After partying hard following the US Supreme Court’s decision legalising sports betting, bookies woke up this morning to trouble at home.
The Government has, for once, put the public interest ahead of a corporate interest by proposing to cut the maximum allowable stake punters can place through fixed odds betting terminals (FOBTs) to £2 from the current £100.
That was the toughest option on the table as part of a triennial review. The most palatable alternative to the industry had been £50. There were two lower compromises but they too have been rejected.
The long delayed decision has put Culture Secretary Matt Hancock in a tough spot. His constituency includes horse racing’s Newmarket hq and there will be an impact on the sport of kings.
It is funded through bookies’ racing profits, and the rights fees they pay to screen racing at their outlets. If, as expected, lots of betting shops close through being made unprofitable both will take a hit. Officials are, we are told, thinking about ways to ameliorate the impact.
Spare a thought too for the people who do a very tough job working in betting shops for not much pay. Some of their jobs will be lost. The number of lay offs could prove to be quite high. William Hill reckons up to 900 shops could be made unprofitable with group revenues facing a hit of up to 45 per cent.
But the decision was still the right one.
The evidence of harm has been mounting. The opportunity FOBTs provide for thrill seeking punters, for addicts, to stake £100 every 20 seconds and potentially rack up thousands of pounds in losses is a temptation too much for some. Misery is the all too frequent result, and the price is paid not just by them but by their families.
Not for nothing are FOBTs often dubbed the “crack cocaine of gambling” because of their impact on users.
But they’ve beem an addiction to bookmakers too, for whom they’ve for years served as a money pit, a tarnished golden goose whose eggs have kept dividends fat.
That industry will now have to look elsewhere for earnings.
So it’s time for bookmakers’ CEOs to make good on the gamble their investors have taken on them.
They are heavily punted on because they are supposed to be good at business, at dealing with tough challenges like this one, at innovating and creating new earnings streams.
This presents them with an opportunity to prove their worth and not just in the City’s parade ring. They’re needed on the track, even if the going report reads ‘hard’.