Ladbrokes owner powers through new rules

The owner of Ladbrokes took a hit to its top line last year after the Government imposed a maximum stake on so-called fixed odds betting terminals.

However GVC said the restriction on FOBTs had been offset elsewhere in the business, as its online footprint boomed.

Chief executive Kenneth Alexander said: “Our first full year since the Ladbrokes Coral acquisition has been a good one, and the performance has continued to be underpinned by our unique and highly effective operating model.”

A maximum £2 bet on so-called fixed odds betting terminals was introduced in the UK from the beginning of April last year.

Boris Johnson’s Government has also pledged to review the Gambling Act of 2005, to ensure it keeps up with the changing digital landscape.

“The regulatory focus on the industry has never been greater and safer gaming is a core driver, something the industry has embraced,” GVC said.

Recent data shows that moves to crack down on gambling addiction have paid dividends, with the problem dropping to 0.4% of the population in the most recent NHS survey, from 0.7%.

However, Mr Alexander said that too much of a good thing could have unintended consequences.

“Having an effective regulatory environment is critically important in encouraging customers to play with responsible regulated operators,” he said.

“With that in mind, it is our firm view that over-regulation in the UK would result in customers moving to the black market where there is zero responsibility, zero protection and zero tax being paid to the Treasury.”

The business revealed that ebitda (earnings before interest, tax, depreciation and amortisation) hit £678 million in 2019, in line with the guidance that it would come in at the upper end of £670 million to £680 million.

Greg Johnson, an analyst at Shore Capital, said: “On a pro-forma basis ebitda was down 10%, reflecting the significant regulatory developments during the year, notably in UK retail, which masked a very strong underlying performance.

“Although not mentioned, we expect Covid-19 to have a negative impact on near-term trading in the local market.”