Treasury cannot be allowed to scupper a long overdue FOBT stake reduction
The Campaign for Fairer Gambling writes about progress to reduce stake levels on fixed odds betting terminals ahead of the publication of the DCMS review in October.
The Guardian reported last week that the government’s response to a long-awaited review of Fixed Odds Betting Terminals (FOBTs) has been delayed until the autumn, blaming a rift between the Treasury and DCMS.
The views of the minister responsible for gambling, Tracey Crouch, are well known. While a backbencher, she condemned the machines, and shortly after being made a minister she attempted to commence a review, only for it to be blocked by David Cameron and George Osborne.
When Theresa May became Prime Minister, she gave Tracey Crouch the green light to review FOBTs. But is the spectre of George Osborne, with his well-documented links to the gambling industry, still haunting the Treasury under Philip Hammond’s stewardship?
This would explain the rift between Treasury and DCMS over how the government responds to the review. Politically, Hammond is much more closely aligned to George Osborne than he is to Theresa May, and FOBTs could well be the latest in a long line of differences between Number 10 and the Treasury.
But Treasury should not fall into the trap of buying into the bookies’ spin. While direct tax revenue from FOBTs is around £400 million a year, both Landman Economics and NERA Economic Consulting have argued that there would be a net benefit to the economy in terms of jobs and tax revenue if the maximum stake was £2 a spin. This is because FOBTs are a “labour un-intensive” form of consumer spending.
The hung Parliament adds another dimension to this puzzle. Without an overall majority, a well-placed source has indicated to the Campaign for Fairer Gambling that the Number 10 policy unit is looking for initiatives that would have cross-party appeal. With Labour and the Lib Dems already committed to a £2 cap, this should appeal to the Conservatives in the current political context.
The deal that’s been done between the Conservatives and the DUP relates to the Queen’s Speech and the Budget, but in response to instructing DUP MP and FOBT-critic Jim Shannon to postpone his Westminster Hall debate on FOBTs, the DUP leadership said it wanted to make its voice heard to government on this issue.
Of immediate concern is that the Treasury has exempted remote betting sites and betting shops from the EU money laundering directive. These are the two gambling sectors on which there has been the greatest media reporting of money-laundering activity.
Despite Brexit, there will be many laws in which the UK should stay in harmony with the EU. The Treasury decision will be taken as sign by the EU that the UK is going in a lax regulatory direction – exactly the opposite stance that the UK should be taking if trying to get the best Brexit deal.
So under pressure from the gambling minister Tracey Crouch, the Labour Party, the Lib Dems and the new Tory bedfellows the DUP, the question is whether Philip Hammond will make his mark on changing the Treasury civil service legacy created by Osbourne that its ok for corporations to screw people who are less likely to be Tories.
The Campaign for Fairer Gambling will be making its case to Treasury in the coming months, bringing forward a new economic analysis and holding Treasury to account before the government is due to respond to the review in October.