finance

FOBT limits could shut third of gambling outlets


Dominic Ford ran seven successful bookmaker shops in and around London until this year, but now has only one. “My business has been destroyed,” he said.

His story is repeated across many of the UK’s more than 160 independent bookmakers awaiting the law changing on the amount that punters can bet on machines branded the “crack cocaine” of gambling.

On Monday, the maximum stake that can be placed on fixed odds betting terminals, an electronic slot machine, will be cut from £100 to £2 in response to a campaign by anti-gambling groups. Industry figures say the government’s decision will lead to the closure of up to a third of the 8,500 high street betting shops open last year, although campaigners say this is exaggerated.

The change marks the latest shake-up for a £14.4bn a year industry that has ballooned since betting shops were legalised in 1961.

Larger bookmakers such as Ladbrokes and William Hill are also suffering the effects of the stake cut. GVC, which owns Ladbrokes Coral, expects to close about 1,000 out of 3,475 shops as a result of the stake reduction. Last week, William Hill asked its landlords for rent cuts of up to 50 per cent in a bid to keep shops open.

After FOBTs were introduced in 2001 they became a big revenue stream for bricks-and-mortar shops, generating £1.7bn annually in gross gambling yield — the total of bets placed minus winnings paid out — by 2018, according to the regulator, the Gambling Commission.

Chris Eden, who owns Eden Bookmakers, a seven-outlet business in south-east England, said machines accounted for “well over” half of his profits and had “stopped the internet damaging us up until now”.

Dave Pluck, owner of Dave Pluck Bookmakers in Liverpool, said he had already closed three of his 40 shops, and expected to shut up to another 10. Those facing closure were dependent on FOBT revenues, he said, without which “it’s impossible to conceive that they could break even”.

As FOBTs grew in popularity, legislation was introduced in 2005 to cap the number per shop to four. That contributed to the clustering of betting shops on high streets, as bookmakers sought to maximise their intake from the machines in areas of high demand.

The latest Gambling Commission statistics, from December 2018, showed an average of 3.9 FOBTs per shop, while in some towns, up to 7 per cent of all shops are bookmakers, according to the Local Data Company, a retail sector market research business.

The extent of campaigners’ concern that problem gamblers could lose thousands of pounds on FOBTs in very little time was highlighted when the government tried in November to delay the introduction of the new rules from April to October 2019. This prompted the resignation of the then sports minister Tracey Crouch, and an embarrassing ministerial climbdown.

In response to the FOBT stake cut, many larger bookmakers are focusing on online gambling. William Hill has said its capital expenditure on online operations was £50m last year and will be the same this year. By contrast, its investment on retail operations was £20m-£30m last year and £10m-£20m this year, even though they accounted for 55 per cent of revenues in 2018.

For smaller bookmakers, this is not an option. Mr Ford, who previously worked at Coral, said he founded his chain because he felt going to one of the major bookies had become a “soulless experience”.

But he said he could not compete on the internet: “As we know with all the big tech companies, online the big just get bigger.”

Despite the vociferous campaign against FOBTs, some campaigners say the stake cut is a dangerous half measure and that gamblers will move to less well-supervised apps and websites.

At one London Coral shop, a store assistant said staff were being offered incentives of £20 per person to sign customers up for the company’s app.

There are no restrictions to the stakes or speed of play when gambling digitally, which allows punters to bet as many times as the speed of their internet connection will allow. Campaign group Fairer Gambling. said current legislation was “not fit for the digital age”.

Gambling addicts have also noted aggressive marketing tactics online. One former addict said he continued to receive marketing emails and offers for free bets after unsubscribing and closing his account.

The industry says it is doing more to monitor those at risk. Kenny Alexander, GVC chief executive, cited the company’s new “markers of harm” system to spot early signs of problematic behaviour. “We are constantly striving to use technology to assist the small number of customers who are at risk,” he said.

Matt Zarb-Cousin, a former addict who was instrumental in the FOBT campaign, said betting companies needed to be more receptive to safer gambling initiatives.

“Any replication of the tactics of the Association of British Bookmakers — to deny there is a problem that needs to be resolved — will see harm increase and public opinion decline,” he said.

As public concern has grown, the regulator has opened a further three consultations, into gambling blocking software, the use of credit cards to bet online and other so-called “category B” machines, which have lower stakes but offer playing speeds eight times those of FOBTs.

Jeremy Wright, secretary of state for digital, culture, media and sport, said: “We are looking at further treatment of those who have suffered from gambling-related harm, whether gambling on credit should be limited and considering what actions are necessary to tackle problem gambling online.”



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