Fitch alerts bookmakers over restrictions
The credit-debit watcher Fitch alerted British bookmakers over the possible increase of restrictions on in-store gaming machines.
UK.- Fitch Ratings followed the warning of a British MP earlier this week and said that companies like William Hill and Ladbrokes are in risk of suffering because of a possible increase of the restrictions on in-store gaming machines.
The UK government is focused on controlling the operation of FOBTs, as the Gambling Commission published evidence that they could be harmful for players. Analysts Paula Murphy and Patrick Duncan said in a note: “The UK government is likely to propose changes to the regulation of gaming machines in the next few months, following the completion of its triennial review. Our base case is for an incremental tightening of regulations that would mainly affect smaller, independent companies with less diversified revenue streams. But we have also considered an adverse scenario where gaming machine revenues are significantly affected.” Both of them agreed that the two giants are the ones who are gonna get affected by the changes because the machines constitute half of their earnings.
“Ladbrokes Coral and William Hill are the most exposed major gaming companies, because of their large portfolios of licensed betting offices. In our downside scenario we assume that Ladbrokes Coral would lose about 35% of gaming machine revenues, leading to FFO-adjusted net leverage remaining above our 4.0x sensitivity guidance for a downgrade for two years,” they said, and explained that a possible outcome includes a reduction in maximum stakes, which are currently £100 every 20 seconds, and potentially other measures to slow betting speeds.
MP John Whittingdale said during the annual meeting of the Association of British Bookmakers (ABB) that betting shop operators should be alerted because the latest review on gaming machines from the government could lead to significant changes. Despite the fact that the MP doesn’t really have official information anympre, he said that the current culture minister Tracey Couch will likely change the rules since she doesn’tt really like FOBTs. Nevertheless, he believes that there’s a good future for the industry since half the population likes to bet, and that a tighter control on FOBTs would not change a thing.
