Bookies take a hit as they wait to hear the score on FOBTs
THE adage that the bookie always wins is being challenged by a crackdown on betting shops’ biggest money-spinners: fixed-odds betting terminals.
Reports that the Government favours cutting the maximum stake on the controversial FOBTs from £100 to £2 wiped millions of pounds from the UK’s biggest bookmakers in recent days.
William Hill’s shares fell 12 per cent on Monday, knocking £340 million off its value. Ladbrokes shares fell by 8 per cent on the same day, wiping off £280million.
The Government launched a review of FOBTs last October, saying it would reduce the maximum stake to a figure between £50 and £2. The consultation process ended last week, with officials saying a decision will be made ‘in due course’.
It is particularly critical to Ladbrokes because it affects the company’s imminent takeover by online betting firm GVC Holdings.
The lower the Government sets the maximum stake for FOBTs, the lower the price GVC will have to pay for Ladbrokes. If a £2 limit is enforced, Ladbrokes could lose £449 million a year in revenue, according to analysts at Barclays. William Hill could lose £284 million, and Paddy Power Betfair could lose £55million. But gambling activist Derek Webb says the bookies have ‘significantly overstated’ the impact of the curb, and that the £2 cap is vital to protect consumers.
The casinos mogul, who runs the Campaign for Fairer Gambling lobby group, says FOBTs are ‘a magnet for criminal damage and money laundering’, and two in every five users are either problem gamblers or at risk.
Webb said: ‘If the objective is to reduce gambling-related harm, reducing the maximum stake to £2 is the most effective means of achieving that.’