Bookmakers write to DCMS in late bid to avoid £2 FOBT stake
The heads of a number of UK bookmakers have penned a letter to the Department of Digital, Media, Culture and Sport (DCMS) Secretary, Matt Hancock, in a late effort to avoid stakes on fixed-odds betting terminals (FOBT) being slashed from £100 to £2.
The parties are represented by the Association of British bookmakers (ABB) and GVC Holdings, William Hill, Betfred, Scotbet, and Jenningsbet, have all signed the letter.
The government is close to reaching its decision of its triennial review of the gambling industry. The focus has been on advertising standards and the stakes of FOBTs.
While MPs and the public are backing the maximum cut in FOBT stakes from £100 to £2, major UK bookmakers have long warned against such a move and detailed some of the effects that it will have.
A report by KPMG commissioned by the ABB found that a £2 FOBT stake could lead to over 20,000 job losses and half of UK high-street betting shops being forced into closure.
The letter details these and other ‘catastrophic consequences’ that the implementation of a £2 stake will cause.
A part of the letter reads:
For the avoidance of any doubt, we believe a £2 maximum stake is a disproportionate response and will be catastrophic for retail betting in the UK, with widespread consequences for people’s livelihoods and the wider economy.– Statement, Association of British Bookmakers
Government close to announcing decision
This review of the industry has rolled along for more than a year now and has garnered more attention than any other. The key issue has been FOBT stakes.
Early last week, it appeared the decision would be delayed after it was reported that the Chancellor, Phillip Hammond, was hesitant to cut stakes too drastically due to a concern over lost tax revenue.
Bookmakers breathed a sigh of relief but it was not to last. A day later, several UK sources reported that Hammond had agreed to the £2 stake and the decision is to be announced in the coming weeks.
While most major UK operators would be affected, some carry much more exposure than others.
Ladbrokes Coral, who have the most FOBTs in the country, could stand to lose around £430m. Furthermore, the final price of GVC Holding’s takeover of the group is dependent on the result of the review. The takeover price will be between £3.2 -3.9bn, depending on whether the decision is favourable.
William Hill currently earns more than half of its revenue from the machines and would also stand to lose heavily.