Government FOBT Delay Influenced by Controversial Report
When the government delayed their decision to cut the amount one can bet on a Fixed Odds Betting Terminal (FOBT) from £100 to £2 until October 2019, it prompted the resignation of sports minister Tracey Crouch. Her decision will now be vindicated by a secret report commissioned by bookmakers that have since been discredited.
Chancellor of the Exchequer Philip Hammond explained away the delay from April to October due to the need to safeguard the 15,000 to 21,000 jobs that are estimated to be lost when these stakes are capped to £2. Nicky Morgan, Chair of the Treasury Select Committee, directly opposed this decision, claiming that Hammond was prioritising industry jobs over people’s lives.
Now The Guardian is reporting that the paper, written by consultancy and accounting firm KPMG, and which played a crucial role in the government’s decision, relies on key assumptions that have been viewed as highly suspect. It contains a disclaimer by the firm that the report was “performed to meet specific terms of reference” that agreed with the Association of British Bookmakers, crucially stating that:
“The report should not, therefore, be regarded as suitable to be used or relied on by any other person or for any other purpose.”
Exchequer Secretary to the Treasury Andrew Jones ignored these warnings, replying to ABB chief Malcolm George that it “will make a valuable contribution to the evidence base.”
In an ironic stroke, none other than Paddy Power Betfair wrote to the Prime Minister that many speculations in the report were “unrealistic”. It took issue with one prediction that said that only 50% of customers of shuttered shops due to this cap would take their trade to another place. As they state:
“Our evidence suggests a very high proportion (around 75%-90%) of customers move to other shops.”
This is an embarrassing failure for the government, prompting accusations that they care more about the health of the betting industry and the money it generates than addicts being able to lose £100 every 20 seconds. The government are concerned about the loss of money from this move with the budget also including a rise in online casino tax from 15% to 21%. Yet coming at a sensitive time with Brexit looming, this delay is setting them up for another embarrassing defeat they cannot afford politically. Labour MP Carolyn Harris didn’t hold back in her criticism of the delay, stating that:
This is policymaking of the worst kind, not based on evidence and pandering to a corporate interest at the expense of the public interest and the protection of the vulnerable.– Carolyn Harris, Labour MP
The government have defended their decision, with a spokesman for the treasury giving a vague answer that: “We consulted widely with interested parties – including charities and all parts of the gambling industry – before considering all of the evidence and making a final decision.”
Opposition to this delay has become a cross-party concern, with a 70-strong group comprising both sides of the House of Commons looking to overturn the delay. Thirty Tory rebels are expected to take part, including Jacob Rees-Mogg, Boris Johnson and David Davis. Shadow chancellor John McDonell is leading the Labour opposition to the delay, stating that:
“The chancellor’s position on this issue is now completely untenable and he must now back the cross-party amendment to the finance bill”
The timing of the amendment, which is almost certain to pass, couldn’t be worse for the government, potentially coming at the same time that Theresa May seeks approval on her Brexit deal. While the exit from the EU will get more press, this likely amendment will pour salt in the Tories’ already gaping wound.