Campaign to cut FOBT stake to £2 approaches finish line – and industry face a levy for treatment
The Campaign for Fairer Gambling writes about the likely next steps on FOBT stake levels following the closure of the government's consultation.
The Sunday Times reported a “£2 limit to curb crack cocaine of gambling”, which prompted multiple stories across the media on Monday claiming that DCMS might reduce the maximum stake per spin on FOBTs from £100 to £2. A stake reduction had already been announced as policy, and £2 is one of the options.
William Hill and Ladbrokes combined market values declined by over 10%, as it seemed the “news” took business journalists and analysts by surprise. Their excuse was a stake reduction to £20 or £30 had been factored in, but not a stake reduction to £2. Do these people actually get paid for just listening to the bookies? The Campaign warned the analysts were getting it wrong on PoliticsHome’s Central Lobby.
Out of all the submissions presented to DCMS in 2016, there was no evidence-based submission advocating a maximum of £20 or £30. There were many evidence-based submissions advocating a £2 maximum, with a wealth of additional support and evidence for £2 throughout 2017.
The best the ABB, can do is to keep spinning their secret KPMG report, as the ABB CEO did with PR Week UK. Rather than explain the best or average case scenario of a reduction to £2, the ABB only quotes the worst-case scenario. It also “forgets” that KPMG crafted the report based on part of the sector only and that KPMG advised that conclusions should not be drawn for the sector as a whole.
Furthermore it “forgets” that the KPMG report was crafted on “confidential commercial assumptions” supplied by the bookies. Perhaps the reputation of KPMG would be best served by returning fees to the ABB and publicly disassociating itself from the ABB’s claims?
The hook for the Sunday Times story was that Matt Hancock, newly appointed Secretary of State at DCMS, was reported by a source as recognising that FOBTs are detrimental to horse-racing, rather than an asset to it. Regardless of the opinion of Mr. Hancock, the responsible minister is Tracey Crouch, who has taken great care to ensure there will no opportunity for a Judicial Review (JR) by the bookies.
Despite the bookies being quoted in the Guardian that for a JR to succeed it would have to prove the Minister was mentally unstable, the bookies are now threatening to go to a JR based on the Sunday Times story. This is the exact opposite of how they should be handling the matter, given FOBTs are not the only issue under consideration in the consultation, and HMRC’s review of tax levels for gambling sectors is due soon after.
An event at the International Casino Exhibition in February will feature the Gambling Commission, the Competition and Markets Authority and the Adverting Standards Association reporting into abuse of consumer protection law, which could even result in licenses being revoked. “Bookmakers pay the price for failing to clean up their act” might be just the beginning.
A comment by Jim Mullen, the CEO of Ladbrokes, really exposes how unconvincing the bookies’ PR pitch has been. He was stated as claiming that there is “no evidence” that FOBT gamblers would move to sports betting. The best source of evidence would have been the bookies themselves if they knew how much of their FOBT win was crossover from sports bettors. Investors will be questioning why they don’t know that.
In contrast, they have said that restrictions on FOBTs would result in an increase in remote gambling – (which Ladbrokes and other bookies also operate), illegal gambling and in “grotty” arcade gambling. Given the level of crime, anti-social behaviour, and abuse to staff in betting shops, “grotty” would be too lenient a description of bookmakers. They have also made the false and non-evidenced accusation that Fairer Gambling is a commercially motivated “casino campaign” – but appear to have no evidence of crossover within their own premises, let alone to casinos.
GambleAware supported ResPublica’s report on research, education, and treatment for problem gambling, which proposed a mandatory levy at 1% of profits. ResPublica identify that gambling addicts receive three times less funding for treatment per capita than drug or alcohol misusers, and a 1% levy would close this gap. With the consultation now closed, the Campaign for Fairer Gambling is confident that the government will make the evidence-based decision to back a reduction to £2 on FOBTs, and is hopeful for much-improved funding for treatment.