Shares in gambling firms have taken a hammering after the biggest bookies reportedly agreed to a ban on adverts during live sports broadcasts.
Ladbrokes-Coral owner GVC tumbled 5% and 888 Holdings sank 4%, while Paddy Power Betfair and William Hill were also 3% lower amid fears their earnings would take a knock from the ban.
The sell-off came after BBC Sport reported the Remote Gambling Association – which includes Bet365, Ladbrokes and Paddy Power among others – struck a deal to agree a “whistle-to-whistle” TV advertising ban.
The move follows political pressure about the amount of betting advertising on television, with more than 90 minutes of adverts shown during the football World Cup last summer.
Is is understood the deal will ensure no adverts will be broadcast for a defined period before and after a game is broadcast.
It will reportedly include any game that starts prior to the 9pm watershed but
ends after that time.
Russ Mould, investment director at AJ Bell, said: “Investors are clearly betting that earnings will be hit.”
Brokerage Davy Research reportedly estimates that Paddy Power and GVC both spend between £40 million and £50 million a year on TV advertising.
It is said the impact of the ban will be mostly felt in football given the financial value of the sport to both the gambling companies and broadcasters.
But it is understood that horse racing will be exempt from the restrictions because of the commercial importance of gambling on its viability, while all other sports will be included.
It is expected the final ratification of the TV ban is needed from the
Industry Group for Responsible Gambling before coming into force, though the ban could still come into place as early as this month or at the start of 2019.
The move comes after a tough past year for the gambling sector, which is set to see earnings already affected by the Government’s crackdown on fixed-odds betting terminals.
It will limit the maximum stake to just £2 from £100, which will take effect in October next year.