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Further intervention suggested in Fixed Odds Betting Terminal market

Jonny Clark

31st January 2017

Here's a fascinating example of intervention in a market and potential government failure that you may wish to share with students.

An all-Parliamentary report has been released on the Fixed Odds Betting Terminal market that has suggested that the government should intervene to reduce the current £100 per bet limit (for account holders) down to just £2 per bet. FOBTs are electronic terminals that allow gamblers to bet on the outcome of virtual games such as roulette or poker.

The report argues that such terminals exploit the addictive nature of gambling and have created anti-social behaviour. A classic de-merit good for our economics students to consider!

However, the report has been attacked by the betting industry as being flawed and biased. As such, if the recommendation was to become a regulation in law, would be an unfair intervention in the market. The Association of British Bookmakers claim that the findings in the report are the opinion of a small number of MPs with an axe to grind and that the research was funded by organisations who would ultimately benefit if the FOBT market saw a reduced level of demand. It is suggested that some of the funding for the report came from a casino.

The group of MPs who have compiled the report have also took a swipe at the indutry's regulator, The Gambling Commission, suggesting that it has been too slow to react to some of the issues created by FOBTs.

Report here of the debate.

Summary of the report plus link to full report here.

Jonny Clark

Jon Clark has been teaching economics and business studies for over 25 years primarily in the Further Education sector. Before joining tutor2u, he was a senior manager at South Cheshire College in Crewe.

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