Bookmakers shops may be regarded by some as a blight and have been linked to anti-social behaviour. But they have kept some commercial streets alive, and they do provide a service to those who enjoy a flutter – responsibly, of course. William Hill’s plans to shut 700 shops is therefore the last thing that Britain’s struggling high streets and property letting agents wanted to hear, adding to the existing gap sites in town centres and neighbourhood shopping areas.
To make matters worse, it looks like the company’s rivals will follow suit. Suddenly, headlines about 4,500 job losses have escalated to 12,000 as the full impact is felt of the clampdown on fixed odds betting terminals.
Ladbrokes owner, GVC, has 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 outlets represents 25% of the 8,423 total.
But is the curb on FOBT’s really to blame for the closures?
While the cut in the maximum stake from £100 to £2 has been a savage blow to revenue (the indutry was betting on a £30 cap), the real culprit is the internet and a shift towards online betting. In other words, the bookies are facing the same crisis as other high street traders.
While 60% of profits from FOBTs come from “problem” gamblers it is too convenient and simplistic to blame the crackdown on the terminals for the cutbacks. Consolidation within the industry, including a number of mergers, has been driven by online gambling and the mass closure of shops was predicted in an industry-funded KPMG report.
The numbers from the Gambling Commission seem to back this up. While income from betting on course and bookmakers slipped from £3.3bn in April 2015 to £3.2bn in September 2018, while total online gambling revenues in the UK rose from £4.2bn to £5.3bn. As William Hill states on its website, this represents “the largest regulated market for online gambling in the world, which continues to grow.”
It adds: “We are focused on growing at or above market growth rates in the UK by continually enhancing our product, listening and responding to our customers’ feedback and using increasingly targeted marketing technology.”
Controlling FOBTs may help tackle gambling addiction among the most vulnerable, but the data and market trends clearly shows that gambling as a whole is a growing industry. The gambling firms will protect their profits and grow their businesses by cutting shops and jobs to control cut their costs and by encouraging their customers to go online. William Hill’s ambition is to reach £1bn in revenue and to double profits from its online business by 2023.
Horseracing, meanwhile, could be another loser as it will see a decline in revenue tied to the shops that was fuelled by the dash to install FOBTs. The British Horseracing Association estimates the annual loss will be around £50m to £60m once the full impact of the FOBT decline is felt. That may be felt in prize money and in the viability of some meetings.