The BBC has this weekend reported that UK betting bosses have penned a letter to Matt Hancock, Secretary of State for Culture, Media & Sport (DCMS), urging the government to drop its plans of implementing a £2 wagering limit on FOBTs machines.
The letter to Hancock leader of DCMS, is supported by the leadership of GVC Holdings, William Hill, Betfred, Scotbet and Jenningsbet, detailing the ‘catastrophic consequences’ of implementing a £2 wagering limit.
“For the avoidance of any doubt, we believe a £2 maximum stake is a disproportionate response and will be catastrophic for retail betting in the UK, with widespread consequences for people’s livelihoods and the wider economy.” the letter details.
Hancock’s DCMS department has previously been warned of significant job losses and shop closures should the government implement a reduction below £10 threshold.
Industry leaders point to the analysis of financial auditor KPMG which estimates that the ‘£2 nightmare scenario’ will likely lead to ‘+ 20,000 job losses, with half of UK betting shops being closed down’.
Represented by the Association of British Bookmakers (ABB), UK betting leaders, seek an open dialogue with DCMS, in which affected parties will aim to develop a solution for all stakeholders.
“As the chief executives of UK retail betting shops we would like to express our alarm, that according to media reports, the government has determined that the maximum stake on betting shop gaming machines should be reduced from £100 to the lowest possible level of £2,”
A tumultuous April has seen UK media report that the government would suspend its decision on FOBTs machines, due to treasury concerns relating to a long-term industry tax shortfall.
However, last week Chancellor Phillip Hammond was reported to have greenlighted the £2 FOBTs cut, supporting the UK Gambling Commission’s industry policy recommendations.
The ramifications of £2 FOBTs cut will be deeply felt by the majority of UK FTSE-listed betting operators.
An enlarged GVC Holdings, which now operates Ladbrokes Coral’s combined + 3000 UK retail betting portfolio could potentially lose £430 million of corporate revenues generated by FOBTs.
Furthermore, GVC’s takeover of Ladbrokes Coral is directly attached to the pending outcome of the triennial industry review, with GVC placing a value of £3.2-3.9 billion dependent on the final FOBTs judgement.
Competitor William Hill currently derides 54% of its retail revenue from FOBTs machines. Independent bookmakers Scotbet and Jenningsbet have further stated that any drastic cut would debilitate their services and operations.
In previous updates, all UK betting leaders have warned the government that a drastic cut to FOBTs would lead to industry reductions in marketing spend and sports sponsorships, impacting grassroots initiatives.
To date, the UK betting sector has waited more than a whole year for the government to deliver its pending triennial industry review judgement on FOBTs and advertising standards, a matter that was originally meant to be decided last April 2017.