TWO OF THE biggest bookmakers on the high street lost a combined £460m from their stock market valuations yesterday after a 25 per cent tax rate was announced for fixed-odds betting machines.
William Hill saw £270m wiped off its market capitalisation after the chancellor announced that tax on the machines would be raised from 20 per cent to 25 per cent with immediate effect, and the Department of Culture, Media and Sport would release a review before Easter to consider additional regulation.
“Based on 2013 [fixed-odds] gaming machine gross win, had this rate applied in 2013 it would have cost the business an additional £16m,” William Hill said in a statement following the announcement.
Ladbrokes had over £190m wiped off its market valuation following the chancellor’s speech, as its share price sank 11.7 per cent.
“Increasing the rate to 25 per cent... so soon after it was first introduced, makes a bad policy much worse. This could cost the industry an extra £75m. This knee jerk and ill-considered tax raid means their [bookmakers] futures are now on the line,” said the Association for British Bookmakers in a statement.
William Hill shares closed down 6.8 per cent and Paddy Power, which is expected to be less affected by the changes, saw a two per cent drop to 59p.