Could Croydon’s high streets become even emptier of active shops than some already are? Our retailing and betting correspondent, M.T. WALLETTE, with a hot tip for the 5.15 at Aintree on Saturday*, reports on how even the borough’s turf accountants are feeling the pinch
It’s the Grand National on Saturday, the biggest single betting event of the year, with bookmakers expected to rake in more than £250million in wagers on the historic Aintree steeplechase, as 1 in 4 of the nation has a flutter.
But according to reports in the trade press this week, there’s another stat which could impact Croydon’s landlords and high streets very soon: 1 in 3 of betting shops in the borough run by bookmakers William Hill could be about to close.
Inside Gaming News is reporting that William Hill, Britain’s second-largest betting firm with annual revenue of £1.6billion, is having a “personal conversation” with 2,000 landlords to reduce their rents by half.
“There is a future on the UK high street for betting operators, we just have to make the best of the situation we are in,” Philip Bowcock, William Hill’s chief exec, warned last month.
Bookmakers are usually odds-on to be quids in, but government legislation which took effect on Monday to limit the maximum stake allowed on FOBT machines – reducing it from from £100 to £2 – is bringing tears to the eyes of Bill Hill, Joe Coral, Paddy Power and their mates.
FOBTs – Fixed Odds Betting Terminals – are the casino-style fruit machines now common in most bookmakers’ shops. They were introduced after rules were changed under the previous Blairite government’s relaxation of gambling laws, and have been dubbed “the crack cocaine of gambling” because of their highly addictive nature, which has caused pain and misery for tens of thousands of gamblers and their families, while generating juicy profits for the bookies.
Indeed, FOBTs are regarded as the reason for the rapid increase in the number of betting shops on Croydon’s high streets, where they often stand side-by-side with charity shops and fast food outlets… but these days, often little else.
By 2015, there were 12 betting shops from a range of firms within a small area around Thornton Heath high street alone, with the local authority usually powerless to proscribe new ones from opening.
FOBTs are also given as the cause for an increase in crime and police call-outs: the Metropolitan Police responded to 184 call outs for problems encountered by the staffs of the Thornton Heath’s betting shops between 2012 and 2015.
With the rapid growth in online gambling, FOBTs have often become the be-all and end-all for the profitability of many high street betting shops.
Anticipating a rapid fall-off in their income from their retail outlets, William Hill are considering closing as many as 900 of their 2,342 outlets in Britain. William Hill has 16 betting shops in Croydon.
Ciaran O’Brien, William Hill’s director of corporate communications, said, “The stake cut was always going to have a significant impact on the business and we think it could close up to 900 shops, but we aren’t going to close anything immediately. We’ll look at long-term customer behaviour and what we seek through mitigation. We will see what happens over the next 18 months.
“We are trying to encourage landlords, given the situation on the high street, that reduced rent is better than having an empty shop and this is what we will continue to discuss.”
With high streets across the country struggling, and commercial landlords worried that they may lose all their rental income, William Hill clearly reckon that they are playing with a winning hand here.
Even if you don’t have the inside track on the winner of the 5.15 at Liverpool on Saturday, one thing of which you can be certain: if William Hill is reviewing the financials of its betting shops because of FOBT changes, then every other major betting firm with retail premises is doing exactly the same.
Confirming that her company had written to the landlords of its betting shops asking for a rent reduction, Nicola Frampton of William Hill told Inside Gaming News: “The purpose of the letter is to inform landlords we are taking some extremely difficult decisions about the size of our betting shop business and that these decisions will have a direct impact on our landlord partners.”
William Hill recently reported a loss of £722million before tax for 2018, compared with a profit of £147million for the previous year. This was despite revenue rising 2 per cent to £1.62billion.
*Our hot tip for Saturday’s National? Keep your cash in your pocket or purse.
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