FOBTs: What happened next?

 

New statistics from the Gambling Commission were published last week and they make for interesting reading. You may recall that the stake limit on fixed-odds betting terminals (FOBTs) was reduced to £2 in 2019, which amounted to a de facto ban since hardly anybody wants to play them with such a low stake.

 

Advocates of the reform said it would reduce gambling-related harm by making it more difficult for machine gamblers to lose large sums of money. There was also a suggestion that it would reduce the number of problem gamblers.

 

Opponents said that it would lead to the closure of thousands of betting shops and that problem gamblers would switch to other gambling machines and go online.

 

The pandemic has made it difficult to make a simple before-and-after comparison because physical gambling venues were closed for long periods between March 2020 and July 2021. The financial year 2020/21 was a write-off and 2021/22 was partially affected by a lockdown. Even 2019/20 was slightly affected, with venues closed for the last 10 days of that year.

 

Nevertheless, there is enough evidence for some obvious changes in the gambling market to be identified. The table below gives an overview of the sector (click to enlarge).

The FOBT reform was introduced in April 2019. Overall Gross Gambling Yield (which basically means revenue: stakes minus prizes) fell slightly in 2018/19 and fell again in 2019/20. Bookmakers were the big losers, with GGY falling from £3.3 billion to £2.4 billion in this period.

 

By contrast, online casino GGY rose from £2.9 billion to £3.2 billion and then shot above £4 billion in the first year of the pandemic. Online betting revenue rose by £300 million in the first year of the FOBT change, having fallen the previous year.

It's difficult to call cause and effect in an evolving market but this data is consistent with the prediction that online gambling would pick up some of the slack from the fall of the FOBTs.

In the betting shop sector, there is clear evidence of a massive switch from FOBTs (formally known as B2 machines) to high jackpot machines (B3 machines). In 2017/18, there were 33,685 B2 machines in bookies and just 31 B3 machines. By 2021/22, there were just seven (!) B2 machines and 24,339 B3 machines.

Over the same period, Gross Gambling Yield from B2 machines fell from £1.7 billion to £110,000 while GGY from B3 machines rose from £158 million to £1.1 billion. Overall gaming machine revenue declined by 42 per cent. It should be remembered that 2021/22 was affected by lockdown. Nevertheless, there is little doubt that betting shops are making significantly less from gambling machines than they were as a result of the disappearance of FOBTs.

 

The other striking change is the number of betting shop closures. 2,300 bookmakers have disappeared since the FOBT reform. There are now 6,219 betting shops in the UK, which is half as many as there were in 1980. And there are more to come if yesterday's announcement from the new owner of William Hill is anything to go by.

An unpublished report by KPMG commissioned by the bookies predicted that 4,500 betting shops would close if the FOBT stake was reduced to £2. So far, it has been around half of that, but it has been a hell of a lot more than the few hundred predicted by anti-gambling campaigner Matt Zarb-Cousin.

Incidentally, and contrary to the notion that gamblers in betting shops would switch to betting on the horses, revenue from horse-racing continued to fall in 2019/20 with turnover (i.e. the amount wagered) falling below £4 billion for the first time. 

 

I can't find figures for employment, but I believe 53,000 people were employed in the bookmaking industry in 2018. With a quarter of betting shops closing, a rough estimate would be that around 13,000 people have lost their jobs.

As for problem gambling, the Commission's latest figures give the following estimates:

Year to September 2018: 0.5%

Year to September 2019: 0.5%

Year to September 2020: 0.6%

Year to September 2021: 0.3%

Year to September 2022: 0.3%

On the face of it, the rate of problem gambling halved between 2020 and 2021. This is possible, but it seems very unlikely. While this decline doesn't exactly correlate with the timing of the FOBT reform, anti-gambling campaigners could say that it is consistent with the prediction that the number of problem gamblers would fall once the 'crack cocaine of gambling' was banished from Britain. I haven't heard any of them make that claim, presumably because they are now crusading against online gambling and don't want to give the impression that things have got better.

The Betting & Gaming Council, by contrast, have been shouting about the low prevalence figure. This is probably a mistake. The problem gambling rate has been estimated at between 0.3% and 0.9% ever since it started being recorded in 1999. There has never been a sustained rise or decline. The fluctuations from year to year are probably meaningless. Although the Gambling Commission surveys 4,000 people, there are so few problem gamblers that the confidence interval is enormous (+/- 1.5%!). In the latest survey of 4,018 people, only 11 of them were problem gamblers. 

 

As a consequence, none of the year-to-year changes are statistically significant. It is perfectly likely that the next survey will find a prevalence of 0.6%, in which case anti-gambling campaigners (and The Times) will claim that the number of problem gamblers has doubled. That, too, will almost certainly be nonsense.

In summary, the radical stake reduction on FOBTs was associated with gamblers in betting shops suddenly spending £1.1 billion on machines that most people have never heard of, but spending less on machines as a whole. There is a strong suggestion in the data that some FOBT spend was displaced online. A quarter of the UK's betting shops closed. British gamblers may be spending slightly less overall, but we will have to wait for the 2022/23 post-pandemic figures to be published before we can say that with any certainty.

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Last Orders with Julia Hartley-Brewer

A new Last Orders dropped this week. We welcomed back friend of the show Julia Hartley-Brewer to discuss the world cup, free speech on campus and how to keep your house warm.

Listen here.

You can send your questions to lastorders@spiked-online.com and we’ll try to answer them in the next episode.

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Great success! Mexico's sugar tax

 

There's some terrific cognitive dissonance in this article in Frontiers in Public Health. You may fondly recall the Mexican sugar tax which supposedly reduced sugary drink consumption by 6 per cent or 12 per cent, depending on who you get your news from (it actually reduced it by about 3 per cent). It was much talked about in the months before George Osborne inflicted a sugar tax on the UK.

Did this 'world-leading' policy lead to a reduction in obesity in Mexico? You might think so according to the authors of 'Childhood obesity in Mexico: Influencing factors and prevention strategies'. They say... 

 

... given that sugar-sweetened beverages are well understood as a casual factor of overweight and obesity, the year 2014 saw the implementation of a tax of one Mexican peso per liter on beverages with added sugars, as well as on food items with an energy content ≥275 calories per 100 g.

Alas, their figures tell us otherwise. 14.7% of Mexican kids were classed as obese in 2006 and there was "a sustained increase over the following survey years until reaching nearly 20.0% in 2021."

Yes, it's another big 'public health' win! The obesity rate amongst adults has also risen - from 32 per cent to 36 per cent since 2012. On the face of it, the widely lauded sugar tax of 2014 has made not a jot of difference to the thing it was supposed to tackle. 

 

It would be interesting to compare these figures to countries in central America which do not have sugar taxes, but idea of using a control might be a bit too 'sciency' for the authors who seem to have a pretty weak grasp of how to work with statistics. When they look for correlations between diet and obesity they say:

Snack foods, sweets and desserts, and sugar-sweetened beverages were not statistically significant contributors in the model (p = 0.112 and 0.098, respectively), but seem to show weak associations.

There is either an association or there isn't. Statistical significance exists to help us establish if they is a likely association. There isn't one here but the authors proceed to act as if there is.

 

The pseudo-panels of the study showed that those food groups considered as protective, such as fruits and vegetables, protected against overweight and obesity in school-age children. On the other hand, intake of snack foods, sweets and desserts, and sugar-sweetened beverages were associated with the presence of both outcomes.

 

No, they weren't.

 

They do it again with fibre.

 

We also found that greater fiber consumption was associated with lower overweight and obesity in school-age children, even when this association was not statistically significant.

How do this stuff get through peer review?

 

Although this association is inconclusive in the scientific literature, we suggest that a greater fiber content in food items indicates a lower caloric density, as well as a lower consumption rate and possibly a greater sense of satiety.

 

In other words, "we didn't find an association between fibre intake and obesity, and the rest of the literature is inconclusive, but here's what we reckon..."

 

Notably, when facing a problem of the magnitude of school-age child obesity, permanent government strategies and actions are required to ensure the containment, prevention, and management of this outcome in order to avoid serious consequences for long-term health and national development. To the present, various strategies have been implemented in Mexico, as well as in other countries around the world.

 

And none of them have worked.

 

Although these have been associated with some positive results, they are not public policy actions which demonstrate an overall effective impact.

 

That's one way to describe abject failure.

 

An example of this is the establishment of regulations on the sale and distribution of foods and drinks in the school environment dating back to 2010, and which were only put in place in 2012 and whose implementation was monitored only starting in 2015.

 

That didn't work either.

 

Other actions implemented on the national stage and not only targeting the school-age population include the 2014 tax of one Mexican peso on sugar-sweetened beverages, and one previous study found a reduction of 6% in buying of taxed beverages in 2014. Furthermore, from 2014 to 2015 changes were observed in the buying of taxed and non-taxed beverages, where buying of taxed beverages diminished by 5.5% in 2014 and 9.7% in 2015: an average reduction of 7.6% over the study period.

Did it lead to a reduction in obesity, or even a slowing of the increase of obesity, as was promised? As we have seen, it did not. 

 

Nonetheless, the tax is too small to expect the provocation of biological impacts such as a reduction in obesity.

 

Oh, so now you tell us. Didn't say that at the time, did you? If you'd said it wasn't going to reduce obesity, the government would have never implemented it. All the modelling, as recently as 2020(!), said it was going to reduce the weight of children. Now you tell us the tax was too small. 

 

Why is anyone still listening to these charlatans?

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The SNP's mad plans for alcohol advertising

Nicola Sturgeon yesterday

The Scottish National Party has been fully captured by the temperance lobby. Minimum pricing has crashed and burned, but they are still listening to the alleged experts from the pressure groups whose wages they pay. Banning alcohol advertising was always next on the agenda for the Scottish temperance groups and the Scottish Government has produced a consultation document that reads like it was written by Carrie Nation.

Licensing solicitor Stephen McGowan has written all it in on his blog.

 

I have been reviewing and practising alcohol related law in Scotland over some years, in my role as a licensing lawyer representing the trade, and I have written on this topic widely. I have often been a “critical friend” of the Scottish Government, having sat on many working groups and bodies on licensing reform, and must also concede I have been withering in my analysis of the efficacy of some of the licensing law which the Parliament has produced. That being, said even I am amazed at just how far these new proposals go, and the absence of balance.

Indeed. The SNP don't even have the power to ban TV and digital advertising but they've included them in the consultation anyway to show how serious they are (and what they would do if Scotland was 'independent'). They say...

 

“It is crucial that any potential restrictions to reduce the volume of alcohol marketing are as comprehensive as possible.”

And they are not kidding. The proposals not only include every form of advertising, but virtually every kind of sponsorship, brand-sharing, merchandise and even the display of alcoholic drinks in shops. Head over to Stephen's blog for the full story but here are the lowlights...

 

Event Sponsorship

This part of consultation starts by telling us there is no evidence at all as to whether sponsorship of “events”, by which they mean music, cultural events and so on (as opposed to sporting events) by alcohol has negative outcomes. Nevertheless, unhindered by any expressed desire to wish to proceed with probative and proportionate policy-making, they plough on and ask whether there should be a prohibition on alcohol sponsoring all events across Scotland. This, if enacted, would end alcohol sponsorship of musical or cultural festivals as well as local community led events. Heaven knows how you organise a beer festival.

Brand-sharing and merchandise

Not content with proposing a complete ban on all alcohol advertising in all public spaces, and the shuttering of shop-fronts, they go further, and suggest that there should be a ban on the sale of all alcohol-branded merchandise altogether. No more hats or mugs. No more t-shirts. No more craft brewery hoodies. In the context of this consultation, these have become “walking billboards“. The Scottish Government go further still, and present a case that even alcohol-free products should be banned as they are, in essence, “gateway” brands to expose people to the alcoholic variants, because of the use of the same names and logos:

“This demonstrates the need to carefully consider restricting these other distinctive and identifiable elements associated with the alcohol brand, in addition to restricting use of the alcohol brand name.“

... Perhaps the most incredible proposal within this consultation is the suggestion that there should be a complete ban on any and all promotion/advertising of alcohol in public places. This notion is suggested not, it would seem, as an intrinsic goal, but on the basis that it might be quite difficult to create a more nuanced law. Consider the following paragraph:

“Given the difficulties around defining places as places children and young people frequent, as well as the likely impact of alcohol marketing on adults too, a prohibition of alcohol advertising in public spaces may be the best course of action.”

I find that to be a remarkable statement. Here we have the Government saying that, because it might be too complex to prohibit alcohol marketing under defined circumstances, they should just go ahead and ban it altogether. We are looking at the white-washing of the alcohol industry across the country.  

... Hard-working alcohol producers will be vexed, I would suggest, to see the following comment:

“Without branding and other marketing strategies, alcohol products in each beverage sub-sector are essentially variations of the same thing“.

This is an overt effort to eradicate the diversity and personality of individual alcohol products; to reduce them to a denominator common to those who are so opposed to it; that is, to see alcohol only as a harmful commodity, a vice. This one sentence discounts centuries of craft, effort and enterprise. This one sentence discounts the joy in sampling one malt whisky over another and sharing that experience with a friend. These, of course, are positive traits and experiences, which explains their absence.

... They even take us into territory where alcohol must be seen in the same context as tobacco:

“Where alcohol is displayed behind the checkout this could be required to be in a closed cupboard, like tobacco products.”

 

Yep, that was always the plan.

 

You can read and respond to the consultation here.

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A swift half with David Zaruk

Some of you may be familiar with the Risk-Monger, David Zaruk. If not, you can make his acquaintance by watching this week's Swift Half. David has been battling anti-science NGOs in Brussels for many years. We talk about the precautionary principle, Glyphosate, neo-nics and why the Dutch government is closing down farms. Do have a watch.

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Banning disposable vapes?

A motley collection of environmental and 'public health' groups have joined forces to get disposable vapes banned. 

 

Environmental groups have called for the sale of single-use e-cigarettes to be banned due their “rapidly escalating threat”.

In an open letter to environment secretary Thérèse Coffey and health secretary Steve Barclay, 18 environment and health groups, including Green Alliance and RSPCA, argue that disposable vapes are “unnecessary electrical items” that contain single use plastic, nicotine and batteries, all of which are “hazardous to the environment and wildlife when littered”.

 

They describe disposable vapes as single use plastics, which is a stretch given that they provide 300 puffs each. They also claim that the amount of lithium in their batteries equates to 1,200 electric cars per year. Maybe so, but there were seven million electric cars produced last year and that number is rising exponentially. Lithium usage in e-cigarettes is negligible by comparison.

 

Disposable vapes are not a 'health threat'. On the contrary, they are hugely important in helping smokers who want to quit. Reusable e-cigarettes are cheaper in the longterm and many people who start with disposables will switch to them later, but they require a larger financial commitment up front and are less simple to use. For smokers who are trying vaping for the first time, disposables are the most appealing option.

 

As I told City AM... 

Vaping has been incredibly effective in driving down smoking rates in Britain, but 28 per cent of smokers have still never tried an e-cigarette and the majority of those who have tried them have not become longterm users. If more smokers are going to switch to vaping, they need products that are simple, convenient and cheap.

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A big rise in gambling addiction?

There’s an eye-catching claim splashed over the front of The Times today under the headline ‘Big rise in gambling addiction’:

The health service will announce tomorrow that it has opened clinics in Southampton and Stoke, adding to a national network of five commissioned in 2019. Figures seen by The Times show that 599 patients have been referred to the service in the past six months, a 42 per cent increase on the same period last year and up 65 per cent from 2020-21.

The figures come from here. ‘Gambling addictions’ rising by 42 per cent in one year is so unlikely that it is worth asking whether these statistics accurately reflect what is going on.

Astute readers will recall the coronavirus pandemic of 2020-21 and wonder whether the accompanying restrictions, which included the total shutdown of face-to-face gambling support for months, may have led to the figures for these years being lower than they would otherwise have been. It seem almost certain that they did.

2019/20 would be a better baseline to compare the most recent years to, except that a lot of these clinics didn’t even exist for part or all of that year. This significant fact is hiding in plain sight in the paragraph quoted above:

The health service will announce tomorrow that it has opened clinics in Southampton and Stoke, adding to a national network of five commissioned in 2019.

The whole point of these clinics is to give problem gamblers somewhere to go for face-to-face support. When the NHS Northern Gambling Service was opened in September 2019, Dr Matthew Gaskell said:

“I’m delighted to be opening our new clinic in Manchester. This will help make our service more accessible to people in the North West of England where we know there are thousands who need our support.”

As intended, problem gamblers are using these relatively new facilities. When more clinics are opened in Southampton, Stoke and elsewhere, it will presumably lead to even more people attending a gambling clinic. It will disappointing if they don’t, but it will not be evidence of a ‘big rise in gambling addictions’, although perhaps The Times will portray it as such

The aforementioned Dr Gaskell is quoted by The Times…

He said the patients referred to NHS addiction clinics were a “drop in the ocean” of those suffering mental health problems because of problem gambling.

Perhaps so, but it is an increasingly large drop in the ocean as the number of NHS clinics proliferates and word gets around that they exist.

If you want to know whether there has been a rise in problem gambling, you need to look at the problem gambling surveys which have been running since 1999. They show that the rate of problem gambling has been flat and low for over 20 years. According to the latest data…

• the overall headline problem gambling rate as measured by the short form PGSI is statistically stable at 0.3%.

In short, there is a fairly obvious ‘if you built it they will come’ aspect to this story. I suspect that journalists at The Times are smart enough to see this but have had their minds clouded by the paper’s editorial line which resembles a moral crusade (why else would this half-story be on the front page?)

The rest of the article pushes the sports betting angle, with Dr Gaskell making the pointed and remarkably convenient claim that his clinics are “filled with young men in football shirts“. He is not a man averse to hyperbole…

“People start gambling as soon as they wake up in the morning; they’re gambling in the shower, gambling while they’re driving to work. The NHS is picking up the tab.”

The mind boggles at the idea of gambling in the shower. As for the NHS picking up the tab, the government made over £3 billion from gambling duty revenue last year and the industry was willingly paying for gambling treatment services via GambleAware until the puritans at the NHS decided that it could no longer accept this tainted money and passed the bill to the taxpayer.

If ‘gambling addictions’ have really risen by 65 per cent in two years, you have to wonder what the point of ridding the country of fixed odds betting terminals was. Remember them? They were the root of all evil according to dozens of Times articles until April 2019 when they were effectively banned. There were the ‘crack cocaine of gambling’, no less.

How does The Times square its victory over the dreaded FOBTs with the spiralling rates of gambling addiction it is now reporting? Perhaps it is relying on its readers having short memories.

 

Cross-posted from the Snowdon Substack.

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