New FOBT Drama as Government Report Comes Under Scrutiny

In a shock report written in the Guardian today, it seems that the UK government is in hot water over its decision to postpone a cut on maximum FOBTs stakes.

The newspaper claimed that the government instead based its decision to postpone cutting maximum stakes on fixed odds betting terminals (FOBTs) on a “discredited” report that was commissioned by bookmakers themselves.

Last week, chancellor Philip Hammond said the need to mitigate job losses was a deciding factor in postponing the implementation of the maximum stake reduction from £100 to £2.

Industry jobs over addicts’ lives

Hammond has suggested to the Treasury select committee that the industry could see job losses of between 15,000 and 21,000 when FOBT stakes are capped at £2. The industry has asked the government to allow it time to mitigate these job losses by adjusting their business models to operate within a new gambling landscape.

But this wasn’t an argument easily accepted. Indeed, committee chair, Nicky Morgan, called out the verdict and said as a result that Hammond was more concerned about industry jobs than addicts’ lives.

In this latest twist, UK newspaper The Guardian has found documents that suggest the report used to come to the decision was commissioned by accountancy firm KPMG, and warned the key assumptions on which the report was based had been set out by the Association of British Bookmakers (ABB). The inclusion of the disclaimer would indicate that there is a potential conflict of interest.

KPMG said the report was written “to meet specific terms of reference” that had been set out by the ABB, with “particular features determined for the purposes of the engagement.

Important figures agreed with the industry

KPMG’s report stated “the report should not therefore be regarded as suitable to be used or relied on by any other person or for any other purpose” and that figures that were crucial to estimating how customers would respond to changes in FOBT stake limits had been “agreed with the industry”.

The disclaimer in effect means the report’s content had been agreed as opposed to researched and, as a result, its inclusion in the government’s decision to postpone the implementation of the cap is being widely criticized.

Despite the disclaimer, the KPMG report was distributed to Treasury officials including Exchequer Secretary to the Treasury, Andrew Jones MP.

High street names such as Paddy Power have also cautioned the government against using the report, saying that some of the assumptions made in the report, as well as some of the figures, were “unrealistic”.

Paddy Power questioned the report’s estimates of betting shops that would have to close due to the stake cap, saying “the business is not expected to see an increase in the number of shops that are loss making compared to the current position, and therefore does not expect to close any shops because of changes to FOBT stake limits”.

Paddy Power concluded that while there would be a significant impact on the industry when the cap is introduced, it would not be as severe as the ABB has predicted.

Campaigners concerned for addicts

Labour MP Carolyn Harris, a prominent campaigner for the cap to be introduced as soon as possible, has said: “The chancellor has apparently decided to delay the stake cut on FOBTs because of data in a widely discredited report. This is policy making of the worst kind, not based on evidence and pandering to a corporate interest at the expense of the public interest and the protection of the vulnerable.”

Fairer Gambling, a campaign group within the gaming industry, released a statement that said: “Philip Hammond has got his sums wrong by basing them entirely on bookie-funded research that hasn’t been made available for public scrutiny.

“The job loss estimates by KPMG are greatly exaggerated, but irrespective of that the chancellor should be aware that FOBT spend yields far fewer jobs than if that spend was diverted to the wider economy as a result of a £2 cap.”

In response to these claims, a Treasury spokesperson said: “We consulted widely with interested parties – including charities and all parts of the gambling industry – before considering all of the evidence and making a final decision.”

The delay in implementing the cap has caused cross-party anger, with some seeking to overturn the decision to postpone. The vote to review the implementation date is likely to be held on the same day as the Brexit deal vote.