This week, bookmakers of Britain could lose their shirts on high street gambling machines as ministers prepare to reduce the maximum stake allowed.
The triennial review of the Government on the betting industry is anticipated to take action on fixed-odds betting terminals that are known as the “crack cocaine” of gambling because they allow gamblers to bet as high as £100 in a single 20-second flutter.
The maximum bet is probably going to decline to between £50 to £20 per spin. However, it could plunge to lows of only £2 amid appeals for tough action from the Democratic Unionist Party and a prominent cross-party group of MPs.
Last year, the chairman of the parliamentary group, Carolyn Harris, said that there was “a clear case” for the highest stake on fixed-odds betting terminals to be reduced from £100 to only £2.
However, analysts have suggested that the move would wipe millions from the gambling industry in a single stroke, delivering a major setback to tax revenues and jobs while also affecting the horse-racing sector. In 2015, it was estimated about 100,000 people were employed by the gambling industry.
Ladbrokes Coral has the largest exposure in the industry to gambling terminals. Analysts have predicted that even lowering the maximum stake to £10 per spin could reduce the £2.4bn giant’s earnings per share by more than a quarter. Both William Hill and Ladbrokes have experienced a year-long share price losing streak.
Last summer, the shares of William Hill had dropped to 246p from over 330p while the market value of Ladbrokes has faltered from 162p a share to 124p.
The push for a £2 maximum stake was “the worst case scenario from the perspective of UK bookmakers,” stated a gaming analyst at Goodbody, Gavin Kelleher.