Book­ies gain on gam­ing con­sul­ta­tion

Shares - - BIG NEWS -

THE DE­PART­MENT for Dig­i­tal, Cul­ture, Me­dia and Sport’s (DCMS) lon­gawaited doc­u­ment (31 Oct) on gam­ing ma­chines in bet­ting shops trig­gered share price gains for Lad­brokes Coral (LCL) and Wil­liam Hill (WMH) as pro­pos­als weren’t as bad as feared.

The max­i­mum stake for fixed-odds bet­ting ter­mi­nals (FOBTs) will be cut ei­ther to £50, £30, £20 or £2 per spin from the present max­i­mum of £100.

Canac­cord Ge­nu­ity an­a­lyst Si­mon Davies thinks ‘a £20 max­i­mum stake is sig­nif­i­cantly the most likely out­come’, rather than a dam­ag­ing £2 max­i­mum stake which would se­ri­ously dent sec­tor earn­ings.

Beren­berg im­plies Lad­brokes’ shares were pre­vi­ously weak be­cause the mar­ket was pric­ing in a worst-case sce­nario of £2 max­i­mum stake. Sev­eral an­a­lysts be­lieve Lad­brokes will be taken over if its share price doesn’t im­prove in the near fu­ture.

DCMS is now un­der­tak­ing an­other con­sul­ta­tion and a fi­nal de­ci­sion on the FOBT stake lim­its is likely to be made in the sec­ond quar­ter of 2018 at the ear­li­est. (JC)

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