April 7, 2014 / 1:47 PM / 5 years ago

Britain plans tighter controls on betting machines

LONDON (Reuters) - Britain plans to tighten controls on the high-stakes gambling machines whose numbers have grown rapidly in town centre betting shops in recent years, sparking a warning from the gaming industry that hundreds of jobs could be put at risk.

A casino sign stands behind a plastic palm tree in Blackpool, northern England, January 30, 2007. REUTERS/Phil Noble

Anti-gambling campaigners have long warned of the addictive nature of these machines, often cited in poor inner-city areas and which feature games such as roulette allowing as much as 300 pounds to be staked a minute.

But bookmakers said in a letter to Prime Minister David Cameron on Monday that changes to tax and regulation of the machines would cost the industry 350 million pounds ($580.7 million) a year and could put more than 2,000 betting shops out of business.

The government said its proposals were aimed at ensuring punters do not rapidly run up big losses on the machines, known in the industry as fixed-odds betting terminals or FOBTs.

Under measures announced in last month’s Budget, taxation on the machines will rise to 25 percent of their takings from 20 percent next year, costing bookmakers around 75 million pounds ($124 million) a year.

In addition, the government now says it wants to make voluntary warnings introduced by bookmakers last month tougher and mandatory, hoping to guard against an increase in problem gambling.

Shares in leading gaming companies William Hill and Ladbrokes were down 1 percent and 2 percent respectively by 1400 GMT (9:00 ET), while the FTSE 100 index of leading shares was down 0.7 percent. Both stocks had fallen sharply when the tax measures were announced in last month’s Budget, with Ladbrokes touching its lowest level in more than two years.

With an election due next year, both the Conservatives - who are the senior party in Britain’s ruling coalition - and opposition Labor have been talking tough about the growth of the machines and the related clusters of betting shops in British town centers.


“We have asked the Gambling Commission to consider whether the 250 pound and 30 minute limits before a pop-up message appears are too high and too long,” said a spokesman for the Department for Culture, Media and Sport, referring to measures brought in by bookmakers a month ago.

“We want a successful gambling industry but not at the expense of player protection and will announce our plans on this soon,” the spokesman added.

There are around 33,000 of the machines in British town centre betting shops generating income of around 1.5 billion pounds, helping to keep shops viable when growing numbers of gamblers are opting to go online.

The betting industry was already starting to cut costs ahead of a new regime for taxing online gambling that is expected to come into force in December, closing a loophole that had allowed many operators to keep taxes to a minimum by basing operations offshore in places like Gibraltar.

Bookmakers including William Hill and Ladbrokes say there is no evidence to support claims that the machines are causing an increase in problem gambling.

The letter from the Association of British Bookmakers to Cameron said the industry had cooperated with the government on concerns over fixed-odds machines.

“This dialogue has made the unexpected and punitive measures recently announced in the Budget, even more difficult to comprehend,” said the letter, signed by industry figures including the chief executives of William Hill, Ladbrokes and Ireland’s Paddy Power.

“It is often forgotten that we are the only sector that pays more in tax than we make in profit and contribute 1 billion (pounds) to the Exchequer,” it added. ($1 = 0.6028 British Pounds)

Editing by David Holmes

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