The bookmaker which owns The Tote will axe more than 4,500 jobs if the Government implements plans to slash maximum stakes on gambling machines to just £2.
Sky News has learnt that Betfred has told ministers that almost 900 of its shops – more than half its UK estate – will become loss-making overnight if they press ahead with reforms to Fixed Odds Betting Terminals (FOBTs).
In a letter to members of the home affairs sub-committee, Mark Stebbings, Betfred’s managing director, warned that “much upset and heartache will go into having to make…redundant” close to 4,500 people who work in the potentially loss-making betting shops.
Sources said that several hundred staff at the company’s Warrington headquarters were also likely to be made redundant if the £2 move goes ahead.
One insider said the figures in Mr Stebbings’ letter were consistent with wider industry forecasts that around 20,000 jobs would go in total if the stake reduction takes place.
He proposed a compromise involving the tracking of players’ gambling activity on machines with stakes between £20 and £30, with non-tracked play capped at £20.
“Working in conjunction with the Gambling Commission we believe these stake ranges would protect vulnerable gamblers, limit the number of job losses and the impact of livelihoods in the betting industry, and would protect some jobs in the racing industry,” he wrote.
Mr Stebbings’ letter is the latest warning shot from the gambling sector about the impact of a cut to FOBT stakes on jobs and revenues for the Treasury and horse-racing.
The Government is expected to confirm this week that it will impose a £2 maximum stake on FOBTs – down from £100 now, and well below the £30 recommended for consideration by the Gambling Commission.
On Monday, William Hill chiefs told Matthew Hancock, the Digital, Culture, Media and Sport Secretary, that the impact of FOBT reforms on the company’s value would leave it vulnerable to a foreign takeover bid.
Speaking to Sky News, Fred Done, the eponymous co-founder of Betfred, said loss-making shops would not close immediately but were likely to do so when their leases expired.
He warned that the impact would be “greater than the job losses and shop closures at Maplin, Toys R Us, Mothercare and Prezzo put together”.
UK high streets are already enduring a bleak period as retailers and restaurant chains battle the headwinds of rising costs and declining consumer confidence.
Mr Done said he had not ruled out participating in efforts to seek a judicial review in order to challenge a decision to slash FOBT stakes, although he said a decision would be made after reviewing the evidence following a Government announcement.
The entrepreneur, who is in the process of selling a stake in The Tote to a racing consortium, also warned of the impact of the proposed reforms on Betfred’s supplier base, and predicted that the racing industry would suffer a revenue loss of close to £100m.
Mr Done, whose brother Peter is a major Conservative Party donor, criticised the Government over the proposed changes saying: “The Tories have adopted a Labour Party manifesto pledge. They are playing politics with people’s jobs”.
FOBTs have been dubbed ‘the crack cocaine of gambling’ after data showed that thousands of punters had lost more than £1,000 in a single session.
The issue of reform has divided ministers, with members of the Cabinet including the Work and Pensions Secretary Esther McVey reported to have lobbied against a cut to £2.