Tuesday 22 August 2017

Paddy Power co-founder calls for ban of 'crack cocaine' gambling machines

A fixed-odds betting terminal
A fixed-odds betting terminal
Michael Cogley

Michael Cogley

The co-founder of betting giant Paddy Power urged the government not to legalise a terminal that would allow gamblers to bet £100 (€120) every 20 seconds.

Stewart Kenny, who set up the business in the late 1980s, described the fixed-odds betting terminals (FOBTs) as the "crack cocaine" of gambling, according to a report in a UK newspaper.

In a 2009 submission to the Irish government, during the debate over whether or not the terminals should be legalised here, Mr Kenny said the FOBTs were "particularly enticing" to younger gamblers in disadvantaged areas.

The former betting boss also criticised the British government over their fascination with the tax take from the machines.

"They are as addicted to the tax revenue as vulnerable customers are to losing money in them," he said.

When asked by the Irish Independent about the claims made by Mr Kenny a spokesman for Paddy Power Betfair (PPB) did not comment. FOBTs are extremely popular in the UK, netting total revenue of £1.75bn (€2.08bn) there last year.

The Government decided against legalising the machines.

In the submission Mr Kenny described what he saw as the machines' dangerous nature, including using close calls and bright colours to entice players to gamble more.

The company's co-founder urged the Irish Government to learn from the "mistake" in the UK.

Paddy Power never campaigned to bring the FOBTs into the Irish bookmaking sector, it is understood.

However, it is reported that the company operates around 1,400 FOBTs in the United Kingdom from its 350 betting shops.

Mr Kenny resigned from the board of the newly-merged PPB back in August after spending 28 years with the company.

His departure from the company was followed shortly after by former Paddy Power ceo Andy McCue.

Mr McCue had spent 10 years at the company before leaving it two months after the merger.

PPB began trading in February following the €8bn merger of the two companies.

The news comes after the company posted a return to winning ways in the third quarter of the year.

A strong end to Euro 2016 helped the betting giant regain some of the ground it lost in a bad Cheltenham racing festival.

The recently-merged entity reported revenue of £404m (€454m) in the three months to the end of September, up 25pc on the same period last year.

The surge in income was driven largely by strong growth in the company's sportsbook stakes, which rose 26pc.

However, despite the return to form in Euro 2016 the company was hit with a loss of around $4.5m (€5.3m)after Donald Trump's shock win in November in the US presidential election.

The business paid out $1m to punters that had bet on Democrat nominee Hilary Clinton before the election results were revealed.

The firm's third quarter results also included a loss of £47.5m (€55.4m) as merger costs took their toll on the company.

Speaking last month PPB ceo Breon Corcoran said it was another good period for the business after its merger.

"We are continuing to focus on building a stronger combined operation by exploiting the unique assets and capabilities of each legacy business, and on using our scale to better serve our customers".

Irish Independent

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