The move follows the introduction of new regulations which reduce maximum stakes on betting terminals from £100 to £2.
Paddy Power and Betfred have withdrawn new high stakes betting games from their shops after warnings from the Gambling Commission.
Paddy Power’s game, which is called Pick ‘n’ 36, features a maximum stake of £100. Players bet on numbers from 1 to 36 in a manner similar to roulette while a TV monitor displays ‘hot’ and ‘cold’ numbers. The latter feature has attracted a great deal of criticism because it gives the false impression that the numbers which appear are not random.
Betfred’s FOBT, Virtual Cycling, allows players to place bets on where they think an animated cyclist will be overtaken by virtual competitors. To participate, a ticket is obtained over the counter that displays a graphic similar to a roulette table with each number representing a section of track. This particular game includes a maximum stake of £500.
Predictably, the two bookmakers have drawn the ire of UK lawmakers with shadow culture minister Tom Watson describing the roulette-style games as ‘FOBTs through the back-door’. In response, Betfred has requested further talks with the Gambling Commission with Paddy Power contending that its game is only available for a limited trial.
It seems unlikely that either firm will find a receptive ear among UK regulators, especially in light of the controversies surrounding FOBTs which have been branded as the ‘crack-cocaine’ of gambling as well as a ‘social blight’.
Former Sports Minister Tracey Crouch MP who recently resigned in protest over the delay in limiting FOBT stakes, suggested that any attempt to get around the new regulations ‘would be morally irresponsible’.
Her successor, Mims Davies echoed Crouch’s sentiments, reassuring the general public that the Government was ‘watching closely to see how the industry reacts’ and that it ‘would not hesitate to act’ if it saw evidence of harm.
Fixed-Odds Betting Terminals have become massively popular with UK gamblers since their introduction in 2001. According to the Gambling Commission, they accounted for around £1.7bn in gross gambling yield by 2018.
But although the number of these machines has risen by just 9% since 2009, the amount of money players lose on them has increased by 73% over the same time period.
Not everybody shares the concerns voiced by the Government and regulators. The Association of British Bookmakers (ABB) has consistently rejected the link between problem gambling and FOBTs and has warned of the impact that stake cuts will have on industry. It also commissioned a study by auditors KPMG which found that around 20,000 jobs could be lost as a result of the new regulations.
In accordance to these findings, it seems that some UK bookmakers are set to take a hit with Ladbrokes Coral expected to close around 1000 of its 3475 shops. William Hill has also requested rent cuts of up to 50% from its landlords to prevent the closure of many of its bricks-and-mortar establishments.
In the lead up to the new FOBT regulations, many doubted the Government’s will to implement the new changes, especially in light of the ABB report which found that curbing maximum stake FOBTs would cost the Treasury around £1bn in tax revenue.
But FOBTs are just one aspect of a multi-billion pound industry that continues to expand exponentially. In 2009, income derived from online casinos, online poker and online bingo was somewhere in the region of £817m. Today the figure is well over £5bn. However, it’s not just the gambling companies that have benefited.
According to HM Revenue and Customs, betting, gaming and lottery duty soared from £1.48bn in 2007 to almost £2.8bn in 2016 – a figure that’s almost certain to increase given the online gambling sector’s growth. So although jobs are at stake, not to mention the continued operation of some of the UK’s most renowned bookmakers, it appears that the Government can look forward to substantial tax revenues from gambling for many years to come, with or without FOBTs.