UK Policy Committee – DCMS’ FOBTs policy fits purpose but assumptions cannot be tested

The UK government’s independent Regulatory Policy Committee (RPC) has published its assessment of the Department for Digital, Culture, Media & Sport (DCMS) policy enforcement on ‘FOBTs wagering and social responsibility standards’.

The RPC has reviewed whether DCMS inbound UK gambling FOBTs regulatory policy (to be enforced 1 April 2019), has effectively assessed social costs/benefits, industry impacts and further macro dynamics.

The policy review signed by RPC Chairman Anthony Browne, concludes that DCMS policy mandate is fit for purpose and can/should be enforced on the UK gambling industry and its wider stakeholders.

The RPC’s report details that DCMS has undertaken a fair assessment of potential business impacts, detailing industry-wide GGY reductions at £540 million per annum.

Furthermore, the RPC details that DCMS has formed a fair assessment of UK betting transition costs, and has gained a fair industry consensus supported by alternative analyses and scenarios offered by ‘Big Four’ auditor KPMG.

Whilst DCMS industry review has been comprehensive, the RPC details that there has been a limited analysis on small/micro business assessments which are a concern as –  ‘two of the five small businesses that responded to the consultation said that they would have to close stores’.

In its review of social benefits and whether the policy will ultimately reduce gambling-related harms, the RPC notes that DCMS assessment has been driven by the Institute for Public Policy Research (IPPR) ‘which estimates that B2 gamblers are imposing a cost of £1.5 billion onto themselves’.

However, DCMS has not overstated the policy’s social benefits, by acknowledging that available data is limited on impacts. and that it is difficult to replicate analysis or test assumptions on its gambling policy.

Utilising wider stakeholder analysis, DCMS points to Centre for Economics and Business Research (CEBR) which details that an effective policy implementation may reduce government costs on gambling harms related to civic health, welfare housing, and criminal justice services.

“The CEBR report suggested that potential reductions in gambling-related harm from introducing a £2 maximum stake on B2 gaming machines might be between £430 million and £1.3 billion per year.”

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