D-Day looms for future of fixed odds betting terminal stakes which could drop from £100 to just £2

  • Government under pressure to reduce FOBT stakes
  • Industry faces uncertainty while review is ongoing

There has been so much media attention in the UK on fixed odds betting terminals – betting machines located in high street bookmakers – that it could be forgiven for believing that shackling them is an inevitability.

Fixed-Odds-Betting-Terminal-(FOBT)
Fixed Odds Betting Terminal (FOBT)

The UK government’s Department for Digital, Culture, Media and Sport has confirmed that its review into Fixed Odds Betting Terminals will be published later this autumn, reports the Mirror, suggesting that a decision on whether to reduce FOBT stakes will be made in the current parliamentary session.

If proposed reforms pass, betting stakes on FOBTs could be reduced from £100 ($130) per wager to as little as £2 ($2.60) – potentially slashing millions from the profits of bookmakers.

Some rumors suggest the limit could be as high as £20 ($26).

Some high street betting firms are reliant on FOBT income to keep the lights on in their stores, and they face serious losses if the proposed reforms go ahead.

However, gambling safety advocates and anti-gambling groups are backing the reforms, arguing that FOBTs are among the biggest contributors to problem gambling in the UK.

Politicians continue to debate FOBT stakes

Reducing the stakes of FOBTs is something of a sensitive issue for the Government.

The Conservative Party, currently in power in a coalition, are traditionally supportive of the gambling industry, believing in free enterprise and welcoming the tax receipts that follow.

But in opposition, the Labour Party is firmly opposed to FOBTs and want the maximum stake dropped to £2 ($2.60) per bet, to prevent losses racked up by addicted players on machines that have been termed the ‘crack cocaine of gambling’.

However, the Conservatives’ coalition partner, the Democratic Unionist Party are also set against FOBT use, and would like to see the machines outlawed entirely.

While they have pledged to support Theresa May’s government, they would likely side with Labour on a gambling reform vote.

The Liberal Democrats, the Scottish National Party and the Green Party are also supportive of a reduction in betting terminal stakes.

Earlier this year, it was reported that the Treasury might scrap its review into betting machines, despite mounting public pressure for action against FOBTs.

Now the Department for Digital, Culture, Media and Sport has confirmed that the review will be published ‘this autumn’, and decisions regarding its contents will be put to Parliament shortly after.

Those decisions will relate to cutting stakes, keeping them at the same level – or banning FOBTs.

Huge potential cost to UK’s bookmakers

Research shows that FOBTs do contribute to the UK’s gambling problem, although other forms of gambling, such as financial spread betting and games of poker in the pub or other venues have higher rates of problem gambling incidences.

What isn’t clear is how limiting stakes will impact on the rate of problem gambling with FOBTs. Which stake size is going to balance player safety with acceptable risk?

And if it expected that all forms of gambling carry with it some risk of problem gambling, how much of a risk is deemed acceptable?

Th Association of British Bookmakers, which represents high street bookmakers has long argued that each betting shop has responsible gambling procedures in place to identify customers at risk of developing a problem.

It has also said that there is little material evidence of FOBTs causing an unacceptable level of harm.

The ABB also says that severely clipping the wings of FOBTs has the potential to force the closure of hundreds of betting shops, which are already closing at a rate of 100 per year. This would cost thousands of jobs, and rob the treasury of millions in taxes.

Forbes reports that the best case scenario for British bookmakers is a £150 million annual loss, based on a reduction in betting stakes to around £25-30, but a reduction to £2 per bet could cost some companies as much as £449 million next year.

A study by Barclays found that Ladbrokes Coral and William Hill, who make the largest portion of their income from FOBTs, would be hit hardest. Paddy Power Betfair and other mainly online operators would be better placed to carry the losses, thanks to growing mobile and online revenues.

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