The UK Gambling Commission caused controversy this week when it recommended the government impose a maximum £30 stake limit on casino-style fixed-odd betting terminals (FOBTs).
The recommendation caused an outcry among charities and anti-gambling campaigners who had been calling for a £2 limit on all types of FOBTs.
In October 2017, the government announced a review that would cut the maximum bet to £50 or less. However, recent coverage had suggested that a limit of £2 on all games was in the pipeline, hence the disappointment at the news.
The Gambling Commission’s recommendation is likely to have a significant impact on the ultimate decision from the Department for Digital, Culture, Media and Sport. Shares in William Hill and Ladbrokes have fallen in recent weeks due to shareholder uncertainty over the outcome.
Popular betting machines have been under intensive scrutiny over the past year. Players are currently allowed to bet £100 every 20 seconds at the terminals, and can therefore potentially lose up to £18,000 per hour.
Earlier this year, the government announced it was reviewing FOBTs and would limit the maximum stake to as little as £2. Whether or not they are swayed by the Gambling Commission’s findings remains to be seen.
In a letter to the Secretary of State, the Gambling Commission stated: “At the heart of our advice is an aim to reduce the risks that consumers, especially those that are vulnerable, face from gambling. We think that action – from the government, the Gambling Commission and operators – is needed to achieve that aim.”
“While the package which we are recommending includes a stake cut for Category B2 gaming machines, our advice is clear that any serious attempt to reduce the risk of harm must not rely solely on a change to the stake limit for one product, which only 1.5% of the population plays each month. The package should include, for example, action to improve the tools available to customers to help them to manage their gambling.”
The commission recommended the lowest possible limit of £2 a spin on slot games – similar to fruit machines and much less popular than games like roulette.
Speaking to the Guardian, Tom Watson, Labour’s deputy leader and a prominent opponent of FOBTs, said: “This is a deeply disappointing report from the Gambling Commission, which appears to have caved in to industry pressure. Ministers must not use this report as a cover to maintain the status quo.
“These machines are the heart of the UK’s hidden epidemic of problem gambling. The government must cut the stake to £2 on all FOBT machines, including the highly addictive roulette-style games.”
Carolyn Harris, the Labour MP who chairs an all-party parliamentary group investigating FOBTs, added: “It is disappointing. However, I am confident that the government will see past this and do the right thing, as the moral argument has been made so overwhelmingly for £2.”
A spokesperson for Fairer Gambling, which has been campaigning for a blanket reduction in all B2 stakes to £2, said: “The Gambling Commission is giving the government free rein to determine an appropriate stake. We are confident that when the evidence has been reviewed, £2 a spin will be considered the most appropriate level.”
Financial implications ahead
However, there are financial implications, and not just for the bookies, who can gain more than half of their annual revenues from FOBTs, but also for the government. In 2014, then-Chancellor George Osborne hiked the tax on FOBTs, from 20% to 25%, and the markets reacted by taking 11% off the price of Ladbrokes shares and 5% off William Hill.
If the government does implement a £2 betting limit on all games, it will have a substantial impact on the public purse.
The decision is now in the hands of the Department for Culture Media and Sport, which has been waiting for the findings of the Gambling Commission before making any public announcements.
The department will now need to meet and discuss the commission’s findings before announcing any further changes.