Paddy Power Betfair soft-pedals ₤ 2 stake cut effect

8 August 2018

remarks

77 Comments

Gambling firm Paddy Power Betfair has said it can stand up to the federal government's strategy to cut the maximum bet on fixed-odds wagering terminals [FOBTs] to ₤ 2.

The business made the statement as it reported a 4% increase in very first half revenues to ₤ 106m.

"Our stores are more profitable, and surpass on sports wagering, enabling them to much better withstand the effect of lower maker stakes limits," the business stated.

The stake is being cut from ₤ 100.

FOBTs generate ₤ 1.8 bn in revenue a year for the wagering market, according to the yohaig code Gambling Commission, in addition to taxes of ₤ 400m for the yohaig code federal government.

High tramp

"We run in high-footfall, highly completed locations, which means we are well placed to gain from rival store closures," Paddy Power Betfair said.

"In the UK, we do not expect the government's proposed new ₤ 2 stake limitation for gaming makers to have a material effect on our retail method," it included.

Rival William Hill, which creates just over half its retail incomes from FOBTs, has warned 900 of its shops could become loss-making, potentially causing job losses.

Paddy Power Betfair stated the proposed FOBT cut to ₤ 2 would minimize its earnings from gaming devices by between 33% and 43%.

Based on its 2017 figures, this might recommend earnings would fall by up to ₤ 46m, which it stated totaled up to 2.6% of its total profits.

It also offered a gauge of the yohaig code federal government's strategy to increase remote gaming responsibility to balance out some of the lost tax from FOBT. Each one portion point increase - from the existing level of 15% - would result in an extra ₤ 2.5 m of responsibility to be paid.

Paddy Power Betfair stated it had actually contributed ₤ 170,000 to LGBT charities as part of its "Rainbow Russians" campaign, that included making a contribution every time Russia scored in the yohaig code World Cup.

It was likewise behind the "main bus of gay professional footballers" that was on show at Brighton Pride.

Paddy Power Betfair is pushing into The United States and Canada by buying US fantasy sports wagering website Fan Duel.

It said losses from the Fan Duel company and new taxes in Australia would put pressure on its full-year outcomes.

Ed Monk, associate director of Fidelity Personal Investing's share dealing service, said: "It wasn't everything about the World Cup for Paddy Power Betfair. Half-year numbers revealed a 13% boost in profits in the 2nd quarter of 2018, however income was up 9% in the period prior to the competition."

Paddy Power Betfair has been increasing its costs on marketing considering that March in an effort to detain its falling market share.

Peter Jackson, its president, stated this promotion code was settling: "The World Cup was a display event for Paddy Power, with a series of effectively performed marketing campaigns causing it being one of the UK's most talked about brand names in social media discussions around the competition."