The UK Government is set to reduce the maximum stake on the highly controversial fixed-odds betting terminals to £2, The Times reports citing people familiar with the ongoing discussions. An announcement is expected to be made within the next few weeks.
The decision was to be made public at an earlier stage, but according to media reports from yesterday the delay was incurred by Chancellor of the Exchequer, Philip Hammond, who was said to have previously been opposed to such a massive cut in the maximum stake. Mr. Hammond reportedly contested the measure as it would result into a huge fall in tax revenue.
At present, FOBTs accept £100 maximum stakes every 20 seconds. Following a review into the gaming machines sector conducted by the Department for Digital, Culture, Media, and Sport, it was announced last fall that the maximum bet would be cut to somewhere between £50 and £2. A reduction to £2 would cost the exchequer £450 million in annual tax contributions, it has been estimated.
Latest media reports indicate that Mr. Hammond may be close to settling what was believed to be an ongoing dispute with supporters of a bigger reduction of the betting limits, with the latter group being led by Culture Secretary Matt Hancock. Sources told The Times that “[they] are nearly there”.
It is believed that Mr. Hancock and his team have managed to appease concerns voiced by Mr. Hammond about the impact the massive crackdown on FOBTs would have on tax revenue.
Alternative Revenue Sources
It is understood that levies will increase on other gambling services to offset losses incurred by the FOBTs crackdown. It is yet to be announced how exactly other forms of gambling will be taxed.
The announcement about the UK Government’s decision on the changes that will be introduced in the gambling machines sector is expected within the next several weeks. However, it will not be made before next week’s local elections due to purdah rules.
Following yesterday’s reports about Mr. Hammond’s opposition to a reduction of the maximum bet to £2, several influential MPs said that they would contest any decision that does not include a cut of the maximum stake to £2. Tory MPs Sarah Wollaston and Nick Boles were among those to say that they “will not support half measures”. Both officials took to Twitter to voice their opinion on the topic.
Shares in William Hill tumbled 11% as news about the pending crackdown on one of its key sources of revenue emerged earlier today. GVC, which recently acquired Ladbrokes Coral – the operator of the largest number of FOBTs across the UK, saw its shares go down 4.8% earlier today.
The B2 gaming machines or FOBTs represent UK’s second largest gambling sector. They generated gross gambling yield of £1.8 billion in the period between April 2016 and March 2017.
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