RGD hike will “spark second wave of large-scale M&A” says specialist

RB Capital Co-founder Julian Buhagiar has voiced his view that yesterday’s governmental budget, and the decision to increase remote gaming duty (RGD) to 21%, will “spark a second wave of large-scale mergers and acquisitions”.

The specialist gaming industry brokerage boss called the rate rise announcement “inevitable but disruptive” as the Chancellor looks to both make up for the shortfall in tax receipts from the decrease in fixed-odds betting terminal stakes and raise more funds to spend in other areas following several years of austerity measures.

Buhagiar continued: “The rise was not unexpected but this doesn’t take away from the further pain many UK-facing operators are going to have to prepare for. In addition to the fallout from changes in Brexit-related legislation, this industry is constantly adapting to wave after wave of regulatory changes and, because of today’s announcement, some operators will feel like throwing in the towel.

“We’ve already seen a spate of mega deals with the likes of GVC and the Stars Group completing major M&A transactions. Today’s rate rise will only mean one thing: that life will get tougher for smaller operators and they will either be forced to downsize UK operations, shift market focus elsewhere or sell to the highest bidder.

“We fully expect this Budget decision to be a catalyst for increased M&A which will start as early as the first quarter of next year, and for already dominant brands to further strengthen their positions by capitalising early on these buy-side opportunities.”

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