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EDITIONS
 Monday, 30 December, 2002, 17:22 GMT
Bookies new betting games in court

Bookmakers and casino regulators are going to the High Court in order to decide the future of new betting terminals introduced in the wake of the government's changes to betting tax.

Bookmakers had until now been enjoying a boost to profits from new betting machines.

These allow punters to place immediate bets on races around the world - rather than simply those shown in the betting shop - as well as on a variety of games such as bingo and roulette.

The new terminals were described as a "lifesaver" by some in the betting industry, which had been hit by cancelled races and competition from new online betting sites.

The bookmaker is making it easier for a punter to lose more money, more quickly

Andrew Burnett, Merrill Lynch

But the Gaming Board, which regulates casinos and bingo halls, has suggested some of the games are too closely imitating casino games while escaping much of the regulation.

Analysts have also criticised the bookmakers for introducing more ways for customers to lose money.

'Harder gambling'

The new machines - formally known as Fixed Odds Betting Machines - can host up to six games at a time and include a number of inter-changeable betting platforms.

So, while one customer may bet on a horse race abroad and play a game of roulette, another may be offered a football game, bingo, and a more traditional fruit machine game.

There are special dangers associated with machines because of their potentially addictive characteristics

Peter Dean, Gaming Board for Great Britain

"Our concern is that by offering coin-accepting electronic-roulette-style bets, the Licensed Betting Office is offering a 'harder' form of gambling," said analyst Andrew Burnett at Merrill Lynch.

"By harder gambling, we simply mean the bookmaker is making it easier for a punter to lose more money, more quickly."

The High Court will decide whether the new games constitute 'bets' or 'games', with the latter needing more substantial control.

Lifeline

The betting industry argues that the machines provide vital funds and help remove the flat-cap image of betting shops.

Warwick Bartlett, chairman of Global Betting and Gaming Consultants, told BBC News Online:

"These new products are very important to bookmakers when racing is cancelled."

A run of bad weather and the cancellation of races because of the foot and mouth crisis severely dented bookmaker profits last year.

"Because of their overheads, bookmakers can't trade for very long without turnover," added Mr Bartlett.

Tom Kelly, the director-general of the Betting Office Licensees Association told BBC News Online that the new games as "an expanding part of the business", but said they currently represent less than 3% of bets placed.

'Breach of spirit'

The Gaming Board claims the machines are sophisticated tools, with no legal limits on prize money, which could fuel the danger of addiction in the betting world.

The introduction of casino-style games ...may be seen as a covert attempt by bookmakers to introduce casino-style gaming into a bookmaking environment.

Andrew Burnett

"Their proliferation is a breach of the spirit and intent of current legislation," said Peter Dean, chairman of the Gaming Board for Great Britain.

Mr Dean told a recent convention of the leisure machine association, BACTA:

"There are special dangers associated with machines because of their potentially addictive characteristics."

Analysts have warned that the High Court may agree with the gaming regulator.

Mr Burnett said: "The introduction of casino-style games such as coin-operated roulette may be seen as a covert attempt by bookmakers to introduce casino-style gaming into a bookmaking environment."

Competition

The betting industry disputes claims that the new machines, with their roulette and bingo games, are a direct threat to the gaming industry, or that they are creating a dangerous addiction.

Mr Kelly added that " a number of shops don't even have them" and that the main game at the centre of the court case is a roulette-style game.

"We are not open at the same time as casinos," said Mr Bartlett.

"And it's not as if they're in a pub - they're in betting shops, where people have already come to place a bet."

The High Court case is likely to take months or even years to resolve.

What now?

The issue centres on whether these games constitute a casino-style gaming machine.

If so, bookmakers are in danger of breaking the 1968 Gaming Act by housing such technology and staff should undergo much more rigorous training.

"This intellectual debate has the potential to remain unresolved in the courts for months," said Mr Burnett.

But in the meantime, betting shops have been asked to stop installing the new machines and their success is now limited.

"Whatever the outcome of the Gaming Board's initiative, we must put some doubt on the size, growth and endurance of FOBT (fixed odds betting terminal) revenues in the future," said Mr Burnett.

See also:

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