As bookmakers in the United Kingdom prepare to adapt to tough new gambling regulations, one of the largest operators – William Hill – has said it may have to close as many as 40% of its stores, citing fears they will no longer be profitable to run.
On April 1st, 2019, a new law comes into force that bans the maximum stake a player can place on a fixed-odds betting terminal (FOBT) to £2, down from £100. The move, which has proved highly controversial within the gambling industry, is a welcomed move by gambling reform campaigners – but operators fear it could put thousands of people out of jobs, as stores around the country close.
At the time of writing there are approximately 2,300 William Hill stores across the country (making the operator one of the country’s largest employers), and as many as 4,500 jobs could be cut.
The legislation is expected to cost the company as much as £100m each year – and this was recently announced in a letter to shareholders.
What Are Fixed Odds Betting Terminals and Why Are They So Controversial?
‘A fixed odds betting terminal (FOBT) (pronounced “fob”-“T” (T as in the letter T, fob as in the word fob)) is a type of electronic slot machine normally found in betting shops in the United Kingdom and introduced in 2001. The terminals allow players to bet on the outcome of various games and events which have fixed odds, with the theoretical percentage return to player (RTP) being displayed on the machine by law. Like all casino games, the “house” (i.e. the betting shop) has a built-in advantage. Typically, slot machine FOBTs have an RTP of 90% to 94% depending on the chosen stake, and standard roulette FOBTs have a long-term average RTP of 97%.’
The machines have been accused of facilitating problem gambling throughout the UK, with many dubbing them the ‘crack cocaine of gambling’, and the machines have been said to ruin people’s lives up and down the country.
Politicshome estimates that as many as 43% of FOBT players exhibit signs of problem gambling:
‘Given 43% of FOBT users are either problem or at-risk gamblers, and 230,000 FOBT sessions in a single year resulted in losses of more than £1000, it’s no surprise the government decided to lower the limit to £2 to “reduce the risk of gambling-related harm”, which they deemed was necessary to “lower the potential for large losses” that damage “players and communities”.
Bookmakers, including William Hill have been aware of the impending changes for a while – and the bookmaker was found, last year, to have distributed an internal memo ensuring that workers made sure to inform players the maximum stake was still £100.
It read: “Following last week’s update from the Government regarding their intention to reduce staking limits . . . we have had a softening in our overall gaming machine performance and I am concerned this is because many may believe the limits are already in place. We don’t yet know when [the lower limit] will be . . . Therefore, please be aware there is no change to the current maximum stake of £100 and if appropriate ensure that your customers are aware of this fact so they can continue to enjoy playing gaming machines as they do currently.”
Whether the move will result in the mass-closing of shop around the country remains to be seen – but one thing is clear, and that’s the fact that the new regulations are going to change things in the UK dramatically. Whether the industry adapts, and recovers, is a different matter.