GVC Holdings, the owner of British gambling brands Ladbrokes and Coral, has changed its expectations for the impact which the recently imposed crackdown on fixed-odds betting terminals (FOBTs) was expected to have on its performance.
The group reduced the predicted impact, saying that the cut in the maximum stake of the machines from £100 to £2 which was brought into effect at the beginning of April is now expected to affect its earnings by approximately £105 million. In comparison, the company had previously forecast that the reduced maximum stake of the controversial FOBTs would hit its earnings by about £120 million in 2020.
According to previous estimates provided by GVC Holdings, the reduced £2 stake would force the group to shutter between 950 and 1,000 betting shops over the upcoming year and a half. The betting outlets closures, on the other hand, would lead to lay-offs of about 5,000 employees. The recent reduction in losses could now mean that the final number of betting shops closures is smaller than initially projected.
The more optimistic forecast for the groups’ earnings after the fixed-odds betting machines’ maximum stake reduction contrasted the one provided by William Hill which has not only previously projected significantly lower earnings due to the Government’s crackdown but also confirmed that the impact so far corresponded to its initial guidance. Paddy Power Betfair, now Flutter Entertainment, also said that its revenue drop was at the upper end of the predicted decline.
GVC Holdings Among British Gambling Operators That Seek US Expansion
Over the last few years, the group has seen rapid growth and it preferred to keep it that way. Until 2018, its services were available only on the Internet, but after completing the takeover of Ladbrokes Coral worth £3.2 billion GVC Holdings added the two acquired brands’ retail operations in Europe, including 3,500 brick-and-mortar betting outlets across the UK.
The crackdown which the UK Government rolled out on the controversial machines pushed not only GVC Holdings, but its rival gambling operators as well, to look for further expansion of their assets in overseas markets, and especially in the US, where the gambling sector was expanded through the sports betting legalization in May 2018.
One year since the historic ruling of the US Supreme Court which decided to lift the federal ban on sports betting in the country, Atlantic City-based Borgata Casino officially rolled out its online sports betting platform, named BorgataSports. This is the first Borgata-branded sports betting service. It joins the playMGM NJ application which the MGM has released in New Jersey under its Borgata license.
Reportedly, the two companies invested $100 million each into the project. Now, the Borgata brand and GVC Holdings have joined forces working on the latest sports betting offering, which is to help the UK gambling operator expand its presence in the US gambling sector.
- Author
Olivia Cole
