Bookmaker share prices hit on back of FOBT report
Shares in William Hill and Ladbrokes-Coral plc fell sharply on Thursday after a group of MPs released a report calling for the stakes on gaming machines to be slashed.
The Fixed Odds Betting Terminals All Party Parliamentary Group (APPG) published the interim findings of its inquiry into machines which claimed it had found a "strong case" for the maximum stake to be cut to £2 from £100.
The Association of British Bookmakers (ABB) issued a strong response to the report, describing the group as a "kangaroo court".
Meanwhile, charity GambleAware said that research it had commissioned suggested a reduction in stakes alone would be ineffective in tackling problem gambling.
The APPG, whose members have been long-standing opponents of gaming machines, also said government should consider slowing the rate of play on gaming machines and review the number of machines permitted in an individual bookmaker, currently set at four.
The group's chair Carolyn Harris MP said: "In this interim report we note that, from the evidence presented to us, the government now has clear case for significantly reducing the £100 stake that can be wagered on a Fixed Odds Betting Terminal. The group sees a strong case for the stake being set at £2."
However, Dr Jonathan Parke, speaking at the GambleAware conference on Thursday, said that access to additional funds and speed of play were important factors in problem gambling.
"Stopping players from spending more than they can afford is important," he said. "However, restricting stake size while failing to consider the other cost determinants, like game speed and volatility, will likely prove ineffective."
Bookmakers have warned that thousands of betting shops would have to close as a result of such a dramatic cut in stakes with a damaging effect on racing's income through levy and media rights.
Responding to the MPs report, the ABB said the APPG was "a small group of anti-bookmaking MPs, funded by casinos and arcades that will benefit from undermining bookmakers".
It added: "When a properly balanced and independent select committee of MPs investigated FOBTs they came out strongly in favour of them. As opposed to that select committee report, this is a biased and highly misleading piece of work, with no material evidence to support their claims."
The APPG's associate members who help fund the group include amusement arcade trade body Bacta, the Hippodrome Casino and gaming company Novomatic UK who are in competition with betting shops.
By mid morning Hills' shares had fallen by nearly eight per cent to 286.8p, while Ladbrokes-Coral shares were down around 6.7 per cent at 118.6p, although they recovered to 292.7p and 123.6p respectively by close of trading.
Analyst Gavin Kelleher at Goodbody said: "The reduction of FOBT maximum stakes to £2 would be considered by many to be the worst case scenario from the perspective of UK bookmakers. If the report today pushes for such a reduction, it will undoubtedly be seen as a negative for the sector."
The government is carrying out a review of gaming machines and is expected to report in the new year.
The APPG's findings have been submitted to the Department for Culture, Media and Sport. A DCMS spokesperson said: "The government is currently undertaking a review of stakes and prizes of gambling machines and their locations, that includes FOBTs.
"We welcome the submission from the APPG on FOBTs as part of this and will consider their report. It is important that gambling regulations strike the right balance between allowing the industry to contribute to the economy and enable people to bet responsibly whilst ensuring consumers and communities are protected."