With the UK government recently slashing the stakes on FOBTs, we ask whether the banks will soon be adding to the gambling industry’s woes.
As regular readers of these columns will know, last month the UK government reduced the maximum stake on fixed odds betting terminals (FOBTs) from £100 to £2 ($134 to almost $3). It was, the government declared, a move to protect the vulnerable and prevent gambling addicts from suffering catastrophic losses.
The move was widely condemned by the gambling industry: it would lead to betting shop closures, job losses, reduced sponsorship for sport, and “the vulnerable” undoubtedly finding somewhere else to gamble. Better that they were in a betting shop where they were known to the staff…
Whatever your views on the rights and wrongs of that decision, there are already suggestions that the legislation could be flawed. Hilton hotels in the US have iPads in every room. The iPads connect only to the Hilton website, allowing guests to order food and drinks and items such as towels, soap, and shampoo without ever talking to a member of staff.
Could I walk into my local betting shop and be handed an iPad that only allowed me to play roulette on that betting shop’s site? Could I pay cash over the counter to fund my game of roulette? As the law currently stands, the answer appears to be yes.
There is no doubt that the legislators will be back to close that little loophole – and there is no doubt that right now the bookmakers are everyone’s favorite whipping boys. With a vicar’s daughter as prime minister and a queue of opposition MPs lining up to criticize the gambling industry, legislation in the UK is only moving in one direction.
Could the banks be joining in?
Earlier this week, my colleague, Gina Clarke, wrote about the problems of enforcing self-exclusion – that is, when a gambler asks a bookmaker to temporarily close his or her account.
Let’s go back to the imaginary scene in the shop. A member of staff has given me my iPad – but instead of paying cash to fund my half hour of roulette, I have handed over my debit card.
“I’m sorry, sir, your bank has declined your payment.”
“They can’t, there’s plenty of money in the account.”
“I’m sorry, sir…”
Could that scenario become a reality? It appears so: Monzo, the online banking app so beloved of millennials, has recently stated that it is working on a feature that will allow users to block transactions made to gambling sites. People will be able to turn on the feature in settings or ask someone from Monzo’s customer support to do it for them.
You would think that people who have turned on the feature could equally well turn it off – but are we moving towards a time when banks might decide not to allow payments to gambling sites? My personal account is with a bank that makes a great play of being the only UK bank with a “customer-led ethical policy”.
Well, my online betting accounts are linked to my personal account: could I wake up one morning and find that the “customer-led ethical policy” will no longer allow me to transfer money to Ladbrokes or William Hill?
I wouldn’t bet against it – and if so, the UK government and the banks may be treading a dangerous line.
One of the criticisms aimed at FOBTs was that they were used extensively for money laundering. A reduction in the maximum stake from £100 to £2 ($134 to almost $3) certainly makes it much more difficult – but if cash were to become the only acceptable currency for gambling, then the situation would swiftly be reversed.
It would be a fine example of the law of unintended consequences: the more the government cracks down on gambling and the more banks join the moral crusade, the closer the ties between gambling and money laundering would become.