The UK Government's 12-week long consultation period on the future of fixed odds betting terminals (FOBTs) comes to an end this week, and with speculation rife that the government is ready to reduce the maximum stake to £2 the gambling industry is bracing itself.
According to reports in the Sunday Times newspaper, Matt Hancock, the newly-appointed Secretary of State for Digital, Culture, Media and Sport, favours a reduction to a maximum £2 stake.
Ahead of this, shares in Ladbrokes Coral, the subject of one of 2018’s biggest mergers, dropped by 11.84% to 159.7p a share, while shares in one of its main competitors William Hill dropped by 13.73% to 286p a share.
At the same time, shares in GVC Holdings, which is currently in the midst of a £3.9bn takeover of Ladbrokes Coral, also dropped by a more modest by 4%. Paddy Power Betfair also experienced a minor slump in its share price, which dropped by 1%.
Issuing a statement in response to the press speculation, Ladbrokes Coral Chief Executive Jim Mullen said: “The triennial review has been running for over 15 months and throughout that time there has been constant rumour and speculation about potential outcomes, of which this is yet more. It should be noted that the current call for evidence is yet to conclude and industry responses have not yet been submitted to Government.
"We are very clear that stake cuts will fail to adequately address any issue of problem gambling. The industry has also always made it clear that a cut to stakes will have serious consequences – resulting in shop closures which will ultimately affect jobs, tax revenue and the funding of racing.
"There is also no evidence that machine customers will switch their spend to sports betting such as horse racing, and our experience is that they won't. Any policy made on this assumption would result in a significant reduction in the level of funding for horse racing.
“We will continue to make the case for a sensible measured, evidence led and proportionate response to the public concern regarding these issues and this will be the basis of the evidence submitted as part of the ongoing review."
City insiders have estimated that Ladbrokes Coral would lose £437m in annual revenue, with William Hill and Paddy Power Betfair losing £288m and £60m respectively should the maximum stake be reduced to £2.
Figures released by the Association of British Bookmakers (ABB) forecast that over 3,000 betting shops in the UK could be at risk of closure due to the curbs, with potentially over 15,000 job losses.