Can’t the Mail do numbers?

£1BILLION in one month… what Ladbrokes made from ‘crack cocaine’ machines: Secret document reveals huge profits as Downing Street announces crackdown on terminals

Sounds like a nicely profitable business that, doesn’t it?

Over the last four years, annual player losses from the fixed odds betting terminals (FOBTs) have risen from £1.3billion to around £1.5billion.

Ah, standard bollocks then.

The first number is the turnover of the machines, the second the actual losses to gamblers. Doesn’t do to get confused between the two really.

20 comments on “Can’t the Mail do numbers?

  1. Folding your two numbers together gives a machine bias of over 10%. Unless the industry’s changed, that’s about twice what was regarded as the optimum odds to keep punters playing & losing..
    The trick with running any game is to let the mark see enough winnings to keep interest. Be too greedy & they take their money home.

  2. Typical of my luck that they only start installing crack cocaine dispensing machines after I leave the UK. Really looking forward to my trip back in the summer though.

  3. None of this adds up: if these machines were played 5 million times in a month and turned over 1,000 million pounds, then punters were pumping 200 quid a time ??? Or have i missed something…

    There was another example, the Mail was reporting on the MH370 disaster and said that the Black Box was broadcasting at “37.5 KHz per second”

  4. From the Mail article: “as the average spend is £93 and only 8 per cent of punters play for more than half an hour”

    Yikes. £93? Average? In less than half an hour? Even allowing for the machine returning some to the fool that’s using it, that’s pretty impressive.

    I’d be inclined to add extra tax rather than restricting the use of the machines.

  5. Andrew M – “A few months ago the Guardian claimed that fixed-odds betting terminals are mainly used by drug dealers to launder their ill-gottten cash. They get the numbers right too:”

    But the rate of return is crap. If you want to launder some money, play roulette. Or better yet, bet on the ponies. If you plonk your money down on a roulette wheel in a casino the House has a 2.7% edge. Hard to beat that.

  6. @SMfS
    You go try launder money through a casino, let us know. Could be the best entertainment around. Big guys packed into shiny suits entertainment.
    You own casinos to launder. Not provide it as a drop-in service..

  7. Steve, declared income from pubs, taxis and ice cream vans is taxable – and if you try to claim it as income for laundering purposes but not for tax, you attract unwelcome attention from the authorities.

    I would guess that the advantage of gambling is that it is tax-free income. Plus easier to disguise very variable income.

  8. Steve Crooks said “£93? Average? In less than half an hour?”

    Probably not. We’re told that £92 is the average – presumably the mean – and only 8% of people play for more than half an hour.

    It’s quite possible the 92% playing for less than half an hour to all be spending far less than £92, if the 8% playing for longer are putting in much more.

    Which sounds quite possible if those 8% are using it for money laundering.

  9. Richard,
    Yes, it’s the difference between mean and median. A wide difference between the two figures would lend credence to the Guardian’s money laundering theory. Sadly we only have one figure, and we have to assume it’s the mean; we’re left to speculate on the median.

  10. The bit I ddn’t understand about the Guardian story is this:

    “James’s strategy is simple: £20 on black, £20 on red and £2 on zero. A press of a button and the wheel spins before the ball lands on red. That’s a loss of £2. The money placed on the zero is the only risk James is taking with his cash. If the ball does land on zero, he wins £72.”

    Now that’s a money laundering machine, not a “fixed odds betting machine”.
    This is what casinos get all mean & moody about & will be having a severe word if you try it. The croup & security will be monitoring the table & if you & your mate start a pattern of compensating bets like that, enjoy the hospitality of the management.
    Can’t say I’ve ever seen one of those machines, let alone played one. I like poker. I’m not a gambler. But no-one in their right mind, would build one could do that. Why would you? It’s impossible to win.
    The only thing I can imagine is each machine is a terminal, working off a central number generator. In which case, staking across three linked machines would work. But I’d find it hard to imagine the software wouldn’t pick up the betting pattern.
    Laundering is bad news in the gaming business. Fixing the odds is bad enough. But it’s working on the profit & you’ve only those easygoing guys in the Fraud Squad to worry about. Laundering’s working on the turnover, so over 90% bigger & the heat is HMRC who take no prisoners.
    Gaming people are very touchy about their licenses.

  11. The only numbers the Mail understands involve house price inflation or (gasp; wail) deflation. The are savants in regards to those.

  12. Richard Allan – “you really want Baccarat or Craps to eliminate the house edge.”

    Yeah but they take skill. Roulette is simple mechanics.

    bloke in spain – “You go try launder money through a casino, let us know. Could be the best entertainment around. Big guys packed into shiny suits entertainment.
    You own casinos to launder. Not provide it as a drop-in service..”

    As soon as my Crystal Meth comes out blue. I am still working on that. If you have millions to launder you need a high cash business. I doubt many people here are in that sort of business. But if you take your cash into a casino, turn it into chips, walk once around the floor, turn it back into cash, and ask for a receipt, you can tell the Tax men that it is gambling winnings. Laundered.

    Richard – “I would guess that the advantage of gambling is that it is tax-free income. Plus easier to disguise very variable income.”

    As I dimly remember, if you are too good with the ponies, the Tax men used to claim it was not random and tax you on your winnings. Do they still do that? I have to say that I don’t know enough people who actually win at the race track. Except the bookies who moved to Gibralter. But they are not friends exactly.

  13. Ah, SMfS! The sweet innocence of the Brit middle class.

    ” But if you take your cash into a casino, turn it into chips, walk once around the floor, turn it back into cash, and ask for a receipt, you can tell the Tax men that it is gambling winnings. Laundered.”

    As mentioned above, the people in the gaming industry do love their licenses. And a really good way of losing that license it facilitating money laundering. So they don’t give customers they don’t know large amounts of chips. And if you did what you proposed you’d be having a less than pleasant interview with the management, before you cashed in, be told to never darken their door again & your photo would be with every other house in town.
    That’s with the friendly end of the industry.
    The less friendly end, being indeed gamblers, will bet someone attempting to launder money is hardly going to be complaining to the authorities & take it off of you.

    SMfS. Don’t mess with the grown ups. Please.

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