Ladbrokes Plc (LAD) and William Hill Plc (WMH), Britain’s two biggest bookmakers, fell after Chancellor of the Exchequer George Osborne announced higher duty on in-store gaming machines known as fixed-odds betting terminals.
Ladbrokes closed down 11.7 percent at 140.4 pence after falling as much as 15.1 percent in London trading, the biggest intraday decline since October 2008. William Hill dropped 6.8 percent to 351.5 pence, the largest decline since Jan. 9, after falling as much as 9.7 percent following Osborne’s annual statement to Parliament today.
“Fixed-odds betting terminals have proliferated since gambling laws were liberalized almost a decade ago,” Osborne said. “These machines are highly lucrative, and therefore it’s right we now raise the duty on them to 25 percent.”
Osborne also announced he will extend the Horserace Betting Levy to bookmakers that are based offshore. The levy funds race prize money alongside industry training and education, loans to racecourses for capital projects and veterinary science and education.
Following a campaign by Conservative Party lawmaker Robert Halfon to reduce taxation on bingo clubs to woo back working-class voters, Osborne said he would cut the rate in half to 10 percent “to protect jobs and protect communities.”
The bingo-tax reduction will cost the exchequer 40 million pounds from 2015-16, while increasing the tax on betting terminals will raise 75 million pounds in the same year, the Treasury estimates.