Yes, mankind has always gambled, but we’ve also always regulated – we should now do so again over fixed-odds betting terminals

Gambling on chance is as old as human civilisation. Palaeolithic man could be found taking bets on the outcome of a throw of painted pebbles or the polished knucklebones of a sheep.

And attempts by authorities over the centuries to ban gambling have always collapsed in the face of this hardwired human preference (or vice, depending on your point of view). The emperor Augustus, Henry VIII and the Victorians all tried. All failed.

Yet authorities have generally also long regulated gambling, partly to limit its harm, partly to extract useful revenues from it. The description of the National Lottery as state-sponsored gambling is justified. It has helped to deliver the nation an impressive haul of Olympic gold medals through sports funding.

The proceeds of previous national lotteries in the past were used to fund the construction of the British Museum and Westminster Bridge. Thus is vice laundered into, if not always virtue, then at least something more edifying.

Technology and innovation has long opened up new ways for people to speculate, from the mass horse-racing meets of 18th century England, to the Mediterranean casino resorts of the 19th century to telephone bookmakers in the 20th century.

The internet is the latest facilitator for people to lose their money. There’s no need any longer to walk to the nearest bookies’ shop to stake a wager. You can now bet on the outcome of a football match, or a horse race, the closing price of the FTSE 100, or the spin of a roulette wheel, with a few taps on your mobile from the comfort of your sofa.

Yet it’s a more primitive gambling technology that is raising the biggest furore. Fixed-odds betting terminals (FOBTs) began to appear in betting shops around the turn of the Millennium after a change in gambling taxation made such lower-margin machines commercially viable.

These chance machines, usually an electronic roulette wheel or blackjack table, enable you to lose £100 every 20 seconds. There are now around 34,000 terminals around the country and the Government, responding to concerns of campaigners and MPs, has today unveiled plans to cut the maximum bet on them from £100 to somewhere between £2 and £50.

Libertarians see a moral panic. But there is evidence of harm. The estimated number of problem gamblers in the UK stands at around 400,000 according to various studies. It is unclear whether this figure has actually been rising, but FOBTs are named by gambling charities as one of the biggest drivers of destructive addiction. They also tend to be common in betting shops in more deprived areas. Even one large betting company, Paddy Power Betfair, supports slashing the permitted stakes on the FOBTs, recognising the reputation damage these machines are inflicting on the wider industry.

The broader libertarian argument against the principle and practice of gambling regulation – that the state has no place interfering in a pursuit that is freely chosen and which imposes no harm on others – is unconvincing. It’s self-evidently true that rational people gain enjoyment from a flutter on a chance outcome. With the odds of winning the National Lottery jackpot around one in 14 million it’s less the mathematical expected value of the ticket one buys than the fantasy of winning. Yet decisions are not axiomatically validated as rational by the fact of their being taken, as the work of the latest Nobel economics laureate Richard Thaler has demonstrated. Our rationality is bounded. We can do things that make us worse off – things that we will, predictably, end up wishing we hadn’t.

But if we are going to protect people from themselves this, of course, leaves the question of where the line should be drawn. Should the permissible maximum stake on a FOBT be £2? Or £50? The truth is there is no right or wrong answer. We muddle through by trial and error, guided by an imperfect estimation of public opinion and the tolerable level of social harm – just as we have done ever since mankind first started casting knucklebones and betting on which side they would fall.