Treasury pulling hard to rein in momentum on £2 FOBT stake

As one would expect with the tumultuous debate over FOBTS, as the picture gets clearer, the mist swoops in to cloud the vision. When you thought it was impossible to halt the £2 maximum stake momentum, the Chancellor has, according to newspaper reports, stepped in to stop the surge. Money, surprise, surprise, sits at the very heart of the issue. The bookies want it, the city wants it, even the horseracing industry wants it, and now HM Government wants it. Two pound, or not two pound; that is the question?


Government departments are jockeying for position over FOBT stakes according to an insight article in the Sun last week. The DCMS and the Treasury are backing different horses in the race for a new and drastically reduced stake limit for the widely criticised machines. The “feuding” visions range from £2 to £20, with the battleline now drawn clearly over state coffers versus social responsibility.

New culture secretary Matt Hancock, only weeks into his elevated role, has reportedly put his money on a £2 maximum stake, siding with most interested bodies, charities and, notably, the majority of sectors from the broader gaming industry.

But the new kid on the ministerial block is in danger of being smacked across the back of the legs by his elder statesman, chancellor and keeper of UK plc’s piggy bank, Philip Hammond. Mr Hammond is reported as favouring a £20 stake – a huge reduction from the current £100, but still someway short of the moral favourite supposedly touted by the DCMS.

The Sun’s inside source said: “Matt Hancock is jumping the gun by suggesting the stake will be set at £2, because the Treasury will have a big say in this and they are not at all happy with it. He hasn’t thought this through or seen it in a wider context of the damage it will do to the public finances.”

Clearly not, if you look at it from Hammond’s wide angled, but less socially responsible lens. Terrified by the shortfall he anticipates from the 2 to 8 per cent drop in GDP expected after Brexit, another £450 million loss to the Treasury from the FOBT tax, and the bigger picture is seemingly not so comforting.

So, time to reach for counter evidence, which in this case comes courtesy of the bookmakers who once again suggest 3,000 betting shops will close, unemployment will rise, high streets will lose footfall, and – importantly for many – the contribution to the Horseracing Levy will be slashed to near crisis levels.

Undoubtedly, it’s a message the chancellor has had to find compelling – and until the recent wave of opinion had surged for a £2 stake, he probably would have gotten away with £20, especially with most people almost conceding to that reality pre-Christmas.

But £20 is not running well in this particular part of the race. The DCMS consultation is now over and the department is looking at the ultimate cut, as The Sun reported: “Matt Hancock wants to impose the smallest possible new maximum on FOBTs.”

And Tory MP Chris Philp backed the new secretary of state telling the newspaper: “The evidence shows that the cost of the social damage from addiction – whether it’s job losses or marriage break ups – far outweighs the loss of revenue to the Treasury”.

Time, then, for the twenty pounders to hold their nerve? Well, key voices in the horseracing industry are hoping that will be the case. Arena Racing Company chief executive Martin Cruddace last week described the impact of a £2 maximum stake as “pretty catastrophic” reducing as it would the sport’s income from ‘media rights and levy payments by at least £55 million’.

But industry trade bodies, most notably Bacta, have pushed hard for £2 and have provided powerful evidence that indicates a significantly lower impact on the bookmaking sector if the limit is reduced to the lowest level. The association is expected to maintain its lobbying activities throughout the run-up to the DCMS’s decision – a voice which will put added pressure on the Treasury.

But it’s back to Downing Street for the last say, suggests the Sun. “Theresa May will be forced to intervene between her feuding ministers,” the paper reported, which will only add the possibility of feuding neighbours into the mix of already feuding ministers.

Who’d be the leader of a minority Tory government at this moment in time?

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