Contents EXECUTIVE SUMMARY Introduction: Responding to Government s call for evidence Defining Vulnerability Methodology...

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2 2 About the authors Professor Peter Collins retired in 2010 as Professor of Public Policy Studies at the University of Salford where he was also Director of the Centre for the Study of Gambling. He retired in 2013 after 14 years as Executive Director of the South African Responsible Gambling Programme which he founded. In he was a special adviser to the Joint Scrutiny Committee on the Gambling Bill. Until 2015 he was a trustee of Gamcare. Professor Graham Barr (PhD) is (jointly) a Professor in the departments of Statistical Sciences and Economics at the University of Cape Town. He has consulted to the gambling industry over the last 25 years in the areas of slot machine software design and computer modelling, and published extensively in the gambling literature. Dr. Leanne Scott (PhD) is a senior lecturer in the department of Statistical Sciences at the University of Cape Town. She has consulted to the gambling industry over the last 7 years and is an experienced focus group facilitator. Her research interests are in the area of Decision Analysis in the field of Operations Research.

3 Contents EXECUTIVE SUMMARY Introduction: Responding to Government s call for evidence Defining Vulnerability Methodology The Qualitative Evidence from Focus Group Discussions London, Group 1: London, Group 2: Manchester Group Manchester, Group Glasgow Group Glasgow, Group 6: The Quantitative Evidence from the Simulations The Roulette Simulation Differences between the simulation and actual FOBT play Reaction of focus group players to the authenticity of the simulation computer interface The Game of Roulette Risk and Return, Betting profile and vulnerability to loss A rationale for using the standard deviation of return as a measure of player vulnerability Defining VLL, our measure of player vulnerability to large losses The actual Roulette computer simulation player records Highlighting the reduction in VLL for those who typically bet more than 10 per play and those who are vulnerable Evidence from Other Sources Evidence from betting shop and industry employees Evidence from professionals who treat problem gamblers Evidence from the Omnibus Survey Other Considerations Protecting the Vulnerable and Bookmaker Profits Other Regulatory Considerations Conclusion Acknowledgements Appendices Appendix A. Understanding the effect of stake size reduction on machine gambling-related harm: a select literature review Appendix B: Omnibus Survey Questions Appendix C: Questionnaire administered to Focus Group participants Appendix D: Problem Gambling Severity Index (PGSI) Appendix E: The Derivation of VLL (Vulnerability to Large Losses) Selected Bibliography

4 Table 1: Range of EGMs available in Great Britain Table 2: Summary of Focus Group Demographics and Characteristics Table 3: Consistency of Questionnaire Responses with Observed Betting Behaviour Table 4: Bet Risk as measured by SD (Total Bet Risk) and CV (Intrinsic Bet Risk) Table 5: Recorded Player Data (respondents with PGSI>3 highlighted) Table 6: VLL reduction for Players who usually bet more than 10 per spin (Group 4) Table 7: Reduction in VLL for those who are defined as vulnerable on BOTH measures of vulnerability Table 8: Reduction in VLL for players with PGSI scores Table 9: Omnibus Survey attitudes towards current Max Bet on FOBT machines Table 10: Omnibus Survey views on reducing max stake Table 11: Omnibus survey: typical stake size Table 12: Omnibus survey : Max bet Table 13: Recorded Player Data from simulations, sorted by PGSI score (those with PGSI>3 highlighted)

5 5 EXECUTIVE SUMMARY This research was commissioned in response to the UK Government s statement in 2015 that there is insufficient evidence to warrant reducing the maximum permitted stake on a B2 machines or Fixed Odds Betting Terminals (FOBT) in betting shops from 100 per 20-second spin, if registered with the bookmaker, or 50 if not registered. The brief was to gather information which would remedy this lack of evidence one way or another, and so support the government in making an evidence-based decision on whether or not to maintain the status quo. Although we were primarily concerned with the question of whether a substantial stake reduction would afford significant increased protection to the vulnerable, we were also concerned with the likely impact on player enjoyment. We started from the premise that good gambling policy is primarily a matter of balancing the potentially competing principles of consumer choice, on the one hand, and consumer protection, on the other. Here we agree with Alan Budd et al (2001) that the former has too often been neglected in discussions of gambling policy, and with others that the need for the latter has often been exaggerated, e.g. Manson (2010), Bernhard (2013) Collins (2003). We were also conscious of the need for all regulation to be proportional but thought it undeniable that B2 machines, given that it is possible - even if rare - for players to lose 300 per minute when playing them, must constitute high-stakes or so-called hard gambling rather than low-stakes or so-called soft gambling (to employ a distinction embedded in most gambling legislation around the world, from China to the UK itself). The research project focussed on trying to answer the question: What would be the likely impact, on protecting the vulnerable amongst those who play electronic roulette in betting shops, of substantially reducing the permitted stake per spin from the present maximum, i.e. 100 per 20- second spin, if registered with a bookmaker and 50, if not registered. We were also concerned to ascertain the effect of such a reduction on player enjoyment. The reason for this narrow focus is that FOBTs are not only the most controversial feature of the UK gambling environment: their position within it is clearly anomalous as is shown by the following table which covers the broad range of electronic gambling machines (EGMs) available in Great Britain: Category Maximum stake Maximum prize Number in operation Typical locations B1 5 10,000 (or 2,645 Casinos 20,000 for linked progressive) B ,725 Betting shops and casinos B ,150 Bingo clubs, arcades, betting shops B Private members clubs C ,221 1 Bingo clubs, arcades, pubs D 10p 5 40,844 Bingo clubs and arcades To ensure maximum credibility and minimum vulnerability to accusations of bias towards the perceived interests of the funders of this research, we sought to build a cumulative case for answering the question by gathering evidence from multiple sources, including: regular (once-a month or more) players of electronic roulette in betting shops; those who have worked in betting shops or as managers in book-making companies, problem gambling treatment professionals and 1 Excludes Category C machines in bars and public houses

6 the general public. We also reviewed the small amount of relevant research evidence available in academic research publications. Perhaps, most relevantly, we conducted 6 focus groups of regular players of B2 machines in betting shops ( Fixed Odds Betting Terminals (FOBTs)), in the course of which participants engaged in two 20-minute sessions of simulated play, one session where the maximum stake was 50 and one where the maximum stake was 10. We have good grounds for confidence that the simulations were highly successful in reflecting how people actually play in betting shops. This methodology has the scientific merit of being repeatable by others. Also, in accordance with best research practice, we publish the raw data on which our conclusions are based, including the results of the simulations, the transcripts of focus group discussions and the raw data from the omnibus survey. This means that others can reanalyse our data or seek comparable data of their own. To our basic question about substantial stake reduction, there were three logically possible answers: 1. It would reduce the vulnerability of players to gambling more than they can afford, thereby causing significant harm to themselves to others and to society as a whole; 2. It would make little or no difference; 3. It would increase vulnerability. The evidence from the focus groups of regular players was that it would make little difference to the way most people actually played but would, it was believed, mitigate gambling-related harms amongst some, but not all, vulnerable players. The evidence from the simulations was that, again, while the reduction would make little difference to the way people actually play, it would lead to an average reduction of over 50% in the vulnerability to large losses of people at significant risk of being or becoming problem gamblers. The general and clear conclusion from the evidence of regular FOBT players was that the reduction would make little difference to most players enjoyment. However, it was also recognised that some vulnerable players, who would be prevented from betting more than 10 per spin might emigrate to other forms of gambling on-line or at casinos. Overall, participants did think it would be a good idea to have a substantial reduction of the stake to help at least some of those who are clearly gambling beyond their means in betting shops. This was also the conclusion reached from the other sources of evidence we report on below. In addition to studying the rather exiguous existing literature (Appendix A), we sought evidence on the likely effects of substantially reducing the maximum permitted stake on single games played on FOBTs from a diversity of sources. Thus we sought opinions from people who had worked in betting shops and the bookmaking industry and from problem gambling treatment professionals. We also sought the views of the general public by asking seven relevant questions (Appendix B) in an omnibus survey of respondents. Our main focus, however, was on gathering evidence from those most likely to be affected, for better or worse, by a reduction in maximum permitted stakes: namely, regular consumers of the product, defined as those who play FOBTs once a month or more. To this end we undertook six focus groups comprising a total of 58 people who regularly play electronic roulette in betting shops: two in London, two in Manchester and two in Glasgow. We also created a customised computer programme which would allow participants in the focus groups to play a laptop-based computer simulation of electronic roulette which mimicked the game of roulette played on FOBTs, this being the preferred FOBT game and played by about two thirds of regular FOBT players. This laptop-based computer game had, inter-alia, a feature that enabled the maximum to be set at any level required. In the focus groups we first asked the participants to fill in a questionnaire (Appendix C) about their gambling habits and then discussed gambling in general. We then explained the laptop-based roulette simulations to them pointing out the differences between playing this game and playing roulette at a FOBT machine: in particular, they were not in a betting shop, there was no touch screen, and they were not playing with their own money. However, we urged them to play as closely to the way they normally played in betting shops. In the first simulation the maximum stake per spin was set at 50; in the second simulation the maximum stake was reduced to 10. In each simulation, we allowed players to play for 20 minutes. If they regularly played for less than 20 minutes they were asked to stop when they would usually stop and start again, imagining that they were coming back 6

7 on some future occasion. Participants were asked between and after the simulations whether they had played as they would have in a betting shop. 97% said they had played in the same way that they play in betting shops, a fact confirmed by their questionnaire answers to questions about how they usually bet when playing roulette in betting shops. At the end of the session we asked them to complete the nine questions of the Canadian Problem Gambling Severity Index (PGSI - Appendix D) which scores respondents as No risk (of being or becoming a pathological gambler); as Low risk ; as Moderate risk and as High risk. We also sought their opinions on what they thought would be the likely effect on vulnerability to problem gambling of substantially reducing the maximum permitted stake from 50 to, say, 10. From this evidence, together with the evidence from other sources, we sought to build a cumulative case which either would, or would not, support the case for reducing the maximum stake. Clearly the case would not be supported if the evidence from different sources was significantly divergent or intrinsically inconclusive. On the other hand, while we recognised that some criticism might be made of our individual samples on diverse grounds, if all the evidence converged in strongly supporting one conclusion, this conclusion could only be reasonably challenged by repeating our research with bigger and better samples or by making public the records of actual staking behaviour and individual loss sizes on FOBTs, if such records exist or can be generated. In general, the advantage of basing decisions on cumulative cases rather than seeking to base them on individual experiments or unambiguous sets of statistics is that these latter are extremely hard, if not impossible, to devise or find, and are almost always, especially in studies of human behaviour, open to methodological challenge. A cumulative case by contrast, which draws together evidence from a variety of sources does not claim that any of its component elements are decisive; but that, when taken together, they constitute a case which is difficult to deny, perhaps overwhelmingly so. In order to assess the likely impact of substantial stake reduction in affording significantly increased protection for the vulnerable, we also needed a way of defining vulnerability so that we could correlate it with changes in patterns of play under higher and lower stake limits. We were initially concerned to use measures which are widely recognised in the international research and treatment communities as psychologically indicative of individuals who are prone to suffer and cause harm as a result of excessive or compulsive gambling. These harms (domestic strife, criminal behaviour, suicidal ideation etc.) are themselves all a function of the gambler s disposition to incur unaffordable losses. We, therefore, wanted to establish degrees of psychological vulnerability amongst our participants and correlate this with the actual vulnerability to large losses in their playing behaviour. To establish psychological vulnerability, we included in the questionnaire (filled out by participants at the beginning of the session) a question which mirrors one of the key indicators of a tendency to gamble addictively identified in the 5 th Edition of the Diagnostic and Statistical Manual (DSM V) of the American Psychiatric Association, viz. Have you ever thought you should stop or cut down on gambling on machines in betting shops? Participants could answer: Never; Occasionally; Sometimes; Often. An advantage of this question is that it is likely to pick out not only those who might gladly accept counselling, but also identifies people who are likely to welcome a decrease in the maximum stake on the grounds that it has made it easier for them to cut down or give up, in the same way that some addicted smokers have welcomed the ban on smoking in public places. In addition to this, as indicated, we also used the PGSI screen to identify psychological vulnerability. This screen has the advantage that it has been widely used in gambling research internationally and was used in the UK Prevalence Studies. It has been criticised on a variety of grounds, notably that it is liable to generate both too many false negatives (because of denial etc.) and too many false positives, because it doesn t adequately discriminate between enthusiastic and genuinely problematic gambling behaviours. It is therefore of limited use when used as an instrument for determining prevalence levels of problem and probable pathological gambling in national or other large populations. However, in dealing with small groups of regular gamblers, where other selfreports and actual behavioural evidence is available, this essentially diagnostic instrument has a plausible role to play in measuring psychological vulnerability. Our impression from the focus groups was that a large percentage of our untypical sample did indeed have problems controlling their 7

8 gambling as indicated by their PGSI scores and the frequency with which they thought they should cut down or give up. Many researchers count as problem gamblers only those who score 8 or more on PGSI, and so are rated high risk. This is frequently done in attempts to assess the prevalence of problem gambling in large populations as in the UK Prevalence Surveys. We are mainly reluctant to use this measure in this way because measuring vulnerability to becoming a problem gambler is not the same as measuring problem gambling. We are also uncomfortable with the standard uses of the PGSI 8+ definition of problem gambling, partly because two of our respondents scored 24 out of a possible 27 while others who would also have been counted as problem gamblers just scored 8, and some others who seemed clearly to gamble problematically, would have scored less than 8, if they gave false answers because of denial, dishonesty, or for some other reason. Also, when PGSI is used in conjunction with other screens such as the DSM ten questions as in the UK Prevalence studies, each screen typically identifies large numbers of different individuals as problem gamblers. However, since 8+ on PGSI is the number most commonly used to identify problem gamblers, we also furnish numbers for those who scored 8+ on PGSI. Given these reservations and qualifications we have not assumed that anyone who only answered Often or Sometimes to the question about giving up was likely to be vulnerable to developing serious problems with excessive gambling. We think, however, that individuals, who both Sometimes or often think about cutting down or stopping and are rated Moderate risk or High risk on PGSI, are most likely to be those that legislators would have wanted and/or would want now to protect in order to meet the stipulation in the 2005 Gambling Act, that regulation must protect children and other vulnerable persons. In this study, we thus characterised as vulnerable to being or becoming problem or addictive gamblers only persons who satisfied both criteria. We have convincing qualitative evidence from the focus group discussions about what our sample of regular gamblers think about the likely effects of a substantial stake reduction on vulnerable people. Participants were asked to agree to one of three statements about our core question: i.e. about the likely effect of reducing the maximum stake to, say, 10 on people vulnerable to spending more than they can afford to on gambling: 1. It would reduce vulnerability; 2. It would make no difference; 3. It would increase vulnerability. More than half thought it would reduce vulnerability. Most of the remainder thought it would make no difference and only 3 thought it would increase vulnerability by making players gamble more recklessly or for longer periods of time. Focus groups unsurprisingly differed from one another in their responses and amongst themselves. Moreover, individuals also sometimes hold contradictory views at the same time. General comments, however, in the focus groups largely, and often quite vehemently, supported a substantial reduction in stakes in the interests of protecting the vulnerable and some supported an outright ban. Other comments, however, suggested that high stakes gamblers would just migrate to casinos or would gamble online. Interestingly, some participants changed their view about the desirability of reducing stakes to protect the vulnerable from negative to positive in the course of the sessions. (See e.g. responses for London Group 2.) This seems to us to have been clearly in response to discussion and reflection within the group rather than a desire to please the group facilitator who gave no indication of preference for any particular view. Indeed, some of the participants said they assumed we were working for bookmakers considering introducing a new game. In the course of the simulations we recorded a total of 1888 games played with a maximum stake of 50 and 1710 games played with a maximum stake of 10. Note that each of the two simulations comprised 20 minutes of playing time, making 40 minutes in all. We do not think the slightly smaller number of games played under a 10 maximum stake is relevant or significant and are inclined to attribute it to a small degree of player fatigue amongst people who don t usually play for as long as 40 minutes at one time. We are consequently confident that the simulations furnished us with hard 8

9 quantitative evidence from which we have been able to reach firm conclusions about the likely effects of substantially reducing the maximum stake from its present level to 10, on both vulnerable and non-vulnerable players. This is because the evidence from the focus group discussions, immediately before simulation sessions and immediately after the simulations, demonstrates the realism of the simulations. The overwhelming majority of participants (97%) said that they played on the simulations as they would play in betting shops. They were also visibly fully engaged in playing the simulations which mostly took place in silence with only desultory conversation amongst participants. Moreover, reports at the beginning of the focus groups about what they usually staked and how they usually played also overwhelmingly coincided with how they actually staked and played during the simulations. Thus the simulations yielded robust quantitative evidence about how a substantial reduction in maximum stakes would affect the play of all members in our sample. In order to assess the difference, if any, between the way players played with a 50 maximum stake and a 10 maximum stake, we needed a key indicator which would enable us to estimate the effect of lowering the stake on vulnerability. This required a combination of common sense and statistical calculation. Common sense told us that what alarms people about the fact that it is currently theoretically possible to lose 300 per minute playing electronic roulette at a high street betting shop, is that this clearly makes it very likely that people who can t afford it, will lose large sums of money in a comparatively short period of time. We therefore came up with a new quantifiable measure (rather than a definition) of vulnerability which has not been used before in gambling research though it is adapted from similar concepts employed in the study of finance and investment. We call this measure Vulnerability to Large Losses or VLL. This concept which is fully explained in Appendix E combines a player s staking behaviour (actual quantum of bet made) with the riskiness of the bets they make (in the sense that betting on even is less risky than betting on an individual number) thus giving a measure of their exposure to large losses. Although large is a relative term and related to affordability, we know that no-one in our sample is rated higher than C1 on the socio-economic status (SES) index so we can be confident that large losses can reasonably be measured in hundreds rather than, say, tens of thousands of pounds (which might be appropriate for Mayfair casinos). More importantly, we can see the average percentage by which VLL decreases for different categories of player, when the maximum stake is reduced. This shows the difference in the propensity of players to risk large losses and so, in some cases actually to incur them, when the maximum stake is reduced from 50 to 10. To clarify the concept of VLL and to show how it differs from staking behaviour alone, consider the following examples: Player A bets (the maximum allowed bet of) 100 on 100 spins (approximately 34 minutes of play, assuming 20 seconds per play) in 2 different ways: EITHER: i) S/he places a bet of 100 on RED each time, OR ii) S/he places a bet of 100 on a particular number each time 2. In BOTH case i) and ii) the player s expected loss for the 100-spin session is around 270, reflecting the house advantage. However, one can use statistical theory to show that in case i) s/he has around a 17% chance of losing or more; in case ii) s/he has around a 17% chance of losing 6108 or more. Contrast this with player B who plays 100 games at a reduced maximum of 10 (again, approximately 34 minutes of play) in the same two different ways: EITHER: 9 2 Since the maximum permitted pay-out on FOBTs is 500, a bet of 100 is not possible, the maximum bet on a single number being Our use of the 100 figure here is solely to illustrate the concept of Vulnerability to Large Losses (VLL).

10 10 iii) iv) S/he places a bet of 10 on RED each time, OR S/he places a bet of 10 on a particular number each time. In BOTH cases iii) and iv) the player s expected loss for the 100-spin session is around 27, again reflecting the house advantage. However, in case iii) s/he has around a 17% chance of losing or more; in case iv) s/he has around a 17% chance of losing or more. The vulnerability to large losses thus reduces by a factor of 10 if the maximum permitted stake is reduced by the same amount, and all other factors remain constant. Although this is necessarily true, the concept of VLL enables us to see how individual people s self-exposure to large losses actually changes when the maximum permitted stake is greatly lowered. The most important statistics for considering whether the maximum stake on FOBTs in betting shops ought to be substantially reduced are these: For our group of 17 out of 58 players who were counted vulnerable in that they had BOTH thought sometimes or often about giving up or cutting down AND were rated as either moderate or high risk on PGSI, the average VLL reduced by 54.0% For the 13 players who scored 8+ on the PGSI the average reduction in VLL was 58.6% These numbers clearly suggest that reducing the maximum permitted stake on FOBTs would more than halve the likelihood of unaffordable losses by those who are most vulnerable to being or becoming problem gamblers. It would not affect all equally but it would affect a few very substantially. The focus groups and simulations, together, gave us the best evidence about the likely effects of reducing the maximum stakes since it involved talking to regular B2 players as well as obtaining observable results from highly realistic simulations of actual gambling behaviour. It is also extremely important, in relation to considerations of consumer satisfaction that a majority of regular FOBT players themselves supported a reduction in the maximum stake to something much closer to 10, thereby - perhaps surprisingly - concurring with the bulk of the views we accumulated from a small number of former industry workers and problem gambling treatment professionals. We also found a similar result from the answers to 7 questions which we arranged to be included in an omnibus survey of 2004 members of the general public. The six people we spoke to, on conditions of anonymity, who had worked in the provision of FOBT gambling each assured us that their views would be shared by the majority of betting shop staff, though people would not articulate them for fear of reprisals. We have no means of verifying this and recognise that a sample of six is very small. However, these six were vehement and unanimous in their view that FOBTs should never have been allowed into betting shops in the first place. They were especially concerned that the introduction of FOBTs had caused some betting shop customers to become uncontrollably angry and frustrated. The danger to staff and others thus posed had been exacerbated by the practice of single staffing which the low employment needs of machine gambling, by contrast to over-the-counter betting, had made economically possible. This unacceptable situation had been made tragically clear by two well-publicised, though isolated, recent events (a rape and a murder). These interviewees had also all had and believed that their colleagues would have had - direct experience of the smashing of FOBTs by frustrated and enraged customers, a phenomenon comparatively common with FOBTs but almost non-existent in casinos and adult gaming centres. It is difficult to verify this or get accurate numbers because, so we were told, bookmakers neither report such incidents nor prosecute offenders. Estimates of the annual number of such incidents were thought to run into thousands per annum by our interviewees (out of a total of ± machines) and some unchallenged estimates in the Press have claimed the number is in the high thousands. This small sample of people from the betting industry was much more supportive of an outright ban of FOBTs than the eleven problem gambling treatment professionals we spoke to, also anonymously. These were much more aware of the complexity of the causes of problem gambling and the difficulty of identifying individual features of games as exacerbating or eliciting a disposition

11 to gamble excessively or compulsively. They were also sceptical of the likely effectiveness of prohibition which they thought would make it less likely that people in trouble would seek the help they need. Nevertheless, they did report that a comparatively large number of their clients identified gambling on FOBTs as having played a major part in their problem gambling behaviour and, they were all supportive of a substantial reduction in maximum stake per spin on FOBTs on harm reduction grounds. In relation to the survey of members of the general public, we were interested in two main questions: What do the general public think about the maximum stakes permitted per spin on FOBTs? and To what extent would they support a reduction in maximum stakes on FOBTs in the interest of protecting the vulnerable? We were also interested to see how the small proportion of them (179 individuals - 8%) who had played FOBTs corroborated or contradicted our evidence on patterns of play in the focus groups and simulations: they substantially corroborated it, as well as being internally consistent in that there was a high correlation between those who thought the present maximum stake significantly too high and those who thought that reducing it would afford significant protection to the vulnerable. We asked the seven questions set out in Appendix B and, in analysing them, compared the answers of those who did not know that roulette could be played in betting shops (and may well not have known what roulette is or how it works) with those who did know but had not themselves played and those who themselves had played FOBTs. The key results were: 1. About 65% of the total sample thought that the present maximum stake of 100 was significantly too high. Less than 10% thought it about right or too low. 2. Around 50% of the total sample thought that reducing the maximum stake substantially would make it less likely that vulnerable people would gamble more than they can afford to. A further 44% thought it would make little difference. 3. Of the 1214 respondents who were not aware that one can play roulette in betting shops, 34% think it should not be permitted, i.e. it should be banned. This possibly reflects the view of many people who know little of gambling and who dislike all forms of prohibition in principle, but still think that the less gambling there is in a society, the better. 4. Of the 790 respondents who were aware of the existence of FOBTs, 63% think they should be banned. This suggests that being aware of the fact that people can play roulette in betting shops makes people more likely (nearly twice as likely) to favour prohibition than if they are unaware. 5. There was very little difference in the answers given to these questions by respondents from different social classes. This indicates that although most of our focus group gamblers were SES category C, this is unlikely to have made their responses atypical of regular FOBT players. Although, as one would expect, SES AB players tended usually to play for somewhat (but not much) higher stakes than SES DE players, 65% of all players usually staked less than 10 and about half had never staked more that this amount. Only 5 people (<3%) usually staked more than 40 and 3 of these were categorised SES AB. There are other considerations relevant to any decision a Government might make in relation to FOBTs which have been emphasised by academic studies of gambling. Perhaps the most important of these is the consideration that it is much harder effectively to regulate large numbers of small venues where high stakes gambling can take place than in small numbers of large venues. Indeed, it is arguable that if one is going to have a maximum stake limit as high as 100, one might as well not have any limit at all. Another consideration is that there is little social benefit to be derived from small venues, in terms of harnessing the creativity of gambling companies to the furnishing of infrastructure and services which will attract tourists or fund non-gambling amenities for the local population - both of which public benefits are demonstrated by Singapore s Integrated Entertainment Resorts (Eadington and Collins). Our conclusion from this whole study is that substantially reducing the maximum stake permitted on B2 machines would make little difference to the majority of consumers who mostly stake less than 11

12 10 anyway. One clear impact of reducing the maximum permitted stake would be on those few players who like to stake more than 10 after they have already won a significant sum. This may be negative in terms of player enjoyment. On the other hand, such a reduction would demonstrably diminish greatly (i.e. by more than half on average) the vulnerability to large losses of those who can reasonably be identified as being vulnerable to being or becoming, problem gamblers. As such, it would afford significant additional protection to those vulnerable to gambling excessively or compulsively and so to causing substantial harm to themselves, to those close to them and to society as a whole. In this respect the best analogy for stake limits seems to us to be speed limits. We doubt that anyone would seriously dispute that a speed limit of, say, 100 mph. would be far too high for high streets in urban areas or on country lanes. It might be appropriate, even essential, to have unlimited speed limits on race tracks and, clearly, higher speed limits are generally appropriate for motorways than for non-motorways. On the other hand a universal speed limit of 4 mph. would make driving all but pointless, even though it would undoubtedly virtually eliminate road deaths and mutilations. The force of this analogy is that many people, including many regular gamblers, think that what we have at present in high street betting shops is the equivalent of a 100+ mph speed limit in built-up areas and that this is far too high. All the evidence we have gathered cumulatively supports the view that the Government should, in the interest of protecting the vulnerable and in line with its policy of prioritising mental health issues, impose a substantial reduction on the maximum stake currently permitted when playing FOBTs in betting shops. This view is strongly supported by the general public, by those who have worked for bookmakers and in betting shops, by problem gambling treatment professionals and by regular B2 (FOBT) players. Cumulatively all the evidence converges in support of a substantial reduction in the maximum allowable stake on FOBTs in betting shops. 12

13 1. Introduction: Responding to Government s Call for Evidence 13 This research project is intended to contribute to furnishing the credible evidence identified by Government and its advisory bodies as being needed to decide whether the maximum stake permitted to be wagered on B2 3 gambling machines should be substantially reduced from 100 per 20-second spin or 300 per minute, as present regulations stipulate. At the conclusion of his letter in 2015 to local authorities explaining why he was not presently minded to reduce the 100 maximum stake on B2 machines the Minister for Local Government wrote: Hence my call for data that supports the view, rightly or wrongly, that high stake machines contribute more to gambling-related harms I suspect that it does but to what extent is the question, and more importantly, will limiting the stake size reduce harms or shift players to lower stake machines or other forms of gambling. There is much speculation and opinion but limited data to inform us. Like you, I find the question hard to answer in the absence of robust and good quality research. The research reported on here seeks to contribute to the furnishing of such good quality research data. Perhaps even more importantly it seeks to establish an original methodology y for generating the kind of research data needed by Governments in making decisions about gambling policy and regulation. As everybody recognises, the Government s decisions need to be consonant with the three regulatory objectives of the 2005 Gambling Act to keep out crime; to ensure fairness to players; and to protect the vulnerable. Government must also achieve an appropriate balance, in accordance with the regulatory principles of proportionality and effectiveness, between the competing needs to secure an optimal degree of consumer choice and adequate consumer protection. This research is, for the most part, focussed on trying to answer the question: What would be the likely effect on protecting vulnerable players of substantially reducing the maximum permitted stake per spin on B2 machines (FOBTs) from 100 per spin three times per minute? In particular; What would be the effect on people playing electronic roulette in betting shops? We were also concerned to ascertain the effect of such a reduction on player enjoyment and were aware that issues of effects on bookmaker earnings, employment and taxation revenues would also need to be taken into account by Government. 3 This is the official categorisation of Fixed Odds Betting Terminals (FOBTs) most commonly found in betting shops though permitted in other venues as well.

14 14 2. Defining Vulnerability Before anything can be investigated about strategies for protecting the vulnerable, we need a clear and credible set of criteria for classifying people as vulnerable, where vulnerability is understood in terms of a propensity for the gambler, or those close to him or her, to suffer gambling-related harm. This propensity is commonly evaluated by using various screens in which gamblers answer questions about particular harms plausibly taken to be related to gambling behaviour. However, there are a number of problems with defining vulnerability in terms of players self-reporting on their own propensity to cause harm to themselves and others by gambling too much. By acknowledging these problems, however, and applying appropriate techniques of cross-checking for consistency, it is possible to draw some important and credible conclusions around player vulnerability. These conclusions will be especially credible if they converge with evidence from other sources. In the case of trying to measure the likely effects of altering gambling regulations on player vulnerability, one large problem derives from the tendency of people who are prone to over-indulge in any activity especially those which carry a degree of social stigma - to deny, minimise or be selfdeceived about the harm their activities are causing. This phenomenon leads to false negatives. As against this, it is also important to distinguish problem consumers of any product, including gambling opportunities, from those who simply engage in an activity a great deal because they greatly enjoy it but do so without doing anyone any significant harm. Such people, of course, occasionally exhibit behaviours which are justifiably recorded by clinicians as symptoms of gambling addiction. The inability of screens to make this discrimination leads to false positives. All prevalence studies and the screens they employ are vitiated by these two phenomena as well as by others relating to sample size and composition. Moreover, since the Act speaks of protecting the vulnerable rather than, say, of reducing the incidence and severity of gambling-related harms, we need a method of identifying those who are potentially problem gamblers or gambling addicts, which differs from methods which attempt to identify those who are actual problem gamblers or gambling addicts. We have considered a continuum of measures ranging from the relatively loose, which identifies a larger number of people as vulnerable, to the relatively tight which identifies fewer people as vulnerable. One loose definition simply identifies as vulnerable those who report having thoughts, albeit only occasionally, that they should give up or cut down on their gambling. Another would classify as vulnerable all those who score more than zero on the Canadian Problem Gambling Severity Index (PGSI) and, according to that classification, would be identified as being at no risk of being a pathological gambler. Those who score 1-2 on this screen are classified as low risk, those who score 3-7; as moderate risk, and those who score 8 or more as high risk 4. Conversely a tight definition of vulnerability would only include those who often, rather than sometimes oroccasionally think about stopping or cutting down on their FOBT play. Similarly, a tight definition would only include those at high risk according to the criteria of the PGSI outlined above. We have opted for a via media which we think accords with common sense as well as with what legislators had in mind when they passed the 2005 Act (or would have had in mind if they had thought about it, and would now deem reasonable if they were asked to think about it again). This is to define as vulnerable anyone who has sometimes or often thought about stopping or cutting down AND who is also identified as being at moderate or high risk: of being or becoming a pathological gambler according to the PGSI classification. 23 (40%) of our 58 players met the first part of this criterion for vulnerability ( sometimes or often thought about stopping or cutting down). 29 (50%) met the second part of the criterion ( moderate or high risk of being or becoming a pathological gambler according to the PGSI classification). Those who met both criteria numbered 17 (29% of the sample). The overlap between the two measures is 69%, i.e. 69% (40 players) are identified as vulnerable on both criteria or not vulnerable on both criteria (as a percentage of the total of 58 players). The number of players who were classified as vulnerable on the one criterion but not the 4 See Appendix D for the full screen and how it is scored.

15 other (18 of them or 31%) may be attributed to the problems associated with false positives and false negatives identified above. We acknowledge, in particular, that the first component of our composite criteria ( sometimes or often thought about stopping or cutting down) underestimates the vulnerable, by excluding those who in fact gamble to excess and deny or do not realise it. However, this criterion has two advantages: it is likely to identify those who might most readily be willing to seek help; relatedly, it identifies those who may well welcome a stake reduction and consequent risk of large losses in the same way that some addicted smokers welcomed the banning of smoking in public places. The second part of our composite criterion (PGSI) is used, because, for all its inadequacies in gauging prevalence levels in large populations, it has been widely used in gambling research internationally and provides a reasonable set of symptoms in contexts where these can be properly discussed such as in counselling sessions or, at least to some extent, in focus groups such as the ones we conducted and where the PGSI was administered at the end of the focus group discussions. 15

16 16 3. Methodology To ensure maximum credibility and minimum vulnerability to accusations of bias towards the perceived interests of the funders of this research, we sought to devise a methodology which would enable others to repeat our investigations and either confirm or disconfirm our findings. In a further attempt not to ignore potentially conflicting evidence, we sought to build a cumulative case for answering our question by gathering evidence from multiple sources, including: regular (once-a month or more) players of electronic roulette in betting shops; those who have worked in betting shops or as managers in book-making companies; problem gambling treatment professionals and the general public. We also reviewed the rather exiguous evidence relevant to our question in the academic and other published literature. Finally, we engaged in a small amount of participant observation in betting shops though, given its unsystematic and impressionistic nature, we do not draw any subjective conclusions from this source. Most originally, we conducted 6 focus groups of regular players of B2 machines in betting shops ( Fixed Odds Betting Terminals FOBTs ) in the course of which the participants engaged in two, 20-minute sessions of simulated Roulette play - one where the maximum stake was 50 and one where the maximum stake was 10. We have very good grounds for confidence that the simulation sessions were highly successful in reflecting how people actually play in betting shops. This unique methodology has the scientific merit of being repeatable by others. Also, in accordance with best research practice, we publish the raw data on which our conclusions are based, including the results of the simulations and the transcripts of focus group discussions, so that others can reanalyse our data or seek comparable data of their own. Because the research was being funded by bacta, the Trade Association representing operators of Category B3, C and D machines, it was essential to design the research so that it could not be accused of distorting evidence or fallaciously drawing conclusions to further the perceived commercial interests of bacta members. This was achieved by adopting three research strategies: i. We narrowed the research focus to seeking primarily to answer one question only: namely, What would be the likely effect of substantially reducing the maximum permitted stake per spin from 100 to, say, 10 for people playing roulette in betting shops, especially but not exclusively in relation to the third objective of the Gambling Act (2005), i.e. to protect the vulnerable? We consequently sought to write a document which would meet the needs of an ideal Government equally immune to lobbyist pressure and tabloid hysteria. ii. iii. We sought to build a cumulative case to answer this question in respect of three possibilities: a) that such a reduction in maximum permitted stake would significantly reduce vulnerability, as operationally defined below; b) that it would make little difference to vulnerability; c) that it would increase vulnerability. In building our cumulative case we invited comment on these three possibilities from the diverse sources specified above, i.e. betting shop customers who regularly (once a month or more) play electronic roulette, people who have worked in betting shops and the book-making industry, problem gambling treatment professionals and the general public. Most importantly, we devised a repeatable experiment, simulating and recording B2 machine play on a computer by a group of regular B2 machine players. This generated quantitative data about the different possible answers relating to our basic research question. We combined this with qualitative data from focus group discussions, including discussions of the simulations. We are publishing all the quantitative data from the simulations as well as the qualitative data contained in the transcripts of the focus group discussions. We are also making available the relevant evidence from surveys and questionnaires. We shall be doing this through the well- respected Harvard Transparency Project, an initiative of the Division on Addictions of the Harvard Medical School directed by Dr Howard Shaffer. Details of how this project works to make available, and thereby potentially subject to scientific evaluation,

17 addiction research which has been funded by the private sector, can be found at Additionally, in order to maintain impartiality, we were careful, in drawing conclusions, to leave open the possibility that damage to bookmaker earnings and other associated costs from a substantial reduction of maximum stakes might be so substantial that it might outweigh any benefits in terms of protecting the vulnerable. It may also be worth mentioning that we reject the characterisation of FOBTs in the media and amongst some of the critics of FOBTs as being analogous to crack cocaine. This sensationalist and misleading analogy lacks scientific support and displays insensitivity towards those who have experience of what consuming crack cocaine is really like. Better analogies for gambling behaviour, including gambling addiction, are with the consumption of alcohol. The narrow focus in (i) above may be justified on the grounds that high stakes gambling on B2 machines in betting shops has been the most hotly controversial aspect of what the 2005 Act has led to and, in particular, to the charge that, by permitting betting shop customers to gamble up to 300 per minute in high street venues, the Government has failed adequately to protect the vulnerable. The anomalous position of FOBTs in the general UK gambling environment is shown in Table 1 below which covers the broad range of EGMs available, offering many different games in diverse venues in Great Britain. 17 Category Maximum stake Maximum prize Number in Typical locations operation B1 5 10,000 (or 20,000 for linked progressive) 2,645 Casinos B ,725 Betting shops and casinos B ,150 Bingo clubs, arcades, betting shops B Private members clubs C ,221 5 Bingo clubs, arcades, pubs D 10p 5 40,844 Bingo clubs and arcades Table 1: Range of EGMs available in Great Britain The focus in our research on electronic roulette as played on FOBTs is justified by the fact that this form of gambling accounts for some two thirds of all machine play in betting shops. The reason for seeking to build a cumulative case as described in (ii) above is that it is notoriously difficult to devise a so-called crucial (or single, decisive) experiment, or to amass a single set of statistics, which would conclusively answer the following question: Will a substantial stake reduction reduce people s vulnerability to gambling more than they can afford, thus causing significant harm to themselves and others? A cumulative case which brings together evidence from different sources may, of course, produce conflicting answers in which case Governments must exercise judgment and make decisions on the basis of inconclusive evidence. Alternatively, the evidence may converge to a greater or lesser 5 Excludes Category C machines in bars and public houses

18 degree so that it points more or less forcefully to a particular course of action. In these cases, governments can claim to be making genuinely evidence-based policy. The sources for our cumulative case were: 18 Evidence from questionnaires completed at the beginning of focus groups with regular FOBT players and answers to the PGSI questionnaire completed at the end of the whole session Focus group discussions of gambling in general, of FOBT gambling in particular and of views about the desirability or otherwise of a substantial reduction in maximum permitted stake Two 20-minute simulations of playing electronic roulette on a FOBT, the first, with a maximum stake of 50; the second with a maximum permitted stake of 10 Anonymous discussion with people who have worked in the betting industry Anonymous discussion with people who treat problem gamblers Administration of 7 questions in an omnibus survey of 2004 members of the general public The repeatable experiment, referred to in (iii) above, which was specifically devised for this research and has, we believe, an important role to play in gambling research methodology, provided that good reasons can be given for thinking that the simulations in question offer a close approximation to real life behaviours. The participants in this experiment were drawn from six focus groups (totalling 58 people) of regular B2 roulette players in betting shops two in London, two in Manchester, and two in Glasgow. The focus groups were furnished by the UK-based market research company, Future Thinking, who were asked to ensure that each group contained at least one player who had wagered 50 or more on a single spin of the roulette wheel. We were also interested in the attitudes and behaviours of women players. However, since these constitute only some 5% of all B2 players in betting shops, we reserved one of the six focus groups for women only, the other five groups being all-male. Moreover, the groups of players differed in important ways from one another. Thus, though all groups were (regrettably) of similar socio-economic status (mainly Cs), it turned out that both London groups were much more likely to play with higher stakes. These constraints mean that the focus group participants should not be taken as fully representative. However, in the absence of bookmaker data to the contrary, we believe that where responses were close to being unanimous, we may safely assume that they would be broadly replicated in a much larger and more fully representative sample of FOBT players. There are, of course, other obstacles to getting reliable data from focus groups, particularly that focus groups are never representative since they are always skewed in favour of those willing to participate in focus groups (as are larger surveys towards those willing and able to be surveyed). Further, some participants in focus groups, like some students in tutorials, are likely to talk a lot, while others remain much quieter. Also, focus group participants may have a tendency to give answers based on what they think the group leader wants to hear or what they think is the right or morally respectable answer. These and other potential obstacles need to be acknowledged by focus group facilitators who must then do their best to try to overcome them. It is hard to demonstrate that this has been done. However, we were conscious of the need to conceal our own views and seem to have succeeded since a number of participants said they assumed we were working for bookmakers doing market research on a new game. In general, to overcome these obstacles we proceeded as carefully as we could, as detailed in the following. In the first one-hour of focus group discussion, players were asked what they thought of gambling in general, electronic gambling in betting shops in particular, and what the effect of reducing maximum permitted stakes would be on themselves and on others who may be vulnerable to gambling more than they can afford to. They were then also asked to engage in two, 20-minute sessions of simulated Roulette play on a laptop computer: the first session involved playing standard roulette according to the rules currently in place for FOBTs (maximum stake of 50 per play); the second playing with a

19 maximum stake of 10 per play 6. We were, of course, acutely aware that playing with pretend money, using a computer mouse rather than a touch screen, and being in a very different environment from a betting shop, might well mean that participants would not play as they normally do when playing real FOBT machines in a betting shop. Another difference from real play was that participants were playing with a predetermined time limit so that those who typically play for, say, only a five-minute period were asked to start new sessions afresh during their 20 minute session, as if they were returning for completely new sessions of play. Those, of course, who usually played for longer than 20 minutes had to stop earlier than usual. Participants were alerted to these differences and requested to play as closely as possible to how they normally play in a betting shop. Gratifyingly, after they had played the simulated FOBT game, all groups reported overwhelmingly (97%) that they had played as they normally would and it was evident from observing actual play that there was a very high degree of immediate understanding of, and absorption in playing the computer simulated FOBT game. Across our 6 focus groups located in the 3 different cities, with 58 participants in total, we recorded a total of 1888 simulated games played with a maximum stake of 50 and a total of 1710 games played with a maximum stake of 10. Note that each of the two Roulette game sessions comprised 20 minutes of playing time, making 40 minutes in all. However, we do not think the slightly smaller number of games played under the 10 maximum stake is relevant or significant and are inclined to attribute it to a small degree of player fatigue amongst people who don t usually play for as long as 40 minutes at one time. The record of these games is available for analysis by other researchers, together with commentary by the participants on their experiences of playing the simulations of Roulette with a maximum stake of 50 on the one hand and a maximum stake of 10 on the other. We report on each group separately. We also report separately on the general discussion and the discussion which took place between and after each of the two simulation sessions. One noteworthy fact was that a number of participants changed their points of view between the first session and the final discussion in the last session, in relation to what they thought the effect would be of lowering the maximum permitted stake. Since we did not disclose indeed did not have a preference for any particular result, we think the most likely explanation for this change of view, as evidenced by some of the specific comments made was that participants, is that they changed their view as a result of discussion within the group or when they switched from thinking about a stake reduction as it would affect them and when they thought about it as it would affect problem gamblers in general. To provide some support for these interpretations of the focus group evidence we publish the transcripts of the focus groups, where, incidentally, the silence during simulations is evidence of player absorption. In connection with maximising credibility by trying to build a cumulative case we note again that, as discussed above, in addition to problems of realism in simulations and of possible distortions in focus groups, there are also severe limitations to the use of self-reports about gambling behaviour and to the screens which have commonly been used to identify the vulnerable whom the Government is required to ensure receive adequate protection. We addressed these problems and our strategy for minimising them above, in relation to defining vulnerability Note that players were, of course, able to bet less than the maximum stake if they so wished. This just represented the maximum allowable total bet that could be placed per spin.

20 20 4. The Qualitative Evidence from Focus Group Discussions Six focus groups were recruited in three metropolitan areas: London (2 groups); Manchester (2 groups); Glasgow (2 groups). Each group had 10 recruited participants, with 2 participants not showing up, leaving us with a total of 58 focus group participants. All groups were male, except for the last group which was female. The remit given to the recruiting company was to ensure that each group had at least one player who had, at least on one occasion, placed a total stake of 50 on one spin. We did this to ensure that we had at least some players who bet at levels where a significant reduction in maximum stake would affect their play. However, it is important to realise that the focus groups are thus skewed towards players who bet high stakes and they are not directly representative of the general FOBT gambling population. Another potentially distorting outcome of the recruitment process was that the players we had in our focus groups were largely higher socio-economic groups (C1 and C2) with relatively few classified as D. This further limits the appropriateness of directly inferring results about the general population based on the set of gamblers in the focus groups. The focus group sessions were divided into two parts. In the first half, a general discussion was held with all participants contributing and reporting on aspects of their gambling behaviour. In this half we probed the general view of participants of a substantial reduction in maximum allowable stake. Participants were generally very willing to talk about their gambling behaviour and attitudes, but, as is common with all focus group discussions, there were a few dominant players whose voices were heard more than others simply because they had the most outrageous stories, the strongest views and the firmest convictions. We have captured some of these comments in our descriptions of each focus group because they are illuminating but again we would caution against regarding these comments as necessarily representative of the whole group. The views of quieter participants were sometimes ascertained through nods and collective murmurs of assent. It was also interesting to note, as discussed above, that many participants changed or moderated their views as the focus group wore on. The second half of the focus group was devoted to running the simulated roulette games over two 20-minute periods with discussion in-between and at the end. The first simulated play was with a 50 maximum total stake per spin (Play1) and the second simulated play was with a 10 maximum total stake per spin (Play2). On the basis of their betting behaviour, participants were classified into the following categories: i. Those who never stake more than 10 on a single spin of the roulette wheel ii. Those who occasionally stake more than 10, i.e. between 1% and 20% of the time iii. Those who often stake more than 10, i.e. between 21% and 60% of the time iv. Those who usually stake more than 10, i.e. over 60% of the time At the start of each focus group, participants completed a questionnaire 7 which repeated questions they had answered at the point of recruitment. This gave us another handle on the staking behaviour of the participants and the degree to which they played as they (on two different occasions) had reported. 72% (44) of the players staked the same as they had reported they did in the questionnaires. Of those who staked differently, 3 had misunderstood the question about stakes, and 4 had usually bet the same amount as reported but upon accumulating a stash of winnings, increased their stakes. The remaining 7 (12%) players bet more than they claimed to in the questionnaires. We report on each focus group separately. 7 See Appendix C for the questionnaire. The hard copies of the completed questionnaires, as well as of the PGSI written responses and the transcripts of the focus groups are available for inspection at the Harvard Transparency Project at

21 London, Group 1: Profile: 10 men; Socio-economic groups: C1 (5), C2 (4), D (1). Ages Never more than 10 5 Occasionally more than 10 0 Often more than 10 0 Usually more than 10 5 Part 1: General Discussion. This group contained two former big spenders ( spend in a session), both of whom had cut down over the last year. They, in particular, came out strongly about the dangers of FOBT machines in high streets (as opposed to casinos). It's just that roulette seems to hit you more than any other gambling. I found it hit me more. To me, it was, like, evil. when you ve done that and you re thinking, Fucking hell, I m skint, do you know what I mean? Fuck, how am I going to tell the Mrs that I just spunked my money in about half an hour, now I ve got to do the overdrafts, if you go in the bookies with other men there, it s just a bit stressful, because all the guys that have a betting problem are in there. You go to the casino, it s fun, and there s music and drinks. there are times you win big, do you know what I mean? You ve got, like, 3,000, and you think, Fucking hell, but you put that back in within a week, you don t even spend it on a holiday, you put that back in in a week. So, those roulette machines, they re evil. In response to a maximum stake limit of 10 pounds: There was broad sympathy for the idea of reducing the maximum stake. With reference to how it would affect their own play, none of the respondents were averse to the idea of cutting the maximum stake; there was, however, mention that other gamblers might not like it. Well, if it says 10 per spin maximum, then I would feel that it's got my interest a little better than come and stick 100 in me and spin it. I think it would help some people. The other thing is that everyone has got a bookies at the end of the street you know, you haven't got a casino at the end I don't think it would encourage you to have more goes. I think it would just restrict the amount of risk you put. For some people, it wouldn't be worth their while. Part 2: Discussion subsequent to Play1 and Play2. All participants agreed that, in general, they played the same in the simulation as they would on FOBT machines in the bookmakers. In response to playing on the simulation with the reduction in max stake to 10 per play: Two of the players expressed feeling frustrated but most players indicated it made no difference to them (5 of the 10 participants never bet as much as 10 a spin). I found it a bit frustrating, to be honest. I sort of feel limited to what we had with 50. Makes no difference.

22 22 Total Stake per spin across plays with Max Allowable Stake = 50 : London, Group Group s response to the question on the effect of cutting max stake on players vulnerability: Question: What effect would reducing the total stake (per spin) from its current maximum to a maximum (per spin) of 10, have on gamblers vulnerability to lose more than they can afford? It would reduce vulnerability 4 or 5 8 It would make no difference 5 or 6 It would increase vulnerability 0 8 One participant was undecided between the first and second categories.

23 London, Group 2: Profile: 9 men; Socio-economic groups: C1(5), C2(4). Ages Always 10 1 Occasionally > 10 0 Often > 10 4 Usually > 10 4 Part 1: General Discussion This group was unusual in that it was completely dominated by gamblers who regularly bet more than 10. They tended to talk up their play, in terms of both the highs and lows of gambling. I usually stake 30, 40. Recently it s changed a lot, because they ve got the 50 limit thing, which I think is a very good thing, because you get so carried away sometimes that you re just pressing You might be on a roll. You re reading your neighbours and you think your patterns are coming, and then you re like Yeah!, just tapping away and you re about to spin and you re like Aw.[Hit the 50 limit]. It just makes you think for a second. You re in the zone and then like No, actually cancel that. Let s just half it and go for it again. So it kind of slows you down. When do you bet 50? [When I m] losing money. If you lose a 5, 10 bet, you put 20, but you re already down, so, you ll be here quite a long time, might be until the next day. In response to a maximum stake limit of 10 pounds: In response to reducing the max stake per spin to 10, members of the group were, as would be expected of this profile of player, initially overwhelmingly and vociferously negative. No! Just to cap it at 10. It seems almost pointless. We re going to have to stay there longer to be able to win anything of any kind of significance. I think a lot of people would find either a new game to play, that didn t have that cap, or maybe would push them to do it more on their mobile or they d go to real casinos. I think it s a bad idea. It s like, for example, imagine they stop selling litre bottles of alcohol People will try and just make it up, 10, 10, 10, all the time. You d lose the gamblers. The only people that play it would be people who ve got 2. for the serious gamblers then I think the businesses would lose customers. Part 2 : Discussion subsequent to Play1 and Play2. Most players said they played the same in the simulation as they normally would have in real life, although 2 players said their play was more risky. Most said they found it less exciting and a couple said it felt a bit fake (as, indeed it was, though not because of the reduced maximum stake).. In response to playing on the simulation with the reduction in max stake to 10 per play: Not as exciting Definitely not. I couldn t really chase as much, and I probably would spend longer in doing it. [My money]. probably lasted longer I think I was being more careful, I wasn t trying to spend too much, it delayed how I do it really.

24 Yes, definitely, [I felt the restriction] because I like to spread it out a bit more, like, a spread safe play All of the participants agreed, however, that while they found the 10 max stake restricting, a 20 max stake would be much more acceptable. Group s response to the question on the effect of cutting max stake on players vulnerability: 24 Response to Question: What effect would reducing the total stake (per spin) from its current maximum to a maximum (per spin) of 10, have on gamblers vulnerability to lose more than they can afford? It would reduce vulnerability 7 It would make no difference 0 It would increase vulnerability 2 Reasons why the 2 individuals thought that the reduction would increase people s vulnerability: You spend a lot more when you re just feeding the machine pennies than you would if you put 50 on it. The fact.. that they will then have to be there for longer to win the amount that they normally like to win means that they re spending more of their time there, which means there s a big increase of them being addicted. There appeared to be a shift in view once the participants started to think about vulnerability to losing more than one could afford to. It seems possible that their responses were different when they were thinking how change might affect their own play and that of others like them and when they were thinking specifically about problem gamblers. When asked whether they thought FOBTs in bookmakers should be banned, there was a high degree of support for the idea. I m in that sort of stage in my life where I m trying to get away from this, so I think it s a good thing you ve got the excessive gamblers who are terribly weak and can t control, don t know how to control it. I think the vulnerability sets in there, people who are excessive gamblers turn to drink or drugs or just kill themselves I think banning them would be a good idea for people that are excessive gamblers, but then for those that just like to gamble for a flutter or recreation or whatever, we would find an alternative. Other people might do that [jump off a bridge] because they re addicted to the flashy sounds, the colours, the instant serotonin gratification of the win and stuff like that you d be pushing people towards the mobile apps, and still they get to play roulette, they get to play other games, there are loads of games I think the current stake of 50, if they re saying that that s too high as a max, bring it down to something that is like the average of what people generally bet. Bring it down to 20, maybe even 25, cut that in half. Most people would not be that affected if it went to 20.

25 25 Total Stake per spin across plays with Max Allowable Stake = 50: London Group Manchester Group 3 Profile: 10 men (9 for the simulation, as one left early). Socio-economic groups: C1(8), C2(2). Ages Always 10 4 Occasionally > 10 0 Often > 10 3 Usually > 10 2 Part 1 (General Discussion) This group was split between low stake gamblers and (relatively) high stake gamblers. Moreover, it tended to be dominated by two high stake gamblers who were extremely vociferous. One of these players claimed to have lost over playing FOBT before giving up. The lower stake gamblers tended to be less vocal and less dominant in the group. In response to a maximum stake limit of 10. The high stake gamblers voiced very strong views against reducing the max bet to 10 on the basis of reduced enjoyment. This group were the only group where participants endorsed the libertarian view that if people wanted to ruin themselves gambling that was their right and Government should not try to stop them. I think individuals need to be empowered to do what they choose to do. It s choice. It s personal choice. I don t think it would work if governed in that way anyway. It needs self-governance. The people they d go elsewhere Part 2: Discussion subsequent to Play1 and Play2 All respondents confirmed they bet exactly (or very close) in the simulated play to how they would in real life. In response to playing on the simulation with the reduction in max stake to 10 per play: Predictably, the higher stake gamblers said they found the cap on max stake boring and restrictive, while others said it made no difference. There was no support for the notion of outright banning of FOBTs in bookmakers.

26 While they generally didn t like the idea of reducing the max stake, there was support for the notion that it would reduce people s vulnerability to losing more than they could afford. Group s response to the question on the effect of cutting max stake on players vulnerability: 26 Response to Question: What effect would reducing the total stake (per spin) from its current maximum to a maximum (per spin) of 10, have on gamblers vulnerability to lose more than they can afford? It would reduce vulnerability 5 It would make no difference 4 It would increase vulnerability Total stake per spin across plays with Max Allowable Stake of 50: Manchester Group Series2

27 Manchester, Group 4 Profile: 10 men : All C1 Always 10 6 Occasionally > 10 0 Often > 10 2 Usually > 10 2 Part 1 : General Discussion There were a number of high stake betters in the group. The low stake betters tended to be quieter. A variety of comments surfaced about the addictive nature of their FOBT habits. I m normally chasing and I m normally vastly down. So I can t walk away from those things. They are horrendously addictive. I ve done it. I ve done 500 in 15 minutes. You only need one punter like myself to come in and you [the bookmaker] can earn 3,000 in a day because whatever we can access is going in that machine. and I ll carry on at 50 a spin until I m back until I ve either won 1,000 or 2,000 Games like roulette should be in a casino. They should be in a casino, not on the high street. In response to a maximum stake limit of 10: There was a fairly positive response to the suggestion, even from the higher stake players. absolutely delighted. That would have saved me about 100,000. [it would] make my visit to a bookies fun, rather than a traumatic experience and an experience that has huge financial implications for me and my family. I personally wouldn t play on the machine for 10. There would still be excitement. It would just be safe excitement. It s still exciting. Part 2: Discussion subsequent to Play1 and Play2. Players unanimously stated that the way they played in the simulated Roulette game was very close to how they would play in real life. In response to playing on the simulation with the reduction in max stake to 10 per play: Reaction from the low stake players was that it made no difference and the reaction from the higher stake players varied between that s actually a very pleasurable experience, because I m not doing myself terminal harm each spin and Boring I wouldn t play a machine like that. When asked how they would respond to the option of outright banning of FOBT machines in high streets, the group responded positively, indicating substantial support for, and no opposition to the idea. It would be a fantastic idea. It s crack cocaine to the gambling world. Group s response to the question on the effect of cutting max stake on players vulnerability

28 28 Response to Question: What effect would reducing the total stake (per spin) from its current maximum to a maximum (per spin) of 10, have on gamblers vulnerability to lose more than they can afford? It would reduce vulnerability 8 It would make no difference 2 It would increase vulnerability 0 Total Stake per spin across plays with Max Allowable Stake 50 : Manchester group Glasgow Group 5 Profile: 10 men; Socio-economic groups: C1(7); C2(2), D(1). Ages Always 10 7 Occasionally > 10 0 Often > 10 3 Usually > 10 0 Part 1: General Discussion. There were no high stake betters in this group, although some did indicate that if they were up they would then consider betting for high stakes: No, I wouldn t put 50 in and bet my own money but [I ve] definitely won 50 on it and bet that. In response to a maximum stake limit of 10 In general the group indicated that restricting the max bet would not affect them personally but they were reluctant to advocate steps to restrict people s freedom and aware of the need to balance this with protection of the vulnerable. It s fairly difficult because it s people s own responsibility. You just spend longer playing it or they would play two machines at once. I don t know. People have to be responsible for their actions.

29 A lot of people that go in like the idea of winning big and if your spins are only 10 you re not going to get that big win. Contrasting views emerged as the discussion progressed: For the big time losers that are in there every day, I mean, it s [max stake restriction] obviously stopping them. So I think it s a good thing. It should be reduced. Most of us know somebody who s lost a lot of money and again with the roulette machines, it s so instantaneous. You re not waiting for a score. You re not waiting for a horse to come up. You re just feeding this machine with more money. If you can limit somebody s ability to lose all their money then it s probably a good thing for a consumer. I mean, they [bookies] have got a responsibility there. If you re a drunk and out in a pub you won t get served. 29 Part 2: Discussion of subsequent to Play1 and Play2. There was complete agreement that they played in the simulated game the same as the way they would play in real life. Some even declared the simulated game to be fun and exciting. In response to playing on the simulation with the reduction in max stake to 10 per play: As expected, most participants said they didn t notice the difference. One person, however, said Yes, [I noticed the difference] but I see it as a good thing. Although I felt it, I see it as a good thing, because if it was my actual money, I d rather I was doing this and another noted: A wee bit frustrating but you just change your bet a bit lower In response to the possibility of an outright ban on FOBT machines in bookmakers: there was very limited support and a preference for other means of control. Response to Question: What effect would reducing the total stake (per spin) from its current maximum to a maximum (per spin) of 10, have on gamblers vulnerability to lose more than they can afford? It would reduce vulnerability 6 It would make no difference 4 It would increase vulnerability 0

30 30 Total stake per spin across plays with Max allowable stake = 50: Glasgow Group Glasgow, Group 6: Profile: 10 women. Socio-economic groups: C1(8), C2(1), D(1).Ages Always 10 7 Occasionally > 10 1 Often > 10 1 Usually > 10 1 Part 1: General Discussion. The women described a more social experience of gambling than the men. All emphasised that they did sports betting but didn t really understand it. Consequently, they played FOBTs, somewhat desultorily, as an alternative, and also used Apps to gamble at bookies. They had mainly been introduced to gambling through partners or fathers. Significantly, they talked about the betting problems of their husbands, fathers and sons. This is significant since excessive gambling negatively affects families as well as individual gamblers. Hence the perceptions of these women of the gravity of problem gambling may be more accurate than that of partners who may be in a condition of denial and of minimising the seriousness of their problems. I was married to a man that was an addict of gambling. Yes, so was I. I ll often get a phone call on a Thursday to tell me he s lost his wages. I think the machines are very addictive. I think roulette s definitely the one you can see yourself getting addicted to Yes That s the one that you get that gambling rush, you get it in your belly and the feeling It s instant and it s easy playing The noise, the whoosh.fifteen seconds and it s over. I get quite confused by odds, right? I still can t work out odds. I still get to a bookie and go, What does that mean? What does that mean? I just can t get my head around it. So, for me, that s why I would choose to go to roulette rather than picking something that s got odds. for me, the buzz that you re losing, it s not a buzz really, the feeling of losing outweighs more, for me, than the buzz of winning.

31 31 In response to a maximum stake limit of 10: Many felt it would be a good thing (especially for husbands and partners) but some of those who bet slightly more heavily felt that it might remove some of the excitement. Part 2: Discussion subsequent to Play and Play2. The women all said they played pretty much as they would in real life (and declared they enjoyed it!). In response to playing on the simulation with the reduction in max stake to 10 per play: Most participants said it made no difference to them but two of the women said it was frustrating as they couldn t double up when they wanted to and felt they couldn t win as big. Response to Question: What effect would reducing the total stake (per spin) from its current maximum to a maximum (per spin) of 10, have on gamblers vulnerability to lose more than they can afford? It would reduce vulnerability 6 It would make no difference 3 It would increase vulnerability 1 In response to why the one participant felt it would increase vulnerability. I don t think you would control your money the same. Do you know what I mean? I think you actually have to spend 50 to actually realise I m spending 50 because they think they re spending less, so it ll get longer. It s quite deceiving. Total stake per spin across plays with Max allowable stake = 50: Glasgow Group In the above section we have broadly described the contributions made to discussions in the focus groups as well as the reactions of participants to playing simulated roulette. The simulated play gave us the advantage of observing how people play rather than relying on how they say they play. One point which was noteworthy in all the focus groups was the level of focussed engagement by players when playing the simulated roulette. Even those players who described playing Roulette on a computer as a bit boring showed high degrees of focus and involvement in their play. Almost all players had to be stopped playing after 20 minutes (in each simulation) and, perhaps more

32 surprisingly, there was no discernible difference in the degree of focused concentration and engagement between the first (max 50 stake) and second (max 10 stake) simulations. It was also interesting to note how the views of participants tended to shift during the course of the focus group, although it was difficult to know whether to ascribe this to hearing the views of their peers, having time to think through the nuances of the subject matter or to changed views in the light of their experiences playing simulated roulette. The concluding table in this section, Table 2, summarises the key verbal responses to the question of whether reducing the maximum permitted stake to, say, 10, would reduce vulnerability to being or becoming a problem gambler, would make no difference or would increase it. 32

33 33 Table 2: Summary of Focus Group Demographics and Characteristics City & Group Demographics Betting Stake Profile Vulnerability Question City Group #Participants Men Women C1 C2 D Age Always <= 10 Occ. > 10 Often > 10 Usually > 10 Reduce Vuln. No Diff. Increase Vuln. London London Manchester Manchester Glasgow Glasgow

34 34 5. The Quantitative Evidence from the Simulations This section presents the quantitative evidence from 1888 simulated plays at maximum stake of 50 and of 1710 simulated plays at maximum stake per spin of The Roulette Simulation A computer program was written to simulate the player experience of playing on a FOBT. The underlying idea was that regular FOBT players would play the simulated game and we could record in detail how they played. The record of play would, inter alia, include the stakes they made, the riskiness of the bets they made, the length of time they played, the strategy they adopted when winning or losing and the frequency with which they used the supplementary playing buttons, particularly the Repeat Bet button. The game was structured so that a set of initial parameters could be set when each player initialised their play. These included: Money in pocket (available cash) Maximum Stake Minimum Stake Minimum time between bets (speed of play) Some parameters which currently apply legally in the UK were hard-coded into the program. These include the maximum prize of 500 restriction. This implies, for example, that no bet can be made on a single number at odds of 36-1 in excess of under the current maximum 50/100 stake restriction. The key options in the simulation as presented to participants are given below: The advantages of the simulation approach is that one can apply the same program with the same settings to any group of people for any length of time. If required, such an experiment can then be repeated under the same circumstances. At each session one obtains a highly detailed record of play in all respects which then can be statistically analysed. Moreover, one can then change some key variable such as the max stake restriction and get the same set of players to replay the game with this new restriction and then observe the detailed record of their play. In this way one can assess

35 the extent to which changing the max stake limitation from, say, 50 to 10 affects the play of FOBT players Differences between the simulation and actual FOBT play The simulation is conducted on a computer and is mouse driven. The mouse interface was chosen as it gives the player precise control over bets on the relatively small (laptop) computer screen. It thus differs from actual FOBT machines which use a touch interface. Also players are not playing with their own money and they are not in a betting shop with its associated ambience, although the simulation does embrace the sounds and responses of the normal betting-shop FOBT machine along with Roulette ball spinning sounds, winning number announcements and bets etc. etc. The differences were highlighted to focus group participants who were, however, urged to play as closely to how they would play in real life. The laptop FOBT screen is shown below. 5.3 Reaction of focus group players to the authenticity of the simulation computer interface Almost all (97% of them) 58 players, over 6 focus groups, felt that the computer simulation captured the look-and-feel experience of the betting-shop FOBT. A couple of players said it took time to adapt to the mouse driven, rather than touch-driven, interface but after a few plays were very comfortable with playing the simulation game. A key feature of the focus group play sessions was the engagement of the players in the game. Consistently across all 6 focus groups there was complete focus and engagement in the game from the beginning. In fact the room was almost completely silent during game playing time apart from the odd yelps of joy when players made a good win and the occasional brief exchanges of chat with neighbours. This engagement was, if anything, slightly more intense than what we observed in betting shops. The issue of the similarity of the pattern of Roulette play across the two alternative platforms (simulation and FOBT) was then interrogated in the focus