FTSE100 betting group Ladbrokes Coral Plc may seek to significantly reduce its £8 million sports sponsorship budget, should the UK government drastically reduce FOBTs wagering levels through its pending industry review judgement.
Operating as the UK bookmaker with the most exposure to FOBTs revenues, Ladbrokes Coral governance eagerly awaits the government’s judgement on machine wagering reductions, which is anticipated to be below a £20-per-bet limit.
Servicing the UK’s largest retail portfolio of +3000 betting shops, Ladbrokes Coral is desperate to avoid a ‘nightmare judgement’ of below £10 limit on FOBTs wagering.
City analysts forecast that a below £10 scenario would cost the FTSE betting group approximately + £450 million loss in annual FOBTs revenues.
Last week, the betting group reported to UK media that a drastic FOBTs cut would see it revise its spend on sponsorship activity.
With a £3.5 million budget, the Ladbrokes brand is the title sponsor of Rugby Football League’s ‘Challenge Cup’ and the Scottish Professional Football League (SPFL), as well maintaining key partnerships with snooker and darts.
Furthermore, Ladbrokes Coral maintains a high coverage within UK racing, operating a sponsorship portfolio which includes; Ladbrokes Winter Carnival, the Coral Scottish and Welsh Grand Nationals, the Coral Cup at The Cheltenham Festival, the Coral Eclipse and the Coral Sprint at York.
“A severe stake cut has many implications not least on jobs, the Treasury and the sports we support.” Ladbrokes Coral detailed in its market update.
“Sports sponsorship is a two-way street, yes we get exposure but it also helps sports finance their entire structures right down to grass-roots funding.”
Speaking to the BBC, Racing Post Editor Bruce Millington stated that Ladbrokes Coral’s revision of sponsorship budgets would be yet another headache for UK racing stakeholders, which at present were being held hostage to the UK government’s long-awaited judgement on FOBTs wagering.