Bookmakers Aim To Avoid Gaming Machine 'Disaster'.

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


At present bettors can wager approximately ₤ 100 a spin on the electronic machines.


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


And they have contacted Mr Hancock "not to compromise wagering stores".


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


The companies, in addition to the Association of British Bookmakers, are now looking for talks with Mr Hancock.


'Disproportionate reaction'


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


Those reports stated Chancellor Philip Hammond was ready to decrease the highest can bet from ₤ 100 a spin to ₤ 2.


"As the primary executives of UK retail wagering stores we would like to express our alarm, that according to media reports, the federal government has actually identified that the optimum stake on wagering shop gaming machines must be minimized from ₤ 100 to the most affordable possible level of ₤ 2," say the betting executives in their letter.


"We acknowledge that the federal government is devoted to lowering the maximum stake, nevertheless this must be a proportionate response and constant with the proof.


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


They state analysis from KPMG estimates that a ₤ 2 stake would result in 21,000 direct task 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 evaluation


Last week the Treasury said it was "totally helpful of DCMS's work to make sure the UK's gambling program continues to stabilize the requirements of vulnerable people, customers who bet responsibly and those who operate in this sector".


Last month, the UK's Gambling Commission advised that the maximum stake for FOBTs need to be cut to ₤ 30 or less.


Bookmaker William Hill obtains 54% of its retail income from video gaming machines.


GVC Holdings, has linked its deal to buy Ladbrokes Coral and its 3,500 betting shops, to the result of the evaluation into FOBTs. If the maximum 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 created from FOBTs made up around 6% of Paddy Power Betfair's total sales of ₤ 1.7 bn last year.