Bookmakers Aim To Avoid Gaming Machine 'Catastrophe'.
29 April 2018
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Bosses of leading UK betting companies have sent a letter to Culture Secretary Matt Hancock in a quote to avoid the imposition of a ₤ 2 leading stake on fixed-odds wagering terminals (FOBTs).
At present can bet up to ₤ 100 a spin on the electronic makers.
Ladbrokes' owner GVC, William Hill, Betfred, Scotbet, and Jenningsbet say a ₤ 2 limitation would have a "devastating impact on jobs and the economy".
And they have actually called on Mr Hancock "not to compromise betting shops".
They warned: "An optimum stake of ₤ 2 on FOBTs is a de facto ban on the devices as the video games are not practical at that level."
The firms, as well as the Association of British Bookmakers, are now looking for talks with Mr Hancock.
'Disproportionate response'
The Department for Digital, Culture, Media and Sport (DCMS) is leading a review into the machines, and media reports recently recommended that the Treasury will back a reduction in the optimum stake.
Those reports said Chancellor Philip Hammond was willing to lower the highest amount individuals can bet from ₤ 100 a spin to ₤ 2.
"As the primary executives of UK retail wagering stores we wish to express our alarm, that according to media reports, the federal government has identified that the maximum stake on betting store video gaming makers must be decreased from ₤ 100 to the most affordable possible level of ₤ 2," say the gambling executives in their letter.
"We acknowledge that the federal government is devoted to decreasing the optimum stake, nevertheless this need to be a proportional response and consistent with the proof.
"For the avoidance of any doubt, our company believe a ₤ 2 maximum stake is a disproportionate reaction and will be disastrous for retail wagering in the UK, with extensive effects for individuals's incomes and the larger economy."
They say analysis from KPMG estimates that a ₤ 2 stake would result in 21,000 direct task losses, with half of betting stores 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 year.
Commission evaluation
Recently the Treasury stated it was "fully encouraging of DCMS's work to make sure the UK's betting program continues to balance the requirements of susceptible individuals, consumers who gamble responsibly and those who operate in this sector".
Last month, the UK's Gambling Commission suggested that the maximum stake for FOBTs must be cut to ₤ 30 or less.
Bookmaker William Hill obtains 54% of its retail earnings from gaming machines.
GVC Holdings, has connected its offer to purchase Ladbrokes Coral and its 3,500 betting stores, to the result of the evaluation 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 produced from FOBTs made up around 6% of Paddy Power Betfair's total sales of ₤ 1.7 bn last year.