A worrying trend for UK retail sportsbooks
A new report shows that more than 1,000 betting shops across the UK have closed since restrictions were placed on fixed-odds betting terminals (FOBTs) in April 2019. This works out to an average of four betting shop closures per day.
there could be a total of 2,000 shutdowns within the next three years
More stores are expected to shut down their business in the foreseeable future. According to estimates, there could be a total of 2,000 shutdowns within the next three years.
If this were to happen, only about 6,635 betting shops would remain open across the UK. Since April, 1,037 stores have closed, with an additional 982 deeming it very likely that they will also have to cease operating by 2021.
A lot of jobs could be lost
If there are as many closures as forecasted, approximately 11,000 employees will be out of work. This represents about 10% of the total workforce of the UK gambling sector.
approximately 11,000 employees will be out of work
Betfred founder Fred Done described the current state of affairs for retail betting shops. He said: “We are fighting for our lives. When Mothercare closed there was lots of sympathy for the people who lost their jobs. But I haven’t heard a single politician show sympathy for anyone out of work in the betting industry. We don’t matter to the Government.”
An anonymous industry source in the report said the closures can have a contagious effect on other high street retailers, not just betting shops. The source maintained that “when you see boarded-up shops it brings everything else down with it” and called the issue a “ticking time bomb”.
Prominent bookmakers are struggling
Of the 1,037 stores to shut down, 700 were William Hill outlets, 198 belonged to Ladbrokes Coral, and Betfred accounted for 70 shops. Ladbrokes Coral has plans to cease activity of another 702 retail joints, with Betfred looking at up to 500 additional closures. The decision for closure depends on the monthly performance of a given betting shop.
Scotbet, previously the leading independent bookmaker in Scotland, has been in receivership since July. The receivers of Scotbet have kept 30 of the 41 betting shops open.
The crackdown on FOBTs
FOBTs were very popular in betting shops across the UK as they offered a quick way to place bets. This often led to people racking up significant losses within short periods.
The UK Government reacted by cutting the maximum stake for FOBT machines from £100 ($128.89) down to £2 ($2.58). The decision was announced in May 2018, with the curtailment only coming into place on April 1, 2019.
As FOBTs were a major revenue driver for betting shops, retail betting shop profits crashed by about 60% overnight.
The Managing Director of Jenningsbet, Greg Knight, believes the FOBTs stake cut has not achieved its intended result. He said a lot of gamblers have switched over to other types of gambling that are not as well-regulated, namely adult gaming centers.