Bookmakers Aim To Avoid Gaming Machine 'Disaster'.

29 April 2018
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Bosses of leading UK wagering companies have sent out a letter to Culture Secretary Matt Hancock in a bid to avoid the imposition of a ₤ 2 top stake on fixed-odds wagering terminals (FOBTs).


At present gamblers can bet up to ₤ 100 a spin on the electronic devices.


Ladbrokes' owner GVC, William Hill, Betfred, Scotbet, and Jenningsbet say a ₤ 2 limitation would have a "catastrophic influence on jobs and the economy".


And they have actually contacted Mr Hancock "not to sacrifice betting stores".


They cautioned: "An optimum stake of ₤ 2 on FOBTs is a de facto restriction on the machines as the games are not practical at that level."


The firms, along with the Association of British Bookmakers, are now looking for talks with Mr Hancock.


'Disproportionate action'


The Department for Digital, Culture, Media and Sport (DCMS) is leading a review into the machines, and media reports last week recommended that the Treasury will back a in the maximum stake.


Those reports said Chancellor Philip Hammond was ready to reduce the highest amount people can bet from ₤ 100 a spin to ₤ 2.


"As the primary executives of UK retail betting shops we want to express our alarm, that according to media reports, the federal government has actually identified that the optimum stake on wagering shop video gaming machines must be decreased from ₤ 100 to the least expensive possible level of ₤ 2," say the betting executives in their letter.


"We acknowledge that the federal government is devoted to decreasing the maximum stake, however this need to be a proportionate action and constant with the proof.


"For the avoidance of any doubt, we believe a ₤ 2 optimum stake is a disproportionate action and will be disastrous for retail wagering in the UK, with extensive repercussions for individuals's livelihoods and the wider economy."


They state analysis from KPMG estimates that a ₤ 2 stake would lead to 21,000 direct task 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 year.


Commission evaluation


Last week the Treasury said it was "totally encouraging of DCMS's work to make sure the UK's gaming routine continues to balance the requirements of susceptible individuals, customers who bet properly and those who work in this sector".


Last month, the UK's Gambling Commission suggested that the optimum stake for FOBTs should be cut to ₤ 30 or less.


Bookmaker William Hill derives 54% of its retail income from gaming makers.


GVC Holdings, has connected its offer to purchase Ladbrokes Coral and its 3,500 wagering stores, to the outcome of the evaluation into FOBTs. If the optimum stake is cut to ₤ 50, GVC pays ₤ 3.9 bn for Ladbrokes Coral. If it is lowered 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 last year.