There’s been a good deal of discussion this week about the report by the Centre for Economics and Business Research (CEBR) into fixed-odds betting terminals (FOBTs). The report, which was released at the start of the week, concluded that the financial impact of cutting FOBT maximum stakes to £2 would be far less significant than the government had previously estimated in the treasury’s original analysis, which utilised betting shop data. The maximum bet at a FOBT being reduced from £100 to as little as £2 is likely the most drastic reduction which might occur as a result of the ongoing government review headed up by the Department for Digital, Culture, Media and Sport (DCMS).
The Association of British Bookmakers (ABB) complained about the report this week, accusing it of being commercially influenced by vested interests and, consequently, flawed. They cited the government’s own original figures of an anticipated hit to the industry of at least £5.5 billion, and potentially up to £8.5 billion. The ABB’s independently commissioned research, in contrast, predicts a loss of 21,000 jobs, closure of 4,500 betting shops, and £1.1 billion in lost revenue over two years, if the review concludes in favour of the most extreme change to the maximum bet.
Still, this CEBR report – commissioned by Bacta, the largest trade association in gaming – states that the earlier projections were “wildly overestimated”, revising down expected losses to gross gambling yield from £639 million to £335 million per annum. That’s very nearly a reduction of a full 50%. Furthermore, the report highlights the gains to the government budget which will result from expected savings in welfare costs, work and housing issues, as well as criminal activity; these savings are expected to be on the order of £210 million per year. Recent studies show that accounting for all the wider social costs of problem gambling, such as mental health and unemployment, show an overall cost to the UK economy of around £1.2 billion. There are numerous bodies calling for a full max bet reduction to £2, including over 90 local authorities across the UK.
I think, once again, this comes down to how long a view you take. In the short term, certainly, any major change to FOBTs’ maximum is going to be very tough on the bookmakers. But long-term it may just be that this is the best decision for all parties, not just socially but economically. It may be that such a decision will allow for a healthier and more sustainable gambling sector and high street, which may bring benefits to the UK economy and ultimately to the gambling sector itself.
