Betting giants to reveal impact of cost-of-living rise and affordability checks

The effect of the cost-of-living crisis and affordability checks on the gambling sector should become clearer this week when three of the giants of the industry unveil their financial results for the first six months of the year.

The announcements come against the backdrop of falling share prices for the three companies – Entain, Flutter Entertainment and 888 – and the uncertainty caused by the continued delay to the publication of the government's gambling review white paper.

British racing's leadership will also be examining the figures closely given suggestions that online betting turnover on horseracing has been falling since April and concerns that pressure from the Gambling Commission on operators to impose affordability checks in advance of the white paper was one of the causes.

Entain, the parent company of Ladbrokes and Coral among others, will be the first to publish its figures on Thursday, although the City will not be expecting many surprises given the profit warning the operator issued last month.

The company said its online revenues would be flat this year after being hit by the effect of tougher economic conditions and affordability measures.

Analysts were told that those measures had had a "significant impact" on figures in the UK, while spend per head had started to dip in April.

Flutter, the parent company of Paddy Power, Betfair and Sky Bet, is set to publish its interim results 24 hours after Entain, having last updated the market in May when it revealed online revenues in the UK and Ireland had fallen by 20 per cent in the first quarter.

At that point chief executive Peter Jackson said the cost-of-living crisis had yet to have a discernible impact but he said there was "no doubt" rising prices would hit customer expenditure.

Flutter said safer gambling measures the company had introduced over the previous 12 months had resulted in a £30 million reduction in revenues during the first quarter.

Nevertheless analyst David Brohan of stockbrokers Goodbody, looking ahead to Friday's results, said: "The white paper delay is unhelpful to sector sentiment, however, the pre-emptive measures the group has taken leave it well positioned.

"Flutter is increasingly recreational-focused, and we think it will be relatively resilient to recessionary pressures."

888 will also announce its interim results on Friday, the first since it completed the acquisition of William Hill's non-US business this year.

When the company issued a trading update at the end of June it said that both William Hill and the 888 business had been affected by additional safer gambling measures during the first half of the year.

888 has a much smaller footprint in the burgeoning US gambling market than its two bigger rivals. Flutter and Entain are two of the major players through FanDuel and BetMGM respectively.

Brohan said those two businesses were the key drivers in growth for their parent companies.

The share price of both Flutter and Entain has fallen by around 25 per cent since the start of the year, while 888's halved during the same period.

Read more:

Ladbrokes Coral owner: online growth hit by affordability measures and economy

Flutter: US drives six per cent Q1 growth as UK and Irish revenues drop

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