UK Review of Gaming Machines

RNS Number : 3949O

Paddy Power Betfair plc

17 May 2018

Paddy Power Betfair plc (the "Group") notes the announcement today by the Department of Digital, Culture, Media and Sport regarding its Review of Gaming Machines and Social Responsibility Measures.

The announcement includes a proposal to implement a new stake limit for gaming machines of £2.

Paddy Power has a strong, sports-led retail proposition based around investing in the best odds, content, locations and staff. We do not envisage that this proposed change will have a material impact on our UK Retail strategy.

We estimate that the direct, pre-mitigation, impact of this new stake limit would be a 33% to 43% decrease in our total machine gaming revenue. In 2017, this would have equated to a £35m to £46m revenue impact, representing 2.0% to 2.6% of Group revenue.

Potential mitigation factors on the Group's profitability include reduced direct variable costs (including Machine Gaming Duty at 25% and supplier revenue share), product development, substitution to other betting products and market consolidation.

Peter Jackson, Paddy Power Betfair's CEO, said: "We have previously highlighted our concern that the wider gambling industry has suffered reputational damage as a result of the widespread unease over stake limits on gaming machines. We welcome, therefore, the significant intervention by the Government today, and believe this is a positive development for the long-term sustainability of the industry."

ENDS

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