Breon Corcoran, the CEO of Paddy Power Betfair, the company that was formed when the two giants merged in 2016, has taken a surprising step in coming out in favour of stricter limits on Fixed Odds Betting Terminals. The machines are normally found inside bookmaker shops and allow customers to play games such as roulette, poker or blackjack. They have long been the subject of some controversy because the maximum stake is £100 and the game tends to be over incredibly quickly. That has reportedly caused some addiction and seen people lose thousands of pounds, leading to them being labelled the ‘crack cocaine of gambling’.
Pretty much all high street stores have FOBTs located inside them and they tend to be popular with punters. In fact, the likes of Ladbrokes and William Hill actually find that the machines are the greatest source of income in some of their shops, whilst others such as Betfred and Paddy Power themselves admit that they are a large source of profit. That’s why it’s quite surprising that Corcoran has come out in favour of proposals to limit how much people can bet on them. He said that there are serious ‘societal concerns’ surrounding the machines that would only be addressed via ‘drastic’ action, such is the toxic nature of how they are perceived by the wider public.
Why Is This Controversial?
As I say, the move from the Paddy Power Betfair is quite surprising precisely because so many of his industry colleagues have long protested any possible move to limit the stakes that the government might make. Some of them have suggested that doing so would reduce their profits to such an extent that jobs would be lost, shops would have to close and the Treasury would receive less tax. That has been undermined by a letter from Corcoran to Tracey Crouch, the Department for Culture, Media and Sport minister, saying that he believes a limit of ‘£10 or less’ should be introduced.
430,000 #gambling addicts in the UK according to Commission. Never been a more important time to crack down. #FOBTs https://t.co/j71S6Rt6dK
— John Leech (@johnleechmcr) 26 September 2017
Whether or not Corcoran’s motive is purely for the benefit of the consumer is likely to be debated by many. After all, in his letter to the minister he specifically cites the ‘increasing reputational damage to the gambling industry’ that is being done as long as FOBTs are allowed to have a maximum stake of £100. That said, he also had a slight dig at some of his competitors when he suggested that a ‘well-run operator’ would be able to cope with the stakes being reduced without it damaging their business. There’s also the fact that analysis suggests that Paddy Power Betfair would lost around £30 million in revenue in 2018 by stricter stakes, but William Hill would lose over £180 million and Ladbrokes Coral about £280 million.
What Do Others In The Industry Think?
Ladbrokes’s external relations director, Donal McCabe, wasn’t slow to make clear what he thinks Corcoran and Paddy Power Betfair are up to here. He accused his competitor of ‘opportunistic commercialism’ in the form of ‘concern’ for the wider public. Meanwhile the face of the British gambling industry, The Association of British Bookmakers, distanced itself from the letter written by the Paddy Power Betfair CEO when it confirmed that his view did not reflect that of the majority of its members.Paddy Power Betfair might well be an impressively large company, yet it’s only responsible for around four percent of UK real estate.
One thing that is worth noting is that Breon Corcoran announced in August this year that he would be stepping down as Paddy Power Betfair’s CEO to be replaced by Peter Jackson. Whether his statement reflects the overall opinion of the company is, therefore, open to some debate. Certainly it doesn’t seem as if Paddy Power have voluntarily reduced the maximum stake on any machines in their shops, which you would assume they might do considering they’re apparently so keen to lead the charge.
