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Paddy Power have become the first major betting operator to support the introduction of stricter controls on fixed odds betting terminals (FOBTs) in the UK. The decision goes against the opinion of other major operators such as Ladbrokes Coral and William Hill and most involved in the UK gambling industry who believe that limits would result in shop closures and job losses. According to the Financial Times the CEO of Paddy Power, Breon Corcoran, has written to Tracey Crouch, Britain’s parliamentary under-secretary for sport, calling for limits to be imposed on the amounts bet on gaming machines. In his letter Corcoran explained “We now believe that the issue has become so toxic that only a substantial reduction in FOBT stake limits to £10 or less will address societal concerns”.
A recent UK government review of the controversial FOBTs recommended reducing the maximum stake from its current £100 to £2 and imposing a maximum limit per playing session of either £20 or £30. It’s estimated that Britain’s 9,000 betting shops earned a total of £1.8 billion from the machines in last year while the UK government collected almost £400 in tax from these profits. If the decision was made to cut the maximum bet on FOBTs to £10 Barclays estimates that Paddy Power would lose approximately £32 million in revenue each year or £55 million if the maximum bet was set to £2. Rival bookmakers Ladbrokes and William Hill would fare far worse losing out on an estimated £276 million and £182 from a £10 limit or £449 million and £248 million from £2 maximum bet.
According to Corcoran the loss in revenue from FOBTs wouldn’t cause significant damage to the company’s profitability. “I am confident we could operate our retail business successfully and profitability under such circumstances. Other well-run operators should be able to do the same.” Anti-gambling activists have been heavily critical of FOBTs for some time and Corcoran believes that the introduction of limits on the machines is a necessary step that the industry needs to take in order to clean up its image. “Whilst we are not aware of any evidence which links stake size to problem gambling, we are acutely aware of the increasing reputational damage to the gambling industry that has followed lack of progress in this area. We believe that this undermines the role of the sector as a provider of entertainment, employment and tax revenue, in addition to being a much-needed supporter of sports such as horse racing”.
Paddy Power Call for Stricter Controls on FOBTs in the UK
Friday, Oct 20, 2017 13:56Irish bookmakers Paddy Power have earned themselves a reputation as the ‘class clown’ of the gambling industry through humorous and often controversial marketing campaigns. Despite this reputation as a bit of a joker the company have always taken their commitment to responsible gambling very seriously. It shouldn’t come as any surprise then that a company who made a name for itself by doing things differently has chosen to break ranks and announce its support for the proposed crackdown on fixed odds betting terminals in the UK.
Taking a Stand
Paddy Power have become the first major betting operator to support the introduction of stricter controls on fixed odds betting terminals (FOBTs) in the UK. The decision goes against the opinion of other major operators such as Ladbrokes Coral and William Hill and most involved in the UK gambling industry who believe that limits would result in shop closures and job losses. According to the Financial Times the CEO of Paddy Power, Breon Corcoran, has written to Tracey Crouch, Britain’s parliamentary under-secretary for sport, calling for limits to be imposed on the amounts bet on gaming machines. In his letter Corcoran explained “We now believe that the issue has become so toxic that only a substantial reduction in FOBT stake limits to £10 or less will address societal concerns”.
The Issue of FOBTs
A recent UK government review of the controversial FOBTs recommended reducing the maximum stake from its current £100 to £2 and imposing a maximum limit per playing session of either £20 or £30. It’s estimated that Britain’s 9,000 betting shops earned a total of £1.8 billion from the machines in last year while the UK government collected almost £400 in tax from these profits. If the decision was made to cut the maximum bet on FOBTs to £10 Barclays estimates that Paddy Power would lose approximately £32 million in revenue each year or £55 million if the maximum bet was set to £2. Rival bookmakers Ladbrokes and William Hill would fare far worse losing out on an estimated £276 million and £182 from a £10 limit or £449 million and £248 million from £2 maximum bet.
A Cleaner Image
According to Corcoran the loss in revenue from FOBTs wouldn’t cause significant damage to the company’s profitability. “I am confident we could operate our retail business successfully and profitability under such circumstances. Other well-run operators should be able to do the same.” Anti-gambling activists have been heavily critical of FOBTs for some time and Corcoran believes that the introduction of limits on the machines is a necessary step that the industry needs to take in order to clean up its image. “Whilst we are not aware of any evidence which links stake size to problem gambling, we are acutely aware of the increasing reputational damage to the gambling industry that has followed lack of progress in this area. We believe that this undermines the role of the sector as a provider of entertainment, employment and tax revenue, in addition to being a much-needed supporter of sports such as horse racing”.
