Bookmakers' legal challenge to FOBT decision would be 'last resort' measure

Bookmakers would only mount a legal challenge to the government's verdict on fixed odds betting terminal stakes as a last resort, industry sources have said.

A judicial review has been raised as a possibility following a Sunday Times report which claimed culture secretary Matt Hancock was in favour of cutting the maximum stake on the machines to £2, a move bookmakers claim would lead to the closure of thousands of betting shops and racing losing out on millions of pounds of income from media rights and levy.

The government consultation on the maximum stake level for FOBTs, which had set out a range of options from £2 to £50, closed at noon on Tuesday and it had been suggested that if it appeared that the government had made a decision before receiving all the evidence then it left itself open to judicial review.

A judicial review is a type of court proceeding in which a judge reviews the lawfulness of a decision or action made by a public body and are a challenge to the way a decision has been made, rather than the rights and wrongs of the conclusion reached.

If permission were granted for a review it would probably take place before a new stake came into force and if it were successful would lead to the government having to start the consultation process again.

However, bookmakers would have to decide whether the benefits of a judicial review outweighed the negatives and one industry source said: "It would always be a last resort and only if it was clear the decision was not being taken on the evidence."

Ladbrokes Coral chief executive Jim Mullen was asked about the possibility of a judicial review on BBC Radio 4's Today programme on Tuesday morning.

He replied: "I am trying to err on the positive here because we have racing and bookmaking who have nothing to disagree about, I have had close relationships with government to fix a problem that we have to address about problem behaviour across all products.

"We have invested millions both in products and processes and with the gambling charities to address the problem which we recognise is there and I think if we focus on what we are trying to do we can get to a positive conclusion."

Arena Racing Company chief executive Martin Cruddace has said a cut to £2 would have a "pretty catastrophic" effect on British racing with the loss of at least £55 million in income per year.

Asked about those who would like to see FOBTs banned whatever the cost, Mullen told the BBC: "If that were a subjective view certain people had, I could engage with that. As it is, this is an evidence-based review and there is no evidence [that cutting stakes would reduce problem gambling]."

There has been some political support for the betting industry, from Conservative MP Laurence Robertson whose Tewkesbury constituency includes Cheltenham racecourse.

In his submission to the consultation, seen by the Racing Post, Robertson said he was responding "mainly from the position of wanting to protect the sport of horseracing, which is heavily dependent on betting shops and bookmakers for a significant part of its income".

Robertson said there was no evidence of any significant increase in the level of problem gambling since the introduction of FOBTs, adding that restriction of stakes was not a "quick-fix solution" to problem gambling.

He concluded: "If the government is insisting on maintaining a limit on the maximum stake for FOBTs I would suggest it settles at £50 and then works with the gambling industry to help introduce technological changes which will reduce and hopefully eradicate problem gambling."

Shares in William Hill and Ladbrokes Coral plummeted on Monday following the Sunday Times report.

They recovered slightly on Tuesday morning and approaching noon William Hill shares were up 5.5p at 302.7p, while Ladbrokes Coral were up 1.3p at 169.3p.

In a note issued on Tuesday analysts at Goodbody said: "These reports are only speculation for the moment and circumstances can change before any decision is made.

"However, it would be naive not to conclude that the probability of the maximum B2 stake being reduced to £2 has increased materially.

"The deadline for submissions is today with a final decision expected in the coming weeks and months. We expect plenty of ongoing speculation until the final decision has been made."

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