Bookmakers Aim To Avoid Gaming Machine 'Disaster'.

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


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


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 actually contacted Mr Hancock "not to sacrifice wagering shops".


They alerted: "An optimum stake of ₤ 2 on FOBTs is a de facto ban on the devices as the games are not practical at that level."


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


'Disproportionate action'


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 reduction in the maximum stake.


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


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


"We acknowledge that the federal government is devoted to lowering the maximum stake, however this ought to be a proportionate action and constant with the evidence.


"For the avoidance of any doubt, we think a ₤ 2 maximum stake is a disproportionate reaction and will be catastrophic for retail wagering in the UK, with widespread repercussions for people's incomes and the broader economy."


They state analysis from KPMG approximates that a ₤ 2 stake would lead to 21,000 direct job losses, with half of betting shops 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 evaluation


Recently the Treasury stated it was "fully encouraging of DCMS's work to guarantee the UK's gaming program continues to stabilize the requirements of vulnerable individuals, customers who bet properly and those who operate in this sector".


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


Bookmaker William Hill derives 54% of its retail earnings from video gaming machines.


GVC Holdings, has actually connected its offer to buy 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 decreased to ₤ 2, GVC will pay ₤ 3.2 bn.


Revenues generated from FOBTs made up around 6% of Paddy Power Betfair's total sales of ₤ 1.7 bn in 2015.