geofutures and Landman Economics shows there are almost three times as many betting shops per adult head of the population in the 25 per cent of most deprived areas in Scotland compared to the least deprived areas.

Coupled with the well-documented adverse psychological and social impacts of FOBTS, this clustering of betting shops in deprived areas explains why an increasing number of local authorities are taking steps to limit further expansion of betting shops on high streets.

Rather than making unwarranted accusations that Landman Economics panders to “sniffy middle class” prejudices, Mr Prentice should take a hard look at the adverse economic consequences offobts in deprived working class communities and get behind the Campaign for Fairer Gambling’s campaign for a reduction in the maximum stake on FOBTS from its present level of £100 per play to £2.

HOWARD REED Director, Landman Economics