Gambling industry will welcome Government's proposals to increase gaming machine stakes and prizes levels, says expert

The Department for Culture, Media and Sport (DCMS) has set out its intention to fix the maximum stakes and payouts for certain categories of gaming machines, such as fruit machines and slot machines and fixed odds betting terminals (FOBTs). FOBTs are high stakes rapid play gaming machines and are commonly found in high street betting shops and have formed the centre of some recent disputes relating to the primary gambling activity within such shops.

Gambling law expert Audrey Ferrie of Pinsent Masons, the law firm behind Out-Law.com, said that the industry would be pleased to have won the right to increase the stakes and payouts for some categories of gaming machines and to have convinced the Government to reintroduce a system of review of the rates every three years.

"Previously the reviews have been conducted on an adhoc basis," Ferrie said. "There will now be a better structure for review, and operators will be able to improve their planning and organisation of the evidence they will need to provide to  support increases in  stake and prizes levels."

According to the DCMS' new policy (39-page / 582KB PDF), the gambling industry will have to provide evidence of the social and economic impact of any  increases to the maximum stakes and prizes for gaming machines. It said that there would be "no presumption of routine increases in limits" and that the levels would be set only after a "robust analysis" of the evidence of the potential impact of such measures.

As part of the current review, there will be no change to the current maximum stakes or prizes that can be charged or paid out by the gambling operators for category 'B2' gaming machines – the FOBTs. The maximum stake that can be placed in those gaming machines is £100 and the maximum prize is £500.

"The industry will view this as a success because there were efforts from within the anti-gambling lobby to have the levels of stakes and prizes for B2 gaming machines cut," Ferrie said.

The Association of British Bookmakers (ABB) has backed a 'no change' approach for B2 gaming machines and had argued that there was "no empirical evidence" to show that "a reduction in stake and prize levels has any positive effect in reducing problem gambling or minimising gambling related harm".

However, whilst DCMS resisted calls from campaigners to reduce the levels of stakes and prizes for B2 gaming machines, it called on the industry to close "knowledge gaps" that it said exists in relation to B2 gaming machine play and its impact.

"The Government is clear that the industry must lead in closing these knowledge gaps by making data available on player behaviour, patterns of play, spend and stake distribution in order to support robust, independent research which is representative in scale and informed by current data," DCMS said in its paper.

"The Government notes that the ABB has now developed a social responsibility code of practice in relation to licensed betting offices which will be implemented from October 2013 and includes measures designed to strengthen player protection and bring about a step change in performance on social responsibility. The Government expects the industry to carefully evaluate the effectiveness of these measures, and will look to the success of the code in reducing harm as a demonstration of the industry’s commitment to the licensing objectives," it said.

The ABB Code (24-page / 2.14MB PDF) sets out measures that ABB members have to abide by to ensure responsible gambling and player protection. Under the Code, players of gaming machines will be given the opportunity to set their own cash and time limits, whilst new age-verification measures and rules on the advertising and promotion of gambling were also introduced.

"The Government proposals recognise the importance of gaming  machines to the success of gambling operators in Great Britain in what is a testing economic environment currently," Ferrie said. "It shows they are willing to support growth, providing there are safeguards in place."

Ferrie also said that the gambling industry would welcome the Government's decision not to introduce new rules relating to the clustering of betting shops on the high street.

Some campaigners had asked the Government to intervene to prevent a concentration of betting shops from forming in local areas, but DCMS said that "local authorities are best placed to manage this" using existing powers.

Under the Gambling Act, gambling operators need to obtain a premises licence from the relevant local authority, as well as an operating licence from the Gambling Commission, before they can open a betting shop.

Gambling operators will welcome the opportunity to continue to present their arguments for a premises licence at local level on a case-by-case basis, rather than face having to comply with a "blanket quota" on the number of betting shops that can be situated within a certain area, Ferrie said.