Bookmakers Aim To Avoid Gaming Machine 'Disaster'.
29 April 2018
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Bosses of leading UK wagering companies have actually sent a letter to Culture Secretary Matt Hancock in a quote to avoid the imposition of a ₤ 2 top stake on fixed-odds betting terminals (FOBTs).
At present can wager approximately ₤ 100 a spin on the electronic devices.
Ladbrokes' owner GVC, William Hill, Betfred, Scotbet, and Jenningsbet state a ₤ 2 limit would have a "catastrophic effect on jobs and the economy".
And they have called on Mr Hancock "not to compromise betting shops".
They warned: "A maximum stake of ₤ 2 on FOBTs is a de facto restriction on the devices as the video games are not practical at that level."
The firms, as well as 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 last week suggested that the Treasury will back a decrease in the optimum stake.
Those reports stated Chancellor Philip Hammond wanted to minimize the highest quantity individuals can bet from ₤ 100 a spin to ₤ 2.
"As the primary executives of UK retail betting stores we want to express our alarm, that according to media reports, the government has determined that the maximum stake on wagering store video gaming makers need to be decreased from ₤ 100 to the most affordable possible level of ₤ 2," say the gambling executives in their letter.
"We acknowledge that the government is committed to lowering the optimum stake, nevertheless this need to be a proportional reaction and consistent with the evidence.
"For the avoidance of any doubt, our company believe a ₤ 2 optimum stake is an out of proportion reaction and will be catastrophic for retail betting in the UK, with widespread consequences for individuals's incomes and the wider economy."
They say analysis from KPMG approximates that a ₤ 2 stake would lead to 21,000 direct job losses, with half of betting stores closing, a loss to HM Treasury of ₤ 1.1 bn over the next 3 years, a loss to local authorities of ₤ 45m and to British Racing of ₤ 50m per year.
Commission review
Recently the Treasury said it was "totally helpful of DCMS's work to guarantee the UK's gambling routine continues to stabilize the requirements of vulnerable individuals, consumers who bet properly and those who work in this sector".
Last month, the UK's Gambling Commission suggested that the optimum stake for FOBTs should be cut to ₤ 30 or less.
Bookmaker William Hill derives 54% of its retail profits from video gaming devices.
GVC Holdings, has connected its deal to purchase Ladbrokes Coral and its 3,500 wagering stores, to the result of the evaluation into FOBTs. If the optimum stake is cut to ₤ 50, GVC pays ₤ 3.9 bn for Ladbrokes Coral. If it is decreased to ₤ 2, GVC will pay ₤ 3.2 bn.
Revenues produced from FOBTs made up around 6% of Paddy Power Betfair's overall sales of ₤ 1.7 bn last year.