UK gambling companies are having to perform a balancing act. Operations in their home market have been hamstrung by tougher regulations, while legislative changes and added taxes threaten business lines and earnings in some overseas markets. But recent legislation changes in the US have bookies shifting their growth plans to the newly legal American sports betting market. Online gambling also continues to grow, making up for lower footfall at high-street shops.
From April 2019, the maximum stake permitted on fixed-odds betting terminals (FOBTs) will be cut to £2. This change, dramatically down from the previous £100 limit, was announced in early 2018. The three main UK betting shop operators are expected to be hit hard by the new stake limit, and the next 12 months will reveal by how much. William Hill (WMH) has already put through an £883m impairment on its retail assets and stated that around 900 store closures are expected. It’s been estimated that total net gaming revenue could fall by between 35 and 45 per cent as a result, and adjusted operating profits by between £70m and £100m.
Ladbrokes Coral is now part of GVC (GVC). This deal was announced shortly before the FOBT stake cut, on terms where GVC wouldn’t pay up in the case of a heavy cut. That proved a prudent decision, and GVC chief executive Kenny Alexander remains optimistic, saying that he’s spent the past two years creating a business that could withstand structural or regulatory shocks in any of its markets.