The high street staple of the betting shop could be facing the final furlong as the Government gets tough on fixed odds betting terminals. The terminals had been criticised as the “crack cocaine of gambling”. In April 2019, In a decisive effort to curb their impact, the Department of Culture introduced restrictions which saw machines that could previously gamble £100 every twenty seconds limited to a maximum £2 stake. By rendering the terminals simply uneconomical to run, it represents a huge loss for bookmakers who had relied on the terminals for more than half their revenue. The change is said to have cost William Hill nearly £1billion so far this year.
But whilst also coping with difficulties posed by the growing market for online gambling, in response to the stake restrictions, leading bookmakers announced estimates which could leave nearly 25% of all betting shops vacant. There are approximately 8,500 betting shops across the UK. The major players are undergoing consultation processes which could see shops being closed before the end of 2019. So far plans have been revealed that suggest Ladbrokes is looking at closing 900 shops. Additionally, William Hill intends to close 700 branches, threatening nearly 4,500 jobs. Looking to the future, bosses have been discussing business remodeling which could see a move away from bricks and mortar to “digitally-led international business”. On the international front, the growth of stateside profits is predicted; as UK-based betting brands begin to shift their attention to overseas investment as sports betting was legalized in the United States in May 2018.
In addition to tackling gambling addictions, the government had said introducing the restriction was part of a move towards encouraging more diversity on the British high street. But in a move that could see more shutters going down on the high street on top of the average fourteen shops per day that closed their doors in 2018, there are questions as to what will happen next and how that diversity will be achieved. The shadow cabinet recently revealed plans to introduce a policy whereby local authorities could take action and seize properties which have been vacant for twelve months and offer them to community projects, cooperative business and startups. There are numerous cases of empty buildings being gifted a new lease of life in this manner. In Stockton upon Tees, independent businesses have been offered lower rents and are not charged business rates in an effort to revitalize the retail market. Other examples include introducing community hubs through leasing to charitable organisations, using pop up arts and culture activities as a form of advertisement to potential tenants and moving towards experience-focused retailers, such as escape rooms. Former department stores with larger vacant spaces are being transformed into leisure facilities such as indoor mini golf centres, gyms and restaurants. In Edinburgh, the council has approved plans to transfer the former House of Fraser on the iconic Princes Street into a whisky experience by alcohol giant Diageo.
A property becoming vacant can raise the stakes and ultimately turn a sure bet investment into a liability for landlords. However, there is hope beyond business rate relief for landlords in search of a new tenant. In May this year, the Government announced the introduction of a new register for retail landlords. Commencing with pilot schemes in some local authorities, the system aims to expedite the rental process by helping potential tenants figure out who owns the vacant spaces. It is hoped this will encourage vacant units to be filled more quickly and struggling landlords may hit the jackpot.
Whilst the resulting impact of the crack down on fixed term betting terminals is likely to be seen in the form of boarded up shops, there is still light at the end of the tunnel for the British high street, and its landlords, tenants and consumers hopes to play their cards right by evolving and adapting to the twenty-first century.
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