William Hill may shut 700 shops as it looks to offset £820m loss from FOBT reform

This article is more than 1 year old

This article is more than 1 year old

A quarter of betting shops on UK high streets have been slated for closure, putting 12,000 jobs at risk, with William Hill the latest bookmaker to blame job cuts on stricter regulation of fixed-odds betting terminals (FOBTs).

Restrictions cutting the maximum stake on the controversial betting machines from £100 per spin to £2 came into force in April after a lengthy campaign by activists and MPs, who linked the controversial machines to gambling addiction.

Britain’s leading bookmakers, including Ladbrokes Coral, William Hill and Betfred, have since announced plans to shed jobs, blaming the loss of a product that contributed about half of their annual high-street income.

William Hill said on Thursday that it could close 700 high-street shops, putting 4,500 jobs under threat.

The Ladbrokes owner, GVC, has already said 900 shops could close, threatening 5,000 staff, while Betfred has predicted up to 500 closures, which would reduce its headcount by 2,500.

The combined total of 2,100 shops represents 25% of the UK’s 8,423 bricks-and-mortar bookmakers, potentially affecting up to 12,500 staff, or nearly 12% of people employed in the UK gambling industry.

But the impact is significantly less than the 4,500 closures and 21,000 job losses that bookmakers predicted in a widely discredited report submitted to the government last year in an effort to influence the FOBT decision.

Q&A What are fixed odds betting terminals (FOBTs)? Show Hide Fixed-odds betting terminals (FOBTs) are gaming machines found usually in bookmakers’ shops. They allow gamblers to play a variety of games, including roulette, bingo and simulated horse and greyhound racing. The machines promise the potential of large wins of up to £500. In the past, gamblers were able to bet up to £100 on games, but in April 2019 the UK government introduced a reduction in the maximum stake to £2 following a long-running campaign highlighting fears over the huge losses racked up by users. High street bookmakers have said they will have to close many stores due to loss of revenues.

Tracey Crouch, the former sports minister who pioneered curbs on FOBTs before resigning over a planned delay in their implementation, said it was too convenient for bookmakers to blame the policy.

“While I am sorry to hear of job losses, the truth is there was huge overinflation in the number of bookmakers on our high streets because of the profit-making capacity of FOBTs.

“The closures shouldn’t only be blamed on stake changes though – that would be too simplistic.

“There has been consolidation within the industry and a drive from the bookmakers themselves to less costly online gambling for some time now and mass closures were predicted in the industry-funded KPMG report, even without stake reductions.”

Industry statistics indicate that gambling firms’ high-street betting empires were in decline before the stake cut, as more and more punters switch to online gambling brands, often owned by the same businesses.

Income from racecourse and bookmaker betting fell from £3.3bn in April 2015 to £3.2bn in September 2018, according to regulator the Gambling Commission. During the same period, online betting income jumped from £4.2bn to £5.6bn.

A survey by YouGov indicates that online gambling is now more popular, with 13% of people admitting to placing a bet on the internet in the past year, compared to 11% at an event or in a bookmaker’s shop.

While GVC, William Hill and Betfred have all said they expect shop closures and job losses as a result of the FOBT restrictions, Paddy Power Betfair, which recently changed its name to Flutter Entertainment, has said it expects to see no impact.

Tom Blenkinsop, operations director at the betting shop workers union, Community, called on William Hill to do everything it could to minimise redundancies and find alternatives where possible.

“The government also has a role to play and must look at what support they can offer to workers whose jobs are threatened as a consequence of changes to the law around FOBTs,” he said.

“Betting shops provide an important source of local employment and many of our members have served the company loyally for years. Workers don’t deserve to be the victims of the changes happening in the industry as a result of either government policy or the significant shift towards online gambling.”

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William Hill said it would do whatever it could to cut jobs through voluntary redundancies and find alternative roles for affected staff.

FOBTs were branded a “social blight” by the government last year after a lengthy review, during which bookmakers vehemently resisted any cut in FOBT stakes, only to see them reduced to the lowest possible level of £2.

The low stake effectively rendered the machines, which account for more than half of high street bookmakers’ revenues, uneconomical.

Gambling firms have since been at pains to stave off similar curbs on their fast-growing online businesses, offering to impose a voluntary ban on advertising during TV sports and increase their contribution to gambling charities to £60m.