Market Report: Sportech tumbles after latest twist in Spot the Ball tussle

Decision affects games run from mid-1970s through to mid-1990s

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The Independent Online

It seemed like a safe bet – the gaming group Sportech was set for a windfall after winning a case against the taxman, arguing that its Spot the Ball game was one of chance and not skill and so was exempt from VAT.

But events on Tuesday proved that the phrase “a safe bet” is an oxymoron. HMRC, which has already handed over a £93m rebate, won its appeal against the decision, which affected games run from the mid-1970s through to the mid-1990s. Sportech now has until 15 October to appeal. If it doesn’t, or if its appeal is unsuccessful, it must hand back the cash already booked on its balance sheet. Investors promptly prepared for the worst, sending Sportech tumbling 18.75p to 58p.

Other gaming groups had a better time of it – Ladbrokes put on 4.3p to 130p thanks to an upgrade from Citi, while the bank also helped William Hill gain 6.8p to 348p as it named it one of its key buys in the European travel and leisure sector.

The FTSE 100 lost 11.97 points to 6,792.24 with the looming Scottish referendum continuing to hurt sentiment. After bid speculation had pumped up SABMiller in the previous session, some of the air was let out yesterday. The brewing giant lost 79p to 3661p, despite suggestions in the market that it could be involved in another deal – a bid for SodaStream, which enjoyed strong gains in the US.

The discovery of new gas reserves at its Silenus East-1 well in Equatorial Guinea helped Ophir Energy to the top of the mid-cap index, 10.5p better at 238.5p.

Things got worse for the troubled Russian gold miner Petropavlovsk as it admitted it would have to turn to equity markets to pay off bondholders. The company, formerly known as Peter Hambro Mining, plans to swap bonds due next February with fresh five-year ones, with a cash sweetener funded through a rights issue. Petropavlovsk lost 6p to 34p.

While this could be seen as more evidence of Russian equities’ toxicity, it has not deterred Jim Rogers. Mr Rogers, who helped set up the Quantum Fund with George Soros, has joined the board of PhosAgro, a Russian fertiliser producer. PhosAgro added 0.32p yesterday to 11.8p.