Government caves on fixed-odds betting terminal reform in face of parliamentary backlash
The government has U-turned on delayed changes to fixed-odds betting terminals (FOBTs), bringing forward a widely called-for cap on stakes to April, after the sports minister resigned over the issue.
Shares in gambling companies rallied sharply on the news with GVC up 8.1 per cent, Paddy Power Betfair up 7.5 per cent, William Hill up 2.1 per cent and 888 up 4.5 per cent.
Jeremy Wright, the secretary of state for Digital, Culture, Media and Sport, issued a written statement to parliament this afternoon confirming the U-turn.
“The government has been clear that protecting vulnerable people is the prime concern, but that as a responsible government is is also right to take the needs of those employed by the gambling industry into account and provide time for an orderly transition,” the statement said.
“Parliament has, however, been clear that they want this change to be made sooner. The government has listened and will now implement the reduction in April 2019.”
Shadow minister for Digital, Culture, Media and Sport Tom Watson said: “This climb down shows the disastrous political judgement of culture secretary Jeremy Wright and chancellor Philip Hammond.”
Shares in major gambling companies had risen steadily on the expectation of the news, and rose sharply following the announcement.
Head of research at Accendo Markets Mike van Dulken said the share price increase was likely to be as a result of the certainty which the announcement gave.
“There is nothing worse for share prices than uncertainty, now they can get on with it, take the hit and move on,” he said.
The government has committed lowering the top bet allowed on FOBT machines from £100 to £2 every 20 seconds, despite industry warnings such a change would cause job losses. Last month, the Treasury delayed the planned cut from April to October next year.
Two weeks ago, sports minister Tracey Crouch quit the government over the delay, calling it “unjustifiable”. She claimed that chancellor Philip Hammond had caved under pressure from betting industry lobbying.
Crouch’s resignation provoked fury among Conservative MPs, with rebels saying they backed an amendment that would have moved the cut back to April. The government had been facing a defeat on its budget legislation in parliament next week.
Crouch claimed that other politicians with interests in the betting industry were behind the delay, calling it a "fact" that some MPs are “very interested in the bookmaking industry”.
Watson said: “It’s very sad that it took an honourable resignation of a good minister and a cross party revolt to achieve the blindingly obvious and necessary reforms to fixed-odds betting terminals.”
Campaigners have claimed FOBT machines allow players to lose money too quickly, exacerbating issues around addiction, as well as social, financial and mental problems. The machines generate £1.8bn a year for the betting industry, and £400m in taxes.