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Relief for bookies over gambling machines reports
Shares in bookmakers Ladbrokes and William Hill galloped higher on Monday after reports that they will avoid the worst scenarios envisaged from the government's triennial review on fixed-odds betting terminals.
As it stands, punters can bet up to £100 every 20 seconds on these electronic casino games, with the triennial review potentially had already decided to cut the upper limit to £50 but was mulling a further cut to the maximum stake that punters can bet to £20, £10 or even £2.
But the Gambling Commission has recommended the maximum stakes should only be cut to £30, The Times reported on Monday.
There is a "precautionary case" for a £2 stake limit for B2 slots games, the commission said, but it suggesting a maximum of "at or below £30" for non-slots such as roulette, which are far more popular and produce the bulk of revenues for bookies from these machines.
In January, reports emerged that new culture minister Matt Hancock would slash the maximum stake to £2 hit shares for the machines that have come to be known as the 'crack cocaine' of high street gambling due to their addictive nature. Hancock has previously called the machines a "social blight".
Although the commission's review is not the final decision, which rests with the Department for Digital, Culture, Media & Sport, it appears, said analyst Neil Wilson at ETX Capital, as if ministers will "blink first".
"Although the market had decided a £2 flat cap was looking less likely, the fact the Gambling Commission has left ministers with an easy out for a £30 is perhaps even better than hoped for," Wilson said.
"The government of course still has to decide whether to act on these recommendations or go for a lower cap. Given competing pressures for the DCMS (tax revenue), it would seem likely that it will follow the report and go for a £30 cap, although it may need to await the response from campaigners and MPs who back lower limits to test the water, as it were, as to the best course of action."
The big players may still take a hit, however, said Mike Van Dulken at Accendo Markets, but through their power of marketing ingenuity and ability to innovate is quite likely to make up for, if not offset, the loss.
He noted that Paddy Power Betfair is the odd one out of the three London-listed bookies, having been vocal about more severe curbs, "suggesting the segment is less important for it".