International edition
August 19, 2018 | Edition Nº3553

To cut the maximum stake on fixed odds betting terminals to USD 2.7

Shares in William Hill and Ladbrokes go down following fixed-odd betting review plans

Shares in William Hill and Ladbrokes go down following fixed-odd betting review plans
William Hill earnings are expected to take a hit on the back of the proposed changes.
United Kingdom | 01/22/2018

William Hill shares fell 13.23% while shares in Ladbrokes dropped 10.2% following reports that the government plans to impose the lowest maximum bet proposed for fixed odds betting terminals in a review into the gambling industry.

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hares in bookmakers William Hill and Ladbrokes Coral Group dropped following reports the government plans to cut the maximum stake on fixed odds betting terminals to just £2 (USD 2.7).

Culture secretary Matt Hancock is expected to announce this week that the government will impose the lowest maximum bet proposed in a review into the gambling industry.

William Hill earnings are expected to take a hit on the back of the proposed changes.

“If maximum stakes are cut to £2 it would be a negative surprise for retail exposed UK gambling companies,” said Barclays Capital.

“This scenario is not factored into the share prices of retail exposed bookmakers in our view. We think shares of William Hill will likely come under the most pressure tomorrow.”

Shares in William Hill dropped 13.23% to 292.3p (USD 405) on Monday morning, while Ladbrokes fell 10.2% to 163.7p (USD 227).

Ladbrokes CEO says stake cuts will fail to address problem gambling.

In response to the speculation, Ladbrokes chief executive Jim Mullens noted that there has been a constant rumor about potential outcomes of the triennial review since it began.

“It should be noted that the current call for evidence is yet to conclude and industry responses have not yet been submitted to the government,” he said.

Mullens added: "We are very clear that stake cuts will fail to adequately address any issue of problem gambling.

“The industry has also always made it clear that a cut to stakes will have serious consequences - resulting in shop closures which will ultimately affect jobs, tax revenue and the funding of racing.”

The two companies are expected to take the biggest hit among the UK's top bookmakers.

Analysts at Credit Suisse expect William Hill and Ladbrokes earnings would be slashed by 40% and 50%, respectively, in the worst-case £2 scenario.

Credit Suisse also sees around 1,000 betting shops being closed on the back of the reform.

Yogonet.com / Proactive Investors
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