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May 17, 2018, 3:04 a.m. EDT

U.K. betting companies warn of financial hits

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By Oliver Griffin

British gambling companies said Thursday that their financial performances will be negatively affected following a decision by the U.K. government to reduce the maximum bets that can be placed on fixed-odds betting terminals to 2 pounds ($2.70).

The U.K. Department of Digital, Culture, Media and Sport said it decided to reduce the maximum stakes on fixed-odds betting terminals--described as the "crack cocaine of gambling"--from GBP100 following a government review.

GVC Holdings PLC (GVC.LN) said it expects group earnings before interest, taxes, depreciation and amortization to be negatively affected by GBP120 million as it repositions its business to manage the change in legislation.

William Hill PLC (WMH.LN) said the reduction of the maximum stake could cause a 35% to 45% fall in its total net gaming revenue, adding that about 38% of its retail estate could become loss-making as a result.

Paddy Power Betfair PLC (PPB.DB) said the new stake limit could cause a 33% to 43% decrease in its total machine gaming revenue.

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