In a letter to the minister at the Department for Culture, Media and Sport (DCMS), Tracey Crouch, Corcoran stated that due to the ‘toxic’ nature of the debate that now surrounds the terminals only significant action would suffice in ‘addressing societal concerns’.
Although the move means Paddy Power Betfair has become the first big bookmaker to openly suggest that substantial stake reductions are necessary, Corcoran is following the lead of former Paddy Power co-founder and CEO Stewart Kenny, who secretly lobbied against the terminals in 2009.
It’s widely expected that after next month’s triennial stakes and prizes review by the DCMS, the government will implement new limits on FOBTS, just how significant these remains to be seen.
Corcoran wrote: “Whilst we are not aware of any evidence which links stake size to problem gambling, we are acutely aware of the increasing reputational damage to the gambling industry that has followed lack of progress in this area.
“We now believe that 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 we could operate our retail business successfully and profitability under such circumstances. Other well-run operators should be able to do the same.”
In a report published by the Telegraph in the aftermath of the recent election, a Barclays Bank analysis revealed that cutting the stakes on FOBTS to just £2 would have major implications on the annual revenue for bookmakers, with Ladbrokes Coral being hit the hardest losing £439m, William Hill losing £288m and Paddy Power Betfair taking a £58m hit.
Furthermore, Paddy Power has approximately 100 retail outlets in the UK, compared to William Hill which has around 900 and Ladbrokes and Coral, which combined have over 3500 UK shops.