Investors still like bookie shares

Investors could be forgiven for having reservations about buying shares in British bookmaking companies after the past few weeks of media and activist bashing on betting shop proliferation and fixed odds betting terminals, but in fact industry rumours and looking on the brighter side are pushing share prices back up.

Reuters reported Tuesday that suggestions that the government crackdown on betting shops and maximum betting levels on FOBTs had a more positive side and mitigated earlier fears of severe impacts.

And in the case of Ladbrokes, the persistent industry rumours that Paddy Power is working with private equity companies with the goal of acquiring the major online and land betting group boosted interest in the company.

Ladbrokes, along with other key players in the bookmaking sector, may also benefit from the veto power handed to local councils regarding the licensing of betting shops; analysts have pointed out that this is a restriction that will have benefits for already established companies, because it will make it harder for new competitors to expand into their High Street business areas.

More optimism has also been generated by suggestions from reliable sources that the government’s crackdown on FOBTs may not be as severe as was first thought. Instead of chopping the maximum bet possible, it now appears that the government will be satisfied if an alternative regime is introduced whereby punters will have to interact with betting shop staff if they want to bet more than GBP 50 on the terminals.

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