Reduction in FOBT stake to £2 would cost industry £600m a year

Reduction in FOBT stake to £2 would cost industry £600m a year

Tuesday, October 31, 2017 Posted by Andy McCarron
Long awaited Government review wants lower stake for B2 machines

The UK Government has announced that it intends to reduce the maximum stakes on B2 gaming machines, better known as FOBTs, but has launched a 12-week consultation to determine the new lower level.

Citing social responsibility concerns, the Government has given several proposals for the new staking level - £50/£30/£20 and £2 - and is now seeking views from stakeholders as to what would be a reasonable level.

The consultation said: “We think that the weight of evidence justifies government action on B2 machines, but we acknowledge that there is limited evidence to inform exactly at what level the revised maximum stake should be. In outlining options for consultation, we are seeking to balance the potential impact on the economy and leisure gamblers against the need to reduce gambling related harm.”

As part of the consultation, the Government also published a Regulatory Impact Assessment, which attempts to clarify the costs associated with each option. Not surprisingly the 98% decrease in stakes was by far the most expensive to the industry at an estimated cost of £577m per year.

While the Government has not laid out its preferred staking level, it has included an innovative option which may signal its thinking. One of its suggestions is that while slots content on the B2 profile be reduced to £2, non-slots games such as roulette may only be reduced to £20.

It explained: “With regard to B2 slots, industry data provided to the Gambling Commission during the call for evidence highlighted that there were a higher proportion of sessions with higher losses playing B2 slots than playing B2 roulette. Taking session losses as a proxy for potential harm, we think there are grounds for a greater reduction of the maximum stake for this type of game.”

Such a move would also be expensive for the industry - approximately £299m a year.

The Government has also dismissed the calls from BACTA to increase B3 stakes from £2 to £2.50 and Category C stakes from £1 to £2 and prizes from £100 to £150, despite a report from PwC laying out the economic benefits to such a move. BACTA’s argument for these changes may well have been undermined by its recent lobbying for a stake reduction for B2s.

The National Casino Forum also has had requests for category B1 jackpots to increase from £20,000 to £100,000 rebuffed.

Minister for gambling Tracey Crouch also focussed on the online industry. She said: “I am also aware of the significant growth in online gambling in recent years, which now accounts for 44% of the commercial gambling sector, with 10% of adults across Great Britain now participating in online gambling.

“The Government considers that more needs to be done to promote responsible play and protect consumers in this sector. The Gambling Commission is examining the online sector and encouraging operators to increase action to identify harmful play, design and pilot better interventions and put in place measures that work. We want to see the online sector fully engage with these objectives and this programme of work.

“In the meantime, we are strengthening existing protections relating to online gambling and outlining a package of measures on gambling advertising to minimise the risk to the most vulnerable.”

Totally Gaming says: It’s a key three months for the industry where it needs compelling arguments to bring to the discussion, ideally evidenced based given the weight of anti-gambling stakeholders who will be submitting their own evidence. Given more than half of the profits from UK betting shops are derived from FOBTs, the outcome will have a profound effect on the British gambling landscape.

 
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