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Paddy Power offered to become an ABP

Paddy Power Betfair have announced strong Q3 trading results
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Paddy Power offered to join their stablemates Betfair as part of the authorised betting partner scheme, the company revealed on Friday.

The company's chief executive Breon Corcoran told analysts Paddy Power Betfair hoped there would be a "sensible outcome" to the ongoing efforts to replace the levy.

The news came as Paddy Power Betfair raised their profit forecasts thanks to sterling's recent decline and a strong performance during Euro 2016.

The authorised betting partner scheme was brought in last year to capture a financial contribution from online bookmakers who do not yet have to pay the levy.

Betfair were one of the original signatories but, despite their merger, which completed in February, Paddy Power have not followed suit and as a result are no longer sponsoring the highlight of Cheltenham's Open meeting next week, which is now the BetVictor Gold Cup.

Talks on the statutory levy broke up without agreement this week, while Friday marked the deadline for representations to sports minister Tracey Crouch on the rate for the levy replacement scheme due to start in April.

As part of the statutory levy talks a number of firms, including Paddy Power, made a verbal offer to pay the sport 7.5 per cent of their online gross profits on racing, but that was rejected by the Levy Board.

Corcoran said: "We offered to put the Paddy Power business into our ABP relationship where Betfair currently is."

He added: "We expect there will be more levy to pay and we'd hope we could get to a sensible outcome that's fair for our customers, fair for racing and fair for the industry."

In their trading update for the three months to September 30, the company said underlying ebitda (earnings before interest, taxation, depreciation and amortisation) for the full year would be between £390 million and £405m, up from their previous guidance of between £365m and £385m.

Group revenue for the quarter increased by 25 per cent to £404m, including a £28m benefit from non-UK revenues due to the weakness of sterling.

Bookmaker-friendly results at the conclusion to Euro 2016 generated £16m of revenues across the group in July, while underlying operating profit increased by 68 per cent to £95m.

Corcoran said: "This was another good quarter for Paddy Power Betfair. We're continuing to focus on building a stronger combined operation by exploiting the unique assets and capabilities of each legacy business and on using our scale to better serve our customers.

"Work is under way to combine the best of Betfair and Paddy Power's technology into a multi-brand, multi-channel, multi-jurisdictional platform that will start to unlock the full potential of the group's scale and will lead to increased pace of development and faster roll out of new products."

Paddy Power Betfair shares bucked the general trend and were up more than four per cent to 8,930p on Friday afternoon.

Analyst Gavin Kelleher of Goodbody said: "This is another positive update from Paddy Power Betfair and should be well received.

We expect there will be more levy to pay and we would hope that we could get to a sensible outcome that's fair for our customers, fair for racing and fair for the industry
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