UK hedge funds take short positions on bookmaker performance

deskUK hedge funds – Odey Asset Management, Bluecrest and Marshall Wace are reported to have taken substantial short positions against the future performance of UK licensed bookmakers.

The hedge funds have taken the short positions as the UK government plans further regulation and legislation on betting operators online and offline operations.

Short selling is a trading technique used by hedge fund managers to profit from a share price falling in value by borrowing it, selling it and then hoping to buy it back to return to the lender at a lower price.

The three hedge funds are amongst the largest in the UK. Business news source the  ft.com reports that  Odey Asset Management and Bluecrest,  have disclosed  short positions ranging from 0.60 – 0.65 per cent on betting operator Ladbrokes’ future performance.

Marshall Wace disclosed a 0.54 per cent short position on the future performance of William Hill, the UK’s largest sports betting operator.

As expected financial news sources and business analysts for the betting and gaming sector, have not been positive with regards to the news of impending new laws and taxes on the betting industry.   Simon Colvin, an analyst at Markit, said: “UK bookmakers have been living on borrowed time for the last 13 years, thanks to the advent of the fixed odds betting terminal.”

However last week’s government measures were not as severe as had been feared by investors, prompting shares in Ladbrokes and William Hill to rally

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