The national press in the UK have been all over the FOBT news for a good long while now, but the furore amped up this week, with a lot of back and forth coverage. First, there was news of a further delay in the ongoing saga, with reports of a prominent member of the government railing against the maximum reduction to a £2 stake; there was also some noise about a conflict at the top of government. Some were reporting that the Chancellor himself, Philip Hammond, a long-term ally of the gambling industry, did not want to accept the maximum reduction, fearing massive losses to government tax income as a direct result. The understanding was that there would be a brief further delay until after early May’s local elections before any new decision was officially announced.
On Tuesday, things swung the other way, with the Times reporting that the Treasury had signalled that a deal was very close. Per the Times’ report, the deal looked to line up with the decision the bookies fear the most, the dreaded £2 minimum. The Treasury reportedly suggested that Hammond was close to reaching an agreement with Culture Secretary Matt Hancock, who has been arguing for the maximum reduction all along, with one source close to Hammond stating, “We are very nearly there”.
Of course, shares in the major bookies took a big hit as a result, with William Hill nosediving 14% on Tuesday, GVC down 7% and even Paddy Power Betfair taking a 4% hit. GVC, at least, should be sitting pretty, given that their buyout deal with Ladbrokes is contingent on the outcome of the government’s FOBT decision in terms of the amount to be paid for the takeover.
There have also been reports that the Gambling Commission has recommended a reduction to a mere £30. This is not correct. The Commission actually recommended the full reduction to £2 for all slots-based FOBTs, and a reduction to at least £30 maximum for non-slots-based machines such as roulette. It’s astonishing how many publications are reporting this as support for a higher overall limit, and must be very frustrating for the Commission. The fact is that these machines have caused a great deal of grief for the most vulnerable problem gamblers and those at risk of such problems, and limiting the scale of their use is a socially responsible action.
Whether the government look to hike online gambling taxes to help soften the blow to their tax coffers is the next question, and one which bookies in both the online and high street markets are going to have somewhat anxiously circulating in their minds and board meetings in the months to come.
