Gambling payout for pubs eases smoking ban blow

The Government has softened the blow of the smoking ban for the pub industry by increasing the value of prizes in one-armed bandits.

The maximum stakes will rise this month from 30p to 50p, with the top prize increasing to £35 from £25 from next March in all pub gaming machines.

Analysts said the rises, the first in six years, would help to lure gamblers into pubs even after the smoking ban takes effect. Gaming machines are a source of extra profit for pub owners, who typically rent the machines and keep 70 per cent of the money staked.

Nigel Parson, at Evolution Securities, said: "This development is a godsend for pub companies worrying about the negative impact of the smoking ban on machines income."

In Scotland, which banned smoking in public places this year, gaming machine income has dropped about 7 per cent, yet Mr Parson believes the enticement of higher prizes will drive machine revenue up by as much as 10 per cent.

The Department for Culture, Media and Sport agreed to the increases in return for pub owners clamping down on under-age gamblers under a new code of conduct. In future, all gaming machines must display the GamCare helpline - the charity set up to help with addicted gamblers - and be supervised to ensure that there are no under-age players.

Increasing the maximum stake is expected to prompt suppliers to come up with better machines that will attract more players.

Although the increases have been on the cards for some years, Mr Parson added, "the timing is very helpful".