UK sets £2 maximum for fixed-odds betting terminals
To address the contentious issue of Fixed-Odds-Betting-Terminals (FOBTs), the maximum bet has been capped at £2 per spin. This significant move follows a guideline package presented by the UK Gaming Commission (UKGC) in March, which the British government plans to implement in full.
In coordinated efforts to tackle the harmful effects of FOBTs, Philip Hammond, Chancellor of the Exchequer, and Matt Hancock, Minister for Digital and Culture, have reached a consensus on a stringent limitation: The maximum bet on extreme slots will be significantly decreased to £2 per spin, equivalent to regular slots. This represents a significant reduction of 98%.
FOBTs are digital gaming machines featuring slots, alongside popular casino games like Black Jack and, most notably, Roulette. These machines allow players to place unusually high bets, up to £100, at an astonishingly fast pace.
Considered unregulated aberrations in the British gambling industry and highly addictive, FOBTs are notoriously dangerous debt traps, as per experts. They are infamously referred to as the "crack cocaine" of slot machines. Consequently, a robust player protection measure seems justified.
This decisive action is in line with the recently introduced UKGC guideline package in the Department for Digital, Culture, Media and Sport (DCMS).
The regulatory proposals additionally prohibit multigame machines with simultaneous gambling options. Furthermore, it is suggested to scrutinize any suspicious player behavior to categorize problem gamblers and curb their financial and temporal access. The UK government intends to embrace the commission's recommendations wholeheartedly.
Enforcement over speculation
Although this measure was anticipated by the industry, the extent of the decision may come as a shock. A regulation aligning FOBTs with traditional slots was anticipated for some time, but its execution was considered an unlikely prospect due to the potential tax repercussions.
The resolute application of the FOBT limitation will plug a £400 million tax loophole in the public purse, officials claim.
While there's ambiguity about the specific plans to tackle this tax deficit, Hammond and Hancock remain steadfast in their resolve to counter the terminals. FOBT foes have drawn support not only from the UKGC but also from the highest echelons of politics.
The current Prime Minister, Theresa May, had already endorsed a reduction in stakes in January. With a resounding 62% backing from the Parliament, as indicated by the most recent poll, a £2 cap at the outset has been widely supported.
Stock market setback
Since their market debut in 2001, the UK has witnessed a flood of virtual roulette machines. These FOBTs have transformed into a lucrative £1 billion market, yielding approximately £55,000 per year for each individual FOBT.
As per law, betting shops are only allowed to host a maximum of four Fixed Odds Betting Terminals (FOBTs) - a shop without these terminals would be uncommon in the UK. They have served as a reliable and profitable income source for bookmakers.
Several major betting companies have recently experienced substantial stock market declines due to this landmark decision.
William Hill, a London-based bookmaker, has sustained a 12% loss. Paddy Power Betfair - an Irish-English betting company - has incurred a 3.9% loss in market value. GVC Holdings, the new proprietor of Ladbrokes Coral from the Isle of Man, has lost 7% of its market worth.
The massive acquisition cost of Ladbrokes Coral was likely a considerable factor in the perceived high valuation of FOBTs for the gambling firm from the Isle of Man. Technically, this development has been more painful for the company in light of the current circumstances.
Read also:
- Will Topp be the next Terodde?
- Kompany's Relation to Schenk Explained:
- Permission granted for HSV.
- Millions demanded by HSV handball athletes.
