PADDY POWER fell the most in four months after Bank of America cut its recommendation on the stock to “underperform” and an Australian parliamentary committee recommended keeping a ban on live online gambling.
Paddy Power fell as much as 5.2 per cent in Dublin trading, the biggest intraday fall since August 4th, and ended the day 2.5 per cent off.
Bank of America cut the stock from “neutral”, citing downside risks to the bookmaker’s profitability from the potential imposition of a 15 per cent British online tax on gross profit from 2014.
Separately, an Australian parliamentary committee recommended in a non-binding report that a ban on live in-play online gambling be maintained.
While the recommendations are “negative” for online operators in Australia such as Paddy Power, Dublin-based securities firm Davy said the ban would have no material effect on its estimates for the company.
Paddy Power has online gambling operations in the UK and Australia and generated 81 per cent of operating profit from online activities in the first half. About 73 per cent of operating profit came from outside Ireland. – (Reuters)
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