UK government set for U-turn over FOBT stake cut date

The UK Government is expected to announce a major U-turn this afternoon by bringing the cut in fixed odds betting terminal (FOBT) maximum stakes forward to April.

iGamingBusiness.com understands that Culture Secretary Jeremy Wright will tell MPs that the £2 limit will be implemented from April along with the rise in remote gaming duty from 15% to 21%.

Theresa May, responding to FOBT opponent Iain Duncan Smith (pictured) at Prime Minister’s Questions, said that the government “has been listening to the concerns of MPs” and confirmed Wright will give more details later today. Sports Minister Tracey Crouch resigned following last month’s Budget, when it was announced that the change would only be implemented from October. Crouch had reportedly expected the change to be made in April.

The Government faced resignations, a backbench mutiny and the possibility of a first Budget defeat since the 1970s.

The Government announced that it would reduce the maximum stake to £2 more than six months ago and has since argued that the gambling sector should be given time to prepare for the change. Chancellor Philip Hammond said recently that between 15,000 and 21,000 jobs could be lost due to the changes.

However, it has been suggested that the impact on betting shops may have been exaggerated. Many of the forecasts are based on a KPMG report commissioned by the Association of British Bookmakers (ABB) and based on the industry's assumptions. In March this year lobbying group the Campaign for Fairer Gambling filed a complaint with the Financial Conduct Authority, alleging that the report falsely represented the danger posed by cutting FOBT stakes to the UK retail betting sector.

The Guardian this week reported that Paddy Power Betfair described the forecasts as “unrealistic” in a letter to the Prime Minister.

PPB cast doubt on claims that a reduction in FOBT income would force thousands of shops to close and questioned the report’s prediction that just 50% of customers of a shop that ended up closing would migrate to another outlet.

“Our evidence suggests a very high proportion (around 75%-90%) of customers move to other shops,” Paddy Power said, according to the newspaper

“The business is not expected to see an increase in the number of shops that are loss making compared to the current position, and therefore does not expect to close any shops because of changes to FOBT stake limits.”