Subscribe
Share
Share
Embed
A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
speaker-0 (00:00.258)
my point is the industry has to do a better job of relaying just facts basically that shops are declining and shops are closing.
speaker-2 (00:13.326)
BetFed founder Fred Doane has warned that retail betting shops could be a thing of the past as soon as 2030, as murmurs of a hike in machines game duty continue to swirl. Doan was quoted in the FT and the Sunday Times attacking the UK government's approach on tax and regulation, while the operator has also made cuts to its marketing spend. So what are the threats against retail betting shops? And is Doan right in an assumption that retail could soon die?
Welcome back to iGaming Daily, supported by Optimove, the creator of positionless marketing and the number one player engagement solution for sports betting and iGaming operators. I'm Charlie Horner and today I'm joined by SBC News editor Ted Ormclay and iGaming Expert editor Joe Streter. Ted, how's things?
speaker-1 (00:59.006)
Yeah, pretty good. Thank you, Charlie. think my first time back in the studio after some time off. So yeah, good to be back here with Joe and yourself to discuss what is a very long running topic that we've been going over for quite some time now.
speaker-2 (01:14.68)
Yeah, it's something w we have sort of spoken about a few times before, but I think this is a real a real landmark moment, Joe, because Doan has been in the the mainstream press talking about this and it it made the the it was the the splash story in the F T over the over the weekend.
speaker-0 (01:30.678)
Yeah, and you would you would be forgiven for feeling a little bit of deja vu here, you know, lobbying against tax rises. but this is very different. I think this is different on two fronts. this is a different type of tax, one that will have a really, really, really devastating impact to retail betting. and there were provisions in that last budget that the industry will already will still have PTSD from, yeah, just back at the end of last year, about
that there were provisions in that tax in that budget around retail betting. They they did take steps to kind of safeguard retail betting. Well we have a new government now and they appear like they may just throw away those safeguards and bring up machine game duty. And Fred Dunn on the front foot being very kind of personal and I would say aggressive, being aggressive. You he's on the front page of two big papers as you mentioned.
talking about the job losses, talking about the impact. And yeah, it's hard to deny that the the impact on retail betting would be monumental. And yeah, we're gonna talk about the approach of Fred Fred Doan, but yeah, a really strong effort, strong lobbying effort and I think it's the right move from from him as well. And I think it's one the industry should kind of reciprocate as we yeah, we head into more lobbying.
speaker-2 (02:54.124)
Yeah, okay, well well there's a lot to unpack there. and Ted, I'll come to you. Because we're talking about machines game duty here. that and that's what we're we're expecting to to increase in in the next budget this autumn. And there is w the somewhat of a of an Armageddon cry here if if that is to to come into play. just just tell us briefly what are the proposals and and what what is Dome threatening might happen as a re as a result.
speaker-1 (03:22.094)
Well, mean, to kind of echo what Joe said, we are getting bit of deja vu from last year. We're in the run up to the budget. We're seeing quite a heated debate. are getting, the conversations are getting quite spicy once again.
in the run up to the government announcing its budget which include as usual changes to spending, changes to taxation. Last year the lead up saw a lot of discussion around changes to remote gaming duty, general betting duty and machine games duty was mentioned but as Joe said was ultimately ruled out and we think we've been given a bit of an indicator that would not be part of Rachel Reeves' budget. A year later...
The government are, as always, looking for new ways to raise money, to fund investment projects and infrastructure and things like that, to support their spending agenda. And they've once again looked at the gambling industry as a potential cash cow for this. Like we said, last year we saw the increases in remote gaming duty in general, betting duty announced. The one that is left is the machine games duty.
There's currently three rates of that and we should specify that nothing's concrete. I don't think we're seeing as solid an indicator as we were last year, but it's definitely being discussed. There's lots of rumors about it and the prospect is that MachineGames' duty will be doubled, the three rates will be doubled. So that's the lower rate going from 5 % to 10%.
the medium rate from 20 to 40 and the higher rate from 25 to 50%. Now, that's the, for anyone who's not familiar with the way the sort of retail industry works, I think you can probably, you can divide the product into three areas. You've got the over-the-counter bets, which is, know, you're very, that's the traditional old school product. Going up to the counter, there's someone behind it. You say, want to put a fiver each way on.
speaker-1 (05:22.808)
the 310 at Kempton or whatever they put it on for you. You've then got the self-service betting terminals, which are kind of, it's almost like having the online offer in a shop where you've got the terminal in front of you. You've got all the different markets on there from racing to football to boxing to politics to entertainment. And you put your money in or you pay via over-the-counter and put your bets on. And then the third one is the fixed odds betting terminals.
which are slot games and virtual roulette and so on. This is the one that the machine games duty is applied to and this is the one that the government are looking at doubling. FOBTs as the abbreviation is have been the topic of lot of debate in the past. I think probably the most notable example of that would have been back in 2000 and was it around 18, 19 Joe? think we're going back a few years. Yeah, where they brought in...
speaker-0 (06:16.03)
Implementing the change.
speaker-1 (06:19.116)
They've reduced the stakes. They used to be able to stake up to, I think it was 200 pounds per spin. They brought that down to two pounds. And there was a lot of conversation at the time. They're very often labeled as, a term we saw in the media a lot was the crack cocaine of the high street due to them having a much more, a deeper association of problem gambling, addictive behavior and so on. So they've always been a target when it comes to conversations around gambling reform and regulation.
And that's kind of now linking in, think, with this conversation around tax.
speaker-0 (06:52.792)
Can I pick up on a couple of things Ted said there and maybe just a a a mindset that I think is is a little bit dangerous for for the industry as we kind of move into this budget. firstly, I I think it's important not to be dismissive of the current situation the government is in. Or obviously we know governments are always looking to find if they can pull an easy tax lever to especially left wing governments, if they can pull an easy tax lever to increase spending, that they're going to do it. But this government isn't
Just looking to do that. They are in a uniquely difficult economic position. borrowing is going through the roof. Burnham doesn't really have a mandate. So he's gonna struggle to implement widespread massive changes, things like raising income tax. He's gonna struggle to do that without a mandate. he's got this kind of balance between defence spending with John Helios the Chancellor, that you where there's a lot of lobbying to be to to increase defence spending 'cause of the global climate.
And then the the welfare bill, which we know would if if he cuts the welfare bill it's gonna cause a lot of internal problems for him in the Labour Party. What I'm saying is this none of this may seem relevant, but what I'm saying is if he can get an easy win from machine games duty, I think he might take it. I think there's a strong possibility that because of the position they're in, he you know, he's gonna he's gonna hit that, he's gonna go for that, push that button with little regard for the consequences of an industry that
Clearly doesn't have a high regard for. I think, yeah, and I it kind of brings me to the second point of, you know, we've not really seen as many signs that this will happen as we did last time. I think just the mindset of the current government towards gambling, I think, yeah, that that will that that probably provides me enough of a clue that if this lever is there for him to pull, he's gonna pull it. One thing Fred Do Fred Doan did really well, and Fred it is quite important that Fred Doan did.
Is the consequences of this aren't just you know, Bet Fred's closing. There's gonna be Bet Fred's closing. It's not just that. The consequences are more encompassing, they're far more widespread than that. We see Bet Fred, who had a vast sports sponsorship portfolio. it was significant, it was important, it was, you know, kind of localized, if you like, it was horse racing.
speaker-0 (09:18.146)
it was Super League, which is going to suffer significantly because they don't have that Betford sponsorship as a result of a tougher climate. and and the other side of it is you know, youth unemployment, youth youth youth job losses. we we know that, you know, betting shops, they are a big part of the high street. and you know that as a result of that, they are a big employer. So, you know, you close loads of betting shops, employ you unemployment is is gonna suffer as a result. So
Yeah, I think it's important that you we kind of take this threat seriously because I think it is coming. It's a new government now. My instinct is is that they're going to do this because of the kind of the wider economic challenges. It's it's an easy win for them. They have to be warned of the wider consequences and they have to listen.
speaker-2 (10:05.326)
I think it's you know, someone might want to tell the the gambling company's CEOs that they're making enough money that they can help fund the the new defence spending arrangement show. I think I think there might be a few arguments aga against
speaker-0 (10:18.936)
that you know what I'm trying to say though, because th it will be seen as kind of an easy win. I'm not saying that, you know, no Bitfred taxation is gonna fund. And also, you know, ta tax forecasting is is is interesting, right? Because because you raise tax on on something doesn't necessarily mean that it's directly going to make more money off the back of it because there will be consequences of raising that tax. Shops will close. So raising machine game duty tax, the forecast for it bringing in more money is not necessarily there because
the the kind of consequences of shops closing and and things like that, people playing less. yeah, that will obviously impact that that tax income. So it's not direct like that. So yeah.
speaker-2 (11:01.282)
Yeah, it's it's i it's interesting. I mean the the you know, I think Don said at the weekend that FOBTs make up, you know, a significant proportion of the profits made in in in some of these shops. So if if the ta taxes were to to be raised on them, a lot of those shops just become unprofitable and and therefore we know what happens. And they aren't just idle threats, are they? Because we know that BetFred and and other operators have closed shops already this year and and more will be on the way if this
tax hike comes in. let's just have a quick overview of some of the closures that we've seen already this year. And do we know what the the reasoning is for those closures?
speaker-1 (11:41.964)
Well, we know what the industry has said the reasoning is. mean, so just trying to think of what some of the some of them are. mean, you know, Betfred, as they even prior to these articles getting published over the weekend, I think we discussed this on a podcast long ago, didn't we? The announcement that they would close 100. I think it was 132 sharps. There was an announcement from Evoke and William Hill earlier in the year that they would close 200.
Paddy Power are closing a few as well across both the UK and the Republic of Ireland. Ladbrokes are doing some closures in Ireland and they might be doing some off the top of my head in the UK as well. But the three that I think have probably grabbed the most attention in the UK would be Betfred, William Hill and Paddy Power. A lot of this has been chalked down to the increases in tax.
the, as we said earlier, the remote gaming duty increase came in in April. That only applies to online casino gaming. know, sports betting is exempt from that one. From next year, we'll get the general betting duty increase, which will apply to online sports betting as well, but retail is excluded from both of those. I think the argument that a lot of the big companies have been making is that because of the burden that's now on their online division,
They're having to look more at cutting costs and cost optimization, return on investment and all that. And that has led to the decision to close some of the least efficient shops. The thing is though, is I wouldn't, I've said this before on previous podcasts, we've seen from gambling commission stats, the commission recently published its latest stats for 2025 in looking at gross gaming yield.
Retail revenue is consistently down for the most part across most quarters and year over year The sector is inevitably getting smaller as a result of the online offer just being a thing You know, I when someone's just got the ability to put an Acre on in their pocket rather than go into the shop So I do think that ultimately shop closures like this were probably inevitable that what I think the tax situation has just sped up that process in a lot of cases to be honest with you
speaker-0 (13:53.804)
Yeah, I d I don't know about that. I think shops still have a role to play. I think it might be a different customer base, probably a less profitable customer base, but a d a customer base nonetheless. I think it builds kind of a you know, you you have a a multi viewpoint of a customer. For some customers anyway, you you you have an online customer that also goes into shops and if you can build that omni channel experience, that's of value. But what I would say is sometimes as a as an industry we're we're a bit kind of in in our bubble.
And w you know, we think these these things are are kind of common knowledge. And and when I'm listening to to you chaps speak in there, you're you're speaking like it it's well known, you know, shops are on the decline, revenue of shops is on the decline, the number of shops is on the decline. You know, there's not a degree of complacency, but that's just kind of common knowledge. But I bet if you went out and asked somebody on the street, are betting shops going up or down, they would say they're surging. And
That's not just a person on the street. I think that's also kind of policy makers, anti gambling l lobbyists maybe are blind to it. But I think the industry has to do a better job. And Fred Fred Done does it that's important w why he's s it's so important these out in these big papers, do a better job of relaying that message that shops are declining. You know, we saw them get bundled in with vape shops.
off the top of my head, I don't know the trajectory of vape shops, but I would assume that more are popping up. There's more, you know, I I know that they're growing. So the idea that an industry that's declining, there are actually shops closing, is bundled in with them i as going in the same trajectory. It's really worrying for the industry because it it makes it vulnerable to to to regulation that will make life harder for
for kind of betting shops to survive. But yeah, my point is the industry has to do a better job of relaying just facts basically that shops are declining and shops are closing.
speaker-2 (15:53.25)
But we heard we heard from the Prime Minister himself that this government views gambling as more of a a societal a societal harm than than than a benefit. And I think I think generally retail, the high street, as we know, is in decline. shops across lots of s different sectors are closing. Perhaps some are closing at a faster rate than the retail betting shops and that might be skewing some of the perception here.
speaker-0 (16:21.814)
There are shops, so there are like things that are growing in the high street, you know, I think it w was it barbers, vape shops. The industry and betting shops are being bundled in with them and it's giving this perception that betting shops are on the up, which is just fundamentally untrue.
speaker-1 (16:37.998)
I think probably part of the problem is always because so many other shops like, you your traditional shops like your butchers, your greengroves and that stuff have closed on the high street. The only ones that are left are the betting shops, the vape shops and the barbers. And that gives the illusion maybe that there's more, there's more even when there might not be, you know what mean? Just cause everything else around them is shut.
speaker-2 (16:58.304)
Exactly. It's a it's a perception thing, isn't it? Rather than a an empirical thing. But we do need to go and take a very short break, but we'll come back and we'll discuss.
Continue the the debate. Learn how Optimus positionless marketing is changing how iGaming teams operate. Discover how operators are using Optimus positionless marketing platform to launch personalized CRM campaigns, dynamically change casino lobbies and bet slips and create engaging gamified experiences. Learn more at Optimove dot com. Welcome back to iGaming Daily. now I think all eyes will be on the budget, which which we know is is coming later this this autumn and it will it will be John Healy's first budget.
budget a as Chancellor. But perhaps before that, we have the Labour Party conference this weekend. And I think that's a a super interesting conference because we've got the new leadership at at Labour. We'll see how Burnham does in his his maiden conference speech and we'll we'll get to see what the what the vibe is amongst party members in terms of just the general gist of where the government is.
But over in one of the fringe rooms there's a really interesting debate that's taking place. and it's to do with gambling regulation. Now, Joe, do you want to brief us on what this is?
speaker-0 (18:18.314)
Who's on it Charlie? I know you've got those names there. Who's who's on this panel? Let us know. Vicky
speaker-1 (18:22.584)
Foxcroft is the new gambling minister,
speaker-2 (18:25.432)
This is it. So we've got it's gonna be chaired by Dr James Noyes from the the the Social Market Foundation, who we know we've spoken about on on the podcast before. Then there is as Ted you mentioned, there's Vicky Foxcroft, the minister for for gambling. Alex Ballinger, who is the co chair of the Gambling All Party.
speaker-0 (18:32.046)
Yeah.
speaker-1 (18:46.875)
Long time advocate for regulating reforms.
speaker-2 (18:51.01)
we ver very clearly labeled as a as a one of one of the reformists. as you would Dawn Butler, who who is also in that A double P G. Will Prochaska as well from the Coalition to End Gambling Ads. And Charlie Buckley from More in Common. So that's the that's the panel. Joe, why don't you tell us some some of the detail?
speaker-0 (19:17.432)
Yeah, so I I spoke to Aiden. So obviously we're you know, we're well averse to putting together panels and, you know, how you structure panels and ha you know, these debates that you you put together at being at SBC. You know, we are heading into Lisbon. a plethora of really strong panels at Lisbon. yeah. And I s I spoke to Aidan, our our lead conference producer, the brains behind the operation of the the Lisbon agenda. There are multiple brains behind that operate, but you he he's one of the
The key the key key the key agenda put together is, you know, everything to say. he told me that you would always try to have that opposing voice. If you've got a panel of people that all kind of agree, that is the wrong approach. you're gonna end up with kind of an echo chamber of everybody just agreeing. Whatever it the panel is, whether it's on AI, whether it's on regulation and for something so polarizing like this.
where there is there are kind of two sides to this coin. There's there's another argument to be made
speaker-2 (20:21.538)
Just just tell us what what what is the panel title, what what they're gonna be debating in in this.
speaker-0 (20:28.834)
New gambling act. They're going to be yeah, you know, what's next for gambling reform? Is it time for a new gambling act? The coalition to end gambling ads. So there, right, you've got loads of people that are going to be kind of pushing for the ending of gambling advertisement. But there we know there's another side to that argument where you know, the regulated industry needs to advertise in order to for it to compete against the black market. That case is not going to be made on that panel. so yeah, there's a real
imbalance, it's an echo chamber. and yeah, d just interesting. I I spoke to our conference producer who who told me you would you would never try to put together a panel that is such an echo chamber like that.
speaker-2 (21:08.718)
Yeah.
speaker-1 (21:09.922)
I'm sorry maybe the risk of sounding like a bit of a cynic is not the whole sometimes is not the whole purpose of party conferences to be an echo chamber anyway and to just hammer home the agenda of the then leadership at the time but I guess this is the point you're making though isn't it Joe is that this is definitely the fact admittedly obviously it's not like it's on the main stage at the event it's not like Andy Burnham is there holding up a
a Betfred sign and torching it or something in front of all the crowd. It's at the fringe part of the party but the fact I guess it's on the agenda should give the industry an indication of what the current political leadership's view of it is.
speaker-2 (21:47.214)
Particularly because the minister is there. Yeah. The minister is is on
speaker-1 (21:50.638)
Which is interesting because the former Minister, Baroness Twycross, definitely showed a much more nuanced approach to a lot of regulatory topics, didn't she? I think during her tenure at DCMS in that role. So yeah, it's interesting to see quite a significant change up.
speaker-0 (22:09.774)
So this is the fringe, right? Anything that you think could could we be looking out for apart from a myriad of TikToks, I'm sure, could we be looking out for anything from Burnham or Healy from the the actual part of the conference around gambling? Could there be any any clues? I
speaker-2 (22:24.896)
I would be s very surprised if if th you know, th he mentioned gambling in in his maiden speech.
speaker-1 (22:32.312)
like maybe if he's going to it will come up in a conversation about revitalization of the British high street or something like that. might just reiterate what we already know the whole thing, the conversation about bang shops and AGC's, vape shops and that term for dodgy businesses, which I think was referring to like shops doing the fairies. mindset towards gambling.
speaker-0 (22:55.374)
So if they say, you know, things like taxing th things that are detrimental or a societal we know what they're referring to, even if they aren't name checking gambling, right?
speaker-1 (23:06.414)
It's a case of reading into the language, isn't it?
speaker-2 (23:09.454)
If we just link this back to the the first half just before we wrap up, really, because it it it strikes me that that there's two things going on at the same time here. We're talking about, you know, a s a a founder of one of the leading operators who has to go to the the national press to to tell the alternative story, because presumably government isn't really listening to industry on this.
And now we see a a fringe event like this where there's no representation for for the industry. Do you do you fear that we're in a a situation now where industry can't really be be heard?
speaker-1 (23:47.95)
Maybe not, you know, can't be heard. There's there's definitely voices in politics who will listen to it. mean, there's MPs within the Labour Party who have been shown to be, you know, more sympathetic maybe to the industry viewpoint. The trouble is just seems like they're not the ones pulling the strings. That's the problem the industry is going to face. I think it's probably just a case of a bit like what we talked about last year, adjusting
communications strategy a little perhaps. I guess again though the problem is, it pointless adjusting your communications strategy if the government clearly have an agenda that they're dead set on? And also it's kind of related to what you said earlier Joe, are also facing a lot of financial pressure, a lot of pressure to do with international politics, economics, domestic politics and so on. At the moment for them they're gonna be looking and thinking we need money now to support our
plans and projects and so on. We raised the tax on this, something that isn't particularly popular with a lot of our political allies. And we should add, the industry doesn't always have the best view among the general public either. And yeah, we raised that, we get the cash we need and we deal with whatever consequences there may be later.
speaker-0 (25:06.412)
Yeah, no, ch Charlie, if I can answer your original question, you know, we can't talk about Fred Dunn Fred Done being on the the you know what in all these papers and then talk about an industry that can't be heard. It can be heard. But I think as opposed to the budget last year, the messaging has to be right, it has to be clear. it's gonna be a tough nut to crack this government because of the kind of the the economic strain yeah on the UK at the moment and on the Labour Party. but
The messaging can be heard. it's and it's important that they get across the messaging through things like sponsorship, job job losses as a result of shop closures. This is this is the impact. and I think Fred Doan did a an important job this this past weekend in getting getting that message across. The industry can be heard, but the messaging has to be strong. We know what resonates, we know what cuts through and we know what doesn't.
speaker-2 (26:03.458)
Well, I think this is a topic that we could talk about all day, but unfortunately we do have to leave it there. But for now, Joe, Ted, thanks for joining me today. I'm sure we'll be returning to this topic sometime or another when when the budget is is announced and and also we might come and talk about this in in the aftermath of of Labour conference. But yeah, thanks for thanks for coming on and and chatting about this with me today. Thanks to Optimu for supporting the show and to our listeners, thanks for tuning in to today's episode of iGaming Daily.
Come back tomorrow to keep up to date with all the latest global gambling news.
speaker-1 (26:37.166)
you
you