Bookmakers fall on reports of FOBT decision
Chancellor Philip Hammond has reportedly opted to accept advice from campaigners on the maximum stake for fixed-odds betting terminals.
Shares in bookmakers fell sharply on Tuesday following reports that the Government is to cut the maximum stake for fixed-odds betting terminals (FOBTs) to £2.
The recommendations of a review carried out by the gambling regulator earlier this year said the maximum stake should be set at or below £30.
But Chancellor Philip Hammond has opted to accept advice from campaigners for a more drastic reduction to £2, according to The Times.
FOBTs currently allow punters to gamble up to £100 every 20 seconds.
Betting firms are bracing for a profits hit as a result of the change, and have warned of potential shop closures.
Shares in William Hill tumbled 14%, PaddyPower was down 5% and Ladbrokes owner GVC shed 7% following the report.
Michael Hewson, chief market analyst at CMC Markets, said: “High street bookmakers have taken a beating on concerns that the stake on fixed odds betting terminals might be cut from £100 to a maximum of £2, with William Hill sharply lower, along with Paddy Power Betfair and Ladbrokes owner GVC Holdings.
This has also raised concern that other gambling taxes may rise to offset the loss of tax revenues that this cut would precipitate Michael Hewson, CMC Markets
“This has also raised concern that other gambling taxes may rise to offset the loss of tax revenues that this cut would precipitate.”
FOBTs have been described as the “crack cocaine” of gambling, with Culture Secretary Matt Hancock also thought to be supportive of the £2 figure.
A final decision is thought to be weeks away.
John White, boss of Bacta, the trade association for the UK’s amusement and gaming machine industry, said: “While the final decision is yet to be made, Mr Hammond’s recognition of the vital need for £2 aligns the Treasury’s view with that of the DCMS (Department for Digital, Culture, Media and Sport), Bacta, the public, cross-party MPs, faith groups and countless other stakeholders.
“New analysis from the Centre for Economics and Business Research (CEBR) should also appease any further worries of the Treasury and the bookmakers.
“It demonstrates their rude health, with revenues and profits consistently on the rise, and major growth on other fronts beyond FOBTs.”
The Treasury said: “We are fully supportive of DCMS’s work to ensure the UK’s gambling regime continues to balance the needs of vulnerable people, consumers who gamble responsibly and those who work in this sector.
“Any speculation on gambling tax is just that.”