Government to impose £2 limit on FOBTs – although legal challenge not ruled out
The government will slash the maximum stakes on the "social blight" of FOBTs to £2 from £100, culture secretary Matt Hancock said on Thursday, although one leading bookmaker is understood to have not ruled out a legal challenge.
After months of wrangling ministers finally delivered their verdict following a gambling review launched in the autumn of 2016, an announcement met with praise from campaigners but dismay from betting operators who have warned thousands of shops will close after becoming unprofitable.
British racing could lose £40-£60 million as a result of reduced media rights income and levy if the bookmakers are right, although the government has said it will try to ameliorate that by extending the levy to bets made on overseas racing.
However in a letter to BHA chairman Steve Harman, Hancock said: "It cannot be right for our magnificent sport to rely on these machines for its income."
Along with the stake change the government has announced a number of measures including stronger age verification rules, proposals to require operators to set limits on spending until affordability checks have been conducted and heightened responsible gambling messages around advertising.
Remote Gaming Duty, paid by online gaming operators, will be increased "at the relevant Budget" to cover for any impact on tax revenue, a move criticised by online operator Sky Bet.
Bookmakers expressed their disappointment at the decision, with William Hill saying 900 shops - 38 per cent of their estate - would become loss-making as a result.
Both William Hill and Ladbrokes Coral owner GVC Holdings said they were not considering a legal challenge to the government's decision.
However, a Betfred insider told the Racing Post that if they believed the government had made an error in law they would consider bringing a judicial review.
Bookmaker share prices fell initially before recovering strongly. William Hill shares ended Thursday up 13.3p at 330.8p, GVC Holdings shares rose by 45.5p to 961p and Paddy Power Betfair shares rose 155p to 8,405p.
Protection for vulnerable
Hancock said: "When faced with the choice of halfway measures or doing everything we can to protect vulnerable people, we have chosen to take a stand. These machines are a social blight and prey on some of the most vulnerable in society, and we are determined to put a stop to it and build a fairer society for all."
The changes to the stake will be made through secondary legislation, while the government said it would ensure operators were given sufficient time to implement and complete the technological changes required.
Sports minister Tracey Crouch, who had been a prime mover in the effort to reduce FOBT stakes, added: "While we want a healthy gambling industry that contributes to the economy, we also need one that does all it can to protect players.
"We will work with the industry on the impact of these changes and are confident that this innovative sector will step up and help achieve this balance."
The news was welcomed by campaigners and politicians who have long called for the stakes on the controversial machines to be cut, claiming they cause problem gambling and other social ills.
Shadow culture secretary Tom Watson said: "This announcement signals the end of the reign of destruction and misery that FOBTs have brought on the lives of gambling addicts and their families and communities for too many years."
He added: "It’s not often that the opposition congratulates a government minister, but Tracey Crouch has made the right decision today."
In turn high street bookmakers have warned that a major cut in FOBT stakes would have severe consequences for their businesses, claiming a £2 stake would result in 4,000 betting shops closing and 21,000 jobs lost.
The Association of British Bookmakers said in a statement the decision would have "far-reaching implications".
They added: "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."
Levy could be extended
Racing figures have said they are working on the basis of the sport losing between £40 million and £60 million a year in income from media rights and lost levy if large numbers of shops close.
However, the BHA said it welcomed the government's announcement.
The governing body's chief executive Nick Rust added: "It is too early to say what the financial impact for racing will be.
"Our estimates before today’s decision ranged from £40 to £60 million per year, once the impact of the changes has filtered through into racing. These estimates did not take into account the Secretary of State’s suggestion that the levy could be extended to bets on global racing which could partially offset any reduction.
"We are also encouraged by the Secretary of State’s reference to a period of transition which will allow time for racing and betting to adjust."
Leading trainer John Gosden said he had concern for those who might lose their jobs but there had been a sense of inevitability about the decision.
He added: "We’ve got to work together, the government to help racing and tune in with the betting industry, certainly with the levy replacement coming. There’s a lot of work to be done and we’ve just got to look out for the people whose jobs might be gone. I’m sure if we get our heads together and stay united we can achieve a lot."
However, the government was blasted by Christopher Snowdon, head of lifestyle economics at the Institute of Economic Affairs.
He said: "There has never been any evidence to support this campaign. The government is weak and cowardly to have given in to it."
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