Group of Tory MPs want stakes slashed from £100 to £2 in spite of lobbying by bookmakers

Theresa May risks a defeat in the House of Commons unless the government slashes stakes on fixed-odds betting terminals (FOBTs) from £100 to £2, with a decision expected as early as Thursday.

A group of Conservative MPs, led by Iain Duncan Smith and thought to number more than 25, will write to the prime minister at the beginning of next week, urging her not to waver in the face of last-ditch lobbying by bookmakers.

A draft version of the letter, seen by the Guardian, says it is the government’s “moral duty” to restrict FOBTs, which they say “are causing many social harms and leading to huge financial losses for those who can least afford it”.

Quick guide What you need to know about FOBTs Show Hide What are FOBTs? Fixed-odds betting terminals (FOBTs) are machines, found largely in bookmakers and betting shops, that allow customers to stake up to £100 every 20 seconds on digital versions of games such as roulette. How many are there? The UK has 33,611 FOBTs, each of which take more than £53,000 from gamblers per year. Why are they considered a problem? Critics of FOBTs say they are particularly addictive, allow gamblers to rack up huge losses within a few hours, and are concentrated in deprived areas. They have also been linked to money laundering.

Given the support for a £2 stake from every other political party, the strength of feeling among Conservatives means a more lenient approach would put May at risk of becoming the first prime minister to suffer a defeat on a statutory instrument since James Callaghan 40 years ago.

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Matt Hancock, the minister for digital, culture, media and sport, will announce the final decision. Carolyn Harris, a Labour MP and long-time campaigner against FOBTs, said: “We now have a situation where if the government proposes a stake any higher than £2 they face being defeated by their own party in the House of Commons.”

Bookmakers, who derive more than half of their revenues from FOBTs, wrote to all cabinet ministers this week to warn of “catastrophic” consequences – including the closure of high street shops with the loss of thousands of jobs – if stakes fall to £2.

The eleventh-hour plea came after they lost a key ally in Philip Hammond, the chancellor, who had raised concerns about the impact of a £2 stake on the Treasury’s tax take, but has since dropped his opposition.

A senior betting industry source said that bookmakers are also urging the government to allow them a year’s grace to change FOBT software once a decision is made. The source said this was a stalling tactic because bookmakers are more likely to do away with FOBTs altogether and are already preparing to replace them by installing more self-service betting terminals (SSBTs), which automate the process of laying bets on sport.

Matt Zarb-Cousin, an anti-FOBT campaigner, said this cast doubt on the bookies’ public statements of concern about the impact of new curbs on staff.

“The bookies warn of staff cuts if FOBTs are capped at £2 but with the introduction of more SSBTs they are automating their staff out of a job.”

In their letter to MPs, gambling bosses including the chief executives of William Hill, Betfred and GVC which is in the process of a £4bn takeover of Ladbrokes, proposed a series of alternatives to a £2 stake. They suggested a reduction to £30, systems to allow customers to block their own debit card from gambling transactions and “hard stops” limiting losses to £500.

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Figures from the Gambling Commission have previously shown that gamblers are losing up to £14,000 in a day, with 233,000 sessions ending in losses of more than £1,000 in 2015-16.

The executives also called for the government to tighten up regulations on gambling advertising. This could do less damage to bookmakers than it would to well-established online rivals, who rely on advertising to build awareness of their brands.