Monday 1 April 2019

How many bookies will close?

Today saw the introduction of the £2 cap on stakes for fixed-odds betting terminals. Like the introduction of minimum pricing eleven months ago, it gives us a chance to see how the promises of nanny state campaigners bear up against reality.

It's all quiet on the minimum pricing front, although I gather that the number of units of alcohol sold in Scotland rose by around four per cent in the first six months.

With regards to the dreaded FOBTs, various anti-gambling campaigners have claimed that punters will abandon high stakes digital gambling in favour of betting on horse racing and sports. There will, they say, be little impact on high street bookies. By contrast, I have always said that punters will go online and at least a thousand bookies will close - with the loss of several thousand jobs. I also predict that the rate of problem gambling will remain within the same narrow band of between 0.4% and 0.9% that it has been in for the last 20 years.

The early signs are that I'm on the right track. Even the Guardian's anti-FOBT correspondent Rob Davies admits that 2,300 of Britain's 9,000 betting shops could close and the big bookmakers are already in the process of wielding the axe...

Ladbrokes is to close up to 1,000 shops this year in a move that could put "thousands" of jobs at risk. The bookmaker, which is part of the Ladbrokes Coral group, currently has 3,475 stores.

.. William Hill announced in January that it may have to close up to 900 stores over the next two years, in a move that could affect 4,500 jobs.

Let's face it. The mass closure of betting shops is a feature, not a bug, of this policy.

Meanwhile, it's worth reading this article by the Independent's business reporter Ben Chapman, who is virtually the only journalist who has bothered to do any real research about this moral panic.

Just three weeks before the stake cut is due to come into force, DCMS quietly released a report detailing major flaws in the evidence relied on for the policy. The department has sat on the report for a year.

The Regulatory Policy Committee (RPC) report shows that while bookmakers will lose out when stakes are cut to £2, other parts of the gambling industry stand stand to scoop a £440m windfall as players shift their behaviour.

Even this figure may be an underestimate because it is not based on empirical evidence, the RPC report reveals.

Some of the hundreds of millions of gambling losses that will migrate from FOBTs are likely to flow to sectors such as arcades and casinos which spent large sums lobbying MPs for the FOBT stake cut.

Casinos and arcades possess slot machines with many of the same addictive features as FOBTs.

Because these machines are faster than FOBTs and pay out less, players can lose money on slots just as quickly - even at drastically lower stakes.

The RPC – an independent government body which evaluates the evidence behind proposals - initially found that DCMS’ impact assessment for the £2 stake policy was “not fit for purpose”.

The main point of Chapman's article is that no adequate process of evaluation has been put in place for this policy. That will suit the anti-gambling crowd well. In any case, FOBTs will soon be forgotten when we rerun the whole panic substituting 'online gambling' for 'fixed odds betting terminals'.

No comments: