Around 25 per cent of the earnings of Ladbrokes Coral will be wiped off if the predicted UK government action in the three-yearly review of stakes and prizes that will come in the first quarter of 2017 goes through.
The merged companies – a deal in 2016 which was worth £3.3bn – stand to lose a fortune in the proposed crackdown on their fixed odds betting terminals in the Triennial Review.
It is estimated by City analysts that around 60 per cent of revenue comes from FOBTs and the expected cuts in what the terminals may do will cost the merged company about £100m from its pre-tax earnings in the next year. Ladbrokes and Coral are in the midst of paying off a £1.2bn debt from the merger.
British politicians have become worried about the impact on society from the terminals that they believe has led to an increase in compulsive gambling over the past 15 years. Most are requesting that the current maximum bet of £100 should be reduced to £2. This would be welcomed by the rest of the British street market, which has argued about the perceived unfair comparison between FOBTs in bookmakers’ shops and the prize levels in AWP machines in the pubs.
Evidence for the various sectors involved in the Triennial Review is in the course of being collected with a December deadline.
