April 30 (Bloomberg) -- The U.K. government outlined “targeted and proportionate action” to tackle problem gambling caused by the use of gaming machines in betting shops. Shares in Ladbrokes Plc and William Hill Plc rose.
Announcing the results of a review into gambling, Sports Minister Helen Grant said in a written statement to Parliament today that customers staking more than 50 pounds ($84) will be required to play on account or pay up cash in advance over the counter.
The Gambling Commission plans to consult on whether users should choose between limiting the maximum amount of time or money they want to spend before starting to play, Grant said. Local authorities will also get more powers to stop the opening of new betting shops in their towns.
“The outcome is largely as expected, but significantly better than what was feared, and we expect the shares to have some relief today,” London-based Credit Suisse Group AG analyst Ed Birkin said in a note to clients.
Ladbrokes rose 7 percent, the biggest jump since October, to 154 pence as of 4:14 p.m. in London. William Hill gained 4.7 percent to 355.1 pence, the most since March.
“The proposed recommendations are a balanced response, and we will now work to develop and embed the necessary IT changes and enhanced compliance framework,” William Hill Chief Executive Officer Ralph Topping said in an e-mail.
Topping’s counterpart at Ladbrokes, Richard Glynn, said the rules are the latest in a series of measures that will “hit profitability and threaten jobs.” While the impact of the government’s plan is unclear, further shop closures are “inevitable,” he said in an e-mailed statement.
Under the plans, the government will create a new planning class for gaming shops, giving councils stronger vetting powers and local citizens a greater say in where gaming shops can be opened.
“A smaller planning use class containing betting shops will mean that in future where it is proposed to convert a bank, building society or estate agents into a betting shop it would require a planning application,” Grant said.
The move is designed to deal with the high numbers of betting shops that have sprung up in town centers in recent years. It comes a month after Chancellor of the Exchequer George Osborne raised the duty on fixed-odds betting terminals.
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