Friday, March 16, 2018

Ladbrokes Coral and William Hill Probed by FCA over “False Market” Claims

Casino News Daily
Ladbrokes Coral and William Hill Probed by FCA over “False Market” Claims

The Financial Conduct Authority is looking into allegations that Ladbrokes Coral and William Hill have created a “false market” by quoting certain pieces of information from a report on the impact of a significant cut of the maximum bet on fixed-odds betting terminals, and have thus influenced fluctuations in their share price.

The Financial Times reports that while there is no official investigation launched, the UK financial watchdog has been probing the matter following a complaint by Campaign for Fairer Gambling.

According to the lobby group, which has been crusading against the proliferation of FOBTs for years now, the two London-listed bookmakers have used “misleading information” about the extent to which their businesses would suffer if the Government reduces the current FOBTs limits.

Campaigners also believe that investors could have benefited from that knowledge, as both companies’ share price has fluctuated on the information distributed in relation to the pending crackdown on the controversial gambling machines.

Campaign for Fairer Gambling said in a recent letter to the FCA that the two bookmakers have quoted selected piece of analysis from a report compiled by research firm KPMG and commissioned by the Association of British Bookmakers. The report’s findings have generally remained confidential, except for the excerpts used by William Hill and Ladbrokes Coral.

The bookmakers are currently operating UK’s two largest chains of betting shops with FOBTs. The controversial devices generate a large portion of their annual revenues. The two companies have warned that, as per the KMPG study, cutting the maximum stake on FOBTs to £2 would result in a shocking decrease in revenue and the closure of 9,000 betting shops across the nation.

Commenting on the recent developments, the Association of British Bookmakers said that these were the result from another “spurious claim” by the Campaign for Fairer Gambling and that the group’s accusations were baseless and would only waste the FCA’s time and resources.

Looming Crackdown

Tension between the industry and anti-gambling campaigners is building quickly as the Government is expected to announce its final decision on how much the maximum stake on FOBTs would be reduced in the coming weeks.

Ministers manifested their intention to crack down on the controversial gambling machines with the publication of their triennial review on UK’s gambling industry last October. The amount of £100 can currently be wagered on FOBTs every 20 seconds. The government has been discussing three different options for cutting down the maximum stake. These include a reduction to £50, £20, and £2. The third option has been the most popular one among anti-FOBTs campaigners from the outset, but industry experts believe that a reduction to £20 is the likely outcome from the prolonged discussions.

FOBTs currently represent the largest retail gambling sector. The gaming machines generated gross gambling yield of £1.8 billion last year.

The post Ladbrokes Coral and William Hill Probed by FCA over “False Market” Claims appeared first on Casino News Daily.

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