FOBTs Crackdown Could Cost British Bookmakers over £150 Million in Revenue
UK gambling operators could annually lose more than £150 million in revenue as a result from the pending crackdown on fixed-odds betting terminals, The Financial Times reported citing gambling analysts.
A review into the controversial gaming machines is expected to be completed and released next month. It is believed that game-changing curbs will be introduced as a result from the probe, ones that could see the maximum stake FOBTs accept reduced significantly. Currently, gambling customers can wager up to £100 every 20 seconds.
The speed with which players can stake considerable amounts of money has become one of the main bones of contention between FOBTs opponents and gambling industry stakeholders. The machines have been in the middle of bitter controversy due to their addictive nature and the risks they pose to vulnerable people.
FOBTs are UK bookmakers’ largest retail revenue contributors. According to information from the UK Gambling Commission, gross gambling yield from the betting machines totaled £1.8 billion in the October 2015-September 2016 reporting period.
The gambling devices are located in betting shops around the nation. Generally speaking, they allow customers to wager on the outcome of popular table games, such as roulette and blackjack. The average number of FOBTs stood at 34,388 in the above-mentioned period. Gambling operators Ladbrokes Coral and William Hill are currently the biggest operators of betting shops in the UK and the biggest FOBT owners, respectively. In other words, the two major bookmakers would suffer huge revenue losses, if any reduction in the maximum stake is implemented.
According to British financial services firm Barclays, Ladbrokes Coral could lose up to £450 million in revenue in 2018, if the maximum stake is reduced to £2. As for William Hill, it is expected to lose more than £280 million in revenue.
Possible Clampdown Scenarios
The UK Government is expected to finally release the results from its review in October. There have been three possible outcomes from the review speculated upon in media. Although it all shows that there will be a FOBTs crackdown launched after the report’s publication, particularly when bearing in mind that British Prime Minister Theresa May gave her blessing to the move, there are still hopes that the current maximum stake will be retained.
The more realistic predictions suggest that there will be a reduction. However, it is believed that the extent to which the maximum stake should be reduced is what has been the subject of prolonged discussions between politicians and other involved parties.
According to multiple media reports, the maximum stake could be brought down to around £20-£30. FOBTs opponents have proposed a reduction to just £2. That last option is not that likely as this could affect tax revenue paid by UK bookmakers.
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