NFO sector sees reduction in prize payouts for 4D Games

KUCHING: The first prize money for 4D games might be reduced by some RM200, bringing the first prize money for 4D Big to fall to RM2,300 while that for 4D Small to decline to RM3,300.

This was highlighted by AmResearch Sdn Bhd (AmResearch) in a research report released recently, whereby it believed that this was in response to the government’s hike in pool betting duty from six to eight per cent which took effect from June 1 this year.

The research house understood that one of the number forecast operators (NFOs) was applying to the government to reduce the prize payout.

Although the reduction in prize payout would help mitigate the negative impact from the increase in pool betting duty, AmResearch was not excited over this move as the lower prize structure would widen the prize differential between legal and illegal operators. This, it highlighted, would subsequently encourage punters to buy tickets from illegal NFOs.

According to industry sources, the split between the legal and illegal NFOs was presently 55:45. Should the first prize money

be reduced, the theoretical prize payout for 4D games would decline from an estimated 65.5 per cent to 63.5 per cent.

Without revising its ticket sales to draw assumption ratios of five per cent, the lower prize payout would see Berjaya Sports Toto Bhd’s (Sports Toto) net profit for the financial year ending April 2012 forecasts (FYE4/12F) increasing by 12.6 per cent, effectively wiping out the negative impact of the increase in pool betting duty completely.

Assuming the ticket to draw assumption ratios of two per cent for Tanjong

PLC remained unchanged, the group would see its financial year ending January 2012 forecasts net profits to rise by 3.4 per cent while the net earnings for FYE1/11F would improve by 1.7 per cent.

As a conclusion, the research house expected the gaming industry to see some slight decline because although a lower prize layout would support the operating margins and profitability of these NFOs, the risk faced included ticket sales declining.


by Borneo Post