Paddy Power reviews LCG agreement
Paddy Power has told the London Capital Group that it is reviewing the white-label spread betting agreement between the two parties.
Paddy Power has informed the London Capital Group (LCG) that it is reviewing its white-label spread betting agreement with the AIM-listed company.
The ‘Paddypowertrader’ financial spread betting service represents 17% of LCG’s current active client base and is hosted on LCG’s platform.It was launched in 2007 initially in a white-label capacity, and has continued to exist in this format ever since.
In a statement to the stock exchange this morning LCG said that in the event that Paddy Power withdrew from financial spread betting it would work with the Irish operator to “determine the process to assist clients currently on Paddypowertrader to continue trading as direct clients of LCG”. Since the announcement the group’s share price has dropped by more than 13%.
The spread betting company had already delayed the publication of its results, which were due out last week, after a ruling from the Financial Ombudsman Service left it susceptible to a potential payout of £7.7m.
Spokespersons for both Paddy Power and the London Capital Group were unavailable for comment at the time of writing.
Meanwhile, the Irish firm’s takeover of Australian bookmaker Sportsbet was confirmed today. Last week the buyout received the backing of Paddy Power’s shareholders in the firm’s Extraordinary General Meeting.
Paddy Power will release its full-year results for 2010 on Monday.