Other bookmakers are raising their eyebrows after UK-listed firm Paddy Power Betfair surprisingly threw its support behind the imposition of heavy curbs on betting machines.
The Financial Times reported that Paddy Power Betfair is the first big bookmaker to express support for curbs on fixed-odds betting terminals (FOBTs), which gambling operators have warned may lead to shop closures, job losses, and a hit to the Treasury’s tax receipts.
In a letter to Department for Culture, Media and Sport (DCMS) Minister Tracey Couch, Paddy Power Betfair chief executive Breon Corcoran proposed the implementation of a FOBT stakes limit of “£10 or less.”
The Financial Times reported that Corcoran is convinced that the FOBT curb will “address societal concerns” and at the same time save the reputation of the whole gambling industry in the long run.
“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,” writes Mr. Corcoran. “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. 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.”
Many analysts were left astounded by Paddy Power’s decision, especially since the FOBTs provide a significant source of their income. Paddy Power Betfair could lose £32 million in machine revenues in 2018 should the DCMS implement a £10 limit.
But Paddy Power’s losses are just pennies compared to its rivals Ladbrokes Coral and William Hill. It is projected that Ladbrokes and Hills stand to lose £276 million (US$370.6 million) and £182 million ($244.39 million), respectively.
Of course, Corcoran was quick to dismiss claims that PPB’s support for FOBT curbs had anything to do with commercial gain over their rivals.