Investors stay positive on UK machine review

With a potentially calamitous review of high street gaming machines due to be announced any day now, investors in British bookmakers exposed to sharp losses are remaining remarkably cool.The Triennial Review of UK gaming machines will include measures to reduce the maximum stakes on fixed-odds betting terminals this month. Currently at £100 per spin, sources close to the review say ministers have bracketed possible reductions into three categories: £30, £20 or £2. Leaving it at £100 is apparently no longer an option.Yet the gap between £30 and £2 will make the world of difference to firm’s reliant on FOBTs. A cut to £30 would cost the UK industry £150m in revenues; whereas a £2 maximum bet would see Ladbrokes Coral alone miss out on £449m next year, and William Hill, £248m, according to Barclays. Half the UK’s 9,000 betting shops could close.It was reported earlier in the month that ministers still had “a long way to go” before reaching a decision, calling into question how soon an announcement might be made; investors are remaining steadfast nonetheless.Simon French of Cenkos says a cut to £20 has long been priced-in, so “anything at £20 or above will be taken very well by the industry and investors.” A compromising cut to £30 would most likely see stocks rise; a cut to £2 however would severely restrict machine takings sending share prices tumbling.

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