The UK government may have declined to take immediate action to stop the spread of fixed-odds betting terminals (FOBT), but shares in the country’s top bookmakers tumbled Thursday after the tepid support they received from all parties during Wednesday night’s debate in the House of Commons. Shortly before Christmas, Labour party leader Ed Miliband had garnered plenty of headlines with his pledge – if he wins the next general election – to take steps to allow local councils more control over the number of betting shops allowed in their jurisdictions and to reduce the number of FOBTs each shop can contain (presently capped at four).
On Wednesday, Prime Minister David Cameron said the Tory party “absolutely shares” Miliband’s concerns over the impact of FOBTs but said no action should be taken at least until the Department for Culture, Media and Sport (DCMS) completes its ongoing review of the FOBT data. The initial findings of the DCMS report are expected this spring, with the full study scheduled for release in the fall. Cameron noted that a member of Miliband’s own party had observed as recently as November 27 that there was “no evidence to support a change to stakes and prizes for FOBTs,” and Cameron invited Miliband to submit any “extra evidence” he may have obtained since then.
Cameron also took care to note that it was Labour – then run by Tony Blair – that released the FOBT kraken when it “relaxed gambling regulations” back in 2001. John Leech, a Liberal Democrat member of the ruling coalition government, went further, saying Miliband was looking to “score cheap political points.” Leech insisted he would “take no lectures from Labour … whose cultural contribution to our high streets were lap dancing bars, 24-hour drinking and the explosion of betting terminals.” (Attention Labour strategists: there’s your slogan for the next general election.)
Undeterred by this verbal spanking, Labour put forth their motion to allow local councils greater control over betting in their constituencies and to double the length of time between allowable spins of the FOBT reels, but this was defeated by a vote of 314 to 232. Nonetheless, several members of the coalition expressed reservations about waiting too long to deal with the FOBT situation.
BOOKIES TAKE A BEATING IN THE CITY
Thursday brought carnage on the public markets, as shares in the nation’s two biggest high street bookies – William Hill and Ladbrokes – closed out the day’s trading down 7% and 6.5% respectively. Despite the fact that no legislative action on FOBTs is likely this year, Barclays’ analysts suggested the negative press would weigh heavily on the sector and thus downgraded their outlooks for both firms, in particular Ladbrokes, whose struggling online operation means it relies more heavily on its FOBT revenue. Davy analyst David Jennings said it appeared “very, very likely” that the government will act to curb FOBTs and the uncertainty over the extent of those curbs “is going to leave a door open to paint particularly bleak scenarios” for high street bookies.
Representatives from Hills, Ladbrokes, Coral, Paddy Power and Betfred were all present at a December meeting with gambling minister Helen Grant, during which they were told to implement certain harm reduction measures, such as allowing gamblers to set their own limits on playing time and losses. Hills issued a statement noting that the industry was willing to work with the government to arrive at appropriate harm reduction measures, but insisted that such a strategy “should be informed by facts, academic research and a proper economic impact assessment.’
While Hills’ CEO Ralph Topping described the meeting with Grant as “very friendly,” he told the Financial Times that he’d had no luck getting Miliband to sit down to discuss his FOBT concerns. “People don’t talk to us. They think we are capitalist running dogs. How can you have sensible conversations when people don’t talk to you?”