Paddy Power Betfair is breaking ranks with its industry in the UK by calling on the government there to impose tough limits on the amounts bet in gaming machines.
The British government is under pressure to curb the use of betting machines, known as fixed-odds betting terminals (FOBTs), in UK betting shops, as they are blamed for an increase in problem gambling.
Paddy Power Betfair chief executive Breon Corcoran has written to Tracey Crouch, Britain's parliamentary under secretary of state for sport, saying the government should cut the maximum customers are allowed bet in FOBTs to £10 from £100.
Mr Corcoran’s letter states that his company believes the issue has become “so toxic” that only the reduction that he is recommending would address society’s concerns.
A recent British government review of FOBTs proposed either allowing the status quo to remain, which is not believed to be viable, cutting the maximum stake to £2, or imposing a limit of £20 to £30.
The Irish group's position puts it at odds with the rest of its industry in the UK, where big players such as Ladbrokes Coral and William Hill warn that strict limits on FOBTs could force bookie shop closures and cost jobs.
Deprived areas
Anti-gambling activists want the limit slashed to £2. Britain’s 9,000 bookie shops earned profits of £1.8 billion from the machines last year. Some reports suggest a disproportionate share of this comes from deprived areas.
Mr Corcoran’s letter states that his company is not aware of any evidence linking stake size to problem gambling, but is aware of the increasing damage that the controversy has inflicted on its industry’s reputation.
“We believe that this undermines the role of the sector as a provider of entertainment, employment and tax revenue, in addition to being a much-needed supporter of sports such as horse racing,” he says.
He adds that Paddy Power Betfair could run its retail business successfully and profitably with a £10 limit. “Other well-run operators should be able to do the same,” he says.
Paddy Power Betfair has about 350 betting shops in the UK. Mr Corcoran said last month that it had already told staff that restrictions on FOBTs would not force it to close outlets.
Ladbrokes Coral has more than 3,500 shops across England, Scotland and Wales, while William Hill has 2,300. If the maximum were cut to £2, Barclays estimates that Paddy Power would lose £55 million in revenue, while Ladbroke Coral would lose £449 million.
Earlier this week, the Labour Party, the biggest opposition group in the British legislature, demanded that the betting industry be charged to pay for gambling addicts' treatment.
Q&A
What are fixed-odds betting terminals?
FOBTs are machines used in UK betting shops that allow punters to bet on roulette and other casino-type games. Each outlet is allowed a maximum number of machines and the biggest single bet allowed in each is £100.
Why are they a source of controversy?
Dubbed the “crack cocaine of gambling” members of parliament and other activists say they are a key cause of betting addiction.
What is the British government doing?
It has carried out a review that is expected to recommend that the status quo remain, that maximum bets be cut to £2, a move sought by the machines’ opponents or introducing a new compromise maximum of £20 to £30.
What is the betting industry’s position?
That there is no evidence linking them to problem gambling and that limiting their use could cause job losses in bookie shops already struggling to compete with online gambling.
Are they used in this country?
No: while there was some debate a decade ago over their exact legal status, the view is that their use here is against the law.
