Bookies coveri up !!

[bennythedip2]

A swelling political furore around fixed-odds machines, which feature casino games, threatens to reach boiling point

Fixed-odds betting terminals. Four words that hardly roll off the tongue. No wonder “crack cocaine” gambling machines has caught on to describe the gaming terminals found in betting shops across Britain.

A year ago, most people would never have heard of FoBTs - or “Fobtees” as they are pronounced.

Unless you work in the betting industry or dwell in a bookie any longer that it takes to put a tenner on some no-hoper of a nag at the Grand National, it’s unlikely you would have given the touch-screen gaming terminals anything more than a fleeting glance.

Now, though, a swelling political furore around fixed-odds machines, which feature casino games, typically roulette, threatens to reach boiling point just as the payday loans scandal did a few months ago. And, with FoBTs accounting for around half of bookmakers’ profits, the City is sitting up and listening.

As many in the Square Mile prepare to decamp to the Cheltenham Festival next week, the political campaign against gaming machines is likely to dominate talk in the queue for the Tote.

Let’s be clear, fixed-odds betting terminals are not a recent phenomenon.

Bookmakers such as William Hill (Other OTC: WIMHF - news) , Ladbrokes (LSE: LAD.L - news) and Gala Coral first introduced them to betting shops in 2002. Along with online gaming, the machines have been an increasingly important driver of bookies’ profits.

With a relatively low, fixed margin, the terminals offer a more stable income stream than over-the-counter sports wagers, which are vulnerable to the mood swings of the England football team or a freak win by an unknown jockey.

According to the most recent statistics available from the Gambling Commission, on average there were more than 33,320 controversial “B2” gaming machines in Britain between April 2012 and March 2013, up from 31,484 in 2008-09.

“B2” games are at the source of the most recent uproar as they allow players to stake a maximum of £100 every 20 seconds, meaning a customer could, in theory, stake £300 in a minute.

A pretty stark statistic albeit one that the Association of British Bookmakers (ABB (NYSE: ABB - news) ) claims is unlikely.

Most players spend 10 to 15 minutes on gaming machines, according to the industry, losing about £7.55 on each occasion.

Gross gaming yield in other words the money gambled minus any winnings paid out from B2 machines across the industry hit almost £1.6bn in 2012-13, up from £1bn in 2008-09, according to the Commission’s figures.

Controversy is no stranger to the betting industry, which has gone to great lengths over the years to demonstrate how it is seeking to reduce problem gambling. As Ladbrokes again stressed in its full-year results last week: “Problem gamblers, contrary to popular myth, are not good for business.”

But the ferocity of this latest campaign on FoBTs has taken some in the industry by surprise. One industry chief admitted to me: “I think the industry has been rather slow-footed in terms of contradicting the misinformation that has been propagated from various parties.”

Industry leaders have questioned the motives of one of the main funders behind the protest group driving the latest assault on FoBTs, the Campaign for Fairer Gambling. The campaign, of course, denies claims of “vested interests”. Both sides also exchange fire over the accuracy of statistics.

Whether you believe the conspiracy theories or not, the Labour Party has also made FoBTs the latest target of its “responsible capitalism” agenda.

Fixed-odds terminals have been branded, along with payday lenders and pawn shops, part of an “epidemic” that is gripping Britain’s high streets.

Labour is seeking to curb the prevalence of the machines by handing power to local authorities to create “FoBT-free zones” if they so wish.

What is happening within the halls of Westminster has also spilled over on to the markets. Remarks by David Cameron, the Prime Minister, on January 8 expressing some sympathy with Labour’s view triggered a sharp decline in the major bookmakers’ share price the following day. The bookies are already facing a potentially painful new 15pc tax on online gaming in December and a machine games duty introduced last year also took a large bite out of 2013 profits.

Further regulation would be about as welcome as Arsenal’s 2-1 victory last month over Aston Villa, which triggered the biggest jackpot for punters in football betting history.

Shares in Britain’s biggest bookie, William Hill, have regained some ground since January, as the Government indicated it will await the outcome of research by the Responsible Gambling Trust in the autumn before it takes any action.

The industry has also since mounted a fightback. At the start of this month, the industry rolled out a new voluntary code for fixed-odds machines, which allows customers to set a maximum amount they are prepared to lose during a single session. Players receive automatic alerts on screen to warn them when they have spent £250 or have been playing for 30 minutes. Bookies have also agreed not to advertise £100-stake games in their shop windows. One-fifth of all advertising in betting shop windows will also be devoted to responsible gambling messages.

The ABB and individual operators argue that credible evidence and research is needed into FoBTs and also problem gambling as a whole before politicians take any knee-jerk decisions.

A fair point but one that is unlikely to hold off the rising tide for long, particularly in the run-up to a General Election.

At the weekend, Maria Miller, the Culture Secretary, stated that the measures outlined in the voluntary code are “not enough” and player protections “must be mandatory”.

She has also asked the Gambling Commission to look into shortening the time and money limits before pop-up alerts appear on screen.

A mandatory code would not be opposed by the industry, according to Dirk Vennix, chief executive of the ABB, who points out that it is in the Gambling Commission’s power to enforce one.

The industry is in a tricky situation when it comes to defending FoBTs. Betting chiefs argue they are a leisure activity and betting shops are often misunderstood by the middle classes who dominate the benches of Westminster and the ranks of the media.

Problem gamblers use a variety of products to feed their addition, says Ralph Topping, the chief executive of William Hill, who points out that he doesn’t blame Smirnoff or any other single brand for the problems of alcoholics within his own social circles.

But it is also pretty hard to argue when, as occurred at a meeting at Parliament on Tuesday, a former gambling addict explains how an obsession with the machines triggered a terrible downward spiral, claiming 90pc of his income.

For now, the Government appears ready to hold off on any kind of heavy-handed crackdown before the Responsible Gambling Trust research is published.

But, with Labour MPs such as Tom Watson, one of the leading crusaders against phone-hacking, also on the FoBT trail, the industry can be assured the storm hasn’t been calmed for long.

Monikers such as the “crack cocaine of gambling” have already stuck and entered the public conscience.

After their “slow-footed” start, betting chiefs would do well to spend next week’s Cheltenham Festival thinking how they can catch up with the rest of the field before this debate runs away from the industry entirely. Otherwise, before they know it, bookies will be the new Wonga.

Benny says,
And what about the "Overseas Accounts"?? All these firms have them and if they want a starting point, well, although they have no High Street Shops maybe Skybet and Skypoker would be a good place to begin investigations