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Ladbrokes parent will switch servers to offset Brexit risk

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Stock image: PA

Stock image: PA

PA Archive/PA Images

Stock image: PA

Ladbrokes owner GVC is planning to move some of its servers to Ireland as it prepares for Brexit.

The servers host its online gambling platform, and it would only be transferring infrastructure.

The move is due to legal and regulatory reasons and no additional jobs would be created here.

Companies that provide a gambling offering to customers in the European Union need to be established and licensed in an EU member state.

As well as this, under the regulations of some EU countries, the servers hosting a company's online gambling platform need to be located in the EU.

The group has 141 betting shops in Ireland.

With just 23 days to go before the UK is due to leave the EU, GVC said its online business will continue to be based in Gibraltar.

In addition, GVC is implementing or preparing plans that involve operating parts of the business, which have customers in the EU, under Malta online gambling licenses.

The group will continue to be headquartered in Gibraltar, and the plans will not have a significant impact on the number of people it employs in that British overseas territory.

Meanwhile, GVC has posted soaring full-year sales, but again warned that new rules for fixed-odds betting terminals in the UK will see around 1,000 shops shut.

Revenue jumped from £789.9m (€919m) to £2.9bn (€3.7bn) in 2018 on a reported basis, driven by a strong World Cup performance and the integration of Ladbrokes.

The group posted an £18.9m pre-tax loss in 2018, an improvement on the £22.6m the prior year.

GVC said profits were dragged down by £322.5m of amortisation charges linked to its £4bn (€4.6bn) acquisition of Ladbrokes Coral in March last year.

However, group underlying profit before tax came in at £434.6m, up from £151m.

GVC also reiterated that a UK Government move to cut the maximum stake for fixed-odds betting terminals (FOBTs) to £2 will result in the closure of around 1,000 Ladbrokes Coral shops.

The firm said this will hit earnings by £135m (€157m) in 2019, adding that it is trying to transition to a "smaller, right-sized and more sustainable estate" as smoothly as possible.

But boss Kenneth Alexander said that the firm is "well-placed" to absorb the impact of the new regulations.

He added: "2018 was a transformational year for the group with the completion of the Ladbrokes Coral acquisition in March making the group the largest online-led sports-betting and gaming operator in the world.

"Excellent operational execution, effective marketing and a good World Cup helped both the legacy GVC and the acquired Ladbrokes Coral businesses perform ahead of expectations and materially ahead of the market, delivering market share gains in all our major territories."

However, UK retail net gaming revenue was 3pc down on a like-for-like basis and 5pc on a total basis.

GVC is now turning its attention to taking advantage of deregulation in the US.

Additional reporting PA

Irish Independent