Paddy Power Betfair Slammed Over ‘Self-Serving’ FOBT U-turn

PaddyPower Betfair CEO Breon Corcoran has been accused of stabbing the betting industry in the back over his sudden dramatic call for tighter regulations on fixed-odds betting terminals (FOBTs).

PaddyPower Betfair CEO Brendan Corcoran denounces FOBTs

PaddyPower Betfair’s Breon Corcoran says FOBTs are “toxic” and undermine the reputation of the industry as an entertainment provider.  (Image: The Business Post)

Corcoran, who has announced that he will shortly step down from his role as head of the company, told the UK government this week that it should slash the maximum stakes on the machines from $100 per spin to “£10 or lower,” thus breaking ranks with the betting industry.

The Association of British Bookmakers (ABB), of which Paddy Power Betfair is a paid-up member, has warned that a significant reduction in stakes would lead to the potential closure of hundreds of bookmaking shops and thousands of job losses.

The Department of Digital, Culture, Media and Sport (DCMS) is currently conducting a review of the controversial machines and Prime Minister Theresa May has demanded that a reduction must be imposed, despite reported protestations from chancellor Philip Hammond.

The findings of the review are to be published next month and are expected to recommend maximum stakes of either £20, £30 or £2.

FOBTs ‘Undermine’ the Industry

In a letter to DCMS Minister Tracey Crouch, this week, Corcoran said that, while he did not believe there was any evidence of a link between stake size and problem gambling, the issue of FOBTs was creating so much “reputational damage” to the industry that it was time to take action.

“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,” he wrote. “I am confident we could operate our retail business successfully and profitability under such circumstances. Other well-run operators should be able to do the same.”

“We believe [FOBTs] undermine the role of the sector as a provider of entertainment, employment, and tax revenue, in addition to being a much-needed supporter of sports such as horseracing.”

Trouble for Independents

But the move is being viewed as little more than a self-serving commercial consideration by some operators, who point out that Paddy Power Betfair would stand to lose much less money from a reduction in FOBT stakes than its major competitors.

That’s because it has far fewer retail betting shops and fewer machines in the UK than Ladbrokes Coral and William Hill, and meanwhile it has far more to gain from an anticipated migration online, should betting shops be forced to shut in the wake of the government review.

But it’s not only the market leaders in the retail betting market that will suffer. In fact, the smaller independent operators may be hit the hardest.

“There are over 800 family-owned businesses like ours in the UK that compete against Paddy Power Betfair. They do not have the online revenues to support loss-making retail estates,” Greg Knight, managing director of independent bookmaker Jenningsbet told the Racing Post.

“The most pertinent fact here is that anybody can play the same games found on FOBTs on the Paddy Power website or app and play at £3,000 per spin rather than the £100 limit imposed in betting shops.”

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