Government delivers worst case scenario for the industry over FOBTs

Government delivers worst case scenario for the industry over FOBTs

Thursday, May 17, 2018 Posted by Joseph Streeter
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The DCMS has confirmed that stakes will be cut to £2

The UK Government has this morning confirmed that the maximum stakes on Fixed Odds Betting Terminals (FOBTs) will be cut to £2.

Subject to Parliamentary approval, the decision comes in spite of widespread industry warnings that such a drastic stakes cut would have severe implications for jobs and sponsorships provided by Britain’s bookmakers.

Ladbrokes, the UK’s largest retail betting outlet, has said that it does not intend to push for a judicial review of the DCMS‘ decision, but has urged the government to allow it “an adequate implementation period” - it’s expected that the decision will cost Ladbrokes an immediate £160m.  

Both William Hill CEO Philip Bowcock and Betfred CEO Fred Done have outlined the significant retail implications that the decision will have, with half of their betting shops looking likely to close because of the decision.

Additionally, research by KPMG suggested that a £2 limit would cut revenue for the Treasury by £1.1bn over three years, an annual loss of £45m to local authorities and £50m to British racing.

The Association of British Bookmakers (ABB) also emphasised how damning the impact will be on the industry: “This is a decision that will have far-reaching implications for betting shops on the high-street.  We expect over 4,000 shops to close and 21,000 colleagues to lose their jobs.

"The independent expert advice warned that this would simply shift people, the majority of whom gamble responsibly, to alternative forms of gambling where there is less chance of human interaction and its impact on problem gambling levels is far from certain.

“As the industry adjusts its business model, those shops that do survive will continue to provide a safe place to gamble with staff interaction and industry leading responsible gambling measures and support British sport.”

In the review, DCMS Secretary of State Matt Hancock stated: “When faced with the choice of halfway measures or doing everything we can to protect vulnerable people, we have chosen to take a stand. These machines are a social blight and prey on some of the most vulnerable in society, and we are determined to put a stop to it and build a fairer society for all.”

Minister for Sport and Civil Society Tracey Crouch added: “Problem gambling can devastate individuals’ lives, families and communities. It is right that we take decisive action now to ensure a responsible gambling industry that protects the most vulnerable in our society. By reducing FOBT stakes to £2 we can help stop extreme losses by those who can least afford it.

“While we want a healthy gambling industry that contributes to the economy, we also need one that does all it can to protect players. We are increasing protections around online gambling, doing more on research, education and treatment of problem gambling and ensuring tighter rules around gambling advertising. We will work with the industry on the impact of these changes and are confident that this innovative sector will step up and help achieve this balance.”

The implications aren’t limited to just retail betting, as revealed by Sky Betting & Gaming CEO Richard Flint, who said: “Sky Betting & Gaming doesn’t have any FOBTs but now we – and Yorkshire’s economy - risk being punished because of them.

“Any increase in Remote Gaming Duty is a tax on hi-tech Yorkshire jobs. Our company is based in Leeds and has created nearly 1000 roles in the last three years - with another 120 jobs to fill. Increasing an already heavy tax burden will clearly have an impact on our plans to create new jobs in the North of England in the years to come.

“Rather than punishing a UK based job creator, the government should focus on getting a fairer tax contribution from other tech companies who, unlike us, don’t already pay sufficient taxes on their UK activities.There are a number of wider proposals in today’s Gambling Review based around online safety which we welcome.”

Totally Gaming says: This decision, that will have a major impact on all elements of the industry, could be perceived as the government being reactive, rather than proactive. It may well deter problem gamblers from a relatively safe retail outlet and push them online and into a potentially more isolated unsafe gambling environment.

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