Bookmakers need to fear barnaclisation

The Opposition Day debate of the 8th January 2014 on Fixed Odds Betting Terminals made most commentators take either an optimistic view; that while evidence based policy making remains DCMS’s strategy, FOBT’s are safe unless the RGT research comes out against them (they publish their interim report in March and full one in September/October). Or the pessimists view; which is the belief that this matters little, as now both the Labour Party and the Liberal Democrats have stated that anti-FOBT measures will be in their election manifestos and as they are most likely to be in No.10 come the 7th May 2015, it will be gameover for the FOBT’s in just a couple of years. This has been my belief too - see my article of January 12th 2013[].

Unfortunately for the bookmakers, there is one more scenario to consider and this is the nuclear option, giving FOBT’s only months on this earth. This, as it where, is my updated view based on the current political climate and some political analysis.

Many of you will have heard of Lynton Crosby, the Australian political strategist who is advising David Cameron about his election campaign. Many of you will also have heard of his phrase ‘getting the barnacles off the boat’. This means removing policies and problems that aren’t solely to do with the Conservatives campaign focus on the economy and whether the electorate should trust Labour with it. Cameron is obviously listening as problematic policies are getting delayed until after the election (e.g. minimum alcohol pricing and an in-out vote on Europe) but most importantly, populist social issues highlighted by Ed Miliband, are getting adopted by the Tories and actioned off the media grid (e.g. payday loans and energy). The fear is that FOBT’s could become a ‘barnacle on the boat’ and dealt with in a similar fashion.

Let’s be honest, Ed Miliband couldn’t give two hoots about FOBT’s if you asked him for his opinion. The other Ed, Ed Balls, Shadow Chancellor, is against having them reined in as he likes their revenue and he believes that many Labour supporters like a punt. However, the Labour campaign against FOBT’s and betting shop clustering has been taken to a new level this year (it was started in 2008 by David Lammy, MP for Tottenham) by the social media expertise of the Campaign for Fairer Gambling combined with the complete opposite of the Association of British Bookmaker.

The bookmakers lobbying ineptitude has meant that the anti-FOBT campaign has moved from the stagnant backwaters of the loony left (e.g. Lammy, Abbot, Ruddock and even the Grand Dame of paternalism; Harman) to the bubbling mainstream left (e.g. Slaughter, Powell, Greatrex) and finally to the gushing of the big beast, literally, that is Tom Watson. The video game loving ex- election coordinator is a man of substance within the Party and his unquestioning support of the Fairer Gambling Group’s campaign has meant that the FOBT issue made it to the top table. Ed M’s support shortly followed due to his fervent belief in the need for some popular policies which can show up the Tories as being unsympathetic of the austerity blighted under-working classes while the Labour Party decide what actual policies they will fight the election on. As with pay day loans, energy bills, bankers bonuses, Ed has taken the anti-FOBT campaign to heart because he knows it will fill column inches and make him look caring of the man on the street and in the bookmakers.The support of the Mirror, the Mail and the Guardian also helps.

What this means in practice, is that over the next few months we will have at every opportunity the Opposition and backbench Lib Dems pointing out that the government is doing nothing while the evil bookmakers are ‘preying on the poor supplying them with the methamphetamine of gambling’. And all that DCMS can respond with is that they’re waiting for the RGT research to be published, ignoring the cries for the precautionary principle to be invoked and toxic FOBT’s reined in until the research proves they are harmless rather then letting them continue until it can be proved they are not.

Unfortunately for DCMS and the bookies the RGT research will not save the day. The Phase One report published in December said that the data available wasn’t sufficient to allow the research to be conclusive. This then begs the question of how any research goes from a base of no data to that which shows conclusively that FOBT’s aren’t a problem in only three months when every bit of research so far on high stakes gaming machines has been at best inconclusive and at worse condemning. If it did say FOBT’s were conclusively not a problem, a cynic would think it either miraculous or fraudulent but either way politically unbelievable. The most likely outcome of March’s report will be a request to wait for the full report in Autumn. This will be the stuff of political nightmares.

It will be at this point I believe that No.10 will call in Helen Grant and tell her to make FOBT’s go away as a political issue - for they have become a barnacle on the boat.

How this is done is open to debate but the easiest route politically; i.e. involving the least political time and effort, is to reduce the stakes and prizes dramatically, something that under s.236 (4) of the Gambling Act 2005, the Secretary of State has the power to make regulations to do so under a statutory instrument approved by both Houses. Far less messy than the complex amendments to primary legislation needed to implement Ed’s ‘power in the hands of the local authority’ policy.

A reduction of stakes to £2 would basically destroy the FOBT product, as a roulette game where your chips are in pennies would be of little interest to any gambler. Ending the FOBT’s would see the closure of thousands of bettings shops and the end to thousands of jobs. But at a constituency level it would be tens of jobs and maybe the only Labour MP who would shed a tear would be Ed Balls, even though, if he was Chancellor he would probably recoup most of the lost Machine Gaming Duty in other gambling taxation as punters just moved to another product (roulette became popular in Britain because the dice game Hazard was outlawed).

A more palatable option for a Tory action against FOBT’s would be a significant reduction in stake such as from £100 to £20 or what the ABB say the average stake is anyway. Add to this spins speeds that match real casinos, pauses in gaming to allow the punter to reflect and an end to single staffing in betting shops so that they can properly fulfil their problem gambling prevention duties and you have a much defused political issue. This would play well politically as it would show the Tories as adopting the precautionary principal while not destroying the bookmaking industry. Labour and the Lib Dems would have little to argue about as any problem gambling expert could be rolled out confirm such significant reforms can only prevent problem gambling and give a breathing space until proper research can be published.

What is glaringly apparent is that FOBTs are entering the end game, and have few friends left in either Westminster or the media. The fact that the bookmakers don’t seem to have realised this is just an example of how they have lost the plot about public affairs and its importance to their business.