Independent on Sunday, The: High street roulette bigger than Lottery

In thousands of smoke-filled rooms on your local high street a gambling revolution by stealth is under way.

While the Government is under pressure to scrap plans for mega- casinos, more than 20,000 street-corner casinos are making more money than the National Lottery. "Virtual roulette" machines operate like the real thing and account for a dramatic rise in bookmakers' income. Turnover at Ladbrokes, for example, increased pounds 3bn in 2003-04.

Now the machines, or fixed odds betting terminals (FOBTs), which also accept credit and debit cards, are under fire as more people become addicted.

Dr Mark Griffiths, professor of gambling studies at Nottingham Trent University, said: "If I wanted to design a machine that would keep people in addictive behaviour patterns then I would invent something that you could gamble a lot on again and again. Virtual roulette is designed to do this."

GamCare, the support group for gamblers, will in April release a study that is expected to report a dramatic increase in the number of people that have contacted it for help.

Each machine generates a profit ranging from pounds 380 a week at William Hill, to pounds 188 at Stanley Racing. William Hill reported an increase in turnover of 93 per cent in 2004, to pounds 4.75bn. At Stanley Racing turnover rose from pounds 822m to almost pounds 1.5bn, while gross profit at Tote rose by 40 per cent. All attributed the rise to the FOBTs. By contrast, the annual revenue at the National Lottery, which is played by 70 per cent of the adult population, is pounds 4.5bn a year.

But the industry says an independent review by Mori found there was no evidence that the machines are addictive. It says that its voluntary code of practice has reduced the maximum bet to pounds 15 a time and limits the number of machines in each outlet to four. It says the Mori report also found that only 0.6 per cent of the adult population use FOBTs.

Professor Peter Collins, chief executive of GamCare and director of gambling studies at Salford University, said: "The difference between the number of users and turnover is great mystery. On the one hand they say the machines are hardly used, on the other hand they amount for a substantial amount of the profits."

At a Coral betting shop in east London The Independent on Sunday talked on Friday afternoon to some of the punters. Dave, 32, a construction worker, won pounds 300 in a few minutes, but lost it in 20. Phil, 40, a banker, says he has lost pounds 6,000 this year, but won pounds 4,000 last year. "It's all swings and roundabouts," he said.

But James Burton, 51, told the IoS that the machines have "blown his life apart". A recovering gambling addict, he moved to Bedford "because there are no casinos here". His habit landed him in jail for embezzlement, and he lost his wife and family.

In Bedford he rebuilt his life, until discovering the machines. "When I saw the machines I knew that was it," he said. "The most I've put in is pounds 4,300 in one afternoon. Then I started on the credit cards and spent pounds 3,000.

"Once the ball is rolling you can't stop it. I ended up in a psychiatric hospital and then a homeless hostel."

When the machines were rolled out from 2001 the industry agreed to produce the voluntary code of practice and submit to the review by Mori. The draft of the review, which has been handed to the Department for Culture, Media and Sport, says: "There is no evidence in this study which suggests that FOBTs are closely associated with problem gambling."

Tom Kelly, chief executive of the Association of British Bookmakers, said: "The explanation of the huge turnover and low number of players is that these machines have a low profit margin. I think 20,000 machines is as far as we are going to get because the code of practice limits the number of machines per shop to four."

Richard Caborn, the Sport minister, agreed that there is "no evidence" the machines are addictive, but added: "We do not base decisions on one report.

" The jury is still out and we will continue to monitor the machines."

James Burton will be the subject of a 90-minute documentary, `The Confession', to be broadcast on BBC2 in April