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Home > News > Double hit for Betting Industry with FOBT stake reduction and tax hike

Double hit for Betting Industry with FOBT stake reduction and tax hike

17 May 2018 |

The most significant (and eagerly anticipated) change to gambling legislation since the introduction of the Gambling Act, with news that the industry was fearing and those seeking tighter regulation were hoping for, has finally been announced.

The maximum stake on FOBT machines in betting offices is to be cut from £100 to £2. In making the announcement today, DCMS secretary Matt Hancock said “When faced with the choice of halfway measures or doing everything we can to protect vulnerable people, we have chosen to take a stand. These machines are a social blight and prey on some of the most vulnerable in society, and we are determined to put a stop to it and build a fairer society for all.”

The boost to British Bookmakers after a US Supreme Court decision to sanction the lifting of the ban on sports betting in the country has been short-lived.

There had been concerns expressed within Government that the dramatic drop in the maximum stake would deprive the Treasury of significant funds but the DCMS has indicated that, in a further blow to the industry, “in order to cover any negative impact on the public finances, and to protect funding for vital public services, this change will be linked to an increase in Remote Gaming Duty, paid by online gaming operators, at the relevant Budget.”

Whilst the drop in maximum stake to £2 has naturally grabbed the headlines, the Government has also confirmed that:

  • The Gambling Commission will toughen up protections around online gambling including stronger age verification rules and proposals to require operators to set limits on consumers’ spending until affordability checks have been conducted.
  • A major multi-million pound advertising campaign promoting responsible gambling, supported by industry and GambleAware, will be launched later this year.
  • The Industry Group for Responsible Gambling (IGRG) has amended its code to ensure that a responsible gambling message will appear for the duration of all TV adverts.
  • Public Health England will carry out a review of the evidence relating to the public health harms of gambling.
  • As part of the next licence competition the age limit for playing National Lottery games will be reviewed, to take into accounts developments in the market and the risk of harm to young people.

The Association of British Bookmakers has been quick to respond saying that they “expect over 4,000 shops to close and 21,000 colleagues to lose their jobs” and warning that this change would “simply shift people…to alternative forms of gambling where there is less chance of human interaction”. The industry is also previously on record as having said that a  reduction of the kind announced would have an impact on the levels of sponsorship that it is able to provide to sport, as well as highlighting concerns about the possibility of illegal gaming machines getting on to the market as a consequence of the change.

BACTA (the trade association for the amusement and gaming machine industry in the UK) CEO John White described the decision as “long needed” and one that puts “player protection first” allowing the industry to “move forwards and create a safer, more socially responsible environment”.

Chief executive of William Hill, Philip Bowcock, is quoted as having said that “the government has handed us a tough challenge…it will take some time for the full impact top be understood”. By contrast, Peter Jackson, CE of Paddy Power Betfair welcomed “the significant intervention by the government”

Matt Zarb-Cousin, spokesperson for Fairer Gambling, said: “The work of Tracey Crouch and Carolyn Harris should be commended…The government’s decision to cut the stake back to £2 is the right one and must be enacted as soon as possible.”

The Church of England praised ministers for “admirable moral leadership” for reducing the maximum stake.

It is expected that the change in stake limit will come in to effect some time next year.

The fact that a piece of liberalising social legislation that sought to bring gambling in to the main stream by a Labour administration has subsequently been restricted by the current Conservative government is telling, and a mark of how far the debate has moved on in recent months and years.

On a day when further closures on the high street were announced by Mothercare and Caruluccios it will be interesting to see what further impact the announced changes will have between now and their implementation next year.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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