Paddy Power Betfair's CEO Peter Jackson takes first steps amidst 2.7 per cent fall in shares

Former Worldpay boss Peter Jackson has taken up his new job as chief executive of Paddy Power Betfair this week, as Breon Corcoran stepped down from the board on January 7th. The move represents a big step up for the youthful 42-year old, who was only appointed head of the payment processing group in March 2017. Prior to that he spent seven years as chief executive of foreign exchange Travelex.

Mr Jackson also has a considerable challenge to face, with the departure of the well-respected Corcoran who led the successful USD 8.4 billion merger of Paddy Power with Betfair back in 2016, which took everyone by surprise.

Mr Jackson’s arrival in Dublin, where he will be based, coincides with a decision from Morgan Stanley to cut its recommendation on the gambling giant to underweight, the first time it has taken a negative stance since the company was formed by a merger almost two years ago.

Morgan Stanley analyst Ed Young told clients on Monday that the company’s “premium valuation” may soon come under pressure. His price target of USD 555 is almost 10 per cent below the average and implies about 14 per cent downside from the current price. Shares fell as much as 2.7 per cent on Monday.

Mr Young warned that the incoming chief executive needs to address “some major strategic issues,” and there are “few silver linings” from regulatory changes in Australia. The analyst said that while Paddy Power Betfair has “strong technology and a robust balance sheet,” expectations for a significant acceleration in online revenue growth after completion of a project to put customer interfaces onto a single platform “may not materialise.”

Regulatory changes in the UK also pose a challenge. Late last year the government proposed new restrictions on controversial instore betting machines, dubbed the “crack cocaine of gambling.”