Gambling Popularity in the UK
Gambling has been and remains incredibly popular in the UK. The primary factors are the well-developed banking sector, sports culture and access to modern betting technology (machines and online). All of these combine to make England a prime destination for all types of gambling action.
The British government has always had a love-hate relationship with gambling. It recognizes the advantages of the “sin tax” to raise revenue, but wants to limit the negative social ramifications of poor people losing all their money through gambling. In the latest spin, the Labour Party and media are calling the Fixed-Odds Betting Terminals (FOBTs), the “crack cocaine” of the industry because they are concentrated in the poorer areas of the country.
Gambling Starts with Access to Capital
The British Parliament has begun to discuss the dangers of FOBTs to poor people losing all their money and drug dealers using the machines for money-laundering. This has lead government experts to consider statistics on the nation’s entire gambling culture. The Guardian has complied statistics on the top three gambling preferences for UK punters: 1) virtual dog or horse races (in person), 2) casino games (online) and 3) virtual gaming machines (in person). The virtual gaming machines are the government name for FOBTs.
The United Kingdom remains an ideal location for all sorts of gambling due to its mature banking sector. High Street banks can easily fund betting establishments, which increase the velocity of money. There is a form of betting for nearly every population group. The general population has the National Lottery. The elderly prefer bingo. Young men love football. The entrepreneur enjoys Forex currency trading. Something for everyone.
Gambling makes life more interesting. Punters will put down a few quid here and there to increase the enjoyment of watching the English Premier League Football games. People have a “financial interest in the outcome of events.” All of these factors combine to increase the popularity of gambling in the UK. Now, let us look at the history of the FOBT in the UK in more depth.
UK FOBT History
In 2001, the United Kingdom permitted placement of FOBTs in bookmaker betting shops. Punters can play their favorite casino games – like bingo, roulette, racing and slot machine games – on these machines. The largest single payout is limited to £500.
British Law limits FOBTs to 4 per establishment. The Gambling Commission reported the presence of 33,319 FOBTs in the country circa 2012.
Gambling Addiction Can Be Like Drug Addiction
According to the HMRC, the UK government made £1.7bn in betting and gaming duties. During tough economic times, this revenue would be sorely missed. The bookmakers earned a profit of £1.42bn by playing the FOBTs with an average weekly profit per machine of £825. There is no wonder why the bookmakers are resisting regulation. Their machines are huge money makers.
The tension between permitting the enjoyable activity of gambling and minimising the negative consequences has lead to the Association of British Bookmakers introducing legislation to limit 1) the time and 2) the money spent on the FOBTs. The concern has been that many of these terminals have been placed in predominately poor areas.
Gambling is generally a “high risk” activity with the odds favoring the bookees. So far, the government concern has been focused on the poor. The wealthy can afford to lose more money.
FOBTs Laundering Drug Money
Randeep Ramesh wrote a very powerful story on 8 November 2013 about how drug dealers were using the FOBTs to launder their drug money. “The temptation of high-speed, high-stake casino games in the high street proved irresistible” as drug addicts gambled “£100 every 20 seconds.” Drug money laundering has become a global issue as Bitcoin and the Vatican Bank have been penalized recently for this crime.
In the same Ramesh Guardian story, he recounts the behavior of a drug dealer named “James” who feeds the FOBTs £200 – “a score at a time.” Referring to the FOBT, James states “That’s what turns dirty money clean.” The Gambling Commission fined Coral bookmakers £90,000 in profits it made from just one drug dealer. The trade association stated that FOBTs were a “high inherent money-laundering risk.”
Bookmaker Defense of FOBTs
Well if poor areas are the problem, then why not place more FOBTs on High Street? The wealthy continue to have plenty of money passing through the “Credit Crunch” as evidenced by the recent record price of £140 million for one London apartment. In January 2014, Ladbrokes offered to open 100 more High Street betting shops. But it has since rethought its position. Betting establishments are wary of investing in new gambling features for a number of reasons.
As some people continue to struggle with high debt, gambling institutions have become an easy target. The “sin” industry is easier to blame than a High Street bank or the Royal government. According to a response by the bookmakers in the Spectator, the Point of Consumption Tax to be instituted in December 2014 is dousing enthusiasm in the industry.
Still, the Spectator reports that industry profits remain high. The Guardian article claimed that 55% of UK citizens gambled. The company that makes software for FOBTs, computers and mobile phones – Playtech Plc – reported better-than-expected profits for 2013.
Much Ado About Nothing
All in all, the primary competition for UK gambling is 1) online and 2) overseas. Modern gamblers don’t need the “physical one-armed bandits” to lose all their money. Sure, it makes it easier, but whether a drug dealer plays on a FOBT in a poor area or on High Street, he can still “launder the drug money.” The concern over FOBTs in poor areas seems more like a convenient Labour Party issue before the next elections.
Although 55% of the UK population gambled in 2013. That was down from 57% in 2012. Younger people were “less likely” to bet based on surveys conducted by the Gambling Commission. Furthermore the collection of online versus in-person betting is rather mixed in terms of popularity.
The profits, excitement and foundation of gambling in the United Kingdom will not really change dramatically due to regulation of FOBTs. Limiting time or money will limit profits and taxes. The government cannot afford to reduce its budget. Plus, enforcement will be tough. UK gambling remain extremely popular with some of the most options available due to the power of the High Street banks.