The largest bookmaker in the UK – GVC Holding – has warned that Ladbrokes and Coral betting outlets will turn to a relatively small part of the group’s operations.
According to a pre-closing trading statement issued by GVC Holdings, the company’s full-year profits are expected to be in the range from £750 million to £755.
The company’s Chief Executive Officer Kenny Alexander said that the UK retail sector is in what he called a “terminal decline”. In an interview for The Telegraph, Mr Alexander explained that digital operations become larger by the day, with GVC Holding’s online gambling business registering an increasing market share. As explained by the company’s boss, the double-digit growth in its online gaming revenue was more than enough to neutralise the decline in brick-and-mortar shops in the country.
The net gaming revenue of the operator in the fourth fiscal quarter was boosted by a 15% sales increase from its online business in comparison to the result posted for the same period a year ago. Despite the quarterly decline of the retail sales of GVC Holdings’ European business, they rose by 16% for the full year.
GVC Holdings among UK Gambling Operators Eyeing US Expansion
The operator, which managed to complete a £3.2-billion acquisition of Ladbrokes Coral in March 2018, insisted that its performance has been affected by the UK Government’s decision to cut the maximum stake allowed at fixed-odds betting terminals (FOBTs) from £100 to £2. GVC Holdings further reiterated that the crackdown on the controversial machines would lead to the closures of up to 1,000 Ladbrokes and Coral betting shops as they would no longer manage to stay profitable. Logically, layoffs would also follow, as explained by Mr Alexander.
Despite the relatively poor performance of local high-street betting shops, Mr Alexander explained that profits from UK retail gambling sector would be a relatively small part of the company’s overall business the future.
GVC Holdings is one of the UK gambling companies which have been eyeing an expansion of its operations on a global scale by taking advantage of the recently relaxed sports betting sector in the US. Following the ruling of the US Supreme Court to strike down the federal ban imposed on these operations by the Professional and Amateur Sports Protection Act of 1992 (PASPA), GVC Holdings reached a deal with MGM Resorts in the summer of 2018. The deal is expected to push the company to a market-leading position in the next few years.
The company’s Chief Executive Officer further explained that the group cares the momentum into the new year, with the integration of Ladbrokes Coral and the US-based joint venture with MGM Resort making it a very well-placed operator in 2019. Both analysts and investors, however, still remain cautious, saying that no such thing as a “guaranteed winner” exists.
- Author
Olivia Cole
