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 quote to avoid the imposition of a ₤ 2 leading stake on fixed-odds wagering terminals (FOBTs).
At present bettors can bet up to ₤ 100 a spin on the electronic machines.
Ladbrokes' owner GVC, William Hill, Betfred, Scotbet, and Jenningsbet state a ₤ 2 limit would have a "devastating influence on tasks and the economy".
And they have actually contacted Mr Hancock "not to compromise wagering shops".
They warned: "An optimum stake of ₤ 2 on FOBTs is a de facto restriction on the devices as the video games are not possible at that level."
The firms, as well as the Association of British Bookmakers, are now seeking talks with Mr Hancock.
'Disproportionate reaction'
The Department for Digital, Culture, Media and Sport (DCMS) is a review into the machines, and media reports last week recommended that the Treasury will back a reduction in the maximum stake.
Those reports stated Chancellor Philip Hammond wanted to reduce the greatest amount people can bet from ₤ 100 a spin to ₤ 2.
"As the presidents of UK retail betting shops we would like to reveal our alarm, that according to media reports, the federal government has determined that the optimum stake on wagering store video gaming devices should be reduced from ₤ 100 to the least expensive possible level of ₤ 2," say the gambling executives in their letter.
"We acknowledge that the government is devoted to lowering the maximum stake, however this ought to be a proportional response and consistent with the evidence.
"For the avoidance of any doubt, our company believe a ₤ 2 maximum stake is a disproportionate response and will be disastrous for retail betting in the UK, with extensive repercussions for individuals's livelihoods and the wider economy."
They state analysis from KPMG estimates that a ₤ 2 stake would lead to 21,000 direct task losses, with half of wagering stores closing, a loss to HM Treasury of ₤ 1.1 bn over the next 3 years, a loss to regional authorities of ₤ 45m and to British Racing of ₤ 50m per annum.
Commission evaluation
Recently the Treasury said it was "totally encouraging of DCMS's work to ensure the UK's gambling regime continues to stabilize the requirements of vulnerable individuals, customers who bet properly and those who work 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 income from gaming machines.
GVC Holdings, has actually linked its deal to purchase Ladbrokes Coral and its 3,500 wagering stores, to the outcome of the review into FOBTs. If the optimum stake is cut to ₤ 50, GVC pays ₤ 3.9 bn for Ladbrokes Coral. If it is reduced 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 last year.