Bookmakers Aim To Avoid Gaming Machine 'Catastrophe'.
29 April 2018
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Bosses of leading UK wagering firms have sent out a letter to Culture Secretary Matt Hancock in a quote to prevent the imposition of a ₤ 2 leading stake on fixed-odds betting terminals (FOBTs).
At present bettors can wager as much as ₤ 100 a spin on the electronic devices.
Ladbrokes' owner GVC, William Hill, Betfred, Scotbet, and Jenningsbet say a ₤ 2 limitation would have a "disastrous effect on jobs and the economy".
And they have gotten in touch with Mr Hancock "not to compromise wagering shops".
They warned: "A maximum stake of ₤ 2 on FOBTs is a de facto ban on the machines 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 response'
The Department for Digital, Culture, Media and Sport (DCMS) is leading a review into the makers, and media reports recently recommended that the Treasury will back a reduction in the optimum stake.
Those reports stated Chancellor Philip Hammond wanted to lower the highest can bet from ₤ 100 a spin to ₤ 2.
"As the presidents of UK retail wagering stores we would like to express our alarm, that according to media reports, the government has figured out that the optimum stake on wagering shop gaming makers should be minimized from ₤ 100 to the most affordable possible level of ₤ 2," state the gaming executives in their letter.
"We acknowledge that the government is committed to reducing the maximum stake, nevertheless this ought to be a proportional response and consistent with the proof.
"For the avoidance of any doubt, we think a ₤ 2 optimum stake is an out of proportion reaction and will be catastrophic for retail betting in the UK, with prevalent 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 regional authorities of ₤ 45m and to British Racing of ₤ 50m per annum.
Commission review
Last week the Treasury said it was "totally supportive of DCMS's work to ensure the UK's betting program continues to balance the requirements of susceptible people, consumers who gamble responsibly and those who work in this sector".
Last month, the UK's Gambling Commission recommended that the optimum stake for FOBTs ought to be cut to ₤ 30 or less.
Bookmaker William Hill obtains 54% of its retail revenue from gaming makers.
GVC Holdings, has actually linked its offer to purchase Ladbrokes Coral and its 3,500 betting shops, to the result of the review 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 comprised around 6% of Paddy Power Betfair's overall sales of ₤ 1.7 bn in 2015.