Investors Told to Take Caution With Gambling Stocks
Wednesday, February 1st, 2012The UK’s online gambling market is expected to see a great deal of changes this year. The introduction of a new tax will see profits decline for UK-based companies that have recently moved offshore, analysts to caution investors against putting too much faith in gambling stocks this year.
Ladbrokes, William Hill and Betfair are three companies listed on the London Stock Exchange. Over the course of the past few years, however, all three have moved to offshore locations to avoid paying steep gambling taxes to the government. While the move initially helped to improve their profits, the UK Gambling Commission has found a way to close the loophole by requiring offshore operators to obtain new licenses.
This is likely to have a detrimental effect on these companies and their profits, and the turmoil is likely to travel down into the pockets of investors. With profits expected to wane as a result of the new taxes, investors are have been warned against working with gambling stocks.
Already, prices are beginning to drop, as Ladbrokes has seen a 2p decline and William Hill has dropped by at least 4p. Things aren’t looking good for UK gambling stocks this year, since the year has already gotten off to a bad start.




