Bookmakers Aim To Avoid Gaming Machine 'Catastrophe'.
29 April 2018
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Bosses of leading UK wagering companies have actually sent out a letter to Culture Secretary Matt Hancock in a quote to avoid the imposition of a ₤ 2 top stake on fixed-odds betting terminals (FOBTs).
At present bettors can bet as much as ₤ 100 a spin on the electronic devices.
Ladbrokes' owner GVC, William Hill, Betfred, Scotbet, and Jenningsbet say a ₤ 2 limit would have a "catastrophic impact on jobs and the economy".
And they have called on Mr Hancock "not to compromise wagering stores".
They cautioned: "An optimum stake of ₤ 2 on FOBTs is a de facto ban on the makers as the video games are not feasible at that level."
The firms, as well as the Association of British Bookmakers, are now looking for talks with Mr Hancock.
'Disproportionate reaction'
The for Digital, Culture, Media and Sport (DCMS) is leading an evaluation into the makers, and media reports recently recommended that the Treasury will back a decrease in the optimum stake.
Those reports stated Chancellor Philip Hammond wanted to lower the greatest quantity people can bet from ₤ 100 a spin to ₤ 2.
"As the chief executives of UK retail wagering shops we want to reveal our alarm, that according to media reports, the federal government has determined that the maximum stake on wagering shop video gaming devices must be minimized from ₤ 100 to the most affordable possible level of ₤ 2," state the gambling executives in their letter.
"We acknowledge that the government is committed to lowering the maximum stake, however this ought to be an in proportion action and consistent with the evidence.
"For the avoidance of any doubt, we think a ₤ 2 maximum stake is an out of proportion action and will be catastrophic for retail wagering in the UK, with widespread consequences for individuals's incomes and the wider economy."
They say analysis from KPMG estimates that a ₤ 2 stake would result in 21,000 direct job losses, with half of betting shops closing, a loss to HM Treasury of ₤ 1.1 bn over the next three years, a loss to local authorities of ₤ 45m and to British Racing of ₤ 50m per annum.
Commission evaluation
Recently the Treasury said it was "fully supportive of DCMS's work to ensure the UK's gambling program continues to balance the requirements of susceptible people, consumers who gamble responsibly and those who work in this sector".
Last month, the UK's Gambling Commission suggested that the maximum stake for FOBTs need to be cut to ₤ 30 or less.
Bookmaker William Hill derives 54% of its retail profits from gaming makers.
GVC Holdings, has actually connected its offer to buy Ladbrokes Coral and its 3,500 betting shops, to the outcome of the review into FOBTs. If the optimum stake is cut to ₤ 50, GVC pays ₤ 3.9 bn for Ladbrokes Coral. If it is minimized to ₤ 2, GVC will pay ₤ 3.2 bn.
Revenues generated from FOBTs made up around 6% of Paddy Power Betfair's overall sales of ₤ 1.7 bn in 2015.