How Traditional Bookmakers are Discovering New Revenue Streams

Filed in archive Betting on December 2, 2004

FOBT stands for Fixed Odds betting Terminals - or put in layman's terms - its a slot machine terminal that offers roulette and other games. These machines are available at UK bookmakers across the country and have grown at a phenomenal rate over the last couple of years - in fact, it could be argued they have single-handedly bolstered the profits of nearly all the UK's traditional bookmakers - a shot in the arm for those being hit by telephone, internet and exchange betting.

Some sources claim that these 15,000 FOBT's currently available rake in revenues of �15bn per annum

Due to a quirk in the definition of a fixed odds games, bookies began offering roulette on the high street - despite roulette being covered by the UK Gaming Board as a 'casino game'. The games play like slots in that they are relatively high speed but offer much higher payouts than current UK regulations allow for normal 'fruit machines'. Naturally, this concerned the Gaming Board and the bookies and government developed a vountary 'code of practice' limiting the machines in payout, speed and numbers allowed. However, this hasn't stopped the UK public from playing.

This new growth in terminals has also given rise to a group of new technology companies entering the market - developing Intranet or central server-based systems to allow for new game downloads across the whole network. Unlike traditional Fruit Machine boxes, these new terminals offer touch-screen technology, printed receipts, online transaction processing and detailed reporting back to a central system.

Using the current figures published by British gaming company, Stanley Leisure, Tony McDonough offers an indepth special feature about this gambling phenomenon in ICCheshireBookies' money-making machinesProfits from all of Liverpool-based Stanley's operations for the 12 months to May, 2004, was �41.8m with an astonishing �14m contribution from FOBTs.

The so-called big three bookmakers --Ladbrokes, William Hill and Coral - have all invested heavily in FOBTs.

The UK's biggest betting shop operator is Ladbrokes which operates 5,900 machines in its 1,800 plus betting shops. The profit from each machine each week is estimated at between �500-�550.

William Hill is the next biggest operator with 1,587 high street outlets and says its is on target to have 5,200 FOBTs installed by the end of this year. Average profit per terminal per week is �400.

Coral is the third largest bookmaker in the UK with 1,112 licensed betting offices and so far has around 3,000 machines.... it is estimated FOBTs will make an operator at least �300 a week in profits.