The Government’s crackdown on addictive gambling machines could be challenged in the courts by one of Britain’s biggest bookmakers.
Betfred, owned by billionaire betting moguls Fred and Peter Done, is understood to be considering a judicial review to try to overturn plans to limit the sum punters can bet on roulette machines.
Fixed-odds betting terminals (FOBTs) are known as the ‘crack cocaine’ of gambling because they encourage low-income Britons to lose £1.8 billion of bets a year.
Addictive: Britons lose £1.8 billion a year on fixed-odds betting terminals
On Thursday last week, Sports Minister Tracey Crouch announced that the maximum punters can bet on each 20-second ‘spin’ would be cut from £100 to £2, as part of measures to tackle problem gambling.
The result of the long-debated review was welcomed by anti-gambling campaigners, who call FOBTs a ‘social blight’. But Betfred, which links managers’ wages to the profitability of their shops, accused Ministers of playing ‘politics with people’s jobs’. Betfred boss Mark Stebbings said: ‘This disproportionate stake cut is clearly not evidence-based but a political decision.’
He added that the consequences would include ‘direct and indirect job losses, empty shops on the high street, and a massive funding hit for the horseracing industry’.
In total, the Association of British Bookmakers has said 21,000 jobs could be lost, and more than 4,000 betting shops could close, leaving a swathe of empty shops on already struggling high streets.
Betfred, based in Warrington, Cheshire, is Britain’s biggest privately owned bookmaker, with 1,650 shops and 12,000 staff.
Fred Done, 75, and his brother Peter, 71, founded the firm 51 years ago and have amassed a £1.35 billion fortune. The siblings gave £250,000 to the Conservatives last year, putting them among the party’s top donors. Their firm has lobbied hard against the crackdown on FOBTs, first announced in 2015. Last week, Betfred made a last-ditch attempt to lessen the expected cut to the maximum stake by urging staff to lobby their MP. A leaked email from Stebbings said the ‘drastic’ move would have a ‘significant impact’ on the ‘viability of the number of our shops and therefore employment’.
Betfred also begged Culture Secretary Matt Hancock not to ‘sacrifice betting shops’ in a joint letter with William Hill, Scotbet, Jenningsbet and GVC Holdings, the new owner of Ladbrokes Coral. But their pleas fell on deaf ears. In a double blow, the Treasury also said it would raise the tax payable on bookmakers’ online operations in the next Budget.
On the day the news was announced a senior source at one bookmaker said: ‘I’m going to turn my phone off and get drunk.’ Another said independent firms could be ‘wiped out’ by the change, as part of a wave of consolidation in the industry.
Greg Knight, head of family-run bookmaker Jenningsbet, called for the Chancellor to help bookmakers by cutting the 15 per cent tax on the profits of bets placed in high street shops. He added: ‘The Treasury will get the worst of both worlds unless it eases the retail tax burden.’
Last week, FTSE 250 firm William Hill, which says the FOBT crackdown could wipe £100 million off its operating profits, warned it could fall prey to a foreign takeover.
If Betfred launches a judicial review – a specialist form of litigation designed to challenge decisions by a public body – a High Court hearing could be held within six to nine months. The company declined to comment on any legal action.
Virgin boss Sir Richard Branson used a judicial review to win back control of the West Coast train line in 2012, overturning a decision by the Department for Transport. But claimants have less than 50 per cent chance of winning, and a challenge would cost Betfred hundreds of thousands of pounds in legal fees.
Nusrat Zar, a partner at Herbert Smith Freehills, represented Branson’s Virgin Trains. She said: ‘Judicial reviews can be a difficult form of litigation to win because it is a high hurdle to prove a decision by a public body was unlawful.’
GVC, run by Kenny Alexander and former HBOS boss Andy Hornby, said it was ‘disappointed’ by the Government’s decision but ruled out launching a judicial review.
Only Paddy Power Betfair, which has just 620 high street branches in the UK, called the crackdown a ‘positive development’ for the gambling industry, citing the ‘reputational damage’ of FOBTs. The firm is in talks to expand in the US, via a tie-up with sports website FanDuel, after the US Supreme Court paved the way for legalised sports betting in America last week.
Racehorse trainer John Gosden said he had ‘great concern for people in the betting industry whose jobs are at stake’, but that the Government’s decision was inevitable.