Bookmakers should expect bad news says MP Whittingdale
In a chilling message to betting shop operators former culture secretary John Whittingdale has warned they need to brace themselves for "significant change" triggered by the government's review of gaming machines.
Whittingdale, who held responsibility for gambling in government until being replaced by Karen Bradley last July, made the stark statement as guest speaker at the Association of British Bookmakers' annual meeting in London on Tuesday.
The government launched a call for evidence into gambling in October with the main element the review of stakes and prizes for gaming machines, also known as fixed odds betting terminals (FOBTs), which make up more than half of betting shop revenues.
Opponents of the machines have called for the maximum stake to be cut to £2 from £100, something ABB chief executive Malcolm George claimed would lead to thousands of betting shops closing and the loss of £290 million to the horseracing industry in media rights and levy payments by 2020.
Outlining the opposition to machines from gambling industry rivals, campaigners and politicians who believe they have the press and public opinion on their side, Whittingdale said: "Given all of that I would have to say I do think there will be proposals for significant change."
He added: "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."
'Culture minister not a great fan'
Whittingdale told the audience he was no longer in a position to give them information on the government's plans and that he was speculating. However, he said culture minister Tracey Crouch was "not a great fan of FOBTs" and was concerned about their impact.
Whittingdale said he thought government would invoke the "precautionary principle", adding: "They will say we can't say for certain it is damaging but there are indicators that it is, and therefore the sensible course is, rather than wait and have it proven that people are suffering, it is better to act now."
The Conservative MP for Maldon did offer bookmakers some crumbs of comfort, saying chancellor of the exchequer Philip Hammond would not want to give up a substantial source of income.
Whittingdale said: "The counter will of course, as has always been the case, be the Treasury because they receive a very large amount of tax revenue."
And he later added: "I still think that even if there are controls on FOBTs . . . the fact that half the population like a bet is not going to change, therefore there's still a good future for your industry."
Whittingdale said he thought the government was likely to publish its proposals in April after Easter.
In his speech, George said he believed the government was facing a dilemma over machines.
"Does it simply seek to shift the issue of problem gambling or work with the industry to solve it?" he asked.
"If shifting the problem is all the government wants, then a stake cut is the right route.
"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."
The ABB has been in dialogue with senior figures in British racing hoping to gain their support.
'Next few months critical'
George warned: "A cut in stakes will significantly damage the horse and greyhound racing industries.
"Our research suggests a £2 stake could result in over £290m being lost from horseracing by 2020 if implemented."
Other effects of a cut in gaming machine stakes to £2, George claimed, were the potential cost in revenues for government of £1 billion by 2020 and the loss of half the betting shop estate along with 21,000 jobs.
He concluded: "The ABB stands ready to engage with all interested parties in government and the broader stakeholders in our industry.
"The next few months will be critical, not just for betting shops, our shop colleagues and customers, but also for horse and greyhound racing and the whole eco-system that exists around shops.
"With our members' support, I believe we can secure the future of betting shops for many years to come."