Bookmakers Aim To Avoid Gaming Machine 'Catastrophe'.
29 April 2018
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Bosses of leading UK betting companies have sent out a letter to Culture Secretary Matt Hancock in a quote to prevent the imposition of a ₤ 2 leading stake on fixed-odds wagering terminals (FOBTs).
At present bettors can bet as much as ₤ 100 a spin on the electronic machines.
Ladbrokes' owner GVC, William Hill, Betfred, Scotbet, and Jenningsbet say a ₤ 2 limit would have a "catastrophic effect on tasks and the economy".
And they have contacted Mr Hancock "not to sacrifice wagering shops".
They alerted: "An optimum stake of ₤ 2 on FOBTs is a de facto restriction on the makers as the video games are not possible at that level."
The companies, as well as the Association of British Bookmakers, are now looking for talks with Mr Hancock.
'Disproportionate reaction'
The Department for Digital, Culture, Media and Sport (DCMS) is leading a review into the machines, and media reports recently that the Treasury will back a reduction in the maximum stake.
Those reports stated Chancellor Philip Hammond was ready to lower the highest amount people can wager from ₤ 100 a spin to ₤ 2.
"As the presidents of UK retail betting shops we want to reveal our alarm, that according to media reports, the federal government has actually figured out that the optimum stake on betting store gaming machines should be lowered from ₤ 100 to the least expensive possible level of ₤ 2," state the gaming executives in their letter.
"We acknowledge that the government is dedicated to minimizing the optimum stake, however this ought to be a proportionate action and constant with the evidence.
"For the avoidance of any doubt, we believe a ₤ 2 maximum stake is a disproportionate action and will be catastrophic for retail betting in the UK, with prevalent effects for people's incomes and the wider economy."
They state analysis from KPMG estimates that a ₤ 2 stake would result in 21,000 direct job losses, with half of wagering shops closing, a loss to HM Treasury of ₤ 1.1 bn over the next 3 years, a loss to local authorities of ₤ 45m and to British Racing of ₤ 50m per annum.
Commission evaluation
Last week the Treasury stated it was "totally helpful of DCMS's work to guarantee the UK's betting regime continues to stabilize the needs of susceptible individuals, consumers who gamble properly and those who operate in this sector".
Last month, the UK's Gambling Commission recommended that the optimum stake for FOBTs must be cut to ₤ 30 or less.
Bookmaker William Hill obtains 54% of its retail income from gaming makers.
GVC Holdings, has connected its deal to buy Ladbrokes Coral and its 3,500 betting stores, to the result of the review into FOBTs. If the optimum stake is cut to ₤ 50, GVC pays ₤ 3.9 bn for Ladbrokes Coral. If it is reduced to ₤ 2, GVC will pay ₤ 3.2 bn.
Revenues created from FOBTs comprised around 6% of Paddy Power Betfair's total sales of ₤ 1.7 bn last year.