Should fixed odds terminals - the "crack cocaine" of betting - be banned from the high street?

The betting shop run by Lena Corner's family was a pillar of her south London community. Then along came fixed-odds terminals - which let punters lose a fortune in a flash - and her father began to question his vocation

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The Independent Online

A few weeks ago, a customer went into a betting shop in west London to have a flutter. He started with a few pounds in a fruit machine game but got nothing back. Feeling a little irked, he decided to try his hand at roulette, upping his stakes to £100 a go.

By the time the machine, a fixed odds betting terminal (FOBT), had swallowed £3,000, the man completely lost it. He smashed up all four roulette games and then put his fist through the screens of two betting terminals. To the bookie, he was a good punter – a regular who laid out big stakes. So once they had fixed up the machines a couple of hours later, far from barring him for his violent outburst, they welcomed him back that very same day.

"There was one shop that I worked in where the machines were getting smashed every single week," says Shelley (not her real name), a cashier at a chain of bookmakers. "They keep it quiet, they don't want the bad publicity. They tell you as long as you aren't hurt, not to call the police. We just phone the company who makes the machines and usually they'll come straight out within the hour and fix them."

These FOBTs are a hot topic right now. Since they were first introduced to our betting shops 15 years ago, debate has raged about the wisdom of introducing what is essentially casino-level gambling to our high streets. FOBTs are touchscreen electronic gambling terminals, a little like fruit machines, but with much higher stakes. You can bet anything up to £100 on a single go and the jackpot is £500. By far the most commonly played game is roulette, but the machines also offer poker, Black Jack and a range of slot-machine games.

For the bookie, they are a golden goose. Shelley tells me that customers between them regularly put £25,000 every week into a single machine – and there are four – in her London branch. For the Government, it's even more of a bonanza. In March, it announced that it was hiking the tax on FOBTs from 20 to 25 per cent. For the punters, however, it's a little less rosy. The machines have been called the "crack cocaine" of betting. Detractors say that they create problem gamblers in shops that cluster in the most deprived high streets of the UK.

In January, in a heated Commons debate over regulating FOBTs, Barry Sheerman, MP for Huddersfield, described them as "a scourge, that vacuums money out of our community". At the time, Labour's proposal to give new powers to local authorities to restrict the machines was defeated. But the debate is likely to intensify in the run-up to next year's general election. Ed Miliband has pledged that a Labour government would amend planning and gambling laws, giving councils the power to ban the machines from their high streets.

He will, of course, face strong resistance from those who profit from FOBTs. According to figures from Adrian Parkinson, at the Campaign For Fairer Gambling, there are now more than 33,000 machines in the UK. In 2008, we put £1bn into them; in 2012, this went up to £1.55bn and this year it's expected that this will rise to £1.63bn.

I've had my eye on these machines ever since one appeared in the corner of my family's betting shop in 2003. We had a small independent betting shop, which was run by my brother and my dad, called Arc Racing (Alex and Richard Corner). I was the Saturday girl. It was in a slightly down-at-heel corner of Wimbledon, just on the edge of Tooting, in a little row of shops next to Chicken Hut.

They had been in the betting business for more than a decade by then and had turned what was a failing shop into a busy and focal part of the community. They had done this by taking pride in their service and plenty of customer care. They always gave the best odds, for example – over and above what the Ladbrokes and William Hill down the road would offer. They also allowed customers a back price on the horses, gave endless cups of sugary tea to anyone who wanted one, and, at Christmas, distributed Arc Racing diaries to all the regulars.

In the early days, Arc was frequented by staff from an Oriental takeaway over the road, known collectively as "the Chinese". They rubbed shoulders happily alongside the locals: Gordon, who lived on a diet of eggs and cheese, and moved seamlessly from a lifetime on the dole to collect his pension; George, who scrawled out brilliantly complicated patent bets for the tiniest stakes; and Bob, a gregarious builder, who was steadily working his way through a compensation payout from falling through a glass roof. As the business thrived, my brother and my dad acquired a further two shops. One was in Chiswick – and happened to have been formerly owned by the family of actor Mel Smith – and another was farther west in Isleworth.

Arc provided a service that was more than just about placing bets. The punters came, they sat, they chatted and they drank their tea. It got them out of the house and, no doubt also from under the feet of their wives. The vibe was more low-key social club than high-rolling gambling den. When George passed away some years ago, the stool that he used to occupy sat empty for ages. No one dared use it – though it was never quite clear whether that was out of a mark of respect or fear that it would bring bad luck on the horses.

When the machine first arrived, it offered a £10,000 maximum payout and no stake limit. It was life-changing stuff. My £30 Saturday-girl wages disappeared into it within seconds. Queues formed as punters lined up to have a go, and, for a while, it was an exciting addition to the horses and dogs.

But slowly, things began to change. First, it was the opening hours. As other betting shops started opening early and closing late to let punters in to use the machines, Arc was forced to do the same. My brother found himself working 16-hour days. Then, when the Gambling Act of 2005 abolished the rule that banned one betting shop from opening within half a mile of another, with a keen eye on the profits made by the FOBTs, the betting chains expanded aggressively. Very quickly, the number of shops in the area had more than doubled. And as taxes and levies endlessly went up and up, Arc simply couldn't compete.

"I never wanted to be a purveyor of machines anyway," says Richard. "I've seen lots and lots of people who have just lost everything – their house, their business, everything into these machines. Now you can actually use your debit card in them – I assume until you've got nothing left in the bank.

"The independent betting sector has now gone. There was quite a number of small shops in a 10-mile radius of Wimbledon, maybe as many as 35, but they've disappeared. All of them. Now it's just a question of getting the shop open as many hours as possible at minimum cost and having the machines there. Paddy Power and Betfred are the ones who have come to the fore. They keep overheads low by paying around the minimum wage and single-staffing. Now the skills I've got are redundant."

The fallout of these changes is evident in Shelley's's wage packet. As a cashier, she is on £7.12 an hour. Her employer, she tells me, has recently informed all of its staff that since the Government tax hike, this sum is due to be cut. If you are a manager, in charge of running, staffing and banking five shops, you'll be expected to work for about £9.50 an hour. This year, for the first time ever, Shelley had to work on Good Friday. She may also have to be available on Christmas Day. Oh, and she doesn't get paid extra for bank holidays either.

"I've been working in betting for more than 30 years and this is the worst it's been," she says. "They can do whatever the hell they like. I've got no rights. Plus, I'm on edge all the time when I'm in the shop – frightened of people turning violent or abusing me. Some of the nicest customers that I've known for years, once they get on those machines, they turn into demons.

"The bookies aren't interested in horse or dog racing any more. They'll take bets, but they don't care, they are killing it. All they want is profit from the FOBTs. I'd say 80 per cent of the business is now from machines."

The books from the last year of trading at Arc in 2012 corroborate this. It took £18,000 from the horses and £66,000 from the machines. In a little over a decade, the balance has shifted completely. Questions are now being raised about the future of horse and dog racing, which is subsidised by retail betting. The Daily Mail has already run one scare story saying that if this continues, racehorses and greyhounds may have to be put down.

It's widely accepted that something needs to be done and currently the Department for Culture, Media and Sport (DCMS) is consulting with the Association of British Bookmakers (ABB) and is due to announce plans for more regulation this summer. The measures that they are discussing include a self-exclusion system, whereby people can voluntarily be barred from their local shops, as well as warning measures, time limits that pop up as you play and a cut in the maximum stake from £100 to £50.

It's too little, too late for 54-year-old Nicola Grice, who at the height of her addiction to the machines, was gambling £2,000 a day. She used to play bingo with her friends, but since its decline, she – like many women – moved over to betting shops. She played in between shifts working in a shop, arriving at the bookies as it opened at 8am and staying till closing time at 10pm. She took out 15 credit cards and five loans to fund her habit and by the time she was forced to declare herself bankrupt, Grice had put £74,000 into the roulette machine. "I was playing every spare hour. I couldn't wait to get out of bed to play. I didn't care if I ate, drank or slept," she says, "I just wanted to be on the machines. It took over. If you get into that zone you don't care about anything. You just want to play that machine. It's terrible. It's so addictive."

She doesn't think much of the ideas under discussion. "Self-exclusion just doesn't work," says Grice, "because you can just go down the road to the next shop. And all that stuff about setting time limits is crap. All you do is get a pop-up on the screen. That's not going to stop anyone."

And problem gamblers aren't the only issue. Because of the vast amounts of cash that go through these machines, they are ideal for money laundering. Last year, Coral was fined £90,000 after a drug dealer put nearly £1m through its shops across the North-east, and other dirty money – from ATM thefts in Liverpool and armed robberies in the Midlands – have been "cleaned" through FOBTs.

Richard thinks the solution is to ban the machines altogether. "They are just removing huge chunks of money out of the economy," he says. "The Government is taking a high-handed attitude about trying to discourage gambling, yet they are by far and away the biggest earner of them all."

And the impact they have on our betting industry continues. This Saturday, my local bookie is holding a "tournament" where anyone can come in and have a go on the machines for free – a clever marketing device which lures in many. My high street is crammed full of bookies now – but each one is as uninviting and corporate as the next and always has roulette machines flickering away in the corner. "The shops are completely different now," says Shelley. "Often, there are no regulars. Just a few people sat staring at the machines. They are very quiet places now. Too quiet."

While I'm sure that the death of the independent book maker may not be lamented in the same way as say the death of the independent record or bookshop, for many the soul has been ripped out of one of our classic institutions. For the Gordons and Bobs of the world, it really is the end of an era.