The maximum stake on fixed-odds betting terminals (FOBTs) will be reduced to £2 under new rules unveiled by the government this morning. Currently, people can bet up to £100 every 20 seconds on electronic casino games such as roulette. This change is focused on the impact it has on problem gamblers but it will have a dramatic effect on betting companies, and will reduce Government revenue from taxation by a significant amount too. The Gambling Commission recommended a medium ground of reducing the maximum stake to £30 and stated at the Woods Whur Gambling Conference that this was an evidence-based figure. However, the Government have ignored their experts and gone with the headline grabbing change.
Minister Tracey Crouch said reducing the stake to £2 “will reduce harm for the most vulnerable”. We will have to wait and see what impact this will actually have with problem gamblers/gambling and whether online gambling ends up being the winner for multi-platform operators.
High Street bookmakers have warned it could lead to thousands of betting shops closing. William Hill, which generates just over half its retail revenues from FOBTs, described the Government’s decision as “unprecedented” and warned that 900 of its shops could become loss-making, potentially leading to job losses. It said it’s full-year operating profit could fall by between £70million and £100million. Provision for this will have been made as the industry had expected this cut but hoped the Gambling Commission suggestion of £30 stake could save shops and jobs.
Tom Watson, Labour’s deputy leader and Shadow Secretary of State for Digital, Culture, Media and Sport, told the BBC’s Today programme: “The great tragedy of this is [that] for five years now pretty much everyone in Westminster, Whitehall and in the country has known that these machines have had a very detrimental effect in communities up and down the land. The bookmakers have chosen to take a defiant approach, trying to face down Parliament, really, with a very aggressive campaign.”
The Government’s consultation into gambling machines found consistently high rates of problem gamblers among players of FOBTs “and a high proportion of those seeking treatment for gambling addiction identify these machines as their main form of gambling”.
Ms Crouch said FOBTs were “an outlier in the world of high-street gambling because of the speed with which it is possible to lose large amounts of money” .She said the £2 limit would “substantially” reduce harm and protect the most vulnerable players. “Even cutting to £10 would leave problem gamblers, and those most vulnerable, exposed to losses that would cause them and their families significant harm.”
It will be very interesting to see how the betting industry reacts to these changes. FOBTs were originally introduced into betting shops before the Gambling Act 2005 was introduced. They successfully argued that these new machines were not bound by the stakes and prize limits of the time. They persuaded those who opposed them that they were not gaming machines but were a fixed bet due to the status of the determination of winners. A High Court challenge was fended off by a voluntary agreement as to the number allowed in each shop and a maximum stake and prize. This heightened status was preserved when they were categorised as B2 machines under the Gambling Act 2005.
The Betting Industry has proved itself to be innovative and prepared to fight for its position on the High Street. It will be interesting to be involved in the next stages of this story, which doesn’t seem to be over just yet.
To read the full review of gaming machines and social responsibility measures click on the link below.