(photo credit: REUTERS)
Israeli gaming firms including Playtech are expected to see losses following the introduction of new laws for fixed odd betting machines. Playtech is owned by Teddy Sagi, one of Israel’s wealthiest men, which powers the software for over 35,000 machines located in bookmakers across the high street in the UK.
The machines currently allow customers to bet up to £100 every 20 seconds, which has attracted a lot of criticism from MPs and something that Tracey Crouch, the sports minister has labelled the ‘crack cocaine’ of the high street. The machines are typically bright, loud and are unsupervised, resulting in high margins for bookmakers and has generated over £1.3 billion for companies the last year.
However, pressure from UK politicians and Tracey Crouch will see the maximum stake on the machines changed from £100 to just £2 per play. Crouch has been pushing heavily for the reform on the games and whilst the £2 change was expected to start in October 2018, it was pushed back by an entire year – something that made the minister quit her post.
Crouch received praise from fellow MPs including Boris Johnson for ‘sticking up for her beliefs’ and the continued pressure has now pushed the law forward and will be in place from April 2019.
Sagi has a majority share in Playtech and the company receives a 9% commission from every bet placed by the fixed odd betting machines. Whilst the company is expected to lose £150m per year as a result of the new laws, it is unlikely to impact his vast wealth accumulated through property and other investments. The company has recently struggled to crack the Asian market, although revenue appears to be stabilising.
High street bookmakers such as Ladbrokes and Coral have protested against the new laws and have claimed that new decision could cost hundreds of UK citizens their jobs. However, shareholders have welcomed the new and improved law as being more transparent and fair, with Ladbroke’s share price increasing 8% and William Hill’s up 2% upon hearing the news.
Currently, there is no change on the minimum requirements for online casino and gambling, although first-time customers are typically limited to thresholds of £10, £20, £50 etc. Therefore, this new ruling only applies to in-house betting machines and should not affect the wider industry. Customers online can be encouraged to play using welcome or matched casino bonuses
, although wagering requirements will commonly apply.
Israel continues to be a hub for UK casinos who benefit from their customer management, web hosting
and technology. UK companies that currently have their headquarters in Israel include 888 Casino, Winner and William Hill.
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