One Quarter of UK Betting Shops May Close
A quarter of UK high street betting shops may have to close down following the government’s decision to cut the maximum stake on fixed-odds betting terminals. The closures could put up to 12,000 jobs at risk. William Hill revealed that it may have to close 700 shops in order to rearrange its business in accordance with the new FOBT ruling.
In April 2019, new restrictions came into play on fixed-odds betting terminals, cutting the maximum stake from £100 per spin to £2. The decision was made after a lengthy campaign by activists and MPs who have linked the machines to gambling addiction.
Since the change, William Hill has reported that it has experienced a “significant fall” in gaming machine revenue. In May, the operator revealed there was a 7% year-on-year drop in retail revenue for the first seventeen weeks of the year.
Three of Britain’s leading bookmakers – Ladbrokes Coral, BetFred, and William Hill – have all announced plans to cut jobs at their stores and are blaming the decision on the FOBT ruling. They argue that the machines contributed almost half of their annual high-street income, so the change in regulations has been a big hit.
Ladbrokes have said that it may have to close 900 shops, which would result in the loss of around 5,000 jobs. BetFred is also talking about shutting 500 shops, with 2,500 people out of work. If William Hill did indeed close 700 shops, as is currently being discussed, another 4,500 jobs would be under threat. This would be a combined total of 2,100 shops that may be closed, which is a quarter of the UK’s land-based bookmakers. This could affect up to 12,500 staff members – nearly 12% of people employed in the UK gambling industry. However, this is actually not as large of an impact as the bookmakers originally predicted when the subject of FOBTs first came up. The operators said at the time that there could be 4,500 closures and 21,000 job losses if the ruling went through, but these numbers were discredited.
The government had originally decided not to cut stakes on the FOBTs until October 2019, but it later came out that this decision was heavily influenced by a report commissioned by bookmakers which was, in fact, unreliable.
In November 2018, the Chancellor, Philip Hammond, announced that the stake reduction would be delayed in order to mitigate job losses. The statement was not well received, and the sports minister Tracey Crouch resigned in protest. Hammond told the Treasury select committee that the industry estimated that 15,000 to 21,000 jobs would be lost if the stakes were capped at £2, and so needed more time to prepare. The committee chair, Nicky Morgan, accused Hammond of putting jobs above addicts’ lives.
The report on which Hammond based his decision and comments was written by accountancy firm KPMG but included a disclaimer stating that key assumptions on which it was based were set by the Association of British Bookmakers. KPMG stated that the report “should not therefore be regarded as suitable to be used or relied on by any other person or for any other purpose.”
FOBTs and Gambling Addiction
A report by the Gambling Commission in 2017 found evidence that there was an increase in addiction amongst those playing fixed-odds betting terminals. The machines allow a player to bet up to £100 every 20 seconds and have been called the “crack cocaine of gambling”.
The non-profit organisation Fairer Gambling found that the high-stake machines “suck money from poorest communities”. Their research showed that in the fifty constituencies with the highest number of unemployed people, there were 1,251 betting shops and £5.6bn was being put into FOBTs every year. By comparison, in the fifty constituencies with the lowest unemployment rates, there were only 287 betting shops, and only £1.4bn was being put into FOBTs.
The Gambling Commission’s report found that around 11.5% of people who use the machines are problem gamblers. However, the ABB insists that prohibiting that machines would make no difference: “Seeking to ban a single gambling product will simply lead to the shifting of problem gamblers to other areas rather than addressing the root cause of the issue.”