Paddy Power Betfair plays down £2 stake cut impact

Paddy Power Betfair plays down £2 stake cut impact

  • 8 August 2018
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Gambling firm Paddy Power Betfair has said it can withstand the government's plan to cut the maximum bet on fixed-odds betting terminals [FOBTs] to £2.

The company made the statement as it reported a 4% rise in first half profits to £106m.

"Our shops are more profitable, and outperform on sports betting, enabling them to better withstand the impact of lower machine stakes limits," the company said.

The stake is being cut from £100.

FOBTs generate £1.8bn in revenue a year for the betting industry, according to the Gambling Commission, as well as taxes of £400m for the government.

High footfall

"We operate in high-footfall, highly competed locations, which means we are well placed to benefit from competitor shop closures," Paddy Power Betfair said.

"In the UK, we do not expect the government's proposed new £2 stake limit for gaming machines to have a material impact on our retail strategy," it added.

Rival William Hill, which generates just over half its retail revenues from FOBTs, has warned 900 of its shops could become loss-making, potentially leading to job losses.

Paddy Power Betfair said the proposed FOBT cut to £2 would reduce its revenue from gaming machines by between 33% and 43%.

Based on its 2017 figures, this could suggest revenue would fall by up to £46m, which it said amounted to 2.6% of its total revenue.

It also gave a gauge of the government's plan to increase remote gaming duty to offset some of the lost tax from FOBT. Each one percentage point rise - from the current level of 15% - would result in an extra £2.5m of duty to be paid.