PartialLogo
News

Bookmaker shares in freefall amid 'unprecedented' concern caused by coronavirus

Paddy Power: founded in 1988, by the merger of the 40 shops of three Irish bookmakers Stewart Kenny, David Power and John Corcoran
Coronavirus has caused turmoil in stock markets worldwide

Gambling operator share prices have plummeted due to the "unprecedented" uncertainty created by the coronavirus outbreak that has caused turmoil in stock markets across the world.

William Hill shares were down more than 24 per cent on Thursday at 92.48p, having more than halved in price since being 192.4p on February 21.

Shares in GVC Holdings, the owner of Ladbrokes and Coral, were down around 20 per cent at 519.4p.

Shares in Paddy Power Betfair owner Flutter Entertainment were down 15.45 per cent at 6,700p.

Meanwhile, shares in gambling technology company Playtech, which has an Italian retail business Snaitech where betting shops have been closed until next month by government decree, fell by more than 15 per cent to 176.65p.

Gavin Kelleher, gaming and leisure analyst for Goodbody, said concerns about sports cancellations as well as the prospect of closures of retail outlets such as betting shops were weighing hard on a sector which was already under pressure from the likelihood of further regulatory action.

"There is severe selling across the market given the COVID-19 outbreak – the level of uncertainty is unprecedented," Kelleher said.

"The overall market is weak and people are worried about a number of things relative to the gambling sector. Investors are worried about whether we have a long period of time with sporting cancellations, so that would obviously impact revenues because there would be nothing to bet on."

"People are worried if operators have land-based operations – in Italy, betting shops are closed at present until April 3."

Kelleher said those short-term concerns could lead to other problems the longer the crisis dragged on.

"Those are the immediate worries but if we see a prolonged period of economic weakness there is the question of how companies will be impacted by that – a economic recession is now likely in most people's eyes," Kelleher said.

"You will also have people thinking about if companies are indebted and have leverage, how does that impact them. All of these things are weighing on people's minds."

He added: "There are a lot of share price moves recently that are difficult to explain over the last week and I just think the gambling sector has been out of favour and in this environment is more out of favour.

"However, this sector has dealt with significant headwinds in the past, such as foot and mouth in 2001, and it's the well capitalised scale operators that will survive and prosper long term."


You might also be interested in:

Racing in Ireland in balance as government reveals coronavirus measures

The government's action plan

Japanese meetings to be staged behind closed doors as coronavirus fears grow

Chantilly card to be staged behind closed doors in light of coronavirus threat


For the freshest betting advice, based on latest going and market conditions, don't miss the Live Tipster every afternoon. Just click Raceday Live at racingpost.com or the mobile app


Industry editor

Published on inNews

Last updated

iconCopy