Paddy Power Betfair plays down ₤ 2 stake cut effect
8 August 2018
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Gambling firm Paddy Power Betfair has said it can withstand the government's strategy to cut the yohaig code maximum bet on fixed-odds betting terminals [FOBTs] to ₤ 2.
The business made the statement as it reported a 4% increase in very first half revenues to ₤ 106m.
"Our shops are more profitable, and surpass on sports wagering, allowing them to better hold up against the effect of lower maker stakes limits," the company said.
The stake is being cut from ₤ 100.
FOBTs produce ₤ 1.8 bn in profits a year for the betting industry, according to the Gambling Commission, in addition to taxes of ₤ 400m for the government.
High step
"We run in high-footfall, highly competed areas, which suggests we are well placed to gain from rival store closures," Paddy Power Betfair stated.
"In the UK, we do not anticipate the government's proposed new ₤ 2 stake limit for gaming machines to have a product influence on our retail method," it added.
Rival William Hill, which produces simply over half its retail profits from FOBTs, has cautioned 900 of its stores could end up being loss-making, possibly causing job losses.
Paddy Power Betfair stated the proposed FOBT cut to ₤ 2 would reduce its revenue from video gaming devices by in between 33% and 43%.
Based upon its 2017 figures, this promotion code might suggest earnings would fall by up to ₤ 46m, which it stated amounted to 2.6% of its total profits.
It likewise gave a gauge of the federal government's plan to increase remote video gaming duty to offset some of the lost tax from FOBT. Every one percentage point increase - from the present level of 15% - would lead to 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" project, that included making a contribution each time Russia scored worldwide Cup.
It was likewise behind the "main bus of gay expert footballers" that was on show at Brighton Pride.
Paddy Power Betfair is pressing into The United States and Canada by buying US dream 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 all about the World Cup for Paddy Power Betfair. Half-year numbers showed a 13% increase in income in the second quarter of 2018, but profits was up 9% in the period prior to the tournament."
Paddy Power Betfair has actually been increasing its spending on advertising considering that March in an attempt to apprehend its falling market share.
Peter Jackson, its primary executive, stated this promotion code was paying off: "the yohaig code World Cup was a display event for Paddy Power, with a series of effectively carried out marketing campaigns leading to it being among the UK's most discussed brands in social networks discussions around the tournament."
