association of british bookmakers ltd
The Truth aboutBetting Shops and
Gaming Machines –ABB submission to
DCMS Triennial ReviewApril 2013
www.abb.uk.com
www.abb.uk.comPage 1
CONTENTS OF THE ABB’s TRIENNIAL REVIEW RESPONSE 1. EXECUTIVE SUMMARY - Page 2
2. INTRODUCTION - Page 6
3. THE LICENSED BETTING OFFICE MARKET - Page 9
4. THE ELECTRONIC GAMING MACHINES MARKET - Page 17
5. REALITY OF PUBLIC ATTITUDES TO GAMBLING - Page 19
6. DISPELLING THE MYTHS - Page 20
7. EXISTING EMPIRICAL RESEARCH - Page 24
8. UNDERSTANDING THE TRUTH ABOUT PROBLEM GAMBLING - Page 28
9. INDIVIDUAL RESPONSIBILITY/INFORMED CHOICE - Page 30
10. SOCIAL RESPONSIBILITY - Page 36
11. RESPONSIBLE GAMBLING - Page 40
12. REGULATORY IMPACT ASSESSMENT - Page 44
13. RESPONSE TO STATUTORY CONSULTATION - Page 53
14. CONCERNS ABOUT THE CONSULTATION PROCESS - Page 64
15. SUBMISSION SUMMARY - Page 71
association of british bookmakers ltd
Page 2
CHAPTER 1EXECUTIVE SUMMARY Introduction
• TheLicensedBettingOffice(LBO)sectorhasdevelopedquicklyoverthelasttwodecadesto
becomeamodernleisureentertainmentbusinesswith8millioncustomers
• Thelegislativeandregulatorymeasurescurrentlyinplacearefoundedonindustrybestpractice
andvoluntarymeasuressuchastheABB’sCodeofPractice.
• TheABBiscommittedtoensuringthatthefactsbehindmachineuse,addictionandpublicattitudes
togamblingintheUKareproperlydiscussedandanalysedintheconsultationsothatalldecisions
aremadeonthebasisofevidencenotanecdote.
• ThereviewsinglesoutB2electronicgamingmachinesunfairlyandgivesriseforconcernbutwe
welcomeevidencebasedpolicymaking.
• Webelievethatafair,openandevidencebasedconsultationcanonlytakeplaceifunverified
commentsandopinionsaredisregardedandpositiveweightingisgiventosourcedandverified
evidencewhichweprovideinoursubmission.
• Ourpositionisthatifthereisnoevidencetosupportintervention,orevidenceastotheintervention’s
likelyoutcome,itwouldbedevastatingtoproceedwithacourseofactionwhichwouldhave
negativeimpactonjobs,communities,highstreets,sportsectorsandthewidereconomy.
• TheABBwelcomestheGovernment’scallforanevidencebaseddebatearound
electronicgamingmachinesandourmembershaveagreedtogivefullaccesstoNatCenaspart
oftheirmachinesresearchprojectfortheResponsibleGamblingTrust.
Economic and social benefits of LBOs • TheCentreforEconomicandBusinessResearch(Cebr)’sstudyrevealsthatbettingshops
contribute£3.2billiontoUKGDP,support100,000jobsandpay£1billionintaxes.
• Forevery£1ofGrossValueAdd(GVA)generatedbybettingshops,anadditional£0.61ofGVAis
generatedinthewidereconomythroughindirectandinducedimpacts.
• Bettingshopsalsocontributetolocalservicespayingmorethan£58millioninbusinessrateseach
year.
• Bookmakershavealreadyinvestedabout£2billioninlocaleconomiesthroughtheopeningof
newandrefittedbettingshops.
• AccordingtoCebrbettingshopsprovideatotalof55,000fullandparttimejobs,whichequatesto
nearlyoneintenjobsintheleisureindustry.
• Some31,000,or56%,ofthosejobsarefilledbywomen
• Bettingshopsemploy14,000youngpeopleaged18-24(25%),anagegroupwith20%
unemploymentcurrently.
• ResearchbyBashamandLuikalsoshowsthatgamblerstendtoparticipatemoreincommunity
andsocialactivitiesthannon-gamblers,anddonatemoretocharity.
• Byofferingadiverserangeofentertainmentandasafeenvironment,bettingshopscontributeto
socialcohesionandareanintegralpartofthelocalcommunity.
association of british bookmakers ltd
Our position is that if there is no evidence to support intervention, or evidence as to the intervention’s likely outcome, it would be devastating to proceed as it
would have a negative impact on jobs, communities and the wider economy.
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Proliferation • Thereisnoproliferation;therearecurrentlyaround8,700bettingshopsintheUKandthe
numberofshopshasremainedstablefor10years.
• Bookmakersdonottargetvulnerablepeopleindeprivedareas.
• Bettingisahighvolumelowmarginleisureproductandthenumberofshopspersquaremile
directlycorrelatesdirectlytothedensityofpopulationpersquaremile.
• Bookmakersarepredominatelylocatedinretailandcommercialcentresthatbestservenon-
residentialcustomersjustlikefoodoutletsandconveniencestores.
The reality of public attitudes to problem gambling • TheABBaredisappointedtoreadinthereviewthattheGovernmentclaimsitisactingonpublic
concernwhenitdoesnotdefinethelevelordegreeofpublicconcern.
• Althoughweacknowledgethereissomepublicconcernaboutproliferationandproblem
gamblingwebelievethatthisisunfounded,unjustifiedandexaggerated.
• RecentpollingfortheABBranked13socialissuesinorderof“publicconcern”–“gambling
onslotorfruitmachines”wasranked13th.
• GamblingCommissionresearchshowsthatjust45visitsweremadebylocalauthoritiesfollowing
acomplaintaboutabettingshopin2011/12.
• Therelativelyhighnumberofsuccessfulplanningapplicationsandsupportiveindependent
planningreportsalsohighlightthelackofpublicconcern.
Existing Empirical Research • AlthoughtheBritishGamblingPrevalenceSurveysin1999,2007and2010werenotset
uptoidentifyacausallinkbetweenproblemgamblingandelectronicgamingmachinesthese
regulatorysurveysdidnotprovideanyevidenceforconcernsthatthereisacorrelation
• ThiswasconfirmedbysecondaryanalysisoftheBGPS2007conductedbyVaughanWilliams,
Page,ParkeandRigbyein2008.TheABBaskedVaughnWilliamsandLionelPagetoassessthe
causalityquestionandreplicatetheirmethodologyagainforthe2010BGPS.Theyconcludethat
theywereunabletoestablishacausallinkbetweenB2machinesandproblemgambling.
• NatCenrecentlyundertookanothersecondaryanalysisofthe2010PrevalenceStudy,which
lookedatmachinesinparticular.TheGamblingCommission(March2013)concludedthat
theresearch:“isconsistentwiththeearlieranalysisintheBGPS2010whichsimilarlyhighlighted
thestrongassociationbetweenproblemgamblingandparticipatinginawiderangeofdifferent
gamblingactivities.”
Understanding the truth about problem gambling • Problemgamblingmaybeviewedasperson-centricratherthanproduct-centric.
• Thepatternofparticipationingamblingactivitiesshowsamajorityofgamblersparticipate
infrequentlyinrelativelysimpleandbroadlypopularactivities.
• Itisnotpossibletoclearlysingleoutsometypesofgamblingactivitiesasbeingspecifically
associatedwithproblemgambling.
• Problemgamblersseemtodifferfromothergamblersbyahigherfrequencyofparticipationina
varietyofgamblingactivitiesratherthangamblingonaparticularproduct.
There is no empirical evidence of a causal link between problem gambling and electronic gaming machines
Page 4
Individual responsibility/informed choice • Governmentselsewhereintheworldfocusonproblemgamblingpreventionandcustomer
interaction.WiththeexceptionofNorway,nowhereisthelevelofstakesandprizesforgamesmachines
usedastheprimarymethodfortacklingproblemgambling.
• TheNorwegianexampleshowsthatevenwithahugestateinvolvementandanationalisationof
gamingmachines,thereisnoevidencetoshowthatusingacaponstakesandprizeshas
successfullyreducedproblemgambling,infact,theevidenceshowsaslightincreasesincethe
introductionofmoneylimits.
• Thisagaindemonstratesthatproblemgamblingisabouttheindividualandnottheproduct
andthatareductionofstakesandprizeswillbeanineffectiveandverybluntinstrumentifapplied
toproblemgambling.
Social Responsibility • Whetherworkingwithotherretailerstoimprovethelocalenvironment,makingcharitabledonations
orcreatingschemestoimproveskillsfortheunderprivileged,highstreetbettingshopsare
responsibleretailers,committedtoworkingwiththecommunityinwhichtheyoperate,andthe
communitybeyondthat.
• Thewholegamblingindustryvoluntarilydonatesnearly£6milliontotheResponsibleGambling
Trusttohelppeoplewhohavedevelopedproblemswiththeirgambling.
• DetailsaboutGamcareservicesisdisplayedprominentlyinallbettingshops
• Thebettingindustrysupportsawiderangeofcharitableorganisationsandworkswithcommunities
toaddressanylocalissuestheyhaveraised.
• Theindustrytakesitsresponsibilitiestoprotectchildrenandyoungpeoplevery
seriouslyandiscommittedtotheABB’sHighStreetBettingIndustryActionPlanand
SupplementaryCodeofPracticeonAgeVerification.
• AlloperatorsenforcearigidThink21policy
• In2010theABBlaunchedSafeBetAlliancewhichisavoluntarycodeofshopsafetyand
security,settingsinglenationalstandardsforbookmakers
• LBOrobberiesinLondonwerereducedby60%between2010and2012
Responsible Gambling • TheABBisfirmlycommittedtotheconceptofresponsiblegambling,wherecustomersaregiven
theself-helptoolstoavoidexcessiveorirresponsiblegamblingandthusavoidgamblingrelated
harmtothemselvesorothers.
• CurrentmeasuresandcodesadoptedbyABBmembersgofarbeyondthecurrentstatutory
requirementsanditisnowtheABB’sintentiontoconsolidatecurrentbestpractice,andproven
harmpreventionmeasures,intoavoluntaryABBcodeforresponsiblegamblinginLBOs.
• TheABBhaveengagedaleadingacademicinthistofieldtoadviseonthedevelopment
ofthiscodeandwillalsoseekadviceandinputfromtheGamblingCommission,RGSB,RGT
andDCMS.
• ThebettingindustryisalsocommittedtofundinganewindependentBGPSundertakenby
NatCenin2014.
Regulatory Impact Assessment. • NewABBdataclearlyshowsthattheindustrywouldbesignificantlyimpactedbyanynegative
association of british bookmakers ltd
The ABB intends to consolidate current best practice, and proven harm prevention measures, into a new voluntary ABB
“code for responsible gambling in LBOs”.
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regulatorychangeduetoasurprisinglyhighnumberofshopsonverylowmargins.
• Therearealready2,685LBOsatriskfromnayreductioninstakeastheyonlymakeonaverage
around£15,200p.a.Theyemployaround11,300people.
• Asahypotheticalexample,ifthelevelofB2stakewerereducedto£2,ABBcommissioned
analysisshowsthat:
• 7,880LBOs(91.7%ofshops)and,39,031jobs(85.8%ofjobs)wouldbeatrisk
• LBOswouldmakea£58,900losspershop.
• TheTreasurystandstolose£650million.
• Theclosureofaround85%ofshopswouldaddthousandsofsquarefeetofemptypremisesonto
thehighstreet.
• Nearly£60millioninbusinessrateswouldbelosttolocalcouncils.
• Thelossofnearly40,000jobs–manyamongst18-24yearoldsandpart-timefemale
workers-wouldaddtounemploymentratesandincreaseTreasury’sbenefitsbill.
• Therewouldbeasignificantimpactonthehorseracingandgreyhoundindustriesand
leadtoanincreaseofactivityontheillegalgamingmarkets.
• TheLBOsectorneedsstrongbackingfromGovernment,tomaintainandgrowitsbusiness.For
thisreason,weproposeincreasingthemaximumstakeforB3machinesfrom£2to£3andincreasing
themaximumavailableprizefrom£500to£1000.
Concerns about consultation process. • TheABBnotesthattheconsultationprocessappearstoexposeaclearpresumptionagainstB2
machinesinbettingshops.
• Weareseriouslyconcernedaboutthebiasandvalidityofthereview’squestionsonB2machines
containedintheconsultation,inparticulargiventhedivergentapproachestakenbytheGovernment
inrelationtodifferentcategoriesofgamingmachines.
• TheABBhopesthattheGovernmentwilldemonstratethatourconcernsareunfounded,
andensurethattheresponsetothisconsultationiscarriedoutinaneven-handedand
transparentfashion.
• WenotethatanyproposalstoproceedwithaprecautionaryreductioninB2limitswould
requiretheGovernmenttoconductafurtherconsultationprocessandtopublisharevisedImpact
AssessmentclearlysettingouttheGovernment’scost/benefitanalysisfortheproposal.
• Anyreductiondownwardinthepermittedstake/prizelimitsonB2machinesonLBOs
wouldhavedisastrousconsequencesforbettingshopoperators.
• TheABBtruststhattheGovernmentwouldnotfurthercountenanceanynegativechanges
withoutcompellingandincontrovertibleevidencethatthiswouldresultinpublicprotectionbenefits
whichwouldoutweighthesignificantdetrimentaleffectthatsuchamovewouldhaveonthe
industryandlocaleconomies.
We are seriously concerned about the bias and validity of thequestions on B2 machines contained in the consultation.
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CHAPTER 2INTRODUCTION • Thelegislativeandregulatorymeasurescurrentlyinplacearefoundedonindustrybest
practice and voluntary measures such as the ABB’s Code of Practice.
• TheLBOsectorhasdevelopedquicklyoverthelasttwodecadestobecomeamodernleisure
entertainment business with 8 million customers
• Thesectorsupports100,000jobs(directlyandindirectly)andcontributes£5billionperannum
in terms of gross value added.
• WewelcometheGovernment’sreviewandagreewithitspositionsonstakesandprizeson
all machines with the exception of B3 machines.
• Oursubmissionisbasedonevidencewhichissourcedandverified.
• Webelievethatafair,openandevidencebasedconsultationcanonlytakeplaceifunverified
comments and opinions are disregarded and positive weighting is given to sourced and
verifiedevidence.
• Ourpositionisthatifthereisnoevidencetosupportintervention,orevidenceastothe
intervention’slikelyoutcome,itwouldbedevastatingtoproceedwithacourseofaction
whichwouldhavenegativeimpactonjobs,communities,highstreets,sportsectorsandthe
wider economy.
IntroductionTheAssociationofBritishBookmakers(ABB)issubmittingthissubmissiontothetriennialreviewonbehalf
ofLicensedBettingOffices(LBOs)intheBritain.TheABBistheleadingtradeassociationforbookmakers
and represents the operators of around 7,000 betting shops in the Britain, including Coral, Ladbrokes,
PaddyPower,WilliamHillandabout100smallerindependentbookmakers.Togetherourmembersoperate
80%oftheBritishbettingshopmarketwhichisanimportantpartoftheretailleisureindustryonthehigh
street.
NowadaystheLBOisamodernleisureentertainmentbusiness,offeringcustomersstate-of-the-artvideo
andaudiosystems,comfortablefurniture,alcohol-freerefreshmentsandfriendlystaff.Notonlydoesbetting
remainapopularBritishpastimewith8millionpeoplevisitingourshopseveryyear,thebettingsectoras
a whole makes a substantial contribution to the UK economy. They support 100,000 jobs (directly and
indirectly)andcontribute£5billionperannumintermsofgrossvalueadded.Inchapter3weprovidefurther
detailsoftheprimaryandsecondarybenefitstotheUKeconomy.
Aswewilldemonstrateinchapter7electronicgamingmachines(B2andB3machines)havebeeninbetting
shopsforoveradecade–duringwhichtimenoempiricalevidencehaseverbeenproducedtosupport
theanecdotalclaimsthattheycauseproblemgambling.Quitetheoppositeinfact-themostrecentpeer
reviewedandindependentlyproducedresearch,the2010GamblingPrevalenceStudy,showsthattherehas
beenareductioninthenumberofproblemgamblerswhousedgamingmachines1.
TheGovernmentproposes in the review’s impactassessment tomaintainB2stakesandprize limitsas
theywould representnorisk toplayerprotection.Ourposition is that if there isnoevidence tosupport
1 British Gambling Prevalence Surveys (2007) table 5.4a page 95 / (2010) table 6.4 page 96
association of british bookmakers ltd
Nowadays the betting shop is a modern leisure entertainment business, offering customers state-of-the-art video and audio systems, comfortable furniture,
alcohol-free refreshments and friendly staff.
Page 7
intervention,orevidenceastotheintervention’slikelyoutcome,itwouldbedevastatingtoproceedwitha
courseofactionwhichwouldhaveadisastrousimpactonjobs,communities,highstreets,sportsectors
andthewidereconomy.ThisargumentwillbesupportedbyevidenceinChapter12.
However,theABBdoeswelcometheResponsibleGamblingTrust’srecentannouncementaboutthebiggest
everprogrammeofacademicresearchintoCategoryBgamingmachinesintheUK’sbettingshops,bingo
halls, adult gaming centres and casinos. There can be no question that we fully support the objective
tounderstandbetterhowourcustomersbehavewhenplaying thesemachinesandwhathelps themto
playmoreresponsibly.NoonebackstheGovernment’scallforanevidencebaseddebatemorethanour
membersandtheyhavepro-activelyagreedtogivefulldataaccesstoNatCenaspartofthisproject.
Asweoutline inchapter11theABBisfirmlycommittedtotheconceptofresponsiblegambling,where
customersaregiventheself-helptoolstoavoidexcessiveorirresponsiblegamblingandthusavoidgambling
relatedharmtothemselvesorothers.CurrentmeasuresandcodesadoptedbyABBmembersgofarbeyond
thecurrentstatutoryrequirementsanditisnowtheABBsintentiontoconsolidatecurrentbestpractice,and
provenharmpreventionmeasures,intoavoluntaryABB“codeforresponsiblegamblinginLBOs”.TheABB
haveengagedaleadingacademicintheareaofproblemgamblingandplayerprotectiontoadviseonthe
developmentofthiscodeandwillalsoseekadviceandinputfromtheGamblingCommission,RGSB,RGT
andDCMS.Thebetting industry isalsocommitted to fundinganew independentBGPSundertakenby
NatCenin2014.
Inchapter13wewillberespondingtoall35consultationquestions,althoughquestions1,2,3,13,14,15
and16areofprimaryconcerntotheABBanditsmembers.Oursubmissionisbasedonevidencewhich
issourcedandverified.Webelievethatafair,openandevidencebasedconsultationcanonlytakeplaceif
unverifiedcommentsandopinionsaredisregardedandpositiveweightingisgiventosourcedandverified
evidence.
Finally,weare,concernedthattheconsultationprocessappearstoexposeaclearpresumptionagainstB2
machinesinbettingshops.WesetoutourobservationsandconclusionsinthisregardinChapter14ofour
submission.
Gaming Machines in Betting Shops - A Brief History
Beforeweprovideareviewoftheevidenceongamingmachineswebelieveit’simportanttorememberthe
historicaldevelopments.TheNationalLotterywas launched in1994andactedasacatalyst forgaming
machineinnovationinLBOsworthyofaQueen’sAward.
TheHenleyCentrefoundthatin1995bettingofficeprofitswere35percentlowerthantheywouldhave
beenintheabsenceoftheLottery.Governmentrevenuesfrombettinghadfallenby£82million,400betting
shopshadclosedbytheendof1995,andmorethan3,400industryjobshadbeenlost.Needlesstosay,
thesewereverychallengingtimesforbookmakers.
In response the LBO sector introduced new products like ‘magic numbers/daily draw’ which allowed
customerstobetontheoutcomeoftheIrishLottery.TheDeregulationofBettingandGamingOrder1996
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permittedtheopeningofshopfronts,shopwindowmarketing,thesaleofsnacksandrefreshmentsand
theintroductionofAmusementswithPrizesMachines(AWPs)–oftenreferredtoasSlotMachinesorFruit
Machines.PriortoJune1996noformofGamingwasallowedinbettingshops.Althoughtheindustryhad
around16,000AWPstheywereessentiallyapubproductandbookmakershadlittleinfluenceoverfuture
development,sothesearchwasonforabespokebettingshopproduct.
In1996GlobalDrawwasformedandthiscompanydevelopedalotterystyleproduct‘theGlobalDraw’-a
numbersdrawonadedicatedscreenorterminalwithbetsplacedoverthecountereveryhour.Thisinnovative
businessexpandeditsrangeofproductsandrandomnumbereventsweredeliveredmorefrequently.
The replacement of turnover tax with Gross Profits Tax (GPT) in 2001 allowed the betting industry to
introducenew lowermarginproducts.The roulettegamewas introduced to the16,000 terminalswhich
becameknownasFixedOddBettingTerminals(FOBTs)andanumberofnewsuppliersenteredthemarket.
Theyusedsoftwaretorandomlydeterminetheoutcomeofgamesandthereturntoplayerrateswerebased
onfixedodds.Theproductsprovedpopularandfuelledfurtherexpansionandinnovation.
ThissurgeincustomerdemandprecededtheGamblingAct2005andhappenedatatimewhenbetting
terminalswerenotsubjecttoanyspecificlegislation.ABBmembersrealisedthatiftheywantedtoattracta
widespectrumofcustomerstotheirstorestheycouldonlydothisbyofferingthemasafeandresponsible
leisureexperience. In2003ABBand itsmembersproducedavoluntaryCodeofPracticegoverningthe
supplyanduseofFOBTsinbettingshops.TheCodesetlimitsgoverningthemaximumpermittedstakes
andprizes,thenumberofmachinespershopandthespeedofplay.Andfrom19November2003,ABB
membershipwasonlyopentobookmakerswhoacceptedandoperatedaccordingtotheconditionsofthe
Code.ThemajormachinesuppliersalsosigneduptotheABBCodeofPracticein2003.
TheABB’scodewasacceptedbytheDepartmentforCultureMediaandSport,theGamblingBoardand
theindustry.PeterDean,ChairmanoftheGamingBoardofGreatBritainsaid,“Itwasthebestexampleof
commercial/regulatorco-operationhehadseen.”Thelegislativeandregulatorymeasurescurrentlyinplace
,mostofwhichwereformallyintroducedinthe2005GamblingAct,arefoundedonindustrybestpractice
andvoluntarymeasuressuchastheABB’sCodeofPractice.Andasaresulttoday’sgamingmachinesare
apopularBritishleisureproductenjoyedsafelyandresponsiblybythevastmajorityofourcustomersand
aswewillshowinChapter9theUKnowleadsbyexampleinregulatoryterms.
2 Gambling Commission Industry Statistics April 2009 to March 2012 table 18, page 19
association of british bookmakers ltd
In 2003 ABB and its members produced a voluntary Code of Practice setting limits governing the maximum permitted stakes
and prizes, the number of machines per shop and the speed of play.
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CHAPTER 3THE LICENSED BETTING OFFICE MARKET • Gamblingisoftenportrayedinanegativelight.However,thereisclearevidenceofthe
economicandsocialbenefitsofbetting.
• CentreACentreforEconomicandBusinessResearch(Cebr)studyshowsthatbetting
shopscontribute£3.2billiontoUKGDP,support100,000jobsandpay£1billionintaxes.
• Forevery£1ofGrossValueAdd(GVA)generatedbybettingshops,anadditional£0.61ofGVA
is generated in the wider economy through indirect and induced impacts.
• Between87%(Wales)and99%(London)oftheeconomicbenefitsstaylocaltoo,enriching
communities.
• Bettingshopsalsocontributetolocalservicespayingmorethan£58millioninbusinessrates
each year.
• Bookmakershavealreadyinvestedabout£2billioninlocaleconomiesthroughtheopeningof
newandrefittedbettingshops.
• AccordingtoCebrbettingshopsprovideatotalof55,000fullandparttimejobs,which
equatestonearlyoneintenjobsintheleisureindustry.Some31,000,or56%,ofthosejobs
arefilledbywomen,makingbettingshopsoneofthemostfemale-friendlyindustriesinthe
UK,muchbetterthanmanufacturingandakintofoodandbeverageservices.
• Bettingshopsemploy14,000youngpeopleaged18-24,anagegroupwith20%unemployment
currently.Thismeansthat25%ofbettingshopemployeesisaged18-24,comparedto8%
of employees across the economy as a whole.
• AtatimewhentheGovernmentistryingtotacklehighunemploymentratesandmany
unqualifiedandunskilledworkersarefindingthemselvesoutofworkanotherrecentstudy
commissioned by the ABB has found that the industry provides opportunities for those with
fewformalqualificationshelpingthemtostepontotheemploymentladder.
• ResearchbyBashamandLuikalsoshowsthatgamblerstendtoparticipatemoreincommunity
andsocialactivitiesthannon-gamblers,anddonatemoretocharity.Byofferingadiverse
rangeofentertainmentandasafeenvironment,bettingshopscontributetosocialcohesion
and are an integral part of the local community.
• Thereisnoproliferation;therearecurrentlyaround8,700bettingshopsintheUKandthe
number of shops has remained stable for 10 years.
• Bookmakersdonottargetvulnerablepeopleindeprivedareasandanysuchaccusationsare
both false and offensive. Betting is a high volume low margin leisure product and thus
operators will locate more premises in areas with a high density of population. The number
ofbettingofficespersquaremiledirectlycorrelatestothepopulationpersquaremile.Anew
marketreviewofbettingshopslocationsbyCACI(2012)showsthatbookmakersare
predominatelylocatedinretailandcommercialcentresthatthatbestservenon-
residential customers. They have a very similar retail footprint to food outlets and convenience
stores in these areas.
BackgroundTobetterunderstandthedevelopmentofLBOsonehastogobackto1961toremindourselveswhyoff-
3 http://www.gamblingcommission.gov.uk/pdf/Licensing%20authority%20statistics%20April%202010%20to%20March%202011.pdf
The betting industry provides a service to 8 million customers and around 1.5 billion bets are placed with LBOs every year.
Page 10
coursebettingwasintroduced.Thepolicyobjectivewastosolvetheproblemofillegalgamblingininnercity
andurbanareas.Itwasabighitwithconsumersand,bythe1970s,theirdemandwassustainingasmanyas
15,000bettingshops.However,earlylegislationwashighlyrestrictive.Forexample,closedshopfrontages
wererequired,andrefreshmentsandlivecoverageofsportingeventswereprohibited.
Over the ensuing decades, parliament accepted that these restrictions were misplaced in a modern
regulatoryenvironmentandaprocessofliberalisationoccurred.Inreturn,ourindustrybecameoneofthe
mostregulatedgamblingsectorsintheworld.Mostrecently,theGamblingAct2005whichempoweredthe
GamblingCommissiontoconductavigoroussuitabilityinvestigationoneverybookmakerandinitiateda
duallicensingregime.Operatorsrequiretwolicenses:anoperator’slicencefromtheGamblingCommission
andapremiseslicensefromalocallicensingcommittee.Alicensewillnotbegrantedifitcanbeproved
thatabettingshopwouldcausecrimeorhaveanegativeimpactonyoungandvulnerablepeople.Since
theGamblingAct2005notonesinglebettingshopoperatorhashadtheirlicenserevokedforabreachof
thethreelicensingobjectives.Bookmakerstaketheirresponsibilitytothelocalcommunitiesinwhichthey
operateveryseriouslyandwanttooffertheircustomersasafeandresponsibleleisureexperience.Thatis
whysignificantresourcesareinvestedintoresponsiblegamblingproceduresandthetrainingofstaff.3
Economic Benefits
Gamblingisoftenportrayedinanegativelight.However,thereisclearevidenceoftheeconomicandsocial
benefitsofbetting.TheABBhasnotfoundanyrealrecognitionofthebenefitsfromtheLBOmarkettothe
widereconomy in theconsultation.That’swhy it commissioned theCentre forEconomicandBusiness
Research(Cebr)tocarryoutthefirstcompleteeconomicimpactassessmentoftheindustryanddiscovered
itssignificantcontributiontolocalemployment,revenueandtaxation2.Thefulldetailscanbefoundonour
websitewww.abb.uk.com.
TheCebrstudyshowsthatbettingshopscontribute£3.2billiontoUKGDP,support100,000jobsandpay
£1billionintaxes.Forevery£1ofGrossValueAdd(GVA)generatedbybettingshops,anadditional£0.61
ofGVAisgeneratedinthewidereconomythroughindirectandinducedimpacts.
In fact, betting shopsare responsible for about 15per centof the economiccontributionmadeby the
aggregate Arts, Entertainment and Recreation sector, which itself contributes about 1.3 per cent of UK
GDP.AccordingtotheCebrreportbettingshopscanbeseentoberesponsibleforabout40percentofthe
contributionmadebythegamblingandbettingservicesindustryasawhole.Thiscontributioncanbeseen
onaregionbyregionbasis:
association of british bookmakers ltd
Betting shops contribute £3.2 billion to UK GDP, support 100,000 jobs and pay £1 billion in taxes.
Bookmakers have invested about £2 billion in local economies over the last decade through the opening and re-fitting of betting shops on the high street.
UK nation / English region Direct GVA contribution (£m)
Direct contribution to regionalGVA(%)
Total regional GVA impact(£m)*
NorthEast 146 0.4% 205
NorthWest 238 0.2% 346
Yorkshire&TheHumber 168 0.2% 252
EastMidlands 79 0.1% 122
WestMidlands 144 0.2% 219
EastofEngland 114 0.1% 174
London 420 0.2% 627
SouthEast 180 0.1% 270
SouthWest 138 0.1% 202
Total England 1,628 0.2% 2,588
Wales 75 0.2% 101
Page 11
Between87%(Wales)and99%(London)oftheeconomicbenefitsstaylocaltoo,enrichingcommunities.
Bettingshopsalsocontributetolocalservicespayingmorethan£58millioninbusinessrateseachyear.
Bookmakershavealreadyinvestedabout£2billioninlocaleconomiesthroughtheopeningofnewbetting
shopsandthe‘new-style’re-fittingofbettingshopsthatalreadyexistedbeforethemostrecentchangesin
theindustry.
Bookmakershavealreadyinvestedabout£2billioninlocaleconomiesthroughtheopeningofnewbetting
shopsandthe‘new-style’re-fittingofbettingshopsthatalreadyexistedbeforethemostrecentchangesin
theindustry.Openingorresitingabettingshopusuallycostsbetween£150,000and£250,000depending
onthebookmakerandregion.Openingnewbettingshopsoftenrequiressignificantre-fitting,re-decoration
andequipmentpurchasesoftenundertakenbylocaltradespeople.Hence,openingssupportregionaljob
creationandwagesforretailers,decoratorsandcarpenters.TheCebrestimatethetotalamountinvested
bybettingshopsintheregionsatapproximately£2.0billionintoday’smoney.
Bettingshopsareplayingakeyroleinregeneratinghighstreets.AreportbyDeloitteconcludesthat:“An
increaseinvacantretailspaceonthehighstreet–duetotherecession–hasallowedtheindustrytobenefit
bymovingtomoreprominentpremises.Thereisevidencefromplanningexpertsthatbettingshopsactually
drivegreaterfootfallonhighstreetsthanstandardretailunits…andthattheindustrycanactasacatalyst
togeneratecriticalmasseffects–inparticularthehighfootfallassociatedwithretailbettingshopscanhelp
increasethelevelofconsumeractivitywithinthesurroundingarea.Consequentlytheexistenceofbetting
shopsinotherwisedegeneratingareascanincreasetheoveralleconomicactivityfornearbybusinesses.”
AccordingtoCebr,bettingshopsprovideatotalof55,000fullandparttimejobs,whichequatestonearly
oneintenjobsintheleisureindustry.Thiscontrastswith3,000FTErolesintheonlinebettingsector.
Some31,000,or56%,ofthosejobsarefilledbywomen,makingbettingshopsoneofthemostfemalefriendly
industriesintheUK,muchbetterthanmanufacturingandakintofoodandbeverageservices.
Thisisatatimewhenthefemaleunemploymentrateis7%.
Bettingshopsalsocontributesubstantially toyouthemployment in theUK.Cebrestimates thatbetting
shopsemploy14,000youngpeopleaged18-24.Thismeansthat25%ofbettingshopemployeesareaged
18-24,compared to8%ofemployeesacross theeconomyasawhole.Bettingshopsemployahigher
proportionofyoungpeoplethaneventheculture,mediaandsportssector,whichhas18%ofitsemployees
inthe18-24agerange.Again,thisisatatimewhentheyouthunemploymentratestandsat20%.
Ata timewhen theGovernment is trying to tacklehighunemployment ratesandmanyunqualifiedand
unskilled workers are finding themselves out of work, another recent study commissioned by the ABB
hasfoundthattheindustryprovidesopportunitiesforthosewithfewformalqualificationshelpingthemto
stepontheemploymentladder.AreportbyDeloittesaysthat“theindustryprovidesflexibleworkinginthe
formofentrylevelpart-timerolesrequiringfewornoformalqualifications.Thesejobscanfitaroundwider
commitments,andmanyoftheserolesaretakenbywomen.”
4 The contribution of betting shops to the UK economy – Cebr (2012)
Page 12
Around13%ofthoseworkinginGamblingandBettingactivitieshavenoformalqualifications;thisistwice
theallindustryaveragefortheUK.Thissuggeststhattheindustrycanhelptoreduceunemploymentand
boostemploymentopportunities.Anequalproportion(13%)holdadegreeorfurtherdegree–thisismuch
lowerthanallbut7industriesintheUKandhasmajorimplicationsforprogressionwithinthefirmsinthe
industrywhichishighlightedbytheDeloittereport.
Theindustryalsoprovidesmorepart-timejobsforbothmaleandfemalesthantheGreatBritainaverage.
In 2011, the percentage of jobs occupied by female, part-time workers across Great Britain was 24%,
comparedwith31%intheGamblingandBettingindustriesasisshowningraphbelow.Thisfitswellwith
theGovernment’sstatedaimofprovidingemploymentopportunitiesforfemalestraditionallylesslikelyto
engagewiththelabourmarketinafull-timerole.
ThefulldetailsoftheDeloittereportcanbefoundonourwebsitewww.abb.uk.com.
association of british bookmakers ltd
Gambling tends to better the physical and mental health of their customers, helping them live longer and happier lives.
Industry employment, by qualification, 2012
Source: Quarterly Labour Survey, January - March 2012
21%
20%
19%
19%
19%
13%
1%
1%
1%
1%
Legal and accounting activities
Computer programming and consultancy
Extraterritorial organisations
0%
Manufacture of pharmaceuticals
Insurance, reinsurance and pension
Gambling and betting activities
Domestic personnel
Services to buildings and landscape
Manufacture of textiles
Manufacture of wearing apparel
Crop, animal production, hunting
100%20% 40% 60% 80%
Degree or equivalent
Higher education
GCE A Level or equiv
GCSE grades A-C or equiv
Other qualifications
No qualification
0
10
20
30
40
50
45
35
25
15
515%
%
8%
29%
24%
44%
32%
Gambling and Betting
Great Britian
Male P/T Source: Labour Force Survey, JOBS03,May 2012
Part-time employment rates, industry vs total, 2011
Female P/T Total P/T
TheGamblingandBettingindustryhasarelativelyhighnumberofitstotaljobsfilledbyemployeeswith
noqualifications,shownbythechart:
Page 13
5 The Full Picture II: Measuring the economic contribution of the British Betting Industry (March 2013)
Social Benefits
It issometimesforgottenthat thebetting industryprovidesaservice to8millioncustomersandaround
1.5billionbetsareplacedinLBOseveryyear.Whyisbettingsopopular?In“Gambling–AHealthyBet”
(2011) Basham & Luik ask themselves why betting continues to be a popular pastime in the UK. They
notedthatmoststudiesofgamblingaremarredbyananti-gamblingbias,derivingfromanobsessivefocus
on“problem”gambling.Infact,BashamandLuikconcludedfromtheirresearchthattherearenumerous
significantpersonalandsocialbenefitsfromgamblingthatdeservetobemuchmorewidelyrecognised.
Gamblingtendstobetterthephysicalandmentalhealthoftheircustomers,helpingthemlivelongerand
happierlives.
Bashamwrotethattheprincipalbenefitofgamblingisthediversionandpleasureitprovidestomillionsof
people.Tocritics,gamblingisaninfuriatingscam.Butwhy,arguesBasham,assumegamblersarebeing
fooled?Itismorereasonabletoassumethattheyknowtheywillprobablylosebutarehappytotakethat
chanceforthepleasureofplayingandthechanceofcomingoutahead.
TheuncomplicatedtruthaccordingtoBashamisthatgamblingisaterrificformofentertainment.Gambling
isaleisurepursuitandasourceofrecreationthat,likeanyother,isalegitimatepartofcapitalistenterprise
intheauthors’view.Perfectlyrationalpeopleplayelectronicgamingmachinesandbetonsportsbecause
theyreceivealeisureexperienceatapricetheyfindreasonable.
Basham found that people who gamble do so voluntarily and, in return, receive intrinsic benefits from
theirownconsumption. Ifconsumersaregamblingforentertainment, theyarepurchasinggambling just
astheywouldpurchasecinemaorsymphonytickets.Thismaybeconsideredarelativelyharmlessformof
entertainmentthatprovidesarecreationaloutletforparticipants.
The bottom line is that gambling has become a widespread pastime for the simple and unassailable
reasonthatitaddstothesumofhumanhappinessaccordingtoBasham.British,AmericanandSwedish
governmentstudieshaveallfoundthatgamblerstendtobemoresociable,moreneighbourly,andmore
involvedincommunityactivitiesthantheirnon-gamblingpeers.
Gambling–likeotherrecreationalleisureactivities–alsodeliversmanyworthwhilebenefitstotheindividual.
Basham provides evidence: relief from stress and boredom, a sense of freedom, independence and
autonomyaswellasenhancedself-confidenceandbetterabilitytorelatetoothers.Ultimatelyitcanbuilda
morepositiveoutlook,greaterjoyfromlifeandenenhancedperceivedqualityoflife.
Bashamfoundthatevidenceismountingthatthesystemsofsocialsupportandcompanionshipinherent
in gambling contribute to longer, more disease-free and higher quality life. For working class people in
particulargamblinghelpsthemtorelaxfromwhatiscommonlyadayoftiringphysicalwork.
Gambling helps players by building creative skills and competencies such as memory enhancement,
problemsolvingthroughgametactics,mathematicalproficiency,concentrationandhand-to-eyephysical
coordination. Basham wrote that sports betting encourages practice with analytical thought, and most
sportsbettorsfeelthatasuperiormindisanasset.
DreamingaboutwinnersappearstosustainthepsychologicallyvitalqualityofhopeinBasham’sexperience.
Page 14
Apersongamblingforthisreasondoessonotbecauseheorsheexpectstowinbutbecauseheorshe
hopestowin.BashamreferredtoJonFasmanwritingthat‘Gambling’swidespreadandenduringappeal
comesasmuchfromthehopeofimposingorderonthefundamentalrandomnessoftheworldasfromthe
expectationofeconomicgain’
Oldergamblersarelesspronethannon-gamblerstoalcoholabuse,depression,bankruptcyandimprisonment
accordingtoBasham.Retiredpeoplewhoremainactiveinthecommunityandwhoconstantlyengagein
socialactivitieslivehappierandhealthierlivesdespitetheirage.Thebettingshopofferspensionersaplace
tosocialiseandinteractwiththeirpeers.Forpeoplewithfewfriendsandlittlefamily,gamblingcanoffer
themasocialcontactthattheyotherwisemightnothave.
Inadditiontothesocialaspectofgambling,Bashambelievedthatthemostimportantbenefitforpensioners
isthatgamblingoffersthemanopportunitytocontinuouslyexercisetheirbrain.Mentalactivitysuchasthe
patternrecognitioninvolvedinplayingmultilinebonusslotshelpspensionersstaveofftheeffectsofmental
degenerativediseases,suchasAlzheimer’s,bykeepingthebrainactiveanddevelopingnewconnections
between brain cells. In this regard gambling is more beneficial than either crossword puzzles or board
games,suchasbackgammon.
The Number and Location of Shops
Thesuggestionthatthenumberofbettingofficesisexcessiveisitselfentirelymisplaced.Infact,thereare
farfewerbettingofficescurrentlythantherewereinformertimes.Thenumberofbettingofficelicencesin
forcepeakedin1968at15,782.In1987,whenthenewUseClassesOrderwaspublished,thenumberwas
10,384.Thisnumberfellyearonyearuntil2003,whenitreached8,804in2003.Therehasbeenpractically
nonetincreasesincethatdate.
AccordingtoABBmemberdatatherearecurrentlyaround8,700bettingshopsintheUKandthenumberof
shopshasremainedstablefor10years.Thereisnoproliferation.Thefollowinggraph,usingdataprovided
bytheGamblingCommission,showsthenumberofLicensedBettingOfficesintheUKfrom1961to2012
(datanotavailablefor1962):
NumberofUKLicensedBettingOffices1961to2010(datanotavailablefor1962)
PlanningexpertsatGeraldEveLLPbelievethispatternshowsamaturemarketintheprovisionofoutlets
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
0
association of british bookmakers ltd
There are currently around 8,700 betting shops in the UK and the number of shops has remained stable for 10 years.
Page 15
which,settingasidetheeffectofgrowthinon-linecomputerbasedtradeislikelytoremaininfuture.
Bettingshopsaccountforlessthan4%ofthecountry’s240,000retailunits.Toputthisintocontext,this
representationis22%lessthanbankbranches,25%lessthancharityshopsand60%lessthanfastfood
outlets4.
Even inareaswhicharecommonlycitedashavingthemostbettingshops,theymakeup lessthan3%
ofretailunits.Forexample,bettingshopsmakeup lessthan2.3%ofretailunits inSouthwark,2.7%in
Lewisham,2.7%inHackney,2.8%inWoodGreen,3.2%inManchester,3.3%inBirminghamand3.5%in
Leeds5.
Itwouldthereforebewrongtosaythatbookmakerstargetvulnerablecommunities,assuggestedbysome
pressuregroups.Likeanyotherretailer,keyfactorssuchasfootfall,competitivepresence,demandand
overallcostofrunninganoutlethelpoperatorsdecidewheretoopennewshops.
Thenumberofbettingofficespersquaremiledirectlycorrelatestothepopulationpersquaremile.Betting
isalowtickethighvolumeleisurepursuitandthusbookmakingchainswilllocatemorepremisesinareas
withahighdensityofpopulation.Thisisillustratedbythegraph(CACI2013)below:
AnindependentmarketreviewofbettingshopslocationsbyCACI(2013)showsthat:
• 84%ofbookmakersareinretailandcommercialcentresnotresidentiallocations
• Bookmakersarelocatedinplacesthatbestservenon-residentialcustomers
• Bookmakersarejustservinglatentdemandwithintheareaandarenotashighlyconcentrated
assomeotherretailservices
• Bookmakershaveaverysimilarretaildistributiontowellknownhighstreetbrandssuchas
Greggs,SubwayandNisaLocal
Book
mak
ers
per S
quar
e M
ile
% of UK Population by Ward
Population per Square Mile
% of All Bookmakers Locations
Popu
lati
on p
er S
quar
e M
ile
Top 10%
2nd Declin
e
3rd D
ecline
4th D
ecline
5th D
ecline
6th D
ecline
7th D
ecline
8th D
ecline
9th D
ecline
Bottom 10%
35%
30%
25%
20%
15%
10%
5%
0% 0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
4 Gerald Eve LLP – Planning Research in the Location of Betting Offices (2012)5 Gerald Eve LLP – Planning Research in the Location of Betting Offices (2012)
Page 16
CACIdemonstrateintheirreportthattheLBOindustryisservicingthenumberofpeopleinlocalities,not
thetypeofperson,andhasastrongpresence inretailcentreswhicharedestinationsforshoppersand
workers.Theexistenceofbettingshopsalsobooststhelevelofeconomicactivitybyfillingemptypremises,
generatingfootfall,creatingjobsandpayinglocaltaxes.
According to Deloitte the betting industry can “act as a catalyst to generate critical mass effects – in
particular, thehigh footfall associatedwith retail bettingshopscanhelp increase the levelof consumer
activitywithinthesurroundingarea.Assuch,otherbusinessescanbenefitfromlocatingthemselvesnear
thesehubsofconsumerpresence.Consequently,theexistenceofbettingshopsinotherwisedegenerating
areascanincreasetheoveralleconomicactivityfornearbybusinesses.”6
DeloittealsostatesthatalthoughindustryemploymentdatasuggeststhemajorityofGamblingandBetting
firms are located within urban areas, there is also evidence to suggest that the industry contributes to
employmentinmoreruralareas.Thisislikelytooccurparticularlythroughlinkstothehorseracingindustry,
whichtendstotakeplaceinmoreruralareas.
8 The Full Picture II: Measuring the economic contribution of the British Betting Industry (March 2013)
Population in the gambling and betting industry in urban areas
0
10
20
30
40
50
60
70
80
90
100
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5
Employment in gambling and betting (% total)
Population classified as urban (% total)
Windsor and Maidenhead
West Somerset
Three RiversThanet
Tendring
Southend-on-Sea
Scarborough
HarrowHammersmith and Fulham
Great Yarmouth
East Lindsey
These outliers represent head office presence
Source: ONS and Deloitte Analysis
association of british bookmakers ltd
The number of betting offices per square mile directly correlates to the population per square mile.
Page 17
CHAPTER 4THE ELECTRONIC GAMING MACHINE MARKET In this chapter the ABB reviews the Electronic Gaming Machine (EGM) market data which is
availablefromthe2010BritishGamblingPrevalenceSurvey(BGPS)commissionedbytheGambling
Commissionandotherresearch,includingdataprovidedbyABBmembers.
Therearecurrentlyaround140,000gamingmachinesinoperationintheUKacrossallgamblingsectors.
Approximately35,000ofthesegamingmachinesareinbettingshopsandthenumberhasremainedstable
for3years.
Althoughweareproudtoserveeightmillioncustomersthishastobeputinperspective.Only12%ofthe
UKpopulationvisitabettingshop,35%ofbettingshopcustomersonlyvisitmonthlyandthevastmajority
ofbettingshopcustomersareoccasionalvisitorsaccordingtoKantarMediadatacommissionedbythe
ABB.
And89%ofelectronicgamingmachineplayersaremen,comparedwith71%ofmenwhohavegambledon
allproductsonofferinabettingshop.11%ofwomenareelectronicgamingmachineplayers,comparedto
29%ofwomenwhohavegambledonallproductsinashop.
According to the 2010 British Gambling Prevalence Survey (BGPS), commissioned by the Gambling
Commission,4%oftheadultpopulationplaysonB2machines.Thisfiguredroppedto3.4%in2011-2012
accordingtotheGamblingCommissionIndustryStatistics(2009-2012)whichalsostatedthatthenumber
ofpeoplewhohavegambledonB2machinesinthepreviousmonthfellfrom2.5%ofgamblersin2009to
1.4%in2012.
ItisimportanttonotethatB2isapopularbutinfrequentlyplayedproductwith74%ofB2playersplayonce
amonthorlessaccordingtothe2010BGPS.KantarMediadatashowsthatB2machineplayersgamble
onarangeofproducts.Only24%ofbettingshopcustomersjustplayongamingmachines.Infact,50%of
machineplayersarealsoregularhorseracingbettorsand57%ofmachineplayersarealsoregularfootball
bettors.
Whydomachineplayersvisitabettingshop?AccordingtoKantarMediadata22%visitLBOstomake
money,19%becauseit’sfun,15%topassthetime,15%thethrillofwinning,8%meetfriends,8%for
instantsatisfaction,6%watchsportand3%tobeatthebookie.
Consultationquestion13(c)askswhostakeswhereandwhataretheproportionsonB2machines.
Accordingto2010BGPSB2GamingMachinesplayersaremorelikelytobeeducatedtodegreelevelor
higherthantohavenoformalqualifications,andtheoverwhelmingmajorityhadGCSEs,A-Levelsoranother
professionalqualification.
Furthermore,thosewhoareunemployedarefarmorelikelytoparticipateinotherformsofgamblingthan
playingB2GamingMachines.Ofthosesurveyedinthe2010BGPS53%saidtheygambledonthenational
lottery,32%scratchcards,23%slotmachines,21%Horseraces,18%privatebetting,18%sportsbetting,
According to the Gambling Commission’s latest data 3.4% of the adult population plays on B2 machines.
Page 18
16%anotherlottery,15%onlinegambling,14%bingoand12%saidtheyplayedonB2gamingmachines.
KantarMediadatacommissionedbytheABBalsoshowsthat
• Morethanhalfofgamingmachineplayersare(56.7%)age25–44,oneineightareage18–24
(12.7%)andoneineightareolderthan55(12.7%).
• Fourofeveryfivegamingmachineplayers(77.9%)workfullorparttime,oneintwentytwo
(4.5%)arestudents,oneinfifteen(6.5%)areretired,oneineighteen(5.7%)arenotworkingbut
arenotunemployed,andoneintwenty(5.2%)areunemployed.
• Twoofeveryfivegamingmachineplayers(40.9%)havesupervisoryorintermediatemanagerial
leveljobs,oneineight(12.2%)aresemiorunskilledworkers,oneinfourteen(7%)have
highermanagerial/professionaljobs,othersmakeup13.7%(retired,students,homemakers,
unemployedetc.).
• Halfofregulargamingmachineplayers(48%-52%)aresocialgradeABC1(lowermiddleclass,
middleclass,&uppermiddleclass)andmorethanhalf(57%)ofoccasionalplayersareABC1.
• Gamingmachineplayersearn£20,000to£40,000perannum–onaverage£33,300–6.7%more
thanthosewhoparticipateinotherformsofgambling.Moregamingmachineplayersearnover
£40,000perannum(30.3%)thanthosewhoearnlessthan£20,000(26.7%)andoneintenearn
(9.7%)earnmorethan£60,000perannum.
• AsoutlinedinChapter3bookmakersdonottargetvulnerablecommunities.Thenumberof
bettingofficespersquaremiledirectlycorrelatestothepopulationpersquaremile.CACI
researchshowsthat84%ofbookmakersareinretailandcommercialcentresasbookmakersare
locatedinplacesthatbestservenon-residentialcustomers.
association of british bookmakers ltd
It is important to note that B2 is a popular but infrequently played product with 74% of B2 players
playing once a month or less.
Page 19
CHAPTER 5REALITY OF PUBLIC ATTITUDES TO GAMBLING • WewelcometheGovernment’spledgetoensurethatanypolicychangesitconsidersare
basednotonconcernandanecdotealone,butaresupportedbyfirmevidenceandfactual
foundation.
• Althoughweacknowledgethereissomepublicconcernaboutproliferationandproblem
gamblingwebelievethatthisisunfounded,unjustifiedandexaggeratedasweexplainin
chapter3,6,7and8.
• RecentpollingconductedfortheABBranked13socialissuesinorderof“publicconcern”.
Gamblingonslotorfruitmachines”wasranked13thandlastbehindviolenceonTV,the
availability of cheap alcohol and the negative impact of supermarkets on traditional high
streets.
• GamblingCommission’sownresearchshowingthatonly45bettingshopcomplaintswere
receivedbylocalauthoritiesduring2011/12–a33%dropfromthepreviousyear.
• Thismeanslocalauthoritiesonlyvisitedabout0.5%ofbettingshopsinthiscontext.
• Therelativelyhighnumberofsuccessfulplanningapplicationsandsupportiveindependent
planning reports also highlight the lack of public concern.
Itisoftenarguedbyasmallbutvocalnumberofanti-bettingcampaignersthatelectronicgamingmachinesin
bettingshopsareamatterofhugepublicconcern.Althoughweacknowledgethereissomepublicconcern
aboutproliferationandproblemgamblingwebelievethatthisisunfoundedandunjustifiedasweexplainin
chapter3,6,7and8.
Recentpollingranked13socialissuesinorderof“publicconcern”.Anti-socialbehavior,violentcrime,illegal
drugs, vandalism and obesity were the top 5 public concerns, “Gambling on slot or fruit machines” was
ranked 13th and last behind violence on TV, the availability of cheap alcohol and the negative impact of
supermarketsontraditionalhighstreets.
TheABBalsowelcomesrecentlypublishedstatisticspublishedbytheGamblingCommissionshowingthat
only45visitsweremadetoabettingshopby localauthoritiesduring2011/12 inresponsetoacomplaint
– a 33% drop from the previous year. This means local authorities only visited 0.5% of betting shops in
this context. The statistics also show that 227 local authorities did not visit a betting shop at all. These
statisticsprove–onceagain–thatthereisnoevidenceatallofbettingshopscausingmajorproblemsinlocal
communities.
There is no widespread concern proliferation of betting shops. In 2012 betting operators applied for the
openingorresitingofaround200shopsandweregrantedlicenseswithoutobjectionsinaround90%ofthe
cases.Inplanningcaseswherelocalauthoritiesrejectedtheapplications.Bookmakersoftenoverturnedthe
decisiononappealonthegroundsthattherewasnoevidenceofharmtothecommunity.Tothecontrary,
independentDCLGplanninginspectorshaveconsistentlyreportedthatbettingshopsaddedtothevitality
andvibrancyofthehighstreet.Theyconcludedthatbettingshopsactuallydrivegreaterfootfallthanother
comparableretailoutletsexceptforpharmaciesandpostoffices.
Sector Visits follow-ing a Complaint
2009/10
Visits follow-ing a Complaint
2010/11
Visits follow-ing a Complaint
2011/12
%change2009/10-2010/11
%change2010/11-2011/12
FEC 10 9 20 -10% 122%
Other 194 181 272 -7% 50%
AGC 32 47 43 47% -9%
Betting 25 67 45 168% -33%
Bingo 5 15 10 200% -33%
Casino 1 0 1 N/A N/A
Tracks 2 0 2 N/A N/A
Totals 269 319 393 19% 23%
Totals minus other
75 138 121 84% -12%
Page 20
CHAPTER 6DISPELLING THE MYTHS Thehigh-streetbookmakingindustryhasbeenshockedbytheunfairandunsubstantiatedcampaigns
being waged against gaming machines in LBO’s which are operated by well-run and socially
responsiblebusinesses.Ourmembershavebeensubjectedtoavicious,unjustifiedandsustained
attackoverthepastsixmonths,andwewouldliketosettherecordstraight.Inthischapterwedispel
sevenmythscommonlypedalledbyanti-bettingshopcampaigners.
Myth 1: ‘Too many betting shops are blighting the high street and an increase in the number of
betting shops has detrimental effects on the other businesses that surround these clusters,
even forcing some off the High Street’.
The Facts
TheCentreforEconomicandBusinessResearch(Cebr)foundthatforevery£1ofGVAgeneratedbybetting
shops,anadditional£0.61ofGVAisgeneratedinthewidereconomythroughindirectandinducedimpacts.
Between87%(Wales)and99%(London)oftheeconomicbenefitsstaylocaltoo,enrichingcommunities.
Bettingshopsalsocontributetolocalservicespayingmorethan£58millioninbusinessrateseachyear.
Bookmakershavealreadyinvestedabout£2billioninlocaleconomiesthroughtheopeningofnewbetting
shopsandthe‘new-style’re-fittingofbettingshopsthatalreadyexistedbeforethemostrecentchangesin
theindustry.
WhilstMaryPortasconcludedinherreportthatbettingshopsareblightingthehighstreets,independent
planninginspectorshavealsofoundthatbettingshopsaddtothevitalityandvibrancyofthehighstreet.
Theyfoundthatbettingshopsactuallydrivegreaterfootfallonhighstreetsthanstandardretailunits,tothe
benefitofotherretailersMoredetailscanbefoundinChapter5.
Myth 2: ‘You can lose £18,000 an hour on a B2 gaming machine’
The Facts
Statementssuchas“youcanlose£18,000anhourplayingonaB2machine”areatotalfabrication.
Firstly,B2GamingMachineshaveahighreturn-to-playerrate(RTP):97.15%onRouletteGames.TheRTP
ofallgamingmachinecontentistestedandverifiedbyGamblingCommissionapprovedindependenttest
houses.
Secondly, it is impossible loadamachine thatquickly.Pre-pay (counter loadedcredit)at levelsgreater
than£100mustbecreditedinblocksnotasalumpsum.Thenthecreditmustbeacceptedbytheplayerat
themachine£20attime.Itisalsoimportanttonotethatdebitcardsandcreditcardsarenotpermittedon
gamingmachines,butcreditcanbepre-paidoverthecounterbydebitcard.Themachinesthemselvesare
cashonlyandaredesignedtorestricttheamountofcashdepositedatanyonetime.
association of british bookmakers ltd
For every £1 of Gross Valued Add (GVA) generated by betting shops, an additional £0.61 of GVA is generated in the wider
economy through indirect and induced impacts.
Throughrigoroussurveyevidenceitisrepeatedlyshowntobethecaseinplanningappealsthatcustomer
footfallatbettingoffices,akeymeasureofvitality,ranksamongthehighestofalltowncentreuses,well
aheadofmosttypesofretailfacility.Furthermore,themajorityofthosewhovisitbettingofficesdosoaspart
ofawidershoppingtrip.Thisconceptoflinkedtripsmeansthatbettingofficesarenotonlyanimportant
towncentreuseintheirownright,buthelpinpromotingthevitalityandviabilityoftowncentresasawhole.
Inshort,bettingofficesarerepeatedlyviewedbyindependentinspectorsasmodernshops,withinteresting
windowdisplaysandattractiveinteriors,frequentedbyarelativelyhighvolumeandvarietyofcustomers,
youngandold.Theinternalhubofactivity,clearlyvisiblefromthestreet,alsoaddstothevibrancyofthe
highstreet.
Page 21
Thirdly,thefactthatittakes40secondsonaveragetoload£100intothemachineandmakeaselection
meansthat,youwouldonlygetamaximum90spinsperhour,assumingofcoursethatyouhad£18,000in
cashinyourpocket.
AB2machinehasareturntoplayerofcirca97%,andthusitisfirstlyphysicallyimpossibletostake£18,000
perhourandsecondlyifyoudidtheoddsoflosingthewhole£18,000wouldbe11milliontrilliontooneor
lesslikelythanbuyingasinglelotteryticketeachweekandwinningtheNationalLotteryjackpotthreeweeks
inarow.TheABBispleasedtohearthatsomestakeholdersnowadmityoucan’tlose£18,000perhouron
gamingmachinesinbettingshops.
Myth 3: Gaming machines are ‘highly addictive’ and dubbed the ‘crack cocaine of
gambling ‘
The Facts
TheABBbelievesthewords“highlyaddictive”and“crackcocaine”aredenigratoryandmisleading.The
wordsimplythemachinesareakintodrugorsubstanceaddiction.Theimpliedassociationisunfounded
whilstthereisnosubstantiation,scientificorotherwise,presentedtobackuptheopinionthattheroulette
contentofEGMsis“highlyaddictive”.Thesepejorativetermsaredamagingtotheperceptionsofalegitimate
andresponsibleleisuresector.
TheaverageamountspentbycustomersonaB2gamingmachineisaround£11permachineperhour.
And74%ofB2playersplayonceamonthorlesswhichishardlyreflectiveofanaddictiveproduct.There
isnoevidenceofacausallinkbetweengamingmachinesandhigherlevelsofproblemgamblingandthe
percentageofidentifiedproblemgamblersplayingonB2machinesactuallywentdownby20-25%from
2007to2010.
ResearchcommissionedbytheResponsibleGamblingFundin2011(Disley–‘MaptheGap’)foundthat
therewasadistinctlackofclearevidencelinkingelectronicmachinestoproblemgambling.
ResearchbyDowlingpublishedin2005said:“Theempirical literatureprovides inconclusiveevidenceto
support theanalogy likeningelectronicgaming tocrackcocaine.Rigorousandsystematicevaluation is
required toestablishdefinitively theabsoluteaddictivepotentialofgamingmachinesand thedegree to
whichmachinecharacteristicsinfluencethedevelopmentandmaintenanceofproblemgamblingbehaviour.”
Ourbettingshopstaketheirresponsibilitytothelocalcommunitiesinwhichtheyoperateextremelyseriously.
Bettingshopswanttocontinuetoattractawidespectrumofcustomerstotheirstores;theycanonlydothis
byofferingthemasafeandresponsibleleisureexperience.Thatiswhysignificantresourcesareinvested
into the trainingofstaffmembers.This includes trainingallstaffoncustomersafety, tacklingunder-age
gamblingandaddressinginstancesofproblemgambling.
TheABBhasprovidedfurtherevidenceinChapter7.
Myth 4: Over £300million of EGM profits come from people with gambling problems and the
industry gives just £5m to the Responsible Gambling Trust.
The Facts
The odds of losing £18,000 would be11 million trillion to one
Page 22
9http://www.crimestoppers-uk.org/media-centre/news-releases/2013/crimestoppers-and-william-hill-launch-campaign-to-tackle-betting-shop-robberies-in-north-london
Thereisnocredibleevidencetosupporttheclaimthatover£300millionofEGMprofitscomefromproblem
gamblers.Weareawareofasecondaryanalysisofthe2010BritishGamblingPrevalencesurveyundertaken
byProfessorOrford,whichattemptstocalculatethepercentageofdaysplayedandmoneyspentbyproblem
gamblersonavarietyofproducts.However,theresearchersthemselvesstatethat:“theseestimatesmust
betreatedasapproximationsonly”and“thereare,ofcourse,anumberoflimitations”including“relatively
smallnumbersofproblemgamblers”.Thesecondaryanalysisisbasedonastatistically,andthustotally
misleading,meaninglesssampleofB2machineproblemgamblersof25peopletakenfromthe2010BGPS.
Astheabovefactsshowthevastmajorityofthosewhogambledosoresponsibly.Indeed,overalllessthan
1%ofthoseadultswhodogamblehaveaproblemacrossallgamblingproductsandonlyasmallproportion
ofgamblersplayonaB2gamingmachine.Nevertheless,asaresponsibleindustrywerecognisethatone
problemgambler isonetoomanyandthereforevoluntarilyraisenearly£6millioneachyearforresearch,
educationandtreatmentofproblemgamblers.Withoutthiscontribution,manycharitableserviceswouldnot
beavailabletoproblemgamblers.Tosuggestthatourlevelofcontributionisinadequateisinsultingtoour
membersandthosethatcontinuetoworkhardandseriously,aidedbythatfunding,tocombatgambling.
Myth 5: ‘Betting shops attract crime and anti-social behaviour’
The Facts
Itisimportanttorememberthat,likeanyotherbusiness,bettingshopsarethevictimsofcrimenotthecause.
Wetakeallincidentsofviolenceextremelyseriously.However,thesecasesareexceptionalcircumstances
andnot theexperienceof thevastmajorityofcustomers inbettingshopsacross thecountry.Likeany
otherbusinesswedonotwanttheactionsofaverysmallnumberoflessresponsiblepeopletoaffectthe
experienceofourmillionsofveryresponsiblecustomers.
Betting shop operators work pro-actively to tackle any issues in communities alongside the Gambling
Commission,police,localauthorities,otherbusinessesandotherorganisationslikeNeighbourhoodWatch
andCrimestoppers.ArecentexampleofthisisLewisham,wherethemajoroperatorsrecentlysignedup
totheDeptfordHighStreetCharter.Thecharteraimstoencourageeveryonetoplaytheirpartintackling
crimeandgrime.ItsetsoutwhatLewishamCouncilandLewishamPolicecandotosupportbusinesses
inDeptfordHighStreet,andhowbusinessesthemselvescanhelptokeepthelocalareasafe,clean,green
andliveable.OtherexamplesincludeWilliamHill’srecentcampaignwithCrimestopperstotacklebetting
shoprobberiesinNorthLondon7andLadbrokeshasbeenanofficialpartnerofCrimestopperssince1998.
Thebetting industryhasastrongsafetyandsecurityrecordwiththewelfareofourstaffandcustomers
beingournumberonepriority.TheSafeBetAlliance(SBA)isavoluntarysecuritycodeofpracticedrawn
upin2010,incloseconsultationwiththeCommunityUnion,MetropolitanPoliceandDWPamongothers.
Itisclearthatthesestandardsarepayingdividends.Forexample,robberieshavefallenby60%overthe
lasttwoyearsinLondon.TheABBisaimingtoenhancethecodeandbuildnewpartnershipswithpolice
forcesinotherregions.Additionally,theindustry’seffortsinaddressingshopsecuritythroughtheSBAwere
recentlyrecognisedwithaHomeOfficeaward.ThelargenationaloperatorsalsohaveCCTV,panicalarms
andothercrimepreventionmeasuressuchassecuritydoorsandelectro-magneticlocks.
association of british bookmakers ltd
It is important to remember that, like any other business, betting shops are the victims of crime, not the cause.
Page 23
Myth 6: ‘All betting shops are in breach of their Gambling Commission licenses on primary
purpose‘.
The Facts
TheGamblingCommissionandlocalauthoritiescarryoutregularcompliancecheckstoensurelicensees
arenot inbreachof their licenses. Industrycompliancewith the relevantGamblingCommission rules is
verystrongandthisisillustratedbythefactthatnobookmakershavehadtheiroperatororpremiselicense
revokedbytheGamblingCommissiononthebasisofprimarypurposesincethe2005GamblingActcame
intoforce.
On the specific point of primary purpose, this is not a statutory concept, but a Gambling Commission
developedconcepttoallowonlybonafidebettingoperatorstosecureabettingpremiseslicence.Under
section172ofthe2005GamblingActtheholderofabettingpremiseslicenceisauthorisedtomakeupto4
categoryBgamingmachines‘availableforuse’.Theconceptofprimarypurposeisnotdesignedtoregulate
thenatureandtimeofsupplyofproductwithinabettingshopaslongaswhenthepremisesareopen,there
isopportunitytobetaswellasusegamingmachines.Forexample,abonafidebettingshopcouldconsist
of5self-servicebettingterminals(SSBTs),withrequisitesupervision,and4gamingmachines.Thisismade
clearbyaGamblingCommissionnotetolicensingauthoritiesinAugust2012whichstates:‘thenumberof
betstakenisoneofawiderangeoffactorsforconsideration’.8
Myth 7: ‘Bookmakers “sneaked” fixed-odd betting terminals into their shops and
“circumvented” the rules by introducing more casino games and facilitating debit card
transactions’.
The Facts
Thisissimplynottrue;theindustryprovidedtheGovernmentwithaccurateandfulsome
informationconcerningthesemachinesandonthisbasisafullandrigorousanalysis
wascarriedoutbytheGovernment.
As part of the process all operators agreed to a voluntary ABB code of
conduct which amongst other matters set maximum machine limits
at 4 and stakes and prizes at £100 and £500 respectively. Many of
theseconditions were thenabsorbedby theGovernment into the
provisionsoftheGamblingAct.UndertheGamblingActsocalled
fixed-oddbettingterminalsweredesignatedascategoryB2and
B3gamingmachines.
10 Gambling Commission Licensing Authority Bulletin – Primary Gambling Activity (August 2012)
The vast majority of gambling in the UK does not take place in a betting shop.
Page 24
CHAPTER 7EXISTING EMPIRICAL RESEARCH Inthischapterweassesstheexistingempiricalevidencearoundelectronicgamingmachines(EGMs).
• ThereisnoconsensusonwhethertheconcernthatEGMscauseourcustomerstobecome
problem gamblers is valid.
• AlthoughtheBritishGamblingPrevalenceSurveys(BGPS)in1999,2007and2010werenot
set up to identify a causal link between problem gambling and electronic gaming machines
theseregulatorysurveysarethemostsignificantstudiesofgamblingofitskindintheUKand
they did not provide any evidence for concerns that there is a correlation
• ThiswasconfirmedbysecondaryanalysisoftheBGPS2007conductedbyVaughanWilliams,
Page,ParkeandRigbyein2008.TheABBaskedVaughnWilliamsandLionelPagetoassess
thecausalityquestionandreplicatetheirmethodologyagainforthe2010BGPS.Thekey
findingsoftheirindependentreportwere:
• Theauthorssaythatcaremustbetakennottoover-interpretparticularfindings.For
example,the2007BGPStendedtosuggestthatahigherlevelofproblemgamblingwas
linkedwithspreadbetting,FOBTsandbettingexchanges.Yettheauthors’analysisofthe
2007BGPSindicatedthatusingatechniquewhichismorerobusttosmallobservationsand
alargenumberofcovariatesgavequiteadifferentpictureofthepotentiallinkbetween
pattern of gambling activity and problem gambling. As they said in their 2008 report the results
should invite caution about the order of activities linked with possible influence on problem
gambling.
• VaughanWilliamsandPageconcludethattheywereunabletoestablishacausallink
between B2 machines and problem gambling.
• NatCenrecentlyundertookanothersecondaryanalysisofthe2010BGPS,
theGamblingCommission(March2013)concludedthattheresearch:“isconsistentwiththe
earlier analysis in the BGPS 2010 which similarly highlighted the strong association between
problemgamblingandparticipatinginawiderangeofdifferentgamblingactivities.”
Research historyTherehavebeenthreemajorpiecesofresearchintogamblingcommissionedbyUKregulatorsinthelast
fourteenyears.TheBritishGamblingPrevalenceSurvey(BGPS)hasresearchedparticipation,productsand
amountoftimegambledandithastrackedlevelsofproblemgambling.Thethreesurveysshowaconsistent
levelofgamblingparticipation–72%ofadultsagedover16 in1999and73%in2010. Inotherwords,
gamblingasapopularleisureactivityremainsatastablelevel.
According to the Gambling Commission’s data the vast majority of gambling in the UK does not take
placeinabettingshop.IntheyeartoMarch2011/201258.1%of4,000adultssurveyedsaidtheyhad
participatedinatleastoneformofgamblinginthepreviousfourweeks.Themostpopulargamblingactivity
wasNationalLotterytickets(48.0%ofrespondents),followedbyNationalLotteryscratchcards(13%)and
ticketsforsocietyorothergoodcauselotteries(10.6%).Bettingonhorseracesorvirtualhorseraceswitha
association of british bookmakers ltd
The Gambling Commission (March 2013) concludes that the new research: “is consistent with earlier analysis which similarly highlighted the strong association between problem gambling and participating in a wide range
of different gambling activities.”
Page 25
bookmaker(4.3%),gamblingonfruitorgamingmachines(3.4%)andprivatebettingwithfamily,friendsor
colleagues(3.3%)werethenextmostpopularactivities.
ThereisverylittlerelevantevidencefromstudiescarriedoutonadultgamblersinGreatBritain(Parke&
Griffiths,2006;2007).Andfromtheavailableresearch,thereisnoconsensusontheextenttowhichgaming
machines(includingthoseconsideredthehigh-stake,high-prizegamingmachinesinGreatBritain)cause
gamblerstobecomeproblemgamblers(Griffiths2008).
Furthermore, it is worth noting Professor Mark Griffiths’ recent comments on B2 gaming machines in
bettingshops: “So,givenall thesedata,shouldFOBTsbebanned fromBritishbookmakers’offices? In
short,no.Evenifthedataweremorerobust, IwouldarguethatFOBTsshouldn’tbebannedparticularly
becausesimilartypesofgamecanalreadybeaccessedfarmoreeasilyviatheinternetandmobilephone
inenvironmentsthatarearguablylessprotectivetowardsproblemgamblers.Myownstanceisthattohelp
overcomeproblemsandaddictions toFOBT,gamingcompaniesshouldengage in thehighest levelsof
socialresponsibilityandintroducecuttingedgeprotocolstoensureplayerprotection.”9
The causal link between problem gambling and B2 machines
Toanswerconsultationquestions13(aandb)theABBhasreviewed
existingresearchonproblemgamblingandB2machines.Thequestion
isdoestheoverallstakeandprizelimitforB2machines,inparticular
theverywiderangeofstakingbehaviourthata£100stakeallows,give
risetoencourageaparticularriskofharmwhocannotmanagetheir
gamblingbehavioureffectively?Ifso,inwhatway?
TheABBassessedthecausality,inparticularthesocio-demographic
factorsEGMB2machineparticipationandpotentiallinkstoproblem
gamblingintheBGPS2007and2010.
the British Gambling Prevalence Surveys in 1999, 2007 and 2010.
Althoughthesecomprehensiveregulatorysurveyswerenotsetuptoidentifyacausallinkbetweenproblem
gamblingandEGMsthese regulatorysurveysdidnotprovideanyevidence forconcerns that there isa
correlation.
Forexample,BGPS2007(NatCen-Wardleetal,2007)–commissionedbytheGamblingCommission-
examinedproblemgamblers’participation ingamblingactivitiesandreportedthatB2GamingMachines
hadthesecondhighestprevalenceamongthosewhohadgambled in the lastyearwhileslotmachines
ranked 11th. However due to the cross-sectional nature of prevalence surveys, no conclusions can be
drawninrelationtocausality.The2007BGPSalsofoundthatonaverageproblemgamblersparticipatedin
oversixformsofgambling.Thismeansthatitwouldbeextremelydifficulttousethissurveytosingleout
particularform(s)ofgamblingthatareespeciallyrelatedtoproblemgambling.
11 http://drmarkgriffiths.wordpress.com/2013/01/13/terminal-cases-should-virtual-roulette-machines-be-banned-from-high-street-bookmakers/
Problem gambling levels for the whole gambling industry have remained at less than 1% - which is low by international standards
Page 26
VaughanWilliamsPage,ParkeandRigbye(2008)undertooksecondaryanalysisofthe2007BGPSdataset
andreportedthatwhenfrequencyofplayistakenintoaccounttherankingoftheactivitiesmostassociated
withproblemgamblingisnotthesame,withslotmachinesfeaturinginthethirdpositionandB2Gaming
Machines considerably lower down in the ranking. They also concluded that there was no causal link
betweenproblemgamblingandEGMsintheBGPS2007.
The ABB looked at BGPS 2010 (NatCen-Wardle et al, 2010) – also commissioned by the Gambling
Commission - and did not find any evidence of a causal link in this research either. This most recent
regulatorysurvey found thatproblemgambling levels for thewholegambling industryhave remainedat
lessthan1%-whichislowbyinternationalstandards-andthepercentageofidentifiedproblemgamblers
playingonB2machinesactuallywentdownby22%from2007to2010.Thesurveyalsoshowsthat74%of
B2playersplayonceamonthorlesswhichishardlyreflectiveofanaddictiveproduct.
TheABBaskedLeightonVaughanWilliamsandLionelPagetoassessthecausalityquestionandreplicate
theirmethodologyagainforthe2010BGPS.Theirreportincludedasetofexploratoryfindingsinrelationto
B2machineuse,asetofinferentialfindingsinrelationtoB2machineuse,asetofexploratoryfindingsin
relationtoproblemgamblinginrelationtoB2machineuse,asetofinferentialfindingsinrelationtoproblem
gambling inrelationtoB2machineuse,andanassessmentofthecausal linkbetweenB2machineuse
andproblemgambling.Inthisway,theVaughnWilliamsresearchbuiltuponandupdatedtheir2008BGPS
SecondarySurvey,withthecentralaimbeingtoindependentlyreviewtheGamblingCommission’s2010
BGPSconclusions,notablybutnotexclusively in relationtoacausal linkbetweenB2machineuseand
problemgambling.
Thekeyfindingsoftheindependentreportwere:
• LeightonVaughanWilliamsandLionelPagesayitisimportanttolookatfrequencyofparticipationin
studyingproblemgambling.Thegamblingactivitieswhichseemonprimaryinspectiontobemost
closelylinkedwithproblemgamblingarehorseracing,scratchcardsandslotmachines(B3
machines),althoughtheauthorssaysthesefindingsmustbeinterpretedverycarefully.Oncloser
analysisproblemgamblersseemtodifferfromothergamblersbyahigherfrequencyofparticipation
inavarietyofgamblingactivitiesratherthangamblingonaparticularproduct.Forexample,
theauthorssaythatthefrequencyofparticipationinFOBTsisnotaparticularlyusefuldiscriminator
ofaproblemgamblerandtheydidnotfindintenseparticipationinFOBTsisaspecificcharacteristic
ofproblemgamblers.Tothisextent,problemgamblingmaybeviewedasperson-centricratherthan
product-centric.
• Theauthorssaythatcaremustbetakennottoover-interpretparticularfindings.Forexample,
the2007BGPStendedtosuggestthatahigherlevelofproblemgamblingwaslinkedwithspread
betting,FOBTsandbettingexchanges.Yettheauthors’analysisofthe2007BGPSindicatedthat
usingatechniquewhichismorerobusttosmallobservationsandalargenumberofcovariatesgave
quiteadifferentpictureofthepotentiallinkbetweenpatternofgamblingactivityandproblem
gambling.Astheysaidintheir2008reporttheresultsshouldinvitecautionabouttheorderof
activitieslinkedwithpossibleinfluenceonproblemgambling.
• VaughanWilliamsandPageconcludethattheywereunabletoestablishacausallinkbetweenB2
association of british bookmakers ltd
Problem gambling may be viewed as person centric rather than product centric
Page 27
machinesandproblemgambling.
NatCen recently undertook another secondary analysis of the 2010 Prevalence Study, also looking at
machinesinparticular.TheGamblingCommission(March2013)concludedthattheresearch:“isconsistent
with the earlier analysis in the BGPS 2010 which similarly highlighted the strong association between
problemgamblingandparticipatinginawiderangeofdifferentgamblingactivities.”Theyconcludedthat”
thereportsuggeststhatajoinedup,crossvenue/sectorapproachtothedevelopmentofharmminimisation
strategiesandobservationofplayerbehaviourmightbebeneficial.”
National Gambling Telephone Helpline
ThenationalgamblingtelephonehelplineoperatedbyGamCarehasconsistentlyshownthat
EGMgamblersaccountforanotableproportionofcalls.However,numbershaveremained
relativelystable.During2007 itwasreported that25%ofallcallsconcernedB2gaming
machinesandafurther20%concernedfruit/slotmachines.In201224%ofcallsconcerned
B2gamingmachinesandafurther16%concernedfruit/slotmachines.However,caution
mayberequiredastheseresultstendtoprovideanindicationofanassociationbetween
problemgamblingandmachinesandnotadefinitiveproof (Griffiths2008). Inaddition informationabout
furtherhelporadviceforgamblersmaybemoreprominentlydisplayedaroundsomeformsofgamblingthan
forotherforms(e.g.stickersonmachines).Forexample,bettingshopsprovideleafletswithhelplinenumbers
incloseproximity to themachinesaspartof their licenceconditionsandcodeofpractice.Additionally
stickersareoftenputonmachinesandthereisinformationonthemachinesthemselves,bothvialinksfrom
thehomescreenandviascreendisplays.Thiscommitmenttopromotingcounsellingservicesisfargreater
thanseenwithotherformsofgamblingsuchastheNationalLottery.
Summary
Theabovepiecesof researchclearly confirm that it iswrongandwithoutevidentialbasis to singleout
LBOsandB2machinesascausingproblemgamblingorgambling relatedharm.Noempiricalevidence
haseverbeenproducedtosupporttheanecdotalclaimsthatEGMscauseproblemgambling.Quitethe
oppositeinfact-themostrecentpeerreviewedandindependentlyproducedresearch,the2010Gambling
PrevalenceStudy,commissionedbytheregulator,showsthattherehasbeenareductioninthenumberof
problemgamblerswhousedgamingmachines.AndtheGovernmentstatesintheimpactassessmentthat
nochangetoB2stakesandprizelimits“wouldrepresentanyrisktoplayerprotection.”
TheResponsibleGamblingTrusthasannouncedthatit istocommissionthebiggesteverprogrammeof
academicresearchintoCategoryBgamingmachinesinbettingshops,bingohalls,adultgamingcentres
andcasinos-tounderstandbetterhowpeoplebehavewhenplayingthesemachinesandwhathelpspeople
tostayincontrolandplayresponsibly.
The ABB welcomes an evidence based debate around electronic gaming machines in this context and
ourmembersandthemajormachineoperatorshaveagreedtogivefullaccesstoNatCenaspartoftheir
researchprojectfortheResponsibleGamblingTrust.Weareaskeenasanyonetoseetheoutcomesof
theresearchsothattherecanbeaproperevidencebaseddebatearoundgamblingpolicy,particularlyin
respectofgamingmachines.
WenotethatgamblingindustryratesofproblemgamblinghaveremainedrelativelylowintheUKatunder
onepercentsince1999;oneproblemgambler,however,isonetoomanyandweareverycommittedto
tacklingthisissue.
The ABB welcomes an evidence based debate around electronic gaming machines and our members have agreed to give full access to NatCen as part of
their research project for the Responsible Gambling Trust.
Page 28
CHAPTER 8UNDERSTANDING THE TRUTH ABOUT PROBLEM GAMBLING As outlined in the previous chapter the ABB asked Professor Leighton Vaughan Williams and Lionel
PagetoindependentlyreviewtheGamblingCommission’s2010BGPSconclusions,notablybutnot
exclusively in relation to a causal link between B2 machine use and problem gambling.
• Theyconcludedthatthepatternofparticipationingamblingactivitiesshowsamajorityof
gamblersparticipateinfrequentlyinrelativelysimpleandbroadlypopularactivities.
• Itisnotpossibletoclearlysingleoutsometypesofgamblingactivitiesasbeingspecifically
associated with problem gambling.
• Problemgamblersseemtodifferfromothergamblersbyahigherfrequencyofparticipation
inavarietyofgamblingactivitiesratherthangamblingonaparticularproduct.Tothisextent,
problemgamblingmaybeviewedasperson-centricratherthanproduct-centric.
• TheBGPSdescribesproblemgamblingas“gamblingtoadegreethatcompromises,disrupts
ordamagesfamily,personalorrecreationalpursuits.
AsoutlinedinthepreviouschaptertheABBaskedProfessorLeightonVaughanWilliamsandLionelPageto
buildonthe2008BGPSSecondarySurvey,withthecentralaimbeingtoindependentlyreviewtheGambling
Commission’s2010BGPSconclusions,notablybutnotexclusivelyinrelationtoacausallinkbetweenB2
machineuseandproblemgambling.
Thekeyfindingsoftheindependentreportonproblemgamblingwere:
• Participationfindingswereverysimilarto2007BGPS.Thepatternofparticipationingambling
activitiesshowsamajorityofgamblersparticipateinfrequentlyinrelativelysimpleandbroadly
popularactivities.Aminorityofgamblershaveahigherfrequencyofparticipationandtendmore
oftentobeinvolvedinmoretechnicalgamblingactivities.Lessqualifiedindividualsparticipatein
awiderrangeofgamblingactivities,whileindividualswithalongergamblinghistoryalso
participateinalargerrangeofgamblingactivities.Forexample,gamblersplayingrouletteonline
aremorelikelytoengagewithawiderangeofothergamblingactivitiesthanthoseengagedin
otheronlineactivities.
• Thereisalargeoverlapbetweenthepatternsofgamblingparticipationofproblemgamblers
andothers.Itisthereforenotpossibletoclearlysingleoutsometypesofgamblingactivitiesas
beingspecificallyassociatedwithproblemgambling.
• The2007BGPSshowedthatgamblerswhoareyounger,male,fromanAsianbackground,have
lowerincomesandaresingleordivorcedaremorelikelytoexhibitsignsofproblemgambling.
Theseresultswereonceagainfoundinthe2010BGPS.Theonlynoticeabledifferenceaccording
totheauthorsistheinversionofthevariableeducationwithrespondentswithhighereducation
beingnowmorelikelytobeplacedrelativelyhighlyontheproblemgamblingscales.
• Theauthorsofthereportsayitisimportanttolookatfrequencyofparticipationinstudying
problemgambling.Problemgamblersseemtodifferfromothergamblersbyahigherfrequency
ofparticipationinavarietyofgamblingactivitiesratherthangamblingonaparticularproduct.
Problemgamblingmaythereforebeviewedasperson-centricratherthanproduct-centric.
association of british bookmakers ltd
Vaughan Williams concluded that the pattern of participation in gambling activities shows a majority of gamblers participate infrequently in relatively simple and broadly popular activities
Page 29
There isasimilaranalogy toanalcoholicwhodoesnot justdrinkonespecificproduct.As theNevada
CouncilonProblemGambling,inLasVegas(wherethereare200,000gamingmachines)notes:
“Thecauseofagamblingproblemistheindividual’sinabilitytocontrolthegambling.Thismaybedueinpart
toaperson’sgenetictendencytodevelopaddiction,theirabilitytocopewithnormallifestressandeven
theirsocialupbringingandmoralattitudesaboutgambling.Thecasinomerelyprovidestheopportunityfor
thepersontogamble.Itdoesnot,inandofitself,createtheproblemanymorethanaliquorstorewould
createanalcoholic.”
Thevastmajorityofacademicsandcliniciansinthisareabelievethatproblemgamblingisabouttheperson
andnot theproduct.Theyalsobelievestakesandprize limitsareablunt instrument.This isespecially
truewhenagamblercanbet£20,000onafootballmatchorahorse/greyhoundrace,or£2000onasingle
roulettenumberinacasinoonor£20,000onahandofblackjackinacasinoorbet£20,000towinover
£700,000inanonlinecasino.
Whilst machine stakes and prizes are limited a gambler can bet £20,000 on a football match, or £20,000 on a hand of blackjack in a
casino or bet £20,000 to win over £700,000 in an online casino.
Page 30
CHAPTER 9INDIVIDUAL RESPONSIBILITY In response to consultation question 14 (a) the ABB has reviewed common practice in other
jurisdictions.
• Broadlyspeaking,thefocusisonproblemgamblingpreventionandcustomerinteraction.
WiththeexceptionofNorway,nowhereisthelevelofstakesandprizesforgamesmachines
used as a method for tackling problem gambling.
• TheNorwegianexampleshowsthatevenwithahugestateinvolvement,thereisno
evidencetoshowthatusingacaponstakeshassuccessfullyreducedproblemgambling,
infact,theevidenceshowsaslightincreasesincetheintroductionofmoneylimits.
• Thischapteragaindemonstratesthatproblemgamblingisabouttheindividualandnot
theproductandthatareductionofstakesandprizeswillbeanineffectiveandveryblunt
instrument if applied to problem gambling.
UKleadingbyexample
Consultation question 14 (a) asks : Are there other harm mitigation measures that might offer a better
targetedandmoreeffective response toevidenceofharm than reductions in stakeand/orprize forB2
machines?
ToanswerthequestiontheABBhasreviewedcommonpracticeinotherjurisdictionsandconcludesthat
theUKisleadingbyexample.TheUK’sgamblingindustryisregulatedthroughtheGamblingActandadual
licensingregimeoperatedbytheGamblingCommissionandlocalauthorities.Therearedetailedregulations
inplacegoverningand limitingtheuseofelectronicgamingmachines.UKoperatorsalsohave inplace
detailedresponsiblegamblingpoliciesforhelpingproblemgamblers.Thisstrongcombinationofregulation
andresponsiblebusinesshasledtolessthanonepercentoftheUKadultpopulationbeingconsideredto
beaproblemgamblerwhichmakestheUK’sratesrelativelylowcomparedtotherestoftheworld.Thetable
showsthedifferentrates:
Country Year Screen Timeframe % Confidenceinterval
Sweden23 2008/09 PGSI Last12months 0.3 Notgiven
Norway24 2008 NODS Last12months 0.8 0.6-1.2
Canada25 2003 PGSI Last12months 0.5 Notgiven
NewZealand26 2006/2007 PGSI Last12months 0.4 0.3-0.5
GreatBritain 2010 PGSI/DSM-IV Last12months 0.7/0.9 0.5-1.2
Germany27 2007 SOGS Last12months 0.6 Notgiven
Switzerland28 2005 SOGS Last12months 0.8 Notgiven
Iceland29 2005 PGSI Last12months 1.1 0.7-1.5
SouthAfrica30 2005 GA Last12months 1.4 Notgiven
USA31 2000 DIS Last12months 3.5 Notgiven
Singapore32 2008 ChineseDSM-IV Last12months 1.2 0.7-1.6
Macao33 2003 ChineseDSM-IV Last12months 4.3 Notgiven
HongKong34 2005 ChineseDSM-IV Last12months 5.3 Notgiven
association of british bookmakers ltd
The focus of other Governments around the world is on problem gambling prevention and customer interaction. With the exception of Norway, nowhere in
the world is the level of stakes and prizes for games machines used as a measure for tackling problem gambling.
Page 31
Havingreviewedexamplesfromaroundtheworld,thecommonthreadforhelpingpeoplewhoareorhave
developedaproblemwiththeirgamblingisgoodstafftraining,withgoodprocessesinplacetospotand
thenhelpproblemgamblers.ApartfromNorwaynowhereisthereaparticularfocusonelectronicgaming
machines and the mandatory setting of stakes and prizes levels as a method of preventing or helping
problemgamblers.
Thestakesandprizes in theUKonB2machinesarealso lowcompared toothercountries–Mexico’s
100,000gamingmachineshavenolimitsoneitherstakeorprize,whileinSlovakiaandtheCzechRepublic,
therearenolimitstostakes.
TheABBalsonotesthattheUKhasoneoftheslowestspincyclesintheworld,of20secondsonaB2
game.InItaly,forinstance,thereisnospincycle–thegameisplayedinstantly,whileincasinoenvironments
likeMacauorLasVegas,youcanplayslotmachinesat$500perspinevery2-3seconds.
Wehighlightbelowsomeofthewaysinwhichsomeotherjurisdictionstackleproblemgamblingissues.
NorwayTheonlymajordevelopedcountrywhichhasusedaformofregulatingstakesandprizesandplayerspending
asameasuretotackleproblemgamblingisNorway.Untilafewyearsagoelectronicgamingmachineswere
available ina rangeofplaces, includingshoppingcentres,petrolstationsorsupermarkets. In2009, the
NorwegianGovernment introducedstatecontrolofgamingmachines,creatingastateprovider–Norsk
Tipping(whichalsorunsthenationallottery).
Norsk Tipping introduced a mandatory player card system which enables both Government and the
individualtoregulateaplayer’sbehaviour.Therearespendinglimitsforallplayers,setbytheGovernment
andregulator,andthereisamandatorybreakinplayingafteronehour.Thecardprovidesplaysummaries,
moneyandtimelimitsandanindividualriskassessment.Thesystemiscashless,butthecardsarelinked
directlytoaplayer’sbankaccountandmoneyistransferredbytheGovernmentbetweenthecardandthe
bankaccount.
TheregulationssetamaximumspendinglimitofNOK400(£45)perday,NOK2200(£250)permonth,and
ineachgame,themaximumthatcanbebetisNOK50(£5.69),withamaximumprizeofNOK1500(£17.08).
Theminimumdurationforagameisjust3seconds.
Ayearafterthesystemwasintroduced,98.4%ofplayersdidnotplaythegameslongenoughtoreachthe
mandatorytimelimit,whileonly1.1%ofplayersfeltaneedtosetapersonaltimelimit.Just15%ofplayers
everreachthemonthlymaximumsetbytheGovernment.
ThenumberofpeopleclassedasproblemgamblersinNorwayincreasedfrom1.9%in2008to2.1%in
2010.Althoughplayerlimitsandtimeremindershavetheirmerits,thereisnoclearempiricalevidencethat
acapinstakesleadstoareductioninproblemgambling.
AustraliaAustraliahastheworld’s53rdlargestpopulation,buthasonefifthofallelectronicgamingmachinesinthe
world.Knownas“pokies”,electronicgamingmachinesare located inbookmakers,pubs,clubs,hotels,
Since player limits were introduced in Norway the number of people classed as problem gamblers in Norway increased from 1.9% in
2008 to 2.1% in 2010.
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barsandsportsclubs.Thereare100,000pokiesinNewSouthWalesalone–threetimestheamountof
B2machinesintheUK.WhereasEGMsintheUKarerestrictedtofourmachinesperoutletthereareno
restrictionsinAustralia.AndthespeedofplayonamachineinAustraliaisthreeseconds,comparedto20
secondsintheUK.
WhiletherehasnotbeenanationwidesurveyongamblingprevalenceinAustraliasince1999,whenthe
problemgamblingratewas2.1%,regionalstudiesin2005show:
Queensland: 0.83%
Tasmania: 0.73%
NorthernTerritory: 0.64%
SouthAustralia 1.6%
EachindividualAustralianStateoperatestheirownparticularrulesandregulations,andthecommontheme
is thatas longas theapplicanthas followedtheprocesses,assetoutby the individualState, then the
licencewillbegranted.Acommonapproachfortacklingproblemgamblingacrossthecountryisillustrated
inSouthAustralia.
Therewere12,598gamingmachinesoperatinginSouthAustraliaasattheendofMarch2007.Thestate’s
IndependentGamblingAuthorityhasdevelopedaresponsiblegamblingcodeofpracticeforallvenueswhere
gamblingtakesplace,fromhotelsandclubswithgamingmachinestolicencedraceclubs,bookmakersand
lotteries.InasimilarwaytotheUKthekeyelementsofthecodeinclude:
• Allstaffhavetobetrainedabouttheeffectsofgambling,andtherecognitionandidentificationof
problemgamblingtraits,andensurethattheapproach,intervention,referralandfollow-up
processesareclearandwellunderstood.
• Thegamblingproviderwilltakeallreasonablestepstoensureapatronwhodemonstratesdifficulty
incontrollingtheirgamblinghastheirattentiontothenameandtelephonenumberofagambling
referralservice.
• Theproviderwillestablishareportingprocessinrespectoftheidentificationofasuspected
problemgamblerbystaffandensureagamingmanagerreviewstherecordsofsuspected
problemgamblersatregular(atleastfortnightly)interval,anddocumentsanystepstakento
interveneinasuspectedproblem.
New ZealandInNewZealand, thereare23,000“pokies” inover2,000 licencepremisesand thegambling industry is
regulatedbythe2003GamblingActandthroughtheGamblingCommission.
Since2009,pokiesarerequiredtohave‘PlayerInformationDisplays’,whichletaplayerknowhowlongthey
havebeenplayingandhowmuchtheyhavewonorlost,buttheydonotsetlimitsonstakesandprizes.
Under the2003Act,allgamingmachine licenceholdersare required todevelopapolicy for identifying
problemgamblers,whomtheyhavetoofferinformationandadviceaboutproblemgambling.Therearealso
twotypesofexclusionordersprovidedundertheGamblingAct2003:
• Self-exclusion:gamblerswhobelievetheyaredevelopingaproblemcanexcludethemselvesfrom
association of british bookmakers ltd
In Italy there is no spin cycle – the game is played instantly, while in casino environments like Macau or Las Vegas, you can play slot
machines at $500 per spin every 2-3 seconds.
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thegamingareaoranumberofvenues
• ExclusionOrders–gamblingprovidershavetheopportunitytoexcludefromvenueapersonwho
theybelievemayhaveaproblem
In both cases, exclusions can be issued for up to two years and once in place it cannot, under any
circumstances,berevoked.However,theefocuscontinuestobeonstafftrainingisbecauseit iswidely
acceptedthatstaffknowtheircustomerswellandaretrusted,andcanseeproblemsdevelopingovertime.
United States of America (USA)In theUSA3.5%of theadultpopulationareconsideredproblemgamblers.WhiledifferentStateshave
differentlawsonallowinggamblinginthefirstplace,thosestatesthatallowitalsohavedetailed“statutes”
forhelpingproblemgamblers.
Thereare39Stateswhichallowbettingonelectronicgamingmachinesandthecommonthreadamong
allthesestatutes,alongsidetheAmericanGamingAssociationCodeofConductofResponsibleGambling
(2003), is based around key principles: ensuring staff are trained to understand and identify problem
gamblers,andthatvenuesandoperatorsarepublishingproblemgamblinginformationandthedetailsof
afreehelpline.Operatorsalsocommittoexplaintocustomerstheprobabilitiesofwinningandlosingand
allowcustomers tobar themselves fromthevenue if theyhavedevelopedaproblem.The industryalso
providesfundsfortheNationalCentreforResponsibleGaming.Thespeedofplayonmachinesisbroadly
everythreeseconds,andplayerscanusecreditcardsinsteadofcoins.
CanadaThereareover80,000electronicgamingmachines inCanadaandEGMscanbelocatedinbars,hotels,
restaurantsandclubs.Canadahasarelativelylowproblemgamblingrateof0.5%.ThisisdespiteEGMS
havingaspeedofplayofbetween3.5and5secondsandallowingcustomerstotransfermoneydirectly
fromtheirbankaccountorcreditcardintothemachines.ThegamingindustryinCanadahasdevelopeda
setofstandardsforgamblingwiththeResponsibleGamblingCouncil.
Whiledifferentprovinceshavedifferentprogrammesforhelpingproblemgamblers,theyalladheretobasic
principles:
• Alwayscheckingforidentificationandpreventingminorsfrompurchasingoraccessinggambling
products.
• Offeringvoluntaryself-exclusiontoplayersincasinosorothergamingcentres.
• Incorporatingamessageaboutresponsibilityinalladvertising,suchas“knowyourlimit,play
withinit”.
• Makingsureplayerscaneasilyfindthenumberforafreeproblemgamblinghelpline.
• Havinganannualormulti-yearprovincialstrategythatguidesoperatorsandoutlinesthetypeof
problemgamblingprogrammesthatwillbefundedanddelivered.
• ParticipationintheCanadianPartnershipforResponsibleGamblingand/ortheInterprovincial
LotteryCorporation’sresponsiblegamblingsub-committee.
South AfricaSouthAfricahasaproblemgamblingrateof1.4%.Thelawlimitsthenumberofmachinesto50,000and
such machines can be located in restaurants, bars and tavern - the maximum number permitted on a
particularsiteis5machines.
Canada has a low problem gambling rate of 0.5% despite machines having a speed of play between 3.5 and 5 seconds.
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The National Responsible Gambling Programme was created in 2000, bringing together different
representativesfromthegamblingindustry.ThisbecametheSouthAfricanResponsibleGamblingFoundation
(SARGF)in2004.Oneofitskeyrolesisthetrainingdivision,whichprovidesresponsiblegamblingtraining
toallgamblingindustryemployeesthroughoutSouthAfrica.Aswellasanoperatorholdingalicencefor
providingmachines,eachindividualthathasaroleintheirprovisionmustalsoholdalicence.
Acustomerdevelopingaproblemcanself-excludethemselves fromaparticularoperatorandoncethis
isdone,thatperson’sdetailscanbecirculatedtoallotherlicensedvenueswithinthearea.Itispossible
forthirdpartiestoexcludeacustomer,throughthecourts.Onceexcluded,bywhichevermeans,theonus
remainsonanexcludedcustomertostayawayfromthevenueandtheexclusioniseffectivelyacontract
betweentheexcludedcustomerandtheoperator–ifacustomerisfoundinapremisesfromwhichtheyare
excluded,theycouldbechargedwithtrespassing.
association of british bookmakers ltd
Page 35
Whether working with other retailers to improve the local environment, making charitable donations or creating schemes to improve skills for the
underprivileged, high street betting shops are responsible retailers.
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CHAPTER 10SOCIAL RESPONSIBILITY • Whetherworkingwithotherretailerstoimprovethelocalenvironment,makingcharitable
donationsorcreatingschemestoimproveskillsfortheunderprivileged,highstreetbetting
shopsareresponsibleretailers,committedtoworkingwiththecommunityinwhichtheyoperate,
and the community beyond that.
• Thewholegamblingindustryvoluntarilydonatesnearly£6milliontotheResponsibleGambling
Trust to help people who have developed problems with their gambling.
• DetailsaboutGamcareservicesaredisplayedprominentlyinallbettingshops
• Thebettingindustrysupportsawiderangeofcharitableorganisationsandworkswith
communities to address any local issues they have raised.
• Theindustrytakesitsresponsibilitiestoprotectchildrenandyoungpeoplevery
seriously and is committed to the High Street Betting Industry Action Plan and Supplementary
CodeofPracticeonAgeVerification.
• OperatorsenforcearigidThink21policy
• In2010theABBlaunchedSafeBetAlliancewhichisavoluntarycodeofshopsafetyand
security,settingsinglenationalstandardsforbookmakers
• LBOrobberiesinLondonwerereducedby60%between2010and2012
This chapter gives some examples of the betting industry’s best practice in social responsibility.
Helping problem gamblers
Thewholegambling industryvoluntarilydonatesnearly£6million to theResponsibleGamblingTrust to
helppeoplewhohavedevelopedproblemswiththeirgambling.Thismoneyisallocated–independentlyof
gamblingoperators-tofundavarietyofprogrammesandsupportanumberofcharitableorganisations.
This includes GamCare, which operates a free telephone help line service and provides treatment for
problemgamblers.
Detailsaboutthisserviceisdisplayedprominentlyinallbettingshops,whetheratthecounter,bygaming
machinesoronwallsaroundtheshopunit,andthedetailsaredisplayeddirectlyonthescreensofsome
electronicgamingmachinesaswell.
TheABBlastyearwelcomedtheDepartmentforCulture,MediaandSport’sstatementtotheBBCPanorama
programmethatthecommitmentsofthegamblingindustrytowardsthecostsoftreatingproblemgamblers
are“sufficient”andthattheyare“contentwiththecurrentvoluntaryapproach.”
Charitable workInadditiontoprovidingnearly50%ofthevoluntarydonationstotheResponsible
Gambling Trust , the betting industry supports a wide range of charitable
organisations and works with communities to address any local issues they
haveraised.
TheABBanditsmembersrecentlyledaseriesoflocalengagementactivitiesin
LondonBoroughs:
• InLewisham,thelocalbettingshopshaveallsigneduptotheHighStreetCharterandtheABBhas
donated£1500totheLewishamBoroughCommunityFootballClub,sponsoringtheteamshirts.
• IntheLondonBoroughofEaling,theABBworkedwithlocal
association of british bookmakers ltd
Page 37
councillors,enforcementofficersandthepolicetoorganiseaseriesofbriefings.Thisfollowedthe
creationofaBetWatchschemeinthetowncentre
• Over£10,000hasbeendonatedtotheHaringeyPoliceAmateurBoxingClubwhichsupports
youngpeopleintheborough
TheABBhasalsodonated£5,000totheSouthallCommunityAlliancetosupportayear-longprojectgiving
disadvantagedyoungpeoplefromdifferingbackgroundstheopportunitytodevelopnewartisticandcreative
skills;and£5,000totheCityandHackneyCarersCentre,whichwillcoverhalfofthecostsofprovidingto
supportforpeoplewhocareforrelatives.
Age-restricted products
Itisanoffenceforanyoneundertheageof18toenterabettingshop,letalonebetandtheindustryhas
beencommittedtoensuringthismatteristakenveryseriouslybystaff.Acorepartofstafftraining,most
operatorshaveaThink21policyinplace,whichmeanstheLBOsectorcompares
morefavourablythanthepoliciesofsomeotheragerestrictedproductsasindicatedinthistable:
Thebettingindustryissometimesaccusedoflowlevelsofcompliancewiththeprinciplethatchildrenshould
beprotectedfromgambling.However,theindustrytakesitsresponsibilitiestoprotectchildrenandyoung
peopleveryseriouslyandiscommittedtotheHighStreetBettingIndustryActionPlanandSupplementary
CodeofPracticeonAgeVerification.
InMay2009theGamingCommissionconductedanage-verificationtestprogrammeinwhichbettingshops
hadaverylowrateofcomplianceatjust2%.Theindustryrespondedbyinvestingaconsiderableamount
ofresourcetowardsaddressingthe issue:signinguptoanewCodeofPracticeandActionPlan,which
entailedintroducingaboard-level‘champion’,newsignage,stafftrainingandcommissioningfurthertest-
purchasingexercises.Laterthatyear,arepeatexercisebytheGamblingCommissionshowedconsiderable
improvementwith65%rateofcompliance.
Alloperatorsenforcea rigid ‘Think21’policyand the
largenationaloperatorsemploytheirownindependent
testingcompaniestoensurestandardsaremaintained
Product Age LimitVolatileSubstances/Solvents 18+
Fireworks 18+
Alcohol 18+
OffensiveWeapons/Knives 18+
LighterRefillscontainingButane 18+
Crossbows 17+
Airguns&Pellets 18+
Tobacco 18+
Caps,CrackerSnaps,NoveltyMatches,PartyPoppers,SerpentsandThrowDowns 16+
Lotterytickets/ScratchCards 16+
AerosolPaint 16+
DVD’s,Videos,ComputerGames-CheckClassification: 12+,15+,18+
BRIGHTON & HOVEGREYHOUND STADIUM
Coralhasraisedover£2.5millionforavariety of charities selected by staff.
Page 38
atahighlevel.Recentresultsofindependenttestpurchasingexercisesprovethatbettingshopstaffare
highlyvigilantaboutaskingyoung-lookingcustomerstoprovideproof-of-age.Lastyearaloneoperators
turnedawaymorethanhalfamillionpeoplewhowereunabletoprovetheirage.
Recentlyourmembersachieveda100%success rate in a joint age-verification testpurchaseexercise
undertaken by the Gambling Commission and Blackpool Council. Furthermore, a recent survey by
CitizenCardofitscardholdersrevealedthatbettingshopsweremorelikelytoaskan18yearoldtoprove
theiragethanBars,Pubs,NightClubsandTobaccoRetailSales.
Recently our members achieved a 100% success rate in a recent joint age-verification test purchase
exerciseundertakenbytheGamblingCommissionandBlackpoolCouncil.Furthermore,arecentsurveyby
CitizenCardofitscardholdersrevealedthatbettingshopsweremorelikelytoaskan18yearoldtoprove
theiragethanBars,Pubs,NightClubsandTobaccoRetailSales.
Tackling crimes against betting shops
Whenbettingshopsaresubjecttocriminalactions,thestaffandcustomersarethevictims,notthecause.
TheSafeBetAlliance(SBA)waslaunchedin2010,afteraseriesofrobberiesinbettingshopsinLondon.
The Metropolitan Police Flying Squad had been tracking these incidents and worked with the industry,
throughtheABB,toputinplaceasetofguidelinesandmeasuresthatwouldhelpreducetherobberylevel.
Theresultwasavoluntarycodeofsafetyandsecurity,settingsinglenationalstandardsforbookmakers,
covering shopsafety andsecurity for thefirst time.Thedocument setsout clearguidanceandagreed
standardsthatcanhelpreducetheopportunityforcrimestotakeplace,anddealwiththeaftermathofany
incident.
AswellasthePolice,theABBandourindividualmembers,theworkontheSBAproposalsalsoinvolved
Community Union, the Institute of Conflict Management, the Department for Work and Pensions, all of
whomaresignatoriestoandsupportersofthedocument.TheAllianceisalsoendorsedbyCrimestoppers,
withwhomweworkclosely.
This represented the first time the industry, and
those involved in it, came together to tackle what
was becoming a serious problem, affecting not just
the businesses themselves but the staff working in
theshops.At theendof thefirstyear, thenumberof
robberiesofbettingshopshaddroppedby46%andby
theendofthesecondyear(2012)therewere60%fewer
association of british bookmakers ltd
The number of robberies has dropped by 60% in two years in London
The Ladbrokes in the Community Charitable Trust has donated over £6.2milliontoarangeofcharitablecauses,includingTheSamaritans
and Child Line and funded Christmas dinnersforover10,000peoplefor
Age UK.
Page 39
“ResponsibleGamblingForum2012-TheABBhasorganisedtheResponsibleGamblingForum,bringingtogethertheindustry,theregulatorandotherstakeholders,todiscuss
andmoreimportantly,devisesolutionstoissuesofconcern.The2012eventwasattendedbyMembersoftheLondonAssembly,localcouncillors,policerepresentativesand
representatives of charities that help problem gamblers. The event heard about safety measuresinshops,examplesofcommunityworkingandage-verificationmeasures
deployedbybettingshops.”
robberies. The Flying Squad noted that the situation
hadgonefromanalmostdailyreportofabettingshop
robbery,tooneamonthatmost.Thedetectionratefor
bettingshoprobberiesnowstandsat70%.
It has also led to localised action, for example in
Ealing,severalbettingshopshavecreatedaBetWatch
scheme, where they all alert other operators to any
incidentsorpeoplecausinganti-socialbehaviour.
As a result of this, the SBA was awarded the Home
Office Tilley Award at the end of 2011, the awards
recognisinginnovativecrimefightingprojectswherepolice,communitygroupsandthepublicsuccessfully
worktogethertoidentifyandtacklelocalcrimeproblems.
WhileinitiallycreatedinresponsetospecificissuesinLondon,theSBAhasalsobeenintroducedinotherparts
oftheUK,includingScotlandandManchester,andwearecurrentlyfinalisingplanstolaunchthedocument
inNottinghamshire,inco-operationwiththepoliceforce,whoarefocusingontacklingbusinesscrimeina
varietyofareas.TheSBAschemealsorecentlyreceivedACPOaccreditation,ineffectmeaningtheSBAis
endorsedbythecountry’sChiefPoliceOfficers.
It is also worth noting that the large national operators have CCTV systems, employ many former police
officersandhavemanagedtocatchavarietyofcriminalsthroughclosecooperationwiththepoliceandother
stakeholders.
WilliamHillissupportingProjectAfrica,a long term programme in Kenya to build
anddevelopaschool,andinOctober2012,WilliamHillstaffhelpedbuild
and kit out the library. William Hill also match-fundmoneyraisedbytheirstaff
forgoodcauses.”
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CHAPTER 11RESPONSIBLE GAMBLING • TheABBisfirmlycommittedtotheconceptofresponsiblegambling,wherecustomersare
giventheself-helptoolstoavoidexcessiveorirresponsiblegamblingandthusavoid
gambling related harm to themselves or others.
• CurrentmeasuresandcodesadoptedbyABBmembersgofarbeyondthecurrentstatutory
requirementsanditisnowtheABBsintentiontoconsolidatecurrentbestpractice,and
provenharmpreventionmeasures,intoavoluntaryABB“codeforresponsiblegamblingin
LBOs”.
• TheABBhasapproachedaleadingacademicinthisareatoadviseonthedevelopmentof
thiscodeandwillalsoseekadviceandinputfromtheGamblingCommission,RGSB,RGT
and DCMS.
TheABBhasaproventrackrecordofdevelopingandimplementingworkableandeffectivevoluntarycodes
ofconduct,engagingwithawiderangeofstakeholders intheprocesse.g.the2002codeinrespectof
FOBTswhichremainedinplaceuntiltheterminalswereformallyincorporatedintothe2005GamblingAct,
asB2machines,inSeptember2007.ThiscodeofconductwashailedbythethenChairmanoftheGaming
Board (Peter Dean) as “the best example of commercial / regulator cooperation even seen”. The ABB
alsodevelopedtheSafeBetAlliance,asaself-regulatorycode,withinputfromthepoliceandotherthird
partystakeholders,andithasbeenanunqualifiedsuccessinreducingincidentsofrobberyinLBOsand
enhancingstaffsafety.
Asstatedelsewhereinoursubmissionwe(theABB)believethatproblemgamblingisabouttheindividual
andnotspecificproducts.Theonethingthatproblemgamblershaveincommonisthattheygambleona
widevarietyofproductsinarangeoflocations.Wealsosupporttheviewthatbespoke(playerled)measures,
tailoredtoagamblersactualmachineplay,mightbemoreeffectiveinpreventingand/ormitigatingharm
thanthecurrentacrosstheboardregulatorycontrols,suchaslimitstostakesandprizes,andthenumber
andlocationofgamingmachines.Notonlyistherenoevidenceofadirectcausallinkbetweenproblem
gamblingandB2machineplay inLBOs,there isalsonoevidencewhatsoeverthatreducingstakesand
prizeswouldeffectivelyreducegamblingrelatedharm.Thuswebelievethatamoresophisticatedandwide
rangingcodeofresponsiblegamblingforLBOswouldbefarmoreeffective inpreventingandmitigating
harm.
TheABBcodewillcovermorethanjustmachinesandwillalsolookat:-
• Ageverificationprocesses.
• Sportsintegrity.
• LBOsaspartofthelocalcommunity.
• Advertisingstandards(useoftheGambleAwarewebsitedomainonscreen).
• Staffsafety/TheSafeBetAlliance.
association of british bookmakers ltd
The ABB code will be developed to cover more than just B2 machines and will look at age verification, local
community, advertising and staff safety.
Page 41
Thecodewillalsoembedthe3coreprinciple,underpinningthe2005GamblingAct,inthemodusoperandi
ofLBOoperatorsacrossBritain:-
• Keepinggamblingcrimefree.
• Ensuringthatgamblingisconductedfairly.
• Protectingtheweakandvulnerableinsociety.
Whilst theABBarefirmlycommitted tobookmakerscontinuing toplay theirpart, locally;nationallyand
internationally, as good corporate citizens, and we also fully support the notion of consumer / player
protection, we are equally aware that interventions cannot and should not impinge upon the rights of
informedadultstodecidehow,whereandwhentheyspendtheirmoney.
ThereforetheABBcodewillfocus,firstandforemost,onplayerinformationandassistingplayersinlearning
howtoself-regulate theirplay thusensuring that theydonot fallprey togamblingrelatingharm. In this
contextwewillexamine thesuccess,orotherwise, inotherpartsof theworldofsuchharmprevention
measuresas:-
• Automatedplayerinformation.
• Theabilitytosettimeand/orcashlimitsonasessionofplay.
• Stakinganddepositlimits.
• Withdrawalofwinningsandasadefaultsetting.
• Responsiblegamblinginformationandaccessto“help”andcounselling.
• Self-exclusion.
• Automatictimereminders/sessionclocks.
Wewillalsoexplorehowbesttoincorporatetheconceptof“staffintervention”.Unlikepubs,where“haven’t
you had enough Fred” can be directed by staff to clearly intoxicated customers, excessive or problem
gambling is not easy to spot as not all (or even most) problem gamblers play to high (highest) stakes.
CustomerprivacyisveryimportanttoLBOsasiscompliancewiththeDataProtectionAct.
Howeverwewillcontinuetoexplorewaysinwhichstafftraining,interventionandnewtechnologiescanplay
theirpartinassistingproblemgamblerstorecogniseandcontroltheirownbehaviour.
Thecodewillalsorequireoperatorstodemonstrate(produceevidenceof)boardlevelcommitmentto,and
monitoringof,responsiblegamblingactivities.
WebelievethattherecentlyrevampedGambleAwarewebsite(ownedbyResponsibleGamblingTrust)isan
importantelementinplayerprotectionandinformedchoicebytheconsumerandwewillaimtoincorporate
thewebsiteinanyABBcode.
WeshouldperhapsstressthattheABBisnotdevelopingsuchafarreaching“code”becausewebelieve
that there isasignificant riskassociatedwithgamblingonB2machines.Theevidence is in fact to the
contrary.Wearedeveloping thecode tobuildoncurrentbestpracticeand topreventorminimiseany
gamblingrelatedharmarisingoutofallproductslocatedwithinLBOs.
Toassistandadviseusinthiscomplextaskwehaveapproachedaleadingacademicinthisareaofgambling
The ABB “code” will focus, first and foremost, on player information and assisting players in learning how to self-regulate their play
Page 42
andplayerprotectiontoadviseandassistusintheongoingdevelopmentofsuchacode.
TheABBwouldhope,subjecttothelevelofanytechnologicalchangesrequired,tohavea(draft)codeup
andrunningbylate2013andweremainverysupportiveofthecurrentRGTdrivenresearchprogramme
intoB2Machines.Itwouldbeourintentiontoincorporateanyworkable,effectiveandproportionateharm
preventionmeasuresarisingfromtheRGT/NatCenresearchintoourcodeofconduct.
Our code therefore will significantly exceed the current statutory requirements, build upon current best
practicefromacrosstheworldandincorporatenewfeatures(technologydriven)whicharecurrentlybeing
testedbyavarietyofoperators.
Bookmakers in Britain make huge contributions to the community at a national and a local level. Our
donationstoRGTareanimportantpartofthisandwearedelightedthatRGTsincomeisupnearly20%in
2012/13andthatcirca50%oftheirincomecomesfromABBmembers.
ThebettingindustryisalsocommittedtofundinganewindependentBGPStobeundertakenbyNatCen
in2014.
InconclusiontheABBiscommittedtoensuringthatgamblinginBritainisconductedfairly,iskeptcrime
freeandthattherearesufficientsafeguardstoprotecttheweakandvulnerableinsociety.Collectivelythis
equatesto“effectiveconsumerprotection”andthiswillbeattheheartoftheproposedABBcode.
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Page 43
Page 44
CHAPTER 12REGULATORY IMPACT ASSESMENT ThischapterconsidersthestateoftheLBOindustryandanumberofeconomicissuesforthefuture,
which are likely to influence the contribution of the sector to the UK economy and the Treasury:
• NewABBdataclearlyshowsthattheindustryremainsveryexposedtoanynegative
regulatory change due to a surprisingly high number of shops on very low margins. There
arealready2,685LBOsatriskinlowmarginshopstakingonaveragearound£15,200p.a.
employingaround11,300people.
• Asahypotheticalexample,ifthelevelofB2stakeisreducedto£2,ABBanalysisshowsthat:
•7,880LBOsand39,031jobs(83.7%ofjobs)wouldbeatrisk
•OnaverageLBOSwouldmakea£58,900loss.
•TheTreasurystandtolose£650million.
•ThousandsofsquarefeetofemptypremiseswouldbeaddedtotheHighSt
•Nearly£60millioninbusinessratestolocalcouncils.
•Thelossof40,000jobs–manyamongst18-24yearoldsandpart-timefemale
•Workers-wouldaddtounemploymentratesof20%and7%respectivelyandincrease
Treasury’sbenefitsbill.
TheLBOsectorneedsstrongbackingfromGovernment,tomaintainandgrowitsbusiness.Forthis
reason,weproposetakingtheincreasedstakeof£2permittedonB3machinesin2011alittlestep
further(to£3)andincreasingthemaximumavailableprizefrom£500to£1000.
State of the LBO industry
Whilstthenumberofbettingshopshasbeenbroadlystable,manyremainvulnerabletoeconomicheadwinds
andlegislativechange.Themixofavailablebettingproductshasprotectedtheindustry,toanextent,from
theeconomicdownturn;withoverallretailspendincreasingslightly.Thisresilienceisattributabletoashift
towardconsumerusageofmachinesintheretailenvironment.However,theDeloittereportshowstherehas
beenasignificantfallinoveralllevelsofGrossWinasaresultoftheoffshoringofremotefunctions(driven
bybothamovetoremotegamblingandcompetitivedisadvantageforsmallerbusinesses)aswellasthe
declineoftelephonebettingduetotechnologicaladvancements.AccordingtoDeloittethisinstabilityhas
outweighedthestabilityinretailandhasledtothesignificantreductioninGrossWin,FTEemploymentand
GVAcontribution.
TheDeloitteresearchshowsthatkeycomponentsofrevenuegenerationhaveshifted,withmachinerevenue
generatingjustunderhalfofallbettingshoprevenueintheUKmarket–thegrowthofthissector (20%
since2009)hasbecomeakeydriverfortheindustry,withOverTheCounter(OTC)spendremaininglargely
staticoverthesameperiod.Whilstthishasbeenthecase,theproportionofOTCspendhascontinuedto
shiftawayfromhorse-racingandtowardsfootballbetting,possiblydrivenbythe2010WorldCupandthe
popularityofnewproductssuchas‘in-playbetting’onfootballandtennis.
association of british bookmakers ltd
There are already 2,685 LBOs at risk in low margin shops taking on average around £15,200 p.a. and employing
11,300 people.
Page 45
RSBusinessSolutionsconductsanindependentannualsurveyofmemberstomonitorthestateoftheLBO
industryonbehalfoftheABB. Incommonwithmostbusinessesacrosstheretailsector, thehighstreet
LBOsareundersubstantialeconomicpressure.AlthoughABBmemberdatafor2011showsLBOsgrewby
1.5%to8,722theyearbeforeLBOnumbersfellfrom8714to8593.Thetotalnetrevenueshavealsovaried
between£2.86bnin2008,£2.71bnin2009,£2.78bnin2010toanestimated£2.84bnin2011.
LBOrevenuefromOver-The-Counter(OTC)bettingandElectronicGamingMachines(EGMs)grewby2.2%
to£2.840bn.However,theseoverallfiguresdisguisetheimportanceofmachineincomeinmaintainingthe
viabilityoftheLBOsectorEGMrevenuegrewto50.5%(46.7%)oftotalLBOrevenue,whileOTCrevenue
fellto48.4%(52.7%).
At the same time costs have risen and Profit Before Interest and Taxes (PBIT) for the LBO sector has
droppedfrom£763.5Min2008to£627.4Min2011–areductionof17.8%.
Bookmakerspayahigherleveloftaxthananyothercomparableretailsectorandpaidtotaltaxesof£1,029m
- up 7.5% on 2010 when it was £957.3m. These taxes include Rates, Income Tax, National Insurance,
CorporationTax,VAT,GPT,AMLD,leviesandlicences.
Asanexample,thetotalnetrevenuefigurefor2010of£2.78bnabovecomprises£1.33bnofbusinesscosts,
£840moftaxand£610mPBIT.Theratiosin2009were£1.31bncosts,£800mtaxand£600mPBIT.This
simplecomparisonshowsthatcostshavebeencontainedbutthatthetaxburdenhasrisenattheexpense
ofprofit.Thetablebelowshowsthis:
£2,000m
£1,800m
£1,600m
£1,400m
£1,200m
£1,000m
£800m
£600m
£400m
£200m
£0m2007 2008 2009 2010 2011
30%
35%
40%
45%
50%
55%
60%
65%
70%
75%
80%
Taxation as a % of Revenue
Total tax as % of total GWTotal taxation £m
Total betting gross win £m
Page 46
Vulnerable LBOsLBOtaxationburdenismorethanwemakeinprofitandincreasinglyunsustainable,especiallyforthose
smallershopsonvery tightmargins.VerySmallLBOsownedbythe“Big5”andall theLBOsoperated
byIndependentsandSingleShopOperatorsmayberegardedasoperatingatthemarginsofcommercial
viability.Theseshopshaveprofitsofonaverage£15,200pershoporfewerthan7%ofincome.Forthese
reasonstheyareclassifiedas“vulnerable”.
Togethertheyaccountfor30.8%ofLBOs,20.9%ofrevenue,6.5%ofprofit,25.6%ofemploymentand
19.8%of taxespaid.VulnerableLBOspay59.6%tocoverbusinesscosts,33.5 for taxesand6.9%for
profit.Betweenthem,theseshopsemploynearly11,324people,whichequatesto25.6%oftheFTELBO
workforce.
RSBusinessSolutionsdataclearlyshowsasurprisinglyhighnumberofLBOsareonverylowmargins.In
20112,685LBOsweretakinglessthan£19,500p.a.Therearethreecategoriesofvulnerableshops:
• Almost20%oftheBigFive’sshops(7,365)makeanoperatingprofitoflessthan£13,300ayear
-Thisequatestoabout£256operatingprofitperweek.
• LargeandsmallIndependentchains(1,127shops)madeanaverageoperatingprofitof£19,500
peryearorabout£376perweek.
• Singleshopoperators(230intotal)madeanaverageoperatingprofitofonly£4,800peryear
orabout£92perweek.
B machinesTheABBshouldsayattheoutsetthat,atpresent,wesupporttheGovernment’spositiononCategoryB2
machinesasweseenocommercialneedtoseekanyvariationintheircurrentstake/prizelimitsThischapter
is therefore focussedonstating thecase forwhycurrentstake/prize limitsshouldremain thesameand
highlightingthecrucialroleplayedbyelectronicgamingmachinestotheeconomicviabilityoftoday’sLBO
whichisclearlyevidentfromthefigurespresentedbytheABB.
Sincetheirintroductionin2002,EGMshavebecomeincreasinglypopular,withoutbeingresponsibleforany
statisticallyrelevantincreaseinproblemgamblingratesintheUKbetween2007and2010,anditistherefore
vitallyimportantthattheproductsonofferbeallowedtomeetvibrantcustomerdemand.
It isalso important to remember thatas theGovernment is lookingat recommendations tosupport the
HighStreet ingeneral,as indicated inchapter2,LBOs increase footfall,occupyemptyunits (estimated
75%ofourshopswereemptyunits)andprovidediversityofoffertotheconsumer.Over100,000jobsare
dependentonthissectorintheUK.
Therearecurrentlyaround140,000gamingmachinesinoperationintheUKacrossallgamblingsectors.
Approximately35,000ofthesegamingmachinesareinbettingshopsandthenumberhasremainedstable
for3yearsaccordingtoGamblingCommissiondata.
TheindustrygraphbelowillustratesthecommercialtrendsintheLBOgamingmachineindustry.Grosswin
onB2roulettegameshasdroppedfromahighof£600inMay2008to£500inNovember2012.Grosswinis
association of british bookmakers ltd
Since their widespread introduction in 2002, B2 machines have become increasingly popular with betting shop clientele,
without increasing problem gambling rates in the UK.
Page 47
stillgrowingasaresultofanincreaseingrosswinonB3productswhichhasincreasedfrom£190toaround
£300inthesameperiod.AccordingtoABBmemberdataB2saccountedfor89.4%ofEGMturnoverand
B3sprovided10.6%ofEGMturnoverin2011.However,astheLBOmodelishighturnover/lowmarginthe
onlyfiguresthatreallymatterinthesectorareprofitmixpercentageswhichare74.7%forB2sand23.3%
forB3s.TheReturnToPlayer(RTP)ratesarearound97%and90-92%respectively.
B2 gamesAsindicatedabove,wesupporttheGovernment’spositiontomaintaincurrentstakesandprizelevelson
B2games.
As outlined in Chapter 4 they are a popular games with customers who like playing electronic gaming
machines.However,2010BGPSdataclearlyshowsthatonly4%oftheadultpopulationplayonB2sand
74%ofB2playersplaylessthanonceamonth.AccordingtoKantarMediadataonly24%ofbettingshop
customers justplayonelectronicgamingmachines.Of thesecustomers37%play roulettegamesand
29%othercasinostylegames(29%playB3games).Theaverageplayperspinis40secondsalthoughthe
minimumspeedcycleis20seconds.Theaverageplayperspinis40secondsalthoughtheminimumspeed
cycleis20seconds.
Theconsultationquestion13(d)askswhatcharacteristicsorbehavioursmightdistinguishbetweenhigh
spendingplayersandthosewhoarereallyatrisk.
Thisisnotaquestionwithstraightforwardanswers.Andthequestionshouldbebroaderthanthis.Itisnot
justhighstakersthatareatriskofproblemgambling.Thisriskcouldequallyapplytoacustomerwhoplaces
stakesof£2.
ItisimportanttorememberthatB2gamesareahighturnover/verylowmarginproduct.Whilstanaverageof
£322isstakedperhouronEGMsinLBOs,ABBdatashowsthattheaveragesessiontimeonanEGMis8.9
minutesandtheaveragespendpersessionis£7.55.Onaveragethereare1.48sessionsspentonmachines
perhourandtheaveragespendpermachineperhouristherefore£11.13whichisakintotheaverageover-
the-countersportsbet.However,aswithall leisureproducts,differentcustomershavedifferentbudgets
whichtheyarefreetospendastheywish.Wehavecustomersrangingfrompensionerswithlowincomes
£1,000
£900
£800
£700
£600
£500
£400
£300
£200
£100
£0m
Aug-
07
Nov
-07
Feb-
08
May
-08
Aug-
08
Nov
-08
Feb-
09
May
-09
Aug-
09
Nov
-09
Feb-
10
May
-10
Aug-
10
Nov
-10
Feb-
11
May
-11
Aug-
11
Nov
-11
Feb-
12
May
-12
Aug-
12
Nov
-12
Win per terminal per week
Non Roulette
Total
Roueltte
Page 48
tohighnetworthindividualswholikehighstakes.Whatthesecustomershaveincommonisthatthevast
majorityplayresponsiblyandwisely.
It is worth remembering that there is no cap on how much a customer can stake over-the-counter on
horseracing,greyhoundracingorfootballbutstakesonGamingMachinesarelimitedto£100onaB2.
WhereasB3machinesoffersajackpotwhichis250xthemaximumstakeof£2,B2casinostylegamesonly
offerajackpotwhichis5xthemaximumstakeat£100.DuetothehighRTPtheoddsofwinningonB2are
higherthanB3sandhigherstakesareintrinsicallylinkedtotheattractivenessofthecasinostyleproduct
althoughthestakesarestillmuchlowerthanbeingplayedattheroulettegameincasinos.Themaximum
amountyoucanspendonanumberisaround£13sothisalsomeansthatitmakessenseforthestaketo
behigher.ThenatureoftheB2gameencouragesstakespreading(distributionofstakesacrossnumbers)
toamaximumof£100.
Whileastakeof£100maysoundlikealotofmoneyitisimportanttorememberthattheReturnToPlayer
rateis97.3%.Forexample,onRouletteacustomermaychoosetobet£3onacombinationof24numbers
(£72)buttheirchancesofwinningarerelativelyhighat24/37,orabout63%,andiftheirbetwinstheymay
choosetostake-upbetting£4on24numbers(£96).Whileanothercustomermayonlybet20penceon6
numbers(£1.20)onceaweek–abitliketheNationalLotterybutwithfarmorechanceofwinning.
Theconsultationquestion13(c)asksquestionsaboutthestakes.TheaverageB2stakeperspin£16.15
whilsttheaverageB3stakeperspin£0.86TheoverallaverageB2/B3stakecombinedis£5.64.
TheABBrecognisesthatfurtherresearchisrequiredtounderstandbetterhowpeoplebehavewhenplaying
thesemachinesandwhathelpspeopletostayincontrolandplayresponsibly.Wethereforewelcomethe
factthatourmajormembershaveagreedwiththeResponsibleGamblingTrusttogivefullaccesstoNatCen
aspart thebiggest everprogrammeof academic research intoCategoryBgamingmachines inBritain
whichcanbefoundinbettingshops,bingohalls,adultgamingcentresandcasinos.
Negative impact of the B2 stake reduced from £100 to £2Although the Government does not propose different levels of stakes and prizes stating in the impact
assessmentthatcurrentlevelswouldrepresentnorisktoplayerprotectionandhasnotincludedsuchlevels
initsimpactassessmenttheABBconsidersthepotentialimpactinthissection.Wehavetosayupfrontthat
theABBfindsitdifficulttoassessthefullimpactintheabsenceofaproperregulatoryimpactassessment.
However,consultationquestion13(e)explicitlyasksthequestionaboutanappropriatelevel,wronglyinour
view.TheGovernmentasksifthereisevidencetosupportareductioninthestakeand/orprizelimitsforB2
machines,whatwouldanappropriateleveltoachievethemostproportionatebalancebetweenriskofharm
andresponsibleenjoymentofthisformofgambling?
TheABBisalsoawarethattherehavebeenrepeatedcallsfromanti-bettingcampaignersforareduction
inthemaximumstakefrom£100to£2andkeeptheprizeat£500,inlinewithB3levelsinFECsandbingo
halls.TheABBbelievesthere isnomeritatall in thisproposalbut inorder to illustrate thecatastrophic
natureofthisproposal,theABBhasconsideredtheimpactresultingfromthehypotheticalexampleofa50
foldreductioninthemaximumstakewhilstleavingthemaximumprizepay-outas£500forB2gamesand
leavingB3gamesunchanged.
association of british bookmakers ltd
ABB data shows that the average session time on a gaming machine is 8.9 minutes and the average spend per session is £7.55. On average there
are 1.48 sessions and average spend per hour is therefore £11.13.
Page 49
RSBusinessSolutionsdevelopedan independentforecastingmodel,whichassessedthe impactofthis
changeonLBOprofitsandtherisksassociatedwiththischangeonprofits,employmentandtaxes.We
assessedwhatwouldhappentothevulnerableshopsatriskinparticular(earlierdefinedasthoseearning
lessthan£20,000profitperyear).
ABBdatashowsthatin2011machineincomewas£1,434.0mwithOTCandotherincomeat£1,406.7m.
Coststotalled£2,213.3m,resultinginprofitsof£627.4mor£71,900pershop.Netmachinetaxwas£249.7m
or17.4%ofmachinegrosswin.
On1February2013theGovernmentintroducedanewgamingtaxonmachinesatarateof20%forbetting
shopmachines.AsaresultthenetmachinetaxpaidincreasesintheABBforecastscenarioto£286.8m.
Thisadditionaltaxof£37.1maffectsthebottomlinedirectlyandreducesindustryprofitsfrom£627.4mto
£590.3mor£71,900to£67,700pershop.Eventhoughtheindustryrevenuesareprojectedtogrowby14%
overthe3yearsfrom2011to2014,withmachinecostsandmachinetaxesgrowingby31%,theforecasts
for2014implythattheindustrywouldbejustbacktothelevelofprofitabilityitachievedpriortothenew
taxcomingin.
Theproposaltoreducethestaketo£2impactsonthoseplayersthatstakeover£2andisestimatedto
causea68.6%dropinmachinegrosswin.ThisassumesanysubstitutionwithintheLBOwillbenegated
bycustomerswhowillnolongervisitLBOswhilstalsoforecastingthatthosethatplayat£2orbeloware
unchangedthroughtothosethatusuallyplayacrosstherangeofstakesuptothemaximumbecomeless
andlessinterestedina£2maximumstake.
Withmachinerelatedcostsandtaxesfallingbyasimilaramounttheoverallimpactisdisastrous,causinga
dropinprofitsfromthe2014baseof£642.9mtoalossof£207morfrom£70,000profitdowntoalossof
£22,500perLBO,comparedwiththe£20,000profitfigurewhichisthedefinitionofbeing‘atrisk’.Therefore
theentireindustrywouldbeatrisk.Thisanalysisissummarisedbelow:
Table1:RSBusinessSolutionsRiskAnalysisImpactSummaryofB2StakeReductionto£2
2011Model
2011 withMGD
2014withMGD
New2014Scenario£2/£500
%of2014Base
MachineGrossWin£m £1,434.0 £1,434.0 £1,908.6 £598.8
MGD£m £249.7 £286.8 £381.7 £119.8
LBOProfit£m £627.4 £590.3 £628.7 -£308.7
Vulnerable Shops at Risk 2,455 2,726 2,039 7,997 91.7%
Vulnerable Employment at Risk
11,013 12,281 8,861 40,025 90.4%
Vulnerable Taxation at Risk£m
£206.4 £240.4 £203.3 £680.8 57.4%
ProfitperVulnerableShop£000s
£5.0 £2.8 £1.1 -£71.5
ABB analysis shows that 7,880 LBOs and 39,301 jobs would be at risk and shops would make an average £58,900 loss if
the B2 stakes was reduced to £2
Page 50
Asstatedearlier theABBdatashows that2,685LBOswere taking less than£19,500p.a. in2011.For
theprojected2014base,itwasestimatedthattherewere2,829LBOsatriskwhichwouldemploy12,658
people,contribute£266mintaxandonaveragemake£2,800inprofit.
RSBusinessSolutions’analysisshowsthat7,880LBOs(91.7%ofshops),39,301jobs(85.8%ofjobs)
wouldbeatriskandonaverageLBOSwouldmakea£58,900loss.
Question13(g)askswhattheimpactofareductionwouldbeintermsofhighstreetbettingshops.
Theclosureofaround85%ofshopswouldaddthousandsofsquarefeetofunusedspaceontothe
HighStandresultinthelossofnearly£60millioninbusinessratestolocalcouncils.Thelossof40,000
jobs–manyamongst18-24yearoldsandpart-timefemaleworkers-wouldaddtounemployment
ratesof20%and7%respectivelyandincreasetheTreasury’sbenefitsbill.
TheriskanalysisinTable4showthat,oftheestimated£808.3mtaxationunderthenewscenario,the
Treasuryareatriskoflosing£652.9minrevenue.Thisisduetoaround85%ofLBOsmakinglessthan
£20,000profiteach.
Thetableshowsthe2014Baseleveloftaxationat£1,195mwhereasinthenewscenariothishasfallen
to£808.3m.ThisfallisduetolossinMGDof£234mduetothedeclineinmachinegrosswininthenew
scenarioandthedeclineincorporationtaxof£152.7mduetothefallinprofitsfrom£642.9minthe2014
basetoalossof£207mwithonlysomeoftheBig5VeryLargeShopsstillmakingaprofit.
Table2:RSBusinessSolutionsTaxationSummaryofB2StakeReductionto£2
TheRSBusinessSolutions riskanalysisshows that the industrywouldnotbeviable in itscurrent form
underthenewscenarioduetotheimportanceofmachineincomeinsupporting8,722LBOs,44,297jobs
and£1.2bnintaxation.
Notonlywouldthisproposaldecimatethenumberofbettingshopsinthecommunity,itwoulddeprivethe
vastmajorityofoursector’s8millioncustomersof responsibleenjoymentofgamblingproductson the
highstreetanddrivemanytolessregulatedandillegalenvironments.TheABB’sevidenceinthischapter
hastobetakenintoconsiderationandgivenaheavyweightingwhentheGovernmentisconsideringthe
consultationresponsestoquestion13(g).
Further unintended consequences
FurtherunintendedconsequencesoftheproposaltoreducetheB2stakewouldinclude:
• Reducedindustrycontributionstothehorseracinglevyandgreyhoundracing
TheDeloittereportshowsthatbetween2008and2011horseracingfellby21%to42%oftotalgrosswin
2014Base
2014NewScenario
Lost due toNew scenario
2014NewScenarioatRisk
CorporationTax(£m) £157.5 £1.8 -£155.8 £0.7
TotalOtherVAT(£m) £144.4 £144.4 £0.0 £130.3
MachineTax/MGD(£m) £381.7 £119.8 -£262.0 £107.6
All Other Taxation £502.4 £502.4 £0.0 £442.3
TotalTaxation£m £1,186.0 £768.3 -£417.7 £680.8
association of british bookmakers ltd
Page 51
OTC.TheABBgraphbelowofUKhorseracingprofitposttheintroductionofgrossprofittaxin2001shows
thisisalongtermtrendwhichisexpectedtocontinue.Thebettingindustryhelpstokeepinterestalivein
horseracingandalsocontributes£150millioninlevyandmediapayments.
>TheDeloittereportalsoshowsthatgreyhoundracingfellby24%to18%oftotalgrosswinOTC.The
bettingindustryalsomakesxinvoluntarycontributionstogreyhoundracing.
Theabovenumbersonshopclosuresshowclearlythatwith92%ofLBO’satriskitisnoexagerationtosay
thatthiswouldspelltheendofaviableracingandgreyhoundindustryandassociatedtelevisioncoverage.
• Reducedcontributionstothetreatmentofproblemgambling.
TheRGThascollected£15millionoverthelastthreeyearsandisoncoursetoincreaseannual
contributionsby20%to£6millionin2013.Thissibasedon8,700LBOsmakingcontributions
andtheirvitaldonationswouldeblostasaresult.
• Increasedillegalgambling
Asanyreductioninstakesandprizeswouldreducesupply,andnotsuppressdemand,itisreasonableto
assurethattherewouldbeasignificantriseinillegal,unregulated,untaxedandsociallyirresponsiblebetting
andmachineoperators,thusreducingnotenhancingplayerprotection.
ItiswelldocumentedthatillegalgamblinghasbeenprevalentintheUKforalongtime.Forexample,inthe
pasttheIRAutilisingbothlegalandillegalslotmachinesinpubstofundtheiractivities(J.Adams.‘The
FinancingofTerror’.inP.WilkinsonandA.M.Stewart(eds),ContemporaryResearchofTerrorism(Aberdeen:
AberdeenUP1987)p.401.and2002seizureofillegalmachinesinNorthernIreland:http://www.4ni.co.uk/
northern_ireland_news.asp?id=7758
TheGamblingCommissionrecogniseitisalreadyanissuebypublishingaguideforsmallbusinessesas
wellasaguideforlicensingofficers:
http://www.gamblingcommission.gov.uk/pdf/Illegal%20siting%20of%20gaming%20machines%20-%20
November%202012.pdf
TheGamblingCommission’sdataalsoshowsit’salreadyamajorissueacrosstheUK.Around160illegalB2
machineswereseizedinthelasttwelvemonthsincluding138inLondonandmorethan20machinesseized
innortherncities.Thisdataonlycaptures theoperations thatwehaveaworkingknowledgeof through
£500m
£400m
£300m
£200m
£100m
-£100m
2007 2008 2009 2010 2011 2012 2013 2014 2015£0m
UK Horseracing pro�t post GPT
Page 52
ourdirectinvolvement.TheGamblingCommissionstatethattheydonotholdinformationonthenumbers
seizedbythepolice,HMRCorLicensingAuthoritiesasthisisnotreportedonasamatterofcourse.This
meansthisisonlythetipoftheiceberg.
TheABBbelievestheoverallfigureismuchhigheranddemandforillegalB2gamblingmachineswouldonly
befuelledifB2maximumstakeswerereducedto£2.Thiswouldhaveseriousramificationsforcrimelevels,
policeresourcing,regulatorycomplianceandlocalauthorities.
B3 gamesThe LBO sector needs strong backing from Government, both in the regulatory and fiscal contexts, to
maintainandgrowitsbusiness.Forthisreason,theincreasedstakelevelswhichbecameeffectiveforB3
machines inJuly2011weremostwelcomeandwehopethat themodestenhancementssoughtby the
gamblingindustryasawholethroughthisReviewwillmeetwithapproval.
Whilst there isadeclining trend inB2gameGrossWin theB3gamesareclearlygrowing.Wetherefore
proposetakingtheincreasedstakeof£2permittedonB3machinesin2011alittlestepfurther(to£3),as
indicatedinourpre-consultationsubmission,andmatchingthatmeasurewithacorrespondingincreasein
themaximumavailableprizefrom£500to£1000,inlinewithsimilarpercentageincreasesbeingproposed
byothersectorsforgamingmachinessuchasB1.
GiventhechangescouldbeimplementedinNovember2013andanalystspredictthateconomicconditions
will continue tobedifficult; thismeasure couldprovideLBOs, and smallerbusiness inparticular, some
incentiveforgrowthinthenextfewyears.Evidencesincethelastincreasewasimplementedsuggeststhat
averagestakeonB3shasincreasedbyaround10%.
GrossgamingyieldfromB3machinesperweekisapproximately33%ofthatgeneratedbyB2machines
perweekanditispossiblethatanincreasedB3prizelevelof£1000mightincreasethisratiobymakingthe
productsthatmuchmoreattractive.Moreover,ifthecustomercannowbet£2towin£500onaparticular
gamingoutcomewherehecouldhithertoonlybet£1,itseemslogicalattheserelativelylowlevelsthatthe
“win”opportunityshouldbeincreasedinlinewiththestake.
Furthermore, thecustomerexperiencewouldbeenhanced.An increasedmaximumstakewouldpermit
theoperator toprovidemoreopportunitiesforsmallandmedium-sizedpayouts,whicharepopularwith
customersandenhancetheentertainmentvalueofplayingthemachines.
association of british bookmakers ltd
Any reduction in stakes and prizes would reduce supply but not suppress demand, which would lead to a significant rise in illegal, unregulated, untaxed and socially irresponsible betting and machine operators, thus
reducing not enhancing player protection.
Page 53
CHAPTER 13RESPONSES TO STATUTORY CONSULATATION QUESTIONS ThischapterprovidestheABB’sformalresponsetotheGovernment’squestionsonallpackagesand
machines’stakesandprizes.Weprovidedetailedanswerstoquestions13-16andforthemostpart
referstothejointindustrysubmissionand/orsubmissionsbyothertradebodiesonothermachine
categories.
Question 1: Howoftenshouldgovernmentschedulethesereviews?Pleaseexplainthereasonsforany
timeframesputforwardforconsideration.
We would welcome an unbiased and balanced assessment of stakes and prizes every
three years. As this is the 2012 Triennial Review we would like to see the next Triennial
Review in 2015 as we believe the whole gaming machine community, which will have
by then enhanced its responsible gambling reputation, will need further incentives for
business growth.
Question 2: Thegovernmentwouldliketohearaboutanytypesofconsumerprotectionmeasuresthat
havebeentrialledinternationally,whichhavebeenfoundtobemosteffectiveandwhether
thereisanyconsensusininternationalresearchastothemosteffectiveformsofmachine-
basedinterventions.Thegovernmentwouldalsoliketohearviewsaboutanypotential
issuesarounddataprotectionandhowthesemightbeaddressed.
It is important to note that there are already substantial regulatory controls in place in
Britain which go further than most jurisdictions. This includes Gambling Commission’s
Licensing Conditions and Codes of Practice (LCCP) and the Gaming Machine
Technical Standards.
In Chapter 6 of our submission we look at examples of gaming machine regulation in
other countries and measures aimed at reducing problem gambling.
From country to country, broadly, the same principles are being applied wherever
action is being taken to prevent or help problem gambling, focused on customer
interaction and working with the sufferer to help, including self-exclusion.
With the exception of Norway, in none of these cases are there specific procedures for
gaming machines and nowhere is the level of stakes and prizes for games machines
of whatever form they take used as a method for preventing problem gambling.
The Norwegian example shows that even with a huge state involvement, there is no
evidence to show that stakes and prizes has successfully reduced problem gambling,
in fact, the evidence shows a slight increase.
The ABB and its members believe that the best way of tacking problem gambling is
to ensure that highest levels of social responsibility and cutting edge protocols are
in place to help identify and protect those at risk of problem gambling. The ABB is
committed to developing a wide ranging code for responsible gambling in LBOs.
This code will not just be about machine (B2) play but will look at consumer protection
within LBOs in a wider context. However, in terms of machines, the focus will be
Page 54
on helping players to gamble responsibly through self-limiting features such as time
or cash limits per session, automatic time reminders and also staff training and
interventions based upon machine play data being visible to staff. This is a complex
area and the ABB is committed to “getting it right” not “doing it quickly”. To be
worthwhile consumer protection and harm prevention measures must be workable
and effective. The ABB has engaged a leading academic in this field to advise
the ABB on its “code for responsible gambling”. Whilst this will be a voluntary code,
which goes well beyond the statutory requirements, the ABB will also seek advice and
input from the Gambling Commission and the Responsible Gambling Strategy Board.
The ABB would hope to have its “code for responsible gambling in LBOs” in place
towards the end of 2013 and the code would build upon existing best practice and
incorporate many features which are currently being developed by individual
operators.
Question 3: Thegovernmentwouldliketohearfromgamblingbusinesses,includingoperators,
manufacturersandsuppliersastowhethertheywouldbepreparedtointhefuturedevelop
trackingtechnologyinordertobetterutilisecustomerinformationforplayerprotection
purposesinexchangeforpotentiallygreaterfreedomsaroundstakeandprizelimits.
As outlined in question 2 we believe that a wide ranging “code for responsible
gambling in LBOs”is the way forward. It’s not just about machines and player tracking.
It’s about worthwhile consumer protection and harm prevention measures that are
appropriate, workable and effective. As we outline in chapter 9 the costly introduction
of player tracking designed to manage spend and time on machines is not guaranteed
to work.
The ABB shares concerns voiced by members that the question implies that there is
a ‘trade off’ between potentially greater freedoms around stakes and prizes for
high stake gaming machines (i.e. increases) and tracking technology. The question
also wrongly suggests that there needs to be greater player protection for B2s.
This also contradicts the consultation’s conclusion which explicitly states that “there
is no clear evidence to indicate whether B2 gaming machines have had any significant
effect on the level of problem gambling in Britain”.
Package 1:
Question4: DoyouagreethatthegovernmentisrighttorejectPackage1?Ifnot,whynot?
Yes. We refer to our preferred option in response to question 6.
Package 2:
Question5: DoyouagreethatthegovernmentisrighttorejectPackage2?Ifnot,whynot?
Yes. We refer to our preferred option in response to question 6.
Package 3:
Question6: Doyouagreewiththegovernment’sassessmentoftheproposalsputforwardbythe
industry(Package3)?Ifnot,pleaseprovideevidencetosupportyourview.
Yes, we welcome Package 3 as this was proposed to the DCMS in a joint industry
submission in 2011
We welcome acknowledgement that the causal link between B2s and problem
gambling remains poorly understood and that without such evidence there is a risk
association of british bookmakers ltd
Page 55
of introducing disproportionate and untargeted regulation that could cost jobs.
Chapter 13 of our consultation submission highlights the impact of a reduction in B2
stakes and prizes on our industry and Chapter 7 analyses the existing research on
B2s.
However, there are aspects of the Government’s assessment of Package 3 that we
do not agree with. We strongly disagree with the statement: ‘although the association
between gaming machines, particularly high stake, high prize machines and gambling-
related harm is widely accepted’. There is no empirical evidence to support such
claims. From the available research, there is no consensus on the extent to which
EGMs (including those considered the high-stake, high-prize gaming machines in
Great Britain) cause gamblers to become problem gamblers (Griffiths 2008).
Although we are not seeking any change to the stake and prize levels as they
currently apply to B2 machines, we do propose taking the increased stake of
£2 permitted on B3 machines in 2011 a little step further (to £3) and matching that
measure with a corresponding increase in the maximum available prize
from £500 to £1000. This is in line with similar increases being proposed for other
machines. We put forward our case for an increase in stakes and prizes on B3s in
Chapter 9.
Package4:CategoryB1
Question7: Doyouagreewiththegovernment’sproposalforadjustingthemaximumstakelimitto£5on
categoryB1gamingmachines?Ifnot,whynot?
We support the NCIF recommendation of £5. We support and refer to the NCIF and
pre-consultation joint gambling industry submission (Package 3)
Question 8: Doyouconsiderthatthisincreasewillprovidesufficientbenefittothecasinoand
manufacturingandsupplysectors,whilstalsoremainingconsistentwiththelicensing
objectivesoftheGamblingAct?
An increase in the maximum stake limit to £5 and is likely to provide the incentives for
growth for the casino and machine manufacturing sectors. We support and refer to
the NCIF and pre-consultation joint gambling industry submission. ( Package 3)
Question9: Doyouagreewiththegovernment’sproposalforadjustingthemaximumprizelimitonB1
gamingmachines?
We support the NCIF recommendation of £10,000. We refer to the NCIF and pre-
consultation joint gambling industry submission (Package 3)
Question 10:Ifso,whichlimitwouldprovidethemostpracticalbenefittocasinoandmachine
manufacturerswithoutnegativelyimpactingonthelicensingobjectivesoftheGamblingAct?
We support the NCIF recommendation of £10,000. We support and refer to the NCIF
and pre-consultation joint gambling industry joint submission (Package 3).
Question 11:Arethereanyotheroptionsthatshouldbeconsidered?
No.
Question 12:Thegovernmentwouldalsoliketohearfromthecasinoindustryandotherinterestedparties
aboutwhattypesofconsumerprotectionmeasureshavebeentrialledinternationally,which
havebeenfoundtobemosteffectiveandwhetherthereisanyconsensusininternational
researchastothemosteffectiveformsofmachine-basedinterventions.
See our answer to question 3. We also refer to the NCIF and pre-consultation joint
gambling industry submission (Package 3)
Package4:CategoryB2&B3
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Question13(aandb): DoestheoverallstakeandprizelimitforB2machines,inparticularthevery
widerangeofstakingbehaviourthata£100stakeallows,giverisetoencourageaparticular
riskofharmwhocannotmanagetheirgamblingbehavioureffectively?Ifso,inwhatway?
The answer is categorically no. There is no empirical evidence to suggest that the
current limits on stakes and prizes for B2 machines give rise to or encourage a
particular risk of harm to people who cannot manage their gambling activity
effectively. The Government proposes in the review’s impact assessment to maintain
B2 stakes and prize limits as they would represent no risk to player protection . As
is outlined in the impact assessment the Government undertook a qualitative
assessment of the relative risk across machine gaming categories, with reference
to the threat of problem gambling both in vulnerable adult population and amongst
children. The Government concluded that the impact of B2 machine stakes and prizes
levels in packages 2, 3 and 4 would represent “low risk” in relation to problem
gambling. We agree and we have explained the background to
our view in Chapters 7 and 8. Evidence clearly shows that gambling addiction is
person centric and not product led.
Question13(c):Whostakeswhere,whataretheproportions,whatistheaveragestake?
There are currently around 140,000 gaming machines in operation in the UK across
all gambling sectors. Approximately 35,000 of these gaming machines are in betting
shops and the number has remained stable for 3 years according to Gambling
Commission data.
As outlined in Chapter 4 they are popular games with customers who like playing
electronic gaming machines. However, ABB2010 BGPS data clearly shows that
only 4% of the adult population play on B2s and 74% of B2 players play less than
once a month. According to Kantar Media data oOnly 24% of betting shop customers
just play on electronic gaming machines. Of these customers 37% play roulette games
and 29% other casino style games (29% play B3 games). The average play per spin is
40 seconds although the minimum speed cycle is 20 seconds.
It is important to note that B2 is a popular but infrequently played product with 74%
of B2 players play once a month or less according to the 2010 BGPS. Kantar Media
data shows that B2 machine players gamble on a range of products. Only 24% of
betting shop customers just play on gaming machines. In fact, 50% of machine players
are also regular horse racing bettors and 57% of machine players are also regular
football bettors.
Why do machine players visit a betting shop? According to ABB’s data 22% visit LBOs
to make money, 19% because it’s fun, 15% to pass the time, 15% the thrill of winning,
8% meet friends, 8% for instant satisfaction, 6% watch sport and 3% to beat the
bookie.
According to 2010 BGPS B2 Gaming Machines players are more likely to be educated
to degree level or higher than to have no formal qualifications, and the overwhelming
majority had GCSEs, A-Levels or another professional qualification.
Furthermore, those who are unemployed are far more likely to participate in other
forms of gambling than playing B2 Gaming Machines. Of those surveyed in the 2010
BGPS 53% said they gambled on the national lottery, 32% scratchcards, 23% slot
machines, 21% Horse races, 18% private betting, 18% sports betting, 16% another
lottery, 15% online gambling, 14% bingo and 12% said they played on B2 gaming
association of british bookmakers ltd
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machines.
Kantar Media data also shows that
•Morethanhalfofgamingmachineplayersare(56.7%)age25–44,oneineightare
age18–24(12.7%)andoneineightareolderthan55(12.7%).
•Fourofeveryfivegamingmachineplayers(77.9%)workfullorparttime,onein
twenty two (4.5%) are students, one in fifteen (6.5%) are retired, one in eighteen (5.7%)
are not working but are not unemployed, and one in twenty (5.2%) are unemployed
•Twoofeveryfivegamingmachineplayers(40.9%)havesupervisoryorintermediate
managerial level jobs, one in eight (12.2%) are semi or unskilled workers, one in
fourteen (7%) have higher managerial / professional jobs, others make up 13.7%
(retired, students, homemakers, unemployed etc.).
•Halfofregulargamingmachineplayers(48%-52%)aresocialgradeABC1(lower
middle class, middle class, & upper middle class) and more than half (57%) of
occasional players are ABC1.
•Gamingmachineplayersearn£20,000to£40,000perannum–onaverage£33,300
–6.7%morethanthosewhoparticipateinotherformsofgambling.Moregaming
machine players earn over £40,000 per annum (30.3%) than those who earn less than
£20,000 (26.7%) and one in ten earn (9.7%) earn more than £60,000 per annum.
As outlined in Chapter 3 bookmakers do not target vulnerable communities. The
number of betting offices per square mile directly correlates to the population per
square mile. ABB research shows that 84% of bookmakers are in retail and
commercial centres as bookmakers are located in places that best serve non-
residential customers.
It is important to remember that B2 games are a high turnover/very low margin
product. Whilst an average of £322 is staked per hour on EGMs in LBOs, ABB data
shows that the average session time on an EGM is 8.9 minutes and the average
spend per session is £7.55. On average there are 1.48 sessions spent on machines
per hour and the average spend per machine per hour is therefore £11.13 which is
akin to the average over-the-counter sports bet. However, as with all leisure products,
different customers have different budgets which they are free to spend as they
wish. We have customers ranging from loyal pensioners with low incomes to high
net worth individuals who like high stakes. What these customers have in common is
that the vast majority play responsibly and wisely. It is worth remembering that there
is no cap on how much a customer can stake over-the-counter on horseracing,
greyhound racing or football but stakes on Gaming Machines are limited to £100 on
a B2. Whereas B3 machines offers a jackpot which is 250x the maximum stake of
£2, B2 casino style games only offer a jackpot which is 5x the maximum stake at
£100.
Due to the high RTP the odds of winning on B2 are higher than B3s and higher
stakes are intrinsically linked to the attractiveness of the casino style product
although the stakes are still much lower than being played at the roulette game in
casinos. The maximum amount you can spend on a number is around £13 so this
also means that it makes sense for the stake to be higher. The nature of the B2 game
encourages stake spreading (distribution of stakes across numbers) to a maximum of
£100.
While a stake of £100 may sound like a lot of money it is important to remember that
Page 58
the Return To Player rate is 97.3 %. For example, on Roulette a customer may choose
to bet £3 on a combination of 24 numbers (£72) but their chances of winning are
relatively high at 24/37, or about 63%, and if their bet wins they may choose to stake-
up betting £4 on 24 numbers (£96). While another customer may only bet 20 pence
on6numbers(£1.20)onceaweek–abitliketheNationalLotterybutwithfarmore
chance of winning.
The average B2 stake per spin £16.15 whilst the average B3 stake per spin £0.86 The
overall average B2/B3 stake combined is £5.64.
Question13(d):Whatcharacteristicsorbehavioursmightdistinguishbetweenhighspendingplayers
andthosewhoarereallyatrisk?
This is not a question with straightforward answers. And the question should be
broader than this. Regulator, Academics and clinicians have highlighted the strong
association between problem gambling and participating in a wide range of different
gambling activities. It is not just high stakers that are at risk of problem gambling.
This risk could equally apply to a customer who places stakes of £2. Reducing stakes
would be a blunt instrument where the evidence in the UK and across the world
shows that enhanced customer interaction would be more effective.
The ABB recognises that further research is required to understand better how people
behave when playing these machines and what helps people to stay in control and
play responsibly. We therefore welcome the fact that our members have and machine
operators agreed with the Responsible Gambling Trust to give full access to NatCen
as part the biggest ever programme of academic research into Category B gaming
machines in Britain which can be found in betting shops, bingo halls, adult gaming
centres and casinos.
Question13(e) Ifthereisevidencetosupportareductioninthestakeand/orprizelimitsforB2
machines,whatwouldanappropriateleveltoachievethemostproportionatebalance
betweenriskofharmandresponsibleenjoymentofthisformofgambling?
There is no empirical evidence to support a reduction in the stakes and prizes for B2
machines.
The BGPS 2007 and 2010 and subsequent secondary analysis confirms that there is no
causal link between problem gambling and B2 machines.
This conclusion is further supported by research conducted in 2012 by NatCen, for the
Gambling Commission. This research is another secondary analysis of the 2010
Prevalence Study, this time looking at machines in particular. The Gambling
Commission (March 2013) conclude that the research:-
“is consistent with the earlier analysis in the BGPS 2010 which similarly highlighted
the strong association between problem gambling and participating in a wide range of
different gambling activities.”
The Gambling Commission conclude that:-
“The report suggests that a joined up, cross venue/sector approach to the
development of harm-minimisation strategies and observation of player behavior
might be beneficial.”
The above pieces of research clearly confirm that it is wrong, and without (evidential)
basis, to single out LBOs or B2 machines (or machines in general) as causing problem
gambling or gambling related harm.The ABB’s data further supports this
position. Over 70% of B2 machine players play once a month or less, the average
association of british bookmakers ltd
Page 59
session of pay is 9 minutes and the average spend per session is £7.55.
There is no empirical evidence that a reduction in stakes and prizes on B2, or indeed
other, machines will have any effect in reducing problem gambling or minimising
gambling related harm. The vast majority of academics and clinicians in this area
believe that as problem gambling is about the person not the product, stakes and
prize limits are a blunt instrument. This is especially true when a gambler can bet
£20,000 on a football match or a horse / greyhound race, or £2000 on a single roulette
number in a casino or £20,000 on a hand of blackjack in a casino or bet £20,000 to win
over £700,000 in an online casino.
As outlined in Chapter 7 studies into problem gambling related to B2 machine
use have suggested care should be taken in how the conclusions are interpreted.
For example, Professor Orford, Wardle et al state that there are a number of
limitations to their secondary analysis of the BGPS 2010 survey including gross
approximations due to the nature of the data collected and estimates that are likely to
be very sensitive to the answers about frequency and spend provided by relatively
small numbers of problem gamblers.
Question13(f) Whatimpactwouldthishaveintermsofproblemgambling?
Our answer to question 2 refers. As we have indicated in chapter 9 there is also no
empirical evidence in other jurisdictions to suggest that any lower level would have an
impact on the risks to problem gambling or levels of problem gambling. It would also
not provide an appropriate balance between risk of harm and responsible enjoyment
of this form of gambling.
Question13(g) Whatimpactwouldtherebeintermsofhighstreetbettingshops?
The Government does not propose different levels of stakes and prizes and has not
included such levels in its impact assessment. As indicated in Chapter 7, the ABB
finds it difficult to assess any impact. However, if the Government was to accept the
proposal of some stakeholders to reduce the stake from £100 to £2 and keep the
prize at £500, in line with B3 levels, we have outlined in Chapter 12 in detail how this
hypothetical example would have a catastrophic impact on the number of betting
shops and jobs in the UK.
RS Business Solutions, commissioned by the ABB analysis shows that 7,880 LBOs
(91.7% of shops), 39,301 jobs (85.8% of jobs) would be at risk and on average LBOs
would make a £58,900 loss. The Treasury stands to lose £650 million.
The closure of around 85% of shops would add thousands of square feet of unused
space onto the High St and result in the loss of nearly £60 million in business rates
tolocalcouncils.Thelossof40,000jobs–manyamongst18-24yearoldsandpart-
time female workers - would add to unemployment rates of 20% and 7% respectively
and increase the Treasury’s benefits bill.
The reduction would also have a significant impact on the horseracing and greyhound
industries and lead to an increase of activity on the illegal gaming markets.
Not only would this proposal decimate the number of betting shops in the community,
it would deprive around the vast majority of our sector’s 8 million customers of
responsible enjoyment of gambling products on the high street and drive many to
less regulated and illegal environments. The ABB’s evidence in this chapter has to
be taken into consideration and given a heavy weighting when the Government is
considering the consultation responses to question 13(g).
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Question14(a) Arethereotherharmmitigationmeasuresthatmightofferabettertargetedandmore
effectiveresponsetoevidenceofharmthanreductionsinstakeand/orprizeforB2
machines?
Yes. As set out above we do not believe there is any evidence or justification for a
reduction in stakes and prizes for B2 machines. Apart from Norway there is
no jurisdiction that has attempted a reduction in stakes and prizes as a harm
mitigation measure and problem gambling has increased in Norway subsequently.
As outlined in Chapter 7 it is difficult to judge the impact of other potential measures
when there is insufficient research available. We therefore welcome the new research
into B gaming machines commissioned by the Research Gambling Trust and funded
by the whole gaming machine industry.
We also believe that the British Gambling Prevalence Survey conducted by NatCen
in 2010 is the most comprehensive independent, peer reviewed and respected
research available about problem gambling in the gambling industry in the UK. We
thereforesuggestthatthissurvey–usingthesamemethodologyasin1999,2007and
2010, is undertaken again by NatCen in 2014. The betting industry is also committed to
funding this new study.
We would welcome further dialogue with gambling charities and other stakeholders
on other harm mitigation measures that could be more effective.
As we have said in question 2 as part of our aim to achieve continuous improvement in
our responsible gambling procedures our members have been developing policies
in this area and we would like to develop a new Responsible Gambling Strategy. In
Chapter 11 we have outlined our aim to explore the effectiveness of a number of
principles in consultation witha leading academic in this field, the Gambling
Commission, gambling charities and other stakeholders.
On B3 machines, we do not agree that changes in stakes and prizes will lead
to an increase in new people gambling. We believe that this will improve the choice of
options for existing customers and will most probably boost revenue derived from the
same customers. As our graph shows the trends are showing more B3 machine profit
growth and the average amount that might be staked could go up slightly as a result
of an increase in stakes and prizes. (Chapter 3, page 25)
Question14(b) Ifso,whatistheevidenceforthisandhowwoulditbeimplemented?
We refer to our answer to question 3.
Question14(c) Arethereanyotheroptionsthatshouldbeconsidered.
No
Question15DoyouagreewiththeGovernment’sproposaltoretainthecurrentmaximumstakeandprize
limitsoncategoryB3machines?Ifnot,whynot?
No. The Government indicates that there are gaps in existing evidence on B3 stake
limit changes made in 2011 and specifically mentions the impact on AGCs and bingo
premises. We ask the Government to also take into account the impact of B3 machine
income on LBOs and provides the evidence in chapter 12.
On B3 machines, we do not agree that changes in stakes and prizes will lead to
an increase in new people gambling. We believe that this will improve the choice
of options for existing customers and will most probably boost revenue derived
from the same customers. As our evidence shows in chapter 12 there is clearly an
increase in B3 machine profit and the average amount that might be staked could go
association of british bookmakers ltd
Page 61
up slightly as a result of an increase in stakes and prizes.
ABB member data since the last increase was implemented suggests that the average
stake on B3s has increased by around 10%.
We propose taking the increased stake of £2 permitted on B3 machines in 2011 a little
step further (to £3) and matching that measure with a corresponding increase in the
maximum available prize from £500 to £1000, in line with similar increases being
proposed for other machines. Given the changes could be implemented in 2013 and
analysts predict that economic conditions will continue to be difficult; this measure
could provide some incentive for growth in the next few years.
Question16 Arethereanyotheroptionsthatshouldbeconsidered?
No
Package4:CategoryB3A
Question17:Doyouagreewiththegovernment’sproposalforadjustingthemaximumstakelimitto£2on
categoryB3Agamingmachines?Ifnot,whynot?
WesupporttheGovernment’spositionandrefertopre-consultationjointgambling
industrysubmission(Package3)
Question 18:Doyouconsiderthatthisincreasewillprovidesufficientbenefittomembers’and
commercialclubs,whilstalsoremainingconsistentwiththelicensingobjectivesofthe
GamblingAct?
Yesandwerefertothepre-consultationjointgamblingindustrysubmission
(Package3)
Question19:Arethereanyotheroptionsthatshouldbeconsidered?
No
Package4:CategoryB4
Question 20:Doyouagreewiththegovernment’sproposalforadjustingthemaximumstake
to£2andmaximumprizeto£400forcategoryB4machines?Ifnot,whynot?
WesupporttheGovernment’spositionandreferpre-consultationjointgambling
industrysubmission(Package3)
Question 21: Doyouconsiderthatthisincreasewillprovidesufficientbenefittomembers’and
commercialclubsandotherrelevantsectors,whilstalsoremainingconsistentwiththe
licensingobjectivesoftheGamblingAct?
Yesandwerefertothepre-consultationjointgamblingindustrysubmission(Package
3)
Question 22: Arethereanyotheroptionsthatshouldbeconsidered?
No.
Package4:CategoryC
Question 23:Doyouagreewiththegovernment’sproposaltoincreasethemaximumprizeto£100for
categoryCmachines?
Yes.TheABBcontinuestosupportthejointindustrysubmissionasoutlinedin
package3.Anincreaseinthemaximumprizelimitto£100islikelytoprovidethe
incentives for growth for the pub and machine manufacturing sectors. We support
andrefertotheBPPAsubmissionandpre-consultationjointgamblingindustry
submission(Package3)
Question24:Doyouconsiderthatthisincreasewillprovidesufficientbenefittoindustrysectors,whilst
alsoremainingconsistentwiththelicensingobjectivesoftheGamblingAct?
Werefertoquestion24.WesupportandrefertotheBPPAandpre-consultationjoint
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gamblingindustrysubmission(Package3)
Package4:CategoryD
Question25:Doyouagreewiththegovernment’sproposaltoincreasethemaximumstaketo£2andthe
maximumprizeto£60forcategoryDcranegrabmachines?Ifnot,whynot?
Yes.TheABBcontinuestosupportthejointindustrysubmissionasoutlinedin
package3.Anincreaseinthemaximumstakelimitto£2andprizeto£60islikelyto
provide the incentives for growth for the FEC and machine manufacturing sectors.
However,weagreewiththeindustrythatthisshouldnotresultinahighertaxburden.
Prizeincreasescouldpushsuchmachinegamesintothehigherstandardrate
ofMachineGamesDuty(MGD).ThethresholdsforthelowerrateofMGDshould
thereforebeincreasedinlinewithprizeincreasestoensureCategoryDmachinesdo
notbecomesubjecttothe20%rateoftaxationatthenextBudget.
WesupportandrefertotheBPPAsubmissionandpre-consultationjointgambling
industrysubmission(Package3).
Question26:Doyouagreewiththegovernment’sproposaltoincreasethemaximumstaketo20pandthe
maximumprizeto£6forcategoryDcomplex(reelbased)machines?Ifnot,whynot?
WesupportandrefertotheBPPAsubmissionandpre-consultationjointgambling
industrysubmission(Package3).
Question27:Doyouagreewiththegovernment’sproposaltoincreasethemaximumstaketo20pand
themaximumprizeto£20(ofwhichnomorethan£10maybeamoneyprize)forcategoryD
coinpushermachines?Ifnot,whynot?
WesupportandrefertotheBACTAsubmissionandpre-consultationjointgambling
industrysubmission(Package3).
Question 28:Doyouconsiderthattheincreaseswillprovidesufficientbenefittothearcadesector,whilst
alsoremainingconsistentwiththelicensingobjectivesoftheGamblingAct?
WesupportandrefertotheBPPAsubmissionandpre-consultationjointgambling
industrysubmission(Package3).
Question29:Arethereanyotheroptionsthatshouldbeconsidered?
No.
Question 30:Doyouagreewiththemethodologyusedintheimpactassessmenttoassessthecosts
andbenefitsoftheproposedmeasures?Ifnot,whynot?(Pleaseprovideevidenceto
supportyouranswer)
Wehaveoutlinedourconcernsabouttheconsultationprocessinchapter14.
Question 31:Doyouagreewiththegovernment’sapproachtomonitoringandevaluatingtheimpactof
changestoinformfuturereviews?Ifnot,whynot?(Pleaseprovideevidencetosupportyour
answer)
Yes although we see no need for a separate timetable for B2 machines and outline our
viewsonthetimetableinquestion1.
Question 32:Whatotherevidencewouldstakeholdersbeabletoprovidetohelpmonitoringand
evaluation?
We have provided new evidence in our submission. The betting industry is also
committedtofundinganewindependentBGPSundertakenbyNatCenin2014.
Question 33:Arethereothersectorsinadditiontobingothatcurrentlyprovidegamingunderprizegaming
rules?
We refer to the Bingo Association submission.
association of british bookmakers ltd
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Question34:WeretheGovernmenttochangethestakeandprizelimits(includingaggregatelimits),
wouldthisencouragemoreoperatorstoofferprizegaming?
Yes,thiswouldprovideincentivesforgrowth.
Question35:Whattypeofproductswouldtheindustrylooktoofferasaresultoftheproposals?
Werefertothepre-consultationjointgamblingindustrysubmission(Package3)
Page 64
CHAPTER 14CONCERNS ABOUT THE CONSULTATION PROCESS • TheABBnotesthattheconsultationprocessappearstoexposeaclearpresumption
against B2 machines in betting shops.
• Theconsultationdocumentcouldbeconstruedashavingbeenwritteninalessthan
even handed way. We are seriously concerned about the bias and validity of the review’s
questionsonB2machines,inparticulargiventhedivergentapproachestakenbythe
Government in relation to different categories of gaming machines.
• WeexpecttheGovernmentwilldemonstratethatourconcernsareunfounded,and
toensurethattheresponsetothisconsultationiscarriedoutinaneven-handedand
transparent fashion.
• WenotethatanyproposalstoproceedwithaprecautionaryreductioninB2limitswould
requiretheGovernmenttoconductafurtherconsultationprocess-giveninparticular
that the current consultation provides no indication as to what any such reduction
maylooklike-andtopublisharevisedImpactAssessmentclearlysettingoutthe
Government’scost/benefitanalysisfortheproposal.
• Anyreductioninthepermittedstake/prizelimitsonB2machineswouldhave
disastrousconsequencesforbettingshopoperators.WetrustthattheGovernmentwould
not further countenance any negative changes without compelling and incontrovertible
evidencethatthiswouldresultinpublicprotectionbenefitswhichwouldoutweighthe
significantdetrimentaleffectthatsuchamovewouldhaveontheindustryandlocal
economies.
Wewouldliketomakeanumberofgeneralcommentsaboutsomeofthestatementsandquestions
containedintheconsultation,includingnotinganumberofseriousconcernsabouttheGovernment’s
approach.
Comments on Chapter 1
TheGovernmentisrighttostatethatthisreviewisamorecoherentapproachtostakeandprizeregulation.
WealsowelcometheGovernment’scommitmenttocreateconditionsforgrowthinthegamblingindustry
bystimulatingprivatesectorinvestment.IfthereisnochangeinstakesandprizesonB2machinesandan
increaseinstakesandprizesonB3machinestheseproposalswillhelptoprovideincentivesforgrowth.
If the industry’sproposalsare implemented itwill achieve theGovernment’saim toencouragemachine
manufacturerstodevelopnewproductsandbetterhelpoperatorsplanfutureinvestments.
Comments on Chapter 2 pages 8-10
TheGovernmentrightlypointsoutthatthepresentlevelofproblemgamblingacrossallgamblingsectors
isrelativelylowininternationaltermsat0.9%.However,itsaystheGovernmentdoesnotwanttoseeany
increaseinthisfigure.AlthoughweagreewiththisaiminprincipletheGovernmentdoesnothighlightthe
fact that the increase in gambling participation has been driven in recent years by the National Lottery
The consultation process appears to expose a clear presumption against B2 machines in betting shops
association of british bookmakers ltd
Page 65
andotherlotterieswhilstEGMparticipationhasdroppedslightlyandproblemgamblingrelatedtoEGMs
hasdroppedby20-25%.Theanswertoanincreaseinparticipationandproblemgamblingratescannot
thereforenecessarilybefoundinincreasedregulationofEGMs.
TheGovernmentmentionsintheconsultationthatsince2007interventionstoamendstakeandprizelimits
havebeentargetedtowardscertaincategoriesofgamingmachineinresponsetolobbyingfromindividual
sectorsseekingmoreflexibilityinordertopreventclosuresofpremisesandjoblosses.Consequently,stakes
oncategoryCandB3machineswereincreased.Likewise,intheinterestoffairandbalancedapproachtoall
gamblingsectors,thebettingsectorislookingforasimilarflexibilityfromGovernmentonitsBmachinesin
thistriennialreview.WeputthecasetoGovernmentinchapter7thatthisisnecessarytopreventclosures
ofpremisesandjoblossesonacatastrophicscale.
TheGovernmentalsostatesthatthesalesvalueformostcategoriesofgamingmachineareonanegative
pathwiththenotableexceptionofB2machines.Wehaveshownevidenceinchapter7thattheB2machine
trendisactuallyslightlydecliningandisdangerofgoingintoanegativeandfatalspiralifthestakesand
prizesarereduced.
TheGovernmentsays thatwhilstarcadeandpubsectorsarecontinuing tostruggle, thebettingsector
appearstobeinastrongposition.Inchapter7ofoursubmissionweshowthatthestateoftheindustryis
actuallyfarlessbuoyantthansomestakeholdersbelieve.Withathirdofallshopsbeingsmallsizedretail
outletsandmakingonaveragearound£15,000profitperyeartheyareinaveryvulnerableposition.And
singleshopoperatorsareparticularlyatriskastheyonlymakearound£92perweek.ABBdatashowsthat
in2011thenumberofsingleshopoperatorsfellby10%.
TheGovernmentmentions that therearesomesectorswhere the relativestability suggests that further
growthandthebenefitsthiswouldbringintermsofrevenuesandjobscouldbeachievedwithrelatively
minimalrisktopublicprotectionobjectives,suchasbingoandcasinosectors.TheLBOsectorisaheavily
regulatedsectoranditsmachinesarerelativelylowriskasfarasproblemgamblingisconcerned,asstated
in the consultation’s regulatory impact assessment. We therefore believe our sector falls into the same
categoryasbingohallsandcasinos.Takingaconsistent,fairandeven-handedapproach,weseenobasis
onwhichtheGovernmentcanexcludeusfromthisgroupinthisregard.
Weagreewiththenewapproachproposedinthistriennialreview,aimedatlearningfromharmprevention
andexploringthemoreeffectivetargetingofregulationbyusingnewtechnologiesandconsumerinformation
asthiscouldindeed,astheGovernmentsays,givemorescopetolesseningblanketcontrolslikecentrally
imposedlimitstostakeandprizelevels.WerefertosuchanapproachinChapter11wherebythebetting
industryhighlightsexistingandnewmeasureswhichcouldhelpimprovecustomerinteractionandconsumer
information.
Comments on Chapter 2 page 22
TheABBagreeswiththeGovernmentthatB2machinesareimportanttotheeconomicviabilityofmany
betting shops, and associated economic investment and employment. We therefore agree with the
The LBO sector is a heavily regulated sector and its machines are relatively low risk as far as problem gambling is concerned, as stated in
the consultation’s regulatory impact assessment.
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Government’scurrentproposaltoretaintheexistinglimitsonB2s.Thereviewmentionspersistentconcerns
frommanystakeholdersand localcommunitiesabout thesemachinesandpotential impactonproblem
gambling.Wearenotawareofmanystakeholdersandlocalcommunitiesexpressingconcern.Weareaware
ofsomestakeholdersandlocalcouncils,particularlyintheinnercityLondon,voicingpublicconcern,in
manycasesrelatingtoplanningpowers,butthisisnotrepresentativeofalltownsandcitiesintheUK.The
factthatthisisaminorityconcernisillustratedbythefactthattheGamblingCommissiononlyreceived45
complaintsfromlocalauthoritiesin2012(onatotalof8700shops).
We are aware that there have been repeated calls from anti-betting campaigners for a reduction in the
stakefrom£100to£2andkeeptheprizeat£500,inlinewithB3levelsinFECsandbingohalls.Oneof
thecampaignerscallingforthisreductionwasDCLGministerDonFosterMP.AccordingtotheDailyMail
(25September2012)theministersaidthat“Wearenowgoingtoconductareviewintotheevidencefor
theneedtolookagainatthelevelsofstakesandprizesandotherissuesrelatedtothefixedoddsbetting
terminals”.
ThisannouncementonbehalfoftheGovernmentcameasatotalsurprisetotheABBandwewerebemused
astowhyaministerhadannouncedchangestotheDCMS’gamblingpolicyintheDailyMailandportrayed
thisasavictoryinthepublicinterest.
Wenotethatthedepartmentinitiatedapre-consultationonthetriennialreviewin2011andtheindustrywas
consultedonthetriennialreviewprocessatastakeholdermeetinginDecember2011.Wewerethentold
wewouldbeinvitedtoameetingwiththeDCMSministertodiscussfurtherdevelopmentsinthesummer
of2012butthismeetingdidnotmaterialise.Althoughweareanimportantstakeholderandourmembers
couldbeseriouslyaffectedbytheoutcome,theABBwereneverformallyinformedinwritingofanychanges
tothetriennialreviewprocessandhaveonlynowbeengivenanopportunitytocomment.
WearealsosurprisedthatthispublicannouncementbytheDCLGministerwasmadeafterallstakeholders
hadmadewrittenandoralsubmissionstotheCMSSelectCommitteeInquiryintotheGamblingAct,which
incidentallydidnotraiseanyissuesaboutthelevelofstakesandprizesonB2machines.Neitherdidthe
GovernmentraiseconcernsinitsresponsetotheInquiryreport.
TheABBisconcernedthatthepublicdebateisbeingdrivenbyorganisationswhichmaybemotivatedby
politicalandcommercialinterests.Inouropinion,theproposalsputforwardbytheseorganisationswillnot
improvelevelsofresponsiblegambling,andinfactmayhavethedetrimentaleffectofdistortingcompetition
inthebroadermarket.Forexample,theCampaignForFairerGambling’srecommendationsfocussolelyon
theLicensedBettingOfficesectorandoverthelastfewyearstheirproposalshaveincludedproposalsto
banFOBTsfromLBOs,removecasinotypegamesfromelectronicgamingmachinesinbettingshopsand
reducestakesfrom£100to£2forcasinotypegamesinbettingshops.Thebusinesspartnerswhofundthis
campaignstillhavecommercialinterestsinthecasinogamingsector.
ItisessentialthattheGovernmentconsiderthewiderimplicationsoftheproposalsputforwardbythese
campaignorganisations. If theaboveproposalwere tobeaccepted, thiswould reducethestake to the
equivalentoftheslotmachines(B3s)inadultgamingcentreswherethereislessregulation.Itwoulddestroy
thecurrentregulatorypyramidofthegamingmachinesindustrywhichisbasedonanevidencebasedrisk
assessmentoftheregulatoryenvironmentsinwhichthesemachinescurrentlyoperate.Notonlydoesthis
association of british bookmakers ltd
A reduction in the B2 machine stake to £2 would destroy the regulatory pyramid of the gaming machines industry which is based on an evidence based risk
assessment of the environments in which these machines currently operate.
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falloutsidethescopeofthistriennialreview(asthisonlycoversthelevelofstakesandprizesongaming
machines)itwouldalsoraisequestionsaboutwhetherthismeasurewouldunfairlydistortcompetitionin
thegamingmachineindustry.Asoutlinedinthetriennialreviewconsultationdocumentthereiscurrentlya
structureinplacewhichisworkingwellforthewholegamblingindustry.
TheGovernmentstatesthatifthereisaproblemwiththesemachinesitshouldact.However,theGovernment
shouldonlyactifthereisfirmevidencethattheexistingstakesandprizelevelshavehadanegativeimpact
onpublicprotection,andnoton thebasisofaperceivedproblemwithmachines.Wealsobelieve that
theGovernmentshoulddefinewhatitseesasaproblembeforestatingthatitwillactinresponsetothe
problem.TheGovernmentexpresslystatesinthetriennialreviewconsultationthereisnoclearevidencethat
thesemachineshavehadanysignificanteffectonthelevelofproblemgamblingintheUKandthatthereis
alackofevidenceofanycausallink.
Asoutlinedabove,there isnoevidencethatthere isaproblemonamajorscalewithintheUK.But it is
difficulttorespondtoaproblemifthenatureandthedegreeoftheproblemarenotdefined.Therearesome
machineplayerswhohaveproblemgamblingissuesandtheGovernmentisawarethatthisisaverysmall
number.Notwithstandingthis,thebettingindustrytakestheissueofprevention,researchandtreatmentof
problemgamblingveryseriouslyandiscommittedtotheresponsiblegamblingstrategyoutlinedinChapter
11
TheGovernmentstatesthereiswideconsensusthatthereissomelinkbetweenproblemgamblingand
machinegambling.Wedisagree.Wedonotsharethisviewaswebelieveregulatoryresearchhasshown
thereisnocausallinkandthatproblemgamblingisperson-centricandnotproduct-led.Gamblingaddicts
willgambleonavarietyofproductsandthereisrelativelylownumberofproblemgamblersusingmachines
inbettingshops.This isconfirmedbynewresearchcarriedoutbyLeightonVaughnWilliamsandPage
whichissummarisedinChapter7.
WewelcometheGovernment’spledgetoensure thatanypolicychanges itconsidersarebasednoton
concernandanecdotealone,butaresupportedbyfirmevidenceandfactualfoundation.However,weare
concernedthattheGovernmentistalkingabouttheneedtoactonpublicconcernwhenitdoesnotdefine
thelevelordegreeofpublicconcern.Werecognisethatthereissomepublicconcernaboutthisissuebut
webelievethatasmallbutvocalminorityofstakeholdersisdrivingthepublicpolicydebatewithouttaking
intoaccountevidencewhichisfirm,factual,authoritativeandbeyonddispute.Ourpositionisthat,while
thereisnoevidencetosupportanintervention-orevidenceastothelikelyoutcomesofsuchintervention
-thereisaclearanddevastatingcosttoproceedingwithacourseofactionwhichwouldhaveanegative
impactonjobs,communitiesandthewider-economy,asoutlinedinChapter7above.Thereisthereforeno
objectivebasisonwhichtheGovernmentshouldsingleoutthissectorforfurtherscrutiny.
Comments on Chapter 2 page 23
WewelcometheGovernment’sreferencetotheprocesseswhichhavealreadybeenput inplacebythe
ResponsibleGamblingStrategyBoardandResponsibleGamblingTrusttounderstandproblemgambling
better.Weagreethatthisistherightwayforwardtoprovideasteerforpolicyjudgementsastotheconcerns
thathavebeenexpressed.However, theGovernmentalsostates that if there is evidence toprove that
B2 machines are causing harm, then the Government will take appropriate action. We believe that the
We welcome the Government’s pledge to ensure that any policy changes it considers are based not on concern and anecdote alone, but are
supported by firm evidence and factual foundation.
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ResponsibleGamblingTrust researchwillprovideasubstantial, independentlyassessed,evidencebase
toinformtheGovernment’sregulatorypolicyandthatitwouldbeappropriatefortheGovernmenttoawait
theseresultsbeforeconsideringfurtheranychangetothemaximumstakesandprizelimitsforB2machines.
Any“precautionary”reduction,asmootedbytheGovernmentintheconsultation,wouldbeinappropriate
sinceitwould,inevitably,bebasedonalesssoundevidencebase.
TheGovernment’sapproachtotheconsultationonthelevelofstakesandprizesforB2gamingmachines
appearstobeunjustifiedandinappropriate.Weareseriouslyconcernedaboutthebiasandvalidityofthe
questionsonB2machinescontainedintheconsultation,inparticulargiventhedivergentapproachestaken
bytheGovernmentinrelationtodifferentcategoriesofgamingmachines.
This review isdifferent fromprevious triennial reviewsas itcalls fordetailedevidence foroneparticular
sectorinisolation.Inparticular,thequestionsforB2machinesinthisreview(13-14)areverydifferentfrom
thosewhichcoverothergamingmachines(1-12and15-29).
In the case of the other gaming machines the consultation simply asks if respondents agree with the
government’sproposalstoretainorchangethestakesandprizes,andwhetherthereareanyotheroptions
whichshouldbeconsidered.WithregardtotheB2machinestheGovernment’spositionistoretainthecurrent
levelofstakesandprizes.However,theGovernmentdoesnotjustaskthequestionwhetherrespondents
agreewiththisposition,butinsteadasks11separatequestions,callingforsubstantialamountsofevidence
fromstakeholders.
OursectorthereforeappearstobetreatedinconsistentlywithothersectorsdespitethefactthatB2machines
areidentifiedasbeinglowriskintermsofpublicprotectionconcernsinthereview’simpactassessment.We
viewthisapproachtotheconsultationisasunfair,unjustifiedanddisproportionate.
ThenatureoftheGovernment’squestionsalsorisksaflawedandpre-determinedprocess, inwhichthe
Government’sfinaldecisionisdrivenbytheviewsofthesmallbutvocalminorityofstakeholderswhichhave
raisedconcernsoverB2machines.
ThereappearstobeaclearpresumptionagainstB2machinesinLBOs,whichleadstheGovernmentto
seekevidenceto“supportaprecautionaryreductioninthestakeand/orprizelevelsforB2s”,basedsolely
on “publicconcerns”whicharenotbackedbyevidence.Wewouldquestionhow theGovernmentcan
haveformedaviewthatareductionmaybenecessary-givenitsownrecognitionthatthereiscurrentlyno
evidencetosupportthis-andareseriouslyconcernedthatitisnowseekingevidencetosupportapre-
determinedposition.
Wenote,forexample,thatfollowingtheopenmeetingofstakeholdersheldon19December2011,during
whichallparticipantswereinvitedtoputforwardproposalsforchangestostakeandprizelimits,byMarch
2012responseshadbeenreceivedfromallthemajorindustrybodiesaswellasajointindustrysubmission
which is reflected inpackage3 in the triennial review.However,no responseswere received fromanti-
bettingshopcampaigners,problemgamblingcharitiesor faithgroupsor localcouncils.Yetdespite this
failuretomakeausefulcontribution,significantcredenceappearstobebeinggiventotheunsubstantiated
association of british bookmakers ltd
The LBO sector appears to be singled out and treated inconsistently compared to other gambling sectors despite the fact that B2 machines
are identified by the review as being low risk in terms of public protection concerns.
Page 69
viewsofthisconstituencyofinterestgroups.
TheGovernment’sapproachtoB2machinescontrastsnotablytothattaken,forexample,inrelationtoB3
machines,wheretheGovernmentrejectsanincreaseinprizelimitsonthebasisthat“noconvincingevidence
hasbeenpresentedtoustojustifywhythemaximumprizelimitforB3sshouldbehigherthanthemaximum
prizelimitforB2s…[and]thereisnotenoughdataintheindustry’scasetoallowaproperassessmentof
whatthewidereffectofsuchamovemighthaveacrosstheindustryasawhole”.TheGovernmenttherefore
proposes to retain the current limits, without requesting any further evidence to evaluate the industry’s
position.WealsonotethattheGovernmentisproposingincentivesforgrowthintheformofincreasesfor
othersectors,despitethesemachines’levelsbeingcategorisedashigher(medium)riskthanB2machines
(low) in termsofproblemgambling in theregulatory impactassessment in thereview.No justification is
givenforthesedivergentapproaches.
AsconcerningisthefactthatthereappearstobeinconsistencywithintheGovernment’sownapproachto
assessingB2machines,withdifferentviewspresentedindifferentpartsofthedocuments.Forexample,
theGovernmentproposes in the review’s impact assessment tomaintainB2 stakesandprize limits as
theywouldrepresentnorisktoplayerprotection.AsisoutlinedintheimpactassessmenttheGovernment
undertookaqualitativeassessmentoftherelativeriskacrossmachinegamingcategories,withreferenceto
thethreatofproblemgamblingbothinvulnerableadultpopulationandamongstchildren.TheGovernment
concludedthattheimpactofB2machinestakesandprizeslevelsinpackages2,3and4wouldrepresent
“lowrisk”inrelationtoproblemgambling.
TheImpactAssessmentalsoconcludesthat“thereisnoevidencecurrentlyavailabletosupport[assertions
of a link between B2 machines and problem gambling] and consequently there is no clear case for
Governmentintervention…theGovernmentthereforeproposestoretainthecurrentstakeandprizelimits”
theconsultationdocumentasserts,withoutanybasisor justification, that“there iswideconsensusthat
thereissomelinkbetweenproblemgamblingandmachinegambling”andthat“Givenon-goingconcerns
thathavebeenraisedaboutB2machines,thegovernmentwishestoconsiderwhetherthereissufficient
evidencetosupportaprecautionaryreduction”.ThisinconsistencysuggestsafailureontheGovernment’s
behalftofullythinkthroughitsposition.
TheGovernment’scall forevidenceonB2machines is,moreover,unnecessaryand inappropriate,given
theResponsibleGamblingTrustresearchprojectwhichwillspecificallyanalysetheimpactofallcategory
Bmachinesonconsumerbehaviour.The£500,000projectwillbethelargestprogrammeofresearchinto
gamingmachinesundertakeninBritain,andisexpectedtoprovidehighquality,empirically-soundresearch
supported by machine-related data held by a full range of gambling operators. In addition, a panel of
independentexpertswillprovideacademicoversighttotheproject,ensuringobjectivityandstakeholder
confidence in the results,and therewillbean independentpeer-reviewprocess forall researchoutputs
beforepublication.Weare thereforeconfident that this researchwillprovideasignificantlymorereliable
evidencebasetosupporttheGovernment’sregulatorypolicy.
Theconsultationdismissestherelevanceofthisprojectonthebasisthatit is“longterm”,astheoverall
research programme is expected to take 18 months. Yet, under the Government’s current proposals,
regulationswouldnotbeimplementeduntilNovember2013attheearliest,andwithregardtoB2machines
The Government’s call for evidence on B2 machines is unnecessary and inappropriate, given the Responsible Gambling Trust comprehensive
research project into high stakes gaming machines which will specifically analyse the impact of all category B machines on consumer behaviour.
Page 70
theGovernmentstatestheanalysisoftheevidencegatheredthroughtheconsultationmaywelltakelonger.
This suggests that theGovernment’sfinalpositionwith regards toB2machineswould, in fact,onlybe
implemented a few months (at most) before the publication of the Responsible Gambling Trust’s final
research.
This raises theprospect that,should theGovernment’sfinalpositiononB2machinesnotbesupported
bytheResponsibleGamblingTrustfinalreport,theGovernmentcouldreverseitspolicywithinarelatively
shortperiodoftime.Thiswouldrepresentunacceptable levelsofuncertaintyforthe industryandwould
placeadisproportionateriskoffinancialharmonLBOsintheinterimperiod.Asoutlinedinchapter11the
ABBwouldprefertoworkwithGovernment,GamblingCommissionandotherstakeholderstodevelopless
interventionist/potentiallyharmfulmeasures,suchasindustrybasedsolutions.
Wethereforestronglybelievethat itwouldbeappropriatefortheGovernmenttoawaittheresultsofthe
ResponsibleGamblingTrust’scomprehensiveresearchbeforeconsideringfurtheranychangetothestakes
andprize limitsforB2machines.ActionshouldonlybetakenagainstB2if thatresearchprovidesclear,
authoritative and quantifiable evidence that they are causing significant harm to a substantial number
ofpeopleandtheexisting regulatoryprocessesand industry initiativesare insufficientand ineffective in
dealingwiththem.
association of british bookmakers ltd
The ABB strongly believes that the Government should await the results of the Responsible Gambling Trust’s research before considering further
any change to the stakes and prize limits for B2 machines.
Page 71
CHAPTER 15SUMMARY
Inconclusion,oursubmissionclearlyprovidesfivekeymessages:
• Thereisnoevidenceofacausallinkbetweenproblemgamblingandelectronicgaming
machines
• Thereisnoevidencethattheprecautionarymeasuresofareductioninstakesandprizes
are necessary or would work
• Theimpactofunnecessaryactionwouldbedisastrous.Asahypotheticalexamplethe
ABBhasassessedwhatwouldhappeniftheB2machinemaximumstakeisreducedto£2.
This would:
•Put90%ofbettingshopsandnearly40,000jobsatrisk
•Createmanymoreemptypremisesonthehighstreet
•ResultsintheTreasurylosingoutonnearly650millionintax
•Haveasignificantimpactonthehorseracingandgreyhoundindustries
•Leadtoanincreaseofactivityontheillegalgamingmarkets
• TheABB,alreadylicensedandregulatedbytheGamblingCommission,isfirmlycommitted
totheconceptofresponsiblegambling,wherecustomersaregiventheself-helptools
to avoid excessive or irresponsible gambling and thus avoid gambling harm to themselves
or others.
• CurrentmeasuresandcodesadoptedbyABBmembersgofarbeyondthecurrentstatutory
requirementsanditisnowtheABB’sintentiontoconsolidatecurrentbestpractice,and
provenharmpreventionmeasures,intoavoluntaryABB“codeforresponsiblegamblingin
LBOs.
• ThebettingindustryurgesGovernment,regulatorandallsectionsofthegamblingindustry
to work together to develop approaches to promote responsible gambling and minimise
gambling related harm.
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association of british bookmakers ltd
NOTES
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NOTES
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association of british bookmakers ltd
NOTES
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