The Regulatory Policy Committee (RPC), an institution with the primary role of analysing government policies in the UK, has said that the losses due to the reduction in FOBTs stakes may not be as “severe” as predicted.
In August 2018, the UK government announced a massive reduction on the maximum stakes in FOBTs (Fixed Odds Betting Terminals) or bots as they are called locally. The FOBTs in the UK could accept stakes worth £100 ($135). However, with the new rule, the stakes are to be limited to a maximum of £2 ($2.75), starting April 1, 2019.
The decision had stirred massive debate in the UK, and now it is once again picking up as the time for implementing reduced stakes at FOBTs (April 1) draws closer. The bookies have been crying foul and have incurred losses. Amongst the biggest losers is bookmaker William Hill who has reported losses worth £722m ($958m) for 2018. It is primarily attributed by the bookmaker to the reduction of stakes, citing he has managed to rake in profits of £147m ($195m), the year before.
Amidst all this, the new report from RPC has claimed that the decision the Department for Digital, Culture, Media, and Sport (DCMS) took in 2018 and which will take effect from April 1 this year will not have such severe consequences in terms of losses to bookmakers.
According to RPC, the reduced stakes will see a somewhat proportionate increase in the number of sessions, as given the lower stakes players will take a higher number of bets. The report estimates that there will be a 28% increase in the number of sessions while there will be a 10% reduction in the number of players due to reduced stakes. However, according to the predictions estimating the impact of the newly reduced stakes at FOBTs the entire industry may suffer a loss of £540m ($716m).
In the UK, there have been mixed opinions about the new measures. The Centre for Economics and Business Research (CEBR) had suggested that the family and relatives of FOBT players lose £1.5bn ($2b) annually and that with the reduced stakes, they can avoid significant losses.
For the past one year, these figures have been used by all those who have been in favour of the new developments; however, there has been no substantial statistics presented by the CEBR as to how they dug these figures.