Treasury tipped to benefit from FOBT stake cut
A new report suggests the cut in the maximum stake for FOBTs could lead to a £100m (€112m/$130m) annual boost for the UK Treasury.
While it has been estimated that the change could cost the betting industry more than £8bn, research by the Centre for Economic and Business Research (CEBR) suggests a combination of tax increases and consumer habits will benefit government coffers.
The study, commissioned by amusement arcade trade group BACTA, estimates that while machine gaming duty receipts would decline by £287m a year, this would be more than offset by almost £420m of other benefits. CEBR cited a potential rise of Remote Gaming Duty to 20% whilst predicting that many gamblers would switch from FOBTs to other products and estimating that some users would divert their money to other, more productive parts of the economy.
A spokesman for the Association of British Bookmakers told the Guardian that the research would do little to comfort the gambling industry and those whose jobs may be at risk.
He said: “Recent announcements by major operators reveal the true impact of this decision, that thousands of betting shops will close and there will be thousands of job losses. Betting shops are now focused on the future of their staff, customers and suppliers.”
UK bookmakers’ share prices tumbled in April when it was revealed that the government was to accept recommendations for a new £2 stake limit. Shares in William Hill fell by 14% just ahead of the announcement, with Paddy Power Betfair and GVC also well down.
Chancellor Philip Hammond is expected to reveal the date of the FOBT changes in the budget later this year. There has been criticism of the amount of time it has taken to introduce the cut, although the Treasury has said it wants to give operators time to implement technological changes.
At a meeting of a cross-party parliamentary group on FOBTs last week, machine manufacturers told MPs and campaigners that the changes could be made within months.
Speaking at the all-party parliamentary group on FOBTs last week, Labour MP Carolyn Harris said: “It is now clear that it is perfectly possible for the games manufactures to implement the £2 stake reduction in the very near future.”
A spokesman for the Association of British Bookmakers said: “Recent announcements by major operators reveal the true impact of this decision, that thousands of betting shops will close and there will be thousands of job losses. Betting shops are now focused on the future of their staff, customers and suppliers.”
The Department for Digital Culture, Media and Sport, which is overseeing the legislation, has estimated that bookmakers stand to lose up to £540m per year between them once the change takes effect.