Gambling Commission Recommends £30 Higher Cap on FOBTs

Gambling Commission Recommends £30 Higher Cap on FOBTsOn Monday, gambling companies operating in the UK received a piece of positive news after the country’s Gambling Commission provided a better than anticipated recommendation concerning the maximum stakes for High Street fixed odds betting terminals (FOBTs). According to the regulator, FOBTs should have their stake limits reduced from £100 to £30 for non-slot games, such as roulette, while for slot games, such as fruit machines, the stake limit should be set at £2.
Share Prices Bounce
The recommendation proved sufficiently above the £10 level that many industry experts had been predicting that shares in UK online gambling companies subsequently experienced a surge yesterday, with the stock price of Ladbrokes Coral up by 2%, William Hill by 4.4%, and GVC rising by a more modest 1.7%.
Commenting upon the news, Jasper Lawler, head of research at London Capital Group, said that while the maximum stake reduction was “bad news” for the bottom line of gambling company, from a share price perspective investors reacted positively to the better than expected reduction.
“A recommendation in the upper half of the previously recommended £2 to £50 range is a big surprise,” explained Lawler. “And a great result for high street gambling companies like Ladbrokes and William Hill. Symbolically this recommendation shows regulators are not on a path to an outright ban of fixed-odds betting terminals.”
Awaiting Government Approval
It will now be left up to the UK Government to decide whether or not to act upon the advise given by the Commission. In this regard, it will need to balance its worries concerning social responsibility issues in the country with the hit expected to be taken to its state coffers. An economic impact assessment last October, for instance, estimated that a £30 stake limit would cost the economy £1.7 billion over the next 10 years, while the industry would suffer an average cost of £235 million.
In the meantime, a spokesman for the Department for Digital, Culture, Media and Sport said that the Gambling Commission’s advice was being taken under consideration with a final decision to be made following further consultation on the issue. However, the spokersperson indicated that FOBTs would nevertheless have their stakes cut, stating:
“We have been clear that FOBT stakes will be cut to have a safe and sustainable industry where vulnerable people are protected.”
Other Measures Required
Gambling Commission chief executive Neil McArthur further indicated that a stake reduction for FOBTs would not be sufficient on its own to protect vulnerable people from gambling problems. As a result, the regulator is also planning on complimenting any stake reduction decision it makes with a package of other measures designed to protect consumers over the longer term.
One such suggestion includes the ability to monitor how customers are gambling across all types of slot machines in order to determine whether they are exhibiting risky behavior, or even preventing FOBTs from permitting different types of games to be played over the course of a single session. Also being explored is the possibility of ending a customer’s gambling sessions when either a time or money limit is reached.
Not Far Enough
While the opposition Labour Party has welcomed the Gambling Commission’s decision to reduce FOBT stakes to £2 for slot machines, it reacted less favorably to non-slot FOBT games having their stakes capped at £30. According to Tom Watson, Deputy Leader of the Labour Party, the recommendation was “deeply disappointing” and shows that the Gambling Commission appears to have caved in to pressure exerted by the country’s gambling operators.
“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,” urged Watson.
Similarly, Labour MP Carolyn Harris expressed her hope that the Conservative Party would eventually do the right thing and reduce stakes to just £2 for all such machines. While Matt Hancock, Secretary of State for Digital, Culture, Media and Sport, is believed to be open to such a possibility, he must still overcome pressure from the Treasury to implement a softer option, especially as a large part of the £700 million in receives in slot machine duty each year derives from FOBTs.
Stricter Stance on Gambling Industry
The latest recommendations follow a general tightening on the rules governing the UK’s gambling industry, which last year employed more than 100,000 people and generated £13.7 billion in revenues, of which £2.8 billion ended up in government coffers. On the downside, more than two million people are now believed to be either problem gamblers or at risk of developing an addiction in the UK, with the Gambling Commission now exploring and implementing a series of measures to protect vulnerable and underage gambling, including a tougher approach to gambling firm advertisements and marketing.

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