Paddy Power CEO Says U.K. Fixed-Odds Betting Terminal Risk Limits Should be Lowered
The debate over maximum bets at fixed-odds betting terminals (FOBTs) in the United Kingdom has been raging on for quite some time now. There are plenty of advocates on both sides of the issue. One side believes the maximum bet risk should be lowered at the FOBTs from its current limit of £100. Many believe a drastic reduction is necessary.
You can count Paddy Power Betfair CEO Breon Corcoran among those that believe the limit should be substantially slashed. In a letter to UK Sports Minister Tracey Crouch, Corcoran wrote that he supports the notion to reduce the maximum bet risk from £100 all the way down “to £10 or less.”
The gambling industry in the United Kingdom has been under heavy fire of late for failing to try and help what seems to be a drastic rise in gambling addiction among local customers. The UK government is currently in the midst of a lengthy investigation into the gambling industry, and the results are due in late-October. The future of the United Kingdom’s retail gambling sector is the focus of the study.
Several organizations that promote responsible gambling have long been calling for FOBT operators to reduce the maximum betting risk. It is widely believed that sweeping changes, including a reduced max bet, will be coming to FOBTs once the aforementioned review has concluded and its results are released.
Paddy Power Betfair is in charge of about 300 betting shops with fixed-odds betting terminals located all around the United Kingdom. Estimates indicate that the company stands to lose nearly £32 million in revenue from FOBTs in 2018 if the maximum stake is cut to exactly £10. That’s not nearly as much as bigger operators such as Ladbrokes and William Hill stand to lose. Those two operate the largest number of betting shops in the UK, and they would lose an estimated £276 million and £182 million next year, respectively.
What’s Corcoran’s motivation behind supporting a decision that would financially harm his own corporation? He wrote in the letter that the max bet issue has become “so toxic” in the UK that finally reducing the maximum stake is the only way to calm those staunchly against the current maximum of £100. He also added that lowering the limit would still allow Paddy Power Betfair to run a profitable business.
Corcoran also added that PR has been so negative for companies such as his own that it is having an impact on the way Paddy Power Betfair is able to hire employees. Prospective employees have been hesitant to get into a field that has taken such massive public criticism. If the furor dies down, the company can go back to hiring as normal, in theory.
Criticism From Ladbrokes
Corcoran’s comments have not come without criticism from elsewhere within the industry. Ladbrokes Coral External Relations Director Donal McCabe said that Corcoran’s letter may be accurately viewed as “opportunistic commercialism” rather than a legitimate concern about the well-being of the gambling industry itself. Because Paddy Power Betfair has a bigger online operation than a land-based betting shop operation, it would not struggle as much financially with the lower max as the likes of Ladbrokes and William Hill.
British media is reporting that a lowering of the stakes is almost a certainty, though there is still no telling what the new maximum will be. Some proposals have gone so far as to say that the max wager should be as low as £2, while more lenient advocates say a max of £20-£30 would suffice.
We’ll finally have our answer come the end of October.
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