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Paddy Power Betfair plays down ₤ 2 stake cut impact
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8 August 2018
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Gambling company Paddy Power Betfair has said it can hold up against the federal government's strategy to cut the maximum bet on fixed-odds betting terminals [FOBTs] to ₤ 2.

The company made the declaration as it reported a 4% rise in very first half profits to ₤ 106m.
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"Our stores are more rewarding, and exceed on sports betting, enabling them to better hold up against the impact of lower device stakes limits," the business said.

The stake is being cut from ₤ 100.

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

High step

"We operate in high-footfall, highly competed areas, which means we are well put to gain from competitor store closures," Paddy Power Betfair stated.

"In the UK, we do not expect the government's proposed new ₤ 2 stake limit for gaming devices to have a material impact on our retail method," it added.

Rival William Hill, which generates just over half its retail profits from FOBTs, has actually warned 900 of its stores might become 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 might recommend income would fall by approximately ₤ 46m, which it said amounted to 2.6% of its overall revenue.

It also gave a gauge of the federal government's plan to increase remote gaming duty to balance out a few of the lost tax from FOBT. Each one portion point rise - from the current level of 15% - would result in an extra ₤ 2.5 m of duty to be paid.

Paddy Power Betfair said it had contributed ₤ 170,000 to LGBT charities as part of its "Rainbow Russians" campaign, which included making a donation whenever Russia scored worldwide Cup.

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

Paddy Power Betfair is pressing into The United States and Canada by buying US fantasy sports betting site Fan Duel.
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It stated losses from the Fan Duel organization and brand-new taxes in Australia would put pressure on its full-year outcomes.

Ed Monk, associate director of Fidelity Personal Investing's share dealing service, stated: "It wasn't all about the World Cup for Paddy Power Betfair. Half-year numbers revealed a 13% boost in earnings in the 2nd quarter of 2018, but earnings was up 9% in the period prior to the yohaig code competition."
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Paddy Power Betfair has been increasing its spending on marketing because March in an effort to arrest its share.

Peter Jackson, its president, said this was settling: "The World Cup was a display event for Paddy Power, with a series of effectively executed marketing campaigns resulting in it being one of the UK's most discussed brands in social networks conversations around the tournament."
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