Online taxes to rise as FOBT stakes slashed to £2 despite evidence

The government has rejected advice from the Gambling Commission and the Responsible Gambling Strategy Board (RGSB) and cut stakes on B2 Gaming Machines – FOBTs – down from £100 to £2. The announcement was made this morning by DCMS minister Tracey Crouch and could have wide repercussions for the retail betting industry, horseracing and online gaming operations.

Both William Hill CEO Philip Bowcock and Betfred CEO Fred Done has warned that half of their betting shops are likely to close with the measure and research by KPMG has estimated a £2 limit would cut revenue for the Treasury by £1.1bn over three years, an annual loss of £45m to local authorities and £50m to British racing.

In order to cover any negative impact on the public finances, and to protect funding for vital public services, this change will be linked to an increase in Remote Gaming Duty, paid by online gaming operators, at the relevant Budget.

The slashing of the stake has been justified as a move to ‘reduce the risk of gambling-related harm’ despite extensive studies showing that this measure in isolation will be ineffective. The move comes off the back of a fairly unrobust consultation which could well be open to a judicial review by the industry, should it wish to push that forward.

The government wants to reduce the potential for large losses on FOBT machines and the risk of harm to both the player and wider communities. Following analysis of consultation responses and advice from the Gambling Commission, the government said it believes that a cut to £2 will best achieve this.

The Gambling Commission has also been tasked to take forward discussions with the industry to improve player protection measures on B1 and B3 category machines, looking at spend and time limits.

DCMS Secretary of State Matt 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.”

Minister for Sport and Civil Society Tracey Crouch said: “Problem gambling can devastate individuals’ lives, families and communities. It is right that we take decisive action now to ensure a responsible gambling industry that protects the most vulnerable in our society. By reducing FOBT stakes to £2 we can help stop extreme losses by those who can least afford it.

“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 are increasing protections around online gambling, doing more on research, education and treatment of problem gambling and ensuring tighter rules around gambling advertising. 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.”

In addition to the reduction to FOBT stakes the government has today confirmed:

  • The Gambling Commission will toughen up protections around online gambling including stronger age verification rules and proposals to require operators to set limits on consumers’ spending until affordability checks have been conducted.
  • A major multi-million pound advertising campaign promoting responsible gambling, supported by industry and GambleAware, will be launched later this year.
  • The Industry Group for Responsible Gambling (IGRG) has amended its code to ensure that a responsible gambling message will appear for the duration of all TV adverts.
  • Public Health England will carry out a review of the evidence relating to the public health harms of gambling.
  • As part of the next licence competition the age limit for playing National Lottery games will be reviewed, to take into accounts developments in the market and the risk of harm to young people.

Changes to the stake will be through secondary legislation. The move will need parliamentary approval and we will also engage with the gambling industry to ensure it is given sufficient time to implement and complete the technological changes.

September’s Betting on Sports conference will be looking at the situation in the Betting on Retail track at a session entitled: New Reality – Adapting to the post-FOBT landscape. It will ask: With the FOBT stake level being drastically reduced, what options are there for UK LBOs to replace that income? Will B3 profile games take the strain? What is in the pipeline? For more information click here.

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