MP Robertson issues warning over risk to racing from FOBT clampdown

The racing industry will be placed at risk if the government decides on a major reduction in FOBT stakes following its gambling review, according to Conservative MP Laurence Robertson.

In a rare example of political support for retail bookmakers, Robertson, whose Tewkesbury constituency includes Cheltenham racecourse, called on the government to take an evidence-based approach to its review.

Campaigners have called for the maximum stakes on FOBTs to be reduced to £2 from £100 to tackle problem gambling and it is widely expected the government will take action.

On Wednesday the betting shop industry's efforts to stave off government action on FOBTs were dealt a blow when Paddy Power Betfair chief executive Breon Corcoran wrote to ministers to say he supported a reduction in stake to £10 or less.

Seeing the issue as two 'sides'

In a letter to the Racing Post Robertson, who acknowledges he has received hospitality from bookmakers and racing bodies in his role as co-chair of the All Party Parliamentary Group on Racing & Bloodstock, said the debate on the issue had been polarised "by labelling those trying to help racing by seeking to protect its main income stream as being 'on the side of bookmakers'."

He continued: "Such accusations miss the point and prevent constructive debate on the issue by seeing the two as 'sides'.

"Bookmakers are not rivals or opponents of racing, but rather they are customers, and yet so many fail to appreciate that the fortunes of bookmaking and racing are closely intertwined.

Robertson is calling on the government to 'take an evidence-based approach' to FOBTs

"A failure to support bookmakers at this crucial time not only puts those businesses at risk, but also the sport of professional horseracing."

Robertson claimed a reduction in FOBT stakes would cause betting shop closures and a consequent fall in racing's income from the levy and media rights.

He added: "I’m afraid this point is lost on so many people, including MPs, who simply do not know of the connection between betting and racing. And here lies the danger."

Robertson said there had been an "emotive campaign" around the issue of FOBTs and that there had been inconsistencies in policy over problem gambling.

He concluded: "I am therefore calling for the government to take an evidence-based approach to this issue.

"By all means continue to tackle problem gambling wherever it exists, but calling for a balanced evidence-based approach to this issue is not to be 'on the side of bookmakers', nor is it to ignore the problems undoubtedly experienced by a very small minority of people.

'Well-meaning misguided thinking'

"There is, though, a wider picture to be considered and that includes protecting the future, and very existence, of the Cheltenham Gold Cup, the Grand National, the Derby, Royal Ascot and all the smaller races, as well as the thousands of jobs and exchequer receipts that come from racing and betting.

"All of this could be jeopardised by bowing to well-meaning but misguided thinking or, worse, to ill-informed prejudice."

It is understood the government's review will put forward four potential scenarios on FOBT stakes. One is the status quo, which is deemed unlikely to continue, a £2 stake and two figures in between.

Should Corcoran's suggestion of £10 be included it is understood there is little difference in impact on the industry between £2 and £10, as a lower machine games duty rate of 20 per cent applies to £2 stakes compared to 25 per cent on £10 stakes.

Robertson's letter in full . . .

As the government ponders its policy with regard to maximum stakes allowed on FOBTs, many of us are concerned about the potential impact on horseracing if bookmakers’ shops close as a result of any drastic reduction in stakes.

Let me declare my interests: I am the MP who represents Cheltenham racecourse, I co-chair the All-Party Parliamentary Group on Racing & Bloodstock and I accept hospitality from bookmakers, racing bodies and other organisations in some way connected to racing. These interests give me some experience and knowledge in the matter.

Unfortunately, many look to polarise the debate on this issue by labelling those trying to help racing by seeking to protect its main income stream as being ‘on the side of bookmakers’.

Such accusations miss the point and prevent constructive debate on the issue by seeing the two as ‘sides’. Bookmakers are not rivals or opponents of racing, but rather they are customers, and yet so many people fail to appreciate that the fortunes of bookmaking and racing are closely intertwined.

A failure to support bookmakers at this crucial time not only puts those businesses at risk, but also the sport of professional horseracing.

Revenue vital to racing industry

Of course, the profits from FOBTs don’t go directly to racing, but they do help to sustain the viability of betting shops. A reduction in the stakes on FOBTs risks shop closures, and without shops, levy payments to racing would also be reduced and media rights payments perhaps lost entirely.

This revenue is vital to the racing industry, helping to pay for prize-money and other costs; revenue that is vitally important when prize-money at the lower end of racing, while set to improve, is already modest.

I’m afraid this point is lost on so many people, including MPs, who simply do not know of the connection between betting and racing. And here lies the danger.

The Institute of Economic Affairs (IEA) says FOBTs have overtaken over-the-counter bets as the biggest source of gross gambling yield in bookmakers’ shops. Some believe that, if FOBTs were abolished or had their stakes reduced, this money would then be spent on racing bets. This is wishful thinking and there is no evidence to support the assertion.

If FOBTs go, bookmakers’ shops will go, and racing will lose out. That is my concern.

The government is under pressure from some MPs and outside bodies with vested interests to act on the FOBT issue. There has been an emotive campaign around it, asserting that FOBTs are the ‘crack cocaine of gambling’ and that problem gambling is on the increase because of them.

Laurence Robertson MP co-chairs the All-Party Parliamentary Group on Racing & BloodstockCredit: Mike Hewitt

However, The Gambling Commission has failed to demonstrate any increase in problem gambling since the inception of FOBTs, but it does show only around two per cent of the population actually bet on machines in betting shops.

Contrast this figure with the 30 per cent of the population who bet on the National Lottery and we arrive at an inconsistency in policy.

If the government is concerned about problem gambling, it should be concerned about it wherever it takes place, and not just with regard to FOBTs.

The National Lottery – of which I am a supporter in word and deed – has paid out more than £37 billion since its inception almost a quarter of a century ago. The point is this – the £37bn is money that has been lost by people as young as 16, and yet, rightly, there is no campaign calling for restrictions on this kind of betting.

Betting shop numbers have halved

A further inconsistency in policy is this: we often hear that people can lose £100 in 20 seconds on a FOBT. But according to the IEA, spending on FOBTs makes up only 13.5 per cent of total gambling expenditure in the UK, yet there is no limit to the amount someone can lose over the counter, betting on the internet, at the racetrack, on mobile phones or in casinos. Further – again rightly – there is no campaign to restrict these kinds of betting either. It’s all focused on FOBTs.

Again, looking at the evidence on the issue, the IEA also points out that, far from proliferating, as is claimed by opponents, the number of betting shops in existence has halved since their peak in the 1960s.

I am therefore calling for the government to take an evidence-based approach to this issue.

By all means continue to tackle problem gambling wherever it exists, but calling for a balanced evidence-based approach over FOBTs is not to be ‘on the side of bookmakers’, nor is it to ignore the problems undoubtedly experienced by a very small minority of people.

There is, though, a wider picture to be considered and that includes protecting the future, and very existence, of the Cheltenham Gold Cup, the Grand National, the Derby, Royal Ascot and all the smaller races, as well as the thousands of jobs and exchequer receipts that come from racing and betting.

All of this could be jeopardised by bowing to well-meaning but misguided thinking or, worse, to ill-informed prejudice.

Laurence Robertson MP
Member of Parliament for Tewkesbury

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