March 8 (Reuters) - Shares of Britain’s GVC Holdings Plc fell about 18 percent on Friday and were on track for their worst day in nine years, after the sports betting and gaming firm’s top bosses offloaded some of its stock at a discount.
Major regulatory changes on both sides of the Atlantic for the gambling sector has commanded investor attention in recent months, but GVC has been able to weather out the storm and reported strong results.
The company this week, however, spooked some investors after warning that a cut to the maximum stake on fixed-odds betting terminals (FOBTs) would result in the closure of up to a thousand shops and impact core earnings by about 135 million pounds ($176.6 million) in 2019.
Chief Executive Officer Kenneth Alexander and Chairman Lee Feldman together sold 3 million GVC shares at a discounted price of 666 pence, seen by investors as a lack of confidence in the bookmaker.
The company’s shares fell as much as 17.8 percent to 562 pence on Friday, and were at the bottom of London’s midcap index . Shares in rivals William Hill Plc, Paddy Power Betfair Plc and 888 Holdings Plc were also in the red.
“Both of us remain fully committed to GVC and, whilst I continue to have the support of our shareholders, I’m here for the long term and at the very least I have a current plan that will take 3 plus years to accomplish,” Alexander said.
GVC — which owns game brands such as partypoker, PartyCasino, Casino Club, Gioco Digitale and Foxy Bingo — also said this week it had made plans to relocate servers hosting online gambling platforms to Ireland to deal with Brexit uncertainties.
Isle of Man-based GVC, which has licences in more than 20 countries, had earlier said it expects full-year underlying core earnings to be ahead of market consensus, boosted by strong growth in its online business.
The cut to high-stake FOBTs would be implemented from April this year after several lawmakers called for curbs on FOBTs, which have been widely blamed for allowing gamblers to rack up large losses in a short span of time.
GVC has expanded rapidly and last year set up an online betting platform in the United States with hotel and casino operator MGM Resorts International. ($1 = 0.7644 pounds)
Reporting by Noor Zainab Hussain in Bengaluru; Editing by Shounak Dasgupta