War of information on fixed odds betting terminals continues as rival trade group says stake reduction losses overstated

  • BACTA-commissioned study puts stake reduction cost at £335m
  • ABB hits back at “flawed” report, cites own study

Two of the UK’s gambling industry trade groups have continued a war of information over the government’s proposed reductions to fixed odds betting terminal stakes.

BACTA has commissioned a report which plays down the amount of revenue bookmakers will lose from a reduction in fixed odds betting terminal stake sizes to £2.
BACTA has commissioned a report which plays down the amount of revenue bookmakers will lose from a reduction in fixed odds betting terminal stake sizes to £2.

The British Amusement Catering Trade Association (BACTA) has commissioned a study which suggests that the actual losses faced by the betting industry when FOBT stakes are reduced will be as little as half of what a government report has predicted.

However, the Association of British Bookmakers has hit back at the report, citing their own commissioned study which predicts up to 4,500 betting shop closures and the loss of 21,000 jobs – not to mention the billions lost in gaming revenues and Treasury taxes.

An ABB spokesperson said the “flawed” BACTA report revealed “vested commercial interests.”

FOBTs are a product which is in competition with UK arcades, which offer similar games, but with much lower stake limits.

FOBT stake reduction expected in coming months

A recent government review of the gambling industry has focused on the prevalence of fixed odds betting terminals in high street betting shops, and on the high maximum stakes of the machines which have been linked to rising problem gambling rates.

One outcome of the review could be that maximum bets on FOBTs are reduced from £100 to £2.

Consultation on the matter is ongoing, with a possible decision announced later in January.

Betting operators and their representatives have accepted there is some link between FOBTs and problem gambling – and UK Gambling Commission figures suggest they are associated with fairly high rates of addiction, relative to other forms of gambling – although they do not have the highest rates.

But the ABB argues gambling problems cannot be solved merely by reducing stakes on one form of betting – gamblers may just move to other forms of gambling – but they accept that some compromise is needed.

If the stakes are reduced by half, with a £50 maximum, the impact on the betting industry would be relatively small.

However, if the bets are reduced to £2 per stake as proposed, the industry faces huge losses, potential shop closures and the possible loss of operators – according to the ABB.

BACTA research suggests positive outlook for bookmakers

BACTA, which represents amusement arcades and licensed premises offering low-stakes electronic gambling, feels that the doom-and-gloom attitude of the bookmakers’ trade group is unnecessary.

Through the Centre for Economics and Business Research, BACTA has studied the future for bookmakers under a £2 stake and they predict the total losses to gross gaming yield will be around £335 million, rather than the government-reported £639 million loss usually cited.

It added that if reduced stakes are successful in reducing problem gambling, this would relieve the current £210 million cost of supporting FOBT players with gambling problems, offsetting the loss.

ABB calls research “flawed”

The Association of British Bookmakers disagrees with the conclusions drawn by BACTA. It maintains that the proposed £2 maximum stake represents a disaster for the high street bookmaker, with the potential for 4,500 shops to close. If this were to occur, more than 21,000 jobs would be lost. The best case scenario over the first decade of a £2 stake limit would be £5.5 billion, insists the ABB, with a possible £8.5 billion loss at worst. That includes $1.1 billion in tax payments which the Treasury would lose out on.

While BACTA maintains that it stands firmly against FOBTs and the harm they can cause, the group wants to raise maximum stakes and payouts on its own arcade-category gambling machines.

A spokesperson for the ABB was deeply critical of the BACTA study, calling it a “flawed” report “funded by those with vested commercial interests, with no access to betting shop industry data.”

The debate continues.

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