Bookies are still in denial mode and resorting to desperate messages

Posted On: 
7th December 2017

The Campaign for Fairer Gambling writes about the ongoing consultation into the gambling sector.

It is very unusual for the Campaign to recommend reading anything crafted by the Association of British Bookmakers (ABB). However, please consider this headline to an ABB article on PoliticsHome; “Don’t believe the spin - a curb on betting shops is bad news for vulnerable gamblers,” written by Chair Paul Darling OBE QC.  

It is doubtful if the most tabloid of tabloids could have come up with a more outlandish claim. The DCMS consultation is not considering a curb on betting shops, merely a curb on stakes on FOBTs. Let’s spin back in time and imagine a similar ABB announcement when FOBTs were introduced. “Good news for vulnerable gamblers – bookies given protected high-street monopoly on high-speed roulette machines at stakes up to £100 per spin.”

Mr Darling relies on a “secret” KPMG report and explains the worst-case scenario of shop closures, job losses, tax losses and impact on horse racing. The report is confidential as it is claimed to be “commercially sensitive”. It will of course also contain the best-case scenario, which the ABB refuses to make public.

There is no possibility that the best-case scenario can be more “commercially sensitive” than the worst-case scenario – if anything the opposite is correct. But the ABB has pushed these dodgy numbers to business journalists to get sympathetic coverage. They even use them in a Back Your Local Bookie Petition quoting them as “would be” rather than “may be” to create support for their dodgy campaign.

It’s hard to feel pity for big accountants such as KPMG, but it would have provided the report in good faith to be used for the agreed purpose. But what recourse does KPMG have if the agreed purpose is being abused?

Mr. Darling makes a prediction that stake reduction would not help vulnerable gamblers. But where is the prediction on cross-over business from a closed shop to other shops in proximity? And where is the prediction of cross-over revenue to other gambling activities in betting shops? If the predictions are not in the report - why not? If they are, how could they be more “commercially sensitive” than the numbers already disclosed?

The latest Gambling Commission statistics showed a decrease of 332 in the number of betting shops over the past year. However, 255 of those closures are in the Ladbrokes Coral estate. The Ladbrokes Coral merger was driven by cost saving opportunities, which are now coming to fruition through closing shops and reducing staff numbers. Despite shop closures of 4%, FOBT losses increased by 1%, resulting in losses per FOBT increasing 6% to nearly £54,000 per year.

Some newer MPs in the 2005 intake and onwards may not appreciate that betting shops are now open nearly twice as many hours as pre-FOBT days, but that staff numbers per shop have decreased. The idea that bookmaking executives are concerned about job losses is risible. Their long-term game plan has been to convert betting shop gamblers to remote gambling.

Even the Tote, owned by government, went offshore and offered casino games. Tote shops even provided CDs to customers as promotional tools. But two factors prevented the degree of cross-over that the bookies would have liked.

One was that many of their customers are either unbanked or do not want electronic trails of their financial activity. The lack of take-up of loyalty cards, even with the minimal ID threshold, is testament to that. The other was FOBTs themselves, as very engaged gamblers derive satisfaction from getting cash immediately when they win, rather than having to wait through the withdrawal process of remote gambling.

Betting shops now have SSBTs – self-service betting terminals – which allow cash betting on all their online betting offers. Look at all the online sign-up and bonus offers and compare this with the very limited offers for shop gambling. Look at all the analyst comments explaining the online futures of bookmakers. Then reflect on the fact that when the DCMS consultation was published, bookies share prices increased.

“Don’t believe the spin” is excellent advice - if it’s applied to the ABB.