Government plans gaming machines inquiry

By Marc Jones

LONDON (Reuters) - The government said on Wednesday it planned to take a closer look at whether high-stake gambling machines are fuelling addiction, hitting shares in bookmakers who make around a third of their profits from the terminals.

The investigation, to be undertaken by the country's gambling watchdog, overshadowed news the government plans to scrap a levy on bookmakers' profits from horse racing which had been used to help fund the sport.

Sports Minister Gerry Sutcliffe told Reuters the government would take a tough stance if high-stakes video roulette and blackjack machines were found to be triggering problem gambling.

"I'm concerned about the longer-term impact of the growing popularity of FOBTs (fixed-odds betting terminals) and have asked the Gambling Commission to give particular priority to work on the risks associated with high-stakes machines," Sutcliffe said.

"We have always said if any evidence emerges that they (FOBTs) are causing harm, then we are prepared to take action and we have the power to take action."

FOBTs are highly profitable for UK bookmakers, and any tightening in laws surrounding them would be a blow to firms with high street betting shops.

There are roughly 35,000 FOBTs in the UK's 8,500 betting shops. Each one earns a bookmaker around 500 pounds a week while the government takes around 250 million pounds a year in taxes from the machines.

Shares in William Hill (WMH.L) fell almost 5 percent, while Ladbrokes shares (LAD.L) were 2.2 percent lower at 3 p.m..