Government believes bookmakers have had enough time to prepare for job losses

The government expects bookmakers to make suitable provisions for staff who may be affected by shop closures, as the first swathe of high street redundancies was announced on Thursday.

William Hill will begin shutting premises before the end of the year, with around 700 to close initially, although that figure will rise over time. The first round of closures will put 4,500 jobs at risk but the Department for Digital, Culture, Media and Sport believes the industry has had ample time to prepare for the situation.

The government's decision to reduce the maximum stake for FOBTs to £2 from £100 came into effect in April, although bookmakers have been braced for the impact of the new regulations since May 2018.

A statement from a DCMS spokesperson said: "The gambling industry has had over a year to make preparations for this change, including to mitigate job losses. We now expect them to provide the right support to any staff affected by planned shop closures.

"By cutting the maximum FOBT stake from £100 a spin to £2, we are helping to stop extreme losses by those who can least afford them."

The BHA offered sympathy to those directly affected by the news. A spokesperson for the regulator said: "Although today’s news is broadly in line with previous announcements, we would like to express our sympathy to those whose roles have been placed at risk by William Hill’s decision.

"We will continue to focus our energies on working with the betting industry to develop a future partnership based on social responsibility and mutual interest."

The closures will in turn impact on media rights for British racing, and earlier in the year Arena Racing Company took the position of cutting prize-money in order to mitigate the future shortfall.

That decision did not prove popular, and responding to Thursday's news, ARC chief executive Martin Cruddace warned racing's major stakeholders needed to unite or risk the situation worsening.

He said: "This announcement is very much in line with our own forecasting for this year, albeit possibly worse in the longer term.

"In combination with the recent downturn in levy income, it is absolutely incumbent on British racing to work together to manage what will be a catastrophic impact on media rights income to avoid further drastic cuts in prize-money."

Irish racing also stands to be affected, and Horse Racing Ireland chief executive Brian Kavanagh said: "Obviously the closures will have an impact here particularly for racecourses down the line. It would be wrong to say otherwise, although I can't say the news came as a great surprise, but it is something we had factored into our budgets for 2019. We will have to wait and see whether the closures happen immediately or on a phased basis."

The City's reaction to the impending closures was muted, but that was due to the news being expected and the markets assuming their positions on high street bookmakers months in advance.

William Hill's share price closed up 0.7p at 164.4p, but a year ago it stood at 298.3p. Having made it public knowledge last November that up to 900 of their shops could be shuttered due to the government's hardline stance on FOBTs, Thursday's announcement fell in line with City expectations.

Gaming and leisure analyst for Goodbody stockbrokers, Gavin Kelleher, said: "This news should not come as any surprise. The share price of William Hill has been under pressure over the last two years for a number of reasons with regulation being one of them.

"At its CMD [Capital Markets Day] in November the group stated that the £2 stake introduction could see up to 900 shops at the risk of closure. The market has already priced in the impact.

"We have included 650 shop closures in FY19-21, so this is slightly ahead of our expectations. We do not expect to make any changes to our numbers for the group’s retail division on the back of today’s update."

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