The Treasury’s 'backroom deal' with the bookies over FOBTs is inexcusable

Posted On: 
21st June 2018

The Campaign for Fairer Gambling says it is 'unbelievable' that the Treasury thinks it takes two years to run a software update on Fixed Odds Betting Terminals (FOBTs). 'Somehow Ministers have contrived to give the bookies a longer transition period than it will take to negotiate Brexit'.

"The Campaign for Fairer Gambling will be working to ensure a commitment to raise point of consumption tax for online gambling is in this year’s Budget. There is then no excuse for an implementation date beyond April 2019".

After The Times broke the story of the Treasury delaying a reduction to £2 a spin on Fixed Odds Betting Terminals (FOBTs) to as late as 2020, the government faced a backlash in the media from the broad coalition of campaigners and advocates from across the political spectrum who recently praised DCMS for coming to the right decision.

As the Campaign for Fairer Gambling’s Matt Zarb-Cousin asked in the Sunday Mirror following the revelations, “What is it with this Conservative government that on the rare occasion they make the right decision they do their best to turn a positive into a negative?”

CFFG: DCMS does not believe the bookies – so why does the Treasury?

Government should be commended for making the right decision on FOBTs

After DCMS shunned “half-measures”, opting for a cut to £2 to protect the vulnerable, it is inexcusable for the Treasury to delay already long-overdue action on machines that members of the government have called a “social blight” and the “scourge of the high street”.

After responding on Twitter, Labour’s deputy leader Tom Watson was widely quoted, including in the Guardian, describing this as “a pathetic move from a fundamentally weak government.”  Carolyn Harris MP, Chair of the APPG on FOBTs, said she was “absolutely appalled that the Treasury has a done a deal with the bookies” in an interview for BBC Wales.

There would have been an opportunity for this APPG to diversify into tackling other sources of gambling harm. But given the delay, the APPG decided on Tuesday that the focus had to remain on FOBTs, the most harmful gambling product, until the implementation of a stake reduction to £2 is enacted.

DCMS appeared frustrated by the delay, having initially timetabled 9-12 months. HM Treasury has set a terrible precedent by agreeing to a delay. If any sector does not like legislation then all it has to do is trot off to Treasury, and without any concessions, the Chancellor will grant a lengthy implementation period, which increases the chance of an eventual U-turn.

When the FCA announced restrictions on some aspects of spread-betting (a form of gambling that it regulates), the spread-betting sector’s share prices tumbled, but these operators did not go crying to the Treasury. The question then arises why would the bookies think that going crying to the Treasury would help them?

Well, the Treasury has form in taking bookie claims at face value. When deciding to exclude betting shops from money laundering regulations, it appeared to rely on a document compiled by the Gambling Anti-Money Laundering Group (GAMGL), which was essentially a bookmaker lobbying front: an ex-police officer and a member of his staff acting on behalf of the ABB and the Remote Gambling Association. Surprise, surprise, they concluded betting shops are “low risk” for money laundering, despite the Gambling Commission having said the opposite.

Did HM Treasury contact the two FOBT suppliers, SG and Inspired, to request a written explanation of the time required to update their machines? Despite FOBTs being server based, requiring only a software update, the generous timeframe granted by government is as though these billion-pound companies are having to use one white van man with a limited toolbox.

Also, where is the evaluation that the Treasury used to form the assumption that 90% of FOBT losses at over £2 will transfer to other gambling activities, as revealed by The Times? Surely that could not be the same assumption that the ABB forced into the now widely-discredited KPMG report that is still to be made public, and which fuelled the bookies’ project fear campaign. Even if we take the 90% at face value, then the shortfall to Treasury from FOBT stake reduction will only be minimal and does not justify any delay in implementation.

The Treasury wants to coincide increasing tax for remote gambling with the implementation of FOBT stake reduction. The Campaign will be working to ensure a commitment to raise point of consumption tax for online gambling is in this year’s Budget. There is then no excuse for an implementation date beyond April 2019.