Proactive Investors - Forecasts for FTSE 100-listed bookmakers Entain PLC (LON:ENT) and Flutter Entertainment PLC (LON:FLTRF) for next year were clipped slightly following the release of the UK’s gambling white paper.
The changes are mostly focused on digital gambling and include limiting the maximum betting stake on slots and introducing new affordability measures.
Ladbrokes and Foxy Bingo owner Entain predicted the new rules, which are still undergoing consultation before being brought in for 2024, will see a 1% hit to online net gaming revenues, resulting in around a £40mln hit to group revenues.
Analysts at Jefferies said the changes would amount to a 1.5% or £20mln dent in underlying earnings.
Entain cited its proactive approach to player protection as a key reason for the impact not being higher, including the termination of VIP schemes, implementation of affordability models, and personalised staking limits.
Jefferies keeps its price target of 1,805p the same and reiterates a ‘buy’ rating on Entain.
Looking at PaddyPower and Betfair owner Flutter, the investment bank estimates a gross incremental revenue impact of £50mln-£100mln.
“Assuming a 50% drop-through rate, this would imply a £25mln to £50mln EBITDA impact,” Jefferies said.
This represents around a 1.2-2.5% drop in underlying earnings for 2024.
It has also implemented some “pre-emptive changes” for its UK business, which removed £150mln in revenue, meaning the total impact on sales from the white paper could reach £250mln.
Jefferies also maintained a ‘buy’ rating for Flutter and 18,000p share price target.
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