Budget 2014: Picture mixed for leisure sector - UPDATE

19th Mar 2014 13:27

Shares in British bookmakers Ladbrokes and William Hill tumbled after the government's new Budget included an increase to 25 per cent in duty on fixed-odds betting terminals (FOBTs).Chancellor George Osborne said that he would lift the rate on Machine Games Duty on betting content from 20% to 25%, to take effect from 1 March 2015.Ladbrokes has the greatest dependence on FOBTs, representing almost 40% of the company's earnings before interest and tax, compared with 26% for William Hill, according to calculations from analysts at Barclays.William Hill put out a short statement on Wednesday afternoon to explain that had these conditions been applied in 2013 they would have cost the business an additional £16m, based on FOBT gross win that year. The 33,000 FOBTs in the UK account for around £1.6bn of the industry's in store takings, according to research group Mintel.Ladbrokes shares were down 12% to 139.9p and William Hill's 7% to 140p at 15:50 on Wednesday.Elsewhere in the leisure sector, Rank rose 8.1% as the casino operator was boosted by news that bingo duty had been halved from 20% to 10%.Pub landlords rejoiced as the Chancellor, given the Beer Drinker of the Year award last year for scrapping a planned 3p rise in beer duty, cut the beer duty by a further penny. Punch Taverns was up 3% to 12.75p, JD Wetherspoon was up 0.8% to 848p and London Pride brewer Fuller Smith & Turner was up 1.5% to 945p, although Enterprise Inns fell 1.8% to 144.6p.OH