BETTING OFFICES – Gaming machine legislation April 2019
As from April 2019 the government have reduced the amount of money that can be spent on gaming machines in betting shops. The government believe that by capping the amount that can be spent for each play to £2.00 it will help reduce addiction to such machines.
Over 50% of High Street Bookmaker’s profits come from gaming machine income and the industry believes it could suffer 21,000 job losses with more than half their shops closing.
In the interim company reports from the top three High Street Bookmakers’ they each mention shop closures. William Hills have announced that 900 of their shops have been identified as loss making due to the new legislation. Corals and Ladbrokes will close 1,000 shops. William Hill has also announced they will write down the value of their business by £883 million.
Many pubs and workingmen’s clubs have betting shops attached to them and should they close the licensed business will sustain a loss of income through the rents they currently receive from the Bookmaker. The average rent received from a Bookmaker is about £10,000 per year. Not only will this income disappear from the bottom line profit of the licensed business, but the footfall associated with customers visiting the Bookmakers will decline. Many of these leases with Bookmakers are full repairing so repair costs for the licensed operator will also increase.
It is not just licensed property that will feel the effect of this change in legislation. Bookmakers will also be reviewing their involvement with properties currently owned by all third-party landlords. This will mean shops in High Street locations throughout the country will be under scrutiny. It is plausible to expect closures to start taking place within the second half of 2019. How this will affect an already embattled retail sector we will have to wait and see.