Cross-party Budget revolt threatened over Treasury plans to delay FOBT stake reduction

Posted On: 
16th October 2018

The Campaign for Fairer Gambling calls for the Chancellor to be bold on measures to protect vulnerable gamblers in his upcoming Budget and to announce final plans to reduce stake levels on fixed odds betting terminals, which are now overdue.

FOBT machines
Credit: 
PA

During government deliberations of the gambling review, it was reported that HM Treasury was resistant to the evidence-based decision to reduce the maximum stake on Fixed Odds Betting Terminals (FOBTs) to £2 a spin. When DCMS opted for £2, it was understood that the Treasury had agreed to this on the basis that any tax revenue generated by FOBTs that might be lost as a result of this decision would be made up through coinciding the implementation of this policy with an increase in remote gambling point of consumption (POC) tax.

The Chancellor was reported to have wanted to delay this to 2020, despite the CEBR claiming the Treasury stands to gain £100m a year from speedy implementation, given the revenue generated by an increase in online and mobile gambling taxes and the diversion of FOBT spend to more productive parts of the consumer economy.

As there is no economic case for delay, and given the government has already described FOBTs as a “social blight”, there is no coherent argument to not enact their own policy at the earliest opportunity. Liz and Charles Ritchie, bereaved by a gambling-related suicide, told the Sunday Telegraph: “It is utterly inexcusable that the stake has not yet been cut having accepted FOBTs are a major source of gambling addiction. It would be morally reprehensible for this Chancellor to continue to side with the bookmakers and to allow them to make profits at the expense of young people’s lives.”

More than two-thirds of MPs on both sides of the House believe the bookmakers should be given less than a year to reduce the stake to £2, The Sunday People reported on sources indicating Philip Hammond plans to include a date for implementation when he delivers his Budget at the end of this month. But Iain Duncan Smith has warned the Chancellor that unless the date is brought forward then he and his allies will “feel honour bound” to amend the finance bill which enacts the budget.

Derek Webb and Matt Zarb-Cousin wrote an article for The Times on the case for increasing the POC remote gambling duty to at least 25% in this month’s budget, which would begin to recoup the revenue lost as a result of more than a decade of betting operators moving offshore to avoid tax. The cash-rich operators are also able to avoid paying VAT on their marketing due to their location, so increasing POC tax sufficiently would make incessant TV advertising less viable.

Concerns about a tax hike have led to operators such as GVC, which owns Ladbrokes Coral, calling on the government to end to advertising before the 9pm watershed, calling the situation it has itself helped create: “out of control”. At the moment, gambling advertising is banned before the watershed, with the exception of bingo or if it’s broadcast during a live sporting event. But as Matt Zarb-Cousin told TalkRadio, Ladbrokes Coral won’t withdraw advertising unilaterally, as their competitors will simply move in. It is fairly comfortable terrain for larger, more-well known operators to call for curbs on TV advertising as they have less to lose compared to newer entrants to the market.

But aggressive gambling advertising has to stop, because of both its impact on those already addicted – as this interview in HuffPost outlines – and because of its impact on children. Australia has banned in-game advertising for this reason, and Owen Jones recently wrote about the huge backlash in Australia to the decision to project a horse race ad on the Sydney Opera House.

Conservative peer Lord Chadlington has called for an end to in-game gambling advertising, while Labour has similarly called for a “whistle to whistle ban”. Tom Watson echoed Lord Chadlington in a Facebook post when he called for the government to “get on with” implementing advertising restrictions and a 1% levy on the gambling yield, which would generate around £140 million a year for research, education and treatment.

If the Chancellor is looking for a means to increase NHS spending in the Budget, he can deal with the cost of gambling related harm by using existing powers in the Gambling Act to make the levy statutory.