Paddy Power Betfair (LON:PDYPY) shares rose over 6 percent in early trading on Thursday, after confirming that the decision by the Department of Digital, Culture, Media and Sport to implement a new stake limit for gaming machines of £2 will not materially affect business.
The direct, pre-mitigation, impact of the new stake limit is likely to have a negatively affect total machine gaming revenue by between 33 percent and 43 percent. Based on last year’s figures this would have led to a £35 million to £46 million revenue impact, representing between 2.0 percent and 2.6 percent of group revenue.
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.”
The announcement comes on the back of the company’s decision to move further into the US gambling industry, after America legalised the sports betting industry. The change in the US legislation is expected to encourage British firms to move further into the US, seeking takeovers or becoming targets themselves.
Shares in Paddy Power are currently trading up 6.17 percent at 55.86 (0856GMT).