Major flaws revealed in government’s attempt to tackle ‘crack cocaine’ gambling machines

Users may simply move to other forms of equally harmful betting, experts warn

Addictive slot machine games will still be available in bookmakers, gambling arcades and casinos after the £2 stake cut comes into force (EPA)

A flagship government strategy to help addicts stop gambling may simply shift the problem from one part of the industry to another, experts are warning – as it emerged nothing has been put in place to assess its efficacy.

Bookmakers must reduce stakes on “crack cocaine” gambling machines from £100 to £2 by this week but experts fear users will simply move to other, equally harmful forms of gambling.

Despite being aware of this risk the Department for Culture, Media and Sport (DCMS) has not done any work to track how gamblers change their behaviour, and has no plans to do so.

The complete lack of oversight means that a policy over which former sports minister Tracey Crouch resigned in November may prove to be ineffective.

Dr Heather Wardle, a leading expert in gambling behaviour, welcomed action being taken on problem gambling but said it was “deeply concerning that such a huge regulatory change isn’t going to be evaluated to better understand the full range of outcomes and impact on people’s behaviours”.

“You can only really do this effectively by talking to people themselves and understanding how these changes affect the way they think and feel about gambling and are motivated to change behaviours,” Dr Wardle said.

Just three weeks before the stake cut is due to come into force, DCMS quietly released a report detailing major flaws in the evidence relied on for the policy. The department has sat on the report for a year.

The Regulatory Policy Committee (RPC) report shows that while bookmakers will lose out when stakes are cut to £2, other parts of the gambling industry stand stand to scoop a £440m windfall as players shift their behaviour.

Even this figure may be an underestimate because it is not based on empirical evidence, the RPC report reveals.

Some of the hundreds of millions of gambling losses that will migrate from FOBTs are likely to flow to sectors such as arcades and casinos which spent large sums lobbying MPs for the FOBT stake cut.

Casinos and arcades possess slot machines with many of the same addictive features as FOBTs. Because these machines are faster than FOBTs and pay out less, players can lose money on slots just as quickly - even at drastically lower stakes.

The RPC – an independent government body which evaluates the evidence behind proposals - initially found that DCMS’ impact assessment for the £2 stake policy was “not fit for purpose”.

After DCMS made changes, the RPC gave it the green light but with a series of major caveats about the evidence relied upon. The committee told The Independent it still had “significant concerns about the overall quality of the assessment”.

Stronger evidence was needed on “what behavioural changes the policy will cause, and what level of benefits this will generate”, the RPC said.

Dr Wardle said this work should have begun months ago as a standard part of evaluating policy.

“Given that we have already seen evidence of industry practices encouraging FOBT players to migrate to online platforms, it seems to me that you should want to understand these processes better so that you can then understand the implications of the policy change and think about what further regulatory actions may or may not be needed,” Professor Wardle said.

Overall, DCMS estimates that £1.3bn of the £1.8bn currently lost each year on FOBTs will move to other forms of gambling when bookmakers implement the stake cut on 6 April. The industry regulator warns many of these alternatives are just as harmful as FOBTs.

The RPC highlights that the government knew about this problem at least a year ago: “The Department recognises that displacement to other forms of gambling might include significant substitution to other gambling products or outside betting shops.”

And it suggests that it knew other parts of the industry would benefit: “The department notes that this could have significant effects on competition in the gaming industry.”

Yet nothing has been done to measure these effects.

Mike Chatha, who has worked with problem gamblers for 25 years and is author of a new book about the science behind gambling addiction, said that any attempt to tackle the issue must look at all forms rather than individual products.

There must be a “laser focus on one issue: that you cannot tackle problem gambling by focusing on one product”, he said.

“You can’t regulate any addictive substance like that. You couldn’t tackle alcoholism by banning vodka. It’s just not possible.”

Mr Chatha, who suffered with his own gambling addiction for a decade before recovering, welcomed the introduction of a stake cut as a “minor miracle” given extensive pressure against it from bookmakers.

“But, and it’s a big but,” he added. “When someone is addicted they need a certain amount of gambling to give them that hit. If they don’t get it any more they will simply switch products.

“In 25 years of working with Gamblers Anonymous I am not aware of one single example of an individual who has managed to stop gambling on one product and have no problems with others.

“In fact the opposite is true. People who can’t control their gambling think: ‘Well, I’ve lost a lot online, I’ll go to the casino. I’ve lost a load at the casino, I’ll go to the bookmaker’. It’s typical addict thinking.”

One step Mr Chatha says would make a difference would be to get gambling machine makers and online casinos to hand over data on the way people play, so that experts could track harmful signs.

Despite this being relatively simple and cheap for companies to do, neither DCMS or the Gambling Commission collects such data, or has any plan to do so.

Arcade owners lobbied hard for the FOBT stake cut which the government knew they stood to benefit from financially (Rex)

Mr Chatha said that to truly have an impact on gambling addiction the government must massively ramp up spending on treatment. There are hundreds of thousands of problem gamblers in the UK but there are only resources to help about 20,000 of them. Spending on treatment massively lags behind that for alcohol and drug misuse.

People who recognise that they have difficulty controlling their gambling can register to exclude themselves, meaning companies won’t take their money.

But currently the system is almost useless because it is not comprehensive meaning gamblers can easily work round it, Mr Chatha says. To combat this he crowdfunding for a new app which will block all online gambling sites.

‘Crack cocaine’ machines

When it comes to cutting FOBT stakes to £2, addicted gamblers won’t need to find a workaround as they will still be able to lose money rapidly on the same machines in bookmakers.

While the public may be under the impression that “crack cocaine” betting machines have in effect been turned into much less harmful fruit machines, this is not the case.

FOBT machines run two types of games only one of which is affected by the new stake limit. That category, known as B2, typically takes the form of roulette.

But the same machines are also allowed to run slot machine-style games – category B3. The latter category lets players bet eight times faster and jackpots are just as high as £500. It also takes a much bigger cut of their winnings.

Slot machine games will still be available in bookmakers and casinos (AP)

Gamblers lose money on slot machine games at £2 stakes just as quickly as on FOBT games at £50 stakes, raising questions as to why only one type of game was targeted.

A third of the total lost on FOBTs is already lost on slot machine games which will be completely unaffected by the new policy, DCMS concedes.

Given the availability of these games on the same machines, the amount lost on slots seems likely to rise when stakes on roulette are drastically cut.

The Gambling Commission said it had advised the government that slot machine games at low stakes were equally as harmful as roulette at high stakes but DCMS decided to focus exclusively on one type.

Last month, the Gambling Commission rushed out a call to evidence on the harm from other types of machines but it has no indication of when any findings will be published or any action taken.

A commission spokesperson said: “Our advice to the government’s gambling review was based on the best available evidence and focused on reducing the risk of gambling-related harm.

“Our recent call for evidence builds on our advice that a stake cut for B2 gaming machines does not address the risk of harm presented by other categories of gaming machines.

“The gambling industry has an opportunity to demonstrate progress since the gambling review in trialling and evaluating new player-protection measures.”

A DCMS spokesperson said: “We have taken decisive action to ensure we have a responsible gambling industry that protects the most vulnerable in our society.

“By reducing the maximum FOBT stake to £2 we can help stop extreme losses by those who can least afford it. This will target the greatest proportion of problem gamblers and mitigate the impact on those most vulnerable to harm.

“We have been clear that problem gambling is not confined to one product, which is why we have brought in a package of measures to strengthen protections around gaming machines, online gambling, gambling advertising and treatment for problem gamblers.”