Treasury set to lose over £100m from delays to FOBT stake reduction
New research conducted by the Centre for Economic and Business Research (CEBR) has estimated that the Treasury is set to lose between £98m and £132m per year until the new fixed-odds betting terminal (FOBT) stakes are implemented.
Sources close to government have revealed that the implementation of the new £2 maximum stake for FOBTs could be delayed until 2020.
The Guardian reports that the delay is due to concern surrounding the reduced tax the Treasury would receive once the stakes are cut. Last year, £457m in tax was earned from the machines.
The Treasury has publicly stated that no delay is expected, instead saying that dialogue with the industry is underway to ensure implementation can run smoothly. The exact date of the stake cut is expected to be announced in the Chancellor’s budget later this year.
Bookmakers, who lobbied against the changes, have made it clear that they require time to implement and account for the drastic stake reduction.
However, many from the industry maintain that the changes could be enacted swiftly. After attending a cross-party parliamentary group meeting with FOBT manufacturers on the topic last week, Carolyn Harris, Labour MP for Swansea, said:
It is now clear that it is perfectly possible for the games manufactures to implement the £2 stake reduction in the very near future.– Carolyn Harris, Labour MP for Swansea
Government could benefit from stake cut
While bookmakers are sure to lose out, the CEBR also found that the Treasury could be set to benefit from the ruling. In the report, commissioned by the amusement arcade trade body Bacta, the CEBR found that although tax taken from the machines would reduce by almost £300m per year, that would be offset by other earnings.
Mostly, plans to increase gaming taxes would help to bring in £419m per year, while Some FOBT players would likely switch to other taxable forms of gambling. The CEBR also predicts that other FOBT users would stop gambling and contribute an additional £19m to the economy via other, more productive means.