Greg Wood | Sport betting
When the department for digital, culture, media and sport finally announced a range of options for the new maximum stake in fixed odds betting terminals on Tuesday, the most interesting alternative was arguably the one that wasn’t there.
The stake limit could be halved to £50, cut to £30 or £20, or even right down to the £2 maximum that was in the last Labour manifesto, but there is no mention of the £10 limit which no less a figure than Breon Corcoran, the departing chief executive of Paddy Power Betfair, suggested would be an appropriate maximum a couple of months ago.
Corcoran’s intervention infuriated rivals with big betting shop estates – Ladbrokes Coral, William Hill and BetFred in particular – in part because Paddy Power has much less exposure to retail gambling. Mostly, though, it was because it had been lobbying behind the scenes for months with a message that a £10 limit would be “as bad as £2”, which – it claims – would lead to hundreds of shop closures and job losses, and put a big dent in racing’s income from betting shop media rights and the levy.
The lobbying, it seems, has worked – for now. The DCMS proposal looks like a recipe for the richest of fudges on fixed odds betting terminals, which caused betting shops to start clustering in Britain’s most economically deprived areas almost overnight after the Labour government deregulated gambling in 2005. There is even a clear hint of how it might be contrived, with a suggestion that roulette should have a £20 limit while other games are cut to £2, but do not be deceived.
The spinning wheel has been captivating gamblers for more than 200 years, and the electronic, high-speed version is the game of choice for the majority of fixed-odds betting terminal players.
But if this government does not have the courage to address the issue properly, then the next one probably will. Labour and the Liberal Democrats both favour a £2 limit, and fixed-odds betting terminals are the political equivalent of a free hit. An accusation that the ruling party is morally bankrupt is more telling when millions of people walk past long parades of betting shops that were not there a dozen years ago, every day of their lives.
The inherent dangers in allowing £100-a-spin gaming out of casinos and into thousands of high-street shops should have been apparent to the politicians involved at the time, or at least to the civil servants advising them. There are risks attached to betting on sport, and bookmakers need to work for their money.
They can still have a bad Cheltenham or a poor World Cup if the results do not go their way. But there is not a single fixed odds betting terminal among the 35,000 or so in Britain which has ever had a losing week. From the operator’s point of view it is not just easy money, it is effortless.
But it is also perniciously addictive. While other high-street businesses struggled, and sometimes collapsed, in the face of online competition, the big off-course firms have grown fat on their diets of free cash. When the supply is threatened they become angry and defensive, because they cannot imagine a future without their daily fix.
Yet there could be a future for high-street betting with a £2 minimum, or even with no fixed-odds betting terminals at all, as is the case in Ireland. Wherever sport is popular, betting on it is hugely popular too, and there is something about being paid out in cash that an online withdrawal request will never quite replicate. A public face for a business is also valuable, and one of the big three is now rumoured to pick up 40% of its new online accounts via sign-ups in its shops.
Claims that racing will suffer a dramatic drop in income should also be treated with extreme caution.
Some shops, in the urban clusters, are likely to close if fixed-odds betting terminal stakes are restricted to £2, and whatever replaces them will not be paying for racing’s media rights. But the long-term future of gambling is increasingly online, and that business is now all captured by the sport’s new funding regime, while off-course, at least some of the fixed odds betting terminals’ turnover will find its way to racing.
The off-course firms do not want to live without fixed-odds betting terminals, but that is not the same as being unable to live without them. It is something to bear in mind over the course of the government’s consultation, whenever you hear the claim that a £2 limit would put them out of business.
Source: The Guardian