The Treasury will lose more than £100m for every year that it postpones curbs on bookmakers’ fixed-odds betting terminals (FOBTs), according to a report.
The government has agreed to slash the highest-permitted stake on FOBTs from £100 to £2 after concluding that they are a “social blight”, but it is considering postponing the change until 2020.
The delay is thought to be the result of concern among Treasury officials about the impact the policy would have on the £457m it collected in tax from the machines last year.
However, fresh research by the Centre for Economic and Business Research (Cebr) claims the Treasury stands to make money from the cut.
The thinktank estimates that machine gaming duty (MGD) receipts would decline by £287m a year but this would be more than offset by £419m of other benefits.
It cited the Treasury’s plan to increase online gaming taxes to compensate for the FOBT curbs and predicted many gamblers would switch from £100-a-spin machines to other products that also incur tax.
The Cebr factored in an estimated £19m economic benefit from a minority of FOBT users whose money would be diverted out of gambling and into other, more productive parts of the economy.
The report, commissioned by the amusement arcade trade body Bacta, estimates that the Treasury will lose between £98m and £132m for every year that maximum FOBT stakes remain at £100.
The chancellor, Philip Hammond, is expected to reveal the date of the stake cut in the budget later this year, with a separate statutory instrument to follow, fleshing out the detail.
A Treasury spokesperson said there was no delay, adding that the department was speaking to the gambling industry to ensure it had “sufficient time to implement these technological changes”.
At a meeting of a cross-party parliamentary group on FOBTs last week, machine manufacturers told MPs and campaigners that the changes could be made within months.
The Labour MP Carolyn Harris, who attended the meeting, said: “It is now clear that it is perfectly possible for the games manufactures to implement the £2 stake reduction in the very near future.”
She said delaying the stake cut beyond April 2019, when the compensatory increase in online gambling tax is expected to take effect, would be “utterly indefensible”.
Polling by YouGov indicates that nearly half of Conservative MPs believe FOBTs should be curbed as soon as possible.
More than two-thirds of MPs on both sides of the house think bookmakers should be given less than a year to make the necessary technical changes.
Bookmakers, who derive more than half of their revenues from FOBTs, lobbied hard but in vain against restrictions.
A spokesman for the Association of British Bookmakers said: “Recent announcements by major operators reveal the true impact of this decision, that thousands of betting shops will close and there will be thousands of job losses. Betting shops are now focused on the future of their staff, customers and suppliers.”
The Department for Digital Culture, Media and Sport, which is overseeing the legislation, has estimated that bookmakers stand to lose up to £540m a year between them once the change takes effect.
