January 17, 2020 / 7:38 AM / a month ago

Online gambling to boost GVC's profit as tougher rules loom

(Reuters) - Ladbrokes-owner GVC (GVC.L) said on Friday annual core earnings would be at the top end of its forecast, as stronger demand for online gambling buffers a hit from a bruising regulatory clampdown on slot machines in Britain.

The company, whose brands also include Coral, bwin and Foxy Bingo, said total annual group net gaming revenue rose 2%.

However, its UK retail like-for-like sales fell 11% in the last quarter of the year, as Britain cut the maximum stake allowed on high-speed slot machines - dubbed the “crack cocaine” of gambling by critics - to 2 pounds ($2.62) from 100 pounds.

Less than a year after Britain slashed the maximum stake that can be placed on popular fixed-odds betting terminals, GVC said this month that it would ban the country’s 24 million gamblers from using credit cards to bet online or offline to rack up debt, the latest move by the government to tackle problem gambling.

Britain has a thriving gambling industry. It employs more than 100,000 people and made 14.4 billion pounds ($18.84 billion) after paying out winnings in the 2018-2019 financial year.

But the government has sought to tighten rules in recent years, bringing in stricter age and identity checks for online gambling and expanding support for those who become addicted.

Foreign markets have been a boon for companies like GVC, as more U.S. states allow legal online betting and other countries offer softer rules on gambling than in Britain.

The company, founded in 2004, in October raised its annual core earnings forecast for the second time in three months as its U.S. joint venture cashed in on a booming online sports betting market in the country.

It said then that it expects full-year core earnings in the range of 670 million pounds to 680 million pounds.

Isle of Man-based GVC, which has a joint-venture with U.S. hotel and casino operator MGM Resorts International (MGM.N), said the business made “good progress” in the quarter.

Reporting by Indranil Sarkar and Tanishaa Nadkar in Bengaluru; Editing by Shailesh Kuber, Bernard Orr

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