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Treasury warns that cutting gambling stakes will drain public coffers as fight erupts in the Cabinet

A FRESH Cabinet fight has erupted over a plan to limit FOBT stakes to £2 after the Treasury warned it would blow a huge hole in state coffers.

New Culture Secretary Matt Hancock is pushing to impose the smallest possible new maximum on the bookie shop machines, dubbed the crack cocaine of high street gambling.

But it has emerged that Philip Hammond is opposing the move.

The Chancellor instead wants the maximum stake reduced from £100 to £20.

The Treasury takes an estimated £450m a year in Machine Gaming Duty from fixed odds betting terminals.

The levy takes 25 per cent from the total £1.8bn a year blown on FOBTs.

Mr Hammond’s officials have warned that the their takings would plummet under a £2 stake, leaving him having to raise taxes or enforce spending cuts elsewhere to recoup the lost revenue.

A government source said: “Matt Hancock is jumping the gun by suggesting the stake will be set at £2, because the Treasury will have a big say in this and they are not at all happy with it.

“He hasn’t thought this through or seen it in a wider context of the damage it will do to the public finances.”

A long running official consultation on what the stake should be closes this week, with a government decision promised in weeks.

Theresa May will be forced to intervene between her feuding ministers.

Slashing the maximum stake so low may also only have the effect of pushing gambling addicts online where there are less controls on how much they can bet, opponents insist.

Bookies have also warned a £2 stake will have serious consequences for their high street shops, forcing closures and job losses.

But Tory MP Chris Philp, who has campaigned for a £2 limit, said: “The evidence shows that the cost of the social damage from addiction – whether its job losses or marriage break ups – far outweighs the loss of revenue to the Treasury”.

The Fairer Gambling campaign added: “The money lost on FOBTs won’t evaporate from the economy: it’ll go to other, less harmful betting products, or to more productive activities on the high street, which would create more jobs and generate more tax revenue.

“So the Treasury shouldn’t be looking at the tax from FOBTs in isolation.

“Money lost on the bookies’ machines has a net negative impact on the economy as a whole, particularly given the cost of gambling related harm.”

A Treasury spokesman said: “We are fully supportive of DCMS’s work to ensure the UK’s gambling regime continues to balance the needs of vulnerable people, consumers who gamble responsibly and those who work in this sector”.

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Source: https://www.thesun.co.uk/news/5419071/treasury-warns-cutting-gambling-stakes-will-drain-public-coffers/

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