Paddy Power will feel the pinch if fixed odds betting terminals’ (FOBTs) maximum stakes are lowered, as is expected, just as the rest of the bookmaker industry will. But their outlook about it is much more chipper than their competitors. Last week, CEO Peter Jackson spoke during an earnings call about the situation at some length, even accusing competitors in the industry of using “scare tactics.” I suppose this is a plausible tactic in order either to leverage the government review or to justify a range of strategic corporate moves later.
This stance isn’t new for Paddy Power Betfair. Last year, the company spoke up in support of a £10 limit on FOBTs, breaking step with the industry in so doing. Then-CEO Breon Corcoran described the machines as ‘toxic’ in a statement to the UK government in September. Certainly, anything which creates a lot of problem gamblers, or inspires high customer dissatisfaction, distrust, and churn, is toxic in the long term to the industry’s performance as well as its reputation, so he has a point!
For their part, Paddy Power Betfair deny that any shops would immediately close as a result of the government’s decision on FOBT limits. “All our shops are in high footfall, highly competed locations, positioning us to benefit from competitor shop closures,” Jackson stated. With a strong online presence and less outright reliance on its high street earnings, Paddy Power Betfair also has the flexibility it needs to perform well in the wake of the decision.
Critics of Paddy Power Betfair’s rhetoric have pointed out that limits online are sky-high, in comparison with the current £100 limit on FOBTs in betting shops. However, Paddy Power Betfair have an answer there, too. Or, at least, one of their ex-CEOs, Stewart Kenny, does. In a recent interview, Kenny called for mandatory wagering limits for online play. It’s also arguable that voluntary self-exclusion is far more functional a system online than it is on the high street, where a recent BBC undercover study exposed serious problems with the active execution of self-exclusion systems.
Recent sports results have favoured the bookie, which certainly can’t hurt. Jackson says he continues to view the betting shops as “important social hubs” and plans to keep them all open for now. We’ll have to see how that pans out in the coming years, and what other innovations might hit the high street. Considering the speed at which technology improves today, it’s possible that even virtual reality (VR) and augmented reality (AR) could play a role in reviving the flagging brick and mortar bookmakers’ scene.
