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In the News

Unintended Consequences of Regulation - Fixed Odds Betting Terminals

Graham Watson

4th April 2019

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Here is a classic and topical example of the unintended consequences of regulatory intervention. The reduction in the stake for fixed odds betting terminals (FOBTs) has seen the bookmakers respond, by devising ways around the scheme, having developed new high-stakes games.

The Betfred version, Virtual Cycling, is perhaps the 'cleverest' rip-off version of roulette, but equally the most malign - in that the maximum stake is £500. However, it's most interesting as an example of the difficulties of introducing legislation; firms are incentivised to find loopholes. I would wager - see what I've done there - that the government will act to close them, because these innovations are patently against the spirit, if not, the letter of the law.

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Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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