20th Mar 2014 09:49
LONDON (Alliance News) - Betting firm William Hill PLC said Thursday the UK government's decision to increase the tax rate on high-speed, high-stake gambling machines to 25% next year will cost the business GBP22 million, worse than its previous estimate of GBP16 million.
William Hill said the cost is calculated against its 2013 results.
UK Chancellor of Exchequer George Osborne said in his annual budget statement on Wednesday that the government will raise duty on gambling machines, also known as fixed-odds betting terminals, to 25% from 20%.
The terminals affected are also known as B2 and B3 gaming machines, and include fruit machines and slot machines. On B2 gaming machines, a player can bet up to GBP2 per spin on slot games, while on B3 slot games, a player can bet up to GBP100 per spin every 20 seconds, although both types of machines are capped at a maximum prize per spin of GBP500.
The new rate will take effect from March 1, 2015.
The FTSE 100 company said on Wednesday that, based on its B2 gaming machine gross wins in 2013, the new rate, if applied during that year, would have cost the business an extra GBP16 million.
However on Thursday, William Hill said the hike would of cost the business even more, GBP22 million, as the increased tax duty affects gaming machines in Licensed Betting Offices that host both B2 and B3 content.
Shares in betting firms William Hill and smaller rival Ladbrokes PLC plummeted after the government's tax hike plans were announced. William Hill shares closed down 6.8% Wednesday, while Ladbrokes tumbled 12%.
Both are adding to their losses Thursday morning. William Hill shares are trading 2.6% lower at 342.50 pence per share. Ladbrokes shares are down 4.1% at 134.72 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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