The UK government has agreed to move up the date of a cut in maximum bets allowed on fixed odds betting terminals to April in the face of growing opposition in parliament.
The UK will cut the maximum bet allowed on the terminals from £100 to £2 after problem gambling advocates and other groups launched a concerted effort to have the max bet slashed. The groups said the £100 stake allowed problem gamblers to lose huge amounts in the matter of minutes.
The government agreed to make the change, and it was widely reported that they would go into effect in April. However, the date for implementing the cuts was then set for October when an increase on taxes for online gambling from 15 percent to 21 percent was also scheduled.
That set off a new wave of protest and led more than 100 conservative MPs to sign off on an amendment to the government’s budget bill designed to force the cuts to be made earlier. The amendment also gained support with the country’s labor party.
The controversy also caused MP Tracey Crouch to resign as sports minister after the change to October was announced.
Culture Secretary Jeremy Wright, however, issued a written statement last week confirming that the government was bowing to the pressure and the stake reduction would now take place six months earlier.
“The government has been clear that protecting vulnerable people is the prime concern, but that as a responsible government it is also right to take the needs of those employed by the gambling industry into account and provide time for an orderly transition,” the statement said. “Parliament has, however, been clear that they want this change to be made sooner. The government has listened and will now implement the reduction in April 2019.”
“This climbdown shows the disastrous political judgment of Jeremy Wright and Philip Hammond,” said Tom Watson, deputy leader of the Labor party. “It’s very sad that it took an honorable resignation of a good minister 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 amendment would have targeted a hike in the country’s online gambling tax from 15 percent to 21 percent. That has also been scheduled for October to offset the loss in tax revenue from the FOBT stake cut, but the amendment would have read that the tax increase cannot go into effect unless the FOBT cut was made in April, according to various UK reports.
In a related matter, GVC Holdings may have benefited from the change in date and may be spared a major cash outlay to former Ladbrokes shareholders.
GVC would have been liable for a payment of about ₤670 million to former Ladbrokes shareholders if the UK had not moved to cut the FOBT stake under its acquisition deal for Ladbrokes by March of next year.
Though now set for April, analysts tell Reuters they expect enactment of the statutory instrument to make the cuts to be enacted this week, meaning GVC will not have to make the payout.
According to Reuters, GVC issued securities known as Contingent Value Rights as part of their takeover of Ladbrokes in March 2018. The CVR required GVC to make the payment to former Ladbrokes shareholders if the cut in FOBT stakes was not implemented by March 28, 2019.
