International news from the FOBT suppliers

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The founder of the Campaign for Fairer Gambling looks into whether specific communities and demographics are being targeted by the companies behind fixed odds betting terminals.

Great Britain is the only country foolish enough to allow FOBTs in high street betting shops with roulette at stakes up to £100 per spin every 20 seconds. However, as FOBTs are just one form of electronic gaming machine (EGMs) it is useful to consider what the FOBT suppliers say about EGMs when trying to understand FOBTs.

A recent issue of the international trade magazine Global Gaming Business (GGB) featured two relevant articles. One article, with the title of “Target Youth”, was a write-up on Inspired, one of the two FOBT suppliers, quoting Lucy Buckley, the Director of Strategy and Communications at Inspired. She stated that the younger audience is more interested in quick play games and a “place a quick bet during my lunch break experience” than having to visit a special destination.This clearly shows that Inspired targets a different demographic with betting shop FOBT content than the demographic that visits casinos. Of course, not all punters in bookies are fortunate enough to be having a lunch break as they are not in employment. It also clearly spells out something that everybody in the gambling sector already knows – content is targeted to the demographic.

Motor insurance companies figured out a long while ago that both younger persons and faster motors are high risk factors. Put them both together and you have the highest risk category of motoring demographic and product. It is exactly the same with younger persons and sped-up roulette on FOBTs – it’s the highest risk category of gambling demographic and product.

Bookmakers always claim that they do not target deprived areas, implying it is coincidental that their shops are more prevalent there. The recently published “Britain in 2015” report highlighted a 43% increase in betting shops in town and city centres from 2004 to 2012, which shows that shop location is no longer historically based, but is driven by FOBT revenues – with a heavy bias towards deprived communities. So whilst the 2005 Gambling Act has one licensing objective of prevention of harm to young and vulnerable persons, these are part of the target market for bookies and FOBT suppliers.

The second article in GGB is titled “Slot Floor Exodus” referring to a white paper by WMS entitled “Reasons for Increased Player Losses”. WMS is a division of Scientific Games, which also owns SG, the other FOBT supplier. The sub-title of the article is “Manufacturers and operators debate whether rising slot holds are causing players to abandon the machines”.

In 2002, slot machine revenue as percentage of total bricks-and-mortar gaming revenue in Nevada was at 66% whereas in 2014 it was a 61%, being a relative decline. In 2002 I was personally interviewed for a reality television gambling documentary for the Discovery Channel in which I stated that “I am very confident in the future of table games – but there is a slight chance that slots might burn out!”

I had played at the Hard Rock Casino in Las Vegas which catered to the youngest demographic (21 and over in Nevada casinos) and observed that this group was more interested in table games than slots. Despite all the branding and licensing of TV and Hollywood themed content onto slots, all technological innovations, bonus rounds and slot marketing dominance, slots have declined in popularity to tables over the 2002 to 2014 period.

The trend in Britain is in the opposite direction as the gross revenue on FOBTs has risen from minimal in 2002 to over £1.5 billion per year in 2014, with FOBT roulette revenue alone at over £1 billion in 2014, a sum greater than all British casino table game and slot revenue combined.

In the US the relative decline in slot gambler losses is attributable to changes that have created a less positive gambler experience. Nevada casino visitors now have a variety of activities for discretionary spend of their disposable income including table games, sports and race books, bingo, poker rooms, restaurants, shows, bars, nightclubs and shops.

The WMS white paper analyses the reasons for the decline and attributes this to increases in minimum stakes, volatility, speed and edge. These increases would only have marginal impact on deterring gamblers addicted to slots. The contrast with the resilience of FOBT roulette in Britain is demonstrative of a FOBT demographic that has less gambling nous and a more vulnerable profile than the Las Vegas casino slot gambler. The maximum stake of £100 a spin on FOBTs has a considerable capacity for harm, particularly when it is a vulnerable demographic that is being targeted.

It should be no surprise then that BACTA, representing seaside amusement arcades and venues with EGMs with a £2 maximum stake or lower per spin, have stated that companies using FOBTs are “bringing the industry into disrepute.”

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