UK Politicians Threaten to Slash FOBT Max Stakes to £2
Posted on: December 11, 2016, 03:00h.
Last updated on: December 11, 2016, 02:29h.
The maximum stakes on the UK’s fixed-odds betting terminals should be slashed from a maximum of £100 ($125) to £2 ($2.50). That’s the recommendation of an all-party parliamentary group, formed to advise the government’s regulatory review into UK betting industry.
The review promises to put the controversial machines under the microscope. Critics blame them for an increase in crime and gambling addiction, while the media has dubbed them “the crack cocaine of the high street.”
Meanwhile, the betting industry, which has become reliant on the FOBTs to bolster the flagging retail betting market, points out that levels of problem gambling in the UK have remained stable since the machines were introduced high street betting shops in 2001.
Nevertheless the all-party group said the stakes should be drastically reduced, at least on a precautionary basis, until the review has been completed and betting companies have satisfactorily proven that they cause no harm to society.
Duty to Protect
“From the evidence presented to us, the Government now has clear case for significantly reducing the £100 stake that can be wagered on a FOBT,” said Labour MP for Swansea East Carolyn Harris.
“The group sees a strong case for the stake being set at £2. This call is supported by many Members of Parliament from all political parties and in both Houses of Parliament, it is also supported by a significant majority of the public.
“The Government has a duty to protect the most vulnerable in our society and to act in the public interest. We therefore strongly urge them to properly regulate FOBTs and to do so with immediate effect.”
The Association of British Bookmakers was invited to provide evidence to the group, but deliberately snubbed the invitation, branding it a “kangaroo court.”
“The All Party Group is a club of anti-betting shop MPs, funded by amusement arcades and casinos with commercial interest in attacking betting shops,” claimed the industry body.
“When a properly balanced and independent Select Committee of MPs investigated FOBTs, they came out strongly in favour of them. As opposed to that Select Committee report, this is a biased and highly misleading piece of work, with no material evidence to support their claims.”
Nevertheless, the industry is deeply concerned about the review and an unfavorable decision from the government on FOBTs could be extremely damaging to the industry.
Ladbrokes, for example, derives 72 percent of underlying profit at its betting shops from FOBTs, and the cross party group’s announcement today caused its shares to fall 6.7 per cent. Numis Securities estimates if the government chooses to only reduce the maximum stake to £40, the profitability of betting shops could fall by 33 percent as a result.
“The industry knows that a regulatory clampdown is coming, they just have to hope that the new proposals are sensible and measured,” David Jennings, an analyst at Davy, told the Financial Times today.