Less than a week after the DDCMS’ decision to reduce the maximum stake on FOBTs to GB£ 2 and consequences are already manifesting themselves.
One major high-street betting firm has written to staff asking for voluntary redundancies and informed them that over the next 18 months hundreds of shops will close.
An independent bookmaker told GBGC that his FOBT revenue has been slashed by half in his shops since the announcement. How has this happened in just a few days? Betting shop customers seem to have assumed that the new lower stake came into force on the day it was announced by the DDCMS Secretary of State, Matthew Hancock MP.
The Minister’s failure to announce an implementation date could be causing the Treasury to lose tax revenue already, if the bookmaker’s experience is being replicated elsewhere.
If this bookmaker’s customers are not using FOBTs in the same number as before, where has the money gone? Between zero and five percent has gone over the counter (OTC), so the anticipated uplift for horserace betting has not yet happened and might never happen.
A few years ago, I recall one independent bookmaker who ran one of the shops in his estate without a single FOBT for six months to study the effect on the rest of his business. OTC improved only 20% shared between numbers, lottery, football, greyhounds and horseracing.
As GBGC also stated elsewhere, the GB£2 stake makes the bet uninteresting for customers. Another bookmaker told GBGC that his shop punters are mystified by the decision. The punters’ comment is “what’s the point of having GB£ 2 on an even money shot?”
He reported takings on the “low side” since Thursday but did not attribute it directly to the FOBT decision, saying a clearer assessment could be made at the end of the month.
Bookmakers will no doubt be promoting heavily in their shops to inform punters that the maximum FOBT stake is still £100, until Government decides on a date for implementation. But they have to be careful. The Gambling Commission will not wish to see aggressive marketing when the DDCMS has decided it is in the public’s safety to have stakes cut to GB£2.
The UK Treasury is likely to receive less tax from betting shops than it previously envisaged, if the decline in FOBT revenue continues even before the new lower stake is enforced. That is a bad omen for the e-gaming sector, which is being milked as the cash-cow to make up the shortfall.
by Warwick Bartlett