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Ladbrokes-Coral Faces Massive Loss of Earnings Due to Betting Machine Review

Ladbrokes-Coral Faces Massive Loss of Earnings Due to Betting Machine Review

A forthcoming government crackdown on high-stakes gambling machines is threatening to wipe a quarter off Ladbrokes Coral’s earnings in the first year after their merger.

Ladbrokes revenue from the machines makes up 60% of UK revenue and it is thought that the political threat could wipe £100 million from pre-tax earnings next year. The hit comes as the newly formed company begins to pay off the £1.2 billion debt from the merger and put the bookie closer to the limits of its lender agreements that expected.

At present there is a lot of pressure on the government to reduce the maximum stake on betting terminals from £100 to just £2. Even if the maximum stake was cut to £10 it would still result in a £100 million reduction for the company. It is thought that new rules may come into play in the early months of next year.

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.

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