Bookmakers Aim To Avoid Gaming Machine 'Catastrophe'.

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


At present gamblers can bet approximately ₤ 100 a spin on the electronic machines.


Ladbrokes' owner GVC, William Hill, Betfred, Scotbet, and Jenningsbet state a ₤ 2 limit would have a "disastrous effect on tasks and the economy".


And they have gotten in touch with Mr Hancock "not to compromise betting shops".


They alerted: "An optimum stake of ₤ 2 on FOBTs is a de facto restriction on the makers as the video games are not feasible at that level."


The firms, along with 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 suggested that the Treasury will back a decrease in the optimum stake.


Those reports said Chancellor Philip Hammond was willing to the greatest quantity people can wager from ₤ 100 a spin to ₤ 2.


"As the primary executives of UK retail betting stores we wish to reveal our alarm, that according to media reports, the federal government has actually determined that the maximum stake on betting shop video gaming machines must be reduced from ₤ 100 to the most affordable possible level of ₤ 2," say the betting executives in their letter.


"We acknowledge that the government is committed to lowering the optimum stake, nevertheless this ought to be an in proportion action and constant with the proof.


"For the avoidance of any doubt, our company believe a ₤ 2 maximum stake is a disproportionate action and will be disastrous for retail wagering in the UK, with extensive effects for individuals's incomes and the broader economy."


They state analysis from KPMG estimates that a ₤ 2 stake would lead to 21,000 direct task losses, with half of wagering stores 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 annum.


Commission review


Recently the Treasury said it was "totally helpful of DCMS's work to guarantee the UK's gambling program continues to balance the requirements of susceptible individuals, consumers who bet responsibly and those who work in this sector".


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


Bookmaker William Hill derives 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 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 minimized 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 in 2015.