The federal government’s controversial choice to not reduce stakes on fixed-odds betting terminals (FOBTs) from £100 to £2 till October 2019 was influenced by a “discredited” secret report commissioned by bookmakers, it has emerged.
The chancellor, Philip Hammond, final week cited the necessity to mitigate job losses as a key consider delaying the stake discount, a choice that sparked outcry amongst campaigners and triggered the resignation of sports activities minister Tracey Crouch.
He informed the Treasury choose committee the trade estimated that between 15,000 and 21,000 jobs could be misplaced if FOBT stakes had been capped at £2, which means it wanted time to arrange. This prompted committee chair Nicky Morgan to say Hammond was placing playing trade jobs above addicts’ lives.
Paperwork seen by the Guardian solid doubt on whether or not the figures, derived from a report written for the playing trade by accountancy agency KPMG, ought to ever have performed a component in coverage selections.
The report features a disclaimer, written by KPMG itself, warning that key assumptions on which it was primarily based had been set by the Affiliation of British Bookmakers (ABB).
KPMG stated the report was “carried out to satisfy particular phrases of reference” agreed with the bookies’ commerce physique, including that there have been “explicit options decided for the needs of the engagement”.
“The report shouldn’t due to this fact be thought to be appropriate for use or relied on by every other individual or for every other function.”
It stated necessary estimates of whether or not clients would reply to FOBT stake discount by spending on different betting merchandise had been “agreed with the trade”.
Regardless of KPMG’s warning, the report was circulated amongst Treasury officers together with Exchequer Secretary to the Treasury Andrew Jones MP.
He replied to ABB chief government Malcolm George to say that the report “will make a useful contribution to the proof base”.
The credibility given by Treasury officers to the report shocked playing firm Paddy Energy Betfair, which wrote to the prime minister to warning towards it getting used.
Paddy Energy stated its personal proof steered that among the assumptions within the report had been “unrealistic”.
It cited the report’s prediction that simply 50% of shoppers of a store that ended up closing on account of FOBT discount would migrate to a different outlet.
“Our proof suggests a really excessive proportion (round 75%-90%) of shoppers transfer to different outlets,” Paddy Energy stated.
It additionally solid doubt on trade claims that dropping FOBT revenue would pressure 1000’s of outlets to shut.
It stated that within the medium time period “the enterprise is just not anticipated to see a rise within the variety of outlets which are loss making in comparison with the present place, and due to this fact doesn’t count on to shut any outlets due to modifications to FOBT stake limits.”
Paddy Energy concluded that whereas the stake reduce would have “some affect” on betting outlets, it could be “far much less extreme than the depiction supplied by the ABB”.
Labour MP Carolyn Harris, who has campaigned for FOBT stake discount to be applied as quickly as potential, stated: “The chancellor has apparently determined to delay the stake reduce on FOBTs due to knowledge in a extensively discredited report.
“That is policymaking of the worst sort, not primarily based on proof and pandering to a company curiosity on the expense of the general public curiosity and the safety of the weak.”
Matt Zarb-Cousin, of marketing campaign group Fairer Playing, stated: “Philip Hammond has obtained his sums mistaken by basing them completely on bookie-funded analysis that hasn’t been made obtainable for public scrutiny.
“The job loss estimates by KPMG are drastically exaggerated, however no matter that the chancellor needs to be conscious that FOBT spend yields far fewer jobs than if that spend was diverted to the broader economic system because of a £2 cap.”
A spokesman for the Treasury stated: “We consulted extensively with events – together with charities and all elements of the playing trade – earlier than contemplating all the proof and making a last choice.”
The timing of the stake reduce has triggered widespread anger on either side of the Home of Commons.
A cross-party group of MPs looking for to overturn the delay are anticipated to desk an modification to the finance invoice this week, in a bid to get the date of the stake discount introduced ahead.
The modification is known to have the assist of dozens of MPs, together with greater than 30 Tory rebels led by Iain Duncan Smith.
The character of the parliamentary calendar means the modification is more likely to go to a vote similtaneously any Brexit deal that Theresa Might brings again from Brussels later this month, elevating the prospect of a number of bruising defeats for the federal government.