Ladbrokes and Paddy Power both reported solid numbers today but analysts warn that 2009 may not be so bright.

Unlike many other consumer-focused companies, falling demand is not the main threat to these businesses.

Instead, like others in the sector, the duo are being hit by fears they will have to deal with increasing tax and regulatory hurdles.

While some hope that the new US President could free up the US gaming market, few expect this to have a direct benefit for UK players and it certainly seems like any gains will more than likely be offset by domestic issues.

The one bright spot is that, despite the downturn, increasing numbers of people including high rollers are still setting money aside for a bet. But not everyone is convinced this will continue.

'Despite the generally challenging economic conditions, group profit grew overall.  UK retail gross win increased by 5% whilst eGaming has continued to successfully follow its strategy of investing in new customer acquisition and grew net revenue by 22%,' said Ladbrokes chief executive, Chris Bell.

Evolution analyst, Ivor Jones, said the modest profit growth is encouraging. But he said the 14% rise in machine gross win is a mixed blessing as there is increasingly a risk of regulatory pressure in the machines business.

Numis analyst Richard Carter cheered news that Ladbrokes has secured new banking facilities and will be able to redeem its £378m bond in 2009.