The UK government is to cut stakes on fixed-odds betting terminals, categorised as B2 gaming machines, from £100 to £2.
The announcement came this morning from minister Tracey Crouch of the Department for Culture Media and Sport. It is news that many of the country’s largest gambling businesses feared and which is likely to have far-reaching consequences for the sector.
The reduction follows a prolonged and heated public debate about gambling-related harm and the role of FOBTs.
A raft of measures, of which an FOBT stakes cut was just one, include the raising of Remote Gaming Duty (from 15 per cent to perhaps 20 per cent) at the November 2018 budget; tougher limit setting and affordability checks to be introduced online; player tracking and time-limit setting measures to be investigated for other B categories; and a high-profile Responsible Gambling ad campaign.
The news was greeted warmly by advocates of lower stakes on FOBTs and with concern by others, with some warning of severe consequences for bookmakers.
Welcoming the news, Gambling Commission chief executive Neil McArthur said: “Whilst we welcome the reduced stake, that alone will not be enough to address the risks of harm that can come from all forms of gambling.
“That is why we will continue to act in other ways to reduce those risks – including delivering enhanced consumer protection for online gambling in the areas of customer verification, fairness and interaction, implementing strong penalties for businesses who breach advertising guidelines, and reviewing gambling product characteristics to identify whether particular features pose greater risk of harm than others.
“We are particularly pleased that government has formally recognised gambling-related harm as a public health issue and has asked Public Health England to conduct an evidence review to inform action on prevention and treatment.”
Inferring that FOBT players would simply be driven online, the Association of British Bookmakers said the decision will have “far-reaching implications for betting shops on the high-street”.
“We expect over 4,000 shops to close and 21,000 colleagues to lose their jobs. The independent expert advice warned that this would simply shift people, the majority of whom gamble responsibly, to alternative forms of gambling where there is less chance of human interaction and its impact on problem gambling levels is far from certain.
“As the industry adjusts its business model, those shops that do survive will continue to provide a safe place to gamble with staff interaction and industry leading responsible gambling measures and support British sport.”
Gabi Stergides, president of amusement trade body BACTA, joined the Gambling Commission in welcoming the move. “A stake reduction to £2 has long been needed to protect consumers from the harm caused by FOBTs.
“This is a decision that puts player protection first, and will allow the gambling industry as a whole to move forwards and create a safer, more socially responsible environment for consumers. It is a testament to the wide-ranging campaign for stake reduction from concerned individuals and organisations across politics, public health and the wider gaming sector.
“The government has made the right decision and it now needs to be implemented without delay,” said Stergides.
In a note, gambling consultancy Regulus Partners said it estimated that around 3,700 shops would close over a five-year period, with Betfred to be hit hardest while sector profitability would be “reduced by 66 per cent at the EBITDA level,” hitting all operators.
Regulus predicts that the loss in FOBT volume will result in an additional remote tax burden of around £200m.
“The entire GB gambling industry needs to show leadership in safer gambling as a core strategic competence,” Regulus said. “We see this as a key opportunity with international dimensions but with increased risks to other sectors due to an emboldened and perceived proven ‘anti’ lobby.
“Engagement with government needs recalibrating to move on, with key lessons learned from the long-term disaster we believe the LBO sector largely brought upon itself; this needs to be seen very much as the beginning of an era, not the end of one.”