(Reuters) - Gambling company William Hill (WMH.L) plans to close 700 betting shops, putting 4,500 jobs at risk, after Britain in April cut the maximum stake on fixed-odds betting terminals.
The British government had rejected industry suggestions when it proposed the cut in maximum stake to 2 pounds from 100 pounds that such a big reduction could jeopardise thousands of jobs.
Data from Britain’s Gambling Commission showed there were 32,956 B2 gaming machines, as fixed odds betting terminals (FOBT) are also known, in November 2018. They generated a gross annual gambling yield of 1.7 billion pounds.
The terminals were introduced two decades ago and gradually supplanted betting on sports such as horse racing as the main activity in Britain’s 8,500 high street betting shops.
Betting shops are allowed no more than four such terminals in each outlet. Despite the stake cut, the jackpot payout is still 500 pounds.
Below is a summary of the impact on British bookmakers:
WILLIAM HILL (WMH.L)
- Plans to close 700 of its 2,300 British betting shops, putting about 4,500 jobs, a third of its workforce, at risk.
- Said it had suffered a significant fall in gaming machine revenues since the change was introduced in April.
GVC HOLDINGS (GVC.L)
- Ladbrokes owner GVC warned in September last year the restrictions would lead to the closure of up to 1,000 shops and cut its 2019 core profit by about 135 million pounds.
- Britain’s largest high street bookmaker said the impact of the new rule on core earnings would be 130 million pounds in 2020.
FLUTTER ENTERTAINMENT (FLTRE.I)
- Flutter, which has the Paddy Power brand, said in May that revenues from FOBTs were likely to drop by 43%, although it had not seen substantial changes in footfall as a result of the legislation.
Reporting by Tanishaa Nadkar in Bengaluru; Editing by Alex Smith and Keith Weir