The maximum stake on fixed-odds betting terminals will be cut after the government admitted that existing limits on the machines, which allow gamblers to bet up to £300 a minute, are inappropriate.
Unveiling the keenly-awaited review, the Department for Digital, Culture, Media and Sport (DCMS) minister Tracey Crouch said the government would cut the maximum bet on the machines from £100 to between £2 and £50.
Bookmakers, who have warned that shops will close if maximum stakes are cut, are expected to lobby for the £50 option during a 12-week consultation period ending in January.
But the review warned that a £50 limit would involve “minimal change to the status quo”, suggesting lower options of £20 or £30, or the most extreme cut to £2, are more likely.
The DCMS will also consider slowing the pace at which bets can be made, from the current interval of 20 seconds.
Crouch said cutting stakes aimed to “reduce the potential for large session losses and therefore to the potentially harmful impact on the player and their wider communities”.
Figures from the UK’s leading GambleAware show that 233,000 FOBT users lost more than £1,000 in one sitting last year, while 650 people lost more than £5,000 and one person lost £13,778.
Crouch said the government hoped that introducing new curbs would protect vulnerable people “exposed by the current weaknesses in protections”.
The review also raised concerns that bookmakers, who are allowed four FOBTs per shop, tend to cluster them in poorer areas with higher unemployment.
Labour’s deputy leader, Tom Watson, said the review was “deeply disappointing”, while shares in Ladbrokes and William Hill rose, indicating that investors thought the review relatively lenient.
“There’s an old maxim that the bookies always win and they’ve won again today,” said Watson, adding that gambling lobbyists were “grinning from ear to ear”.
“Ministers have squandered a real opportunity to curb highly addictive FOBTs, which can cause real harm to individuals, their families and local communities,” he said. “After months of delays they’ve simply decided to have another consultation.”
He said Labour would tackle a “hidden epidemic” of gambling addiction with policies including a cut in FOBT stakes to £2 and a ban on betting firms advertising on football shirts.
Crouch said Watson had undergone a “conversion”, having been a member of the Labour government that was partly responsible for the spread of FOBTs due to its deregulation of the gambling industry in 2005.
FOBTs have sometimes been called the “crack cocaine of gambling” due to the speed and apparently addictive nature of the games they offer, such as roulette. A report by the industry regulator, the Gambling Commission, earlier this year found 43% of people who use the machines are either problem or at-risk gamblers.
But bookmakers, whose £1.8bn income from the machines accounted for more than half of their revenues last year, have played down links to problem gambling.
Robin Wales, the mayor of Newham in east London, criticised the government’s decision to consult further on reducing maximum FOBT stakes. In a letter to the Guardian he said: “It is over a year since the review was launched and the response is to kick the issue into the long grass with yet a further consultation. Newham residents cannot afford any further delay… Last year, in Newham alone, it is estimated that nearly £20m was lost on FOBTs. That is the price some of our poorest and vulnerable residents are paying because of this government’s continued inaction.”
According to the Money Advice Service, the residents of Newham are the most likely in the UK to be burdened by debt. Wales said his borough has 81 betting shops – one of the highest concentrations in the country – with 12 shops on just one street. He urged the government to slash the stake to £2, despite the cost to the exchequer: “If the maximum stake level is set at anything over £2, it will show that the Treasury is putting exchequer profits before people.”
The Association of British Bookmakers (ABB) has said a cut in the maximum stake to £2 would cost 20,000 jobs and slash Treasury income from machine gaming duty, worth more than £700m last year.
Speaking on BBC Radio 4’s Today programme, ABB chief executive Malcolm George said bookmakers that close would not be replaced by “bijou bakeries” but by “grotty amusement arcades”.
The review also addressed the fast-growing online gaming sector, which took in £4.5bn from 7 million customers last year, according to Gambling Commission statistics.
The DCMS called on online firms to speed up the pace of initiatives to address problem gambling, including “self-exclusion” schemes that allow addicts to bar themselves voluntarily but have failed in high-profile cases.
But the review stopped short of recommending any curbs on the volume of gambling adverts on television, despite pressure from campaign groups to limit their spread.
Instead, the review confirmed plans revealed in the Guardian that would force the industry and broadcasters to fund a £7m responsible gambling advertising campaign costing, a deal Watson has branded a “stitch-up”.
The DCMS also promised new guidelines to prevent gambling adverts from encouraging impulsive behaviour, as well as a commitment from the industry to ensure under-18s cannot access gambling content via social media.
It also vowed to back efforts by the UK’s leading gambling charity, GambleAware, to roll out more specialist clinics to help addicts, something the organisation has said could require a statutory levy on firms to address a funding shortfall.
Crouch said the government hoped gambling companies would increase their voluntary contributions to GambleAware, warning that the government would consider a mandatory levy if they don’t.
The review was due to be released in June but was delayed when the prime minister called the snap general election.