Bookmakers Aim To Avoid Gaming Machine 'Catastrophe'.

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


At present gamblers can wager approximately ₤ 100 a spin on the electronic devices.


Ladbrokes' owner GVC, William Hill, Betfred, Scotbet, and Jenningsbet say a ₤ 2 limitation would have a "catastrophic effect on tasks and the economy".


And they have actually called on Mr Hancock "not to compromise wagering stores".


They cautioned: "A maximum stake of ₤ 2 on FOBTs is a de facto restriction on the devices as the games are not practical at that level."


The companies, along with the Association of British Bookmakers, are now seeking talks with Mr Hancock.


'Disproportionate response'


The Department for Digital, Culture, Media and Sport (DCMS) is leading an evaluation into the machines, and last week recommended that the Treasury will back a reduction in the optimum stake.


Those reports stated Chancellor Philip Hammond wanted to minimize the highest quantity people can wager from ₤ 100 a spin to ₤ 2.


"As the presidents of UK retail betting shops we wish to reveal our alarm, that according to media reports, the federal government has actually determined that the optimum stake on betting store video gaming makers should be reduced from ₤ 100 to the most affordable possible level of ₤ 2," state the gaming executives in their letter.


"We acknowledge that the government is dedicated to reducing the optimum stake, nevertheless this need to be an in proportion reaction and consistent with the evidence.


"For the avoidance of any doubt, our company believe a ₤ 2 optimum stake is a disproportionate response and will be catastrophic for retail betting in the UK, with widespread effects for individuals's incomes and the broader economy."


They say analysis from KPMG estimates that a ₤ 2 stake would result in 21,000 direct job losses, with half of betting 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


Last week the Treasury stated it was "fully helpful of DCMS's work to guarantee the UK's gambling routine continues to stabilize the requirements of vulnerable people, customers who gamble properly 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 derives 54% of its retail earnings from gaming machines.


GVC Holdings, has connected its offer to purchase Ladbrokes Coral and its 3,500 wagering 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 last year.