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Government Announces ‘Humiliating’ U-Turn on New FOBT Maximum Stake Laws

Chancellor Philip Hammond
Image via Chatham House, flickr

While it hasn’t quite been as painful and drawn out as the Brexit negotiations, it would be also be fair to say that the government has made a complete mess of the implementation of the new FOBT laws that would see the maximum stake reduced to £2.

It’s a necessary change and one that has been in the pipeline for more than six months since the UK Gambling Commission produced their report into the harm the machines cause.

The government, after some cajoling, agreed to implement this new maximum stake, and had pencilled in a delivery date of April 2019 for the legislation to ‘go live’.

And then came a huge surprise: the chancellor, Phillip Hammond, announced that the delivery date of the changed regulation had been put back to October 2019, in an attempt to give bookmakers more time to plan for their loss of revenue.

Well, that went down like the proverbial flatulence in a spacesuit….

Rebels Shout the Loudest

Letter of Resignation

There was derision, anger and mostly shock when the chancellor announce as part of his Autumn Budget statement that the FOBT laws would be delayed six months.

The betting industry would trouser an extra £90m in their added time – they weren’t exactly bemoaning that, but the bigger picture of the blight that FOBTs cause in the wrong hands could not be overlooked.

So impassioned was the former Minister of Sport, Tracey Crouch, about the decision she resigned from her post, while a group of some 100 rebel MPs, including big hitters like Iain Duncan-Smith, came together to file an amendment to force the original April date through.

As we know in UK politics at the moment, people power tends to win the day….

Another Headache for the Prime Minister

U Turn SignAlready getting heat from all corners about her bungled Brexit escape plan, you can hardly blame Theresa May for giving in to the masses.

And so she shelved her chancellor’s plans and issued confirmation that the £2 maximum stake would be introduced in April as planned all along. She revealed as such in a Prime Minister’s Questions exchange with Duncan-Smith, which must have left Hammond feeling rather embarrassed.

The shadow culture secretary, Tom Watson, went a stage further, declaring the move a ‘personal humiliation’ for his Conservative counterpart Jeremy Wright.

“This climbdown shows the disastrous political judgment of Jeremy Wright and Philip Hammond,” he said. “It’s very sad that it took an honourable resignation of a good minister [Crouch] and a cross-party revolt to achieve the blindingly obvious and necessary reforms to FOBTs.

“Whilst this is a personal humiliation for Jeremy Wright, this is a very good day for the many thousands of people whose families and communities are blighted by gambling addiction.”

The move, which comes hot on the heels of an increase in remote gaming duty from 16 to 21%, has been met with unsurprising disappointment from the industry.

The Remote Gambling Association’s chief executive, Clive Hawkswood, told The Racing Post “It is frustrating that no consideration at all seems to have been given to the fact that this also means the online gaming sector could now face an additional tax hit of around £100m, over and above the expected £200m-plus a year it had already been saddled with,” he continued.

There was a silver lining for GVC holdings, the parent company of Ladbrokes and Coral however, with Reuters reporting that the gaming giant would avoid paying in the region £670 million to former Ladbrokes shareholders had the FOBT stakes reduction not been moved back. Shares in GVC Holdings rose as high as 8% following the news.