Mail victory on 'crack cocaine' gambling machines: Blow for bookmakers as Osborne hikes levy on 'highly lucrative' fixed-odds betting terminals from 20% to 25%
March 10, 2015
Campaigners and the industry say the rise will not help problem gambling
The Mail has campaigned against the machines, which are found in high street betting shops and allow users to lose up to £100 per spin
Critics say they are highly addictive and make casino-style gambling accessible on the high street
Betting machines dubbed the ‘crack cocaine’ of gambling will be taxed more heavily – but campaigners and the industry say the duty rise will not help problem gambling.
In a blow for bookmakers, whose shares fell yesterday, George Osborne said Fixed Odds Betting Terminals (FOBTs) were ‘highly lucrative’ and he was hiking the levy on them from 20 per cent to 25 per cent.
The Mail has campaigned against the machines, which are found in high street betting shops and allow users to lose up to £100 per spin. Critics say they are highly addictive and make casino-style gambling accessible on the high street.
Addictive: The Mail has campaigned against the machines, dubbed the 'crack cocaine' of gambling
They have been blamed for a rise in problem gambling and account for half of bookies’ earnings.
The move could wipe £79 million off the industry’s profits but campaigners say it does nothing to address the high stakes of the machines and recent proliferation of them on high streets.
Adrian Parkinson, of the Campaign for Fairer Gambling, said: ‘It may well aid the Treasury, but does little to deal with the many issues created by these machines.
‘Problem gambling research, education and treatment will not see any of this revenue, and the addictive nature of FOBTs means the bookmakers will still be raking in huge sums.’
He said ministers should focus on the ‘social and economic cost’ of problem gambling, which far outweighed the revenue the machines generated – even at 25 per cent.
‘The Government should be dealing with the root of the rather than tax the losses of those addicted to them . . . but with only one NHS problem gambling clinic in the UK, this seems a long way off,’ he said.
Mr Osborne said: ‘Fixed-odds betting terminals have proliferated since gambling laws were liberalised almost a decade ago. These machines are highly lucrative and therefore it’s right we now raise the duty on them to 25 per cent.’
Britain’s 33,000 FOBTs have been under mounting scrutiny in recent months – with the Mail leading campaigns to highlight their dangers.
The machines allow players to stake up to £100 a time on a 20-second spin of a wheel for games such as virtual roulette.
Bookmakers are allowed a maximum four FOBTs in each of their premises. They have become so popular that it is claimed they account for up to 80 per cent of the profits in some high street betting offices.
The Association of British Bookmakers said they paid £50 million tax on the machines last year and claimed this move would threaten 15,000 jobs and 3,000 betting shops. A spokesman said: ‘Thirty per cent of our shops make less than £300 profit in a week, and many are small family-run businesses.
This knee-jerk and ill-considered tax raid means their futures are now on the line.’
The association also said yesterday’s move would have ‘absolutely no impact on levels of problem gambling in the UK’. The industry is working with the Government on a voluntary code to address concerns about FOBTs, and betting bosses have mounted the bizarre defence that the revenue they generate supports horse and greyhound racing.
Shares in the bookmakers plunged yesterday following the announcement, wiping millions of pounds off their value. Ladbrokes, the second largest firm, saw its shares slump by 12 per cent, and William Hill, the market leader, dropped 7 per cent. Bookies claim the tax hike will cost the industry £79 million a year.