UK bookmakers advised to “brace yourselves”

British MP John Whittingdale, who formally held responsibility for gambling in the UK government, warned UK bookmakers to brace themselves for some bad news on FOBTs Tuesday whilst addressing the Association of British Bookmakers’ annual meeting in London.

The MP said that it is likely that “significant” changes will soon be announced regarding the controversial subject of staking levels on the machines, which generate almost half of revenues in UK retail betting shops, noting that the current culture minister Tracey Crouch was “not a great fan of FOBTs” and was concerned about their impact.

“I can’t say I would be surprised if there are quite radical measures produced when we come to it and I think you should brace yourself,” Whittingdale added, emphasising that he was no longer in a position to give firm information on government’s intentions and was speculating on imminent events.

Referring to the different views and evidence on FOBTs, the MP said that government may come down on the side of making a precautionary move to avoid possible consumer damage

Our readers will recall that late last year the UK government renewed its enquiry into the impact on society of Fixed Odds Betting Terminals, and that opponents of the machines have suggested that maximum stakes be cut from GBP 100 to GBP 2.

Bookmakers have already introduced various measures aimed at obviating problem gambling on the machines, but this does not appear to have placated the opposition and elements of the media supporting them.

ABB chief executive Malcolm George has claimed that should the opposition be successful in its call for lower wagering limits, the consequences could be severe, with betting shops closing and jobs lost, along with the loss of GBP 290 million to the horseracing industry in media rights and levy payments by 2020.

On a more positive note, Whittingdale said that the major tax revenues from the betting shops would clearly be reduced, and that such an outcome would probably not sit well with the UK Chancellor of the Exchequer. He also opined that many Brits like to gamble and that is unlikely to change because betting limits have been reduced, ensuring a continued future for the industry.

Whittingdale said that the likely timescale for the move on FOBTs by government would possibly be after the Easter break.

In his address, George outlined the choices for government on the FOBT question, saying:

“Does [government] simply seek to shift the issue of problem gambling or work with the industry to solve it? If shifting the problem is all the government wants, then a stake cut is the right route.”

But, he warned, “A stake cut will drive problem gamblers into other forms of gambling – in casinos or amusement arcades, or worse the illegal gambling sector with all the attendant links to money laundering and illegal money lenders.”

Saying that the next few months would be critical, George said that the ABB remained in dialogue with interested parties and would continue to do so. However he predicted that a cut in stakes would not only harm bookmakers, but significantly damage the horse and greyhound racing industries.

“Our research suggests a GBP2 stake could result in over GBP290 million being lost from horseracing by 2020 if implemented, he said, adding that the government also stood to lose around GBP 1 billion by 2020 in taxes and the responsibility for the loss of up to 21,000 jobs if bookmakers started shuttering retail shops.

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