Roulette machines do not belong on the high street







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Roulette machines do not belong on the high street

10/01/2014

Nils Pratley

Bookmakers have become dominated by flashing machines that earn about £900 a week on average at no financial risk to the operator

A generation ago the idea of allowing a fast-action form of electronic roulette to be played and promoted in bookmakers' shops across the land would have been regarded as absurd.

Roulette is a fixed-odds game and the prevailing wisdom of a couple of centuries held that such casino games should be confined to casinos. There even used to be a "24-hour rule" on casino membership to ensure applicants, even millionaires, had time to cool off.

That social arrangement worked reasonably well. Libertarian principles, including the right to risk your money on a game of chance, were respected. So, too, was the sensible idea that roulette, when played for potentially high stakes, should not be treated as an everyday pastime. It is impossible for a persistent player to beat the odds. The house's edge is small but set in stone.

How Britain got into a position where there are now 33,000 electronic roulette wheels, coyly called fixed-odds betting terminals (FOBTs), in bookmakers' shops is well documented. Initially, it was almost by accident. In 2001 the Labour government abolished betting duty and introduced a tax on profits. That made low-margin games such as roulette viable for the operator.

The bookies got around the rule that no betting was allowed on events hosted in their shops by arguing that the "event" – the drop of the ball – was taking place on a server elsewhere. Then parliament in 2005, in the midst of Labour ministers' brief and bizarre love-in with casinos, decided a limit of four FOBTs per shop would be a pragmatic fudge.

Now FOBTs have come to dominate bookies' premises and complaints are rife. Spend time in a bookies and you can understand why. The shops have become charmless places dominated by flashing machines that each earn about £900 a week, on average, at no financial risk whatsoever to the operator.

Only a small minority of players may be so-called "problem gamblers," or even small-time drug dealers laundering cash. But FOBTs are light years away from traditional forms of betting. As Greg Wood, the Guardian paper's racing correspondent, put it this week, they are about "the mechanical extraction of money," often from depressed neighbourhoods. Bookmakers are earning about £1.5bn a year from FOBTs. Ladbrokes makes almost half its UK retail profits from the machines.

Finally, it is dawning on politicians that FOBTs, despite the tax receipts, may be a social ill. Ed Miliband has swallowed any embarrassment over Labour's past stupidity and wants councils to have new powers to control their spread. David Cameron promises to "get to grips" with the problem.

Let's hope he does. Just as we now demand that banks concentrate on banking, rather than gouging their customers with useless products, it is reasonable to expect high-street bookies to focus on honest bookmaking rather than games of chance.

The objections to reform are feeble. The internet, it is said, is awash with casino games. Yes, but many things happen on the internet that we wouldn't wish to see promoted on high streets. And the plea that FOBTs are no less addictive than other forms of gambling is simply naive. Most regular gamblers will confirm there's a world of difference between playing a touch-screen roulette wheel that spins every 20 seconds and having a flutter on the 3.30 at Ripon or taking a punt on England's next batting collapse.

Shareholders in William Hill, Ladbrokes et al would be losers if FOBTs were to be banned, or their size of stake massively reduced from a maximum £100. Those investors have had a good run; they should count their blessings. The real losers would be shop staff since, as JP Morgan's analyst wrote this week, "over time, the viability of the UK retail estates could come into question".

The welfare of staff is a legitimate worry for politicians but doesn't alter the basic point. Roulette is best played in casinos, or, given 21st century realities, at home. Allowing it on every high street was a mistake that should be reversed.