Shares in bookmakers took another hard tumble on Tuesday as all British horseracing was cancelled for a month and a half due to coronavirus social distancing measures.
The British Horseracing Authority (BHA) said that it had decided to postpone all race meetings from Wednesday until the end of April, following consultation with senior industry leaders and based on the statements made by the government on Monday.
Ladbrokes owner GVC Holdings PLC (LON:GVC), Paddy Power owner Flutter Entertainment PLC (LON:FLTR) and William Hill PLC (LON:WMH) had all warned a day earlier that stopping horse racing could result profits falling by £25-50mln per month, if they have to shut their betting shops as well.
“This is a national emergency the like of which most of us have never seen before,” said Nick Rust, chief executive of the BHA.
“We’re a sport that is proud of its connection to rural communities and to the local businesses that support our industry. But our first duty is to the health of the public, our customers and to racing industry participants and staff so we have decided to suspend racing following the government’s latest advice.”
On Tuesday, GVC, which also owns the Coral chain of bookies shops, said it estimates the horse racing suspension will have an incremental impact on underlying profit (EBITDA) of £20-25m per month for the current financial year, before any mitigating actions.
A day earlier, Flutter had said that if UK, Irish and Australian horse racing shuts down from April to August, this would reduce underlying profit (EBITDA) by £30mln per month.
William Hill said if horse racing and its betting shops are both shuttered it expected this to result in a £25-30mln cut to profit per month.
William Hill's shares were down 22% to 51.12p shortly after the afternoon announcement, GVC's were down 15% to 312.5p, and Flutter's down 2% at 5,618p.