FOBT controversy: UK delays 2-pound restriction implementation to 2020
The UK government has unexpectedly delayed the implementation of the £2 limit for Fixed-Odds Betting Terminals (FOBTs) that was planned for 2019 to 2020. Some MPs are calling this a "shameful and dangerous postponement," while bookmakers are relieved. The ongoing debate over the controversial gaming machines in the UK shows no signs of ending anytime soon.
Since May last year, it was believed that the FOBT issue was wrapping up with the UK government's announcement to limit the maximum stakes of digital betting machines to £2 per spin from 2019 and increase online gambling tax to 20% as part of the national budget. However, the controversy over the infamous "crack cocaine" machines is now reaching another level.
The player protection measure, which is as contentious as it is feared in betting shops, has been postponed until 2020. Theresa May's Conservative cabinet didn't approve the official stamp for the directive, despite the UK Gambling Commission's (UKGC) long-standing support for the £2 limit. Both Chancellor of the Exchequer, Philip Hammond, and Digital Minister, Matt Hancock, advocated for the £2 limit since April.
Prime Minister Theresa May had already expressed her support for reducing the FOBT maximum stakes at the beginning of this year, with the justification that a softer regulation might significantly impact the affected parties and cause budget shortfalls. According to the industry and politicians, the UK could be facing a budget deficit of up to £400 million when FOBTs have their limits reduced.
There are reportedly different opinions on the value of raising the online gambling tax. The UK Treasury estimates that a 5% increase in tax would only generate £200 million, while the British media anticipates a short-term but industry-favorable delay in the new tax.
Meanwhile, most MPs have been campaigning for FOBTs to be in line with regular gaming machines. In a survey from April, a 98% reduction in stakes was proposed and supported by over 60% of MPs.
The Problematic Nature of FOBTs
The gambling machines, primarily found in betting shops, have been considered the unruly 'black sheep' of the British gambling sector since their introduction in 2001. FOBTs also offer classic casino games like roulette, with highly addictive features and maximum stakes of up to £100 per spin and a maximum payout of £500.
The UKGC maintains that more than 14% of all FOBT players are already recognized as problem gamblers. The concentration of FOBTs in poorer areas has been criticized - some areas have twice as many machines as others. British bookmakers have been accused of profiting from the poorest citizens.
Despite the sizeable issue, there are currently over 33,000 registered FOBTs in the UK, primarily in the non-traditional gambling environment dominated by William Hill and Ladbrokes Coral branches. Each machine generates around £55,000 per year in revenue for its operator, making FOBTs a critical economic driver in the British gambling sector.
LGA, which represents local councils across the UK, claims that the delay in FOBT regulation is largely due to "unwelcome influence" from the betting industry. The local authorities highly disapprove of any delay, with their Safety and Community Committee Chair, Simon Blackburn, commenting:
"The government must stand firm against this pressure and proceed with these changes to prevent further harm to society."
Moreover, a recent statement from the Association of British Bookies claims that an immediate regulation enactment could result in over 4,000 store closures and a loss of 21,000 jobs. They also highlighted a potential £3.6 billion generation from FOBTs in two years, which would be at risk if the stake limit was implemented. The Association spoke of a "reasonable timeline" for generating liquidity for staff, voluntary redundancies, and lease renegotiation for local suppliers.
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A New Climate for Online Casinos
It's evident that the financial rewards of FOBTs in the UK have become a significant issue at the political level. In the meantime, the online gambling industry is set to benefit from the ongoing FOBT controversy as the government scrambles to find a solution. Research increasingly suggests that regulated and responsible gambling environments provide significant social benefits. It's clear that the issue isn't going to end anytime soon.
A significant portion of the reported £3.6 billion revenue is money coming from poor relief funds, and this has drawn criticism since the LGA's postponement. This is probably known to UK's local fixed-odds betting terminal (FOBT) providers, as well as Prime Minister Theresa May, who hasn't publicly stated her opinion on the matter yet. There's also talk in the industry about whether there will be a rise in online gambling tax in 2019.
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Source: www.onlinecasinosdeutschland.com
