Paddy Power up de­spite UK bet­ting clampdown

Irish Independent - - Business - El­lie Don­nelly

SHARES in Paddy Power Bet­fair were up over 2pc yes­ter­day on the Ir­ish Stock Ex­change, de­spite con­fir­ma­tion from the Depart­ment of Sport in the UK that it was clamp­ing down on Fixed Odds Bet­ting Ter­mi­nals (FOBTs).

The Bri­tish Depart­ment said that it was propos­ing to re­duce max­i­mum stakes on FOBTs in the UK from £100 to £2.

Es­ti­mates from Paddy Power Bet­fair sug­gest that the di­rect im­pact of this new stake limit would be a 33pc to 43pc de­crease in its to­tal ma­chine gam­ing rev­enue.

Last year this would have equated to a £35m (€40m) to £46m rev­enue im­pact, rep­re­sent­ing 2pc to 2.6pc of group rev­enue.

“We wel­come the sig­nif­i­cant in­ter­ven­tion by the gov­ern­ment, and be­lieve this is a pos­i­tive de­vel­op­ment for the long-term sus­tain­abil­ity of the in­dus­try,” Peter Jack­son, CEO of Paddy Power Bet­fair, said.

How­ever the group said that it does not en­vis­age that the proposed change will have a ma­te­rial im­pact on its over­all re­tail strat­egy in the UK.

Paddy Power Bet­fair out­lined a num­ber of ways it could mit­i­gate for the po­ten­tial im­pact on its prof­its in­clud­ing through a reduction in costs as­so­ci­ated with the ter­mi­nals, new prod­uct de­vel­op­ment, and sub­sti­tu­tion to other bet­ting prod­ucts.

Ear­lier this week the com­pany’s mar­ket val­u­a­tion surged more than €400m af­ter it con­firmed talks to merge its US busi­ness with Amer­ica’s FanDuel to cap­i­talise on the ex­pected lib­er­al­i­sa­tion of US bet­ting laws.

The move comes in the im­me­di­ate wake of a US Supreme Court rul­ing which struck down a fed­eral law that has re­stricted sports bet­ting there since 1992.

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