The Sunday Times was an early leader in fixed-odds betting terminal (FOBT) speculation this week, with coverage from “an ally” of Cultural Secretary Matt Hancock suggesting that it is highly likely the government will opt for the full reduction in FOBT stakes, down to £2 per bet. Bookies had hoped the Treasury might speak up on behalf of lowering it to £20, but there’s less hope for that outcome now. Secretary Hancock is said to view the machines as a social blight, and markets have responded to the news, carried widely in other papers, almost as if it was the official decision, which is not expected for some weeks. However, an official at DCMS has been reported by the Financial Times as having spoken out over the weekend to the effect that it is “highly likely” the government will go with the £2 limit.
Shares in leading bookmakers in the UK have slumped by double figures in some cases, and there could be worse to come once the official word is out. On balance, the coverage this week seems likely to be borne out in reality; it does seem probable that the stake will be so reduced. Ladbrokes have already maintained that such a result will “endanger” the horseracing industry and lose the UK economy tens of thousands of jobs, but any such last-ditch efforts to influence the consultation, closing today, seem vanishingly unlikely to meet with much success.
A recent government study suggested that much of the anticipated losses to tax revenue and through job losses are likely to be balanced by reduced social costs in terms of the impact of problem gambling on society, including mental health, employment and cost related to criminal activities. It also revised down previous Treasury estimates of expected industry losses by almost 50%.
In related news, the British Beer and Pub Association has called for “a modest rise in stakes and prizes for pub machines” in the wake of the news this week, in an effort to help stem the decline of the UK’s pub industry. The hope is than an increase in stakes and prizes for these Category 3 machines would make a significant contribution to keeping more pubs running across the country. It seems reasonable timing for such a request.
So what can we expect to see next from the bookmakers, and how will they rally in the face of this decision, assuming it goes ahead as now expected? We can expect to see them putting ever more focus online, of course, and hopefully aiming to secure a better track record, as an industry, towards handling problem gambling and doing good customer due diligence. Doing so throughout the FOBTs timeline could have saved them from what the Association of British Bookmakers is now calling an “effective ban” on the machines.
