Paddy Power Betfair’s CEO Breon Corcoran has sided with proponents of the idea for a dramatic reduction in the maximum bets accepted by the highly controversial fixed-odds betting terminals. According to a letter written by the executive to UK Sports Minister Tracey Crouch and obtained by the Financial Times, his supports a reduction from £100 to “£10 or less”.
Mr. Corcoran’s comments come at a time when the UK gambling industry is suffering heavy criticism for failing to curb rising instances of addiction among its customers.
A review of the industry is due to be released by the Government in late-October and FOBTs and the future of UK’s retail gambling sector will be its main subject. Multiple responsible gambling organizations and other involved parties have called for a reduction in the maximum stake that can be wagered on FOBTs for years now, and it is believed that such a change will eventually be implemented following the publication of the review.
Paddy Power Betfair operates around 300 betting shops with FOBTs in the UK. Barclays analysts have estimated that the company could lose around £32 million in revenue from the controversial machines in 2018, if the maximum stake is reduced to £10. In comparison, Ladbrokes Coral and William Hill, which operate UK’s largest chains of betting shops, could lose over £276 million and £182 million, respectively.
Mr. Corcoran’s Comments – Commercialism or Real Concern?
Mr. Corcoran wrote in his letter that the FOBTs issue has become “so toxic” that only a considerable reduction in the maximum stake could alleviate “societal concerns”. The executive pointed out that Paddy Power Betfair would be able to operate a profitable business if a reduction to £10 is implemented.
The major operator’s CEO pointed out that the waive of negative comments towards the industry in relation to the FOBTs issue have raised concerns about hiring new employees as people could feel discouraged to work in a field so heavily criticized.
Shortly after Mr. Corcoran’s comments were made public, Donal McCabe, External Relations Director at rival Ladbrokes Coral, said that these could be interpreted as “opportunistic commercialism” rather than as “concern over the sector”. Mr. McCabe further suggested that given Paddy Power Betfair’s strong online presence and its relatively small stake in UK’s retail betting industry, it would not suffer as much as his own company and other stakeholders from a potential reduction in the maximum stake accepted by FOBTs.
According to latest media reports, a reduction will indeed be implemented, although it is still unclear by how much exactly the maximum wager will be reduced by British MPs. Proposals that are currently discussed include the drastic implementation of a £2 maximum bet and a more industry-friendly reduction to £20-£30.
The actual scope of the looming FOBTs crackdown is to become known in late-October.
