The All Party Parliamentary Group (APPG) has issued a 62-page report damning Fixed Odds Betting Terminals in betting shops. The group is calling for the maximum stake of £100 to be reduced to £2. How could it arrive at such a draconian move?
The APPG members are a collection of MPs and Lords that are either from the hard left, liberal left or religious ideologists. The committee was constituted as follows: 13 Labour members, 5 SNP, 5 Conservative, 2 DUP, 1 UUP, 2 Lib Dems, 1 Independent and a Bishop.
Representations were heard from, amongst others, Derek Webb, who built a campaign against FOBTs, The Hippodrome Casino, Leicester Square, owned by the Thomas family who would be a major commercial beneficiary were FOBT stakes to be reduced to £2, and BACTA, the trade association for family entertainment centres whose members would also benefit from a reduced FOBT stake. Add to this: Gamcare, Quaker Action, Church of England, Professor Orford (who is anti-gambling), and CARE. The result is hardly surprising.
What is surprising is that Tracey Crouch MP, DCMS Minister with responsibility for gambling, bothered to turn up to give evidence. She added credence to a group regarded by the bookmakers to have produced a ‘rigged report’.
The result of the Triennial Review is due to be announced in the spring of 2017. But on past performance that date maybe missed because of other complications, one of which is likely to be the long-running saga of the Horserace Betting Levy.
The Government wants to be rid of it and wants offshore bookmakers to pay an agreed rate. The bookmakers are fearful it will provide racing with an unaffordable bounty.
FOBTs, whilst producing a substantial part of bookmaker profits, have become a Government tool with which to gain leverage over the other items it would like bookmakers acquiesce to but do not have the time or even courage to bring forth legislation that in any event may be challenged.
The Minster should be mindful that bookmakers employ 43,000 staff, and pay in total taxes about £2 billion a year. They make a major contribution to the economy.
Equally, racing is a valuable industry but it has been subsidised for too long. Billionaires and property developers have been buying or wanting to buy racecourses this last 20 years and now their long-awaited pay-off is coming to fruition.
In 2015 the British Government published a report Land value estimates for policy appraisal. Land in Kingston upon Thames, which is close to Kempton Park, was valued at £22,800,000 per hectare.
Kempton Park has 85 hectares, although admittedly not all would be available to build on. But it does yield a top value of £1.9 billion. Even if only half of the land were available Jockey Club Racecourses would have a huge windfall of £1 billion.
Kempton Park was one of three racecourses (along with Epsom Downs and Sandown Park), that were acquired by the Levy Board when Lord Wigg was chairman in 1970. Its purpose was to ensure the continuance of horseracing for the benefit of the community. The Levy Board then sold the racecourses to the Jockey Club in 1994, again on the premise they would be retained for future public pleasure.
With the demand for housing in the UK and the close proximity of most racecourses to urban populations the omens for Britain’s 60 racecourses are not good.
The horse racing industry in Great Britain has never had it so good. Media rights contracts to betting shops now leave the over the counter business in many shops as a loss leader. Without the FOBTs they would not survive.
It really brings into question whether the Government is acting independently because it appears to this observer that one side of the argument is being taken on board more readily than the other, and it is not the bookmakers who appear to be on the winning side.
The Triennial Review could provide a watershed for the betting shop. What is it that would determine change? Evidence that pathological play is on the increase or that the machines contribute to a break down in law and order. So far, such evidence has not been proven.
Let us say the DCMS is minded to reduce the stakes on FOBTs (something that has already happened with the customer now having to register with counter staff if wanting to place a £100 bet. Only two percent do so). Reducing the stake in such a way so as not to destabilise the betting shop is no easy task. One stake fits all does not work. The FOBTs in London are more popular than in the north so a reduced stake would hit those shops disproportionately because they have higher income per capita customers and also higher shop overheads.
It is also difficult to understand gambler behaviour. Would a customer that can afford to stake £100 be content to stake £20? I would not, and most would not even bother. They are most likely to turn to the internet where limits do not apply. Looking at average stake per play is most likely going to give a misleading outcome. For example, if average play is £15, reducing the maximum stake to £20 would seem a safe option. Within those averages, however, many customers will be placing bets at £30, and at £15 they are most likely not going to be bothered to play at all.
The best solution is to leave everything as it is.
The industry will no doubt be presenting some of these arguments at the DCMS and one hopes that those that read what is tendered will be able to understand it.
Step forward The Secretary of State, Karen Bradley MP. She has a BSc in mathematics.