The Guardian – If there is one sensation that every punter hates, it is the nagging suspicion of having missed something. It is the one you get when the horse you backed at 6-4 steadily drifts to 5-2 before finishing third. Did it simply run as well as it could or did the market know something you did not?
I had that feeling twice in a couple of hours after the chancellor’s budget on Wednesday.
It happened first when George Osborne announced an increase in the duty paid on profits from fixed-odds betting terminals in betting shops, from 20% to 25%, and the markets reacted by taking 11% off the price of Ladbrokes shares and 5% off William Hill.
Even in a world which tends to see the end of next week as the medium to long term, this seems to be somewhat short-sighted. The big chains are clearly going to take a hit on their profits from FOBTs in future, and there is always the chance, of course, that a future cash-strapped chancellor will grab a little bit more. But it also gives the bookies an immensely powerful ally in their campaign to keep offering roulette on the high street, to the detriment of problem gamblers, struggling communities and the long-term interests of racing.
Of course they howled at the injustice of it all when the tax hike was announced. But given the considerable and wide-ranging support for a reduction in maximum stakes to little more than small change – or, better still, a ban on roulette and other casino games in betting shops altogether – it is no bad thing from their side of the argument that the Treasury now has a significant interest too.
The next election is scarcely a year away and Ed Miliband’s promise to give local councils the power to regulate the number of machines on their turf is so far the only FOBT proposal around. The option remains for another party to raise the stakes, declare the last Labour Goverment’s decision to let roulette into betting shops in the place of a crass mistake, and send it back to the casinos where it belongs.
The more money the machines raise in tax, however, the more difficult it will be for any administration, actual or potential, to abandon a revenue stream which brings in easy, guaranteed cash as soon as a FOBT is switched on. The increased duty on FOBT profits may be bad news for the bookies in the short term but it also increases the chance that the machines will still be extracting risk-free money from local communities years from now.
