Betting shop operators received a major boost on Monday as Gambling Commission advice to culture secretary Matt Hancock on the government review of gambling fell short of the industry's doomsday scenario of a £2 maximum stake for fixed odds betting terminals (FOBTs)
The commission, the government's adviser on gambling matters, has recommended that the maximum stake on FOBTs, which account for more than half the business that takes place in betting shops, be reduced to £30 or less.
Shares in William Hill and Ladbrokes Coral rose on the back of the news, which also prompted an angry response from those who have campaigned for a £2 maximum stake, blaming FOBTs for problem gambling and other social problems.
The watchdog will not explicitly back a maximum £2 stake on FOBTs, which bookmakers claim would lead to thousands of betting shop closures and millions of pounds of lost income for racing, instead recommending measures to combat the risk of harm to gamblers.
Gambling Commission executive director Tim Miller said: "We're aiming to reduce the risks that people face from these forms of gambling.
"A stake cut is an important part of our comprehensive package that is recommended to government that will tackle the risks consumers face, but our research has shown that a stake cut alone will not do enough.
"If the government wants to go lower than a £30 maximum stake that will be perfectly consistent with our advice, as we are recommending a maximum stake of £30 or less."
Recommendations from the report include . . .
- The stake limit for FOBTs non-slot games, including roulette, should be set at or below £30 if it is to have a significant effect on the potential for players to lose large amounts of money in a short space of time
- The FOBTs slots games stakes should be limited to £2
- Banning the facility for machines to allow different categories of games to be played in a single session
- There is a strong case to make tracked play mandatory across certain machines
- Forms of player protection should be extended across machines
- Working with the industry and others on steps to make limit-setting more effective – this could include ending sessions when consumers reach time and money limits.
Miller added on Radio 4: "We could have advised a maximum £2 stake, but the evidence did not point to that and show a clear figure.
"For many people it would help them to be restricted to a £2 maximum stake, but for some people there is a risk that if they can bet smaller amounts they can spend longer playing and engage in riskier behaviours, which is why we are advising this comprehensive package of recommendations.
"By tracking customers' play, gambling companies will have much less excuse not to intervene as they will be able to spot the early signs of problem gambling.
"Our focus is on protecting vulnerable people from harm. We have no duties to consider the economic wellbeing of the industry."
The commission's recommendations include a ban on allowing FOBT players to switch quickly between betting on high-stake and low-stake games every 20 seconds. Bookmakers will be recommended to track customers' habits on FOBTs too.
The commission also wants the government to improve player protections on FOBTs, including allowing customers to set time and loss limits, while they will also recommend that slots games, which account for one in every 200 bets on FOBTs, will be reduced to a maximum stake of £2.
ABB: 'We fully understand public concern'
Commenting on the announcement, the Association of British Bookmakers said in a statement: "The ABB is now considering the extensive and wide-ranging advice and recommendations made by the Gambling Commission. We fully understand that there is public concern and that there will be a stake cut to reduce the levels of losses on machines in betting shops.
"The commission has also identified a number of responsible gambling measures that will benefit those experiencing problems with their gambling. The final decision is still to be taken and we await the outcome of the consultation.
"In the interim, we remain committed to introducing further measures to address problem gambling and will continue to work with all interested parties."
The commission's advice was welcomed by government but not by the opposition.
A Department for Digital, Culture, Media and Sport spokesperson said: "We welcome the Gambling Commission's advice and will be considering it alongside responses to our consultation before making a final decision.
"We have been clear that FOBT stakes will be cut to have a safe and sustainable industry where vulnerable people are protected."
Advice 'simply passes the buck'
Hancock's Labour shadow Tom Watson was critical of the commission's advice.
He said: "Today's Gambling Commission's recommendation that the maximum stake on fixed odds betting terminals be reduced from £100 to £30 or less does not go anything like far enough. It simply passes the buck to ministers.
"But, if we are to tackle the hidden epidemic of gambling addiction in this country, we need decisive action. We need to reduce the maximum stake on electronic casino games like roulette to £2, and introduce slower spin times.
"I sincerely hope ministers do the right thing, but I fear they will kowtow to the powerful lobbying of the betting industry, which generates £1.8bn a year by putting the health of its profits before the health of its customers."
BHA 'supports consultation objectives'
There have been estimates within racing that a £2 stake could cost the industry £55 million a year in lost income from levy and media rights.
Reacting to the commission's announcement BHA media manager Robin Mounsey said: "We note the advice to government from the Gambling Commission and await the outcome of the consultation.
"The BHA fully supports the government’s consultation objectives of achieving a balance between a gambling sector which is socially responsible and does all it can to protect consumers and communities, and which can grow and contribute to the economy."
Bookmaker share prices rise
Shares in William Hill rose nearly six per cent to 339.3p on Monday, while Ladbrokes Coral shares were up by nearly two per cent to 173.55p.
The recovery takes the share price of these firms back around the level they were at before The Times report in late January that said Hancock was favouring a £2 maximum stake.
That rumour resulted in £320m being wiped off William Hill's market capitalisation, while Ladbrokes Coral lost £300m from their value.
Analysts at Goodbody said in a note: "It is important to set out that this is not the final decision on machines and represents the Gambling Commission's recommendations to the DCMS.
"We would also note that this issue remains highly political for the DCMS and government. However, the recommendations of the GC will be better than what a lot of people would have expected and will be seen as positive for retail betting operators."
What happens next
- Ministers at the Department for Digital, Culture, Media and Sport decide on stake levels and other measures
- The DCMS then writes round to other affected departments who then feed back their views
- DCMS announces final decision
- Both houses of parliament vote on a statutory instrument containing the government's plans
- If passed then new stake and measures are implemented, possibly in late 2019, if not the status quo is maintained and the process starts again