Slashing maximum bets on gaming machines will leave Britain’s biggest independent bookmaker at risk of being swallowed by an overseas rival, its chairman and chief executive warned ministers on Monday.
Sky News has obtained a letter sent by Roger Devlin, the new chairman of William Hill, to Matt Hancock, the Digital, Culture, Media and Sport Secretary, in which he claimed that proposed reforms to Fixed-Odds Betting Terminals (FOBTs) could leave it vulnerable to a takeover bid.
Mr Devlin also highlighted the risk to tens of thousands of jobs across the gambling sector if the maximum FOBTs stake is, as widely expected, cut from £100 to £2.
“Consolidation within our sector continues and I would…not want to see the impact of a disproportionate triennial (review) outcome being a factor in the name of William Hill being added to the list of companies now in foreign ownership,” Mr Devlin wrote.
Image: Roger Devlin became chairman this year. Pic: William Hill
“At William Hill, we have a long and proud commitment to the UK and I do not want this to change.”
Mr Hancock is expected to announce his decision this week, following a review that has lasted several months.
One City source said on Monday that while William Hill – which has a market value of nearly £2.5bn – held regular talks with its advisers about a takeover defence, it had not received any formal bid approach.
Mr Devlin’s letter was also sent to Theresa May late last week, although his comments about a prospective foreign takeover bid had not previously been reported.
In recent months, Ladbrokes Coral has been acquired by Isle of Man-based GVC Holdings, while Sky Bet has agreed a deal to be bought by Stars Group of Canada in a £3.4bn deal.
While ministers are concerned about the impact of industry reforms on jobs, it was less clear whether they would have any anxiety about William Hill succumbing to a foreign takeover bid.
The plea to Mr Hancock not to slash FOBT stakes to £2 forms part of a desperate rearguard action by the gambling industry to fight the most sweeping overhaul in its recent history.
Bookmakers have warned that thousands of shops will close on the UK’s already troubled high streets, with falling revenues hitting the Treasury’s tax take.
FOBTs – dubbed ‘the crack cocaine of gambling’ after data showing that thousands of punters have lost more than £1,000 in a single session – have become a divisive issue in Whitehall, with ministers including the Work and Pensions Secretary Esther McVey reported to have lobbied against the most draconian proposals.
Paradoxically, shares in London-listed bookmakers enjoyed a spectacular day on Monday as investors digested the likely impact of news of a US court ruling paving the way for legalised sports gambling.
GVC, Paddy Power Betfair and William Hill all saw their value rise sharply.
Philip Bowcock, William Hill’s chief executive, described the ruling as “a landmark moment”.
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However, in a separate letter sent on Monday evening to Mr Hancock, he said that “the disproportionate reduction [of FOBT stakes] to £2 will have a direct impact on the level of investment we can make, thereby lessening our competitiveness and meaning we may well be susceptible to unwanted approaches for the business from overseas”.
The company declined to comment further.