Analysts Warn Of Double Whammy Over Remote Tax

Analysts have voiced concerns over an extra tax burden of £200m that could add to the impact caused to bookmakers by the UK Government’s decision to reduce the limit on fixed-odds betting terminals (FOBTs) to £2.The Government’s announcement yesterday that the FOBT maximum stake will be dropped to £2 as rumoured was music to the ears of many, but was not well received by operators.The announcement did not come alone though, and it was added that Remote Gaming Duty would be raised to fill the gap left in public finances by the limit drop.

Widespread unease

Many industry insiders have made their opinions clear on the issue, with Paul Leyland, formally of William Hill and now of Regulus Partners saying that “Sector profitability [will be] reduced by 66% at the EBITDA level.”Ladbrokes Coral and Paddy Power Betfair spokespeople have both spoke of the anticipated loss in revenue, while Peter Jackson, CEO of PPB, spoke more positively, saying that the company line set out by Breon Corcoran, his predecessor, has created “widespread unease” about FOBTs, adding:“We welcome, therefore, the significant intervention by the Government today, and believe this is a positive development for the long-term sustainability of the industry,”

GVC Holdings

GVC had structured its eventual price for Ladbrokes Coral based on the Government’s decision, and will now be paying less for the company, but have made their disappointment clear, but added that the announcement “marks the end of uncertainty on FOBT staking limits”, stating that the industry is “well placed to face these structural and regulatory headwinds”.There are expected to be 3,700 shop closures in the aftermath of the decision, with Betfred expected to be the hardest hit by the changes.With the news so recent, speculation is all anyone has ta this point, but it’s clear the impact of this ruling will be huge.

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