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Sunday, 20 January, 2019

Government set to unveil FOBT review this week

The government is expected to set out the options for FOBT stakes this week
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The government is expected to finally publish the results of its review of FOBT stakes this week, with the maximum stake looking set to be cut from £100.

Culture secretary Karen Bradley said this month the government would set out a number of options which would be followed by a 12-week consultation.

The Sunday Times and Sun have reported that the options for maximum FOBT stakes will be £50, £20 and £2, although the Sunday People set out an even worse scenario for bookmakers of £25, £10 and £2.

Betting shop operators have resisted calls for a reduction in FOBT stakes and have claimed a cut to £2 – the preferred option of opponents of the machines – would lead to widespread shop closures, thousands of job losses and the loss of millions of pounds of income for horseracing through levy and media rights.

Clarity on machine stakes could also lead to a fresh wave of consolidation within the gambling industry, with online firm GVC Holdings having been linked to a deal with Ladbrokes Coral.

Talks between William Hill and the Stars Group – formerly known as Amaya – could also be resurrected.

The government has also been looking at gambling advertising and social responsibility measures as part of its review.

Arc making more deals in greyhound world

Arena Racing Company's entrance into the world of greyhound media rights continues to make waves.

Last week it appeared the future of Bags had been secured following news of an agreement with Arc, which represents the media interest of the Greyhound Media Group of tracks.

Arc's broadcasting platform, The Racing Partnership, is offering a rival greyhound service to the bookmaking industry against an SIS offering from January 1.

Bags, which has co-ordinated betting shop greyhound racing for 50 years, had been caught in the middle of the two after seeing off a hostile takeover bid from SIS last year.

Under the agreement, a minimum of 1,619 fixtures per year from 12 established greyhound tracks – the 11 GMG venues of Belle Vue, Kinsley, Newcastle, Nottingham, Perry Barr, Peterborough, Poole, Sheffield, Sunderland, Swindon and Yarmouth, plus Towcester – will be made available.

The new deal, which is understood to be for longer than end-2019 when existing Bags contracts expire, means Bags will be in a position to continue to grant the rights for fixtures which have until now provided a big part of its service to major bookmakers in the UK and Ireland.

In turn, TRP will be licensed to supply these fixtures to independent bookmakers on its existing channel.

Arc will also oversee the sale of the rights in the international market and the streaming rights for online betting operators and swiftly announced deals with Australian giant Tabcorp and Athens-based Vermantia.

Meanwhile, SIS is to pay out a £15 million dividend to shareholders but has warned that profits for the year are likely to be lower than budgeted.

Tabcorp issue Sun Bets warning

Tabcorp have warned they will give "serious consideration" to ending their involvement in Sun Bets should the operator's performance not improve.

Sun Bets was launched in Britain last year following a deal with News Corp subsidiary News UK – publisher of The Sun – but Tabcorp's annual general meeting last week was told trading had "disappointed" so far.

Revenue in the first quarter of their 2017-18 financial year was A$1.1 million (approx £642,000/€724,000), a rise of 5.3 per cent.

Tabcorp chairman Paula Dwyer said: "The strategic rationale for Sun Bets was to give us a position in the large and growing UK gambling market under the iconic 'Sun' brand.

"However, in the first 11 months of trading we were reminded of the challenges associated with start-ups, and the performance of the business did not deliver in accordance with our plans."

Dwyer said that as a result Sun Bets had undergone a review and their leadership had been strengthened.

She added: "The management team is now tasked with improving performance. If performance does not improve to meet forecast expectations, we will give serious consideration to exercising our contractual right to exit operations from December 31, 2019."

Record results for Kindred

Kindred Group, the owners of Unibet, Stan James and 32Red, reported an "all-time high" in revenue and earnings as they declared their results for the third quarter of the year last week.

Gross winnings revenue of £193.6 million was up 36 per cent for the quarter and 31.2 per cent higher at £513.4m for the year to the end of September.

Underlying Ebitda (earnings before interest, taxation, depreciation and amortisation) for the third quarter was up 38 per cent at £46.8m and up 30.9 per cent at £110.5m for the first nine months of 2017.

Chief executive Henrik Tjärnström said: "I am delighted to report record revenues and profitability for Kindred Group in the third quarter of 2017 driven by strong growth across our major markets and solid cost control."

Kindred is in the process of migrating Stan James online customers to the Unibet brand and it also emerged last week that Stan James chief executive Denis Kelly is set to stand down after a decade with the company.

Kindred's chief commercial officer for UK, France and Australia Tommi Majala said: "Denis Kelly has decided to retire after successfully leading Stan James for ten years.

"Neil Banbury will assume the role as interim general manager UK with the key focus to support a smooth integration of the Stan James businesses into Kindred Group.

"I’m sad to see Denis leave the group at the end of the year, but am equally excited to work with Neil in further strengthening Kindred’s position in the UK market."

What else is happening this week

Paddy Power Betfair unveil their third quarter results on Wednesday with analysts at Goodbody forecasting group revenues of £423m, up five per cent year-on-year, and Ebitda of £115m, up two per cent.

In a note issued last week, analysts Goodbody said they regarded the company as "by far the best placed of UK operators given the regulatory challenges ahead".

They added: "While European online has disappointed in 2018 the other three divisions are all performing well. We believe the completion of the platform integration will put the group in a position to take share in 2018."

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Culture secretary Karen Bradley has said that the government would set out a number of options which would be followed by a 12-week consultation
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