FOBT delay 'influenced' by industry report

The UK government’s controversial decision to delay until next October a cut in stakes on fixed-odds betting terminals (FOBTs) to £2 from £100 was influenced by secret report commissioned by bookmakers, the Guardian reported on Monday.

The delay, hidden in last month's Budget, has caused outrage among campaigners and led to the resignation in protest of Sports Minister Tracey Crouch.

Chancellor Philip Hammond last week cited the need to mitigate job losses as a key factor in the delay. He told the Treasury select committee the industry estimated that between 15,000 and 21,000 jobs would be lost if FOBT stakes were capped.

The report, seen by the newspaper, was written by accountancy firm KPMG and incudes a disclaimer warning that key assumptions on which it was based were set by the Association of British Bookmakers (ABB).

KPMG said the report was “performed to meet specific terms of reference” agreed with the ABB, adding that there were “particular features determined for the purposes of the engagement”.

“The report should not therefore be regarded as suitable to be used or relied on by any other person or for any other purpose.”

It said important estimates of whether customers would respond to FOBT stake reduction by spending on other betting products had been “agreed with the industry”.

Despite KPMG’s warning, the report was circulated among Treasury officials including Exchequer Secretary to the Treasury Andrew Jones MP, the Guardian said.

He replied to ABB chief executive Malcolm George to say that the report “will make a valuable contribution to the evidence base”.

The credibility given by Treasury officials to the report shocked gambling company Paddy Power Betfair, which wrote to the prime minister to caution against it being used, the Guardian report stated.

Paddy Power said its own evidence suggested some of the assumptions in the KPMG report were “unrealistic”. It cited the report’s prediction that just 50% of customers of a shop that ended up closing due to FOBT reduction would migrate to another outlet.

It also cast doubt on industry claims that losing FOBT income would force thousands of shops to close.

It said that in the medium term “the business is not expected to see an increase in the number of shops that are loss making compared to the current position, and therefore does not expect to close any shops because of changes to FOBT stake limits”.

Paddy Power concluded that while the stake cut would have “some impact” on betting shops, it would be “far less severe than the depiction provided by the ABB”.

A cross-party group of MPs seeking to overturn the delay are expected to table an amendment to the finance bill this week to get the date of the stake reduction brought forward.

The amendment is understood to have the support of dozens of MPs, including more than 30 Tory rebels.