Triennial Review Gambling Uk

17 May 2018

1. Triennial Review Gambling Uk Supreme Court
2. Triennial Review Gambling Uk Official Site
3. Triennial Review Gambling Uk Immigration
4. Triennial Review Gambling Uk Website
5. Triennial Review Gambling Uk Sites

GVC Holdings PLC
(“GVC”, the “Group”)

1. The Gambling Act 2005 and FOBTs 5. The 2013 Triennial Review 6. Continued controversy 7. The Government and player protection 8. The betting industry and player protection 9. Review of gaming machines and social responsibility measures (October 2016) 10. Consultation on changes to gaming machines and social responsibility measures (October 2017).
2. As the Triennial Review moves further toward concrete proposals on issues such as B2 staking limits, the UK’s gambling industry is looking forward to some long-awaited clarity. Grant Humphrey, director of EY’s betting and gaming team, believes decisive action from the DCMS could unlock the next wave of M&A activity in the UK’s.
3. Regulatory obligations are weighing on William Hillthe UK gaming sector. The Triennial Review announcement is due in late October and a potential £2 stake limit on FOBTs would.

Punters can bet up to £100 a time on fixed odds betting terminals, known as FOBTs, but MPs had been considering whether to reduce this level as part of a wider triennial review of the gambling. Money back as a bonus up to £40 if your first racing bet loses + £10 casino bonus. Min deposit £10. Money back as bonus. Wagering requirements: Sportsbook 3x at min odds of 2-5 (1.40), Casino 25x. Only one bonus can be used at a time, Sportsbook bonus must be wagered before using the Casino.

Triennial Review

GVC Holdings PLC (LSE: GVC), the multinational sports betting and gaming group, notes the announcement made today by the UK Government regarding the Triennial Review.

The Government has today published its final decision on the Triennial Review, concluding that stakes on B2 content should be cut to a maximum of £2 per spin. Whilst we welcome the certainty provided by the announcement, we are disappointed with the outcome, particularly given the previous independent evidence on stake cuts published by both the Gambling Commission and the Responsible Gambling Strategy Board.

It is now important that the industry is given an adequate implementation period to help prepare and plan for the shop closures that will arise, including attempting to mitigate the impact of resultant job losses. Significant re-engineering of the machines and gaming software will also be required to effect these changes.

Triennial Review Gambling Uk Supreme Court

Today’s Government announcement marks the end of uncertainty on FOBT staking limits. As a responsible business, we re-iterate our commitment to work closely with the Government and our regulators to ensure that both our retail and online offerings are places where customers can enjoy gambling in a safe and secure environment. In order to achieve a positive and constructive working relationship, GVC confirms that it does not intend to seek a Judicial Review of the Triennial Review decision.

Expected financial impact

The focus in the UK Retail operation over the last two years has been to create a business that is well placed to face these structural and regulatory headwinds. As such we expect to be able to reposition the business within two years following implementation, with an anticipated fully mitigated impact of c£120m on Group EBITDA secured by the end of this period. In the first full year the impact on Group EBITDA is anticipated to be in the region of £160m. Therefore, we expect to retain a profitable and highly cash generative UK Retail estate. Furthermore, our proven leading multi-channel expertise presents additional opportunities to drive online growth.

The offer for Ladbrokes Coral Group (“Ladbrokes Coral”) envisaged the possibility of a £2 maximum stake Triennial Review (see below) and today’s announcement has no impact on the minimum targeted synergies of at least £100m per annum.

Contingent Value Right

As part of the consideration paid for the acquisition of Ladbrokes Coral, GVC issued to each Ladbrokes Coral shareholder a Contingent Value Right (“CVR”) for each Ladbrokes Coral share that they held. The CVRs were constituted under a deed poll made by the Company (“CVR Instrument”), a copy of which can be found at www.gvc-plc.com.The value of each CVR, and therefore the value of any payment ultimately due from GVC to CVR holders, is directly linked to the outcome of the Triennial Review and certain laws enacted pursuant to it. Whilst there is a formal process and methodology for determining the value of the CVRs, which GVC will adhere to, the CVR Instrument envisages that if legislation is enacted prior to 28 March 2019 reducing maximum stakes to £2, as announced by the Government today, this will result in each CVR having zero value. In such circumstances no payment would be required to be made by GVC to CVR holders and the CVRs would be automatically cancelled.

Trading update and pro forma financial information

The Group intends to provide a current trading update, along with enlarged Group pro forma financial information on 25 May 2018. An analyst call will be held at 9.00 AM on the same day. Participants may join the call by dialing one of the following numbers, approximately 10 minutes before the start of the call:

UK Toll-free Dial In: 0808 237 0040

International Dial In Numbers: http://events.arkadin.com/ev/docs/FEL_Events_International_Access_List.pdf

Participant PIN Code: 92468403#

Kenneth Alexander (CEO) said:

“Although we are ultimately disappointed with the outcome of the Triennial Review, it is a decision we accept. The uncertainty has weighed heavy on the industry and the many thousands of people who work within it. Our focus now is to work with Government to build a constructive relationship that will ensure a positive future for the sector and the many millions of customers who enjoy our products responsibly. The offer for Ladbrokes Coral Group was structured to address the potential of a £2 max stake outcome and as such the strategic rationale for the acquisition remains unchanged. Through a combination of trusted brands, scale, technology and diversification, I’m confident that GVC can continue to deliver shareholder value.”

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

– ends –

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About GVC

GVC Holdings PLC is one of the world’s largest sports betting and gaming groups, operating both online and in the retail sector. The Group owns a comprehensive portfolio of established brands; Sports Brands include bwin, Coral, Crystalbet, Eurobet, Ladbrokes and Sportingbet; Gaming Brands include CasinoClub, Foxy Bingo, Gala, Gioco Digitale, partypoker and PartyCasino. The Group owns proprietary technology across all of its core product verticals and in addition to its B2C operations provides services to a number of third-party customers on a B2B basis. GVC acquired Ladbrokes Coral Group plc on 28 March 2018 and is now the UK’s largest high street bookmaker, with over 3,500 betting shops. The Group, incorporated in the Isle of Man, is a constituent of the FTSE 250 index and has licences in more than 20 countries, across five continents.

For more information see the Group’s website: www.gvc-plc.com

As the long awaited triennial review of gaming machines stakes and prizes looms, it’s seemingly becoming increasingly likely that the result will be a crippling clampdown on the maximum stakes on fixed-odds-betting-terminals (FOBTs).

Since the introduction of the Gambling Act in 2005, the political maelstrom that has engulfed FOBTs has inevitably intensified the levels of tension, and decreased the levels of rationality that have surrounded the debate of how and whether the terminals can be used in a responsible and safe way.

• The introduction of the Gambling Act

The Gambling Act was passed by Tony Blair’s Labour government in 2005 and was enforced two years later. In an effort to safeguard against betting shops becoming mini casinos, the legislation restricted bookmakers to just four machines per shop. In reality, bookmakers had been voluntarily capping the number at four per shop anyway after an agreement between the industry and the then gaming regulator (and precursor to the Gambling Commission) The Gaming Board.

In a fashion, the emergence of FOBTs helped the progression of the Gambling Act as the product demonstrated how unfit the current gambling laws, the Gaming Act of 1968 in particular, were for emerging global technologies.

Interestingly, in a report issued in 2012 the Department for Culture, Media and Sport (DCMS) argued that this led to an increase in clusters of betting shops on the high street and another report by the Institute of Economic Affairs (IEA) suggested that if clustering was a problem, then one way to solve it would be to remove the artificial limit on FOBTs per shop. Unsurprisingly, this suggestion did not go very far.

Although the act was aimed at encouraging increased levels of openness and fairness within gambling, critics perceived it as a complete deregulation of the industry. This is despite the fact that it brought bookmakers under the remit of a central regulator for the first time. However two pieces of deregulation – the permission of advertising and the removal of the demands test for new betting shops – were very visible changes.

Despite this ‘legitimisation’, the DCMS ministers were fond of declaring that FOBTs were still ‘on probation’ and that any problems arising would see the then Labour government come down on them hard. However there was still no change in approach during all Labour’s time in power.

A 2010 prevalence study showed that just 4% of people had used FOBTs, up from 3% in 2007, furthermore, the studies identified that levels of problem gambling hadn’t been greatly altered by the introduction of FOBTs or the enforcing of the Gambling Act.

Triennial Review Gambling Uk Official Site

A 2007 report by the Gambling Commission stated that approximately 0.6% of the country suffered from problem gambling, the same levels as were recorded in 1999. In 2010, this number rose to 0.9%, before falling to 0.7% in 2016.

• Results affirm the importance of the machines

The notion that revenue from FOBTs was of the utmost importance to bookmakers, was affirmed in the financial results published by Britain’s leading bookmakers. In 2011 William Hill found that a 1% decrease in OTC net revenue had been countered by gaming machine gross win growth of 13%, announcing its H1 results a year later, Ladbrokes’ machine revenue had gone up 20%.

A motion put forward by Labour’s Tom Watson proposing that the maximum stakes on FOBTs be decreased was voted down, with 314 MPs voting against it as oppose to 232 MPs voting for it. Nonetheless, the morning following the debate when Prime Minister, David Cameron described the machines as ‘a problem’ and vowed to wait until the triennial report to make a decision on the terminals, shares in Britain’s leading bookmakers took a temporary dip.

• Osbourne’s budget hits bookies hard

Chancellor of the Exchequer George Osbourne announced in his 2014 budget that the tax rate on the terminals would be increased from 20% to 25%. It was a move that resulted in the share prices of bookmakers taking a dramatic decline, with Ladbrokes shares falling 12% and William Hill shares falling 5%.

Following up on a report from the DCMS, the government eased mounting pressure to lower the maximum stakes on the machines, by enforcing new regulations that meant if players wanted to stake more than £50 at one time, they had to inform shop members of staff, or create an account with the bookmaker.

The DCMS stated that: “Account-based play allows players access to up-to-date information which can reduce biased or irrational gambling, and help people maintain control.

“Making payments over the counter rather than onto the machine directly can provide opportunities for intervention which may give players a reality check.”

• Labour lays it on the line as snap election further delays review

The upcoming triennial review of gaming machines stakes and prizes was delayed after Prime Minister Theresa May called a snap election, further delays in the review meant that any alterations to the current act would be unlikely to come into place until October 2018.

Amid much pressure and a pending government review, both TheLabour party and the Liberal Democrats made a manifesto pledge to cut the maximum stake on terminals to just £2.

The manifesto read: “These highly addictive machines in bookmakers across the country have become a problem for many families and communities.”

As the political campaign of Labour and Jeremy Corbyn gathered momentum, the pledge inevitably caused a backlash from bookmakers, The ABB (Association of British Bookmakers) described it as a ‘bizarre and unjustified attack on betting shops.’

Triennial Review Gambling Uk Immigration

Adding that: “The Labour Party whose members are among the millions who enjoy their leisure time at their local bookies, have fallen for the spin of our commercial rivals who have a vested interest in destroying Britain’s High Street betting shops.

“There is no evidence to show cutting stakes on gaming machines will help tackle problem gambling.

“Independent research already shows that people lose more money more quickly on an arcade gaming machine than in any other gambling venue at current staking levels.

Triennial Review Gambling Uk Website

“This flawed policy would destroy over 20,000 jobs, close thousands of betting shops, cost millions of pounds in lost taxes for the Government and end a popular activity for millions of people – all without helping a single problem gambler.”

Triennial Review Gambling Uk Sites

• Hung parliament extends period of uncertainty

With the Conservatives losing their majority government, industry fears grew that the looming review would result in a significantly more aggressive approach by the government on the machines, a fear that was exalted by the Conservatives newly formed alliance with the an ardently anti-FOBT Democratic Unionist Party.

An analysis published after the election from Barclays Bank estimated that cutting the stakes on FOBTs to just £2 would have major implications on the annual revenue for bookmakers, with Ladbrokes Coral being hit the hardest losing £439m, William Hill losing £288m and Paddy Power Betfair taking a £58m hit.

Nonetheless, this didn’t stop Paddy Power Betfair chief executive Breon Corcoranwriting to the minister at DCMS, Tracey Crouch expressing his belief ‘that only a substantial reduction in FOBT stake limits to £10 or less will address societal concerns.’ It was a move that caused Greg Knight Managing Director of UK independent bookmaker Jenningsbet to question his motives, stating that Corcoran was ‘deliberately undermining the UK retail betting sector.’