Bacta challenges government's assessment of FOBT crackdown

Bacta challenges government's assessment of FOBT crackdown

Monday, January 15, 2018 Posted by Luke Massey
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The trade association says the impact has been "wildly overestimated"

A report commissioned by Bacta has claimed that the economic impact on bookmakers from lowering FOBT stakes has been "wildly overestimated".

The trade association representing the UK amusements sector commissioned analysis from the Centre for Economics and Business Research (CEBR), which concluded that if the maximum stake was cut from £100 to £2, the implications for betting wouldn’t be as significant as first anticipated.

The CEBR report projected that it would lead to a £335 million deduction in annual gross gambling yield (GGY) for high street betting shops, some way out from the £639 million estimation from the government’s impact assessment.

John White, Bacta CEO, told TotallyGaming.com: “Bacta commissioned research from CEBR to help the DCMS in its decision making on this important issue surrounding FOBTs. The findings clearly outline that the GGY impact of a reduction to a £2 maximum stake on high street bookmakers has been wildly overestimated. They will in fact be left with plenty of profit to invest in their businesses.

White also said that the losses from any reduction, on which the UK Department for Digital, Culture, Media and Sport (DCMS) is nearing the end of its 12-week consultation, would be offset by the fiscal cost of problem gambling associated with FOBTs, such as the impact on welfare services, work and housing issues, estimated by the report to be £210 million.

“The research also outlines the current fiscal cost to frontline services related to problem gambling on FOBTs,” he added. “This too will be impacted from a reduction to a £2 stake. When set alongside the minimal impact to GGY, we hope that this will make the DCMS’ decision a simple and quick one.”

However, the Association of British Bookmakers (ABB) has suggested that the report is "flawed", and funded by those with vested commercial interests and no access to betting shop data.

An ABB spokesman countered: “The Treasury’s own analysis, with detailed betting shop data, has estimated that the net negative cost to the UK economy of a £2 stake would be a staggering £8.5 billion at worst over the next ten years, and £5.5 billion at best.”

Totally Gaming says: The perennially divisive fixed odds betting terminals (FOBTs) have come in for huge criticism for encouraging high-stakes gambling. The DCMS is nearing the end of its review into ‘changes to gaming machines and social responsibility requirements across the UK gambling sector’ after confirming that maximum FOBT stakes would be cut to somewhere between £50 and £2.

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