Lawmakers in the United Kingdom are pushing for an urgent vote to sort out the delay on the gambling crackdown in the country. The delay concerns maximum stakes on fixed odds betting terminals (FOBTs).
FOBTs are considered to generate a lot of social harm and while there are plans in place to reduce their impact on gamblers, the proposed restrictions have been delayed. It appears to be the government that is slowing down the move to limit the stakes, something that members of parliament are looking to change.
Reason for the delay
During the October budget the Chancellor for the Exchequer Philip Hammond announced the restrictions that were to be implemented on FOBTs. The change would see the maximum stake per bet being reduced drastically from £100 to £2.
However, he said the restriction would not be applied until October 2019, six months later than original date of implementation. It seems the government has also employed some forms of political maneuvering to delay voting on this issue.
The delay has triggered a group of MPs to come together to bring this issue to the forefront again. They want to put pressure on the government and censure the gambling sector’s lobbying activities.
They are aiming to insert a clause into Hammond’s proposed finance bill when it reaches the committee stage.
This is the time when MPs have the power to closely scrutinize any and all proposals in the bill. This is unlikely to take place before November 12, which is when the House of Commons is scheduled to read the bill again.
If the MPs achieve adding such a clause, it will mean that changing the FOBTs restriction date from April 2019 to October 2019 will have to be reassessed, and the government may need to have a fresh inquiry.
The reason Hammond gave for changing the restriction date was to help balance needs of the gambling industry and minimize job losses in high street gambling establishments.
However, this move led to Tracey Crouch, the Minister for Sports resigning in protest. She argued that the government was not fulfilling its duty to protect the public. Experts have called FOBTs “crack cocaine” for gamblers.
In her letter of resignation, Crouch said more than £1.6bn would be wagered on FOBTs in the coming 12 months and that every day there are on average two gambling-related suicides in the UK.
Tax rates in the future
FOBTs have been contentious in the UK for some time. The tax revenues from FOBTs have been very lucrative for the government, as well as for gambling operators, which have fought hard against any restrictions.
The government would also rather not lose such a significant source of revenue without replacing it first.
Every year, the UK government receives about £400m tax revenues from FOBTs out of the £1.8bn it derives from the entire gambling sector. Slashing the maximum stake for bets on these terminals will create a significant fall in the government’s revenues.
To try and bridge some of the shortfall, the government has increased the tax rate charged to offshore gaming operators, which currently pay 15% of their gross gambling yield to the government. This will now rise to between 20% and 25%.
FOBTs are currently taxed at 25%. The government introduced the offshore gambling tax a few years ago to help domestic operators become more competitive. All offshore companies that target players in the UK will be subject to this tax.
A number of native gambling operators have based their online offering operations abroad, such as Ladbrokes and William Hill. This means they will be hit on both fronts, with their intake on the terminals being drastically decreased, as well as having to pay more for the remote tax.
Problem gambling in the UK
Problem gambling in the UK is rising and there is a recognition that there needs to be a change in FOBTs. People can lose thousands of pounds in a matter of seconds on them.
There are now extensive advertising campaigns to warning against the dangers of FOBTs. Public Health England is also conducting a review of the issue of problem gambling.
The government is also contemplating increasing the minimum age to partake in National Lottery games as more young people are now playing them.
Finally, there is also a push for extensive restrictions on gambling advertising, something that is now a hot topic across the globe.