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Thursday, 13 December, 2018

Wrong and dangerous: small bookies say FOBT crackdown will not boost other bets

John Heaton: "Racing is caught up with it whether they like it or not"
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Independent bookmakers have rubbished claims that betting on racing and other sports would increase if the government cracks down on fixed odds betting terminals as they warned their sector would be hit harder than the major high street betting shop chains.

One claimed a £2 maximum stake would lead to the demise of the majority of smaller operators, while racing was told it would be caught in the downward spiral "whether it likes it or not".

The Sunday Times quoted an ally of culture secretary Matt Hancock as saying the minister was against FOBTs as they took money "from reasonable, mature betting".

However, that was rebutted on Monday by Jenningsbet managing director Greg Knight, elements of whose submission to the consultation have been seen by the Racing Post.

"It would be erroneous and dangerous to assume FOBT players would convert to other in-shop forms of betting such as horseracing or greyhounds," it read.

'I have made this clear before'

"If that were the case then operators like ourselves would be keen to see such a switch, as logic dictates that with MGD [machine games duty] at 25 per cent and GPT [gross profits tax] at 15 per cent our profits would rise. Our 57 years of experience would indicate that no such 'migration in-store' will occur."

John Heaton, the former Tote chief executive now chairman of Scotbet, said it was disturbing that government was giving the impression a decision had been made even before the consultation had closed.

He said: "Were it to be true – and I have made this clear before – it would put us in a very difficult position.

"I know it's been suggested that somehow this money is going to immediately transfer back to horseracing. That's just absolute nonsense.

"We have different sets of people playing the machines as opposed to racing punters and football punters. There is some crossover, but the idea that they're just going to switch immediately if that is the case is just nonsensical."

Scotbet run 47 shops and while Heaton would not quote figures he admitted a "significant number" would be put at risk by a £2 maximum stake.

He added: "Racing will suffer because shops will close and the flat-rate fee will just disappear. For the rest of the shops, racing won't be able to pile on the charges and hope the rest of the shops will cover it – because they won't.

"This is a downward spiral unfortunately and racing is caught up with it whether it likes it or not."

Howard Chisholm, the managing director of Chisholm Bookmakers, said a £2 stake would have "a considerable effect on any betting shop estate".

'All would be hit hard'

He added: "Although there are good levels of B3 play on gaming machines, which is subject to £2 maximum stake, there is still a high proportion of betting shop customers who enjoy playing the B2 content.

"A reduction to £2 would almost certainly hit the independent sector harder than the high street multiples – but all would be hit hard."

The effect of that hit on the independent sector – which currently numbers 725 shops – and racing was set out in Knight's consultation response.

It read: "Each independent LBO [licensed betting office] will pay approximately £35,000 in media rights payments per shop in 2018, £24,000 of which goes directly to racing.

"If a £2 maximum stake were to be imposed we predict 540 independents would close, which represents a loss to racing of more than £13 million +VAT per annum from the independent sector alone in 2018 and between £50m and £55m over the next four years."

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I know it has been suggested that somehow this money is going to immediately transfer back to horseracing. That's just absolute nonsense
E.W. Terms
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