Paddy Power Betfair Buoyant Ahead of FOBT Changes  

Paddy Power Betfair isn’t concerned about the impending changes to fixed odds betting terminals (FOBTs) according to the company’s latest financial report.

 Fixed odds betting terminal (FOBT).

FOBT changes won’t hurt Paddy Power Betfair as it reports a 4 percent increase in H1 profits. (Image: economist.com)

Publishing its half-year statement on August 8, executives for the betting brand said that reducing the maximum stake from £100 to £2 would only impact revenue by just over 2 percent. In detailing a 4 percent profit increase to £106 million, Paddy Power Betfair reconfirmed that it doesn’t rely as heavily on FOBT revenue as other operators.

“Our shops are more profitable, and outperform on sports betting, enabling them to better withstand the impact of lower machine stakes limits,” reads the August 8 statement.

Closures Could Benefit Paddy Power Betfair

In fact, as William Hill announced that it may have to close 900 betting shops, the Irish operator said that it may benefit from the new regulations.

“We operate in high-footfall, highly competed locations, which means we are well placed to benefit from competitor shop closures,” the report continues.

Analysing the figures, Paddy Power Betfair believes the reduction in stakes will lower its income from FOBTs by as much as 43 percent. In real terms, this could wipe £46 million off the company’s annual earnings, a figure that amounts to approximately 2.6 percent of its total revenue.

Irish Eyes Smiling Across the Pond

The positive forecast comes at a time when other British betting operators are looking to the US for salvation. William Hill has already announced plans to open 11 venues in Mississippi, while GVC Holdings is set to work with MGM Resorts on a series of live and online ventures.

For its part, Paddy Power Betfair has forged relationships with two racetracks in New Jersey and New York. Although New York’s Tioga Downs is yet to benefit from the repeal of PASPA, New Jersey’s Meadowlands is now able to offer sports betting with the help of Betfair US.

In addition to these partnerships, Paddy Power Betfair bought daily fantasy sports site Fan Duel in May. Although the deal is yet to pay dividends, fantasy sports rival DraftKings recently became the first online sports betting site to go live in New Jersey.

With the state’s regulator now reviewing other licence applications, Fan Duel could soon join the mix and give Paddy Power Betfair another foothold in the US.

Irrespective of developments overseas, the company’s executives remain optimistic about the UK betting market.

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