Even in recession-hit Britain, the gambling industry is still making a profit - £5.6 billion last year. With casino-style gambling now available day or night at the touch of a button in our homes and on our phones, Panorama explores its popularity... and reveals a darker side.
http://www.bbc.co.uk/iplayer/episode/b01nm27r/Panorama_Gambling_Nation/Reporter Sophie Raworth hears from those who have found their lives spiralling out of control, and from industry insiders who say violence and frustration, linked to fast-paced high-stake gambling machines, are increasing in our high street betting shops. Panorama goes undercover in some of Britain's bookies to test those claims.
(BBC Iplayer link only available for 7 days, not for those outside the UK)
The fast-paced high-stake gambling machines that is referred to above have been one of the major growth areas for High Street bookies like William Hill, Ladbrokes and others. It is also an area where politicians appear keen to focus on when it comes to increasing the taxation take. The Government in this year's budget made plans for raising more in tax from the gambling machines.
Budget 2012: New gaming machines tax 'puts 11,000 jobs at risk'
Bookmakers fear 11,000 jobs are at risk after the Government unveiled a new tax on gaming and fruit machines, which is expected to cost the industry £50m a year.It goes on;
Gaming companies were taken aback by the 20pc inaugural rate of "machine games duty", which replaces a previous regime of amusement machine licence duty plus VAT.
The betting industry had hoped for a rate of 15pc to 17pc, which would have been "tax neutral".
Analysts said the 20pc rate would add £12m to £13m a year to the costs of both Ladbrokes and William Hill but there are particular fears for small bookmakers, which are closing at the rate of more than 100 a year.
The Association of British Bookmakers, whose members employ 100,000 people, said: "We are disappointed that the Government has introduced an unsustainable rate of machine games duty and has not adopted a revenue neutral rate for the whole machine gaming sector.
"It will put 2,600 betting shops and 11,000 jobs at risk."Budget 2012 New gaming machines tax
Despite the fact that these tax hikes have been known about for some time, the shares of UK bookmakers, especially William Hill, have been in a nice rising trend regardless of this bad news. Not even the budget announcement knocked them down, which is a surprise given that the gambling machines are now a big earner for the traditional High Street bookmakers who have seen a decline in betting in traditional gambling like horse racing.
For bookmakers it’s a winning strategy. The machines contributed 49% of William Hill’s high-street gains from bets last year – £424m. And each year bookmakers squeeze out more profits. William Hill’s latest figures show its 9,000 fixed-odds betting terminals earned an average of £900 a week – more than double the £402 per machine it earned in 2005.http://www.thebureauinvestigates.com/2012/07/24/how-britain-got-addicted-to-bookies-betting-terminals/
There is also other potential bad news when it comes to a tax attack on the bookmaking industry.
The betting industry also faces a "place of consumption" tax on online gaming to crackdown on companies that operate their internet businesses from abroad to avoid levies in the UK.
However, implementation is not expected before 2014.Budget 2012 New gaming machines tax
It is perhaps no coincidence that Panorama have chosen to run this story now.
The DCMS select committee recently recommended lifting the cap on the number of FOBTs per shop as an "anti-clustering" measure, as bookies leapfrog regulations by opening up as many shops as possible, and usually in deprived areas. Research commissioned by Channel 4's Dispatches found there to be more than twice as many betting shops in areas of high unemployment than in areas of low unemployment.
The government is due to respond to those recommendations this month, but both the Campaign for Fairer Gambling and Community, the union that represents betting shop staff, will be hoping they are rejected. Ryan Slaughter from Community said recently: "Our members want to be bookies, not bouncers. Betting shop workers up and down the country will look upon this report with dismay and outrage, because they experience physical and verbal violence on a daily basis owing to the presence of FOBTs."
Tonight's Panorama, which investigates the destructive rise of FOBTs, will more than substantiate Ryan's claims. The government needs to act quickly, otherwise the 34,000 FOBTs on our high streets – which have doubled the number of problem gamblers in the UK to nearly half a million – will create even more.http://www.guardian.co.uk/commentisfree/2012/nov/05/gambling-machines-double-number-addicts
It is this "problem gambling" that may be the bigger threat to UK bookmakers. There has always been the question of the right moral balance that politicians want to be seen to take when it comes to certain "sin" industries, while at the same time making sure that they get their share of the tax take of course. It can be a game of hypocrisy as is often the case when money comes into conflict with morality. It wouldn't surprise me if as usual the Government decides it wants to both have its cake and eat it, by increasing their tax take while being seen to supposedly do more to help those with gambling problems.
For traditional bookmakers like William Hill and Ladbrokes, investors and traders shouldn't be surprised if their share price begins to reflect this negativity. 2013 and 14 could be difficult years for both of them as increased tax take affects the bottom line and it perhaps explains why both are looking to expand further overseas and online with takeovers of smaller companies like Hill's move for Sportingbet.
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