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GVC Holdings

Ladbrokes and Coral owner GVC sees net gaming revenue rise in first half despite tough comps and UK rule changes

The World Cup helped to inflate last year’s numbers, while recent changes to in-store gaming machines have also wiped out a lucrative revenue stream for Britain’s bookmakers

ladbrokes store
Still, the amount of money wagered on GVC’s various platforms and in its store estate rose year-on-year

Net gaming revenue at Ladbrokes and Coral owner GVC Holdings PLC (LON:GVC) rose 5% in the first half of the year, despite tough comparatives and changes to UK betting shop regulations.

As has been the case for a few years now, gambling apps and websites were the big driver, with online net gaming revenue surging 17% during the six months ended 30 June, which analysts at Peel Hunt described as “remarkable”.

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That growth came despite this year’s numbers running up against the World Cup, which was a huge boon for GVC in the same period of 2018.

Unsurprisingly, UK retail like-for-like gaming revenue slumped by 10%, reflecting the government’s recent decision to slash the maximum stake on in-store gaming machines to £2, down from £100 previously.

The drop wasn’t as bad as it could have been though, with customers instead choosing to put some of the money that they would have fed into the machines on sports bets.

Net gaming revenue in GVC’s European betting shops climbed 7% year-on-year, although potential regulatory changes in Germany next month could put a spanner in the works on the continent.

As for the US, the lucrative market that UK betting companies are rushing to exploit, the launch of GVC’s online business is on track to go live for the start of the new NFL season in September.

‘Material market share gains’

“Trading in Q2 remained very strong with the Online division delivering continued material market share gains across all major territories,” said chief executive Kenneth Alexander, who came under fire in March for selling a £20mln stake in the company.

“The transition to a post £2 stakes-cut environment in UK Retail is progressing very well and we believe the Ladbrokes Coral estate is best-placed to take market share.

“In the US, Roar Digital, our JV with MGM Resorts, is on-track for its full online launch ahead of the NFL season in September.”

Shares were down 0.6% to 605p in mid-morning trading on Wednesday, having opened slightly higher.

Quick facts: GVC Holdings

Price: £6.10

Market: AIM
Market Cap: £3.55 billion
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