FOBT stakes look set to be slashed to a £2 limit
As the government consultation into the gambling industry comes to an end on Tuesday, the Sunday Times has reported that the Department for Culture, Media and Sport (DCMS) is set to impose a £2 limit on Fixed-odds betting terminals (FOBTs), in what would be a ‘nightmare scenario’ for bookmakers.
The 12-week consultation period, that has focused on FOBTs in bookmakers’ physical stores, doesn’t end until tomorrow, but the Sunday Times has reported that the government is set to slash betting limits on the machines from £100 to £2.
This was always the worst outcome possible for operators, although confidence remained high throughout the consultation period that a compromise would be reached and stakes would be capped at between £10 and £50.
This sentiment was given further credence after a cabinet reshuffle last week saw Matt Hancock MP appointed as the secretary of the DCMS. Hancock is widely seen as a gambling friendly MP, with ties to horse racing and a voting record that has mostly supported the gambling industry in the UK.
However, if sources are to believed, Hancock is said to have bowed to what was drastic pressure throughout the consultation to impose the maximum limits reduction possible. The DCMS has said that no final decision has been made.
An all-party parliamentary group has authored a letter, sent to Prime Minister Theresa May, which voices support for a £2 betting limit on FOBTs. Carolyn Harris, MP for Swansea, who authored the report, said:
A reduction in the stake to £2 would not just be a victory for common sense. It would be a victory for the thousands of people whose lives are blighted daily by these toxic machines.– Carolyn Harris, MP for Swansea
Bookmakers unprepared for impact
Throughout the consultation period, bookmakers have voiced their concerns about the impact a huge cut in FOBT stakes would have on their businesses. Ladbrokes Coral have the largest amount of gambling machines in the UK and would be hit more than any other operator. The operator has claimed that along with damaging the business, up to 5000 jobs could be lost as a result.
Research commissioned by The Association of British Bookmakers found that cutting stakes to £2 could result in around 4,500 betting shops closing, over £1bn in lost revenue and over 20,000 jobs lost by 2020.
Shares in major UK bookmakers plunged on Monday as traders reacted to the news, with share prices in William Hill and Ladbrokes Coral both dropping by more than 10%.
Cutting FOBT stakes from £100 to £2 was the worst-case scenario for British bookmakers and it appears that most had not expected this outcome.