Shares plummet as Chancellor Hammond accepts FOBTs limit
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Shares in the UK’s biggest bookmakers tumbled on Tuesday after reports that Chancellor Philip Hammond had accepted the need for a £2 maximum stake on fixed-odds betting terminals (FOBTs).
In March, the UK Gambling Commission published recommendations to support the government with its review of FOBTs, including limiting stakes on slot games to £2 and non-slot games to £30.
The recommendation got mixed reviews, while some were calling for tougher action, others and especially some campaign groups were backing this recommendation to lower the top stakes.
According to the Times, Chancellor Hammond postponed the signing off on the limits due to the impact it could have on the gambling taxes keeping in mind just how much the government profits from these activities.
But the Times also noted that the Treasury signalled that a deal is near, with the Chancellor thus having an agreement with Matt Hancock Culture Secretary.
The deal could include increased levies on other forms of gambling to complement for the lost funds from FOBT taxes, concluded the Times baesd on a source from the Department for Digital, Culture, Media and Sport (DCMS).
An official announcement is to be after the local elections according to the Times. The news hit the UK gambling community, as major opeators saw a stinging drop on their share prices.
Shares in William Hill were down as much as 14% today and Paddy Power Betfair down 4%, while GVC, which owns Ladbrokes Coral, also saw shares drop 7% this morning.
GVC’s takeover offer for Ladbrokes Coral, which went through last month, was dependent on FOBT stakes in the UK market.
The deal included Ladbrokes Coral shareholders receiving 32.7p per share and 0.141 new GVC shares, with a further contingent entitlement of up to 42.8p depending on the government ruling on FOBT stakes.
Source: European Gaming Industry News