In a filing with Bursa Malaysia yesterday, Olympia said the increase in the pool betting duty “is expected to have an adverse financial impact on the operating performance of the group for the financial year ending June 30, 2011.”
The betting duty was raised last week from 6% to 8% of gross sales proceeds after deducting gaming tax of 8%. The new rate applies to draws held from June 2010 onwards.
Olympia’s wholly-owned subsidiary, Lotteries Corp Sdn Bhd, is a numbers forecast operator (NFO) in Sabah.
MPHB, on the other hand, said yesterday that the group’s performance “will not be materially affected” from the increase in the pool betting duty. It said this was because the effects of the duty hike would be “mitigated by the positive contribution from the Jackpot games operated by Magnum Corp Sdn Bhd.”
Berjaya Assets, which owns 65% of Natural Avenue Sdn Bhd, said the new betting duty was not expected to have a material impact on the group’s results for the financial year ended June 30, 2010 (FY10).
However, the company did not state the impact on its performance for FY11.
Natural Avenue is the sole and exclusive agent appointed by Sarawak Turf and Equestrian Club (STEC) to operate the NFO on behalf of STEC.
The announcements follow that of Berjaya Sports Toto Bhd and Tanjong plc last week.
Berjaya Sports Toto said that barring any other unforeseen circumstances and taking into account the launch of the new game, Supreme Toto 6/58, in March this year, the directors remained optimistic that the operating performance of the group for the financial year ending April 30, 2011 would be good.
Meanwhile, Tanjong said the revision was not expected to have a material impact on its results. The respective subsidiaries of Berjaya Sports Toto and Tanjong are Sports Toto Malaysia Sdn Bhd and Pan Malaysian Pools Sdn Bhd.
A local analyst said MPHB with its successful Jackpot games by Magnum was an important tool in mitigating the impact of the duty hike.
“The impact on Magnum is lower compared with other gaming players as the others don’t have the Jackpot product like Magnum,” he told StarBiz.
He said the impact on Berjaya Sports Toto would be higher as the company was a pure NFO player in the industry, compared with Tanjong with only 20% of its earnings derived from the NFO business.
“It won’t surprise if the Government implements another round of duty hike in the coming budget,” he said.
He said companies with new products might be key to minimise the impact but it would be hard for the operators to obtain the approvals for their new products, if there were any.
A local research house previously viewed the higher betting duties would lead to an immediate earnings dilution. Assuming an unchanged prize money structure, it expected net profit margins of gaming companies to fall from 10% to 9%.
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