Hedge fund mogul Ken Griffin has built a bet against one of the biggest UK gambling operators, GVC Holdings as the company is trying to fight stricter regulation that could be released.
Mr Griffin, who is the founder of Citadel hedge fund, has placed an £80-million bet against the operator that currently owns one of the largest high-street bookmaker chains, Ladbrokes Coral. As reported by The Sunday Times, Citadel’s owner has now shorted the shares of GVC Holdings, hoping to derive profit from a decline in the shares’ value. Reportedly, other traders have also increased their positions.
The move has made GVC Holdings the FTSE 250 company with the largest change in “short” positions so far in 2020. According to media reports, 3.6% of GVC Holdings’ shares are out on loan to hedge funds. These shares are estimated at £180.2 million.
The 51-year-old Citadel’s boss is not the only trader who has bet against GVC Holdings. The gambling stocks at the London Stock Exchange have come under pressure so far in 2020 amid some concern they could suffer another blow by even stricter regulation by the Government.
As already reported by Casino Guardian, UK gambling operators are facing some difficult conditions to offer their services in, as the Government and local gambling watchdogs have been imposing stricter regulation on the sector. The authorities already unveiled a crackdown on the controversial fixed-odds betting terminals (FOBTs), cutting the maximum stake allowed at the machines from £100 to £2.
Other Gambling Companies Also Face Pressure from Short-Sellers
Earlier in February, Neil McArthur, CEO of the UK Gambling Commission (UKGC), revealed for an all-party parliamentary group that is focused on dealing with gambling-related harm that the gambling watchdog would come up with a decision on further measures within a period of six months.
GVC Holdings has not been the only gambling firm that has come under attack from so-called short-sellers recently. Flutter Entertainment, the owner of another major gambling brand – Paddy Power Betfair, has 7.5% of its shares out on loan to several hedge funds. Other gambling company, William Hill, has 0.58% of its shares out.
Even though GVC Holdings’ shares have risen by 800% under the leadership of the Chief Executive Officer Kenneth Alexander, the gambling company’s investors have reportedly lost confidence in the management following some recent governance setbacks. In March 2019, Mr Alexander and GVC’s chairman Lee Feldman sold £20 million of shares in a single day. The move reportedly made the share price decline by almost 20%. A few months later, it became clear that GVC Holdings had disposed of its Turkey-based business to three individuals, one of whom is an acquaintance of Mr Alexander.
- Author
Olivia Cole
