Ladbrokes Coral State FOBT Hit Less Than Anticipated
May 16, 2019
In an announcement to the Stock Market today GVC Holdings PLC the owner of UK high street bookies Ladbrokes and Corals announced that the effect on its annual profits from the reduction to maximum stakes on FOBT machines to £2 from April 1st would be £15M per annum less than previously expected.
The maximum stake on Fixed Odds Betting Terminals or “roulette machines” in betting shops in the UK was reduced from £100 to £2 in April after many years of campaigning by groups concerned at the proliferation of betting shops and the harmful effect of FOBT machines particularly on problem gamblers.
GVC Holdings PLC is effectively the UK’s largest high street bookmaker with over 3500 shops trading under the Ladbrokes and Coral’s brands. Bookmakers had warned that the reduction in maximum stake would result in thousands of betting shop closures and the loss of thousands of jobs of those staff employed there.
Specifically, GVC had guided the Stock Market that the financial impact in the first full year of trading with the lower FOBT maximum stakes in 2020 would result in a hit to profits of approx £145M. This has now been revised to £130M negative impact in 2020 falling to an adverse impact of £105M by 2022.
The crackdown on FOBTs in the UK market has prompted GVC and other UK gambling companies to look at expansion in the United States, where regulation on sports betting has begun to ease in the last year.
GVC forged a joint venture with US-based casino group MGM Resorts International in July 2018 to establish its presence in the burgeoning US market.
Internationally GVC Holdings operates the Ladbrokes.com.au site in Australia, Sportium in Spain, Eurobet in Italy, as well as Bwin which is prominent throughout Europe and many others. The Group also has many online casino brands such as Gala Spins, Foxy Casino and Casino King.
In today’s announcement, Kenny Alexander the Chief Executive of GVC stated that “We have had an excellent start to the year with strong momentum across all divisions continuing into the second quarter.”