Paddy Power Betfair Calls for Reduced £10 per Spin FOBTsSeptember 29, 2017 9:40 am
Since the Labour Party allowed the introduction of glorified fruit machines called fixed-odds betting terminals (FOBTs) into gambling establishments across the UK in the 1990’s, the chorus of voices calling out for them to be reigned in has grown stronger and stronger over the years. At the heart of the problem is the incredibly high potential loss rate which allows a gambler to wager up to £100 per spin, resulting in some cases of loses of as high as £300 a minute.
As a result of a problem gambling upsurge in the country, campaigners have subsequently been calling out for a greater level of control to be exerted on the UK’s gambling industry, with a reduction in the maximum stakes of FOBTs to be slashed to just £2 one of the ideas being promoted. At the recent Labour Party conference in Brighton, Tom Watson, Deputy Leader of the Opposition Labour Party, said if elected his party would undertake a thorough review of the industry, but in the meantime called upon gambling operators to do a better job of meeting their obligation as far as vulnerable people are concerned.
It would seem Watson’s warning may have hit a chord with gambling operator Paddy Power Betfair, with the company having now broken ranks with its industry peers by suggesting a reduction in the FOBTs stakes to £10. Describing the situation as “toxic”, CEO of Paddy Power Betfair, Breon Corcoran, wrote a letter to Tracey Crouch at the Department for Digital, Culture, Media and Sport, stating that the topic was now starting to undermine the repuation of the gambling industry in Britain. As an extract of the letter read:
“We now believe the issue has become so toxic that only a substantial reduction in FOBT stake limits to £10 or less will address societal concerns. I am confident we could operate our retail business successfully and profitability under such circumstances. Other well-run operators should be able to do the same.”
While Paddy Power Betfair‘s surprise lead in the call to have FOBT stakes reduced has been welcomed as a positive step in the right direction, the operator’s rivals see the move mainly as one motivated by the need to gain a competitive advantage. After all, Paddy Power has between 300 and 400 bookmaker located on the High Street which could lose around £55 million from a reduction in stakes.
On the other hand, Ladbrokes Coral with 3,660 bookies stands to lose around £449 million ($603m) in revenues each year, while for William Hill with 2,375 bookies that figure would be around £284 million ($382m). In addition, Paddy Power Betfair’s strong online presence may also stand to gain further from more bookmaker shop closures by its gambling competitors on the High Street.