Higher service tax a setback for NFOs

Hands tied: A file photo of customers in a Sports Toto outlet. Analysts say NFOs are unlikely to reduce prize payouts for fear of affecting their sales.

PETALING JAYA: The service tax increase disclosed in Budget 2024 is viewed as a setback for the gaming industry, placing an additional tax burden on number forecast operators (NFOs).

RHB Research said this development represents an unforeseen obstacle for the industry and as a result, the research firm has adjusted its earnings estimates for Magnum Bhd and Sports Toto Bhd (Sports Toto), reducing them by 4%-5% for financial year 2024 (FY24) and FY25.