Today, one of the leading gambling operators in the UK – GVC Holdings – announced its trading update for the first half of the current year.
The company, which is the current owner of the betting shop chain Ladbrokes Coral, revealed double-digit growth of its online operations, which it uses to offset a sharp decline registered in the revenue generated by its UK retail operations.
As revealed by the gambling group, the revenue generated from its online operations increased by 18% in constant currency in the year which ended in June. On the other hand, a 10% decline was registered in the revenues generated from the company’s UK retail arm in the same period, after its betting shops suffered the latest measure taken by the UK Government as part its efforts to tackle spreading popularity of the controversial gambling machines.
The change, bringing the maximum stake allowed at the machines down from £100 to £2, was officially brought into effect at the beginning of April 2019, after a few years of consideration and consultation. The considerably lower maximum stake, however, has been seen by gambling operators as too harsh, with many of them having issued warnings for possible betting shop closures and lay-offs across the UK.
GVC Holdings has previously projected that it could close up to 1,000 betting outlets. Its rival gambling company William Hill has estimated that it could be forced to shut 700 of its betting shops due to the stake reduction, with about 4,500 jobs to be affected by the change.
Sports Betting Market Liberalisation Makes US a Desired Expansion Target for UK Gambling Companies
As revealed by the Chief Executive Officer of the group, Kenneth Alexander, trading in the second quarter of the current fiscal year remained strong thanks to the fact that the company’s online operations continued to gain a considerable market share across all major territories. The outperformance of the company has been supported by the considerable competitive advantages of the technology platform offered by GVC Holdings, along with the product offered by its leading brands.
As far as the challenging retail environment in the UK is concerned, Mr Alexander explained that the transition to the new fixed-odds betting terminals’ maximum limit of £2 in the UK retail market is progressing very well, primarily thanks to the fact that the Ladbrokes Coral brand is well-placed to take the stricter regulatory conditions implemented by the Government.
To face the negative impact of the reduced FOBT maximum stake on its domestic market and the stricter regulation of gambling in the UK, GVC Holdings has been looking for expansion options in the US where the Supreme Court liberalised the sports betting market on May 1st, 2018. GVC has already joined forces with the casino giant MGM Resorts for full online sports betting service launch ahead of the beginning of the new National Football League season in September.
Other major UK gambling companies have also been aimed at entering the new market, which is also expected to be highly profitable. William Hill inked a deal with El Dorado Resorts, Paddy Power Betfair’s owner Flutter Entertainment announced a joint venture with the local daily fantasy sports provider FanDuel, while bet365 is expected to roll out a sports betting platform in partnership with Hard Rock in the state of New Jersey.
- Author
Olivia Cole
