Breon Corcoran asks UK government for £10 FOBT stake limit
Outgoing PPB chief executive tells Tracey Crouch the issue is too “toxic” not to impose a significant cut on stakes
Paddy Power Betfair has called for a £10 limit on FOBT stakes, arguing that operators should be able to run a profitable retail estate under those circumstances.
The operator’s outgoing CEO Breon Corcoran made the claims in a letter sent to Tracey Crouch, the minister at the Department for Culture, Media & Sport, seen by EGR.
Crouch’s department is overseeing the government’s triennial review into a cap on FOBT stakes among other issues.
“While we are not aware of any evidence that links stake size to problem gambling we are acutely aware of the increasing reputational damage to the gambling industry that has followed the lack of progress in this area,” Corcoran wrote.
“We believe this undermines the role of the sector as a provider of entertainment, employment and tax revenue in addition to being a much needed support of sport such as racing.”
“We now believe the issue has become so toxic that only a substantial reduction in FOBT stake limits to £10 or less will address societal concerns. I am confident that we could operate our retail business successfully and profitably under such circumstances. Other well run operators should be able to do the same.”
The Financial Times reported that PPB executives are concerned about their ability to attract top-tier technology talent to the under-fire gambling industry.
Corcoran, who is leaving the operator in the coming months, goes on to say that altering spin time or reducing machines per shop would not be effective and in fact could worsen the situation by leading to a “higher number of lower quality gambling operators on our high streets”.
He adds: “I would welcome the opportunity to discuss this issue with you in greater detail at your earliest convenience.”
The impact of a £10 maximum stake would cost PPB around £32m in machine revenues in 2018 according to Barclays, compared to £276m at Ladbrokes Coral and £182m at William Hill.
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The letter could have a significant outcome on the findings of the triennial review, with the next update expected to be published in October.
Analysts at Goodbody last week published the results of a survey of over 50 buy side institutions on FOBTs, concluding that most respondents expect a stake reduction to £20, which would be “well received by the market.”
Goodbody said “anything at £15 or below will be perceived in the short term as a negative for the sector until there is greater clarity on levels of mitigation.”