Let’s ban addictive betting machines

ver since the gaming acts of Charles II and Queen Anne, restrictions on gambling have exhibited an unappealing combination of paternalism, class prejudice and moral exhortation. Yet there’s a compelling case to legislatively crack down on one such activity now: fixed-odds betting terminals (FOBTs).

These electronic gaming machines were introduced to British betting shops in 1999. Though legislation in 2005 limited betting shops to a maximum of four terminals, the aggregate numbers of FOBTs have surged. Owing to distinctive characteristics, they are causing havoc and misery. That’s not a strait-laced sermon. It’s an informed view from within the gaming industry.

In evidence submitted to the Irish government in 2009, Stewart Kenny, co-founder and former chief executive of Paddy Power, warned that the machines were dangerously addictive. “It is in no one’s interest,” wrote Mr Kenny, “neither betting shop customers nor wider society to legislate to allow them into betting shops.” FOBTs are not allowed in Ireland.

The characteristics that Mr Kenny noted are built into the system. FOBTs bear a superficial resemblance to slot machines, but they are far more addictive because of the rapidity of the bets. The maximum stake is £100 but the punter can bet that amount every 20 seconds and can easily lose a monthly pay packet in a lunchtime.

The anecdotal evidence of debt, destitution, depression and marital break-up is extensive, but even that is not the main reason for legislation. FOBTs are simply not recreational gambling in the conventional sense of placing a bet at quoted odds. They are instead an absolute guarantee of a fixed house advantage generated by a machine whose very design, with rapid play and a short payout interval, is intended to override the better judgment of the punter.

This is no more a genuine libertarian issue than are the costs of drug abuse or smoking. A rather wacky free-market think tank, the Institute of Economic Affairs, protests that the amount spent on FOBTs represents just 13.6 per cent of Britain’s total spending on gambling, yet it overlooks the fact that the machines now account for more than half of the industry’s revenues. The costs are heavily concentrated on vulnerable people.

Individual bookmakers can’t be left to police themselves because scrupulous operators would lose out to competitors. The intellectual elegance of the argument for free choice and self-regulation vastly exceeds its purchase on the real world of addiction and exploitation. This is a clear case for draconian legislation to limit stakes, in preparation for an outright ban.