It’s an absolutely stunning development that has never before happened in history, assuming you start your count of history from five minutes ago. Legislation that outlawed fixed odds betting terminals above £2 a spin in the UK has backfired, spurring *gasp* unintended consequences.
The new regulations went into effect on April 1, and appropriately enough for April Fool’s, the joke’s on them. The free market has found a way to bypass artificial price maxima once again, which is all the legislation really is, a price maximum on a very narrow form of gaming. Just like any artificial maximum limit on any price on anything in the economy, all it does is cause shortages. In this case, a shortage of games that allow betting above £2 a spin. Given the shortage, the free market will always figure out a way to meet demand and earn that revenue some other way, legally or not. In this case, it has done so legally by slightly changing the form of the game to comply with the letter of the law.
Basically, instead of placing the bet in the machine itself, gamers place bets on a sheet of paper that corresponds to positions on the machine, so the bet is technically an over-the-counter bet, which can be above the £2 limit.
If you pass a law that the maximum price for an Aston Martin can only be £1,000, you’re going to end up with a serious Aston Martin shortage. You can blame the shortage on the people who greedily went to buy one as quickly as possible, but economics is economics and this is what must happen. If you pass a law that gasoline prices cannot rise after a natural disaster, you’re going to have serious gasoline shortages. Blame the people who waited first in line for a full tank of gas, but it’s not their fault. If prices were allowed to rise to market levels after a hurricane, there would be no shortage. Only those who absolutely needed gasoline right now would buy, like those on the way to the hospital or some other emergency situation, and those that could wait would wait for supply to be reestablished and prices to fall back down. Companies would be trying to specifically flood affected markets with more gasoline so as to earn the higher revenues, bringing prices back down naturally.