Government opens consultation into proposed changes to FOBT gaming machine stakes

A potentially game-changing consultation into proposed changes to category B2 gaming machine (FOBT) stakes and other social responsibility measures has been opened by the Government in recent days.

The Department for Digital, Culture, Media and Sport (DCMS) is calling for responses and evidence in relation to the maximum stakes and prizes for fixed-odds betting terminals (FOBTs).

Following responses to a call for evidence in 2016, with respondents ranging from the Advertising Standards Authority (ASA) and the Advertising Association to Gala Bingo and the Church of England, the DCMS is now consulting on proposals to reduce the maximum stake on FOBTs from £100 every 20 seconds, to a figure of between £2 and £50.

The DCMS’ consultation – which was opened on Tuesday 31 October 2017 – covers a range of other proposals in relation to social responsibility measures affecting the wider industry as a whole.

The intentions behind the new proposals are “to minimise the risk of gambling-related harm, including on gambling advertising, online gambling, gaming machines and research, education and treatment (RET),” the DCMS has said.

It comes amid mounting concerns regarding the impact of high-stakes FOBTs on ‘problem gamblers’, and recent criticisms circulating in the media regarding the nature of many gambling advertisements.

Upon launching the consultation, Tracey Crouch, Gambling Minister, said: “We believe that the current regulation of B2 gaming machines is inappropriate to achieve our stated objective of protecting consumers and wider communities.

“We are therefore consulting on regulatory changes to the maximum stake, looking at options between £50 and £2, in order to reduce the potential for large session losses and therefore the potentially harmful impact on players and their wider communities.”

Responding to previous industry proposals, shunned by the DCMS for allegedly not going far enough to address the growing problem, she added: “While the industry proposes increases to the remaining stakes and prizes, and permitted numbers and allocations across other categories of machine (B1, B3, B3A, B4, C and D gaming machines), we believe retention of the current regulatory environment will better protect players from potential harm than industry’s proposed increases.”

The consultation also includes proposals to crack down on operators in terms of social responsibility, pointing out that operators must do more to ensure that bonus and promotional offers are never targeted at young and vulnerable people. The Government also indicates that it will consider restricting bonus and promotional offers if operators cannot show that they can manage these risks.

The 12-week consultation, which can be accessed here, will run until 23 January 2018, when final proposals will be considered by the Government.

Richard Williams, Partner and Joint-Head in Joelson’s Licensing, Gambling and Regulatory team, said: “The proposed change to the FOBT stakes has been on the cards for a long time, so these proposals are not new. The Government needs to carefully balance the evidence of gambling-related harm caused by maximum stakes on FOBT machines on the one hand, with the financial loss in terms of duty and employment on the other.

“Revising the FOBT maximum stake will inevitably have an impact on the viability of some betting offices. My guess is that the Government will settle on a maximum stake per spin of £20. Whilst this would not be ideal for the industry, it would be far better than a reduction to £2, which would lead to closure of significant numbers of betting shops across the UK.

“Of more interest is the impression that the Government is tightening the noose around the land-based and online betting industry in general,” he said.

“The industry is getting very bad press in the media which is becoming a new moral panic.

“The Government has signalled that it will not put up with the marketing of gambling to children and vulnerable customers. The industry is being asked to get its house in order, before restrictions are imposed on it.

“Some of this criticism is not justified, as there are good and bad operators out there, but the industry is going to have to take a more pro-active stance if it’s going to avoid tighter regulation,” he said.

“It’s also interesting to read that the Government is considering introducing a mandatory levy for the prevention and treatment of gambling-related harm, if the voluntary scheme is not shown to be working effectively.

“Interesting times are ahead for sure.”

Richard Williams

Richard Williams

Partner – Joint-Head of Licensing, Gaming & Regulatory

+44 (0) 20 7307 2105

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This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.