An analyst has warned that William Hill’s decision to close 700 shops could mark the beginning of a wave of closing High Street betting shop.
Analyst Gavin Kelleher recently suggested that between 2,000 and 3,000 bookies could close out of the UK’s 8,400 shops.
William Hill recently reported that they would be closing 700 of their High Street shops, blamed the closures on the UK government’s change to fix-odds betting restrictions. In April this year, the government reduce the maximum stake on fixed-odds betting terminals (FOBT) from £100 to £2.
The stakes were reduced in an effort to support vulnerable people and problem gamblers. However, some reports have suggested that the change will more than likely result in problem gamblers moving form FOBT to other methods of gambling, like online slot machines or online gambling.
“I think we will definitely see more closures. GVC, which owns the Ladbrokes and Coral brand, have said they will close up to 1,000 stores,” said Mr Kelleher, who is an equity analyst at Goodbody Stockbrokers.
“You are also likely to see stores close elsewhere in the market from independents and potentially from Betfred so I think all told we’ll probably see over 2,000 to 3,000 shops close in the UK, which is a significant chunk of the 8,400 shops that currently reside in the UK.”
Mr Kelleher suggested that the stake reduction had been a “tipping point”, he said that until the reduction revenue growth had been flat at High Street betting shops for the past five or six years.
Kelleher said: “The £2 stake is the main issue behind those closures to be honest”.
It’s clear that gambling machines are a controversial issue, however, Kelleher highlights that “there is an economic impact here” as more than 50,000 people the UK are employed in retail betting. He said that the sector pays a “significant amount of tax and duty”.
“You could say that retail betting is a key support for the UK horse-racing industry, which accounts for [the employment of] about 100,000 people in the UK,” Kelleher said.
Doing the ‘right thing’
Jake Berry, the Business Minister recently said that he was “sorry for all the people who work in William Hill who’ll be worried about their jobs”. However, he added that fixed odds betting terminals “have been described as the crack cocaine of gambling”.
“I think we’ve done the right thing,” he said. “Those fixed odds betting terminals were causing enormous problems for some of the poorest and most vulnerable in our society.”
He went on to suggest that the closure of betting shops could be an opportunity for the UK to create more diverse High Streets.
“They can’t all be hot food takeaways, charity shops, and bookmakers. We want to see a diverse and vibrant High Street.”
This suggestion follows the government’s recent launch of a High Streets task force, who’s role is to advise local authorities, in an attempt to revitalise town centres as part of plans announced in the Budget.