Major Cuts In Prospect For Fixed Odds Betting Terminals Stakes (Update)
Speculation that new Culture Secretary Matt Hancock supports drastic cut in maximum bet to GBP 2
The anti-gambling media in the UK was out in force over the weekend, with several prominent mainstream press outlets claiming that the maximum stake on fixed odds betting terminals (FOBTs) is about to be cut to GBP 2 when the gambling review consultative period draws to a close in the near future.
The Reuters news agency quoted a Sunday Times report that new Culture Secretary Matt Hancock is supportive of a drastic cut.
The Sunday Times reported that the “overwhelming” response to the review had persuaded the government to reduce the maximum to two pounds.
“Matt (Hancock) wants the new stake to be at the bottom of the range,” the newspaper quoted a Hancock ally as saying. “His attitude to (the terminals) is very negative because it takes money from reasonable, mature betting, like on the horses.”
A Department for Digital, Culture, Media and Sport spokeswoman said the government was “currently consulting on what the exact cut should be, and would make a final decision in due course once all the evidence has been considered”.
“We are clear that FOBT stakes will be cut to ensure we have a safe and sustainable industry where vulnerable people and children are protected,” she said.
FOBT punters in retail betting shops can currently deposit as much as GBP 100, but the machines have attracted intense action group, political and media opposition, leading to a government decision in October that the maximum stake on the machines would be reduced to somewhere between GBP 2 and GBP 50 following a 12-week consultative period which ends this week.
Bookmakers have warned that such drastic cuts could lead to job losses and shop closures due to the important contribution that FOBTs make to their revenues.
Shares in William Hill dropped 13.23 percent to 292.3p on Monday morning, while Ladbrokes fell 10.2 percent to 163.7p.
The two companies are expected to take the biggest hit among the UK’s top bookmakers.
Analysts at Credit Suisse expect William Hill and Ladbrokes earnings would be slashed by 40 percent and 50 percent, respectively, in the worst-case GBP 2 scenario. Credit Suisse also sees around 1,000 betting shops being closed on the back of the reform.
Ladbrokes Coral Responds To FOBT Speculation (UPDATE)
As bookmaker share values react negatively to prospect of GBP 2 wagering limit
Ladbrokes Coral has responded to numerous press reports detailing a sharp fall in various bookmaker shares due to the prospect of the UK Government lowering the FOBT wagering limit from GBP 100 to GBP 2 following a triennial review consultation (see previous InfoPowa reports).
Jim Mullen, chief executive of Ladbrokes Coral said in a press statement Monday:
“The triennial review has been running for over 15 months and throughout that time there has been constant rumour and speculation about potential outcomes, of which this is yet more. It should be noted that the current call for evidence is yet to conclude and industry responses have not yet been submitted to Government.
Mullen reiterated the company’s belief that cutting FOBT stakes would have little effect on curbing problem gambling but would rather have serious consequences in the industry including the closure of around 3,000 retail bookmaking shops, 15,000 job losses and diminished tax revenues.
“We will continue to make the case for a sensible measured, evidence led and proportionate response to the public concern regarding these issues and this will be the basis of the evidence submitted as part of the ongoing review,” he said.
Horse Racing Industry Urges Caution On Cutting Maximum F.O.B.T. Stakes
Chopping the maximum stakes for fixed odds betting terminals could have consequences for racing as well as retail bookies
Weekend media reports that the new Culture Secretary Matt Hancock is supportive of drastic cuts to the maximum stakes punters can wager on fixed odds betting terminals (FOBTs) not only sent retail bookmaking share prices south Monday (see previous InfoPowa report) but have triggered a response from the racing industry.
The British Horseracing Authority has warned that chopping the maximum stake from GBP 100 to GBP 2 could be a step too far and one that would be disastrous for UK racing.
BHA exec director Will Lambe cautioned that his industry is heavily dependent on the bookmaking industry and warned that any measures which severely compromise the sport’s financial stability would have unintended consequences to British racing and the wider rural economy.
Lambe pointed to warnings from bookmakers that a radical cut in FOBT stakes could see the closure of hundreds of retail betting shops and consequent job losses, which would adversely impact media coverage and betting on races.
The 12 week consultative period on FOBTs ends today, although the final government decision may not follow immediately, analysts have pointed out.