BETTING BUSINESS BULLETIN 20TH NOVEMBER 2017
Online growth boosts Ladbrokes Coral
A strong online performance helped Ladbrokes Coral make up for weak trading in their betting shops as the bookmaker unveiled their latest trading update last week.
Group revenue increased by three per cent in the four months to October 29, with digital net revenue up 12 per cent.
However, UK retail net revenue was down one per cent.
Even then there were markedly differing fortunes for the group’s constituents within that digital performance, with Coral.co.uk growing net revenue by 13 per cent while Ladbrokes.com net revenue was nine per cent behind.
Chief executive Jim Mullen said: “Our digital performance is strong and the Ladbrokes brand in Australia and the Eurobet brand in Italy continue to post very strong revenue growth.”
Over-the-counter stakes in the company’s retail estate were down five per cent but that was an improvement on previous figures thanks to the return of pictures from the tracks involved in The Racing Partnership’s (TRP) betting shop service.
The bookmaker estimated that more than 80 per cent of the volume lost due to the lack of content caused by their commercial stand-off earlier in the year had returned while the revenue share basis of the deal signed with TRP would “help protect the long term profitability of the UK retail business”.
Mullen added: “In UK retail, performance improved in line with our expectations primarily driven by the return of all horseracing content to our shops.”
The group is likely to be among the most significantly affected by any restrictions to stakes on FOBTs the government may bring in and Mullen did point out the uncertainty this continues to cause in the industry.
He said: “We have existed with the uncertainty caused by the review since we were created and hope that the announcement of a 12-week consultation heralds a positive step to reaching a final outcome. We will take a full part in the consultation.”
Responsible gambling focus in new Sky Bet deal with EFL
Sky Bet last week launched a responsible gambling campaign as part of their new five-year sponsorship deal with the English Football League (EFL).
However, the news was still not welcomed by those who do not like the sport’s close relationship with gambling.
The deal, which will run to 2023-24 and lead to more money going to the 72 EFL clubs, represents a 20 per cent year-on-year increase from 2019-20 and extends the partnership to 11 years.
There will be responsible gambling messages on every club shirt, while the bookmaker launched a new marketing campaign on Sky Sports featuring presenter Jeff Stelling and the ‘When the Fun Stops, Stop’ message.
Gambling advertising during televised sport has become a political hot potato, with Labour’s deputy leader Tom Watson calling for operators to be banned from shirt sponsorship in football.
This summer the Football Association said it would no longer have commercial relationships with gambling companies, ending a deal with Ladbrokes early as a result.
Sky Bet chief executive Richard Flint said: “We’re delighted to sign this new deal with the EFL and believe the additional focus we and the league are both placing on responsible gambling will show that well-run betting operators can play an active part in raising awareness of problem gambling.
“By using our sponsorship and marketing capabilities to highlight how customers can gamble safely we hope to ensure nothing gets in the way of people’s enjoyment of sport, definitely not betting.”
However, problem gambling charity GambleAware chief executive Marc Etches said he was concerned about the effect further exposure to gambling would have on young people.
He added: “Today’s news confirms that gambling advertising in sport has now reached a tipping point, and we run the serious risk of normalising an adult activity for young people.”
Commission sets out new strategy
Concern over harm caused by problem gambling was also highlighted last week as the Gambling Commission unveiled a new three-year strategy, which it said would lay out a roadmap for “fairer and safer” gambling.
Operators were warned by the industry regulator that they face broader and tougher sanctions if they do not treat customers fairly and make gambling safer.
The strategy covers five priority areas including consumer protection, harm prevention and raising standards in the gambling market.
The commission said it would also look to optimise returns to good causes from lotteries as well as improve the way it regulated the industry.
Gambling Commission chair Bill Moyes said: “This is an ambitious strategy to deliver fairer and safer gambling over the next three years. We can only be successful in this by engaging with consumers and by working closely with all our regulatory partners and the industry.
“In the same way that this strategy challenges the industry, we also challenge ourselves – as the regulator – to deliver effective, targeted and innovative regulation.
“At the end of three years, we expect to see an industry that strives continuously to raise their standards, treat customers fairly, and protect vulnerable people.”
What’s happening this week
William Hill unveil their latest trading update on Monday with analysts from Morgan Stanley saying they expect “improved underlying trends in online” to be offset by “slightly softer retail trading”.