A significant reduction of the maximum bet on fixed-odds betting terminals could force Ladbrokes Coral to cut its £8-million annual spending on sponsorships of different sports, including horse racing, the BBC reports.
The company runs UK’s largest chain of betting shops with FOBTs. Ladbrokes Coral, which is set to be acquired by Isle of Man-based online gambling operator GVC Holdings in a £4-billion deal, collects more than half of its retail revenue from FOBTs.
British MPs are currently discussing by how much the maximum bet on the machines should be reduced to curb problem gambling. Under one of the popular proposals, the stake could be cut down to as little as £2 from £100.
Ladbrokes Coral has revealed that a reduction of this proportion would inflict losses of thousands of millions of pounds upon its business. To offset these, the bookmaker would look to make cuts elsewhere, as reported by the BBC.
At present, Ladbrokes Coral sponsors the Scottish Professional Football League and the Rugby Football League Challenge Cup as well as a number of horse racing events. The operator said that horse racing might actually be the sport that would suffer the least from a cut of the maximum stake on FOBTs. The company spends £3.5 million for horse racing sponsorships each year.
Ladbrokes Coral has said that “horse racing is in the bookie DNA”, with sponsorships and partnerships going back many years. That association and history makes the sport very valuable to Britain’s bookmaking industry, the operator has further pointed out, which places horse racing high on Ladbrokes Coral’s list to continue working with and sponsoring.
FOBTs Crackdown and Horse Racing
While Ladbrokes Coral may be planning to continue pouring money into horse racing, the latter industry fears that the looming clampdown on FOBTs could have much greater impact than reduced sponsorship money.
Bookmakers have warned that a cut of the maximum FOBTs stake could result in a massive closure of betting shops across the country. According to the Association of British Bookmakers, up to 4,500 facilities could be shut down in the wake of a £2 reduction of the maximum bet.
The closure of betting shops would hit the media rights area of the horse racing industry. Each betting facility pays £30,000 per year for the rights to screen horse races. Fewer betting shops would mean fewer screens and fewer buyers for horse racing events. The horse racing industry could thus lose nearly £300 million in annual media rights payments.
William Hill, which operates UK’s largest chain of betting shops and is highly dependent on its retail revenue, said that it could be forced to have its annual £1-million horse racing sponsorship reduced if the Government puts a £2 cap on FOBTs.