IEA rails at gaming machine ‘exaggerations’

IEA rails at gaming machine ‘exaggerations’

Friday, September 9, 2016 Posted by Andy McCarron
Free-market think-tank says facts being obscured by moral panic

New analysis for the Institute of Economic Affairs (IEA) says the focus of the UK media on the amounts of money being spent on gambling machines in UK high-street bookmakers is greatly exaggerated by a confusion over what is staked and what is actually lost by consumers.

The paper from the free-market think-tank suggests the moral panic over fixed-odds betting terminals (FOBTs) has distorted the debate, both in terms of the prevalence of problem gambling and the supposed proliferation of betting shops.

Report author Christopher Snowden, head of lifestyle economics at the IEA, pointed out that in fact the total number of betting shops has declined in the 13 years since 2013 and that gaming machine revenue from betting shops was worth just 13.6% of the gambling spend in the UK. “The number of problem gamblers stubbornly refuses to rise and the moral panic about FOBTs continues thanks to claims that can easily be shown to be untrue,” said Snowden.

He added that knee-jerk regulation is not the answer to concerns regarding gaming machines. “FOBTs might not be to everybody’s taste but they have a place in the modern industry and existing regulation and taxation is more than adequate, if not excessive, for a gambling product that is only available in licensed, adult-only establishments.”

The new briefing paper also suggests that arguments regarding the £100 maximum level of stake available on the B2 gaming machines confuses the type of game available with other jackpot machines, suggesting the higher stake is necessary for players to get a “sufficient sense of risk and reward”. Says the report: “Anti-gambling activists have called for a £2 stake limit knowing that this would reduce consumer appeal and amount to a de facto ban.”

The paper goes on to suggest that gaming machines are one way for incumbent high-street operators to keep pace with changing tastes in the digital world.

The report states that regulation “cannot afford to be anachronistic in a market in which punters can place unlimited bets on their mobile phones”. Moreover, it adds that the existing regulation and taxation is more than adequate for a gambling product that is only available in licensed establishments.

Addressing the issue of the perception of proliferation of shops, Snowden makes the point that the evidence does point to an element of clustering of shops in more visible locations in densely populated urban areas where it might be surmised the limit of four gaming machines per shop is insufficient to cater for demand. The concentration on key locations might explain why there is more public concern regarding betting shops despite the absolute number having barely moved in over a decade.

The IEA points out that there is scant evidence that gaming machines on the high street have had any effect on the incidence of problem gambling in the UK where rates of prevalence of around 0.5% and 0.6% of the total adult population are below the international average.

Totally Gaming says: The IEA comes from the more libertarian end of the conservative spectrum but its views provide an interesting counterpoint to the nanny-state ambitions on both the left and right of the debate around gaming machines. The Gambling Commission in the UK has always insisted its regulation should be evidence-based, and as Snowden points out, for all the moral positioning in recent years there is no evidence that they have led to any increase in problem gambling prevalence rates in the UK. This fact should be borne in mind whenever the arguments become heated.

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