Shares plunge as Chancellor accepts FOBT limit
UK bookmakers’ share prices tumbled this morning after it was reported that the government is set to accept recommendations for a new £2 (€2.29/$2.79) stake limit on fixed-odds betting terminals (FOBTs).
Last month, the UK Gambling Commission (UKGC) published recommendations to support the government with its review of FOBTs, including limiting stakes on slot games to £2 and non-slot games to £30.
The report received mixed reviews, with a number of campaign groups backing the move to lower the top stakes, but others calling for tougher action.
The Times newspaper said that Chancellor Philip Hammond delayed signing off on the limits due to the impact it could have on gambling taxes and how much the government makes from such activities.
However, the Times reports that the Treasury yesterday (Monday) signalled a deal is close, with Hammond nearing an agreement with Culture Secretary Matt Hancock.
A source from the Department for Digital, Culture, Media and Sport (DCMS) told the Times the deal could include increasing levies on other forms of gambling to make up for lost funds from FOBT taxes.
The Times said an official announcement will not be made until after next week’s local elections, due to UK election rules.
News of a possible deal has hit the gambling community, with a number of major operators having suffered a sharp drop in share price.
Shares in William Hill were down as much as 14% today and Paddy Power Betfair down 4%, while GVC, which owns Ladbrokes Coral, also saw shares drop 7% this morning.
GVC’s takeover offer for Ladbrokes Coral, which went through last month, was dependent on FOBT stakes in the UK market.
The deal included Ladbrokes Coral shareholders receiving 32.7p per share and 0.141 new GVC shares, with a further contingent entitlement of up to 42.8p depending on the government ruling on FOBT stakes.