And they’re off! Shares in the gambling sector have rallied, following the publication of the government’s long-awaited recommendation on gambling on Tuesday. Investors across the sector have responded to an apparent decision by government to kick a reform of the gambling industry in to the long grass, following the launch of a further consultation on fixed-odds betting terminals (FOTBs).
Whilst Gambling Minister Tracey Crouch MP announced that the maximum stake on FOTBs will be reduced, the launch of a consultation on to the extent of this reduction shows a marked wavering of the government’s resolve on the issue. Rumours that a £2 maximum stake may be considered had previously caused a hiatus in sector investment, but the wording of the new consultation suggests that a cap of £20 is more likely.
Following a year of deliberation, it appears that divisions between senior ministers and HM Treasury over the extent of the reduction has caused the government to reconsider the benefits of a drastic reduction in the cap. A move which may draw heavy criticism from stakeholders, both within and without parliament, who are concerned about the social detriment FOBTs can cause. But it has been estimated that the introduction of a £2 maximum cap would cause an estimated £639 million profit loss – and a heavy hit to the Treasury. Economic realities appear to have to have won out over social responsibility, despite the government’s continuing emphasis on social justice and consumer protection as its raison d’etre.
A final decision on the maximum limit is likely to take time, causing further uncertainty in a market that has waited over a year for this first steer on how the government will approach gambling regulation. The launch of a further 12-week review indicates that the government has yet to finalise its approach, and continues to struggle to protect vulnerable consumers while also maximising Treasury receipts at a time of continuing austerity.