The UK’s Triennial Review of gaming machines, including Fixed Odds Betting Terminals (FOBTs), is due to be published soon. Much of the attention has been centred on the implications for the large betting chains but the decisions will also affect smaller, independent bookmakers. GBGC asked an independent bookmaker if he was anxious about the outcome.  He said, “If it goes ahead, according to the worst scenario [GB£ 2 max stake], we would have to close half the shops we have on the first day of the new regime.”  


GBGC asked for the figures of one of his better shops to test his conclusion.

Revenue £000

OTC

150

FOBT

120

Total

270

Expenses

Rent & Rates

30

Staff Wages

70

Light/Heat

7

Provisions

2

Newspapers

2

FOBT rent

11

Telephone

1

SIS, Turf tv, TRP

36

Water

1

Advertising

2

Licence

0.5

Gambling Commission

1.4

Other licences

2

Levy

3.5

BGRF

0.5

MGD

30

Problem gambling

1

Betting tax

22.5

223.4

Profit

46.6

This is a good shop showing a profit of £46,600 a year. The figures do not include repairs and renewals or depreciation.  A shop requires a complete refit of £50,000 to £100,000 every eight years.  In a worst case scenario, if the FOBTs were lost as a source of revenue and without business moving to over the counter, this good shop would lose £73,400 a year.  Such a loss is not sustainable and the shop would close.

This would cause a loss to Government of £74,220 a year taking account of NI, corporation tax, gambling taxes and licence fees. The staff would lose their jobs. The bookmaker would be left with the liability of the lease, four years unexpired at £20,000 a year, £80,000 in all. 

What about horse racing? The new SIS rate card will probably take the £36,000 charge for media rights to about £40,000. When I had betting shops I recall paying something in the region of £8,000 a year for a full service, admittedly some years ago.  The escalation in horse racing media rights has only come about because of FOBTs. Without them, bookmakers would not have agreed to pay the figures they are paying now.

If the Government does decide to reduce the stake on FOBTs, shops will have to close because the overheads have grown disproportionality to any potential return. This situation will come about because of Government decisions.  The bookmaker has done nothing wrong. He has only used a machine that is permissible by current law. Just as the farmers were compensated by the Government when the decision was taken to cull their herds to stop the spread of disease, should not the bookmakers also be compensated if the DCMS curtails FOBTs?