Shares in major bookmakers were hammered after a cross-party group of MPs called for tighter regulations on online gaming including levies, stake limits and credit card bans to stop the industry from “preying on vulnerable gamblers”.
Ladbrokes owner GVC Holdings PLC (LON:GVC) took a 12% tumble to 773.6p by Monday afternoon, followed by a 9% slide at William Hill PLC (LON:WMH) and a 5% drop for both 888 Holdings PLC (LON:888) to 171.71p and Rank Group PLC (LON:RNK) to 233.62p. Paddy Power owner Flutter Entertainment PLC (LON:FLTR) sank 2.5% into the red.
Profits already came under fire this year when the government restricted to £2 the maximum stake allowed on electronic slot machines known as ‘fixed-odds betting terminals’ in April, causing all three firms to revise down profit expectations for the year.
The bookies will be reluctant to trim expectations again, with William Hill guiding 68% lower underlying profits (EBITDA) of £60mln this year, GVC expecting to sink 44% from last year down to £120mln, and Flutter anticipating a 43% thinner year at £29mln.
In an interim report published on Monday, The Gambling Related Harm all-party parliamentary group (GRH) recommended that the government match the in-store £2 stake and deposit limit for online gambling products.
The parliamentarians warned of an “urgent need” to ban the use of credit cards in order to stop punters funding their addiction using debt.
It also advised that a ‘smart statutory levy’ of 1% be put in place to fund research and that current vehicles GambleAware and the Gambling Commission, which the GRH group described as “not fit for purpose”, should be replaced by independent UK research councils and a public health setting.
Further recommendations from the six-month inquiry include affordability checks carried out by banks, reducing incentives to gamblers, a more “responsible” approach to advertising, and a ‘duty of care’ be placed on gambling operators.
