Bookmakers’ shares jump following gambling recommendations
Shares in Ladbrokes Coral, William Hill and GVC bounced on the news.
Shares in bookmakers were on the rise on Monday after the gambling regulator said the maximum stake for fixed-odds betting terminals (FOBT) should be cut to £30, higher than had been expected.
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The Gambling Commission recommended the limit for FOBT slot stakes should be set at £2, but for non-slot games, including roulette, it should be set at £30 or less.
Experts had been anticipating the latter figure to be £20.
Shares in Ladbrokes Coral, William Hill and GVC bounced on the news, rising 2%, 4.4% and 1.7% respectively.
Foxy Bingo owner GVC is set to complete a £4 billion takeover of rival Ladbrokes Coral imminently.
Jasper Lawler, head of research at London Capital Group, said: “It looks like the so-called ‘crack cocaine of gambling’ is still going to be out there on the streets.
“That’s a good thing for the publicly listed ‘pushers’.
“A drop from a £100 to a £30 max stake size is bad news for future gambling company revenues but from the share price perspective, investors have been baking in much worse.”
The watchdog’s advice, to support the Government with a review of gambling machines, was among a raft of suggestions designed to help minimise the risk to vulnerable people.
Culture Secretary Matt Hancock has previously described FOBTs as a “social blight” and it was mooted that the maximum stake would be somewhere between £50 and £2.
Mr Lawler said: “A recommendation in the upper half of the previously recommended £2 to £50 range is a big surprise. And a great result for high street gambling companies like Ladbrokes and William Hill.
“Symbolically this recommendation shows regulators are not on a path to an outright ban of fixed-odds betting terminals.”