Yahoo Finance One bookmaker is bucking the trend by not shutting its stores
Paddy Power owner Flutter says it will “take advantage” of the storm facing UK bookmakers, expecting to snap up market share from rivals hit harder by a government clampdown.
The company, previously named Paddy Power Betfair, said its earnings from betting on sports events were double those of its rivals, helping it survive while it expects competitors to announce more store closures.
It has also expanded its online and international operations in recent years, with revenue up 46% in the US.
But the company still suffered a 10% drop in its underlying earnings in the first half of the year, blaming higher taxes in Ireland and Australia.
It also forecast a dip in full-year earnings in line with expectations, while it said its pre-tax profits were down 24% to £81m.
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The UK government’s introduction of a maximum £2 stake, down from £100, on fixed-odds betting terminals has battered bricks-and-mortar bookmakers often heavily reliant on the machines.
Campaigners have welcomed the crackdown on the highly lucrative machines described as the “crack cocaine” of gambling, but several bookmakers have warned they put thousands of branches at risk.
Flutter’s half-year report said: “The landscape across both UK and Irish retail markets has changed this year with the introduction of new staking limits on machines in the UK from 1 April and a doubling of tax on sports-betting stakes in Ireland from 1 Jan.
“While both changes are impacting the profitability of our estate, the strength of our sports-led estate means we are confident we will continue to grow our share in both markets as less profitable competitors start to re-trench.
“We are starting to see announcements of shop closures from competitors and anticipate that more will follow.”
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