GVC Holdings Wins as Theresa May Brings Forward FOBT Deadline

The deadline reducing the maximum bet on fixed odds betting terminals (FOBTs) will now take place earlier than expected, something that will benefit GVC Holdings but hurt other operators.

Theresa May FOBT deadline

Prime Minster Theresa May has brought forward the much-debated FOBT changes following backlash from MPs. (Image: Wikipedia/Estonian Presidency)

Following pressure from Conservative party members, backbenchers and opposing MPs, Prime Minster Theresa May has been forced to backtrack on the recent FOBT decision. As part of the 2019 budget, Chancellor Philip Hammond said the maximum FOBT stakes would be cut from £100 to £2 in October.

May Performs U-Turn

However, following backlash from MPs across Westminster, May has confirmed that the changes will now take place in April 2019 as many had previously expected.

“The government has been clear that protecting vulnerable people is the prime concern, but as a responsible government it is also right to take the needs of those employed by the gambling industry into account and provide time for an orderly transition. Parliament has, however, been clear that they want this change to be made sooner. The government has listened and will now implement the reduction in April 2019,” Culture Secretary Jeremy White wrote in an official statement.

The U-turn comes as multiple Tory party members threatened to follow Tracey Crouch and leave their positions of power. However, while the government may have averted a crisis with its latest decision, gaming operators will feel the impact in the coming months.

With FOBTs generating upwards of £1.8 billion for bookmakers, William Hill and its high street peers are set to lose out on significant amounts of revenue moving forward. However, one operator that will initially benefit from the April deadline is GVC Holdings.

GVC Profits from New FOBT Deadline

The parent company of Ladbrokes Coral will now avoid paying shareholders £670 million. As part of the takeover deal negotiated in 2017, GVC agreed to make a payment to Ladbrokes Coral shareholders if the changes weren’t implemented by March 28, 2019.

Based on the April deadline, the cost will now be around £80 million or approximately £610 million less than it would have been. With GVC investors revelling in the news, shares in the company were up by 7.9 percent on November 15.

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