Britain cuts top stake on gambling machines on addiction fears
Britain will cut the maximum stake on fixed-odds betting terminals to just two pounds after the government opted to try to tackle problem gambling and rejected claims that such a big reduction could cost thousands of jobs.
The decision follows complaints that the machines, on which gamblers in high street shops bet up to 100 pounds ($135) every 20 seconds on games such as roulette, were highly addictive and allowed players to lose large sums of money too quickly.
“These machines are a social blight and prey on some of the most vulnerable in society, and we are determined to put a stop to it and build a fairer society for all,” Matt Hancock, Secretary of State for Sport, said in a statement on May 17.
Critics of the machines, often dubbed the “crack cocaine” of gambling, had also written to Prime Minister Theresa May urging the government to cut the stake to 2 pounds.
The decision deals a blow to companies such as William Hill and GVC who had argued that the terminals were a major source of income for high-street betting shops which are struggling to stay afloat as younger gamblers move online, putting jobs at risk.
Gambling companies - most of which run internet as well as high street businesses - face a two-way squeeze as the government plans to increase Remote Gaming Duty on online gambling to offset the loss of income from the cut in the stake.
Analysts expect Britain to increase the current 15 percent base levy on online operators by between 3.5 to 5 percent. No further details are expected before the government’s Autumn Budget in November.
The Office for Budget Responsibility watchdog forecast total machine gaming duty would yield 720 million pounds in 2017-18.
The clampdown, which marks the biggest regulatory change in the UK gambling industry since rules were liberalised in 2005, was welcomed by charities, the church and opposition politicians.
However, the government has not set an exact timetable for implementing the changes.
Shares in the main gambling companies fell in early trading on Thursday, with William Hill, down nearly 9 percent at one stage, hit hardest before swinging back into credit.
London-listed gambling stocks have had a topsy-turvy week, surging on May 16 after the Supreme Court paved the way to legalize sports betting in the United States.
With tighter curbs and higher taxes in their home market, the companies are likely to seek to expand across the Atlantic. Ireland’s Paddy
Power Betfair said already on Wednesday it was considering merging its U.S. business with fantasy sports company FanDuel.
There are over 8,788 betting shops in Britain and companies are allowed to install a maximum of four machines per shop.