888, Flutter: Should you buy these stocks with ban on ads starring players?

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 888, Flutter: Should you buy these stocks with ban on ads starring players?
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Highlights

  • The Committee for Advertising Practice has banned ads of gambling and betting companies that feature celebrities and stars to protect under-18s and other vulnerable groups in the UK.
  • The new rules will come into effect from October 2022.

In an attempt to protect children, teenagers, and other vulnerable groups from the ills of gambling, the Committee for Advertising Practice (CAP) on Tuesday banned advertisements of gambling and betting companies that feature top footballers and other sports personalities because of their large social media reach, and followers. The ban will also cover reality TV actors, social media stars and influencers.

The move came after the Committee for Advertising Practice (CAP), which is responsible for the UK advertising and marketing code, had committed to safeguarding young and vulnerable audiences. But the watchdog has limitations. The new changes will mean that ads that feature celebrities and famous football stars, such as Michael Owen, Cristiano Ronaldo, and others, will no longer be allowed in the UK as they influence their fans and followers.

The new changes will mean that gambling ads that feature celebs, football players will no longer be allowed in the UK

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The new rules also include a ban on showing specific teams’ merchandise and stadiums in their advertisements and video game content. Besides, it will also restrict ads from using any imagery, such as video game content and gameplay that may attract children or young people.

These rules will come into effect from October 2022 just before the FIFA World Cup 2022 in Qatar starting in November. This is the time when gambling and betting companies spend heavily on marketing to enhance gambling activities and make huge profits.

Let us look at 3 FTSE-listed gambling and betting stocks that may get impacted by the new rules.

 

888 Holdings Plc (LON: 888)

Commonly knows as 888.com, 888 Holding Plc is the one of the world’s leading online betting and gaming companies that operates through several popular brands and websites. It offers virtual online games such as casino, poker, sport, and bingo.

The company has recently announced that it has entered into an agreement with five industry veterans to form 888AFRICA joint venture. The company has reported 15% increase in its revenue to US$980.1 million in FY2021, from US$849.7 million, driven by competitive advantages in product and content leadership, customer excellence and world-class brands and marketing.  Its profit before tax increased by 205% to US$81.3 million in FY2021, from US$26.7 million.

The FTSE 250-listed company’s share value has depreciated by -47.87% over the last one year as of 5 April 2022, while its year-to-date return stands at -30.76%. With a current market cap of £776.05 million, its shares were trading at GBX 208.40, up by 0.58%, at 11:35 AM (GMT), as of 5 April 2022.

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Entain Plc (LON: ENT)

One of the world’s largest sports betting, gaming, and interactive entertainment company, Entain Plc operates in the online and retail sector and offers virtual games such as casinos, poker, sports betting, and bingo.

The company has reported a 7% increase in its revenues in FY2021 to £3,886.3 million, from £3,628.5 million in FY2020, driven by growth in all the key markets, excluding Germany and the Netherland. Its profit after tax stood at £275.6 million, up from £113.8 million in FY2020.

The FTSE100-listed company’s share value has appreciated by 9.98% over the last one year as of 5 April 2022, while its year-to-date return stands at -0.12%. With a current market cap of £9,932.90 million, its shares were trading at GBX 1,680.50, down by 0.47%, at 11:35 AM (GMT), as of 5 April 2022.

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Flutter Entertainment Plc (LON: FLTR)

Ireland-based Flutter Entertainment Plc is a global sports betting, gaming, and environment provider that operates through four divisions, including UK & Ireland, Australia, the US, and International.

The company has reported 37% in its revenue to £6,036 million in FY2021, from £4,414 million in FY2020 and its loss before tax for FY2021 stood at £288 million, from profit before tax of £1 million in FY2020. However, the company’s net debt at period end reduced to £2,647 million, from £2,814 million in FY2020. 

The FTSE 100-listed company’s share value has depreciated by -41.93% over the last one year as of 5 April 2022, while its year-to-date return stands at -23.55%. With a current market cap of £15,969.20 million, its shares were trading at GBX 8,982.00, down by 1.19%, at 11:35 AM (GMT), as of 5 April 2022.

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Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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